THE PROCEDURAL NATURE OF JUDGMENTS VERSUS ORDERS
The case of PNG Sustainable Development Programe Limited v Rex Lam Paki & 5 Ors [2022] SGHC 188 (the “PNG v RL”) is an important reminder on the different nature of judgments and orders under the Rules of Court (Rev Ed 2014) (the ‘Rules”).
Brief facts. It suffices to say that the plaintiff commenced the action in 2018 against the defendants for various grounds, and claimed for a variety of reliefs.
The plaintiff then applied ex parte under O 19 r 7(1) of the Rules for leave to enter judgment against the defendants in default of defence ([18] PNG v RL).
The O 19 application came before Coomaraswamy J for hearing in January 2020. The Defendants had notice of the hearing but were unrepresented and did not attend the hearing. Coomaraswamy J declined to enter judgment in default of defence, and directed the plaintiff apply inter partes to enter judgment on admissions of fact under O 27 r 3 instead. The hearing of the O 19 application was, accordingly, adjourned ([19] PNG v RL).
The plaintiff duly applied under O 27 r 3, and both the O 19 and O 27 applications were heard in March 2020, where the Defendants were once again not present despite having notice of the said hearing ([20] PNG v RL).
Judgment was entered in favour of the plaintiff for the O 27 application, and leave was granted to withdraw the O 19 application with no order as to costs ([20] – [21] PNG v RL).
This is the judgment (the “Judgment”) which the first defendant was seeking to set aside ([22] PNG v RL).
Procedural nature of the Judgment. Flowing from the above, there are certain points to note about the procedural nature of the Judgment as highlighted by Coomaraswamy J:
The Judgment was a regular judgment. As such, the Judgment could not be set aside under O 2 r 1(2) of the Rules on grounds of procedural irregularity ([24] PNG v RL).
The Judgment was a final judgment, as it was entered under O 27 r 3 of the Rules and on the basis that the defendant had admitted that the facts relating to his liability are not in issue ([25] – [27] PNG v RL).
The Judgment was also a judgment on merits. While the Defendants were absent, the Judgment under O 27 r 3 is not a default judgment, as it was entered into after the consideration of the merits of the plaintiff’s case in light of the Defendant’s admission of facts ([27] PNG v RL). The admissions arose as the Defendants had failed to traverse the facts alleged in the plaintiff’s statement of claim, resulting in a deemed admission of the facts pursuant to O 18 r 13 of the Rules ([29] PNG v RL).
Significance. Why was the procedural nature of the Judgment significant? It was significant as the first defendant sought to set aside the Judgment in August 2021. The first defendant was not seeking to appeal against the Judgment. As a result, three issues arose for the court’s consideration as set out in [31] – [35] PNG v RL:
Whether the court had power under O 32 r 6 of the Rules to set aside the Judgment;
Whether the court had inherent power as preserved by O 92 r 4 to set aside the Judgment; and
If so, should the court exercise the power in the first defendant’s favour to set the Judgment aside.
For the purposes of this blog, we will focus on the first two issues.
O 32 r 6. To start, Coomaraswamy J held that the court had no power under O 32 r 6 to set the Judgment aside ([39] PNG v RL).
There were two main reasons:
Firstly, the Judgment was a judgment, and not an order. While the Rules do not define “judgment” and “order”, they are fundamentally distinct. Judgments have legal consequences which orders do not, such as giving rise to merger. A judgment also renders the subject-matter of the judgment res judicata. Accordingly, O 32 r 6, which refers to “order”, cannot be construed as encompassing a judgment, and hence the court had no power to set aside the Judgment under O 32 r 6. ([40] – [55] PNG v RL).
Secondly, O 32 r 6 requires that the order be “made ex parte”. Coomaraswamy rejected the submission that “… an order is “made ex parte” so long as the party against whom the order is made was absent at the hearing of the application on which the order was made, even if that party had reasonable notice of that hearing. …”, and that since the first defendant was absent, despite having reasonable notice, the Judgment was entered against the first defendant ex parte ([57] – [58] PNG v RL).
It is important to note that Coomaraswamy J rejected the first defendant’s submission that the case of United Overseas Bank Ltd v Chung Khiaw Bank Ltd [1968-1970] SLR(R) 194 (“UOB v CKB”) stood for the proposition that “… an order made on an inter partes application which is duly served on the respondent to the application, but which is heard in the respondent’s absence, is an order made ex parte order within the meaning of O 32 r 6.” ([63] PNG v RL).
Coomaraswamy J highlighted that in UOB v CKB, the party applying to set aside the judgment was a non-party affected by the judgment but had no notice of the application ([72] PNG v RL). UOB v CKB is therefore not a case concerning “… an order made at the hearing of an application which takes place in the absence of a party who has been duly served with the application …” ([74] PNG v RL).
Since O 32 r 6 is intended to cater for “… an application which the Rules permit the applicant to make ex parte …” and not “… an order made on an application which the Rules require the applicant to make inter partes and which is duly served on the respondent to the application, even if the respondent fails to attend the hearing of the application…” ([75] PNG v RL), there was no power for the court to set aside the Judgment under O 32 r 6 as it was made inter partes.
To sum up, as held at [82] PNG v RL, the Judgment “… is a final determination on the merits of the parties’ substantive rights… It can be dissolved only be an appellate court, not by the court which made it…” (emphasis added).
No inherent power. Coomaraswamy J also rejected the submission that the court had an inherent power preserved by O 92 r 4 to set the Judgment aside ([83] PNG v RL).
At [84] – [87] PNG v RL, Coomaraswamy J held that the architecture of the Rules “… leaves no room for an inherent power to set aside a judgment or order on the ground that the respondent was absent when the application was heard despite having been duly served with the application”: “… [w]here the Rules wish to confer a right on a respondent to an application to apply to set aside a regular judgment or order made on that application on the ground that the respondent was absent or failed to appear at the hearing of the application, the Rules do so by an express provision to that effect.“
At [88] – [91] PNG v RL, Coomaraswamy J rejected the submission that there was a “… lacuna in O 27 because it does not contain an express provision allowing a defendant to set aside a judgment under O 27 r 3 on the grounds that the defendant was absent at the hearing, whether or not duly served”. Coomaraswamy J held that given the express provisions in the Rules as set out in [84] PNG v RL, recognizing such an inherent power would subvert the legislative intent. Further, a respondent would, based on Coomaraswamy J’s interpretation of the Rules, still have a right to appeal. Additionally, Coomaraswamy J pointed out that the first defendant’s submission was circular as “… [i]t assumes that there must be a power to set aside a judgment under O 27 r 3 and then characterises the absence of that power as a lacuna to be filled by recognising the court’s inherent power to do so. …”
Conclusion. As Coomaraswamy J pointed out at [179] – [182], the decision in PNG v RL is not a case of elevating form over substance and penalizing the first defendant for proceeding under the wrong provision: not only had the first defendant adopted the wrong procedure, but the first defendant had also proceeded before the wrong court. Putting aside the unique facts, PNG v RL is an important reminder that judgments and orders are very different in nature. This difference not only gives rise to substantive differences in terms of their legal consequences, but also to procedural differences in terms of how they are dealt with under the Rules.
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