R Lam Paki v PNG Sustainable Development Program Ltd

• Jurisdiction: Singapore
• Judge: Kannan Ramesh JAD,Andre Maniam J
• Judgment Date: 04 July 2023
• Docket Number: Civil Appeal No 123 of 2021
• Court: High Court Appellate Division (Singapore)

Rex Lam Paki

and

PNG Sustainable Development Program Ltd

[2023] SGHC(A) 24

Kannan Ramesh JAD and Andre Maniam J

Civil Appeal No 123 of 2021

Appellate Division of the High Court

Civil Procedure — Inherent powers — Setting aside of judgments and court orders — Appellant having no good reason for defaults and delays — Relevant considerations in deciding whether to set aside judgment or order in exercise of court's inherent powers

Civil Procedure — Inherent powers — Setting aside of judgments and court orders — Whether court had inherent power to set aside judgments or orders — Order 92 r 4 Rules of Court (2014 Rev Ed)

Held, dismissing the application:

(1) Besides being able to set aside judgments or orders when they had been obtained irregularly, by fraud, or in default of appearance, the court retained a residual discretion, flowing from the court's inherent powers, to set aside judgments or orders so as to prevent injustice. The court's inherent power to set aside a judgment remained even if there was, or had been, a right of appeal. Setting aside might be necessary to prevent injustice, even if there was, or had been, a right of appeal. That being said, whether there was a right of appeal, and (if so) why an appeal was not pursued, were relevant considerations in deciding whether setting aside was necessary to prevent injustice: at [17] and [19].

(2) The predominant consideration in deciding whether to set aside a judgment in the exercise of the court's inherent powers was the reason for the defendant's absence. The court would consider the applicant's explanation (if any) for the defaults and delay (ie, a failure to file a defence, non-attendance at the hearing, failure to file an appeal, and delay in applying to set aside the judgment), as well as whether there was any prejudice to the other party. It was insufficient for a party applying to invoke the court's inherent power to set aside a judgment, in a case such as the present, merely to show that he had merits in his intended defence: at [24] and [25].

(3) In the present case, the appellant had no good reason for not filing his defence. He was absent at the hearing where the Judge had entered judgment on admissions of fact, and he took no action to either file an appeal against the judgment when he learnt of it in March 2020, or to set it aside. The appellant had no good reason for his defaults and delay in relation to the judgment. It appeared that the appellant was only prompted to act after being notified that the judgement was registered in New South Wales and Papua New Guinea. His concern seemed to be about the judgment being enforced against him, rather than about the judgment having been entered against him. Having sat on his hands and failed to take action despite having had numerous opportunities to do so, it was too late in the day for the appellant to contend that the judgment could not stand: at [27], [28] and [32].

(4) The court's inherent power to set aside a judgment or court order should never become a back-door appeal or an opportunistic attempt to relitigate the merits of the case. The appellant's attempt to set aside the judgment on the substantive merits was no more than a back-door appeal which could not be condoned: at [30] to [32].

Case(s) referred to

First Property Holdings Pte Ltd v U Myo Nyunt (alias Michael Nyunt) [2020] SGHC 276 (refd)

Harmonious Coretrades Pte Ltd v United Integrated Services Pte Ltd [2020] 1 SLR 206 (folld)

Mercurine Pte Ltd v Canberra Development Pte Ltd [2008] 4 SLR(R) 907; [2008] 4 SLR 907 (refd)

PNG Sustainable Development Program Ltd v Rex Lam Paki [2022] SGHC 188 (refd)

Su Sh-Hsyu v Wee Yue Chew [2007] 3 SLR(R) 673; [2007] 3 SLR 673 (refd)

U Myo Nyunt (alias Michael Nyunt) v First Property Holdings Pte Ltd [2021] 2 SLR 816 (refd)

Vallipuram Gireesa Venkit Eswaran v Scanply International Wood Product (S) Pte Ltd [1995] 2 SLR(R) 507; [1995] 3 SLR 150 (refd)

Facts

The appellant was formerly a director of the respondent company. The respondent sued the appellant in 2018 for breaches of fiduciary duties. In March 2019, the writ was served on the appellant. Apart from the appellant, there were six named defendants to the action. The third, fifth and sixth defendants succeeded in having the service of process set aside on grounds that the Singapore courts did not have personal jurisdiction over them. On 26 November 2019, the appellant was directed to file his defence by 13 December 2019. He did not do so.

On 20 December 2019, the respondent applied for leave to enter judgment against the appellant in default of defence. The judge in the General Division of the High Court (the “Judge”) heard the application on 30 January 2020, and indicated that he wished to be addressed on the merits of the claim rather than simply to give judgment in default of defence. The Judge directed the respondent to apply under O 27 of the Rules of Court (2014 Rev Ed) (“Rules of Court 2014”) for judgment on admissions of fact.

The respondent applied for judgment on admissions, these admissions being deemed admissions arising from the appellant not having filed a defence. The hearing of the respondent's application took place on 28 February 2020. The appellant, together with the second and fourth defendants, were represented by PRP Law. At the hearing, an issue of potential conflict of interests (in representing multiple defendants) was raised. The court adjourned the application to allow PRP Law to take instructions and respond.

On 2 March 2020, PRP Law applied to be discharged as solicitors for the appellant, and second and fourth defendants. On 4 March 2020, the court granted PRP Law's application. The court then heard and granted the respondent's application for judgment on admission of facts. The appellant was not present at this hearing.

On 10 March 2020, the respondent's solicitors sent a copy of the judgment to the appellant as well as the second and fourth defendants. No appeal was filed. Some 17 months later, on 6 August 2021, the appellant applied to set aside the judgment. This application was filed after the appellant had received notice that the judgment had been registered in New South Wales and Papua New Guinea.

The Judge who granted the judgment dismissed the appellant's application. He held that the court did not have the power to set aside a judgment on admissions because the Rules of Court 2014 did not expressly provide for this. The Judge further held that even if the court had the power to set aside the judgment, it would not do so in this case. The appellant appealed against the Judge's decision.

Legislation referred to

Rules of Court (2014 Rev Ed) O 13 r 8, O 27, O 35 r 2, O 92 r 4

Boey Swee Siang, Suchitra Suresh KumarandAbel George (Premier Law LLC) for the appellant;

Mark Jerome Seah Wei Hsien, See Kwang Guan (Martin), Alexander Choo Wei WenandPhilip Teh Ahn Ren (Dentons Rodyk & Davidson LLP) for the respondent.

4 July 2023

Andre Maniam J (delivering the judgment of the court):

Introduction

1 The appellant applied to set aside a judgment that had been entered against him on admissions of fact. The judge in the General Division of the High Court (the “Judge”) who granted judgment held that the court did not have the power to set aside a judgment on admissions, because the Rules of Court (2014 Rev Ed) (“ROC 2014”) did not expressly provide for this. The Judge further held that if the court had the power to set aside the judgment, he would not do so in this case. His grounds of decision are set out at PNG Sustainable Development Program Ltd v Rex Lam Paki and others[2022] SGHC 188 (the “GD”).

2 We dismissed the appellant's appeal against that decision with costs to the respondent. We agreed with the appellant that the court did have the inherent power to set aside a judgment on admissions, but we agreed with the Judge that setting-aside was not warranted in this case.

Background

Parties

3 The appellant was formerly a director of the respondent company. In 2018, the respondent sued the appellant for breaches of fiduciary duties. In March 2019, the writ was served on the appellant. After proceedings in which service was disputed, on 26 November 2019 the appellant was directed to file his defence by 13 December 2019, but he did not do so.

4 While there are six named defendants to the action, only the appellant (who was the first defendant), the second defendant, and the fourth defendant (collectively, the “defendants”) were central to the setting-aside application. This was because the third, fifth and sixth defendants succeeded in having service of process set aside on grounds that the Singapore courts did not have personal jurisdiction over them: GD at [9].

Application for judgment in default of defence

5 On 20 December 2019, in HC/SUM 6374/2019 (“SUM 6374”), the respondent applied for leave to enter judgment against the appellant in default of defence. On the same basis, judgment was also sought against the second defendant (the appellant's wife) and the fourth defendant (a company of which the appellant's wife was the sole registered shareholder and director).

6 At the hearing of the application on 30 January 2020, the Judge indicated that he wished to be addressed on the merits of the claim, rather than simply to give judgment in default of defence. He directed the respondent to apply under O 27 of the ROC 2014 for judgment on admissions of fact.

Judgment on admissions

7 The respondent duly filed HC/SUM 772/2020 (“SUM 772”) for judgment on admissions, those admissions being deemed admissions arising from the defendants not having filed a defence.

8 SUM 772 was first heard on 28 February 2020. At the hearing, PRP Law LLP (“PRP”) represented the defendants. An issue of potential conflict of interests (in representing...