Execution rights in garnishee money prevailed over later winding up and a defunct scheme of arrangement.

Attachment alone was treated as prohibitory and insufficient to create a charge or lien, but once the garnishee paid the attached debt into court in execution, the decree-holder acquired a protected execution interest in the realised money and was entitled to preference over the Official Liquidator. The later winding-up order did not displace that accrued right or force the decree-holder into scheme-based debenture treatment. A sanctioned scheme of arrangement was held not to survive as controlling the matter where winding up had intervened and the scheme was no longer workable, so the amount already in court remained available to satisfy the decree-holder.

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Issues: (i) Whether the judgment-creditor, after attachment and deposit of the debt by the garnishee into court, acquired rights sufficient to treat him as a secured creditor entitled to the money in preference to the Official Liquidator and outside the scheme of arrangement. (ii) Whether the subsequent winding up of the company displaced the scheme of arrangement and altered the rights flowing from the execution proceedings.

Issue (i): Whether the judgment-creditor, after attachment and deposit of the debt by the garnishee into court, acquired rights sufficient to treat him as a secured creditor entitled to the money in preference to the Official Liquidator and outside the scheme of arrangement.

Analysis: An order of attachment by itself was treated as prohibitory and was not enough to create a charge or lien. But once the garnishee paid the money into court pursuant to the execution process, the money was treated as being held constructively for satisfaction of the decree. The Court distinguished mere attachment from the later stage where the money had actually come into court, and held that the judgment-creditor's position was no longer that of a mere unsecured creditor. The Court also held that the insolvency provisions relied on did not govern the issue in terms, though they supported the analogy that realized assets already under execution could not simply be claimed by the liquidator.

Conclusion: The judgment-creditor was held to be a secured creditor and was entitled to the money deposited in court.

Issue (ii): Whether the subsequent winding up of the company displaced the scheme of arrangement and altered the rights flowing from the execution proceedings.

Analysis: The Court held that subsequent events could be taken into account where the original relief had become inappropriate. The winding up order meant that the scheme of arrangement could no longer govern the matter, and the rights of the parties had to be assessed in light of the later legal . The Court further relied on the principle that a sanctioned scheme does not become part of the company's constitution and does not survive so as to control a winding up order when the scheme is no longer workable.

Conclusion: The scheme of arrangement did not continue to control the execution, and the winding up did not prevent the judgment-creditor from recovering the amount in court.

Final Conclusion: The attachment and garnishee deposit conferred enforceable rights on the judgment-creditor, and the later winding up could not defeat those rights or compel him to accept the scheme-based debenture treatment.

Ratio Decidendi: Where, in execution, the garnishee has paid the attached money into court and the executing court has made a final order in favour of the decree-holder, the decree-holder acquires a protected execution interest in the realised money that cannot be displaced by a later winding up or by a scheme of arrangement no longer operative.

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