[PPT] - Distress Act 1951 Analysis on Procedures, Limitations and Issues PowerPoint Presentation

SLIDE 1

www.zicolaw.com | 1

ASEAN INSIDERS by origin and passion

Distress Act 1951

Analysis on Procedures, Limitations and Issues

Ahmad Zulkharnain Musa

8 August 2017

DRAFT

SLIDE 2

www.zicolaw.com | 2

Outline

SLIDE 3

www.zicolaw.com | 3

Outline

Introduction Overview Procedures & Limitations Examining the Reported Data, Statistics and Questionnaires Identification of Issues and Recommendation Conclusion DRAFT

SLIDE 4

www.zicolaw.com | 4

Introduction

SLIDE 5

www.zicolaw.com | 5

Introduction

One of the remedies available to a landlord against a tenant who falls into

arrears in payment of rent is to levy distress for rent – in other words, sending in the court bailiff to seize and sell the tenant's goods in satisfaction

f the arrears.
The landlord’s right to distress is governed by the Distress Act 1951 (“the

Act).

Section 5(1) of the Act permits a landlord to apply to a Judge or a Registrar

for the issue of a warrant of distress to recover rent due and payable to the landlord by a tenant of any premises for a period not exceeding 12 completed months of the tenancy preceding the date of the application.

DRAFT

SLIDE 6

www.zicolaw.com | 6

Overview

SLIDE 7

www.zicolaw.com | 7

Overview

The purpose of this Report is to analyse and examine the efficiency in a commencement of a distress action under the Act, with regards to the period to complete the process, as well as the conduct of bailiffs. The structure of this Report is as follows:

Procedures and limitations of the Distress Act 1951;
Examining the reported data, statistics & questionnaires; and
Identification of issues.

DRAFT

SLIDE 8

www.zicolaw.com | 8

Methodology

The methodologies undertaken for this study are as follows:

Analysis of the reported statistics and procedures of distress cases in

Malaysia;

Analysis of the Manual Work Procedures (revised) 2011 PKPMP for Malaysia;
Questionnaires and conducting interviews to collect quantitative and

qualitative data from court’s representatives, such as bailiffs, with respect to the study on Distress Act 1951; and

Our observations of the enforcement of the Distress Act 1951 in Malaysia as

practitioners based in Kuala Lumpur.

DRAFT

SLIDE 9

www.zicolaw.com | 9

Procedures and Limitations

SLIDE 10

www.zicolaw.com | 10

Procedure

The brief overview process for a warrant of distress is organised in the chart illustrated below:

DRAFT

SLIDE 11

www.zicolaw.com | 11

Limitations under the Act

Exempted Property (Section 9 of the Act) Property on premise not belonging to tenant (Section 10 of the Act) Application to the Court by the tenant (Section 16 of the Act) Property seized by way

f execution

(Section 20 of the Act)

DRAFT

SLIDE 12

www.zicolaw.com | 12

Examining the Reported Data, Statistics and Questionnaires

SLIDE 13

www.zicolaw.com | 13

Interview with the Court Representatives

On 28 April 2017, interviews were conducted with court’s representatives with respect to the study on the Act. The following are the issues highlighted with respect to the Act: Statistical Data on Cases

Statistical data on distress cases conducted in the Magistrates Court shows

that from 2014 to 2016, out of a total of 258 registered cases, 13 cases were rejected, whilst 245 cases were processed. A total of 72 distress cases were successful, whilst the remaining 136 cases withdrawn and 50 cases being miscellaneous cases (file transfer and status pending cases).

However, case statistics in the Sessions Court seemed to present a lower

number of 48 successful cases. In comparison with the Magistrates, fewer distress cases are heard in the Sessions Court with a total of 133 registered cases.

Note that the period of time required will lengthen depending on the

complexity of the case or if the defendant/ third party files a notice of application, etc.

DRAFT

SLIDE 14

www.zicolaw.com | 14

Interview with the Court Representatives

Costs

Pertaining to costs, expenses in relation to the procedures on distress are to

be borne by the landlord.

The plaintiff is required to place a deposit of RM1,000.00 (for Magistrates

Court) and RM2,000.00 (for Sessions Court) to the Court for the execution

process. Other than general administrative fees, the Court imposes the

following commission rates on the sale of the auctioned items:

5.0% commission from the first RM1,000.00;
2.5% commission from the remaining sale; and
2.0% commission from the amount of seizures if the auction is not held. (i.e.

plaintiff withdraws the case before the date of auction)

Others: Payment of guard services, praecipe and bailiff’s mileage will be deducted

from the deposit.

DRAFT

SLIDE 15

www.zicolaw.com | 15

Interview with the Court Representatives

Authority of the Bailiff Sale and auction of the seized properties is conducted in the premise of the tenant by the bailiff. Should the valuation exceed the monetary value of RM10,000.00, the plaintiff will be required to appoint a registered auctioneer to conduct the auction of the seized property.

DRAFT

SLIDE 16

www.zicolaw.com | 16

Issues and Recommendations

SLIDE 17

www.zicolaw.com | 17

Issues and Recommendations

Valuation

It is recommended for there to be a guideline in relation to preparation of

valuation for the inventory of item.

A guideline would be able to streamline and consolidate the general market value
f item.
To this end, a uniformed valuation would provide certainty for both the tenant

and bailiffs in charged.

Documentation

It is also recommended for the documentation to display authority or “Kad Kuasa”

to be improved.

At this juncture, there were cases where the bailiffs were denied entry into the

premises as the tenants requested for further documentation other than the Kad Kuasa.

As such, providing the bailiffs with an enhanced and proper Kad Kuasa would

enable them to carry on the valuation process more effectively. DRAFT

SLIDE 18

www.zicolaw.com | 18

Issues and Recommendations

Insurance Policy

It is also recommended for the bailiffs to be insured with a comprehensive

insurance policy.

This will provide comfort and security as there were instances where the tenants

may act hostile towards the bailiffs in-charged in which the same would impede the bailiffs from carrying out the process of valuation.

In this respect, the bailiffs should be provided with safety precaution in performing

their duties as officers of the Court.

Uniform

A more official and proper uniform displaying their authority with respect to the

distress action would better enable the tenants to cooperate. DRAFT

SLIDE 19

www.zicolaw.com | 19

Conclusion

SLIDE 20

www.zicolaw.com | 20

Conclusion

From much of the data and analysis, we gathered that there are several small

issues under the Act which could be better dealt with, as gathered from bailiffs and landlords.

Being the problems faced by bailiffs, along with the suggestions proposed, as

well as possibly expediting the procedural process for a distress action for landlords.

We have recommended the ways in which a distress action can be enforced

more efficiently. Be that as it may, these recommendations may require further deliberations to ensure conformity with the Act.

DRAFT

SLIDE 21

www.zicolaw.com | 21

Questions and Answers

SLIDE 22

www.zicolaw.com | 22

Thank you ASEAN INSIDERS, by origin and passion