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If an event gets cancelled in Malaysia, can you get a refund?

12 days ago JS Lim

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You might be an avid event goer, whether you love cultural conventions, marathons, or even music concerts like Jay Chou's upcoming concert in 2018. You love the fact that the organizers worked hard to put together an event for something you care about, and you willingly pay a premium for some of these events because they are amazing. Go to enough of these events and at some point you might have experienced the event being suddenly postponed, or worse – cancelled.

The hall when you arrive. Image from laneventscenter

Sometimes, you might have let the ticket "burn"; but if the organizers were nice enough, they offered you a full refund. Unfortunately, this still leaves you stuck with all the preparation done, but you have no event to go to. That's still manageable it was just you getting excited and telling your friends about it. But what if you spent money on the preparations like buying a flight ticket?

This was the situation for a lot of participants in the Malaysia Marathon Kuala Lumpur 2017 that was cancelled in September 2017. They did offer participants a full refund, but some runners from East Malaysia who were left with a useless flight ticket were not happy. Especially since the only reason given for cancelling the event was "unforeseen circumstances which would have impacted the overall event quality".

We may willing to let small amounts go, but what if we were quite committed to the event and it was suddenly called off? You might be surprised that in Malaysia, we actually have laws that govern this kind of scenario. And it turns out...

 

The cancellation might have been outright illegal

Your event organiser probably has a list of terms and conditions somewhere on the registration form, or on the ticket itself. The exact line in question should read something like this:

"The organiser reserves the right to cancel or postpone the event without prior notice. The organiser will not be responsible for any loss or inconvenience caused.”

You didn't just sign up for an event when you paid the fee, you also signed a contract with the organiser! The above term gives them the right to cancel, and says that they are not responsible – that doesn't sound very fair. But you might not know that we have a fairly recent addition to our Consumer Protection Act 1999 (CPA) on unfair contract terms like this one. Enter Section 24D(1)(e), which basically makes it illegal for the organiser to limit their responsibility for breaking their promises to you in the contract.

Section 24D of the Consumer Protection Act 1999 (in part)
(1) A contract or a term of a contract is substantively unfair if the contract or the term of the contract—…
(e) excludes or restricts liability for breach of express or implied terms of the contract without adequate justification.

This basically tells the organiser that if something out of their control affects the event, or if something comes up that makes the event impossible for them to run, then it's okay if they need to cancel the event. An example might be a flood disrupting the event.

Dearly Be-flooded. Image from huffingtonpost

But if the organiser can't provide a good justification for the cancellation, they might have to pay compensation for any flight and hotel bookings you made because they breached the contract. So how do we decide whether there was a good justification?

[READ MORE – Some no refund policies are illegal!]

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Organisers are only allowed to make certain changes

To be clear, not every cancellation will be considered unfair just because the organiser didn't tell the participants beforehand. These are a few of the factors the law will consider to decide whether it was unfair or not:

  1. Are the terms and conditions difficult to comply with?
  2. Does it give the organiser an unfair advantage over you?
  3. Are there excessive penalties for not attending the event?
  4. Is the organiser entitled to cancel the event without good reason and without giving a refund?
  5. Is the organiser entitled to change the contract terms without asking you?

There are many other considerations which you can read under Section 24D(2) of the CPA (you may have to hit Crtl + F and search for it).

Generally, if there is no indication that the organiser is trying to take advantage of you, a term saying that the organiser has the right to amend the terms and conditions is still fair. It boils down to whether the amendment affects you unfairly. For example, the organiser can change the venue if they have to, but if they suddenly want to collect extra fees without telling you why… there might be a problem.

There's a case on this point from 2014 decided on this between Fairview International School Subang Sdn Bhd v Malaysian Consumer Claims Tribunal & Another.

Image from imgflip

What happened was a student wanted to withdraw from the school, but she needed to give advance notice of one academic term to get her security deposit refunded. Fairview had changed their academic term from 4 months to 6 months at some point, so the mum wasn't too happy about it.

"The provision empowering the school to unilaterally amend the terms and conditions was neither objectionable nor unreasonable. It was situational depending on how the provision was utilised and the resultant contents and effect of the amended term or condition." – LIM CHONG FONG JC in Fairview International School Subang Sdn Bhd v Tribunal Tuntutan Pengguna Malaysia & Anor

The judge said the school changing the notice period was not unfair because it was not done to make it difficult for students to withdraw. In any case, the mum only gave the school 2 days of notice… So she ended up paying for Fairview's legal fees as well as forfeiting the deposit. This was not a case about events, but it does tell us that the organiser has the right to make changes, as long as they're not cheating you.

 

Here's what legal action you can consider

According to Section 24E of the CPA, if your event organiser uses terms and conditions that limit their responsibilities or your rights, the burden is on them to prove that they cancelled with good justification. Organisers who use such unfair terms to escape their responsibilities can be punished up to RM250,000 in fines (RM500,000 for repeat offences).

On top of that, you might be able to sue the event organiser for compensation. If cancelling the event was unfair to participants, the organiser could be found in breach of contract, which is what entitles you to compensation. You'll get back whatever you can prove to the court that you spent because of the event (such as travel arrangements), but no more than that.

Here are two ways you could bring the issue to court:

1. Sue the organiser

You can hire a lawyer to bring an action against the organiser, which will involve costs. You could also file for a class action lawsuit with other participants who want to get compensation, and you will share the costs of the lawsuit together. You can learn more about how True Fitness members filed a class action lawsuit when the gym pulled out of Malaysia very suddenly on our other article here.

2. The Malaysian Consumer Claims Tribunal (MCCT)

The MCCT is another avenue for consumers to file claims. If you choose this route, you and the organiser will have to argue your case without a lawyer. You'll be guided by a member of the Tribunal, and you have to pay RM5 for administrative fees. You can find out how to file a claim at their website here.

This article is for informational purposes only and should not be taken as legal advice. Every situation is unique and dependent on the facts (ie, the circumstances surrounding your individual case) so we recommend that you consult a lawyer before considering any further action. All articles have been scrutinized by a practicing lawyer to ensure accuracy.
Tags:
consumer protection
event
cancelled
postponed
refund
compensation
breach of contract
contract
unfair contract terms
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