A comparison between Malaysia and Singapore’s Covid-19 Relief legislations

Given the serious delay between the implementation of the Movement Control Order (“MCO”) on the 18th of March, 2020 and the tabling of the “Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Bill 2020” (“Malaysia’s Covid-19 Relief Bill”) which was tabled in parliament for the 1st Reading on the 12th of August, 2020,, one would have thought that the Malaysian Government would have at least used the time to its benefit by crafting a detailed, thoughtful bill. Unfortunately, this is not the case, especially when compared with Singapore’s Covid-19 (Temporary Measures) Act 2020 (“Singapore’s Covid-19 Relief Act”). It is important to note that Singapore’s came into effect almost concurrently when their version of MCO took place in early April 2020, and that their version of the law was put together in a matter of days.

We will focus on the following two areas – contracts and rental relief.

Much has been said about how Malaysia has decided to handle contracts through its Covid-19 Relief Bill. In short, one’s inability to perform his contractual obligation would not allow another party to exercise his/her rights under the contract. However, if one has acted on their right by for example cancelling the contract or going to court between 14 March 2020 to the date the law is gazetted, he escapes what Malaysia’s Covid-19 Relief Bill tries to do.

In contrast, Singapore’s Covid-19 Relief Act is much more thoughtful. Its structure is as such – Singapore first spells out the different principles to be applied in different types of contracts – therefore recognising that all contracts operate differently. If one seeks to invoke the relief under the Act, he or she sends a “notification for relief” to the other side.

If anyone is unsure as to whether the relief in the Act applies to his/her situation, he/she can apply to an “assessor”, a quasi-judicial role who is given the power to decide on whether and how the law is to be applied. When deciding, an assessor can consider the ability and financial capacity of the party to perform the obligation and must seek to achieve a just and equitable outcome. In doing so, the assessor can order refunds, for goods to be returned, for one to pay reasonable costs, apply the deposit to amounts owing under the contract and so on. When new facts arise, the assessor can be asked to review a decision previously made. When appearing before an assessor, the parties cannot be represented by lawyers. At the end of the day, the assessor’s decision is enforceable as if it is a judge’s decision.

Having an assessor essentially avoids parties having to exhaust the lengthy court process. It is a simplified procedure, which makes it accessible to the public to obtain a decisive outcome, thereby promoting quicker economic recovery.

Under Singapore’s Covid-19 Relief Act, one’s rights under a contract cannot be invoked until the earliest of the following three takes place:- one, the expiry of the period that the law is applicable; the withdrawal of the “notification for relief” or until the assessor makes a decision.

For example, Singapore’s Covid-19 Relief Act states that if a party to a tourism contract has forfeited any deposit, he/she must restore the deposit as soon as he/she received the notification for relief. However, if I am uncertain, for example, as to whether the type of contract I have entered into is a tourism contract, I can make an application to the assessor, who would assess my case and decide accordingly.

Such is the thought that Singapore’s government provided when the law was first introduced.

Singapore is also an example in demonstrating how a Covid-19 Relief Act should look like after some time has elapsed after a lockdown is implemented. To illustrate this, we turn to how Singapore handled rental relief, the provisions of which were introduced in June, about 2 months after Singapore’s version of the MCO was first implemented.

One must first note that Singapore had, at this point, decided to implement a moratorium on rent recovery. In recognising that some quarters rely on rent as income, the Singapore Government balanced out the decision to implement a moratorium by introducing a cash grant. The way it works is this – when the owner of a property receives a notice of cash grant issued by Singapore’s Inland Revenue Authority, the rent and interest or other charge payable during the operative period is waived. If a tenant has paid up his/her rent, then the paid-up amount becomes credit which is deducted accordingly when subsequent payments become due. If the tenant has paid up his/her rent for the entire duration of the lease, the owner must issue the necessary refunds. Again, a panel of rental relief assessors is established under the Act to decide on uncertainties that may arise.

(Appendix 1 below shows a comparison between Malaysia’s COVID Relief Bill and Singapore’s initial COVID Relief Bill in April 2020 and the amendments which were introduced in June 2020)

What this demonstrates is that, when a government delays the implementation of legislation that is supposed to provide economic relief, it has to do more work either by pulling more weight or by playing a greater role to ensure that the Act remains meaningful. In respect of a pandemic, we see that the universal objective of all governments is to ensure that citizens and businesses are not unduly burdened or disadvantaged as a result of being unable to perform obligations due to movement restriction measures necessary to contain Covid-19.

Malaysia’s Covid-19 Relief Act is sorely inferior to Singapore’s Covid-19 Relief Act. Our government has failed to address the Act meaningfully with regards to the permutations of different scenarios and, as is clear from the language of the Act, has decided instead to paint all scenarios with broad brush. Not only that, it has also gone further by taking the easy way out by providing exclusion clauses, thereby removing the very objective that the Act should seek to achieve.

Appendix 1: Comparison of the Malaysia and Singapore COVID Relief Bills