To control the spread of the Covid-19 virus, movement restrictions were introduced and various standard operating procedures were put in place. Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Act 2020 (“Covid-19 Act”) was passed to provide temporary relief to those affected by the pandemic.

In this article, we’ll look at two recent cases where the Court found that the Covid-19 Act only applied in limited situations and that the Covid-19 pandemic cannot be a “free pass” for delays.

Case #1– SMEB Asset Management Sdn Bhd v Waris Nove Sdn Bhd & Ors [2021] 1 LNS 709

Here, SMEB Asset Management obtained a judgment in default against the defendants. The defendants applied to set aside the judgment in default.

Under the Rules of Court 2012, such an application has to be made within 30 days from receipt of the judgment, failing which good reasons must be provided to the Court. The defendants here only applied 128 days later. The explanation given by the defendants was that they could not obtain advice from their lawyers during the Conditional Movement Control Order (CMCO) in place, and due to exceptional circumstances during the Covid-19 pandemic.

In refusing the application to set aside the judgment in default, the Court considered and rejected the explanation given for the delay as not plausible. Even though the defendants may be physically constrained from moving about during the CMCO, there was no reason they could not communicate with their lawyers through technology.

The Judge warned that the Court will not condone such excuses for delays:

It appears that the Covid-19 pandemic has become a popular excuse to justify delays which cannot be condoned too readily by the Courts.

Case #2 – Ravichanthiran a/l Ganesan v Lee Kok Sun & 2 Ors (Case No. JA-12BNCVC-3-02/2021)

Ravichanthiran commenced a suit against his former client for unpaid legal fees. The former client counter-claimed. In the Sessions Court, the Judge dismissed Ravichanthiran’s claim and allowed the client’s counterclaim. Ravichanthiran appealed.

Pending the appeal, Ravichanthiran applied for a stay of the Sessions’ Court’s judgment. Amongst the arguments raised, one was that the Covid-19 Act, particularly Sections 7 and 10, ought to prevent the judgment from being enforced.

Sections 7 of the Covid-19 Act provides that the inability of any party to perform their contractual obligations due to COVID-19 shall not give rise to the other party exercising their rights under the contract. Section 10 of the Covid-19 Act provides that judgment or award granted and any execution carried out before the publication of the Act is valid.

The Court found that the Covid-19 Act was inapplicable. The Court held that:

  • To rely on Section 7 of the Covid-19 Act, one has to establish that it cannot perform the contractual obligation and that such inability was due to the measures taken under the Prevention and Control of Infectious Diseases Act 1988 to control or prevent the spread of Covid-19.
  • Since “inability” or “unable” is not defined, the dictionary meaning that is “state of being unable to do something” is taken. “Refusal” or “unwillingness” did not fall within the purview of “inability”
  • Once inability is established, there must also be evidence that the inability was due to the measures taken by the Prevention and Control of Infectious Diseases Act 1988 to control or prevent the spread of Covid-19. Without such evidence, Section 7 of the Covid-19 Act cannot be invoked.

The Judge also observed that the Covid-19 Act cannot be used to avoid liability or debt merely because the debt arose during the Covid-19 pandemic.

Commentary

Although it has been a tough 2 years and counting, the Covid-19 pandemic cannot be an excuse or reason for everything. Even though there may be physical restrictions on movement, e-mails, text messaging and video conferencing make it easy to communicate and exchange documents.  For example, it may seem illogical that a party would take months to contact their lawyer because of the pandemic. Courts will be slow to accept that the pandemic has caused delays in communication, unless a litigant can provide specific circumstances as to how they were disabled or prevented from complying with legal requirements or the Court’s instructions. Evidence that a litigant was or is prevented or disabled by the Covid-19 pandemic (or the measures taken by the government to prevent its spread) must be available.

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Th’ng Yan Nie is a Senior Associate in the dispute resolution practice group at Donovan & Ho.  She has a wide range of experience in litigation matters including contractual and commercial disputes, compulsory land acquisition, debt recovery and strata and property management issues.

Donovan & Ho is a law firm in Kuala Lumpur, Malaysia.  Our practice areas include employment law, dispute resolution (litigation and arbitration), corporate and tax advisory, and real estate/conveyancing.  Have a query? Contact us.

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