As mentioned in Debt Recovery in Malaysia (II) – Enforcement of Judgment, one of the most threatening and effective forms of enforcing a judgment will be to bankrupt a person (provided the person owed a judgment sum of RM50,000 or more) or wind up a company (provided the company owed a judgment sum of RM10,000 or more).
This is when the Director General of Insolvency (‘DGI’) will take control of the assets for distribution among the the creditors.
However, assuming the judgment sum is
- not up to RM50,000 (against individual) or
- RM10,000 (against a company),
one of the other effective method to enforce a judgement will be to apply for Judgment Debtors Summons.
A Judgment Debtors Summons is an order for the judgment debtor to be orally examined before the Registrar of the Court on whether —
(a) any debt is owing to the judgment debtor; and
(b) any other property acquired by him which are able to satisfy the judgment or order.
Such an order must be served personally on the judgment debtor at least seven (7) days before the hearing day.
Thereafter, the judgment debtor must come before the court to declare his financial abilities and the court may order him to pay a lump sum or pay the debt by instalments as per Section 4 Debtors Act 1957.
An application for Judgment Debtors Summons may be made by the judgment creditor with an affidavit in support exhibiting the final judgment.
Moreover, the court may also order the judgment debtor to produce relevant books and documents which are possessed by him as a proof of income and expenses during the examination.
The Registrar of the court who is conducting the examination will record the judgment debtor’s statement and he shall be asked to sign failing which the Registrar shall sign the statement.
Arrest of Judgment Debtor
If the judgment debtor does not appear in court despite the order have been duly served, the court may issue an order of arrest to bring him before the court or make an ex parte order against him.
Besides, the judgment creditor shall personally serve to the judgment debtor a notice which would require him to show cause why he should not be sent to prison for failing to comply with the court order.
If no sufficient cause was shown or the judgment debtor chooses to ignore the court order, committal proceedings may be taken which means he could be arrested and jailed in civil prison for a period of time or until earlier payment of instalment is made.
This may be an effective method for judgment creditor to enforce the monetary judgment against the judgment debtor because in order to bankrupt a judgment debtor who is an individual, there must be a judgment sum of RM50,000 or more and to wind up judgment debtor which is a company, there must be a judgment sum of RM10,000 or more owed by the company.
It is pertinent to note that the limitation period for enforcement of judgment is twelve (12) years from the date of the judgment (Section 6(3) of the Limitation Act 1953).
It is also important to note that no judgment interest can be claimed from the judgment debt and leave of court is required to execute judgment after the expiration of six (6) years.
A judgment creditor is advised to enforce the judgment promptly as any mode of execution will be barred once the limitation period has passed.
About the Author:
This article is written by Chia Swee Yik, Partner of this Firm (assisted by our paralegal, Yong Yu Xian) who has provided practical advice on debt recovery.
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