Mr Tan and his fiancee were to tie the knot at a hotel on April 5, but 10 days before the wedding, the Government announced stepped-up measures on mass gatherings to stem the spread of the coronavirus, forcing them to postpone the event.
Some tour bus drivers, affected by travel restrictions and unable to keep up with monthly loan repayments, fear that their vehicles may be repossessed soon.
A new law passed urgently by Parliament last Tuesday will provide them, and other parties in affected sectors who find themselves unable to meet their contractual obligations because of Covid-19, with some relief, leaving them with cash in hand meanwhile and protecting livelihoods at a time when many sectors of the economy are bleeding.
The Covid-19 (Temporary Measures) Act provides for a deferment of contractual obligations, suspension of rental payments for up to six months, and prevents deposits paid from being forfeited, giving parties breathing space to work out a mutually acceptable compromise, the Ministry of Law (MinLaw) told The Sunday Times.
By disallowing court and insolvency proceedings for at least the next six months, the law also seeks to "avoid unnecessary legal proceedings to resolve a situation no one anticipated", a MinLaw spokesman said on Friday.
Elaborating on the law, the spokesman said it aims to stem the economic bleeding caused by the coronavirus, preserve the value of various sectors, and give them breathing space to make needed adjustments.
The law covers contracts in sectors with a value exceeding around $120 billion last year. This figure excludes event-and tourism-related contracts, for which an estimate of value is not available.
"All of these sectors have been hit hard by Covid-19 since its impacts cascaded through our economy from February. Without decisive intervention, many otherwise viable businesses will fail," said the spokesman. "Jobs will be lost, livelihoods destroyed."
WHAT'S COVERED
A range of contracts are covered by the Act, as long as they were entered into before March 25 - when tougher measures to limit the size of activities in Singapore were announced - and involve obligations that have to be performed on or after Feb 1, when the outbreak significantly impacted Singapore.
The Act covers contracts for events such as weddings or conferences, as well as in tourism, such as cruise and hotel bookings.
It covers contracts for rentals in the industrial and commercial sectors - including where the Government or agencies like JTC are the landlord - worth $21 billion in 2019.
It also defers obligations for construction and supply contracts, which totalled $33 billion last year, Law Minister K. Shanmugam told Parliament last Tuesday.
Also covered are certain secured loan facilities granted by a bank or a finance company to small and medium-sized enterprises (SMEs), which account for about 70 per cent of employment in Singapore. The total value of loans outstanding to SMEs in this category is estimated to be about $76 billion.
Certain hire-purchase agreements, such as private-hire drivers on hire-purchase loans, are also covered. The outstanding value of such vehicle agreements at the end of last year is estimated to be about $2 billion.
MinLaw said: "The Act works together with the three Budgets and MAS' measures that maintain liquidity" in Singapore's economy.
It is also aimed at distributing the economic pain caused by this crisis to those better placed to shoulder it, said Mr Shanmugam.
"In such a situation, you don't talk contract. You talk equity, you talk justice, you talk about what is the right thing to do," he said.
"The State looks at who can bear the pain more, and it's also sharing of the pain. If you insist on your minutest, every single contractual right at this point, that will suck the life out of the economy. You've got to protect everyone."
But while the Act pauses contractual obligations and legal proceedings, MinLaw stressed that it does not waive the contractual rights of parties. Instead, contractual obligations will just be suspended and will still have to be fulfilled once the relief period is over.
Individuals or businesses unable to meet their contractual obligations because of the coronavirus situation and who want to claim relief must give a notice of relief to the other party.
Once the notice has been sent, the other party will not be able to take certain actions, such as making an application for winding up or bankruptcy, or repossessing property used for business, such as a factory or machinery.
If prohibited actions are taken against individuals or businesses despite a notice of relief, it will be an offence punishable with a fine.
Parties that cannot agree can seek help from MinLaw, which will appoint a panel of assessors - professionals from the legal, accountancy, financial and other industry sectors - to decide on what would be a just and equitable outcome for both parties.
WEDDINGS, STAYCATIONS
For consumers, the Act applies to anyone who made event-or tourism-related bookings, such as a cruise or hotel accommodation, during the covered period. A couple who booked a wedding that could not proceed due to Covid-19 could, for example, be allowed to postpone it to next year.
The process will be fast and simple and application to the panel of assessors will be free, said MinLaw. More details will be announced soon, it added.
"Both sides will be given the opportunity to put their facts before the assessor (and) must do this in a timely manner. The assessment should not be dragged out," said the spokesman. What is "just and equitable" will depend on the circumstances of each case, and it is inevitable that the final decision by the assessor - which cannot be appealed against - may not please everyone, the spokesman added.
"If we don't have this law, the couple will lose their deposit. This law helps them, and, if they want to cancel, assessors will have to see if that is fair," said the spokesman. "They have to be fair to the hotels too. In the current business environment, we would struggle to find any winners."
PROTECTING WEAKER PARTY, ENSURING FAIRNESS
While the Act was drafted on the principles of equity and fairness in a time where everyone - from consumers and tenants to landlords and banks - is hurting, smaller parties more so, some quarters have voiced their concerns.
The Reit Association of Singapore (Reitas), for example, said in a statement last week that the law will place "significant strain" on landlords' finances.
Mr Shanmugam told Parliament last week that the Government is not anti-landlord, but is trying to protect as much of the business ecosystem as possible.
"Landlords have benefited tremendously from growth - the Government's rational policies, good governance, low taxes in Singapore. Fairness and justice require that they share some of this pain, rather than leaving it to the smallest and weakest to bear it all," he said.
He noted that Reits lament they cannot evict tenants, and this will affect their returns, and that there will be other tenants keen to come in.
Most landlords and Reits the ministry had spoken to also accepted the need for the law.
"When the whole house, meaning the whole economy, is under threat, we should try not to focus too much on our own individual rooms. We all need to pitch in, to save the economy as a whole," said the minister.
"Everyone has to take a collective approach. Is it really going to be possible for you to get the previous rates of return for the next six months? Is it possible to have business as usual in the next few months? Not possible," he added.
"If it is truly the case that the landlord can find other tenants and the current tenant is taking advantage of the situation, let us know. That will be part of the assessment."
While the Act seeks to help the weaker party in a contract, the assessors' goal is to help both sides reach a fair deal.
"Assessors will have to decide after listening to both sides," said the spokesman. "The law gives them broad discretion to do justice."
Given the current business environment, it would be impossible to please everyone, he added.
"What we would like to do is to protect as much of the business ecosystem as possible, from consumers and tenants to landlords and banks, by helping them reach a fair deal on their contractual obligations which cannot be performed due to the pandemic," the spokesman said.
"Remember that everyone has been affected, and be fair to each other. Singapore and the economy will come out of this in a better shape if they accept that the pain has to be shared."
