Third-party garnishee liable for incorrect third-party declaration

If you are charged against your debtor prejudgment attachment or foreclosure lays under a third party, then that third party must make a so-called third-party declaration. This is a statement stating how much the third-party garnishee must pay to the debtor. The third party under garnishment is often a bank, but it can also be, for example, a tenant, the principal of a contractor, or any other type of party. The point is that it owes something to the debtor. Based on the garnishment, the creditor knows what portion of his claim he can go collect from that third-party garnishee.

Filing third-party affidavit in attachment is mandatory

The law states that the third party is required to make a declaration. That statement must be delivered to the creditor within two weeks after the attachment is made. Within those two weeks, the debtor can still request the third-party garnishee to wait to make the third-party statement. If the debtor has made that request, the third-party statement must be issued two weeks later (i.e., four weeks after the garnishment has been made). The third-party statement must state what the third-party garnishee owes the debtor. In addition, it must state whether he will owe anything from a legal relationship that already existed at the time of the garnishment. Also, if the garnishee holds movable property, he must indicate this on the garnishment statement.

What types of garnishment are possible?

Third-party attachments, whether they are conservatory or foreclosure, come in various forms. In all cases where a third party owes something to a debtor, it can be garnished. The most common forms of garnishment are:

• Wage garnishment. This is garnishment from the employer (the third party) of what it owes the employee (the debtor). Often this is wages. The employer must then surrender that wage to the bailiff, who then pays it (in the case of garnishment) to the garnisher (the creditor).
• Rent seizure. Rent seizure refers to attachment at the landlord's expense of what a tenant owes him.
• Bank attachment. Bank seizure involves attachment at the expense of the account holder on what is owed to him by the bank. This usually consists of the bank balance. This is because the bank owes the account holder the balance in the bank account.
• Seizure of Contractor Debt. Seizure from a contractor's principal is also common when the contractor is the debtor. This is because the principal owes the contractor contract sums. These can also be garnished.
• And so on.

No third-party declaration made despite attachment? Joint and several liability

If the third party garnishee does not make a statement, then he or she may be ordered to pay to the creditor the full amount owed to him or her by the debtor. The garnishee then becomes in effect a (co-)debtor of the creditor. In addition, he must then compensate the creditor for his damages resulting from not making the statement. This is quite a far-reaching sanction. It is included in the law to ensure that third-party garnishers actually make a (correct) statement. However, the creditor must first file a claim with the court to have the third-party garnishee convicted jointly and severally. In practice, a statement is then often made after all. In that case, he still has to reimburse the costs incurred by the creditor.

Court orders third-party garnishee to pay as if he were debtor himself

In a recent case involving the Arnhem-Leeuwarden Court of Appeal (ECLI:NL:GHARL:2024:4078), The garnishee, the B.V. of a debtor, was ordered jointly and severally to pay to the garnishee what the debtor owed the garnishee. The debtor was the DGA of the B.V. The distraining party had levied an attachment on what the B.V. owed its DGA. The B.V. had stated that it did not owe anything. Given the summary nature of the declaration, the Court of Appeal ordered the B.V. to pay to the debtor the claim for which an attachment had been levied.

Incorrect third-party statement: seek judicial declaration

If an incorrect or incomplete third-party statement is made, the creditor may contest it. The creditor may also require the third-party garnishee to complete the third-party statement. The time limit for this is short and strictly enforced. An action contesting the third-party statement or demanding that the third-party garnishee complete the third-party statement must be filed within two months after the third-party statement is made. Thereafter, this power expires.

Judicial declaration of garnishment not in garnishment case

Note: This can only be done in the case of foreclosure. Article 477a Rv (where the judicial declaration is regulated) is in fact not applicable mutatis mutandis in the case of prejudgment attachment. Further, the law provides that the powers under that article do not take effect until four weeks after the judgment is served on the third party garnishee (article 723 Rv). In my opinion, this does not affect the fact that the third party garnishee who is suspected and can be plausibly shown to have made a false statement, in summary proceedings is ordered to still make a (correct) statement. However, the sanction of article 477a Rv that that third garnishee becomes jointly and severally liable for the debt does not then apply.

Considerations for the judicial declaration

Furthermore, it is important that the attorney for the executor (the creditor) who receives a court declaration sends a copy of it to the executor (the debtor) within three days. Sometimes there is a concurrence between the incomplete third-party statement or an incorrect third-party statement. In fact, a statement may be so summary, than it should in fact be classified as failure to make a statement. Therefore, as part of the claim to make a court declaration, the third-party garnishee may also be ordered to substantiate the declaration with documents.

Payment by third-party garnishee in defiance of attachment

If claims are attached, the third-party garnishee may not make payments to the garnishee's debtor. If the third-party garnishee does so, that payment cannot be held against the garnishee. For example, if the third-party garnishee owes €100 to the garnishee and pays it to the garnishee, the garnishee may still recover up to that €100 from the third-party garnishee. The garnishee may then pretend that this payment to the garnishee never took place.

Attorney for seizure and foreclosure law

Thus, providing an overly brief or inaccurate statement can have very far-reaching consequences. Moreover, it prevents the garnishee from obtaining recovery for its claim. Are you a garnisher, third-party garnishee or debtor and have questions about a pending or imminent foreclosure? If so, please contact up with the attachment and enforcement lawyer From Lexys Lawyers.