A judgment debtor summons in Malaysia is an effective method to enforce judgment in Malaysia. This article explains what it is, the process, and other alternatives.
Understanding Judgment Debtor Summons in Malaysia
When there are financial disputes due to outstanding or delinquent debt, creditors usually commence debt recovery processes through legal proceedings to recover those outstanding debts.
After the court proceedings end, the creditors may obtain a court order that orders the losing party, called the ‘judgment debtor’ to pay the winning party, the ‘judgment creditor’) a certain sum. The amount that is ordered to be paid under the court judgment is called as ‘judgment debt’.
The judgment debtors should then comply with the monetary judgement by paying the sums owing according to the order. If the judgment debtor fails to comply, then there are a few enforcements of judgment methods in Malaysia, including judgement debtor summons.
When it is a money judgment or monetary judgment (that is a judgment ordering to pay money), the judgment creditor can apply for a judgment debtor summons. This summons allows the court to compel the judgment debtor to appear in court and be orally examined as to the debtor’s financial means and assets to satisfy the judgment.
Laws On Judgment Debtor Summons
2 main laws govern the procedure for judgment debtor summons in Malaysia, with the Debtors Act 1957 prescribing the rights of both creditors and debtors and the Rules of Court 2012 known in Bahasa Malaysia as ‘Kaedah-Kaedah Mahkamah 2012’ prescribing the related procedures.
A judgment debtor summon is an important part of legal proceedings asset discovery steps where the debtor is to declare his financial abilities and this allows the creditor to conduct an insolvency check on whether the debtor has the means to satisfy the financial judgments.
Otherwise, if the creditor proceeds with other enforcement methods and is unable to get the money back, then it will end in a paper judgment (that is judgment in theory, without practical benefits- getting back any money).
In Malaysia, under section 6 of the Limitation Act 1953, the time limit to enforce any judgment is 12 years from the date the judgment becomes enforceable. The time limit for claiming judgment interest (interest on the judgment debt) is 6 years from when the interest becomes due.
Steps For Issuing Judgment Debtor Summons
The steps for a judgment debtor summons application are usually as follows
Step 1: Filing the Forms
It begins with preparing a ‘request for judgment debtor summons’ form by filling in the details and attaching a copy of the judgment. Then, the judgment creditor should file these forms with the relevant court. The appropriate court is usually where the original judgment was made.
Once this form is approved and given a seal by the court, then the creditor can prepare and file the form for judgment debtors summons. This summons should contain the amount of the judgement sum and the consequences if the debtor fails to attend the hearing.
Step 2: Service
After the judgment debtor summons is sealed and a hearing date is given, the judgment creditor then serves the document on the judgment debtor personally, at least 7 days before the hearing day.
Suppose the judgment creditor is concerned that the debtor may abscond and avoid the examination. In that case, he can apply to the Court by ex-parte notice of application supported by affidavit in support for the debtor to be arrested and be produced before the court for examination.
However, the judgment creditor will have to satisfy the court by evidence in the affidavit in support that there is probable reason that the judgment debtor may leave the state to avoid the examination or paying the monies. He also has to pay a deposit for the costs of bringing the debtor before the Court.
Step 3: Hearing and Examination
Next, the judgment debtor will attend the court for examination as to his ability to pay the sum owed to the judgment creditor. During the hearing, the judge will examine his ability to pay and proof of his assets such as bank account statements, share certificates, and house titles
The judgment debtor can propose to the court his preferred way of debt repayment amount, as to pay the outstanding sum by instalment or a lump sum. Furthermore, the judgment debtor can dispute if the judgment sum is incorrect.
After listening and hearing from both parties, the court then orders the judgment debtor to pay the judgment sum, either in instalments or in a lump sum within a certain period. Furthermore, the court order may also include payment of the court fees by the judgment debtor.
In the event the debtor did not attend the hearing, then the court may:
Issue an order of arrest for him to be arrested and brought before the court to be examined; or
Make an order against the judgment debtor ex-parte (that is making the order without the attendance of the debtor)
Step 4: Post-Hearing
After the hearing, a few possibilities may happen:
Compliance
The debtor pays the amount owing to comply with the court order.
Non-compliance
After the court order compels the judgment debtor to pay and he still fails to comply with the terms by refusing to pay, then a judgment notice can be issued at the request of the judgment creditor.
This notice requires the judgment debtor to attend committal proceedings to show cause why he should not be committed to prison for such a default of complying with the order.
If during the hearing the judgment debtor fails to show good reasons as to why he cannot pay the amount, then the court can order him to be sentenced to prison for up to 6 weeks or until earlier payment of the amount due.
However, the debtor should not be imprisoned unless it seems that since the date of the judgement debtor summons order directing for the payment, that he could pay the sum.
Discharge or Vary
The judgment debtor can apply to discharge, vary, or suspend the order when there are reasonable grounds such as having paid the amount due. If the debtor is dissatisfied with the order, he can appeal to a higher court such as High Court of Malaya.
It is an emphasis that court orders should be complied with as any failure may lead to serious repercussions. If you need any help, you may contact our advocate and solicitor/ lawyer who can help you.
Other Enforcement of Judgment Options
When there is outstanding debt and the creditor pursues the monetary claims and then obtains a financial judgment, there are few other methods of enforcement of judgment in Malaysia including:
Writ of seizure and sale
This is when the creditor, through the court bailiff, seizes and sells properties of the debtor, usually movable properties, to pay off part of the judgment sum.
Garnishee
In garnishee proceedings, a garnishee order in Malaysia means an order directing 3rd party who owes monies to the judgment debtor (called ‘garnishee’) to pay those monies directly to the judgment creditor to satisfy the debts. Examples of garnishee include banks where the judgment debtor has bank accounts with
Bankruptcy proceedings
After the creditor obtains a final judgment against an individual debtor where the debt threshold is at least RM 100,000, then the creditor can apply to the High Court for the issuance of the bankruptcy notice according to the Insolvency Act 1967.
After the bankruptcy order is made, the Director General of Insolvency (DGI) can take over all the assets of the bankruptcy including immovable properties to pay off the creditors who have proved their debts, including unsecured creditors.
Winding up proceeding
When it is a debtor company, then the creditor can apply for winding up of that company when the debt threshold is at least RM 50,000.
Each of the enforcement procedure and methods has its advantages and it depends on the situation. You can contact us to get legal advice on these execution methods.
Conclusion
Judgment debtor summons in Malaysia is an important method for enforcing the judgment by allowing the creditor to check the debtor’s financial means to pay the judgment sum. If you need any assistance on this, do contact us and we will assist you.
Frequently Asked Questions
1. What is a Judgement debtor summon?
A judgment debtor summons is a legal document issued by the court to compel a debtor to appear before the court and be examined on his ability to pay the debt, including his properties. The court can also order the debtor to produce documents relating to such properties.
2. What is the meaning of judgement debtor?
A judgement debtor is someone who has been ordered under a court order to pay monies to another party, called a ‘judgement creditor’.
3. What is the limitation period to enforce judgment in Malaysia?
According to section 6(3) of the Limitation Act 1953, the limitation period to enforce a judgment in Malaysia is 12 years from the date the judgment becomes enforceable.
4. What is a judgment notice?
A judgment notice is a legal document asking the judgment debtor to attend before the court to explain why he should not be committed to prison for failure to pay following the judgment debtor summons order.
5. How to enforce a judgment in Malaysia?
There are a few ways to enforce judgment in Malaysia. If it is an order for payment of money, a few methods include garnishee proceedings, bankruptcy proceeding, winding-up proceedings, and writ of seizure and sale.