The defendants (Filips) brought a motion to set aside a default judgment obtained by the plaintiffs (Ross and Campbell) for $617,209.59.
The Filips argued that the plaintiffs failed to make full and frank disclosure on damages in their ex parte motion for default judgment and that their previous counsel's significant personal and professional issues constituted a plausible excuse for their default.
The court found that the plaintiffs indeed failed to disclose material facts (a lower appraisal report) on damages, which alone was sufficient to set aside the judgment under Rule 39.01(6).
Additionally, applying the five-factor test from Mountain View Farms Ltd. v. McQueen, the court found the Filips' explanation for default plausible, an arguable defence on the merits (both liability and damages), and that setting aside the judgment served the interests of justice, despite the Filips' prior fraudulent conveyance attempt.
The default judgment was set aside, and a schedule for the action was ordered.