Rex Lam Paki v PNG Sustainable Development Program Ltd

• Jurisdiction: Singapore
• Judge: Kannan Ramesh JAD
• Judgment Date: 04 July 2023
• Neutral Citation: [2023] SGHC(A) 24
• Court: High Court Appellate Division (Singapore)
• Docket Number: Civil Appeal No 123 of 2021
• Hearing Date: 24 April 2023
• Citation: [2023] SGHC(A) 24
• Year: 2023
• Plaintiff Counsel: Boey Swee Siang, Suchitra Suresh Kumar and Abel George (Premier Law LLC)
• Defendant Counsel: Mark Jerome Seah Wei Hsien, See Kwang Guan (Martin), Alexander Choo Wei Wen and Philip Teh Ahn Ren (Dentons Rodyk & Davidson LLP)
• Subject Matter: Civil Procedure,Judgments and orders,Jurisdiction,Inherent,Delay
• Published date: 06 July 2023

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

The appellant applied to set aside a judgment that had been entered against him on admissions of fact. 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 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”).

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

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.

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

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).

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 Rules of Court (Rev Ed 2014) (“ROC 2014”) for judgment on admissions of fact.

Judgment on admissions

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.

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 multiple defendants) was raised in relation to PRP’s representation of the defendants. The court adjourned the application to allow PRP to take instructions and respond.

On 2 March 2020, PRP filed an application to be discharged as solicitors for the defendants.

On 4 March 2020, the court granted PRP a discharge from acting as solicitors for the defendants, following which the court heard and granted SUM 772 and entered judgment against the defendants (the “Judgment”). SUM 6374 was consequently withdrawn.

At the hearing on 4 March 2020, the defendants did not attend in person or by solicitors. Nor did they contact the respondent’s solicitors or the court to seek an adjournment.

On 10 March 2020, the respondent’s solicitors sent a copy of the Judgment to the defendants. The appellant could have filed an appeal against the Judgment, but he did not do so; neither did the second defendant or the fourth defendant.

Application to set aside the judgment

Some 17 months later, on 6 August 2021 the appellant filed HC/SUM 3731/2021 (“SUM 3731”) to set aside the Judgment. This application was filed after the appellant received notice that the Judgment had been registered in New South Wales and Papua New Guinea.

On 1 November 2021, the Judge dismissed SUM 3731. The appellant appealed against that decision, and we dismissed the appeal.

The court’s inherent power to set aside judgments and orders

The Judge noted that the ROC 2014 had no specific provision allowing for a judgment on admissions to be set aside. He then held that the architecture of the ROC 2014 excludes any inherent power to do so: GD at [83]–[92]. The Judge reasoned that had he granted the respondent’s initial application for judgment in default of defence, he would have had express power under the ROC 2014 to set aside the judgment; but as the respondent had applied for and obtained judgment on admissions, the court did not have power to set aside that judgment.

On the Judge’s reasoning, a court has no inherent power to set aside any judgment or order. It either has an express power under a specific rule in the ROC 2014, or it has no power to set aside a judgment or order at all. This reasoning cannot hold given the Court of Appeal’s decision in Harmonious Coretrades Pte Ltd v United Integrated Services Pte Ltd [2020] 1 SLR 206 (“Harmonious Coretrades”) which recognised that the court has the inherent power to set aside its judgments or orders to prevent injustice: 34 It is settled law that there are at least three circumstances in which a court may set aside a judgment or order of court. These were first set out in the decision of Judith Prakash J (as she then was) in Ong Cher Keong ([24] supra at [44]–[46]): 44 The basic principles which govern applications to set aside orders of court or judgments are concisely set out in paras 558, 559 and 560 of Halsbury’s Laws of England vol 36 (4th Ed). There are three situations in which an order may be set aside. The first situation is when the order has been obtained irregularly, that is, the person obtaining the order has not complied with the requirements of the Rules of Court in some aspect. In this situation, the person against whom the order is made is entitled to have it set aside … 45 The second situation is when a judgment has been obtained by fraud. Such a judgment may be impeached by means of an action which may be brought without leave. The fraud must relate to matters which prima facie would be a reason for setting the judgment aside if they were established by proof and the fraud must have been discovered after the judgment was passed … 46 The third situation is where an order or judgment has been obtained in default of the appearance of one of the parties to the suit. In such a case, the person against whom the order has been made may apply for it to be set aside but the court has a discretion as to whether to allow the application. As a rule, the applicant must show by affidavit that he has a defence to the action on the merits … 35 Prakash J reiterated these three grounds in her subsequent decision in Sunny Daisy ([24] supra at [21]). 36 The Judge was cognisant of these authorities and held that the Final Garnishee Order was not made under any of the three circumstances. However, he held that the three circumstances were not exhaustive and the court retained a residual discretion to set aside a judgment or court order. This residual discretion flowed from the court’s inherent powers to prevent injustice. 37 On this point, we agree with the Judge. The court’s inherent powers are preserved by O 92 r 4 of the Rules of Court which reads as follows:

Inherent powers of Court (O. 92, r. 4)

4. For the avoidance of doubt it is hereby declared that nothing in these Rules shall be deemed to limit or affect the inherent powers of the Court to make any order as may be necessary to prevent injustice or to prevent an abuse of the process of the Court. 38 We could see no basis to hold that the court has no inherent power to set aside a judgment or court order in circumstances where such an order to set aside is needed to prevent injustice. To circumscribe the scope of the court’s powers to the three circumstances as espoused in Ong Cher Keong may lead to some injustice in less usual cases. 39 In our opinion, such a view about the High Court’s inherent power accords with this court’s decision in MCST Plan No 301 v Lee Tat Development Pte Ltd [2011] 1 SLR 998 where it was held that the Court of Appeal has the inherent jurisdiction to reopen and rehear an issue which it decided in breach of natural justice, as well as to set aside the...