26th October 2020 By Chloe Lim & Carmen Leong
On 23.10.2020, the Government has published the new Covid-19 Act to address the temporary measures to reduce the impact of the Covid-19 pandemic. This Act makes amendments to 16 legislations of Malaysia. This Act shall come into operation on 23.10.2020 until 22.10.2022 in general except whenever it is otherwise stated in the Act as follows:
Part I – 23.10.2020 until 22.10.2022
Part II, III, IV, V, VI, IX, X – 18.3.2020 until 31.12.2020
Part VII – 23.10.2020 until 31.12.2021
Part VIII – 1.4.2020 until 31.12.2020
Part XI, XII, XIII, XIX – 18.3.2020
Part XIV, XV – 1.8.2020 until 31.12.2021
Part XVI, XVII, XVIII – 18.3.2020 until 22.10.2022
A. Covid-19 Act + Contracts Law + Limitation Period
The Covid-19 Act suspends the obligations of the parties under the contracts under the categories of construction, performance bond, professional services, lease, tenancy, events, tourism and religious pilgrimage-related contracts from 18.3.2020 until 31.12.2020.
The Covid-19 Act encourages the parties to resolve their contractual disputes through mediation.
These provisions do not have retrospective effect on acts or legal proceedings validly carried out from 18.3.2020 till 23.10.2020.
The limitation period to sue under Section 6 of the Limitation Act 1953 which expires during the period from 18.3.2020 to 31.8.2020 shall be extended to 31.12.2020. Such period of extension also applies to East Malaysia (Sabah and Sarawak) and Section 2(a) of the Public Authorities Protection Act 2020.
B. Covid-19 Act + Insolvency Law + Winding-Up Law
The Covid-19 Act has also increased the amount of indebtedness by an individual from RM50,000 to RM100,000. Starting from 23.10.2020 until 31.8.21, a bankruptcy petition can only be filed by any creditor provided that the outstanding debt due and payable exceeds RM100,000 and above. This does not have retrospective effect on any pending acts or legal proceedings carried out before 23.10.2020.
On the other hand, in early April 2020, the Companies Commission of Malaysia has announced that the amount of indebtedness by a company has been increased from RM10,000 to RM50,000. The debtor company can respond to statutory notices of demand within 6 months time. A winding-up petition can only be presented by any creditor if the outstanding debt due and payable by the company exceeds RM50,000.00 and the 6 months period has lapsed. Such new law applies till 31.12.2020 tentatively.
Covid-19 Act + Tenancy Law
The Covid-19 Act suspends the obligations of the parties under the lease and tenancy agreements from 18.3.2020 until 31.12.2020. However, it does not have retrospective effect on acts or legal proceedings validly carried out from 18.3.2020 till 23.10.2020.
In the distress proceedings, the landlord cannot distrain for the arrears of rent for the period from 18.3.2020 to 31.8.2020. This does not have retrospective effect on any execution of the distress proceedings that have been carried out before 23.10.2020.
Covid-19 Act + Housing Development (Control and Licensing) Act 1966
The Covid-19 Act bars the developer from charging late payment interest for failure to repay any instalments of the purchase price from 18.3.2020 to 31.8.2020. The purchasers can apply to the Minister for an extension of time from the Minister to pay the outstanding installments. If the application is successful, the developer cannot impose late payment charges up to 31.12.2020.
In calculating the time to deliver vacant possession of the property, liquidated damages, the and defect liability period, the period from 18.3.2020 to 31.8.2020 shall not be taken into account. The purchaser can apply for an extension of time of such period which shall not exceed 31.12.2020. The purchasers shall not be deemed to have taken vacant possession from 18.3.2020 to 31.8.2020.
The provisions above do not have retrospective effect on any legal proceedings filed or judgments awarded from 18.3.2020 until 23.10.2020. Any late payment charges or liquidated damages paid shall not be refunded to the payer.
A new Section 16N(2) is inserted to the Housing Development (Control and Licensing) Act 1966 to allow the homebuyers to file the claim from 4.5.2020 to 31.12.2020 and the Tribunal for Homebuyer Claims shall have jurisdiction to hear such claim, if the limitation period to sue has expired during the period from 18.3.2020 to 9.6.2020.
Covid-19 Act + Employment Law
The period from 18.3.2020 to 9.6.2020 shall be excluded from the calculation of the period under the Industrial Relations Act 1967 for:
- according recognition or notifying the trade union of workmen concerned in writing the grounds for not according recognition under subsection 9(3);
- the making of a report to the Director General of the Industrial Relations under subsection 9(4); and
- the filling of representation under subsection 20(1A).
Covid-19 Act + Powers of the Courts in Malaysia
The Covid-19 Act inserts new SectionS 16A and 17(3A) to the Courts of Judicature Act 1964 , Section 3A to the Subordinate Courts Act 1948 and Section 3(7) of the Subordinate Courts Rules 1955.
These new provisions give an additional power to the Chief Justice to issue directions relating to the business of the court as may be necessary if the Chief Justice is of the opinion that the circumstances warrant and it is necessary in the interest of the dispensation of justice, public safety, public security, public health or proprietary or for other sufficient reason to do so, modify any provisions of the rules of court as is necessary for doing complete justice in any cause of matter pending before the courts and to ensure that the administration of justice is carried out.
The Chief Justice is also empowered to make alternative arrangements for any meeting if the meeting is impossible to be convened, held or conducted. The words “but so that there shall be at least one meeting in each year” under Section 17A of the Courts of Judicature Act 1964 be deleted.
Covid-19 Act + Performance of Statutory Duty/Obligation + Statutory Meeting
Starting from 18.3.2020, the Minister can grant extension of time, by way of order to be gazetted, to perform statutory duty if the Minister is of the opinion that any statutory duty or obligation is impossible to be performed under the law from 18.3.2020 until 9.6.2020. Any order made by the Minister here operates retrospectively starting from 18.3.2020.
No authority shall be liable for any damages due to failure to perform any statutory duty or obligation stipulated herein.
The Minister can make orders for alternative arrangements of meeting if a meeting is not possible to be convened, held or conducted from 18.3.2020 until 9.6.2020. This provision does not have retrospective effect on the meetings which have been carried out.
Covid-19 Act + Hire Purchase Law
Starting from 1.4.2020 until 31.12.2020, no owner shall exercise any power of taking possession of goods contained in a hire purchase agreement for any default of payment of instalments during the period from 1.4.2020 to 30.9.2020.
This does not have retrospective effect on any acts done before 23.10.2020.
Covid-19 Act + Consumer Protection Law
The Covid-19 Act inserted new Sections 24v and 99(2) into the Consumer Protection Act 1999.
Under the new Section 24v, the credit facility provider shall issue a notice to the purchaser for settlement if the consumer has failed to pay 2 consecutive months of instalments.
Within 21 days from the date of receipt of the notice, the purchaser can choose to:
(a) pay the overdue installment;
(b) settle the lump sum earlier; OR
(c) terminate the contract and surrender the purchased goods.
The credit facility provider shall give the statutory rebate if the purchaser makes settle the lump sum earlier.
The credit facility provider shall not sue the purchaser for the whole sum under the credit sale agreement.
However, this provision does not have retrospective effect on acts or legal proceedings happened from 18.3.2020 till 23.10.2020. It also does not apply to credit sale agreements entered before 18.3.2020 or if there is no overdue before 18.3.2020.
Under Section 99(2), any limitation period specified therein which expires between 18.3.2020 till 15.6.2020 shall be extended to 31.12.2020.
Covid-19 Act + Public Transport + Tourism
Sections 21 and 56 of the Land Public Transport 2010 are amended. The government now allows the licensed operators of a public service vehicle, tourism vehicle or goods vehicle to apply to the Director General of Land Public Transport to change the use of the vehicle from other class for a maximum period of 12 months.
Such application must be supported by (a) information on any changes in technical specification of the vehicle, information of the temporary use of the vehicle and other information determined by the Director General; and (b) additional insurance coverage for the vehicle.
Covid-19 Act + Commercial Vehicles Licensing Board
Sections 23 and 24 of the Commercial Vehicles Licensing Board Act 1987 are amended. On an application by any holder of a public service vehicle licence of a particular class, the Board may authorise for a period not exceeding twelve months the holder of a public service vehicle licence of a particular class to use the vehicle for the purpose of a public service vehicle or goods vehicle from other class.
On an application by any holder of a carrier’s license ‘C’ vehicle or ‘A’ vehicle, the Board may, authorise for a period not exceeding twelve months the holder of a carrier’s license ‘C’ vehicle or ‘A’ vehicle to use the vehicle for the purpose of a public service vehicle or goods vehicle from other class.
Covid-19 Act + Private Employment Agencies
The period from 18.3.2020 to 9.6.2020 stated in Section 11(1) of the Private Employment Agencies Act 1981 shall be excluded from the calculation of the period for an application to renew a license.
The contents of this article do not constitute legal or other professional advice or an opinion of any kind. It is provided for general information purposes only. Please contact us for further enquiry.