Coronavirus: How the law may be applied in 4 scenarios

From cancelled weddings to matters of rent, here is how the Covid-19 Act could play out

The new Covid-19 (Temporary Measures) Act offers relief for individuals and businesses unable to meet contractual obligations because of the coronavirus pandemic.

Here are four scenarios to illustrate how the law might be applied and what some of the possible outcomes are.

A Ministry of Law spokesman noted that these cases are provided for illustrative purposes only, and do not represent all outcomes that an assessor may decide on in similar scenarios.

"Assessors' decisions will be guided by the principles of justice and equity, and will take into account the unique circumstances of each case," the spokesman said.

Cancellation of wedding

Mr Tan and his fiancee had engaged a company for their wedding that was to take place on April 5 and paid a deposit of $17,499.

But owing to the pandemic and in accordance with the Government's safe distancing measures, the wedding could not take place.

He wrote to the company to inform them of the cancellation and to request a refund of his deposit.

In turn, he received a letter from a lawyer acting for the company informing him that his deposit will be forfeited.

The letter said: "We are instructed that your wedding/ event... is disallowed. We are not prepared to offer a refund as work has commenced and costs have been incurred and are incurring.

"Further, the duly endorsed terms and conditions clearly indicate a 'no refund policy'. We attach a copy of the same for your reference."

POSSIBLE OUTCOMES:

• Postpone the wedding up to end-2021, and allow for a sum to be paid to the company for any expenses incurred.

• If the company claims that a higher rate would apply if the wedding is held next year, the couple should be given the option of terminating the agreement. The deposit (less any expenses incurred by the company) should be returned to the couple.

• If the couple no longer wish to engage the company, they should not be forced into postponing the event with it. But since it is the couple's choice, in this scenario the company may be allowed to keep a percentage of the deposit.


Staycation booking

Mr Ali made a non-refundable booking on a third-party website for a staycation on April 4, just before enhanced safe distancing measures kicked in. However, the hotel refused to refund the booking and offered a postponement instead.

Mr Ali wrote: "I booked a staycation in Hotel R without expecting the Covid-19 situation to take a turn for the worse. Despite my request to cancel the booking, the hotel refuses to refund my booking fees.

"I am cancelling the booking mainly for reasons of safety for my family and also to prevent a spread to the community. Please advise on the options I have to get the refund."

The website says: "We are sorry to inform you that the hotel does not allow for free cancellation. We have tried to explain your situation to the hotel but still, it insists that it will follow its cancellation policy.

"However, the hotel has offered to amend your period of stay to some time before Dec 30. You have to get back to the hotel with a new date before May 30."

POSSIBLE OUTCOMES:

• The customer is allowed to reschedule the period of stay in relation to the booking - by the end of next year.

• If this is not possible, the payment should be returned to the customer, but the booking service/hotel may be allowed to retain a small fee to cover any wasted costs.


Repossession of excursion buses bought on hire purchase

Mr Raju and several of his colleagues bought their buses on hire purchase but are out of income during the Covid-19 period as there are no tour groups to drive around.

They are unable to pay their instalments and if the finance company repossesses their buses, this would mean losing their jobs entirely should they have an opportunity to use their buses.

They have asked for help deferring their payment for a few months, or to accept partial payment as some of them are still able to pay 50 per cent of their monthly payments.

POSSIBLE OUTCOMES:

• Allow the hirers to make 50 per cent part payment in the meantime.

• Depending on the financial ability of the bus drivers/owners, the amount payable may be either higher or lower. The position may be reviewed after three months and the financial ability of the bus drivers/owners can be considered again.

• They should reach an agreement on how the arrears will be paid back over time.


Commercial landlord concerned that tenant will not pay rent

Mr Thomas is a commercial landlord and his tenant offers beauty spa services. The tenant has informed him that Covid-19 had greatly impacted his business.

They had just renewed the lease on March 2, and the tenant says he will not be able to pay rent for at least six months. Based on the agreement, he can repossess the unit if the tenant fails to pay rent after seven days from the date rent is due.

Under the new law, it will be an offence for him to repossess the unit. He asks: "What kind of protection do I have as the landlord if my tenant refuses to pay rent for so long? I have payments to make too."

POSSIBLE OUTCOMES:

 

• The landlord may be allowed to terminate the agreement if he can show that there are alternative tenants ready and willing to take up the space.

• Depending on the financial ability of the tenant, the tenant may be required to make part payments to the landlord.

• Rent may be offset against the security deposit (and the security deposit may be topped up later).

• The determination may require the parties to come back after three months. The circumstances may be reviewed again thereafter and further determinations may be made.

A version of this article appeared in the print edition of The Sunday Times on April 12, 2020, with the headline 'How the law may be applied: 4 scenarios'. Subscribe