DEFAULT JUDGMENT – APPLICATION TO SET ASIDE – DEFENCE WITH REAL PROSPECTS OF SUCCESS – LITIGATION OF ISSUES DECIDED IN NEW YORK DIVORCE PROCEEDINGS BETWEEN THE DEFENDANTS – UNDERTAKING BY PLAINTIFF TO ENFORCE LOCAL JUDGMENT IN CONFORMITY WITH NEW YORK EQUITABLE DISTRIBUTION ORDER
This case involved two Defendants which were debtors to the Plaintiff Company, which sought to recover sums totalling some US$43.6 million lent to the Defendants in connection with their purchase of a property. After entering appearances in relation to the originating summons, the Defendants did not effectively file Defences in the 14 days after their respective appearances, and the Plaintiff became entitled to enter judgment in default of defence for its claim under Order 19 Rule 2 of the Rules of Court. The Plaintiff entered Judgments in Default of defence against both Defendant 2 (“D2”) and Defendant 1 (“D1”), each in respect of the full sum of the debt with costs to be taxed. Subsequently, D2 issued a Summons seeking to set aside the Judgment in Default of Defence. However, concerns arose from the fact that as the Plaintiff company was controlled by D1, who had been involved in “acrimonious” divorce proceedings with D2, the Plaintiff might seek to recover the full judgment debt from D2.