Effective Debt Recovery during COVID-19/COVID-19期间的有效债务回收

Effective Debt Recovery during COVID-19

**可以在下方查看本文章的华文版本

In an effort to reduce the burden on companies which have been impacted by the COVID-19 pandemic, the Minister of Domestic Trade and Consumer Affairs has passed the Companies (Exemption) Order (No.2) 2020 as temporary measures for financially distressed companies. These temporary measures, as discussed in our previous article, includes the extension of a period of 6 months for companies to respond to a statutory demand before winding up proceedings can be initiated against them.

Although the extension of the statutory period gives companies a temporary protection from being wound up, it is pertinent to note that other actions to recover debts due and owing are still available to creditors. Unless companies opt for a corporate rescue mechanism provided under the Companies Act 2016, companies would nevertheless remain exposed to legal proceedings by creditors in recovering any alleged debt. In the event a creditor successfully obtains a judgment against the company, the creditor may still execute the judgment through one of the following methods:-

  1. Judgment Debtor Summons

A judgment debtor summons can be filed by a creditor against the company to compel an officer of the company to attend Court to disclose the company’s assets and financial means. Essentially, a judgment debtor summons is an examination of the debtor in which the Court may then order the company to pay the judgment either in one-lump sum or in instalments. In the event the company fails to comply with the payments as ordered by the Court, committal proceedings may be taken where the Court may order the officer of the company to be fined or jailed.

  1. Writ of Seizure and Sale

A writ of seizure and sale is an order issued by the Court that allows the creditor to take ownership of a property from the debtor. This enforcement application enables the Court sheriff/bailiff to seize and sell off the company’s properties (both immovable and moveable) in order to satisfy the judgment sum due. The proceeds of sale will then be utilised to satisfy the judgment debt.

It may be noted however, that the creditor may face difficulties in ascertaining whether the company is the legal owner of the seized properties. It is common for companies to rent machineries and equipment from a third party or where the properties are on hire purchase arrangements. Creditors should therefore be wary that under this mode of execution, there could be a chance that the seized properties may be subjected to an interpleader proceeding by a third party who is claiming ownership over the seized properties.

  1. Garnishee Proceedings

A creditor may initiate garnishee proceedings to recover from a garnishee (usually a bank) the sum owed to him by the company. The Court may then order the bank to pay directly to the creditor the amount available in the company’s bank account to satisfy the judgment debt owed to the creditor. Essentially, this method of enforcement changes the garnishee’s obligation to pay money to the debtor into an obligation to pay the creditor.

To garnish the debt, the creditor must first apply to Court for a garnishee order. This leads to a show cause proceeding for the garnishee to give any reasons to object to the application. If the garnishee does not attend or dispute the debt due, the Court may then proceed to order the garnishee to remit such money to the creditor to satisfy the judgment debt.

Creditors should be mindful, however, that they should only proceed with this mode of execution if they have knowledge of the company’s bank account details. They must also be certain that the bank account has sufficient monies available to satisfy the judgment debt.

  1. Charging Orders

A creditor may apply to Court for a charging order to impose a charge on securities such as shares, bonds or dividends owned by the company. Similar to garnishee proceedings, the order shall in the first instance be an order to show cause for further consideration of the matter. During the second stage, the Court will make the order absolute unless there are sufficient reasons to the contrary. The creditor may then enforce the charge by selling the securities in order to satisfy the judgment debt.

It may be noted that the charging order by itself does not realise the monies to satisfy the judgment debt. The charged securities would have to be sold, in which the proceeds of the sale would then be utilised to satisfy the judgment debt owed to the creditor.

Enforcement of judgment against individual debtors

The methods of execution discussed above would also be applicable towards judgment debtors who are individuals. Insofar as individual debtors are concerned, there have not been any temporary measure enforced by the Malaysian government during the COVID-19 pandemic to protect individuals from bankruptcy proceedings. The current debt threshold of RM50,000 for the filing of a bankruptcy petition remain in place and financially distressed individuals would still be exposed to bankruptcy proceedings.

Individual debtors would also include directors and/or shareholders who have acted as personal guarantors in respect of loans taken by their company. In a situation where a bankruptcy proceeding is initiated against a guarantor, the Court must be satisfied that the creditor has exhausted all modes of execution and enforcement to recover debts owed to him by the principal debtor i.e. the company: Section 5(4) of the Insolvency Act 1967. This would include all modes of enforcement discussed above as well as bankruptcy or winding up proceedings.

Conclusion

Although companies currently have some form of temporary protection against winding up proceedings with the passing of the Companies (Exemption) Order (No.2) 2020, the above methods of enforcement remain effective options for creditors to execute a judgment against a debtor.

Lastly, creditors should be mindful that they have a period of 12 years from the date of judgment to enforce the judgment: Section 6(3) of the Limitation Act 1953. Furthermore, any writ of execution to enforce a judgement may not be issued without the leave of Court, in the event 6 years has lapsed from the date of judgment.

By: Jaclyn Chang

DISCLAIMER: This article is for general information only and should not be relied upon as legal advice and/or legal opinion. Messrs Yeoh & Joanne accepts no liability for any loss which may arise from reliance on the information contained in this article.

 

COVID-19期间的有效债务回收

为了减轻受COVID-19流行病影响的公司的负担,国内贸易和消费者事务部部长通过了《2020年公司(豁免)令》(第2号),作为针对财务困难公司的临时措施。正如我们在上一篇文章中所讨论的,这些临时措施包括被清盘的公司将获得6个月的期限以回应该索偿债务通知书,然后才能被提起清盘诉讼。

虽然延长回应索偿债务通知书的期限为公司提供了临时保护,使其免于被清盘,但值得注意的是,债权人仍可采取其他行动索取债务。除非公司选择《2016年公司法》规定的企业救援机制,否则该公司在被索取任何被指控的债务时仍将面临债权人的法律诉讼。如果债权人成功获得针对公司的判决,债权人仍可通过以下方式之一执行判决:-

1.判定债务人传票

债权人可以向公司发出判定债务人传票,迫使公司的一名职员出庭,披露公司的资产和财务状况。实质上,判定债务人传票是对债务人的一种审查,在这种审查中,法院可以命令公司一次性或分期支付判决款项。如果公司未能按照法院的命令支付款项,则可提起交付審判程序,法院可下令对公司高管处以罚款或监禁。

2.扣押和出售令状

扣押和出售令是法院发布的命令,允许债权人从债务人处取得财产所有权。这一强制执行申请使法院治安官/法警能够扣押和出售公司的财产(不动产和动产),以支付到期的判决金额。出售所得将用于清偿判决债务。

然而,可以注意到,债权人在确定公司是否是被扣押财产的合法所有人时可能会遇到困难。对于公司来说,从第三方租赁机器和设备,或者在物业以分期付款方式购买的情况下,这是很常见的。因此,债权人应当警惕,在这种执行方式下,被扣押的财产可能会受到声称对被扣押财产拥有所有权的第三方的相互诉讼。

3.第三债务人法律程序

债权人可以启动第三债务人法律程序,从第三债务人(通常是银行)处收回公司欠他的款项。然后法院可以命令银行直接从该公司银行账户中可用金额支付债权人,以清偿欠债权人的判定债务。实质上,这种强制执行方法将第三债务人向债务人付款的义务变成了向债权人付款的义务。

为了偿付债务,债权人必须先向法院申请第三债务人法律程序令。这允许第三债务人提出反对申请的任何理由的诉讼。如果第三债务人不出席或对该到期债务提出异议,法院可接着命令第三债务人将此类款项汇给债权人,以清偿判定债务。

然而,债权人应该注意,他们只有在知道该公司的银行账户细节的情况下,才应该采用这种执行方式。他们还必须确定银行账户有足够的可用资金来偿还判定债务。

4.押记令

债权人可以向法院申请押记令,对公司拥有的股票、债券或股息等证券进行抵押。与第三债务人程序类似,该命令首先应是一项陈述进一步考虑该事项的理由的命令。在第二阶段,除非有充分的反对理由,法院将使法院命令成为最终法院命令。然后债权人可以通过出售证券来强制执行抵押,以清偿判定债务。

值得注意的是,押记令本身并不能变现用以清偿判定债务的款项。抵押证券或担保品或保证物将被出售,然而出售所得将用于清偿欠债权人的判定债务。

执行对于个人债务人的债务判决

上面讨论的执行方法也适用于个人判定债务人。就个人债务人而言,在COVID-19流行期间,马来西亚政府没有采取任何临时措施来保护个人免于破产程序。目前提交破产申请的5万令吉债务门槛仍然存在,财务困难的个人仍将面临破产程序。

个人债务人也包括公司的董事和/或股东,他们为其公司贷款作为个人担保人。在针对担保人启动破产程序的情况下,法院必须确信债权人已经用尽所有执行和强制执行方式来索取主要债务人即公司欠他的债务:《1967年破产法》第5(4)条。这将包括上文讨论的所有强制执行模式以及公司清盘程序。

结论

尽管随着《2020年公司(豁免)令》(第2号)的通过,公司目前拥有某种形式的临时保护,以防止清盘程序,但上述执行方法仍然是债权人执行债务判决的有效选择。

最后,债权人应该记住,他们有12年的时间从判决之日起执行判决: 《1953年诉讼时效法令》第6(3)节。此外,如果自判决之日起已过6年,未经法院许可,任何执行判决的执行令都不能被颁发。

文章来自于:张美琪律师 (Jaclyn Chang Mei Qi)

文章翻译:李淑婷律师 (Lee Su Ting)

免责声明:本文仅供参考,不应作为法律建议和/或法律意见。Yeoh & Joanne律师事务所不会承担因依赖本文所含信息而产生的任何损失的责任。

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