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
- Date of decision: 4 July 2023
- Judges: Kannan Ramesh JAD and Andre Maniam J (Andre Maniam J delivering the judgment of the court)
- Appellate Division / Civil Appeal No: Civil Appeal No 123 of 2021
- Appellant: Rex Lam Paki
- Respondent: PNG Sustainable Development Program Limited
- Procedural posture: Appeal against the High Court Judge’s decision dismissing an application to set aside a judgment on admissions
- Key procedural events: Judgment entered on admissions after default of defence; later application to set aside filed ~17 months after judgment; appeal dismissed
- Legal areas (as reflected in grounds): Civil Procedure — Judgments and orders; Civil Procedure — Jurisdiction — Inherent; Civil Procedure — Delay
- Statutes referenced: Not specified in the provided extract (but O 92 r 4 of the Rules of Court is quoted; Supreme Court of Judicature Act (Cap 322) is discussed in the extract)
- Cases cited: [2020] SGHC 276; [2022] SGHC 188; Harmonious Coretrades Pte Ltd v United Integrated Services Pte Ltd [2020] 1 SLR 206; Ong Cher Keong (as cited within Harmonious Coretrades); Sunny Daisy (as cited within Harmonious Coretrades); MCST Plan No 301 v Lee Tat Development Pte Ltd [2011] 1 SLR 998
- Judgment length: 16 pages, 4,665 words
Summary
This Appellate Division decision concerns whether the High Court has an inherent power to set aside a judgment entered on admissions, where the Rules of Court do not expressly provide for such a setting-aside. The appellant, Rex Lam Paki, had been sued for alleged breaches of fiduciary duties in his capacity as a former director of PNG Sustainable Development Program Limited. After he failed to file a defence, the respondent obtained judgment on admissions of fact. Approximately 17 months later, the appellant applied to set aside that judgment. The High Court dismissed the application, holding that it lacked power to set aside a judgment on admissions because the Rules did not expressly permit it.
On appeal, the Appellate Division agreed with the appellant on the first point: the court does have an inherent power to set aside judgments or orders to prevent injustice. However, the Appellate Division upheld the High Court’s decision to refuse the setting aside on the facts. The court emphasised that inherent power is not a back-door appeal and should not be used to relitigate merits or to circumvent procedural finality. In particular, the court found that the appellant’s delay and the circumstances did not justify disturbing the judgment.
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. There were subsequent proceedings concerning service of process, but the key procedural development for the present appeal was that, on 26 November 2019, the appellant was directed to file his defence by 13 December 2019. He did not file a defence.
Although the action named six defendants, only three were central to the setting-aside application: the appellant (the first defendant), 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). 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. This meant that the procedural consequences of the appellant’s failure to defend were most directly relevant to the remaining defendants.
On 20 December 2019, the respondent applied for leave to enter judgment against the appellant in default of defence (HC/SUM 6374/2019). On the same basis, judgment was also sought against the second defendant and the fourth defendant. At the hearing on 30 January 2020, the Judge indicated that he wished to hear the matter on the merits rather than simply grant default judgment. He directed the respondent to apply under Order 27 of the Rules of Court (Rev Ed 2014) (“ROC 2014”) for judgment on admissions of fact.
Accordingly, the respondent filed HC/SUM 772/2020 (“SUM 772”) for judgment on admissions, relying on the deemed admissions that arise when a defendant does not file a defence. SUM 772 was first heard on 28 February 2020. At that hearing, PRP Law LLP (“PRP”) represented the defendants. An issue was raised about potential conflict of interests in 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 for the defendants. On 4 March 2020, the court granted PRP’s discharge and then proceeded to hear and grant SUM 772, entering judgment against the defendants (the “Judgment”). SUM 6374 was withdrawn as a result.
What Were the Key Legal Issues?
The appeal raised two interrelated legal issues. First, the central doctrinal question was whether the High Court has an inherent power to set aside a judgment entered on admissions, where the ROC 2014 does not expressly provide for such a setting aside. The High Court Judge had reasoned that the “architecture” of the ROC 2014 excludes inherent power in this context, because the Rules did not expressly allow it.
Second, even if inherent power exists, the court had to decide whether it should be exercised on the facts. This required consideration of whether setting aside was necessary to prevent injustice, and whether the appellant’s conduct—particularly the significant delay in bringing the application—militated against relief. The Appellate Division also had to address the broader principle that inherent power should not become a substitute for an appeal or a mechanism to relitigate the merits.
How Did the Court Analyse the Issues?
The Appellate Division began by addressing the High Court’s view that the court lacked power to set aside a judgment on admissions. The Judge’s reasoning was that if the respondent had pursued judgment in default of defence, the ROC 2014 would have provided an express basis to set aside. But because the respondent obtained judgment on admissions, the Judge held that the court had no power to set aside that judgment. The Appellate Division rejected the premise that the court has no inherent power in such circumstances.
In doing so, the Appellate Division relied on the Court of Appeal’s decision in Harmonious Coretrades Pte Ltd v United Integrated Services Pte Ltd [2020] 1 SLR 206 (“Harmonious Coretrades”). Harmonious Coretrades recognised that the court has inherent power to set aside judgments or orders to prevent injustice. The Appellate Division explained that the “three circumstances” often cited for setting aside (irregularity, fraud, and default of appearance) are not necessarily exhaustive. While those categories are commonly used as a framework, the court retains a residual discretion grounded in inherent jurisdiction.
The Appellate Division also pointed to the preservation of inherent powers in the ROC 2014. In particular, it quoted O 92 r 4, which provides 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 to prevent an abuse of the process of the court. This statutory “avoidance of doubt” provision supported the conclusion that inherent power is not extinguished merely because the Rules do not expressly address a particular procedural scenario.
To reinforce the point that inherent jurisdiction should not be artificially circumscribed, the Appellate Division referred to MCST Plan No 301 v Lee Tat Development Pte Ltd [2011] 1 SLR 998, where the Court of Appeal held that it had inherent jurisdiction to reopen and set aside its earlier decision where natural justice had been breached. The Appellate Division reasoned that natural justice breaches do not neatly fall within the three categories described in earlier authorities, yet the court still retained inherent jurisdiction. The logic was that a rigid limitation to those categories could risk turning a blind eye to injustice caused by the court’s own error.
Having established that inherent power exists, the Appellate Division turned to the exercise of that power. It agreed with the High Court that the setting aside was not warranted. The court stressed that inherent power is not a licence for litigants to bring frivolous applications or to use setting aside as a “back-door appeal”. The court’s discretion is meant to address genuine injustice, not to permit opportunistic relitigation of the merits after procedural finality has set in.
In this case, the Appellate Division considered the procedural history and the appellant’s conduct. After the Judgment was entered on 4 March 2020, the defendants did not attend in person or by solicitors at the hearing. They also did not contact the respondent 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. Instead, he waited until 6 August 2021—about 17 months later—to file 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.
The Appellate Division accepted that the court’s inherent power could be invoked in situations where the “substratum” or foundation of the order is destroyed such that continued existence or future performance of the order would lead to injustice. However, it did not accept that the facts here met that threshold. In other words, the court did not find that the Judgment’s foundation had been undermined in a way that would make it unjust to allow the Judgment to stand.
Although the provided extract truncates the remainder of the judgment, the reasoning framework is clear: (i) inherent power exists; (ii) it must be exercised sparingly and only to prevent injustice; (iii) delay and lack of diligence are relevant; and (iv) the court will not allow setting aside to become an alternative route to appeal or to relitigate matters that could have been raised earlier.
What Was the Outcome?
The Appellate Division dismissed the appellant’s appeal against the High Court’s decision to refuse to set aside the Judgment. While it agreed with the appellant that the court has an inherent power to set aside judgments or orders to prevent injustice, it upheld the conclusion that setting aside was not warranted on the facts.
Costs were awarded to the respondent. Practically, the Judgment entered on admissions remained in force, and the appellant’s attempt to unwind the consequences of the admissions-based judgment failed.
Why Does This Case Matter?
Rex Lam Paki v PNG Sustainable Development Program Limited is significant for two reasons. First, it clarifies that the absence of an express procedural provision in the ROC 2014 does not necessarily mean the court lacks power to set aside a judgment. The Appellate Division reaffirmed that inherent jurisdiction survives and can be used to prevent injustice, consistent with Harmonious Coretrades and the preservation of inherent powers in O 92 r 4.
Second, the decision illustrates the limits of that inherent jurisdiction. Even where power exists, the court will not automatically grant relief. The court’s emphasis on preventing injustice, avoiding back-door appeals, and discouraging opportunistic relitigation provides guidance for practitioners on how to frame and support setting-aside applications. Delay—especially substantial delay after judgment and after the opportunity to appeal—will be a major practical obstacle, and courts will scrutinise whether the applicant has acted promptly and diligently.
For litigators, the case underscores the importance of responding to applications for judgment promptly and ensuring that defendants are properly represented and able to participate. Where a defendant fails to file a defence and does not engage with the proceedings, the risk of judgment on admissions increases, and later attempts to set aside will face both doctrinal and discretionary barriers.
Legislation Referenced
- Rules of Court (Rev Ed 2014), O 92 r 4 (Inherent powers of Court)
- Rules of Court (Rev Ed 2014), Order 27 (judgment on admissions of fact) — referenced in the procedural history
- Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) — discussed in relation to inherent jurisdiction (as cited within Harmonious Coretrades and the extract)
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
- Ong Cher Keong (as cited in Harmonious Coretrades)
- Sunny Daisy (as cited in Harmonious Coretrades)
- PNG Sustainable Development Program Ltd v Rex Lam Paki and others [2022] SGHC 188 (the High Court decision forming the basis of the appeal)
- [2020] SGHC 276 (cited in the grounds/authorities context within the extract)
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.