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Split ownership
02/08/2005 The Star Articles of Law with Bhag Singh
We often read in the news about wives being harassed by lenders of money or
their representatives, especially if it was not the wives who borrowed the
money or even approved of it. The wives’ objection to harassment is another
matter. Such harassment is wrong because it often involves taking loans on
terms and conditions that are not in accordance with the law and the attempt
at recovery by extra judicial means.
What about situations in which the transaction is properly carried out and
steps taken to recover the debt by legal means are in accordance with the
procedures provided for?
An example is a situation in which a husband becomes indebted and is unable
to pay. The creditor then takes steps to obtain judgment. After that the
creditor uses the available procedures, one of which is to apply for a Writ
of Seizure and Sale, and attach everything that is in the debtor’s house.
Can the wife object?
A Writ of Seizure and Sale directs the bailiff of the Court to seize and
sell so much of the property which belongs to a debtor, in this case the
husband, to satisfy the judgment obtained. If the premises are occupied by
the debtor alone, it may in most cases be assumed that whatever is on the
premises belongs to the debtor.
However where the debtor stays on the premises with his wife, can the wife
not claim that some, if not all, the items in the house belong to her – and
therefore should not be seized and sold? This is an important issue,
especially today when wives also work and, in certain situations, even
contribute more to the household.
When this subject is looked at in the context of today’s way of life, the
answer may not be the same as would have been decades ago. Shankar J in
Overseas Investment Pte Ltd v Anthony William O’Brien & Anor posed the
question in the following words:
“What right has a wife against her husband’s creditors in respect of
household goods in the home in which she resides? The answer to this
question is of paramount importance to every married woman in Malaysia.”
The case was about the Plaintiff, Overseas Investment Pte Ltd having
obtained judgment against the defendant, Anthony William O Brien, and
thereafter having seized the property in the house which comprised mainly
furniture, fittings and kitchen equipment which together could be described
as household goods. A date of auction was fixed.
To this the wife objected, claiming that she had been married to the
defendant for over 18 years, that the goods had been bought jointly and
severally by her and her husband, that she was unable to produce receipts
immediately but was willing to testify to that effect, and finally contended
that the goods belonged to her on the principle of harta sepencarian.
The wife exhibited receipts that related to the items that were attached and
seized by the bailiff as well as gave oral evidence on the hearing of the
application to show that the goods belonged to her and that she had an
interest in them.
When a situation like this arises, who has the responsibility of satisfying
the Court as to whether the property seized is correctly so seized?
In an age when woman had no property rights and all property was acquired
by, and in any event belonged to, the husband, it may very well have been
right to assume that all the property in the house could be seized to
satisfy the husband’s debts.
However today it would not be right for a creditor to make such an
assumption without further examination of the facts.
In the case before the Court the wife also gave evidence to the effect that
she came from a wealthy family, had her own business from which she derived
income, and that her husband was in fact employed in the business; there was
evidence before the Court to show that the property did not solely or
exclusively belong to the debtor husband.
A wife may, in such circumstances, raise a valid objection with the result
that the seizure and sale could be declared wrongful and, in consequence,
expose the creditor in damages. What, therefore, are the principles on which
the creditor should proceed? Guidance can be obtained from a passage from
the judgment earlier referred to where Shankar J said:
“In most such cases, the basis of the creditor’s right to attach arises from
the fact that the circumstances are such that it is reasonable to presume
that the defendant is the reputed owner of the goods. Possession is said to
be nine-tenths of the law! So if a house is in the exclusive occupation of
the defendant, his execution creditor may have some justification to attach.
But where a number of persons are in simultaneous occupation of a house, as
for example, one occupied by several wage-earning members it would be
imprudent to assume that everything in the house belongs to the registered
owner or even to the nominal head of the family.”
Thus the right to attach goods on premises where a debtor stays and to
proceed to auction them is based on certain presumptions. If the
presumptions are not met, the creditor may tread carefully lest it find
itself on the wrong side of the law.
Where the property clearly belongs to the wife – in whole or in part – then
the creditor cannot attach the property to satisfy the debt of the husband.
However where there is no clear evidence that the property belongs to either
spouse, it would appear that the Court – in the absence of clear evidence to
the contrary – may take the view that the property belongs to them both and
therefore could not in the face of objection by one spouse be seized for the
debts of the other.
It would be advisable for housewives to keep a record of what they buy, and
when, so that they may confront such a scenario more effectively, however
unlikely it may be. |
