3. Process for Repayment Scheme for Hire-Purchase and Equipment Rental contracts
Process for Repayment Scheme for Hire-Purchase and Equipment Rental contracts
This page provides details on the process for a party who wishes to apply for a Repayment Scheme in relation to an eligible contract under the Re-Align Framework, including information on the Notice of Revision.
It also provides details on how a party may object to a Notice of Revision by lodging and serving a Notice of Objection to Notice of Revision.
Please note that all information or documents disclosed by you or the other person for the purpose of the Framework or the proceedings before the Adjustment Relief Assessor are confidential and must not be disclosed to any third parties.
| Please note that: | |
| (a) | the last day for serving the Notice of Negotiation and Notice for Revision was 26 February 2021. If you did not serve the Notice of Negotiation or Notice of Revision by 26 February 2021, you are not eligible for relief under the Framework. |
| (b) | the last day of the latest possible Objection Period was 9 April 2021. If you did not serve and lodge the Notice of Objection during the Objection Period, you will not be able to object to the Notice of Revision. As a result, the revised repayment schedule in the Notice of Revision may form part of the specified contract from the date of the Notice of Revision, and prevail over any term of the contract to the extent of where there is any inconsistency between them |
This page includes the following sections:
Step 1: Hirer/Renter serves Notice of Revision
Step 2: Hirer/Renter and Other Party renegotiate contract during 4-week Negotiation Period
Step 3: Other Party lodges and serves Notice of Objection during the 2-week Objection Period
(A): Other Party objects to Hirer/Renter’s Notice of Revision
(B): Other Party does not object to Hirer/Renter’s Notice of Revision
Step 4: Registrar reviews Notice of Objection
Step 5: Assessor Conducts Hearing and Makes Determination
Step 6: Registrar Informs Hirer/Renter and Other Party of Assessor’s Determination
Withdrawal of Notice of Objection
FAQs
Step 1: Hirer/Renter serves Notice of Revision ↩
The following eligible parties (“the Hirer/Renter”) who wish to take up a Statutory Repayment Scheme under Division 4 of Part 10 of the Act must serve a Notice of Revision.
(a) a hirer under a hire-purchase or conditional sales agreement for commercial equipment; or commercial vehicle, which is not entered into with a bank, or with a finance company under the Finance Companies Act (Cap. 108); or
(b) a renter under a rental agreement for commercial equipment or commercial vehicle
Please refer to the following links for the methods by which your eligibility will be assessed:
(a) On the applicable methods of determining if your business’s annual revenue does not exceed $30m at a global group level, please refer to this link.
(b) For the applicable method of determining if your business has experienced at least a 70% fall in monthly average gross income, please refer to this link.
| Before serving the Notice of Revision, the Hirer/Renter should have enclosed the supporting documents (set out here) with the Notice of Revision. In the Notice of Revision, the Hirer/Renter must have set out a proposed repayment schedule which meets the requirements here. |
The Notice of Revision must have been served within 6 weeks from 15 January 2021 (i.e. by 26 February 2021), on the following Recipient(s), where applicable:
- The Hirer/Renter’s financing company or leasing company, as the case may be (“the Other Party”).
- The guarantor or surety, or the issuer of a performance bond, in relation to the Hirer/Renter’s obligations under the contract.
- Any assignee of any party to the contract.
| Please note that the last day for serving the Notice of Revision was 26 February 2021. If you did not serve the Notice of Revision by 26 February 2021, you are not eligible for relief under the Framework. |
After the Notice of Revision is served, there will be a 4-week negotiation period for parties to reach a mutually acceptable outcome (see Step 2 below).
Moratorium
To facilitate negotiations and to avoid parallel proceedings on the same matter, once a Hirer/Renter serves a Notice of Revision, the Other Party will be prohibited from taking legal and enforcement actions (e.g. court and arbitration proceedings, or termination of the contract) against the Hirer/Renter for his non-payment of the amounts that must be covered by the Repayment Scheme or any interest or other charge (however described) on that amount.
Broadly, the prohibition will end on the earliest of the following:
(a) On the expiry of 6 weeks after the Notice of Revision is served, if a Notice of Objection is not served and lodged.
(b) If a Notice of Objection is validly served and lodged within the 6 weeks, the day on which the Notice of Objection is withdrawn after the expiry of the 6 weeks.
(c) The day on which an Assessor has made all the determinations required to be made in relation to the Notice of Revision.
For more details on the moratorium, please refer to the Fifth Schedule of the Act.
Step 2: Hirer/Renter and Other Party renegotiate contract during 4-week Negotiation Period ↩
After the service of the Notice of Revision, there will be a 4-week Negotiation Period commencing after the date of the Notice of Revision during which the Hirer/Renter and the Other Party are encouraged to renegotiate the repayment schedule for any outstanding payments owed by the Hirer/Renter to the Other Party, or the terms of the contract, where applicable.
During this Negotiation Period, the Other Party cannot lodge or serve a Notice of Objection. For examples of how to determine the start and end of the 4-week Negotiation Period, please refer to here.
Step 3: Other Party lodges and serves Notice of Objection during the 2-week Objection Period ↩
At the end of the 4-week Negotiation Period, the two possible outcomes are:
- Parties have successfully renegotiated the terms of their contract and/or the repayment schedule for outstanding payments.
- Parties have been unsuccessful in their renegotiation of the terms of their contract and/or the repayment schedule for outstanding payments.
A 2-week Objection Period starts after the end of the 4-week Negotiation Period. If parties have successfully renegotiated the terms of their contract by the end of the 4-week Negotiation Period, they may proceed with the amended terms of their contract or the amended repayment schedule. The Other Party does not need to serve a Notice of Objection in this situation. For examples of how to determine the start and end of the 4-week Negotiation Period, please refer to here.
In contrast, where parties are unsuccessful in their renegotiation by the end of the 4-week Negotiation Period, there are two courses of action for the Other Party or his assignee.
(A): Other Party objects to Hirer/Renter’s Notice of Revision ↩
If the Other Party or its assignee wishes to object to the Hirer/Renter’s Notice of Revision, the Other Party must, within the 2-week Objection Period, serve a Notice of Objection on the required parties, and lodge the Notice of Objection with the Adjustment Relief Registrar within the same period. For examples of how to determine the start and end of the 4-week Negotiation Period, please refer to here.
The Other Party or his assignee may only object to the Hirer/Renter’s Notice of Revision on any one or more of the following grounds:
- The contract in question is not a hire-purchase or conditional sales agreement or a lease of commercial equipment.
- The Hirer/Renter does not satisfy the eligibility criteria for relief.
- The Notice of Revision was not served in accordance with Section 53 of the Act. (e.g. the Notice was not served by 26 February 2021)
- The Hirer/Renter’s proposed repayment schedule does not meet the requirements in Section 53(4)(a)-(d) of the Act. (e.g. The amounts covered by the proposed repayment schedule includes amounts payable before 1 February 2020 or after the date of the Notice of Revision).
To object to the Notice of Revision, the Other Party must lodge the Notice of Objection with the Registrar and serve the Notice of Objection on the following persons within the 2-week Objection Period on the following Recipient(s), where applicable:
- The Hirer/Renter;
- Any other party to the contract;
- The Hirer/Renter’s guarantor or surety, or issuer of a performance bond, in relation to the Hirer/Renter’s obligations under the contract; and
- Any assignee of any party to the contract.
The following documents should have been attached to the Notice of Objection:
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| Please note that the last day of the latest possible Objection Period was 9 April 2021. If you did not serve and lodge the Notice of Objection during the Objection Period, you will not be able to object to the Notice of Revision. |
(B): Other Party does not object to Hirer/Renter’s Notice of Revision ↩
If no Notice of Objection is served and lodged during the 2-week Objection Period, the Hirer/Renter’s revised repayment schedule in the Notice of Revision will form part of the contract from the date of the Notice of Revision and will prevail over any term of the contract which is inconsistent with the revised repayment schedule.
Where the Other Party accepts the Hirer/Renter’s Notice of Revision or came to an agreement during the 4-week Negotiation Period, the parties can carry out their repayment obligations according to the revised repayment schedule in the Notice of Revision or on any other agreed terms. The Other Party does not need to serve and lodge a Notice of Objection in this situation.
Please also note that there will be no case before an Assessor in this situation. Steps 4 to 6 below will not apply.
Step 4: Registrar reviews Notice of Objection ↩
The Registrar will review the Notice of Objection.
If the Registrar is satisfied that the Notice of Objection is in order, the Registrar will send to the Hirer/Renter, the Other Party and their assignees by way of email:
- An acknowledgment of receipt of the Notice of Objection.
- A notice of the appointment of one or more Assessors.
- If applicable, a notice of the date and place for the hearing.
Pending the Assessor’s determination on the Notice of Objection, the Hirer/Renter may make the payments in accordance with the Hirer’s/Renter’s proposed revised repayment schedule.
If the Registrar refuses to accept lodgment of a Notice of Objection or the Notice of Objection is withdrawn by the Other Party, the Hirer/Renter’s revised repayment schedule in the Notice of Revision will form part of the contract from the date of the Notice of Revision and will prevail over any term of the contract which is inconsistent with the revised repayment schedule.
Step 5: Assessor Conducts Hearing and Makes Determination ↩
Where Notice of Objection is lodged
Where the Other Party or his assignee has lodged a Notice of Objection and the Notice is accepted by the Registrar, the Registrar will appoint one or more Assessors to make a determination on the Other Party or his assignee’s Notice of Objection.
If the Assessor(s) determines that there is no valid ground of objection by the Other Party or his assignee, the Hirer/Renter’s revised repayment schedule in the Notice of Revision will form part of the contract from the date of the Notice of Revision and will prevail over any term of the contract which is inconsistent with the revised repayment schedule.
If the Assessor(s) determines that the only valid objection is that the Hirer/Renter’s proposed repayment schedule does not satisfy the requirements under the Act, the Assessor(s) may determine what the revised repayment schedule should be.
Mode of hearing
The hearing will generally be conducted over email. The Assessor(s) may request for clarifications or further documents by email. If the Assessor(s) is of the opinion that the interest of justice would be better served by an online or physical hearing:
- Online hearings will be conducted via Webex.
- Physical hearings will be held at a venue to be advised by the Registrar.
Please note for online or physical hearings:
- The Assessor(s) may permit a party to be accompanied by an interpreter at the hearing. The party will be responsible for sourcing their own interpreter.
- No party may be represented by an advocate and solicitor at proceedings before Assessor(s).
If a party to a contract or his assignee is absent from the hearing, the Assessor(s) may deem that that party (or that party’s assignee) has withdrawn the Notice lodged by him; or may proceed to hear and make a determination on the case.
If a person had a good reason for being absent, he may make an application to set aside the determination made in their absence (see here).
Step 6: Registrar Informs Hirer/Renter and Other Party of Assessor’s Determination ↩
After the Assessor(s) has made a determination, the Registrar will inform the Hirer/Renter, the Other Party and their assignees.
There is no appeal against an Assessor’s determination, and it will be binding on all parties to the contract and their assignees.
The Registrar may publish the facts of the case, the arguments and the determination without disclosing the names of the parties concerned or any information that may disclose their identities.
Withdrawal of Notice of Objection ↩
Where any party who has lodged and served a Notice of Objection wishes to withdraw that Notice, that party must lodge a Notice of Withdrawal with the Registrar and serve the Notice of Withdrawal on the following Recipient(s) where applicable before the determination of the Assessor(s) on the Notice of Objection, if you had served the Notice of Objection on them:
- The Hirer/Renter who served the Notice of Revision;
- Any other parties to the contract; and
- Any assignee to any party to the contract.
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Submission and service by the electronic system To submit to the Registrar and serve the Notice of Withdrawal on the Recipient(s) using the electronic system, you must have an email address as well as the email address(es)* of the Recipient(s): |
*Email address is (i) an email address at which you have corresponded with the Recipient regarding the contract; or (ii) if (i) is not available, an email address which the Recipient has represented to you as the address to which communications may be sent.
FAQs ↩
1. What happens if I did not serve the Notice of Revision with the relevant supporting documents on the relevant parties by 26 February 2021?
The timeline for service was a hard deadline. If you did not serve the Notice of Revision with the relevant supporting documents on the relevant parties by 26 February 2021, you will not be able to obtain relief under the Framework.
2. What should I include in my Notice of Revision?
Your Notice of Revision should set out the revised schedule of repayments in accordance with section 53(4) of the Act.
*Illustration:
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Hirer/Renter serves a Notice of Revision of the repayment schedule on the Other Party and its own guarantors/sureties on 25 January 2021 as the Hirer/Renter has outstanding arrears which he needs more time to pay. The date of the Notice of Revision is 25 January 2021. (Note: Hirer/Renter may serve the Notice of Revision at any time between 15 January 2021 and 26 February 2021 (both dates inclusive)).
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The total outstanding arrears (referred to thereafter as “X”) the Hirer/Renter is able to seek a revision on under the Act is the arrears accrued between the period of 1 February 2020 and 24 January 2021 (i.e. the date before the date of the Notice of Revision).
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The sum of X includes any interest imposed on late payment up till 24 January 2021 (i.e. the date before the date of service of the Notice of Revision).
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Assume X is $10,000 and that the Hirer/Renter intends to make payment over a 12-month period, from 26 March 2021 to 26 February 2022.
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The late payment interest on X accrues at 5% per annum, and starts accruing from the date of the Notice of Revision i.e. 25 January 2021. Accordingly, the late payment interest on X will be calculated as follows: X x (A ÷ B) x 5 %, with A = No. of days between 25 Jan 2021 to 26 Feb 2022 (both dates inclusive) = 398 days ; B = 365 days.
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Using the formula above, the late payment interest on X amounts to $10,000 x (398 days ÷ 365 days) x 5% = $545.21.
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Therefore, the total amount which he will have to pay is $10,545.21 (being principal of $10,000 and interest of $545.21 calculated at 5% per annum).
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Under the Act, the first instalment must be payable by 26 March 2021 (i.e. one month after 26 February 2021, which is the last date to serve the Notice of Revision), the Hirer/Renter wishes to start the payment of the first instalment on 26 March 2021.
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On the above illustration, a sample proposed repayment schedule which should be set out in the notice of revision is as follows:
| Date of repayment | Total amount to be repaid |
| 26 March 2021 | 878.77 |
| 26 April 2021 | 878.77 |
| 26 May 2021 | 878.77 |
| 26 June 2021 | 878.77 |
| 26 July 2021 | 878.77 |
| 26 August 2021 | 878.77 |
| 26 September 2021 | 878.77 |
| 26 October 2021 | 878.77 |
| 26 November 2021 | 878.77 |
| 26 December 2021 | 878.77 |
| 26 January 2022 | 878.77 |
| 26 February 2022 | 878.74 |
If a Notice for Objection is lodged by the Other Party and the only valid objection is that the proposed revised repayment schedule in the Notice of Objection does not satisfy the requirements of the Act, the Assessor may determine what the revised repayment schedule should be.
3. I am the Other Party. I object to the revised schedule of payments proposed by the Hirer/Renter as I would prefer the outstanding arrears to be repaid in a shorter period than the 18-month period which the Hirer/Renter has offered. What can I do?
An eligible Hirer/Renter is entitled under the Act to pay the outstanding arrears in equal amounts over a period of up to 18 months. You cannot serve a Notice of Objection solely on the ground that you want a shorter repayment period.
4. I am a Hirer/Renter. What happens if I fail to pay any instalment under the revised repayment schedule?
The revised repayment schedule ceases to have effect where:
(a) The Hirer/Renter fails to pay an instalment under the revised repayment schedule within 14 days after the date on which the instalment is due to be paid under the revised repayment schedule;
(b) The Hirer/Renter terminates or repudiates the contract during the period covered by the revised payment schedule;
(c) The Other Party terminates the contract for any default by the Hirer/Renter other than a failure to pay an instalment payment.
Assuming any of the above occurs, the following becomes payable immediately by the Hirer/Renter:
(d) the amount of any instalment payable under the revised repayment schedule before the date of the occurrence of the event in paragraph (a), (b) or (c) and that remains unpaid on that date; and
(e) the instalments payable under the revised repayment schedule on or after that, excluding the prescribed interest in section 53(4)(a)(iii) that is part of those instalments.
As from and including the date of the occurrence of the event in paragraph (a), (b) or (c), the outstanding repayment are subject to all interest and other late payment charges (however described) stipulated under the contract until the date that the outstanding repayments are repaid.
5. What happens to title or ownership of the commercial equipment under a hire-purchase agreement if a Hirer/Renter successfully obtains the Repayment Scheme?
Title or ownership of the commercial equipment under a hire-purchase agreement will only pass to the Hirer/Renter when the Hirer/Renter has paid all the outstanding monies the Hirer/Renter is required to pay.
6. What is the consequence of breaching the moratorium?
Any person who, without reasonable excuse, breaches the moratorium shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000.
7. I am subject to Court actions against me for issues related to my Notice of Revision. What should I do?
Please refer to (7) Pending Court or Arbitration Proceedings for more information.
8. The Other Party to the contract is unreasonable. Can the Government intervene and help me with my negotiations with the Other Party?
The Government is unable to negotiate the contract on your behalf.
You may wish to consider mediation, which is a process whereby parties refer their dispute to a neutral third party who will assist the parties in arriving at a mutually acceptable resolution of the dispute.
For more information on mediation and how it may help you, please refer to the links below: