To deal with the economic fallout from the COVID-19 pandemic, the Singapore Parliament enacted the COVID-19 (Temporary Measures) Act 2020 (the “COVID-19 Act”) to grant relief to affected businesses. The COVID-19 Act temporarily postpones claims for certain kinds of debt, while altering the rights of creditors for other debts.
This article aims to inform Singapore creditors about their rights during the duration of COVID-19 and about the actions they may take to recover their debts.
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Nadia Moynihan
R.W. Law Practice | 11 years experience | English, Malay
Nadia’s practice represents a broad cross-section of the kind of legal services that most businesses and individuals typically need, regardless of industry sector or client profile, with a particular focus on dispute resolution.
She regularly advises corporate and private clients on schemes of arrangement, bankruptcy proceedings, trade disputes, employment disputes and a wide array of other contractual and tortious claims from fraud to defamation. Her litigation practice draws upon her experience representing clients in complex multi-jurisdictional cases involving misappropriation of funds and shareholder disputes. She has also represented numerous employers and employees in claims relating to wrongful dismissal, breach of employment contracts and harassment in the workplace. She has significant experience handling highly contentious cases of all kinds from State Courts to Court of Appeal level.
Her matrimonial practice features cross-border disputes regarding child custody and the enforcement of maintenance as well as High Court litigation pertaining to the division of substantial matrimonial assets located in multiple jurisdictions. Her criminal practice includes experience representing clients in prosecutions for drug offences, sexual offences and violent offences ranging from voluntarily causing hurt to homicide. She also has experience representing children charged with criminal offences.
Nadia’s non-contentious practice includes the drafting of various commercial agreements such as shareholders’ agreements and distribution agreements as well as personal legal instruments such as wills, lasting powers of attorney and deed polls.
Nadia is on the panel of lawyers of a number of embassies in Singapore.
Qualifications / Admissions
- LLB (Hons), National University of Singapore
- Advocate & Solicitor of the Supreme Court of Singapore
- Solicitor of the Senior Courts of England & Wales
Memberships
- Irish Chamber of Commerce, Singapore;
- The Medico-Legal Society of Singapore;
- Association of Criminal Lawyers of Singapore;
- The Law Society’s Family Law Practice Committee
- The Law Society’s Criminal Law Practice Committee;
- Singapore Association of Women Lawyers
- AIJA - International Association of Young Lawyers
Selected Cases
- OMG Holdings Pte Ltd v Pos Ad Sdn Bhd [2012] 4 SLR 231: Pleadings, limitation issue
- BMR v BMS [2013] SGDC 421: Care and control and access of child, maintenance
- JAI v JAI [2014] SGDC 382: Maintenance for wife
- TDI v TDJ [2015] SGFC 11: Care and control, overnight access
- TAT v TAU [2015] SGFC 19: Custody, care and control, access, relocation
- THH v THI [2015] SGFC 135: Interim maintenance for wife and child
- PP v Rosdi Bin Joenet [2016] SGHC 58: Sentencing for homicide in case of mental illness.
- Public Prosecutor v ASR [2018] SGHC 94: Sentencing of intellectually disabled young person for aggravated rape.
Che Wei Chin
Fervent Chambers | 12 years experience | English, Mandarin
In the field of litigation, Wei Chin was lead counsel for many types of matters and clients such as:
- Civil and commercial disputes
- Submitting and presenting mitigation pleas successfully to obtain lighter sentences for clients charged in criminal matters, including non-custodial sentences
- Divorce and ancillary matters disputes, including helping parties through Court Mediation
- Private prosecutions for a government statutory board and obtaining deterrent sentences against the offenders
- General solicitors’ work in extracting Grant of Probate and Letters of Administration
- General solicitors’ work in managing landlord and tenancy agreements and disputes
- General Commercial Drafting and Advisory Work
His wide range of experience in litigation includes tenancy disputes, writs of possession, claims concerning breaches of director’s duties, probate matters, criminal matters, matrimonial matters and various other types of litigation work.
Wei Chin recognises that not all matters need to proceed for a full-fledged trial. Having taken Mediation & Negotiation modules in NUS, Wei Chin can capably advise on settlement options, achieving an amicable resolution which is more affordable and efficient than going for trial.
Wei Chin has also advised government agencies and statutory boards, helping them to resolve disputes through negotiations and litigation, depending on their goals and aims.
Wei Chin also takes on commercial contract drafting and contractual negotiation work to protect the interest of his clients when they are entering commercial deals. He has experience being a legal advisor to a local tertiary educational institute and assisted in vetting their intellectual property contracts.
Civil & Commercial Disputes
- Lead Counsel in a dispute involving an ex-finance manager of a renowned bakery being sued for breach of fiduciary duties and other money claims – successfully defended the manager such that all claims were dismissed.
- Lead counsel in contract dispute regarding business consultancy agreements, limitation issues and Legal Profession Act.
- Lead counsel in construction dispute with interior designer for defective works.
- Lead counsel in a supply agreement dispute concerning a local beautician boutique.
- Negotiating a successful settlement involving a potentially Michelin-starred restaurant and its renovation contractors, avoiding a lawsuit of close to $0.4 million.
- Lead counsel in a High Court claim for contractual breach: acted for an independent business consultant in suing 3 business owners for breach of consultancy agreement.
- Lead counsel in High Court defamation claim of a manager defaming a director of a listed company.
- Negotiating a successful settlement involving a defamation claim by a businessman against a university professor.
- Assisting counsel in obtaining a Mareva Injunction for a claim amounting to more than S$3 million.
- Negotiating a successful settlement involving an anti-competition lawsuit by a large rice supplier, thus preventing a prohibitive injunction.
- Advising and successfully negotiating a settlement for a government statutory board concerning a dispute with an oil supplier.
Criminal Matters
- Lead Counsel in a disposal enquiry between two victims of a Bitcoin scam.
- Lead counsel in securing an acquittal for client charged with criminal trespass and outrage of modesty in Marina Bay Sand hotel.
- Lead counsel in successfully securing probation for an Uber driver suffering from frotteurism who touched passenger’s thigh. During appeal by the Prosecution, the Accused did not appoint Mr Che as a lawyer (due to financial constraints). Accused’s sentence was later increased to imprisonment when fresh facts arose during appeal.
- Lead counsel in a shop theft matter where Accused took toys without payment from a well-known toy store.
- Lead counsel in various plead guilty matters for offences regarding:
- Penal Code Section 377BB (voyeurism)
- Penal Code Section s. 405 to 409 (criminal breach of trust)
- Companies Act Section 157 (breach of company director’s duties)
- Road Traffic Act (reckless driving, drink driving etc)
- Common Gaming House Act (gambling)
- Animals and Birds Act 1965 (importation of live animals etc)
Jeannette Chong-Aruldoss
Robert Wang & Woo LLP | 33 years experience | English, Mandarin
Working with clients to help them find real solutions to legal issues that are causing them stress and worry isn’t just a job, it’s something I’m passionate about. It’s a calling. I was called to the Singapore Bar in 1989, and have since chalked up three decades of active legal practice. I’ve acquired the experience and knowledge across a diverse range of legal matters, enabling me to bring a broad-based approach to problem-solving. Where a fight is called for, I’ll bring a hands-on and passionate approach to advocating and championing my clients’ interests.
Ronald Yeo
Yeo Marini Law Corporation | 8 years experience | English, Hokkien, Mandarin
Ronald started off his career as an economist before deciding to pursue a second degree in law. He has worked as a legal counsel in both public and private sector including various international banks. However, the corporate career gave him less satisfaction as compared to helping the layperson. Coupled with his passion to serve and connect with people on the ground, Ronald decided to go back to his original roots and to practise community law.
A person-oriented individual with a practical and realistic mindset, Ronald is able to provide advice with sound reasoning, and at the same time, ensure that it is in the best interest for the client. Hardworking and output driven, he is a hands-on lawyer who sees through any matter from start to finish.
Ronald has a particular interest in family law. Being a father of 3 children himself, he is a strong advocate of being a present parent and understands the challenges one faces during the course of marriage. He believes that the child’s interest is of utmost importance in any marriage. Ronald is able to empathize and apply his legal mind in matters relating to child custody, care and control, and maintenance quantum for children. When push comes to shove and marriage is no longer possible, Ronald is able to represent clients for any divorce proceedings, both contested and uncontested.
Ronald is able to speak both the Chinese and English language.
For Debts Owed Under Contracts Covered by the COVID-19 Act
As a start, the COVID-19 Act grants protection against creditors for parties to certain contracts. It does so by temporarily preventing creditors from suing those parties when they fail to perform their obligations under the contract.
Creditors are also temporarily prevented from commencing proceedings for winding up (for businesses) or bankruptcy (for individuals) against such parties.
This prevention lasts for the entire prescribed period, which at the time of writing is for 6 months from 20 April 2020, or until 19 October 2020.
Creditors will not be able to take legal action to recover debts for a contract if the contract satisfies all of the following requirements under the COVID-19 Act:
(a) The contract is covered under the COVID-19 Act
Only debtors under very specific kinds of contracts will be granted temporary protection against creditors under the COVID-19 Act. These types include:
- Certain kinds of secured loans from a licensed bank / financed company
- Performance bonds under a supply / construction contract
- Hire-purchase agreements for commercial vehicles, or plants/machinery/fixed assets for manufacturing, production or business purposes and located in Singapore.
- Events contracts
- Tourism-related contracts
- Construction / supply contracts
- Commercial leases
Debtors under contracts that do not belong in any of these categories, for instance, residential leases or contracts for general services (for example, financial or book-keeping services), are not entitled to such protection.
(b) The contract was entered into before 25 March 2020
The contract in question must have been entered into before 25 March 2020. This means that creditors will be able to take legal action for debts incurred under contracts entered into on or after 25 March 2020.
(c) The contract had to be performed from 1 February 2020 onwards
The COVID-19 Act postpones legal consequences for failures to perform obligations arising only on or after 1 February 2020. If the obligation arose before that date, it will not be covered by the COVID-19 Act.
(d) The contract could not be performed for COVID-19 related reasons
The COVID-19 Act provides relief only if the party was unable to perform the obligation in question because of COVID-19 or any legal/regulatory order relating to COVID-19. For example, the COVID-19 Act would protect an event planner who was unable to carry out scheduled events due to the circuit breaker measures.
(e) The debtor has served a notification for relief on the creditor
Finally, to qualify for relief, the party seeking postponement of their legal obligations must serve a notification for relief on the other parties (i.e. the creditors and any other debtors) to the contract, as well as any guarantor or surety for his obligations.
Options for creditors whose contracts are covered by the COVID-19 Act
A creditor thus has two options in cases of contracts covered by the COVID-19 Act:
1. Wait until the expiry of the prescribed period
Once the prescribed period expires, parties can once again be sued, so the creditor can recover his debt from them.
However, it should be noted that the Singapore government may choose to extend the prescribed period if the COVID-19 pandemic does not show sufficient signs of easing up by 19 October 2020.
2. Apply for an assessor to determine if all the above requirements are truly satisfied and if the contract truly falls within the COVID-19 Act
The application can be made online with your SingPass or CorpPass account at the Ministry of Law’s standardised form. The assessor’s determination is final and neither side can be represented by a lawyer at the proceedings.
If the assessor considers the contract to fall outside the scope of the COVID-19 Act, then the creditor can sue the debtor for the debt as per usual.
For Debts Not Owed Under Contracts Not Covered by the COVID-19 Act
It should be noted that all contracts not explicitly stated to be covered by the COVID-19 Act, or determined by an assessor as not being covered by the COVID-19, would generally not qualify for relief under it.
In such cases, a creditor is free to sue his debtor to recover his dues as per normal, as well as to commence winding-up / bankruptcy proceedings against him if he cannot pay.
However, COVID-19 has created extraordinary economic conditions. For example, businesses are running into cash flow difficulties due to the circuit breaker measures. As a result, the law has prescribed a higher threshold for the conditions which must be met for the filing of bankruptcy and winding up applications during the COVID-19 period.
Filing a bankruptcy application during COVID-19
Under ordinary conditions, the court will not entertain any bankruptcy application against an individual where his outstanding debt payable immediately is not at least S$15,000. Such an individual must also have been served a statutory demand and have failed to comply with it for 21 days before the application can proceed.
However, these thresholds have been raised for the entire duration of the prescribed period to S$60,000 and 6 months respectively.
Filing a winding up application during COVID-19
Similarly, the requirements for a winding up application against an incorporated business have also been raised. Under ordinary conditions, the court will not entertain any winding up application against an incorporated business where its outstanding debt payable immediately is not at least S$10,000 and it has failed to comply with a statutory demand for payment for at least 3 weeks.
These thresholds have been raised for the entire duration of the prescribed period to S$100,000 and 6 months respectively.
Feasibility of filing a bankruptcy or winding up application during COVID-19
It is therefore clear that the requirements for filing a successful bankruptcy or winding up application are now more onerous and will remain so for the entire prescribed period.
On top of that, it may also not be worthwhile to commence such applications under the present circumstances even if the legal requirements are met.
This is since many individuals and businesses are presently facing cash flow problems and thus may not have the assets or cash to repay their debts even if successfully declared bankrupt/wound up.
Recovering a debt may also require various legal procedures and strategies, especially in cases where the debtors’ assets are unclear or not easily available. A winding up application would also incur further substantial costs of its own (the starting deposit for a winding up is by itself already $10,400, for example) and thus reduce the assets available for distribution to creditors.
We therefore strongly recommend consulting a lawyer to obtain legal advice if you plan on recovering a substantial debt, especially in light of the present uncertain times.
