Great, you’ve managed to obtain a monetary judgment in favour of your client against a pesky debtor who has a habit of evading payment.
You make sure to personally serve the debtor with the judgment and demand that he makes good of such judgment within 14 days of receiving it. Day 10 comes, no word from the debtor.
Day 15 comes and still no word in respect of any payment. Your client is in dire need of liquidity, so you begin to consider the various modes of enforcement to ensure that the judgment obtained isn’t rendered to mere paper.
Enforcing the judgment by commencing bankruptcy proceedings may take too long before your client is actually able to receive the money.
Garnishee Proceedings may also take too long and it is not easy to ascertain your debtor’s debtor. An order for committal may also not be effective for the purposes of enforcing a monetary judgment.
A good option to consider if your debtor has many valuable properties is taking out a Writ of Seizure and Sale (“WSS”). In this respect, there are two types of property which can be seized and sold, movable and immovable. Movable properties which may be the subject of a WSS includes air-conditioners, televesion sets, furniture, ceramic tableware, valuable art, etc. Immovable property on the other hand is usually any landed property/land which the debtor owns.
Procedurally speaking…
In terms of procedure, the two are mutually exclusive. Hence, when moving to procure a WSS, it is important to decide which kind of property will best satisfy the judgment. There is nothing stopping you from taking out WSS against both movable and immovable property, but you should also factor in, amongst others, the approximate time taken to fully satisfy the judgment, length of process, value of the property and cost incurred.
This article will discuss the process and legal issues surrounding the enforcement of a judgment by WSS. Part 1 will be in regards to WSS against movable properties, whereas immovable properties will be discussed in Part 2.
The WSS is one of the few writs of execution governed under Order 46 of the Rules of Court 2012. Now, it is important to note that the courts will not issue a writ of execution without leave of the court in certain circumstances-
Hence before pursuing a WSS, you will want to make sure that your case does not fall within any of the category above. Otherwise you will be required to apply for leave of the Court under Order 46, rule 3.
Procedure (Movable Property)
To procure a WSS from the Court, you will have to file two things, 1) a Praeciple for a WSS; and 2) a draft WSS itself for the Court to seal. The praecipe will be in Form 89 and must be signed by the relevant solicitor. It must also enclose a copy of the judgment which the writ is being issued for. If your judgment stipulates the time in which the debtor must make such payment and such time has not expired, the Court will not seal the WSS. So make sure that your circumstances comply with Order 46 of the Rules.
After you file the two proceedings, the Court will issue a letter with instructions as to subsequent actions required. You will be required to pay a deposit and execution fees to Court before the Court fixes a date for seizure. You will also be required to appoint a representative and provide their personal details to the Court two weeks before the date of the first seizure fixed by Court.
The personal representative will usually be the solicitor responsible of the case, whose presence is required to speak to the debtor or explain any aspect of the process to the debtor if necessary. Apart from a representative from the firm, you will also be required to hire guards to ensure that the attached property remains seized and protected until the time for sale comes. The Court also fixes a limit on the remuneration to hired guards.
On the first day of the process, the assigned bailiff, your firm’s representative and the hired guards will travel to the debtor’s house, where the movable property therein will be attached.
At the debtor’s house, the bailiff will list down the movable property to be attached with their respective value to be sold at. These properties cannot be moved away or sold by the debtor during the period of attachment until they are sold.
Now, there are types of property which cannot be attached by the Court and this includes, among other things, wearing apparel, beds, cooking vessels, tools of debtor’s trade, etc to the value of RM200.00, any pension or gratuity granted by the government, etc (Section 3 of the Debtors Act 1957).
Apart from the list of attached properties, the bailiff would also draft a Bailiff’s Report documenting the important details of the seizure, and a Notis of Attachment and inventory.
The Notice of Attachment will make it very clear that unless the debtor settles the judgment obtained against them, the attached property will be sold at an auction. Usually the auction is fixed two weeks after the date of attachment. In fact, according to Order 46, rule 12 of the ROC, where the bailiff has to maintain possession of the attached movable property for more than 14 days, the creditor shall deposit a further sum of money to provide for the costs of execution.
Not all is lost
Debtors do have recourse if any injustice is caused against them. If their property is wrongfully attached, the debtor may present reasonable causes to the Court to show that property seized ought to be ordered to be returned to the debtor.
Under the Debtor’s Act, a wronged debtor may also apply to court for a reasonable compensation for any injury caused to the debtor for improper attachment. However, an award under Section 23 does bar further action for damages. Hence, a claim for a Section 23 award and an action for damages are mutually exclusive. It is important to note that an award under Section 23 cannot exceed RM1000, hence if the damage caused to you (as a debtor) is substantial and exceeds RM1000, it may be wiser to initiate a civil action instead.
Concluding Words
My first-hand experience going through the process of a WSS (against movable property) was eye-opening. Initially I was afraid because going to someone’s house with a writ to seize and sell their personal movable belongings does always not render the biggest welcome. Fortunately, my client’s debtor was quite an understanding person and settled our judgment before the auction fixed.
So in a way, the threat of selling a debtor’s valuable personal property may encourage them to make good on the judgment obtained. Hence why I think enforcing a judgment by way of WSS is one of the more effective methods (so long as your debtor has valuable property to sell).
- What You Need To Know As A Home Buyer When Purchasing Property From Housing Developers - February 3, 2021
- Sexual Harassment: Duty Of Employers, Policies & Legal Recourse For Employees - January 26, 2021
- The Erinford Injunction: Maintaining Status Quo Pending Appeal - December 22, 2020
Hi Mr Ivan, wondering if Part 2 is available. I can’t seem to find Part 2 of this article. Appreciate it if you can do a follow up on this topic. Thanks.