Third party debt order

Société Iran Shipping Co Ltd v Compagnie Internationale de Navigation and others [2003] UK HL 30, NLJ 20 June

A garnishee, or third party debt order, is a proprietary remedy which operates by way of attachment against the property of the judgment debtor. The property of the judgment debtor so attached was the chose in action represented by the debt of the third party or garnishee to the judgment debtor. The judgment creditor obtained a third party debt order in England against a Hong Kong bank without notice. At the final hearing there was undisputed evidence to the effect that under the law of Hong Kong a third party debt order made in England did not extinguish the third party’s debt to the judgment debtor in Hong Kong. In these circumstances it was not open to the English court to make an order, where it was clear or appeared that the making of the order would not discharge the debt of the third party or garnishee to the judgment debtor according to the law which governed the debt. It did not matter very much whether the House ruled that the court had no jurisdiction to make an order in such a case, or that the court had a discretion which should always be exercised against the making of an order in such case. However, the former was the preferable analysis.