Second Reading Speech by Senior Minister of State for Law, Mr Edwin Tong, on the COVID-19 (Temporary Measures) Bill 2020

07 APR 2020

07 Apr 2020 Posted in Parliamentary speeches and responses

I. INTRODUCTION

  1. I will now deal with Parts 4 and 5 of the Bill which introduces 2 provisions:

(a) Clause 27 which deals with alternative arrangements for meetings – meetings which are usually required to be held in person, the attendance of the shareholders, for example, in person at an AGM.

(b) And also Clause 28 which provides for the conduct of court proceedings by remote means.

  1. Sir, legal proceedings and such meetings generally require personal attendance.
  1. However, the spread of COVID-19 infections, and the Government’s control measures to address this, has meant that such meetings and Court proceedings, that are to be held in person, or to be attended by persons physically, are no longer always possible, or even when they are, should be reduced.
  1. On 27 March, MOH’s Safe-Distancing Regulations under the Infectious Diseases Act, came into force. This limited gatherings outside of work and school to 10 persons or fewer.
  1. Since then, these control measures have been progressively enhanced, stepped up and made stricter.

II. ALTERNATIVE MEETING ARRANGEMENTS

(A) The Problems

  1. This has given rise to some problems transacting usual commercial and other matters.
  1. Many companies, including those listed on the Singapore Exchange, have been unable to hold shareholder meetings, including AGMs, to obtain shareholder approval to undertake a proposed course of action by the company.
  1. For example, meetings which otherwise would be held to approve dividend payments – which can of course, be given to shareholders to assist in their cashflow – could not be held. Companies could not raise capital, for example, through rights issues and share capital increases, because meetings were necessary.
  1. Since 27 March, when the Regulations were stepped up and came into force, certain AGMs were postponed as a result.
  1. For example:

(a) DBS Group Holdings, OCBC, and Great Eastern – three examples of large corporates which ordinarily have more than 1,000 shareholders attend their meetings – and other companies, have had to defer their AGMs, pending the passing of this Bill. This in turn also meant that they have had to defer payment of final dividends for the financial year, as these can only be approved at their AGM.

(b) Several Real Estate Investment Trusts, such as Ascendas and OUE Commercial, have also had to defer their AGMs.

(c) And listed companies, like Capitaland and Starhub, have had to obtain extensions of time, keeping their meetings, and thereafter their corporate plans, in abeyance.

  1. It is not just the corporate sector which has been affected. Similar challenges have also been faced by a range of different bodies in different sectors, for example charities, societies, co-operative societies, trade unions, and MCSTs.
  1. For these bodies, not being able to hold meetings can have various adverse implications.

(a) Some trade unions, for example, may be unable to obtain approvals for additional expenditures, to provide assistance to members, particularly during this COVID-19 situation.

(b) MCSTs may be unable to carry out urgent, non-routine work on their estates where subsidiary proprietors’ approvals would have been needed.

(c) En bloc sales may be unable to be completed by the stipulated timelines, if the requisite meetings are not held. In these situations, if sellers fail to meet their deadlines, they may have to start the process all over – jeopardising existing sales arrangements, and of course, scuttling the plans of buyers and sellers alike.

(d) Societies and charities may be unable to meet deadlines to elect officers, for governance purposes

(e) Co-operative societies may be unable to issue dividends to members.

(f) There are many other examples.

  1. So, across a range of sectors, and in the financial markets, the inability to hold meetings has led to a significant degree of uncertainty and disruption.
  1. Hence, Part 4 of this Bill seeks to introduce and allow some flexibility for meetings to be held in compliance with the necessary safe distancing measures but yet at the same time, maintaining propriety in the conduct of these meetings.

(B) What Clause 27 does

  1. Clause 27 applies to all situations where “personal attendance at the meeting is provided for in written law or any legal instrument.” There need not be an explicit requirement for physical attendance. The relevant law or legal instrument may simply entitle a person to attend a meeting. In this case, Clause 27 would apply. The relevant law or legal instrument may already provide for both virtual meetings, and personal attendance. In such a situation, Clause 27 would also apply.
  1. Under Clause 27, the Minister for Law may prescribe, by order, any alternative meeting arrangement he considers necessary or desirable, for that meeting or class of meetings to take place. Compliance with the prescribed alternative arrangements, will override anything to the contrary in law or legal instrument.
  1. The alternative arrangements, to be prescribed, will be pragmatic, and practicable, given the prevailing conditions.

(a) Safety of the participants in particular, will be the priority.

(b) But there will also be other safeguards, to facilitate informed and effective participation.

(c) At the same time, mindful of the technological constraints, and security considerations, to ensure that the meeting is held regularly.

  1. The range of options that can be considered are set out in Clause 27(2), which allows, in appropriate cases:

(a) For meeting proceedings to take place electronically, or by video-conference, or

(b) Voting by electronic means, or

(c) For an appropriate period of notice to be provided

(d) To name a few.

  1. To illustrate – alternative arrangements for a company AGM may look something like this :

(a) The meeting can be completely virtual. There would be no need to meet physically.

(b) A smaller quorum could also be set.

(c) Documents, such as notices of meetings, or proxy forms, may be sent by electronic means, instead of hard copy. People do not need to be in the office, to do printing, copying, sealing envelopes and so on. Notices of meetings, including electronic meetings, will have to comply with a minimum notice period, as a safeguard.

(d) Since voting in person by everyone at the meeting is not possible, proxy voting can also be used. As a safeguard, a specific office-holder, such as the Chairman, may be designated as the sole proxy.

(e) There will also be safeguards to ensure that the meeting is conducted properly. Hence, the meeting must have “live” video and audio feed. Members must be given the opportunity to submit questions, such as through email, in advance of the meeting. These questions must be addressed by the Chairman or the relevant officer of the meeting before, or during the meeting.

  1. There may be some variations in the way in which these arrangements might work, from one kind of meeting to another,.

(a) There is no one-size-fits-all approach.

(b) Which is why Clause 27(2) prescribes the suite of options available to the Minister to prescribe, as may be appropriate, for one type of meeting to another.

  1. I should highlight to members that Clause 27, like some other parts of this Bill, applies retrospectively, from 27 March.

(a) 27 March is the date on the MOH’s Safe-Distancing Regulations.

(b) Hence, under Clause 27(5), the order under Clause 27(1) may apply retrospectively so that any meetings held in the intervening period would be covered.

  1. We have made this known, as far as possible to the market, once this Bill was being prepared, so that people in the market could rely on the provisions of this Bill, know about it as soon as possible.
  1. In the period leading up to the publication of this Bill, MinLaw and MOF issued a joint press release on the 31 March announcing these proposed legislative provisions so that the market and its users were clear, and also making clear that the intention was for this Bill to apply retrospectively from 27 March.
  1. On the same day, SGX, ACRA and MAS issued their joint guidance for listed companies. The guidance set out in detail how issuers could hold meetings in compliance with the safe distancing measures.
  1. Applying Clause 27 retrospectively ensures that re-arrangements made to meetings between 27 March, and the date when the alternative arrangements are prescribed, will be upheld.

(a) This includes meetings that were deferred in response to safe distancing measures

(b) And also meetings that were re-convened after being originally deferred.

  1. Sir, the application of Clause 27 in this period will reduce disruption, increase legal certainty, and allow for, as much as possible, commercial transactions and activity to carry on, even in this period.

III. REMOTE COURT PROCEEDINGS

  1. I will now deal with Clause 28.
  1. The conduct of court proceedings in physical courtrooms will also need to be reduced during this period where control measures are in place. Hence, more proceedings will be held remotely with the aid of technology.
  1. The Judiciary and the Syariah Court have already moved decisively, prior to this, in response to the measures implemented by the Government to minimise the spread of COVID-19. During the period specified by the Judiciary and the Syariah Court, every matter fixed for hearing in the Supreme Court, State Courts and Family Justice Courts, as well as the Syariah Court, either have already been, or will shortly be adjourned, unless assessed to be essential and urgent. Hearings during this period will as far as possible be conducted through electronic means.
  1. Clause 28 of the Bill will complement and facilitate these measures by allowing for a wider use of remote communication in Court proceedings in the following way.
  1. Subject to conditions which I will outline, accused persons in Singapore and specified categories of witnesses from abroad can give evidence remotely, either by video or television link, in any court proceedings. This applies also to the Syariah Court proceedings.
  1. Clause 28 will allow any court or Syariah Court proceeding to be conducted remotely, if certain conditions are met. This means that judges may hear the cases remotely, outside of a courtroom.
  1. There are some conditions, as I have mentioned earlier, to ensure the propriety of the proceedings. Therefore:

(a) A witness who makes an appearance or gives evidence must do so from a place specified by the court or the Syariah Court.

(b) Second, if the witness is a witness of fact, then the parties to the proceedings must come together and agree that this witness can testify by remote communication.

(c) Existing safeguards adapted from the Evidence Act and the Criminal Procedure Code will continue to apply. For instance, the court or the Syariah Court must not make an order to conduct proceedings remotely, if having regard to the overall justice of the case, the proceedings cannot be conducted fairly, if proceedings were held remotely. Fairness of the proceedings remains the overriding consideration.

  1. The existing rules which prohibit unauthorised audio or visual recordings in court will also apply under Part 5 of the Bill. So for instance, a litigant who is engaged in remote court proceedings, cannot be recording the proceedings without the Court’s permission.
  1. These measures are designed to be temporary in nature, and are intended to ensure the continued operation of the Courts during the COVID-19 situation as much as possible. Hence, two temporal limits have been put in place.

(a) First, the measures will only apply during the specified period. This is the period that the control measures to prevent the spread of COVID-19 are in force, or any further period necessary or expedient to conduct any proceeding in a safe and efficient manner.

(b) Second, Clause 28 also contains sunset clauses. These allow the Minister for Law, in consultation with the Chief Justice or the Minister in charge of Muslim Affairs, to declare that Clause 28 will cease to apply to any court proceedings or Syariah Court proceedings, respectively.

IV. CONCLUSION

  1. Sir, to conclude on these two parts of the Bill. Clauses 27 and 28 of the Bill are designed to respond to changes arising from our country’s fight against COVID-19. These provisions will ensure that commerce and the administration of justice do not grind to a complete halt, even as we observe the circuit breaker measures which the Government has implemented.

Last updated on 07 Apr 2020