In our last Debt Recovery Series 101, we have introduced the debt recovery process and garnishee proceedings. For the topic of the day, we will introduce another method commonly deployed in debt recovery process by way of auctioning the debtor’s property, i.e. Writ of Seizure and Sale (“WSS”). To begin with, it is noteworthy to take note that there are two different types of WSS, i.e. WSS for movable property which refers to writ of seizure and sale of the debtor’s movable assets, i.e. cars, machinery, goods and WSS for immovable property which refers to the auction of the debtor’s immovable assets, i.e. writ of seizure and sale of the debtor’s related estate property. We will explore mainly WSS for movable property in this article.

WSS for movable property is governed under the Rules of Court 2012 (ROC 2012), specifically Order 46 of ROC 2012 which read together with the Debtors Act 1957. It is one of the common execution methods deployed by the creditors and legal practitioners in Malaysia.

It is of great importance to take note that, under Order 46 Rule 2 ROC 2012, it has dictated a few scenarios where WSS may not be issued without a leave of court as follows:-

a.         Where there has been more than six years since the date of the judgment and/or court order;

b.         There has been changes in the parties’ capacity which referred in the judgment and/or court order, such as the Judgment Creditor and/or the Judgment Debtor has passed away;

c.         Where the judgment and/or court order is related to a deceased’s property and, subsequently, the deceased’s property has held by the deceased’s executor and/or administrator since then;

d.         Where the judgment and/or court order has imposed a requirement for a party to fulfil before the said party’s entitlement to such relief; and

e.         Where the movable property is in the hands of a receiver appointed by the Court.

In order to proceed with WSS for movable property, there are several key steps must be achieved:-

1.         Firstly, you must first obtain a Court Judgment in Malaysia which established that the debtor owes you a legal debt (Obtain a Judgment and/or Court Order);

2.         Thereafter, you may apply to the court for a Court Order for a Writ of Seizure and Sale by particularising the judgment obtained, such as the amount owed, and information about the debtor (Apply to Court for WSS);

3.         Upon fulfilment and satisfaction of the mandatory requirements, the Court will issue the Writ of Seizure and Sale (“Writ”) where it authorizes the court’s bailiff to seize and sell the debtor’s movable property to satisfy the debt (Issuance of WSS);

4.         Such Writ must be served on the debtor at his/her premise by the court’s bailiff at a date determined by the Court (Service of WSS);

5.         Upon service of the said Writ to the debtor, the court’s bailiff will also seize the debtor’s movable property at the Debtor’s premise, including but not limited to vehicles, furniture, electronics, and other personal possessions. A list of seized items will be prepared and given to the debtor (Seizure of Movable Assets);

6.         Subsequently, usually within fourteen (14) days from the date of the seizure, the Court will fix and schedule an auction date for the seized property to be auctioned in order to raise funds to satisfy the debt (Scheduling an Auction Date);

7.         On fixed auction day, the seized properties will be auctioned off to the highest bidder. The proceeds will be distributed according to the court’s instructions. Thereafter, the judgment creditor will receive an appropriate amount to satisfy the judgment debt, and the surplus, if any, will be returned to the debtor (Auction and Distribution of Funds).

It should be noted that the seizure of the debtor’s assets is subjected to the limitations and conditions imposed in Debtors Act 1957, other relevant written laws and case laws. The debtor’s wearing apparels, tools of artisan, pensions or gratuity granted by the Government is not subjected to the seizure.

Last but not least, let us remind once again every legal action has its own limitation and you should seek a professional legal advice to discover the appropriate legal action for you. However, you should not procrastinate in initiating or prosecuting your action because you should bear in mind that your cause of action is subjected to a limitation period as specified under the law. Hence, let us assist you in utilising the best appropriate methods under the current legal regime to protect your rights and interests in recovering your money fairly, legally and justifiably. Should you have any inquiries or require legal assistance, please do not hesitate to contact us at +6011-5657 1350 and reach us via email at lowzhigeneral@gmail.com.

Written By: Yap Jian Zhi, Nicholas

Edited By: Low Chee Hau, Melvin

Note: This article does not constitute legal advice in any case. The facts in each and every case will differ and you can contact us for complimentary legal advice.