With the forecast of a new Covid-19 Wave, we revisit some of the common Covid-19 related disputes that arose during the Movement Control Order (MCO).
Myth One
Pursuant to the “Covid-19 Act 2020”, businesses/individuals who owe money during the MCO cannot be sued.
FACT:
Only certain types of contracts are protected under the Covid-19 Act. The few examples are construction work contracts, event contracts and lease or tenancy of non-residential properties.
The Covid-19 Defence is not automatic. Businesses/individuals relying on the Defence must also prove that their inability to pay i.e. perform the contract was actually caused by the MCO measures at the time.
Myth Two
Landlords cannot sue tenants for unpaid rent during the MCO period.
FACT:
Although the Covid-19 Act protects commercial tenants from unpaid rental claims (to some extent), affected landlords can continue to build on their tenant’s liability to pay and opt to pursue a claim after the Covid-19 Act coverage period is over.
Myth Three
Contractors do not have to pay their suppliers until they receive payment from i.e. main contractor/developer.
FACT:
It all depends on the contract. This is usually only true if parties to the contract have agreed to a “pay when paid” or “back-to-back basis” arrangement or where parties entered into a novation agreement.
Myth Four
Creditors cannot recover debts against a company once it goes into liquidation (or “Winding Up”).
FACT:
Creditors can still sue a company that has gone into liquidation. However, permission of the Court may be required.
After a company is wound up, creditors have the option to submit a ‘Proof of Debt’ form to the liquidator of the wound up company. In that way, if any of the company’s assets are sold/realized, the creditor will be entitled to dividends payments.
2022 – 2023 Stamp Duty Exemption For First Time Owners
