Effects of the COVID-19 Act 2020 Implementation on the Public

Written by Ms Carmen Tham Kar Mun and Mr Teoh Tiong Jin, Advocates and Solicitors, and Partners of Messrs Tham Teoh & Partners. 
Edited by Chelsea Ho Su Ven.
Reviewed by Florence Yeap Xiao Qing and Celin Khoo Roong Teng.

Whilst the Coronavirus disease 2019 (COVID-19) pandemic has brought unprecedented economic ramifications across the globe, the Malaysian government has introduced the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020 that aims to protect individuals and businesses through these trying times. However, the Act contains certain loopholes that weaken the relief it is supposed to provide for the economically disenfranchised groups of society. To put it simply, the Act has come too little, too late. The effects of the implementation of said Act on the public, including the writers’ reasoning behind the aforesaid is elucidated throughout this article.

I. INTRODUCTION
The adverse impact on the economy and financial ramifications arising inevitably from the Coronavirus disease 2019 (‘COVID-19’) was further exacerbated by the lockdown measures that the government of Malaysia imposed. In response to this, initiatives have been taken to help cushion the blow and provide the public relief to their despair. Amongst which is the introduction of the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020 (‘the Act’),[1] gazetted on 23rd October 2020.

The objective of the Act, inter alia, is to provide for temporary measures to reduce the impact of COVID-19 by making necessary modifications to certain provisions of several legislations i.e. the Housing Development (Control and Licensing) Act 1966,[2] the Limitation Act 1953[3] and the Insolvency Act 1967.[4]

The Act was designated to have a retrospective effect — whereby it shall be deemed to have come into force commencing 18th March 2020, the first day of the Movement Control Order (MCO), and remain in operation until the specific dates stipulated in each part of the Act respectively. This means that the Act will have a binding effect on actions and/or events that occurred prior to the coming into force of the Act.

The Act is divided into 19 parts as follows: -
I.            Preliminary
II.          Inability to Perform Contractual Obligation
III.        Modifications to the Limitation Act 1953
IV.         Modifications to the Sabah Limitation Ordinance
V.           Modifications to the Sarawak Limitation Ordinance
VI.          Modifications to the Public Authorities Protection Act 1948
VII.        Modifications to the Insolvency Act 1967
VIII.       Modifications to the Hire-Purchase Act 1967
IX.          Modifications to the Consumer Protection Act 1999
X.            Modification to the Distress Act 1951
XI.          Modifications to the Housing Development (Control and Licensing) Act 1996
XII.        Modifications to the Industrial Relations Act 1967
XIII.       Modification to the Private Employment Agencies Act 1981
XIV.       Modifications to the Land Public Transport Act 2010
XV.         Modifications to the Commercial Vehicles Licensing Board Act 1987
XVI.       Modifications to the Courts of Judicature Act 1964
XVII.      Modification to the Subordinate Courts Act 1948
XVIII.    Modification to the Subordinate Courts Rules Act 1955
XIX.       Miscellaneous
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For the purposes of this article, we will only be visiting eight of the modifications stipulated.
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II. INABILITY TO PERFORM CONTRACTUAL OBLIGATION (PART II — SECTIONS 5-10)
​S.7 of the Act seeks to relieve parties from their pre-existing contractual obligations, provided that the parties were made incapable of performing said obligations ‘due to the measures prescribed, made or taken under the Prevention and Control of Infectious Diseases Act 1988 (Act 342) to control or prevent the spread of COVID-19…’. However, this section only applies to the seven categories of contracts specified under the Schedule of the Act. [5]

Notably, the list of contracts which falls under the ambit of this section is strictly limited to contracts where the inability to perform contractual obligations stems directly from the measures to curb COVID-19. Besides, this section does not alleviate certain concerns raised by employers and business owners of the non-essential industry which include businesses such as healthcare, groceries, logistics and food & beverages providers. Employers are required to honour their contractual obligations under pre-existing employment contracts, including salary payment, despite being forced to cease operations during the MCO.

To illustrate the application of Part II of the Act, let us consider a contractor who was unable to carry out his contractual obligations to perform construction works under a construction contract that he had entered into due to MCO.  In this regard, the other contracting party will not be entitled to exercise their legal rights for the breach or non-performance of said contract, and consequently, they would be unable to claim damages and/or other remedies agreed therein.

It is regrettable to note that the Parliament had passed this legislation hastily and failed to provide a detailed mechanism under S.7 of the Act. It is unclear as to the requirements that need to be satisfied by the defaulting parties in their attempt to seek relief and temporary suspension of their contractual obligations. It is also uncertain as to what the term ‘professional services contract’ includes as it is not defined in the Act. It may be widely interpreted to cover various types of contract, but it shall eventually be tested in the courts of Malaysia, whereby precedents will be considered and utilised in interpreting to what extent the term ‘professional services contract’ applies.

Apart from seeking remedies in the courts, mediation, an alternative dispute resolution, is encouraged as a mode of settlement under S.9 of the Act. In conjunction with measures to mediate contractual disputes arising from S.7, the COVID-19 Mediation Centre was established under the Prime Minister’s Department to provide intermediary services as an alternative dispute resolution.[6] Moreover, individuals from B40 and M40 income groups as well as micro and small businesses would be entitled to apply for cost subsidy by the government for said mediation services. However, one must note that this service only caters to contractual disputes not exceeding RM300,000.00, whereas disputes exceeding the threshold are required to resort to court proceedings.

It is the opinion of the writers that Part II of the Act comprises shortcomings which demand to be revisited for the inclusion of proper mechanisms and applications to ease the defaulting parties in seeking temporary relief provided. It is also worthwhile to note that the Act is silent on arbitration — another alternative dispute resolution. Hence, it is unclear as to whether the parties seeking remedies through arbitration will be affected by the Act. However, an arbitral award is required to be registered in the High Courts of Malaysia before it can be enforced against any parties. With the Act coming into force, parties who had obtained an arbitral award may find it difficult or unable, even, to enforce the same due to the recent changes in the Insolvency Act 1967 in line with the COVID-19 Act (this will be discussed further below). Furthermore, the government should consider including additional categories of contracts under the Schedule. This can be done by invoking S.8 of the Act which provides the authority to make necessary amendments to Part II of the Act which the Minister deems fit.[7] For instance, tenancy agreements should be included as they are commonly and widely used in Malaysia to cater to individuals from the lower-income group that are unable to afford to buy properties and therefore, often resort to renting.

During the pandemic, many were faced with problems regarding rent payment, especially for commercial properties as most businesses were unable to operate during the MCO save for essential services. Nonetheless, tenants were required to pay rent as most tenancy agreements do not provide for a force majeure clause. A force majure clause is a contractual clause that alters the contracting parties’ obligations and/or liabilities under a particular contract when an unforeseeable event takes places and is beyond the parties’ control, which in turn prevents or makes it impossible for the parties to fulfil their respective contractual obligations. In the absence of force majeure clauses in tenancy agreements, tenants would still be liable to fulfil their obligations to pay rent throughout the MCO and Conditional Movement Control Order (CMCO) notwithstanding their inability to use, enjoy or occupy the premises during such period. In light of the inclusion of said clause not being a common practice in Malaysia, many businesses were forced to shut down as the owners simply cannot sustain the operating costs including rental expenses as businesses have been severely affected during the MCO and subsequently, the CMCO.[8]

Part II of this Act is deemed to have come into force on 18th March 2020 and will remain in operation until 31st December 2020. However, the saving provision under S.10 of the Act stipulates that ‘any contract terminated, any deposit or performance bond forfeited, any damages received, any legal proceedings, arbitration or mediation commenced, any judgment or award granted and any execution carried out’ from 18th March 2020 until the date of publication of the Act on 23rd October 2020, is deemed valid. This means that S.7 cannot be invoked to reverse or modify the contractual rights, position or proceedings that the aggrieved parties have exercised during the aforesaid period even if the contract falls under S.7 of this Act, and the inability to perform directly stems from the measures taken to curb the spread of COVID-19. As such, any terminated contracts will remain terminated, and any legal actions commenced will continue to take place as though this Act did not come into place. This provision, therefore, defeats the main purpose and objective of S.7 of the Act — that is to allow the adversely affected contracting parties to recover from the effects of the pandemic.
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III. MODIFICATIONS TO THE LIMITATION ACT 1953 (PART III — SECTIONS 11-12)
Under S.6 of the Limitation Act 1953,[9] the commencement of legal proceedings for the following matters are subject to a six-year limitation period: -
I.       Actions founded on a contract or on tort;
II.     Actions to enforce a recognisance;
III.    Actions to enforce an award;
IV.    Actions to recover any sum recoverable by virtue of any written law other than a penalty of forfeiture or of a sum by way of penalty or forfeiture;
V.      Actions for an account; and
VI.     Actions to recover arrears of interest of judgment debt

Apart from that, a twelve-year limitation period is prescribed for actions upon any judgement, and whereas, there is a one-year limitation period for actions to recover any penalty or forfeiture or of a sum by way of penalty or forfeiture.

This would mean that in the event the limitation period expires, the aggrieved party would be barred from commencing any legal actions against the defaulting party. As such, S.12 of this Act provides that any limitation period stipulated in S.6 of the Limitation Act 1953 which expires during the period from 18th March 2020 to 31st August 2020 shall be automatically extended to 31st December 2020.
This is particularly beneficial to the aggrieved parties that have been unable to commence legal actions during the pandemic, as legal firms and courts in Malaysia were not allowed to operate during the MCO and only resumed operating on a reduced capacity throughout the CMCO. Such an amendment ensures that the aggrieved parties are treated fairly and not denied of their rights to claim compensation from the defaulting parties considering that the delay in commencing legal actions was not due to any fault of their own.

IV. MODIFICATIONS TO THE INSOLVENCY ACT 1967 (PART VII — SECTIONS 19-21)
S.20 of the Act provides that during the period from 23rd August 2020 to 31st August 2021, the minimum threshold of debt for creditors to present bankruptcy petitions against debtors has been revised to RM100,000.00. This is an increment from the previous RM50,000.00 minimum threshold under S.5(1)(a) of the Insolvency Act 1967.[10] The modification intends to provide for additional protection to individuals and businesses faced with financial constraints arising from the pandemic, as well as against bankruptcy and winding-up respectively.

Notably, although the COVID-19 Act provides for a temporary increment of the minimum threshold, the Insolvency Act 1967 is not bound by any specific time period. Nevertheless, the Insolvency (Amendment) Act 2020[11] does provide the Minister with discretion to make necessary amendments with regard to the minimum debt threshold for a specific period. The increment of the minimum debt threshold will provide relief and protection to debtors, but on the flip slide, it would significantly affect creditors, especially Small and Medium Enterprises (SMEs), as they are forced to withhold legal proceedings against debtors for the recovery of debts that fall short of the revised threshold. Consequently, creditors are now compelled to play a waiting game before they are enabled to enforce judgements obtained in the recovery of monies rightfully due to them. This would in turn place an immense strain on SMEs as they cannot afford to sustain business operations after having taken a huge blow from the economic downturn.

Notwithstanding the foregoing, the saving provision under S.21 of the Act provides that debtors who have pending proceedings, actions or matters under the Insolvency Act 1967 before the coming into force of the COVID-19 Act, shall be dealt with accordingly as though the Insolvency Act 1967 had not been modified.

V. MODIFICATIONS TO THE HIRE-PURCHASE ACT 1967 (PART VIII — SECTIONS 22-24)
Part VII of the Act stipulates that the owner of goods i.e. financial institutions comprised in hire-purchase agreements under S.16 of the Hire-Purchase Act 1967 shall be suspended from exercising their rights to the repossession of goods, for any default in instalments during the period from 1st April 2020 to 30th September 2020.[12] This is somewhat in line with the loan moratorium that was introduced by financial institutions for hire-purchase whereby monthly loan payments were deferred during the aforesaid period.

The pandemic has caused unprecedented economic ramifications especially to the construction industry in Malaysia, being a developing country. Ergo, modifications to the Hire-Purchase Act 1967 is necessary to provide contractors and sub-contractors with temporary relief from the hire purchase repayment for machineries. Essentially, hirers are provided with the assurance that repossession of goods will not take place during the specified period. However, if the rightful owner had commenced legal proceedings prior to the publication of the Act, such proceedings shall be dealt with accordingly as though the Hire-Purchase Act 1967 had not been modified by the COVID-19 Act.

VI. MODIFICATIONS TO THE CONSUMER PROTECTION ACT 1999 (PART IX — SECTIONS 25-28)
The Consumer Protection Act 1999 was implemented to protect consumers from being exploited by businesses or vendors.[13] With the ever-increasing standard of living in Malaysia, many underprivileged members of society struggle to purchase certain necessities such as housewares and appliances. In order to resolve the issue at hand, the government had, in 2012, implemented regulations on credit purchase whereby consumers are allowed to make purchases by paying instalments via the Easy Payment Plan.

When making a credit purchase, consumers will enter into a credit sale agreement[14] with the seller or credit facility provider to govern the terms and conditions of the credit sale, which includes information such as: -
I.          prices of goods;
II.        the interest rate imposed;
III.      the instalment period;
IV.       the monthly instalment payable;
V.        any other ancillary charges;
VI.      termination of the agreement; and
VII.     the implications of default under the agreement.

S.26 of the Act amends S.24V of the Consumer Protection Act 1999 by exempting consumers who have entered into credit sale agreements from paying late payment interest as stipulated therein. However, this only applies to consumers who make payment of the overdue instalments upon receipt of a default notice from the respective credit facility providers. Apart from the late payment interest exemption, credit facility providers are prohibited from exercising their rights in commencing legal proceedings to recover the total outstanding amount due from the purchasers under pre-existing credit sale agreements. Notably, S.26 of the Act is only applicable to credit sale agreements entered into before 18th March 2020 and subject to no prior overdue instalments. This would mean that the inability to pay for instalments has to stem directly from the impact of the pandemic and shall not be abused by those who had already defaulted on their repayment prior to the imposition of MCO.

Subsequently, S.99(2) of the Consumer Protection Act 1999 is amended to extend the three-year limitation period for the filing of claims at the Tribunal for Consumer Claims which expires during the period from 18th March 2020 to 15th June 2020, to the extended date of 31st December 2020.

It is worth noting that any legal proceedings commenced for the recovery of any outstanding sum, or any awards obtained for the outstanding sum under the credit sale agreements during the period from 18th March 2020 until 23rd October 2020 shall remain valid and enforceable. This would negate the effectiveness that was intended by the Parliament to provide relief to the defaulting consumers, as most credit facility providers or sellers would have already initiated legal actions for the recovery of debt before the Act came into effect.

VII. MODIFICATIONS TO THE DISTRESS ACT 1951 (PART X —SECTIONS 29-31)
In normal circumstances where a tenant neglects or refuses to pay rent pursuant to a tenancy agreement entered into, the landlord can make an application to the court for a warrant of distress under S.5(1) of the Distress Act 1951,[15] for the recovery of rental arrears.

Prior to the modifications introduced under the COVID-19 Act, a landlord must first make a written demand to the tenant for unpaid rent. Subsequently, if the tenant still fails to pay up, the landlord reserves the right to commence legal proceedings against the tenant by an application for a writ of distress. A writ of distress is a court order which directs a bailiff to use reasonable force to enter the rented premises and to seize goods in the premises which will be subsequently sold to recover the outstanding rent as well as costs incurred by the landlord during said application. However, a landlord can only claim outstanding rent for up to twelve complete months prior to the date of application.[16]

With the implementation of S.30 of the Act, landlords are prohibited from bringing distress proceedings under S.5(1) of the Distress Act 1951 during the period the Act is in force — from 18th March 2020 until 31st December 2020 — to recover rental arrears pursuant to the tenancy agreements entered into. It is worthwhile to note that S.30 does not explicitly prohibit a landlord from commencing ordinary legal proceedings as an alternative to recover rental arrears.

With the MCO imposed across the nation, non-essential businesses came to a halt and subsequently, were only allowed to resume operations subject to various restrictions imposed during the recovery period. This caused a significant decline in revenue for businesses that are tenants of commercial properties. It is regrettable to note that the modification to the Distress Act 1951 is flawed as it has a double-edge effect — while tenants are provided with temporary relief from having to pay rent, landlords are prohibited from recovering rent under distress actions. Yet, they are still obligated to service their property loans and pay for other expenditures to maintain and manage the rental premises.

Similar to Part II, VII and VIII of the Act, S.31 provides that any warrant of distress issued prior to the publication of the Act shall remain valid as though the Distress Act 1951 had not been modified at all.

VIII. MODIFICATIONS TO THE HOUSING DEVELOPMENT (CONTROL AND LICENSING) ACT 1966 (PART XI — SECTIONS 32-38)
Part XI of the Act provides modifications to the Housing Development (Control and Licensing) Act 1966 (‘HDA’).[17] Such modifications apply to agreements prescribed under Schedules G (landed properties), H (strata properties), I (build and sell – landed properties) and J (build and sell – strata properties) of the Housing Development (Control and Licensing) Regulations 1989[18] (‘Housing Development Regulations’) that were entered into before 18th March 2020.

A. Late Payment Charges
Under the HDA, a purchaser shall be liable to pay the developer late payment charges arising from unpaid instalments according to the payment schedule stipulated in the Sale and Purchase Agreement entered into. The late payment charges are calculated at a rate of 10% per annum on the unpaid instalment that is calculated on a daily basis from the payment due date until the date that the payment is made.

With the implementation of S.34 of the Act, a developer is prohibited from imposing late payment charges on any unpaid instalments provided that the purchasers’ failure to pay such instalments during the period from 18th March 2020 until 31st August 2020 is ‘due to measures prescribed, made or taken under the Prevention and Control of Infectious Disease Act 1988 to control or prevent the spread of COVID-19’. To put it simply, late payment charges will not be imposed on default of instalments during the MCO.

S.34 acts as a late payment charges moratorium that seeks to relieve the financial burden of purchasers who are inevitably faced with financial difficulties, especially those who have lost their income due to retrenchment during this economic crisis. Moreover, purchasers who face difficulties in paying instalments after 31st August 2020 can make an application to the Minister for an extension up to 31st December 2020. The granting of extension is however, subject to the discretion of the Minister.

B. Extension of Time (Delivery of Vacant Possession and Liquidated Ascertained Damages)
Under the HDA, a developer is required to deliver vacant possession i.e. the handover of keys of housing accommodation to the purchaser within the  stipulated period as per the relevant schedule in the Sale and Purchase Agreement. In the event the developer fails to do so, they will be liable to payment of late delivery damages to the purchasers whereby such damages shall be calculated on a daily basis until the date of delivery of vacant possession.

During the pandemic and especially with the imposition of the MCO, many development projects have been delayed upon the purported completion date, as all construction works were halted during such period. With the implementation of S.35 of the Act, the period from 18th March 2020 to 31st August 2020 shall be excluded from the computation of time for the delivery of vacant possession and the calculation of liquidated damages payable to the purchaser for late delivery of vacant possession.

However, this implementation could be interpreted to have solely benefited the developer. The Parliament has failed to consider that many purchasers bought housing properties with the intention to acquire possessory rights to the properties by a certain date. More particularly, purchasers who are currently renting accommodations while awaiting the handover of vacant possession by the expected date. As a consequence of the delayed delivery of vacant possession, they may be burdened with an additional cost for the prolonged rental or faced with difficulties in finding a new accommodation upon the expiry of the tenancy agreements. In view thereof, the implementation of S.35 of the Act may not function to alleviate but instead, worsen the purchasers’ financial burden during this pandemic.

Further to that, ss.2 of S.35 of the Act provides developers with an option to apply for a further extension to exclude late delivery damages up to 31st December 2020. Although this additional extension would provide greater protection to the developers, it would indirectly jeopardise the purchasers’ rights to claim for the late delivery of vacant possession. It prolongs the financial distress faced by some purchasers as their legal right to recover certain additional living costs incurred before the delivery of vacant possession would be further suspended.
 
Notwithstanding the above, if the notice to take vacant possession had been served to the purchaser during the period from 18th March 2020 to 31st August 2020, yet the purchaser was unable to enter into possession of the housing accommodation during such period, it shall not be considered that the purchaser has taken vacant possession for the computation of defect liability period.

C. Defects Liability Period
Under the Schedules of the Housing Development Regulations, the defect liability period for a housing accommodation is 24 months after the date of vacant possession. S.36 of the Act shall act to exclude the period from 18th March 2020 to 31st August 2020, or the approved extended date of 31st December 2020 from the calculation of the defect liability period as well as the time for the developer to carry out rectification works in the housing accommodation.

Although the exclusion of the aforesaid period does, in a way, help the homeowners in terms of the defect liability period, it would be detrimental to the homeowners if the period for developers to carry out rectification works is extended, especially if the defect is major. This would mean that homeowners occupying the defective properties would have to compromise their living conditions for an extended period before the developer rectifies the defects.

D. Housing Tribunal Claim
​A homebuyer is entitled to file claims to the Tribunal for Homebuyer Claims for the following: -
I.        Defective workmanship;
II.       Defective materials;
III.     Property not constructed in accordance to the approved plans stated in the Sales and Purchase Agreement;
IV.      Late delivery of vacant possession of the property;
V.       Late delivery of common facilities;
VI.      Payment of liquidated and ascertained damages claims;
VII.    Refund of deposit; and
VIII.   Refund of late interest charges.

However, this list is non-exhaustive as the Homebuyer’s Tribunal is given the authority under the HDA to decide on any claims filed by homebuyers for any loss suffered or matters in relation to the homebuyers’ interests arising from the Sale and Purchase Agreements, provided that such claims are valued at RM50,000.00 or below. Bringing a claim to the Homebuyer’s Tribunal as compared to court proceedings would be more efficient and cost-effective as there is no need to appoint a lawyer and that the matter will be conducted in a less formal setting.

Claims must be made to the Homebuyer’s Tribunal within twelve months from either the date of issuance of the Certificate of Completion and Compliance, the expiry of the defect liability period or the date of termination of the Sale and Purchase Agreement (in the event that it was terminated before the date of issuance of the Certificate of Completion and Compliance).          

S.38 of the Act provides that in the event the limitation period of twelve months has expired during the period from 18th March 2020 to 9th June 2020, the homebuyer is still allowed to file such a claim from 4th May 2020 until 31st December 2020. This provision further provides the Tribunal with the power to hear and decide on such claims during the extended period.

IX. MODIFICATIONS TO THE INDUSTRIAL RELATIONS ACT 1967 (PART XII — SECTIONS 39-40)
Pursuant to S.40 of the Act, the period from 18th March 2020 to 9th June 2020 shall be excluded from the calculation of the period under the Industrial Relations Act 1967 for: [19]
‘… 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 in writing to the Director General for Industrial Relations under subsection 9(4) and the filing of representation under subsection 20(1A).’
 
S.40 of the Act implements measures to prevent parties from enforcing their rights under a contract between 18th March 2020 to 31st December 2020 due to the inability to performance of employers and employees due to measures taken under the Prevention and Control of Infectious Diseases Act 1988.[20] However, this only applies to a specific list of contracts stipulated under the Schedule in Part II, examples of which include construction work contracts and contracts relating to the lease or tenancy of non-residential immovable property. It is important to note that employment contracts are not listed under the Schedule. This means that employers and employees are not prevented from enforcing their rights under employment contracts due to the inability of either party to perform their contractual obligations under such contracts, including the payment of salaries and obligations to work.

S.40 is deemed to have come into operation on 18th March 2020. Any actions under tort and contract still fall under S.6 of the Limitation Act 1953, wherein legal proceedings under the employment contract for either breach or negligence is subjected to a six-year limitation period. However, for cases where the limitation expires between 18th March 2020 and 31st August 2020, the aggrieved party may have a window to initiate their suit up to 31st December 2020, as the case may be.

X. CONCLUSION
Given that the intention of the Parliament of Malaysia in introducing the Act was to alleviate and provide relief to the public for the difficulties faced during the COVID-19 pandemic, the writers are of the opinion that the implementation of the Act came too little, too late. Although the Act does in a way provide some form of relief, it is not sufficient to fully address the problems or concerns faced by the public at large. Furthermore, most of the amendments were not wide enough to cover the more common transactions or contracts entered into.

The adverse effects of COVID-19 that was subsequently worsened by the imposition of MCO are extensively reflected in the high unemployment, slow-moving economy and rising of loan defaults after the moratorium ended on 30th September 2020. The Act, albeit designated to have a retrospective effect, was only implemented on 23rd October 2020. During which, affected parties have found themselves sitting on the razor’s edge as they had been caught in the inextricable aftermath of the pandemic, making the untimely implementation of the Act redundant.

Besides, parties who have been gravely affected and have pinned their hopes on the Act to seek temporary relief would be dismayed to find that all the provisions in the Act are subject to a saving clause, which practically defeats the retrospective effect of the Act. Given the limited help the Act offers to aggrieved parties, the writers foresee that the courts will be facing an influx of legal proceedings that would directly add to the already massive backlog of cases since the closure of courts during the MCO. This would in turn be detrimental to the aggrieved parties who are especially pressed for time in seeking any form of legal relief from the courts.

Regrettably, the Parliament appears to have forgotten the real intention behind the implementation of this Act — that is to provide a legal shield on contracts and relief to individuals and businesses in the post-COVID-19 environment. The Act should provide temporary and swift relief to facilitate the regularisation of performance and prevent any further hardships to the aggrieved parties who are already suffering from financial and emotional distress. With little time left before the date of nullity of the Act to do its supposed wonders, the Act did come a little too late.

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Ms Carmen Tham Kar Mun was called to the English Bar and is now practicing as an Advocate and Solicitor in Messrs Tham Teoh & Partners which she and her partner founded. Her main focus of work includes corporate advisory, general conveyance, commercial banking and finance, commercial transactional work, corporate drafting and corporate advisory. 

Mr Teoh Tiong Jin is an Advocate and Solicitor of the High Court of Malaya and is currently practicing in Messrs Tham Teoh & Partners which he and his partner founded. His principal areas of practice include civil litigation, conveyancing and financing, capital markets, mergers and acquisitions, corporate commercial law, corporate finance and corporate banking.
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Disclaimer: The opinions expressed in this article are those of the author and do not necessarily reflect the views of the University of Malaya Law Review, and the institution it is affiliated with.

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Footnotes:
[1] Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020 (Act 829) (Malaysia).

[2] Housing Development (Control and Licensing) Act 1966 (Act 118) (Peninsular Malaysia).

[3] Limitation Act 1953 (Act 254) (Peninsular Malaysia).

[4] Insolvency Act 1967 (Act 360) (Malaysia).

[5] See footnote 1 above, s 7.

[6] Bernama. (2020, Oct 22). Covid-19 Act Comes into Force Tomorrow. New Straits Times. Retrieved from <https://www.nst.com.my/news/government-public-policy/2020/10/634493/covid-19-act-comes-force-tomorrow >. Site accessed on 18 Dec 2020.

[7] See footnote 1 above, s 8.

[8] Malaysiakini. (2020, Nov 11). Over 30k Companies Shut Down Since March, Highest Number in Aug. Malaysiakini. Retrieved from <https://www.malaysiakini.com/news/550501>. Site accessed on 18 Dec 2020.

[9] See footnote 3 above, s 6.

[10] See footnote 4 above, s 5(1)(a).

[11] Insolvency (Amendment) Act 2020 (Act A1624) (Malaysia) s 2(b).

[12] Hire Purchase Act 1967 (Act 212) (Malaysia).

[13] Consumer Protection Act 1999 (Act 599) (Malaysia).

[14] Consumer Protection (Credit Sale) Regulations 2012 (P.U.(A) 89) (Malaysia) s 7.

[15] Distress Act 1951 (Act 255) (Malaysia).

[16] Distress Act 1951 (Act 255) (Malaysia) s. 5(1).

[17] See footnote 2 above.

[18] Housing Development (Control and Licensing) Regulations 1989 (P.U.(A) 58/1989) (Peninsular Malaysia).

[19] Industrial Relations Act 1967 (Act 177) (Malaysia).

[20] Prevention and Control of Infectious Diseases Act 1988 (Act 342) (Malaysia).