Debated in Parliament on 7 Apr 2020.
Mr Patrick Tay.
Mr Speaker, Sir, I rise in support of this Bill. The COVID-19 pandemic has caused unprecedented disruption to all aspects of our lives and debilitated the economy. Many businesses are struggling to cope with the on-going impact to their sales and operations, and many workers are struggling with income loss or even job loss. I would like to commend the Government and the team of luminaries for its swift response in drafting the COVID-19 (Temporary Measures) Bill, a multi-Ministry effort that offers relief for businesses and provides alternatives for companies, trade unions, societies and other bodies relating to the conduct of meetings.
I wish to speak on two specific aspects of the Bill. First, relief for parties who are unable to perform their contractual obligations; and two, alternative measures for the holding of meetings.
First, I would like to speak on the proposed measures relating to the performance of contractual obligations. Many businesses are badly affected by the pandemic and have difficulty meeting their contractual obligations. I welcome the proposals to provide temporary relief from legal action for a party to a contract who is unable to perform its contractual obligations because of the pandemic. However, I note that this relief is limited to certain specified contracts only.
I have received feedback from one type of business which has not been covered under the Bill – security agencies which provide security services at various buildings in Singapore. Such contracts typically require the agency to pay liquidated damages if it fails to meet various obligations under the contract, such as ensuring that a specified number of security officers are present at the work site each day.
Some agencies are unable to fulfil these requirements as their security officers are under quarantine orders or on leave of absence or are unable to come into Singapore as they are Malaysians. I understand that there are cases of service buyers who insist on enforcing their contractual rights by claiming liquidated damages from the security agencies. This imposes a heavy burden on these agencies, which are caught in a bind due to circumstances which are entirely beyond their control.
Furthermore, with the closure of most workplaces now, these agencies will most likely face the termination of a number of existing contracts, which will have a further adverse impact on their business and survivability.
Security agencies perform a very important service in ensuring safety for the public. I urge the Minister to extend protection and relief under the Bill to security agencies, so that they have a respite from legal action by service buyers during this difficult period.
Having said this, I would like to sound a cautionary note. The proposed measures to provide relief under the Bill are fairly extensive and generous. I believe all Singaporeans will recognise that they are a sincere attempt to ameliorate the tremendous pressures businesses face at this time. However, we must also be careful to ensure that they do not go too far, such that while one group is accorded relief, another group becomes adversely affected, or that the measures become subject to abuse. In this respect, I am heartened to note that these measures are temporary and will be in place for only six months at the first instance.
Second, I wish to speak on the proposals relating to alternative methods to convene, hold or conduct meetings as required under any written law or legal instrument. Trade unions registered in Singapore are required by their constitutions to conduct various types of meetings or conferences at specified times. For example, many unions which are affiliated to the National Trades Union Congress, of which I am an Assistant Secretary-General, are required to hold a Delegates' Conference, which includes election of the union's Executive Committee, every four years.
Prior to that, the unions may have to hold General Meetings at each of their branches, where branch leaders are elected. In addition, their constitutions require them to obtain the sanction of their delegates or members for large items of expenditure or to make changes to their constitution.
NTUC has been receiving queries from several of our affiliated unions which are required to hold their Delegates' Conferences or members' meetings this year, and find that it may be difficult, if not impossible, to do so within the time frame mandated by their constitution. I therefore welcome the proposal to allow the Minister to prescribe by Order alternative arrangements for the meeting.
The Bill sets out some examples of possible alternative arrangements which may be prescribed. Some of these are more relevant to entities such as companies or trusts. Where unions are concerned, some of these alternatives may not be workable. For example, in the case of matters which need to be decided by a secret ballot, it would not be feasible to allow voting to be done by electronic means at a meeting, as the unions may or may not have systems which provide the levels of security and confidentiality which the Registrar of Trade Unions may mandated.
I would therefore like to propose that where unions are concerned, the Minister could provide by Order that the Registrar of Trade Unions, as the regulatory authority, may come up with guidelines relating to alternative arrangements which unions may adopt.
In the same vein, besides Unions, there are associations, charities, co-operatives, religious organisations and clans which also have in their respective Constitutions and specified Regulations, process provisions to comply with – in the conduct of AGMs, voting and other meetings for approval of expenditure, leadership change as well as day-to-day operations. A clearer articulation or a set of guidelines for the respective organisations to follow or make reference in these unusual times is welcomed.
To sum up, the extraordinary nature of this Bill amidst these extraordinary times call for extraordinary understanding and appreciation by parties, litigants, the legal and judicial system. With that, I support this Bill.
Senior Minister of State Edwin Tong.
Thank you, Mr Deputy Speaker. I will just respond to two points. The first was raised by Mr Louis Ng, the point about whether the Courts have oversight of why a party may choose not to consent. Let me just explain the framework.
Under clause 28, it is an enabling provision. So, the current position under the Evidence Act is that in all non-criminal proceedings, the Court may permit any witness to give evidence by video or television link in remote proceedings. No consent of the parties will be needed in such a situation. This is for all types of witnesses, whether expert or factual.
But in criminal proceedings, the current position is that all witnesses must be present in Singapore and the current position is therefore narrower. What the Bill does, is to try to expand this slightly given the current situation by allowing overseas witnesses to appear by remote proceedings if the parties consent. And the reason for this is because, in criminal proceedings, life and liberty is at stake and we want to ensure that the overriding consideration is fairness to the parties. To the extent that there might be some prejudice to the accused person and the accused person does not consent, then in such a situation the Courts are unable to force the appearance of the witness by remote proceedings, and I hope that explains the situation.
Mr Patrick Tay asked about unions and the way in which unions might conduct their meetings. I believe I talked about this in my speech earlier as well as about the other types of different meetings that might take place. No doubt, these particular considerations that might apply to one type of meetings or another will be taken into account when the Minister prescribes the alternative arrangements.
Minister Lawrence Wong.
Mr Deputy Speaker, I thank the Members who had spoken and given their suggestions on the specific provisions of the Bill concerning the remission of property tax. There were some points raised so let me provide quick clarifications.
First, whether property owners who had acted quickly to pass on the property tax rebate before this Bill was introduced will be unduly penalised. I think it is very commendable that some property owners had indeed done so and I would like to assure everyone that these property owners will not be penalised for their earlier efforts. If these property owners had already passed on the rebate to each of their tenants in the form of monetary payment, rental reductions or an offset against current and future rental, consistent with the requirements in this Bill, the amount of rebate passed on earlier will satisfy the obligation imposed under this Bill.
The second issue, the amount and the timeliness of property tax rebate passed on to the property owner's tenant. The property owners will be required to pass on the benefits they received at two milestones, namely by July 2020 and December 2020. This is because property owners on instalment payment plans for their property tax will only receive the full benefit of the rebate by the end of the year. These two milestones therefore strike a balance between ensuring that property owners will not be required to pass on more than the rebate that they have received on hand and ensuring that they pass on the rebate in a timely manner to their tenants.
Third, whether master tenants are required to pass on the property tax rebate to their sub-tenants. While we are cognisant that sub-tenants, namely the tenants of the property owners' tenants, are also impacted by the COVID-19 outbreak, the obligation under this Bill is on the property owner to only pass on the rebate to his own tenants. It does not extend to requiring the property owner to pass the rebate to the sub-tenants or to require that the property owner ensures his own tenant passes the rebate to the latter's sub-tenant. There are two reasons for this.
First, we are very mindful that there is a whole range of commercial arrangements between tenants and sub-tenants. It is not always a straightforward landlord and tenant relationship. They have profit-sharing, they have partnership arrangements. So these can be quite complex.
Second, there is no contractual between the property owner and the sub-tenant. So it would be rather onerous to oblige the property owner to reach out all the way to the sub-tenants.
Nevertheless, we strongly urge and encourage all master tenants to pass on the savings from the rebate to their sub-tenants and to share the burden during this time of uncertainty and difficulty.
Fourth, on the maximum fine of $5,000 and whether or not that is sufficient as a deterrent against non-compliant property owners. Again, let me provide some context. First, the fine of $5,000 takes reference from the Property Tax Act, which sets a penalty for general offences at a fine of the same amount. Second, remember that property tax is paid on a per account basis. So, a retail mall, for example, would have multiple property tax accounts to pay and if they were to not comply with multiple property tax accounts, then the fine of $5,000 will be compounded up to $5,000 per account.
I should remind everyone that the fine does not absolve a property owner of his obligation to pass on the property tax rebate to his tenants under the Bill. The property owner must still pass on the rebate fully in the prescribed manner and by the prescribed timelines. Tenants can bring civil action against a property owner to enforce the obligation to pass down the property tax rebate.
On documentation required of property owners, property owners should ensure that they keep sufficient documentation to show clearly when the rebate was passed on and how much was passed on to their tenants. In the case where the property owner lets out a property to multiple tenants, then the owner should also keep documentation showing how he derived the amount of rebate to be passed on to each of his tenants. Property owners can retain the relevant documentation in either soft copy or hard copy form so long as they remain available over a period of three years.
We also strongly encourage property owners to ensure that their tenants acknowledge the property tax rebate received. This is to minimise potential disputes between the owner and the tenants on whether the rebate has been properly passed on.
Mr Deputy Speaker, I believe I have addressed all the comments from Members and I thank them for their support.
Minister for Law.
Thank you, Mr Deputy Speaker. I thank the Members who spoke. I tried to note down as many of the questions as I could. If I have missed out on any of them, it is not intentional.
Mr Zainal Sapari and Mr Patrick Tay asked if we could extend the protection that this Bill offers, to cleaning firms, security firms and others. The general point I want to make is that this COVID-19 Bill is not intended to be a general intervention to all contracts. At the same time, Members would have noted it gives me the power to add further categories of obligations and contracts beyond the five that are specified.
Both Mr Zainal and Mr Tay are Labour Movement Members of Parliament. I suggest that NTUC study these two contracts that they have specifically talked about, whether they think that a case can be made out – that COVID-19 has particularly affected these contracts and some relief ought to be given, because performance has been affected by COVID-19 in an unexpected way and it is unfair to expect performance. If they can make a persuasive case, we will be prepared to add those categories, but always bearing in mind that this is not simply a case of – there is some problem and therefore we need to help people in their contracts. It has got to go beyond that and be a matter of principle. There should be unfairness in enforcing the contracts and we must find a fair way in resolving the issues.
Subject to that, my Second Reading opening speech made it very clear that we have a duty to help the people who have been affected by COVID-19. We should not ask people, we should not require people to be held very strictly to the contracts if they have been affected by this massive event. So, we will take a sympathetic approach.
Mr Murali Pillai asked about trading contracts. I think I can give the same answer, and the Member can take it up with us. But I want to tell him this. I think we need to be careful about trading contracts. There are many wide varieties of trading contracts. Some of them are international in nature and we ought to be careful about imposing our legal obligations on international parties, because that can also have a disproportionate impact on Singapore as a commercial hub. So, we need to be careful about that.
If we are talking about trading contracts within Singapore, Mr Murali Pillai is a lawyer. If it is a question of say, delivery of certain supply, and that supply is no longer available or supply has been affected by logistics, the contracts usually provide for relief in themselves. The law also provides for relief. But if Mr Murali Pillai believes that over and above that, we can identify a class of contracts that can be circumscribed and be subject to relief, we will be happy to consider them.
There was a question about hire-purchase agreements. If the item is for business, as I said in my speech, that will be protected.
Mr Murali Pillai also asked about international arbitrations or arbitrations which are not local, and can there be a moratorium? We carefully considered this. We have been promoting Singapore as a cross-jurisdictional, international arbitration centre. Two parties who are unconnected to Singapore often come to Singapore to arbitrate and I really do not think it is our business then to be saying automatically that there should be a moratorium.
If a French man and a Chinese party have dealings with each other, and they have chosen Singapore because of its neutrality, and the law that applies is, let us say, a foreign law. Simply because they have chosen to come to Singapore, we should not impact on their arbitration. We should leave it to them to decide. If they have chosen Singapore law, then COVID-19 will become part of Singapore law if Parliament passes it. So, we thought about this quite carefully.
Mr Christopher de Souza asked, what about actions taken before this legislation comes into force? For example, deposits which may have been forfeited. Now, the Bill covers deposits which may have been forfeited. So, as I said earlier, that has got to unwound. Other than that, if other actions have been taken, if properties have been possessed, it is difficult for us to go back and unwind retroactively. But pending legal actions must be stayed if the categories of contracts are covered by the Bill.
Mr Saktiandi Supaat asked about the scope of contracts that are covered. He asked about wedding couples who want to cancel their bookings. It covers hotel bookings, it covers all goods and services relating to the event, and for those who have already cancelled, if the deposit has been forfeited, as I explained earlier, relief is available. And I have explained what sort of relief is possible.
I have also pointed out the need to balance between recovering the deposit immediately and the ability of the other party to pay, because everyone is suffering from COVID-19. It does not mean that the event planner or the other contractual party who has taken the deposit can immediately pay back the deposit to everybody who is demanding immediate payment. So, there needs to be some justice, which is why we have gone via the route of Assessors to look at individual facts and decide.
Mr Saktiandi Supaat, Mr Lim Biow Chuan and Mr Liang Eng Hwa asked about remedies. I spoke about it in my earlier speech. One possibility, which I think is the fairest, is that as a rule, if you have booked an event or a certain venue, if now you cannot hold it because of COVID-19, the fairest is to postpone, if that is possible. And then, the event or the event planner or the hotel does not lose out. They still have the contract. You do not lose out because your deposit is not lost. Both sides find a reasonable accommodation. If that is, for one reason or another, not possible or not suitable, if the contract has to be cancelled, then the question is how much to refund and what is a fair amount to be given back, and those are matters for the Assessors.
And I made the point earlier. Just because you do not want to proceed with the event does not mean that you must get back 100%. If the event companies have spent some money, if they have done some work and so on, they need to be compensated for that.
Mr Lim Biow Chuan asked about whether contracts for tours with travel agencies and air tickets will be covered. The contract for tours with travel agencies will be covered. There should be no forfeiture of deposits. Tours can be postponed. Otherwise, alternate arrangements can be directed by the Assessors. Contracts for air tickets are not covered. Airlines have their own re-booking, refund and cancellation policies that are broadly similar internationally, and we should not intervene in those. Many airlines are currently sorting out those issues with their passengers as well as travel agents.
Mr Saktiandi asked about events that are slated for the later part of the year and whether the Bill could offer protection for such contracts. The answer is – his guess is as good as mine. It depends on how long this situation lasts and how long the Bill is valid for; in the first place, as I have said, it will last for six months. We will see. I am unable to say beyond that.
Mr Liang Eng Hwa expressed concern that the reliefs would trigger counter-claims because service providers could charge an upfront fee or price a risk of non-forfeiture in the fees charged. The Bill does not cover contracts entered into on or after 25 March 2020. So, these points would not apply to this Bill. Because the parties are contracting with full knowledge – willing buyer, willing seller.
Mr Murali Pillai asked whether relief under the Bill could apply on a mutual basis, for example, if a hotel was unable to proceed with the event because its workers are on Stay-at-Home Notice, and he asked why big companies ought to be covered.
Sir, the principle is one of fairness, justice and equity. On the whole, the Bill helps the weaker party. But that does not mean always that the bigger party is at fault. For example, if the hotel is unable to proceed because of COVID-19, is that the hotel's fault, and should we try and find some other alternate arrangement?
The relief under clause 5 of the Bill would apply to either contracting party which is unable to fulfill obligations and revise them in a way that seeks to be fair to both parties. For any party to obtain relief, whether big or small, it would have to show that it was unable to perform the obligation and comply, meet the other requirements in the legislation. If the hotel's workers are subject to Stay-at-Home Notices and it can show that it has got no other resources and cannot get any other workers, and if it complies with and fulfills the other conditions in the Bill, it will be covered.
Mr Lim Biow Chuan, Ms Jessica Tan, Mr Murali Pillai and Mr Chong Kee Hiong all spoke about landlords, especially the smaller landlords who may require rent proceeds to service other obligations, such as mortgage payments. Mr Saktiandi also spoke about landlords who are REITs, and Mr Chong Kee Hiong as well, and the eventual impact that non-payment of rent would have on retail investors.
Sir, on REITs and landlords, I have spoken in extenso earlier. The Bill does not alter the payment obligations of the tenants to the landlords. The landlords can show the Assessors that the tenant, in fact, has the financial capacity to pay a part, if not all, of the rent. If the Assessor finds that the tenant is able to pay all or part of the rent, he may determine that the tenant pays that part or in full either immediately or after the expiry of a prescribed period.
Now, how do we balance the interests of the landlords and the tenants? Mr Chong Kee Hiong pointed out that the rate of return will be affected. I spoke at some length about rates of return. I think, at this point, the real question is not the rates of return but how do we protect the parties. Even if we do not have this Bill, the rates of return are going to be impacted. How many tenants are going to be able to pay? How many tenants are not going to be able to pay? And when a tenant is not able to pay, you put him into bankruptcy, you put him into liquidation, are there a queue of tenants waiting to come in? Is it not going to affect the bottom line anyway?
So, those are the realities of the current situation and the landlords are being helped in a significant number of ways. As I have said earlier, they are going to get 75% of their employee wage cost paid for in April. They are going to get Jobs Support Scheme (JSS) paid for their employees following that. They are going to get the whole series of other benefits.
MAS has also worked with the financial institutions to provide for credit flow. Other issues that they may have in terms of people not paying rent and having a knock-on effect on their credit position, these are issues that I am sure MAS will be able to talk to them about and then talk to the banks about. We cannot prevent banks from exercising their rights, but I think, overall in Singapore, everyone can take a sensible approach.
Essentially, the relief is provided for tenants who are not going to be able to pay anyway. So, all these consequences that one sets out – oh, you know, this is going to impact on the rate of return, it is going to impact on the cash flow of the landlords and so on – but we are dealing with tenants who are not going to pay you, who are not able to pay you.
Second, you already have security deposits for a few months. So, your cash flow would not be affected for a few months. And I have indicated the Assessors will be given guidance that, in the first place, in general, they will say for three months, the tenant can suspend payment, if the tenant seeks. Not all tenants will seek. If the tenant seeks that permission, they will be given that for three months and then the Assessor can look at it. The Assessor can give a longer period or shorter period but the general guidance will be three months.
The entire system is under threat. It is not business as usual. Mr Chong Kee Hiong also made a good point about – and others, too – you know, supposing they get a six-month rental holiday, even if we set off two, three months, there will be some months of rental accrued and, at the end of that period, it will be a substantial amount. Can they pay up?
Well, Mr Louis Ng had a suggestion for that. He asked why do we not be like the Germans? Give an additional two years for them to pay. I do not think the landlords would want that. At the same time, would it mean because some will not be able to pay, therefore, we should not even give them relief now? That would effectively be an argument to say we should not intervene; we should let whoever is going to go bust, go bust, and that would inflict a lot of damage.
The proposal we have, there is no perfect solution simply because the situation is very economically dire. There is pain. There is no complete solution. It is a question of how do you share out that pain? If we have a perfect solution where everyone can walk away with their contractual rights, of course, we would do that. But that is not the real world.
So, do we say some tenants will not be able to pay at the end of six months and, therefore, we should do nothing now? And, therefore, let a lot of other businesses which can pay go bust? What will the REITs and the landlords be left with in such a situation eventually?
So, I would say to the bigger players, look, you are getting the benefits from the Government packages. Play your part and help share some of the pain, too. It cannot simply be that you get all the benefits on one side and, on the other side, you only look at it in terms of your contractual rights.
This Bill is one part of, as I have said, the three aspects, the packages put up by the Deputy Prime Minister, the initiatives by MAS. But I understand the points that Mr Chong makes and some of the others make, and I know that some of it is with a genuine concern for tenants. So, really, we are on the same side seeing how we can help the tenants. And is that best done by extending the payment period by two years and giving them a longer period to pay? I want to be careful about it. At this stage, we are focusing on immediate cash flow relief by suspending for a period of six months, or rather, the Bill is for six months; relief is for a period of months, as determined by the Assessor.
Mr Louis Ng had a couple of points which would have meant substantive intervention or substantive alteration of the rights. One is to extend the period for payment. The other is even more radical – why do we not automatically reduce the rental? I want to be very careful about it because, as Mr Chong Kee Hiong and others have pointed out, there are also landlords who are small businesses themselves. They may have one small building with some tenants. And if you tell them that the rent is going to be reduced automatically by a certain percentage, will they survive and is it fair to them? These are all issues that require much more careful deliberation by Ministries, beyond MinLaw. It requires an economic analysis; it requires an assessment of how the situation plays out over the next few months.
Meanwhile, if the Bill passes, we apply a tourniquet, we hold the ring, we give people time. It also gives the time for the Government to assess the situation as it proceeds, do a deeper economic analysis to see whether any other interventions are justified. We have got to be very careful talking about these interventions. If we say we are studying intervening in order to reduce the payments that tenants make, then you can be sure a lot of tenants, even those who can pay, will not pay. They will say "Let us wait for what the Government is coming up with".
If we say we are not going to deal with this, then a lot of landlords, who might have been willing to accommodate a better arrangement with their tenants, will say "Well, since the Government is not going to come in and do anything, therefore, we do not need to come in and help". So, I think Ministers standing at this box need to be very careful in answering these questions. Let us focus on this Bill. This is a suspension. You can be sure that the economic agencies are actively looking at the situation and looking to see how best to handle it as we go forward, and they will take into account all the feedback that has been given.
Mr de Souza asked whether the Assessor can determine that the security deposit may be used to offset rental arrears. The answer is a clear yes. It does not even need to go to the Assessor. We have already said there is nothing to prevent set-off by the landlord against the security deposit.
It is not in every case that the Assessor will have to even decide, review after two to three months. It will depend on the circumstances and, really, if the parties can work it out themselves more sensibly, then it does not even have to go to the Assessor.
If the landlord can show that, yes, there is a queue of tenants waiting to come in and it is unfair to the landlord to allow a particular tenant to carry on without paying rental, that is something the Assessors will take into account.
Mr Lim Biow Chuan asked a related point whether putting in this Bill will give struggling tenants a false sense of hope that they may not need to pay. I expect that tenants, our commercial people, are quite savvy. I am quite sure they will try and understand what the obligations are. But in any event, MinLaw will put it out in very simple terms as much as possible and push it out. I think even if the tenant is under such a misconception, I am sure the landlord will correct those misconceptions pretty soon.
Mr Liang Eng Hwa asked if the landlord will be prohibited from imposing interest on late penalty fees for rent. He also spoke about this with respect to bank loans. These are outside the scope of this Bill but Members will know that the MAS initiatives cover quite some aspects of what he has mentioned.
Ms Joan Pereira asked if the Government will be putting in place further mechanisms to monitor the situation of smaller businesses. Mr Liang Eng Hwa also called for economic agencies to help companies cope with their payment obligations. Mr Saktiandi asked whether the inability of businesses to fulfill contractual obligations would count against their credit ratings. These questions all raised broader policy questions beyond the ambit of this Bill. I can tell Members that the economic agencies are monitoring the economy very closely.
Ms Jessica Tan spoke about construction contracts, how delay in construction contracts will impact individuals or businesses for whom the works have been committed. Mr Lim Biow Chuan also said that he has residents who cannot shift out of their tenanted residential homes because the contractors are not able to complete renovations due to the circuit breaker.
Well, you can look at the Minister for Health. He has imposed the restrictions and there is nothing any of us can do about it. He has actually made it into a criminal offence if you breach those regulations – Part 7 of this Bill. So, we just have to comply. Now, that impacts on everyone.
It is outside the scope of this Bill except to the extent that anyone wants to claim liquidated damages against the contractor. So, what happens to all these people who are in temporary arrangements? I think everything has got to extend by a certain period. However long the Minister of Health tells you that you cannot move, you are stuck. And that in turn depends on health assessments which obviously must override all other considerations because if we are not careful there can be a substantial spread.
In those situations, the law outside of this Bill provides for certain types of reliefs, Mr Lim knows. If you are not able to perform, if the law requires you to be in a certain situation, there is nothing you can do. You cannot complete on a certain date.
And I am given to understand that during this period, 7 April to 4 May 2020, HDB will also not issue any new renovation permits, but HDB will allow on-going renovation works to be completed if it would take only a few days to complete essential works. Basically, if you can do the work within two or three days, and it can be safe for residents to stay, HDB will allow you to do it.
For those with no other housing options in this situation, HDB will be prepared to allow a few more days to complete minimal essential works to make the place liveable in the interim. And the rest of the works can be carried out later. For those whose flats are undergoing transactions, sale purchase, the buyer and seller will have to discuss new dates. That is essentially it.
There have been some questions on Assessors. Mr Saktiandi, Mr Liang Eng Hwa, Mr Lim Biow Chuan and Mr de Souza had a number of questions on Assessors.
There is no minimum or maximum cap on the value of the claims that may be brought to the Assessors. We will seek to appoint a sufficient number of Assessors to ensure that the process is as quick as possible, as efficient as possible, and my Ministry will also be looking at implementing a quick and simple online process of making an application, sending documents, receiving determinations. Hearings may also be held via video-conference where that is viable.
Mr Liang Eng Hwa suggested giving Assessors powers to direct a process to restructure loans. That will be outside the scope and ambit of this Bill. The Assessors do not have that power and the primary purpose here is to suspend obligations for a period.
Mr Lim asked what is to be done if there is clear prejudice shown by an Assessor. How would MinLaw ensure that the Assessor would always be impartial? The process will have to comply with the rules of natural justice and judicial review remedies will be available, when there is breach of natural justice or corruption, for example. Mr Douglas Foo asked if Assessors would be covered by indemnity insurance. The Assessors will not be acting in their professional capacity. The Bill provides that they will have no liability with respect to anything done in good faith, so there is protection.
Mr Murali asked and sought clarification on the phrase "unable to perform an obligation", in relation to event contracts. It is meant to cover the performance of obligations. The intention is to look at whether a party can perform a contract. In the situation that Mr Murali pointed out, the couple have as much obligation to accept the goods and services as an obligation to pay the price for it. If the contract is to have a wedding banquet of a photography services, but they have become unable to accept the services because of the new measures, they are unable to perform.
Mr Murali also sought clarification on the phrase "inability to a material extent caused by a COVID-19 event." The Bill is intended to cover situations where COVID-19 has meaningfully caused the inability to perform. It need not be the dominant cause but it cannot be a remote, insignificant cause either. It can cover situations where there is more than one reason for the inability to perform the obligation as long as COVID-19 is a material reason.
Mr Murali also sought to clarify whether a contractor who intends to seek relief under clause 6, which prevents the other party from calling on a performance bond, has to serve notice on the other party. The answer is yes. The notification for relief has to be served in order for the contractor to rely on clause 6. If the notification for relief is not served expeditiously, the other party may call on the performance bond. A balance has to be struck between providing relief to the contract and certainty to the beneficiary in the event of default. The paying bank also needs to know whether to honour the payment of the performance bond.
Mr Murali recommended that MinLaw look at digitising wills, should the circuit breaker restrictions extend beyond four weeks. As we explained during the Committee of Supply or COS speech this year, we are reviewing the probate and administration regime and we will consider his suggestions as part of that review.
Mr Saktiandi asked what the Government is doing to ensure that the reliefs given to employers are reaching employees – whether in terms of helping them keep their jobs or upgrading their skills. These are outside the scope of this Bill and they were dealt with by the Deputy Prime Minister yesterday and today.
Ms Jessica Tan said that Assessors will review the moratorium after three months. I should correct this: they may review it depending on what the first order is. It does not preclude giving a longer period or shorter period, but the general position would be three months and then review.
Mr Louis Ng specifically mentioned the case of a lady who had a car hire-purchase and she uses it for purposes of her work. I suppose personal and work. She is in the property field. I can understand. I think it is a fair point. We gave some thought to it when we considered it and we left it out, when you take a hire-purchase vehicle and it is not used purely for business.
We left it out because pretty much everyone who takes or buys a vehicle on hire-purchase may be able to say that they need it for their work. They need it to travel to their workplace or they need it as an essential part of their work. So, that was not the intention of the clause. The clause is, really to say that the vehicle is part of your goods and trade, like a van that is used to ferry people, cars used to ferry people in private hire business. But we will look at what he has said. As I said, it is not a closed category and we can consider whether some refinements are possible in there.
Mr Douglas Foo, I think I have covered his point. Thank you, Mr Deputy Speaker, Sir. I think I have covered the points that at least I wanted to cover.
So, if Members have any supplementary questions, please return to your seat. It will make it easier for me to spot you. Mr Murali, please.
Mr Deputy Speaker, Sir, I thank the hon Minister for giving a comprehensive response to the issues I raised in my speech. I just wish to clarify that I did not raise in my speech the issue about landlords' dilemma. Neither to my recollection, did I raise the issue about trading contracts in my delivered speech so I will let the record speak for itself.
I have a short clarification to ask in relation to the hon Minister's response to the reference to the Arbitration Act in clause 5(3)(b) of the Bill, Minister mentioned that this was looked at very carefully and what he does not want to do is to affect international arbitration. And he mentioned the example of two parties outside Singapore having arbitration in Singapore and I completely understand where he is coming from.
The focus of my question, however, is to deal with situations where the subject matter is dealt with in Singapore. You could have, for example, an international party against a Singapore company. That is also considered an international arbitration under the definition under the IAA so I wonder why in those circumstances, perhaps, the reference to arbitration being seated in Singapore could offer some kind of some kind of practical solution to companies who would also want to seek temporary relief under this Bill.
I thank the hon Member. As to my setting out what he might have said in responding to things that he may not have said, I am entirely happy to accept that he may not have said it and I may have mistakenly ascribed to him what someone else has said. My apologies.
On arbitration, I understand the point that Mr Murali makes. I want to be very careful about this. We will study it, but given how much effort we have put into making Singapore an International Arbitration Centre, I want to be very careful about doing anything that potentially affects that perception. We must also look at how many contracts fall in this category that he mentioned – international party and a Singapore party, arbitration in Singapore, coming out of the International Arbitration Act. If it is not that many contracts – my understanding is it may not be that many – then I think we need to analyse it as a balance of benefits and the damage that could be done to our reputation through perception.
*Question put, and agreed to.*
*Bill accordingly read a Second time and committed to a Committee of the whole House.*
*The House immediately resolved itself into a Committee on the Bill. – [Mr K Shanmugam].*
*Bill considered in Committee; reported without amendment; read a Third time and passed.*
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