Case Details
- Citation: [2023] SGHC(A) 24
- Title: Rex Lam Paki v PNG Sustainable Development Program Limited
- Court: Appellate Division of the High Court (Singapore)
- Date of decision: 4 July 2023
- Judges: Kannan Ramesh JAD and Andre Maniam J (Andre Maniam J delivered the judgment of the court)
- Appellant: Rex Lam Paki
- Respondent: PNG Sustainable Development Program Limited
- Procedural history: Appeal against the High Court Judge’s dismissal of the appellant’s application to set aside a judgment entered on admissions
- Lower court decision relied on: PNG Sustainable Development Program Ltd v Rex Lam Paki and others [2022] SGHC 188 (“GD”)
- Appellate Division / Civil Appeal No: Civil Appeal No 123 of 2021
- Key procedural applications:
- HC/SUM 6374/2019 (application for leave to enter judgment in default of defence)
- HC/SUM 772/2020 (application for judgment on admissions of fact)
- HC/SUM 3731/2021 (application to set aside the judgment)
- Legal areas (as indicated): Civil Procedure — Judgments and orders; Civil Procedure — Jurisdiction — Inherent; Civil Procedure — Delay
- Statutes referenced: (Not expressly stated in the provided extract; the judgment discusses inherent powers and refers to the Rules of Court and related authorities)
- 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 in Harmonious Coretrades); Sunny Daisy (as cited in 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 an application to set aside a judgment entered on admissions of fact. The appellant, Rex Lam Paki, had been sued by PNG Sustainable Development Program Limited for alleged breaches of fiduciary duties in his capacity as a former director. After service disputes and procedural directions, the appellant failed to file a defence. The plaintiff then pursued judgment on admissions, and the High Court entered judgment after the appellant and related defendants did not attend the hearing or otherwise engage with the proceedings.
On appeal, the appellant argued that the High Court lacked power to set aside a judgment on admissions because the Rules of Court did not expressly provide for such a remedy. The Appellate Division held that the court does have an inherent power to set aside judgments or orders to prevent injustice, even where the Rules do not expressly confer that power. However, the court agreed with the Judge that, on the facts, setting aside was not warranted. The appellant’s delay, his failure to participate at the relevant time, and the absence of a destroyed “substratum” or foundation for the order meant that the exceptional inherent jurisdiction should not be invoked.
What Were the Facts of This Case?
The respondent company, PNG Sustainable Development Program Limited, commenced an action in 2018 against the appellant, Rex Lam Paki, and several other defendants, alleging breaches of fiduciary duties. The appellant was formerly a director of the respondent. The writ was served on the appellant in March 2019. There were subsequent proceedings relating to service, which were disputed, and the court ultimately directed the appellant to file his defence by 13 December 2019. The appellant did not file a defence.
Although the action named six defendants, the setting-aside application later focused primarily on three: the appellant (as 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 were not central to the later application because they succeeded in having service set aside on the basis that the Singapore courts lacked personal jurisdiction over them.
In December 2019, the respondent applied for leave to enter judgment in default of defence (HC/SUM 6374/2019). At the hearing on 30 January 2020, the Judge indicated that he wanted to hear the matter on its 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. This direction is significant: it shifted the procedural route from default judgment to judgment based on deemed admissions arising from the failure to file a defence.
Accordingly, the respondent filed HC/SUM 772/2020 for judgment on admissions. The application was first heard on 28 February 2020, where a potential conflict of interest was raised concerning the law firm representing multiple defendants. The court adjourned to allow the firm to take instructions and respond. On 2 March 2020, the firm applied to be discharged as solicitors. On 4 March 2020, the court granted the discharge and proceeded to hear and grant SUM 772, entering judgment against the defendants concerned (the “Judgment”). SUM 6374 was withdrawn as a consequence.
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 against the Judgment but did not do so. Neither did the second or fourth defendant.
Approximately 17 months later, on 6 August 2021, the appellant filed HC/SUM 3731/2021 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. The High Court dismissed the application on 1 November 2021. The appellant appealed, and the Appellate Division dismissed the appeal with costs.
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 Judge below had held that the court lacked such power, reasoning that the “architecture” of the ROC 2014 excludes inherent power in this context. The appellant’s argument relied on the absence of express procedural authority.
The second issue was whether, even if the court has inherent power, it should be exercised on the facts. This required the court to consider what threshold of injustice must be shown, and whether the appellant’s circumstances—particularly his failure to participate at the relevant time and the lengthy delay before seeking relief—could justify setting aside the Judgment.
Related to the second issue was the broader doctrinal question of how the court’s inherent jurisdiction interacts with the established categories of cases where judgments may be set aside. The Appellate Division had to reconcile the Judge’s approach with binding authority recognising inherent powers to prevent injustice.
How Did the Court Analyse the Issues?
The Appellate Division began by addressing the doctrinal foundation for setting aside judgments. It agreed with the appellant that the court does have inherent power to set aside judgments or orders to prevent injustice. This conclusion was anchored in the Court of Appeal’s decision in Harmonious Coretrades Pte Ltd v United Integrated Services Pte Ltd [2020] 1 SLR 206, which recognised that the court’s inherent powers are preserved and can be invoked to prevent injustice, even where the Rules do not expressly cover the situation.
In Harmonious Coretrades, the Court of Appeal discussed the basic principles governing applications to set aside orders or judgments, including three situations traditionally identified: (1) irregularity in obtaining the order (non-compliance with the Rules), (2) fraud, and (3) default of appearance. The Appellate Division emphasised that while these categories are important, they are not necessarily exhaustive. The court rejected the Judge’s view that the ROC 2014’s structure completely excludes inherent power to set aside judgments. Such a restrictive approach could, in less usual cases, lead to injustice by preventing the court from correcting an outcome that the Rules do not directly address.
The Appellate Division further relied on the statutory preservation of inherent powers in the ROC 2014. It referred to 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 rule is crucial: it signals that inherent jurisdiction is not displaced merely because the Rules do not expressly provide a remedy for a particular procedural posture.
In addition, the Appellate Division cited MCST Plan No 301 v Lee Tat Development Pte Ltd [2011] 1 SLR 998 to illustrate that courts may exercise inherent jurisdiction to prevent injustice even where the precise scenario does not fall within the traditional categories. In MCST Plan, the Court of Appeal recognised inherent jurisdiction to reopen and set aside decisions founded on a breach of natural justice. The Appellate Division used this reasoning to support the proposition that injustice should not be insulated from judicial correction simply because it does not fit neatly within the three classic categories.
Having established that inherent power exists, the Appellate Division turned to the exercise of that power. It cautioned that inherent power is not a “licence” for litigants to make frivolous or opportunistic applications. It should not become a back-door appeal or a mechanism to relitigate the merits. The court indicated that inherent jurisdiction could be justifiably invoked in situations where the substratum or foundation of the order has been destroyed—meaning that the continued existence or future performance of the order would lead to injustice.
Applying these principles, the Appellate Division agreed with the Judge that the facts did not justify setting aside. The court noted that the defendants did not attend the hearing on 4 March 2020, did not seek an adjournment, and did not engage with the proceedings. The appellant also did not appeal the Judgment when he had the opportunity. The application to set aside was brought only after the Judgment had been registered overseas, which suggested that the delay and timing undermined the claim of urgency or genuine inability to contest the matter earlier.
While the extract provided is truncated, the reasoning framework is clear: the court treated the appellant’s conduct and the procedural history as relevant to whether injustice had been shown. The court did not accept that the foundation of the Judgment had been destroyed. In other words, the procedural posture—judgment on admissions arising from failure to file a defence—did not, by itself, create an injustice sufficient to warrant the exceptional remedy of setting aside after a prolonged delay.
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. Although the appellate court corrected the Judge’s legal approach by confirming that the court has inherent power to set aside judgments to prevent injustice, it upheld the result because the circumstances did not meet the threshold for exercising that power.
The appeal was dismissed with costs to the respondent, meaning the appellant remained bound by the Judgment and the respondent retained the benefit of the entered judgment on admissions.
Why Does This Case Matter?
This case is important for practitioners because it clarifies two related points in Singapore civil procedure. First, it confirms that the High Court’s inherent jurisdiction to prevent injustice is not confined to the three traditional categories often discussed in setting-aside jurisprudence. Even where the ROC 2014 does not expressly provide for setting aside a particular type of judgment (here, judgment on admissions), the court may still act if necessary to prevent injustice.
Second, the decision demonstrates that recognising inherent power does not automatically translate into a right to relief. The court’s willingness to intervene depends on the specific facts, including whether the substratum or foundation of the order has been destroyed, and whether the applicant has acted promptly and responsibly. The appellant’s failure to participate at the hearing, failure to appeal, and long delay until after overseas registration were all factors that weighed against the exercise of inherent jurisdiction.
For lawyers advising clients, the case underscores practical litigation strategy: if a defence is not filed, the risk of judgment on admissions is real, and the opportunity to contest must be taken at the earliest procedural stage. Waiting until enforcement or overseas registration may make it difficult to persuade the court that setting aside is necessary to prevent injustice. The decision therefore serves as both a doctrinal guide to inherent jurisdiction and a cautionary reminder about delay and procedural diligence.
Legislation Referenced
- Rules of Court (Rev Ed 2014), O 27 (judgment on admissions of fact)
- Rules of Court (Rev Ed 2014), O 92 r 4 (inherent powers of the 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.