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Temporary Measures For Reducing The Impact of Coronavirus Disease 2019 (COVID-19) Bill 2020 [“COVID-19 Bill”]

The widely anticipated COVID-19 Bill finally lands in Parliament during its recent sitting and was passed by Dewan Rakyat on 25.8.2020.

 

As its name suggests, the COVID-19 Bill contains legal measures to address the adverse impact of the ongoing pandemic on Malaysian individuals and businesses. The measures contained in the COVID-19 Bill are aimed at, amongst others, providing the rakyat with some temporary relief from their legal obligations as well as to protect the rights of parties who may be affected by the measures taken under the Prevention and Control of Infectious Diseases Act 1988 to combat the pandemic.

 

The COVID-19 Bill is broadly divided into the following segments:

(a)  protection / deferment of rights under contract;

(b)  extension / deferment of the limitation period to take action; and

(c)  modification to parts of various statutes.

 

Once passed, the COVID-19 Bill will be known as the Temporary Measures For Reducing The Impact of Coronavirus Disease 2019 (COVID-19) Act 2020 (“Covid Act”). The Covid Act is intended to modify the following statutes: –

 

  • Limitation Act 1953
  • Sabah Limitation Ordinance
  • Sarawak Limitation Ordinance
  • Public Authorities Protection Act 1948
  • Insolvency Act 1967
  • Hire-Purchase Act 1967
  • Consumer Protection Act 1999
  • Distress Act 1951
  • Housing Development (Control and Licensing) Act 1966
  • Industrial Relations Act 1967
  • Private Employment Agencies Act 1981
  • Land Transport Act 2010
  • Commercial Vehicles Licensing Board Act 1987
  • Courts of Judicature Act 1964
  • Subordinate Courts Act 1948
  • Subordinate Courts Rules Act 1955

 

The table below gives a quick overview of sections of the COVID-19 Bill that are noteworthy.

 

We will send updates as the COVID-19 Bill makes it way through both Houses of Parliament.

This article is intended for general information of the clients of our Firm. It should not be regarded as legal professional advice. If you need advice based on specific facts, please feel free to contact us.

 

Chan Kok Keong
Partner
[email protected]
Tan Gian Chung
Partner
[email protected] 
    COVID BILL
Lifespan Covid Act will remain in operation for 2 years from the date of its publication in the Gazette but it can be extended more than once (“Lifespan of Covid Act”).
  Covid Act shall prevail in event of contradiction with other written law.

 

    INABILITY TO PERFORM CONTRACTUAL OBLIGATIONS
Applicable Period Operative from 18.3.2020 until 31.12.2020.  Can be extended by Minister of Law via order published in the Gazette.  Extension shall not exceed the Lifespan of Covid Act.
Effect

 

 

 

Types of Contracts

If a party to a contract of a type that is listed in the Schedule to the Covid Act (“Contract”), is unable to perform any obligation under the Contract because of measures prescribed/ made/ taken under the Prevention and Control of Infectious Diseases Act 1988 to control or prevent the spread of COVID-19, the other contracting party is precluded from exercising his rights under the Contract during the Lifespan of Covid Act.

 

The Schedule lists the following types of affected contracts (which may be amended by the Minister):

  • construction work or consultancy contract, and any other contract related to the supply of construction material, equipment or workers in connection with a construction contract
  • performance bond or equivalent that is granted pursuant to a construction contract or supply contract
  • professional services contract
  • lease or tenancy of non-residential immovable property
  • event contract for the provision of any venue, accommodation, amenity, transport, entertainment, catering or other goods or services including for any business meeting, incentive travel, conference, exhibition, sales event, concert, show, wedding, party or other social gathering or sporting event, for the participants, attendees, guests, patrons or spectators of such gathering or event
  • contract by a tourism enterprise as defined under the Tourism Industry Act 1992 and a contract for the promotion of tourism in Malaysia
  • religious pilgrimage-related contract

 

Mediation Disputes between the parties to the Contract may be settled by way of mediation.  Mode and manner of the mediation process determined by the Minister.  At the successful conclusion of the mediation, a binding settlement agreement in writing shall be entered by the parties.
Saving for existing cases Does not apply to cases where the Contract was terminated, deposit/ performance bond was forfeited, damages received, legal proceedings/ arbitration/ mediation commenced, judgment/ award granted and execution carried out from 18.3.2020 to the date of publication of the Covid Act.

 

    THE LIMITATION ACT 1953 – MODIFICATIONS
Applicable Period Operative from 18.3.2020 until 31.12.2020.
Effect Any limitation period specified in section 6 of the Limitation Act 1953 which expires during the period from 18.3.2020 until 31.8.2020 shall be extended to 31.12.2020.

 

    THE SABAH LIMITATION ORDINANCE – MODIFICATIONS
Applicable Period Operative from 18.3.2020 until 31.12.2020.
Effect Any limitation period specified in paragraphs 1 to 4, subparagraph 5(a), paragraph 8, 10-33, 35-79, 83-88, 90-95, 98, 100, 106, 107, 111 and 113 in the Schedule to the Sabah Limitation Ordinance which expires during the period from 18.3.2020 – 31.8.2020, shall be extended to 31.12.2020.

 

    THE SARAWAK LIMITATION ORDINANCE – MODIFICATIONS
Applicable Period Operative from 18.3.2020 until 31.12.2020.
Effect Any limitation period specified in paragraphs 1-4, subparagraph 5(a), paragraph 8-29, 31-32, 34-78, 82-94, 96, 98, 100, 106, 107, 111 and 113 in the Schedule to the Sarawak Limitation Ordinance which expires during the period from 18.3.2020 – 31.8.2020 shall be extended to 31.12.2020.

 

    THE PUBLIC AUTHORITIES PROTECTION ACT 1948 – MODIFICATIONS
Applicable Period Operative from 18.3.2020 until 31.12.2020.
Effect The limitation period specified in paragraph 2(a) of the Public Authorities Protection Act 1948 which expires during the period from 18.3.2020 – 31.8.2020 shall be extended to 31.12.2020.

 

    THE INSOLVENCY ACT 1967 – MODIFICATIONS
Applicable Period Operative from the date of publication of Covid Act until 31.8.2021. May be extended by Minister of Law by order published in Gazette. Extension shall not exceed the Lifespan of Covid Act.
Effect During operation of this Part, creditor(s) shall not be entitled to present a bankruptcy petition against a debtor under section 2 or 5 of the Insolvency Act 1967 unless the debt owing by the debtor amounts to RM100,000 or more.
Saving for certain cases Any proceedings, actions or other matters required to be done under the Insolvency Act 1967 which are still pending immediately before the date of publication of Covid Act, shall be dealt with under the Insolvency Act 1967.

 

    THE HIRE PURCHASE ACT 1967 – MODIFICATIONS
Applicable Period Operative from 1.4.2020 until 31.12.2020.  May be extended by Minister of Law by order published in Gazette. Extension shall not exceed Lifespan of Covid Act.
Effect No owner can take possession of goods in a hire-purchase agreement under section 16 of the Hire-Purchase Act 1967 for any default of payment of instalment during the period from 1.4.2020 to 30.9.2020.
Saving for certain cases Any owner who has exercised his power of taking possession of goods comprised in a hire-purchase agreement under section 16 of the Hire-Purchase Act 1967 before the date of publication of Covid Act, shall be deemed to have validly exercised such power of taking possession of such goods.

 

    THE DISTRESS ACT 1951 – MODIFICATIONS
Applicable Period Operative from 18.3.2020 until 31.12.2020.
Effect For the purposes of the recovery of rent due or payable to the landlord by a tenant of any premises, a warrant of distress issued under subsection 5(1) of the Distress Act 1951, shall not include the distrain for the arrears of rent for the period from 18.3.2020 to 31.8.2020.
Saving for certain cases Any execution of the warrant of distress for the recovery of rent due or payable to the landlord by a tenant of any premises that has been issued before the date of publication of Covid Act shall be dealt with under the Distress Act 1951.

 

    THE HOUSING DEVELOPMENT (CONTROL AND LICENSING) ACT 1966 – MODIFICATIONS
Applicable Period Operative from 18.3.2020.
Scope In this Part, “agreement” means agreement for the contract of sale for the sale and purchase of housing accommodation in the forms prescribed in Schedules G, H, I and J of the Housing Development (Control and Licensing) Regulations 1989 [P.U. (A) 58/1989] entered into before 18.3.2020.
Effect on late payment charges for unpaid instalments

– Section 34

(1) Notwithstanding any agreement entered into between the purchaser and the developer, where due to the measures prescribed, made or taken under the Prevention and Control of Infectious Diseases Act 1988 to control or prevent the spread of COVID-19 the purchaser fails to pay any instalment for the period from 18.3.2020 to 31.8.2020, the developer shall not impose any late payment charges in respect of such unpaid instalment on the purchaser.

(2) The purchaser may apply to the Minister or an extension of the period referred to in subsection (1).

(3) Upon considering the application under subsection (2), the Minister may, if the Minister is satisfied that additional time is required by the purchaser, by written direction to the developer, extend the period in which the developer shall not impose any late payment charges on the purchaser in respect of such unpaid instalment up to 31.12.2020.

 

Effect on delivery of vacant possession and LAD

– Section 35

(1) Notwithstanding any agreement entered into between the purchaser and the developer, the period from 18.3.2020 to 31.8.2020 shall be excluded from the calculation of—

(a) the time for delivery of vacant possession of a housing accommodation; and

(b) the liquidated damages for the failure of the developer to deliver vacant possession of a housing accommodation.

(2) The developer may apply to the Minister for an extension of the period referred to in subsection (1).

(3) Upon considering the application under subsection (2), the Minister may, if the Minister is satisfied that additional time is required by the developer to deliver vacant possession, by written direction grant to the developer an extension period of up to 31.12.2020 to deliver vacant possession and such extension shall have the same effect as the period excluded in subsection (1).

(4) Notwithstanding any agreement entered into between the purchaser and the developer, if the purchaser is unable to enter into possession of occupation of a housing accommodation from the date of service of a notice to take vacant possession from the developer during the period from 18.3.2020 to 31.8.2020 or any extension period granted under subsection (3), the purchaser shall not be deemed to have taken such vacant possession.

 

Effect on defect liability period

– Section 36

(1) Notwithstanding any agreement entered into between the purchaser and the developer, the period from 18.3.2020 to 31.8.2020 shall be excluded from the calculation of—

(a) the defect liability period after the date the purchaser takes vacant possession of a housing accommodation; and

(b) the time for the developer to carry out works to repair and make good the defect, shrinkages and other faults in a housing accommodation.

(2) The purchaser may apply to the Minister for an extension of the period referred to in subsection (1).

(3) Upon considering the application under subsection (2), the Minister may, if the Minister is satisfied that additional time is required by the purchaser, by written direction, exclude the period up to 31.12.2020 from the calculation of—

(a) the defect liability period after the date the purchaser takes vacant possession of a housing accommodation; and

(b) the time for the developer to carry out works to repair and make good the defect, shrinkages and other faults in a housing accommodation.

 

Saving for certain cases (1) The modifications in sections 34, 35 and 36 shall not affect any legal proceedings commenced, or any judgment or award obtained, to recover late payment charges payable by the purchaser or liquidated damages payable by the developer or any other sum during the period from 18.3.2020 until the date of publication of Covid Act.

(2) Notwithstanding sections 34 and 35, any late payment charges that have been paid by the purchaser or liquidated damages that have been paid by the developer before the date of publication of Covid Act, shall be deemed to have been validly paid under the Housing Development (Control and Licensing) Act 1966 and its regulations, and such payment shall not be refunded to the payer.

 

Extension of limitation period to file claim at Tribunal Notwithstanding subsection 16N(2) of the Housing Development (Control and Licensing) Act 1966, if the limitation period for the homebuyer to file a claim has expired during the period from 18.3.2020 to 9.6.2020, the homebuyer is entitled to file the claim from 4.5.2020 to 31.12.2020 and the Tribunal for Homebuyer Claims shall have jurisdiction to hear such a claim.

 

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