A Creditor’s Guide To Writs Of Seizure & Sale In Malaysia

When a debtor fails to settle a judgment debt, a writ of seizure and sale (WSS) as prescribed by Order 47 of the Rules of Court 2012 can be one of the more direct ways to recover the outstanding amount.

Specifically, a WSS allows movable and immovable property owned by the debtor to be seized and sold, with the proceeds used to satisfy the debt.

A WSS used on Hospital Islam Az-Zahrah to recover RM8.32 million in damages.

For creditors in Malaysia contemplating a civil suit, our guide covers:

• how a WSS works depending on type of property

• what assets can and cannot be seized

• advantages and disadvantages of a WSS

• real case studies of successful and unsuccessful enforcement, and

• our practical observations at the end

For clarity, as a WSS can only be used after winning the initial civil suit, in the sections below we refer to the reader as judgment creditor and debtor as judgment debtor.

What can generally be seized

A writ of seizure and sale allows certain movable (under Form 84) and immovable (under Form 85) property legally owned by the judgment debtor to be seized, including:

• vehicles

• machinery

• office equipment

• furniture

• warehouse or factory stock

• stock-in-trade

• cash and valuables

• company shares

• equities

• land, and

• real estate

So long as the assets are in the debtor’s possession and ownership, a WSS can include a broad range of items, as was the case of a celebrity entrepreneur owing RM1.1 million to a contractor.

According to the news report, aside from predictable high-value items, among the items seized was a PlayStation and an arcade machine!

What cannot generally be seized

The law affords judgement debtors some level of protection, and the following properties are generally protected from seizure:

• property jointly owned by the judgment debtor with third parties

• property still under lease / mortgage

• tools of trade necessary for the judgement debtor’s livelihood

• clothing, bedding, and personal effects of minimal value

• property held in trust for third parties

• assets already subject to another court order

If only the debtors above had argued their PlayStation was needed for their livelihood 🥲

Procedure overview

The WSS process generally involves three main stages:

1. Ex-parte application for a Writ of Seizure and Sale

2. Seizure of property by the court bailiff, and

3. Public auction and proceeds distribution

From start to finish, expect the process to take three months or longer, depending on the type of property involved, court scheduling, bailiff availability and whether objections arise.

Stage 1: Ex-parte application for writ

The process begins with an ex parte application, meaning it is made without notifying the judgment debtor. Where the enforcement involves immovable property such as land or real estate, the application will also include a prohibitory order (PO).

This prevents the debtor from selling, transferring, or otherwise dealing with the property once they become aware of the enforcement action.

At this stage, we will:

• identify and verify the judgement debtor has suitable assets

• file a praecipe (fancy word for request) and supporting affidavit requesting the court issue a WSS and PO if there is land or real estate involved

• obtain a sealed Writ of Seizure and Sale from the court authorising the bailiff to act

Once the writ is issued, the bailiff proceeds to the debtor’s location to execute the seizure.

Stage 2: Seizure of property

The procedure for seizure varies slightly depending on the type of property.

Movable property

The seizure is carried out in the presence of the parties’ lawyers and under the supervision of the bailiff, who will prepare an inventory of seized assets and either leave them on the premises under the care of a custodian or remove them to a secure storage facility.

Where shares are involved, an order to seize shares is served on Suruhanjaya Syarikat Malaysia (SSM) and, in the case of publicly traded shares, on Bursa Malaysia as well.

Immovable property

For land or real estate, in addition to a similar seizure carried out by the bailiff, the prohibitory order is served on the relevant land office, preventing the judgment debtor from transferring, selling, or otherwise disposing off the property.

Stage 3: Sale of seized property

The specifics of sale of seized property also depends on the type of property.

Movable property

If the judgment debtor fails to make payment within the prescribed period, the court will order the seized movable assets to be sold by public auction.

Immovable property

The aforementioned PO is generally valid for six months from date of issuance, and within this period, an Order for Sale must be obtained from the court to proceed with auctioning the property.

The court will then issue a Proclamation of Sale (POS), an official legal document with necessary details for potential buyers and ensures transparency in the public auction.

Our firm’s role pre- and post-auction

Throughout the enforcement and sale stages, our firm will:

• request an extension of the PO if necessary

• coordinate with the bailiff to arrange auction details and public notices

• ensure fair valuation of the seized property before sale, and

• attend and monitor the auction proceedings to safeguard our client’s interests

If the property is insufficient to cover the full debt, we may pursue additional enforcement steps or file for further writs on other assets.

When to initiate a writ of seizure and sale

A WSS is most effective when:

• the judgement debtor owns valuable physical assets 

• those assets are clearly identifiable and not encumbered (meaning no large outstanding sums due to the bank or other chargees), and

• their cooperation is unlikely without visible enforcement pressure

Depending on the circumstances, we may recommend beginning with an asset search or judgment debtor summons (JDS) to confirm ownership before proceeding. 

When other enforcement methods might be better

If our research shows that the judgement debtor:

• holds few or no tangible assets

• has most of their wealth in bank accounts or receivables

• is already insolvent or facing multiple claims

• has transferred ownership of major properties to family members, or

• owns assets subject to bank charges where the redemption sum negates any net proceeds

Then alternative enforcement routes such as garnishee proceedings, bankruptcy, or winding-up may achieve a better outcome.

And of course, if the debtor is willing, we always encourage out-of-court settlements.

Our final thoughts

From experience, a writ of seizure and sale is like any other debt enforcement method: Very effective under the right circumstances but far from perfect.

Not only does seizure depend greatly on accurate asset identification and timing but is also potentially subject to competing interests from chargees (namely banks), especially when it comes to seizure and sale of real estate and vehicles.

For creditors considering legal enforcement, we invite you to contact our team for a complimentary debt recovery assessment where we can assess the most suitable strategy.

That’s it from us, and we wish you a smooth debt recovery 🙂

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If your reminders have been ignored or you simply don’t want the hassle of chasing debtors, Rule & Co is a debt recovery law firm that helps creditors recover debts via legal strategies that minimise upfront cost, maximise recovery, and safeguard your reputation.