Case Details
- Citation: [2023] SGHC(A) 24
- Title: Rex Lam Paki v PNG Sustainable Development Program Limited
- Court: Appellate Division of the High Court of the Republic of Singapore
- Appellate Division / Civil Appeal No: Civil Appeal No 123 of 2021
- Date of decision: 4 July 2023
- Judges: Kannan Ramesh JAD and Andre Maniam J
- Appellant: Rex Lam Paki
- Respondent: PNG Sustainable Development Program Limited
- Procedural posture: Appeal against the High Court Judge’s dismissal of an application to set aside a judgment entered on admissions
- Key legal areas: Civil Procedure; Judgments and orders; Jurisdiction; Inherent powers; Delay
- Statutes referenced: (Not specified in the provided extract)
- Rules referenced: Rules of Court (Rev Ed 2014) (“ROC 2014”), including O 92 r 4; O 27 (judgment on admissions)
- Related High Court decision: PNG Sustainable Development Program Ltd v Rex Lam Paki and others [2022] SGHC 188 (“GD”)
- Judgment length: 16 pages, 4,665 words
- Cases cited: [2020] SGHC 276; [2022] SGHC 188
Summary
This decision concerns the scope of the High Court’s inherent power to set aside judgments and orders, particularly where the judgment was entered on admissions of fact. The appellant, Rex Lam Paki, sought to set aside a judgment entered against him after he failed to file a defence. The High Court Judge had held that the Rules of Court did not expressly provide for setting aside a judgment on admissions, and further reasoned that the “architecture” of the ROC 2014 excluded any inherent power to do so. The Appellate Division disagreed on the first point but agreed on the result.
The Appellate Division held that the court does retain a residual discretion, derived from its inherent powers, to set aside judgments or orders to prevent injustice. This residual discretion is preserved by O 92 r 4 of the ROC 2014. However, the court emphasised that this power is not a back-door appeal and should not be used opportunistically to relitigate merits. Applying that framework, the court found that the appellant’s case did not justify setting aside the judgment, particularly given the circumstances of non-attendance, the long delay, and the absence of a destroyed “substratum” or foundation that would make continued enforcement unjust.
What Were the Facts of This Case?
The appellant, Rex Lam Paki, was formerly a director of the respondent company, PNG Sustainable Development Program Limited. In 2018, the respondent commenced an action against the appellant for alleged breaches of fiduciary duties. The writ was served on the appellant in March 2019. After disputes regarding service, the appellant was directed on 26 November 2019 to file his defence by 13 December 2019. He did not file a defence.
Although there were six named defendants in the action, the setting-aside application later focused on only three: the appellant (the first defendant), the second defendant, and the fourth defendant. The third, fifth, and sixth defendants had earlier succeeded in having service set aside on the basis that the Singapore courts lacked personal jurisdiction over them. Accordingly, the procedural and substantive contest in the present appeal centred on the appellant and the remaining two defendants who were directly affected by the judgment entered on admissions.
On 20 December 2019, the respondent applied for leave to enter judgment against the appellant in default of defence (HC/SUM 6374/2019). The respondent also sought judgment on the same basis 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 on 30 January 2020, the Judge indicated that he wished to be addressed on the merits rather than simply granting default judgment. He directed the respondent to apply under O 27 of the ROC 2014 for judgment on admissions of fact.
Following that direction, the respondent filed HC/SUM 772/2020 (“SUM 772”) for judgment on admissions. The admissions were deemed to arise because the defendants did not file a defence. SUM 772 was first heard on 28 February 2020, with PRP Law LLP acting for the defendants. At that hearing, an issue was raised about potential conflict of interest arising from PRP representing multiple defendants. The court adjourned to allow PRP to take instructions and respond. On 2 March 2020, PRP applied to be discharged as solicitors. On 4 March 2020, the court granted PRP’s discharge and then heard and granted SUM 772, entering judgment against the defendants (the “Judgment”). SUM 6374 was withdrawn as a consequence.
Crucially, at the hearing on 4 March 2020, the defendants did not attend in person or by solicitors, and they did not 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 appealed but did not do so, and neither did the second or fourth defendant. This procedural history later became significant in assessing whether setting aside was warranted.
Approximately 17 months later, on 6 August 2021, the appellant filed HC/SUM 3731/2021 (“SUM 3731”) to set aside the Judgment. The 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, but the Appellate Division dismissed the appeal with costs to the respondent.
What Were the Key Legal Issues?
The first key issue was whether the High Court has an inherent power to set aside a judgment entered on admissions of fact, where the ROC 2014 does not expressly provide for such a setting-aside mechanism. The High Court Judge had concluded that the court lacked such power, reasoning that the ROC 2014’s structure excludes inherent power in this context. The Appellate Division had to determine whether that restrictive view was correct.
The second issue concerned the circumstances in which the court should exercise any residual inherent discretion to set aside a judgment to prevent injustice. Even if the court has power, the question remains whether the facts justify intervention. This required the court to consider whether the appellant’s case fell within recognised categories (such as irregularity, fraud, or default of appearance) or whether it instead involved a more exceptional situation where the “foundation” of the order had been destroyed, such that continued enforcement would be unjust.
A further practical issue was the appellant’s delay. The application to set aside was brought some 17 months after the Judgment was entered and after the appellant had received notice of it. The court had to assess whether such delay undermined the justification for setting aside, especially in light of the appellant’s failure to appeal and the defendants’ non-attendance at the hearing where judgment was entered.
How Did the Court Analyse the Issues?
The Appellate Division began by addressing the High Court Judge’s view that the ROC 2014’s “architecture” excludes inherent power to set aside judgments on admissions. The Appellate Division agreed with the appellant on this point: the court does have inherent power to set aside a judgment on admissions. The court relied on established authority recognising that inherent powers exist to prevent injustice, and that such powers are not extinguished merely because the ROC 2014 does not expressly provide a particular setting-aside route.
In doing so, the Appellate Division referenced Harmonious Coretrades Pte Ltd v United Integrated Services Pte Ltd [2020] 1 SLR 206 (“Harmonious Coretrades”). That case recognised that there are at least three circumstances in which a court may set aside a judgment or order: (1) where the order was obtained irregularly (non-compliance with the Rules of Court); (2) where the judgment was obtained by fraud; and (3) where the judgment was obtained in default of appearance, where the court has discretion and the applicant must show a defence on the merits. Importantly, Harmonious Coretrades also addressed whether these circumstances are exhaustive, and it affirmed the court’s residual discretion to prevent injustice.
The Appellate Division then considered the statutory preservation of inherent powers. It pointed to O 92 r 4 of the ROC 2014, which declares that nothing in the Rules shall be deemed to limit or affect the inherent powers of the court to make any order necessary to prevent injustice or prevent abuse of process. This provision supported the conclusion that the court’s inherent power is not confined to the three categories identified in earlier authorities. The court cautioned that circumscribing inherent power to those categories could lead to injustice in less usual cases.
In addition, the Appellate Division drew support from MCST Plan No 301 v Lee Tat Development Pte Ltd [2011] 1 SLR 998, where the Court of Appeal recognised inherent jurisdiction to reopen and rehear an issue decided in breach of natural justice, and to set aside the earlier decision founded on that issue. The Appellate Division used this reasoning to illustrate that where a situation is not expressly covered by the Rules, the court should not “turn a blind eye” to injustice caused by its own error or by circumstances that undermine fairness.
Having established that inherent power exists, the Appellate Division turned to whether it should be exercised on the facts. It agreed with the High Court Judge that setting aside was not warranted. The court emphasised that inherent power should not become a “back-door appeal” or an opportunistic attempt to relitigate the merits. The court identified an example of a situation where inherent power might be invoked: where the substratum or very foundation of the order has been destroyed, such that continued existence or future performance of the order would lead to injustice.
Applying that principle, the Appellate Division did not accept that the foundation of the Judgment had been destroyed. The procedural context mattered. The defendants did not file a defence despite being directed to do so. When SUM 772 was heard, the defendants did not attend in person or by solicitors, and they did not seek an adjournment. Although PRP Law LLP was discharged as solicitors, the defendants still had the opportunity to engage with the process and seek relief at the time, yet they did not. After the Judgment was entered, the appellant received notice and could have appealed but did not. The court treated the long delay—about 17 months—as a significant factor weighing against setting aside.
While the provided extract truncates the remainder of the reasoning, the thrust of the analysis is clear: the court recognised the existence of a residual discretion but found no compelling injustice requiring intervention. The court’s approach reflects a balancing of fairness to the applicant against the need for finality in litigation and the prevention of abuse of process. The fact that the application was brought only after the Judgment was registered overseas further suggested that the appellant’s motivation was reactive rather than rooted in a timely challenge to the procedural outcome.
What Was the Outcome?
The Appellate Division dismissed the appellant’s appeal against the High Court Judge’s decision to refuse to set aside the Judgment. Although the Appellate Division agreed that the court has inherent power to set aside a judgment on admissions, it agreed with the Judge that the circumstances did not justify exercising that power.
Accordingly, the Judgment entered on admissions remained in place. The appeal was dismissed with costs to the respondent, reinforcing the court’s message that inherent powers are exceptional and must not be used to circumvent procedural rules or to relitigate matters after substantial delay.
Why Does This Case Matter?
This decision is significant for practitioners because it clarifies the relationship between the ROC 2014 and the court’s inherent powers. The Appellate Division’s holding that the court retains residual discretion to set aside judgments to prevent injustice—despite the absence of an express rule for setting aside judgments on admissions—provides important guidance for litigants who seek relief outside conventional procedural mechanisms.
At the same time, the decision is equally important for its cautionary tone. The court emphasised that inherent power is not a licence to litigants to make frivolous or opportunistic applications, nor is it a back-door appeal. This matters in practice because applications to set aside judgments entered on admissions can be tempting when a party later discovers adverse consequences, including enforcement abroad. The court’s reasoning indicates that such consequences, by themselves, do not justify setting aside where the applicant failed to engage promptly with the proceedings.
For law students and litigators, the case also serves as a useful consolidation of key authorities on setting aside judgments: Harmonious Coretrades for the framework of irregularity, fraud, and default of appearance, and MCST Plan for the broader principle that inherent jurisdiction may be necessary to prevent injustice where fairness is compromised. The decision therefore provides a structured approach: first, confirm the existence of inherent power; second, assess whether the facts show a real injustice, such as the destruction of the substratum or foundation of the order; and third, consider delay and the risk of abuse of process.
Legislation Referenced
- Rules of Court (Rev Ed 2014), O 27 (judgment on admissions)
- Rules of Court (Rev Ed 2014), O 92 r 4 (inherent powers of court)
Cases Cited
- Harmonious Coretrades Pte Ltd v United Integrated Services Pte Ltd [2020] 1 SLR 206
- MCST Plan No 301 v Lee Tat Development Pte Ltd [2011] 1 SLR 998
- PNG Sustainable Development Program Ltd v Rex Lam Paki and others [2022] SGHC 188
- [2020] SGHC 276
Source Documents
This article analyses [2023] SGHCA 24 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.