Ripple Markets Apac Pte Ltd v P Dot Money Limited & Anor

A stay of execution pending an application to set aside a default judgment may be granted where the judgment was entered without consideration of the merits and the applicant has a defence with a real prospect of success. The court must balance the parties’ interests during the interim period and may preserve the status quo by imposing conditions. Those conditions may include payment into court, acceptable security and an affidavit of assets. The court may grant a stay in respect of one defendant where the proposed defence has a real prospect of success, while imposing different terms on another defendant. The court deciding the stay does not determine whether the proposed defence will ultimately justify setting aside the judgment.

The claimant obtained default judgments against the first defendant, a company, and the second defendant, its director, in respect of sums allegedly due under an agreement concerning XRP. The defendants applied to set aside the default judgments and, pending that application, sought a stay of execution.

The claimant argued that the defendants had not established inability to pay or special circumstances under Civil Procedure Rules 1998, rule 83.7. The defendants argued that enforcement would render the set-aside application ineffective, particularly because the first defendant would become insolvent, and that both defendants had realistic grounds for setting aside the judgments. The issue was whether execution should be stayed pending determination of the set-aside application and, if so, on what terms.

1. Stay against the second defendant. A stay of execution was granted because the proposed defence had a real prospect of success. The court considered that execution should not take place before the judge hearing the set-aside application had considered the point. The stay was not a determination that the defence would ultimately succeed.
2. Stay against the first defendant. The first defendant had not received notice of the proceedings until after judgment and had applied to set aside the judgment without delay. The court could not say that the proposed defence had no prospect of success. The defence was, in substance, that the first defendant had been led to believe that the contract operated differently from its apparent terms. Whether that was sufficient to set aside the default judgment was for the judge hearing that application.
3. Balancing and conditions. The judgment had been obtained without consideration of the merits, and there was an interim period before the set-aside application. It was appropriate to preserve the status quo, while recognising the claimant’s legitimate interest in protection against enforcement risk. The court had jurisdiction under rule 83.7(4) to impose conditions.
4. The stay against the first defendant was therefore granted pending the set-aside hearing, conditional on the first defendant either paying the judgment amount into court or providing security acceptable to the claimant within 14 days. If the form of security could not be agreed, the issue would be determined on written submissions. The first defendant also had to provide an affidavit of assets within 14 days, addressing what had been done with the sums alleged to be owed. Liberty to apply was granted concerning the security condition, supported by full documentary evidence of assets and available funding.