Effective Ways to Recover Your Money: A Guide to Enforcing Monetary Judgments in Malaysia

You have successfully won your case in court, and the judge has ruled in your favour, granting you a monetary judgment. But is that truly the end? For many, this marks the beginning of a new challenge—ensuring the other party complies and pays the amount awarded. So, what steps must you take to enforce a monetary judgment in Malaysia? This article explains the process of enforcing a monetary judgment.

Enforcing a Monetary Judgment

When a court order is granted in your favour, and the other party is ordered to pay you a sum of money, you are now a Judgment Creditor (“JC”) while the other party is the Judgment Debtor (JD). O.45, r.1 of the Rules of Court 2012 (“ROC”) provides that a judgment or order for the payment of money may be enforced by one or more of the following means:

• a writ of seizure and sale;
• garnishee proceedings;
• a charging order;
• the appointment of a receiver; and
• an order of committal.

Writ of seizure & sale

A writ of seizure and sale (“WSS”) is a court document prescribed in the ROC for the purpose of enforcing monetary judgment whereby the JD’s properties are seized and sold via public auction to settle the judgment sums owed to the JC. A WSS is appropriate where the JD owns valuable assets which could be auctioned off to settle the judgment sum.

The process begins by filing a WSS, praecipe and other relevant documents in court. On receipt of the relevant documents and fees, the court will seal the WSS which will then serve as a command to the court sheriff/bailiff to seize the property and sell it by way of public auction. The proceeds of the auction will then go towards the payment of the judgment sum owed to the JC. Enforcing a monetary judgment by way of WSS is relatively quick, especially for movable properties. The overall process of WSS can be seen from the diagram below.

Garnishee proceedings

Garnishee proceedings allow a JC to collect money owed to the JD from a third party, whether it is a company or an individual.[1] Under this method, the money owed to the JD, will be expended to the JC instead of the JD. This process is commonly used when the JC has knowledge of which banks the JD has money in, especially in savings or current account. This is because the money a person deposits into a bank account is a debt owed by the bank to the person.

Garnishee proceedings can be initiated by filing in court an ex parte notice of application (NOA) and an affidavit in support of the NOA.[2] The court will then make an order to show cause (order nisi) which serves to prompt the JD or the garnishee to provide reasons as to why the garnishee order should not be made absolute.[3] The court may then make an order absolute[4] if it thinks fit. Garnishee proceedings is one of the quickest and most effective ways for the JC to recover their money. An overview of the process of garnishee proceedings can be seen from the diagram below.

Charging order

A charging order is the imposition of a charge on the JD’s ‘stock’ which includes stock options, shares, debentures, and debenture stock as well as any dividend of or interest payable on such stock.[5] Once a charging order absolute is obtained, the JC would need to institute separate proceedings for the sale of the stocks or interests, since the charging order is not an order for sale.

The procedure for obtaining a charging order is similar to obtaining a garnishee order. First, the JC would need to file in court an ex parte NOA for an order to show cause supported by affidavit.[6] On receipt of the relevant documents and fee, the court will fix a date for the hearing of the application and will grant an order to show cause if it thinks fit. After the hearing of the application, the court may then make the order absolute if there is no cause to the contrary.[7] The overall process of enforcement of monetary judgment by way of a charging order can be gleaned from the diagram below.

Appointment of receiver by way of equitable execution

Under this method, a receiver is appointed to receive income from the JD’s assets who will then forward the income to the JC. This method is suitable where the JD derives income (such as rent) from any asset he owns.

An application for the appointment of receiver may be made by way of NOA.[8] The court, in determining whether it is just or convenient to appoint a receiver, will take into account the amount claimed by the judgment creditor, the amount likely to be obtained by the receiver, and the probable costs of his appointment.[9] The overall process for the appointment of receiver by equitable execution can be gleaned from the diagram below.

Committal proceedings

Committal proceedings may be brought against a JD who disobeys the court’s order or judgment, and it is a way of punishing the disobedient JD (contemnor) by way of fine of imprisonment. Committal proceedings is suitable when the JD is able to pay the judgment sum but is unwilling to do so.

It must be noted that committal proceedings only serve as a last resort and if the JC has other effective and available recourse such as enforcing the monetary judgment by way of garnishee proceedings, the JC should resort to that recourse instead of applying for leave to institute committal proceedings.[10]

Before an order for committal is granted, the JC must first obtain leave (permission) from the court to initiate committal proceedings. An application for leave may be made ex parte by way of NOA.[11] Within 14 days[12] after the leave is granted, the JC must make an application for an order of committal by way of NOA.[13] After the hearing of the application, the court may then make an order of committal against the JD and fine and/or jail the JD for contempt of court.  The overall process to obtain a committal order can be seen from the diagram below.

Choosing the right method of enforcement

In choosing a suitable method of enforcing a monetary judgment, it is vital for the JC to be aware of the JD’s individual circumstances. This is where the judgment debtor summons comes in. A judgment debtor summons serves to bring the JD to the court to orally examine him of his ability to pay the judgment debt and to discover the existence and whereabouts of the JD’s assets.[14] The JC could then employ an appropriate method to enforce the monetary judgment depending on the type of asset the JD possesses.

An application for the examination of the JD is made by filing a request in Form 175 of the ROC.[15] After an order for examination of JD is made by the court, it must be served on the JD and if the JD does not appear before the court on the specified date, the court may either[16]:

• issue a warrant of arrest against the JD to bring him before the court; or
• make an order against the JD ex parte (without his presence).

An ex parte order made against the JD at this juncture may require the JD to pay the judgment sum without delay in lump sum or in instalments[17] failing which, the JD may be imprisoned.[18]

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This article is written by Raja Nadhil Aqran (Partner) and Jeypraba A/P Veerapan (intern). It only contains general information. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such.

To find out more about which enforcement method is most suitable for your needs, contact our lawyers at info@aqranvijandran.com.

[1] O.49, r.1(1) of the ROC.

[2] O.49, r.2 of the ROC.

[3] O.49, r.3 of the ROC.

[4] O.49, r.4 of the ROC.

[5] O.50, r.2 of the ROC.

[6] O.50, r.3 of the ROC.

[7] O.50, r.6(1) of the ROC.

[8] O.30, r.1 of the ROC.

[9] O.51, r.1(1) of the ROC.

[10] Tan Kang Ho v Mao Sheng Marketing (M) Sdn Bhd [2015] 4 CLJ 113 at para [69].

[11] O.52, r.3(2) of the ROC.

[12] O.52, r.4(2) of the ROC.

[13] O.52, r.4(1) of the ROC.

[14] Section 4(1) of the Debtors Act 1957.

[15] O.74, r.11A of the ROC.

[16] Section 4(5) of the Debtors Act 1957.

[17] Section 4(6) of the Debtors Act 1957.

[18] Section 4(8) of the Debtors Act 1957.

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