BVI Privy Council considers who is a “person aggrieved” with standing to challenge a liquidator’s decision

The former director of a British Virgin Islands (BVI) (company) appealed against a decision that he lacked standing to challenge the liquidators’ decision to admit a proof of debt.

At the time it was placed into liquidation, the company had no creditors. However, the trustee of a US firm later obtained default judgment in US proceedings for the reversal of transfers which had been made to the company. The US trustee submitted a proof of debt based on that judgment, which was admitted by the liquidators.

The liquidators then brought claims against the director alleging fraudulent trading, seeking a contribution to satisfy the US trustee’s claim. The director claimed that the US trustee’s claim was inadmissible in the liquidation because the default judgment on which it was based was unenforceable in the BVI.

The director applied under s.273 of the BVI’s Insolvency Act 2003 (the BVI Act) to reverse their decision to admit the proof of debt. The Court of Appeal held that he was not a "person aggrieved" by the liquidators' decision for the purposes of s.273 so was not entitled to challenge the decision.

The BVI Privy Council considered the definition of “person aggrieved”. The BVI Act offered not definition, however s.273 closely resembled s.168(5) of the UK’s Insolvency Act 1986. The Privy Council therefore applied the decision in Brake v Chedington Court Estate Ltd [2023] UKSC 29, [2023] 1 W.L.R. 3035, [2023] 8 WLUK 47. There were therefore three categories of person with standing:

• Creditors applying in respect of conduct by a trustee that was adverse to their interests as creditors.
• Members/contributories of the company applying in respect of conduct by a trustee that was adverse to their interests as such.
• Persons (whether creditors, members/contributories or third parties) whose rights or interests arose specifically from provisions that were peculiar to the insolvency regime.

The director was not a creditor or member/contributory, so the question of standing depended on whether he fell within the third category.  

The Privy Council held that he had failed to show that his interest was directly affected by the liquidators' decision. The sole connecting factor was the existence of the proceedings brought against him by the liquidators, in which he might or might not be found liable to contribute to Barrington's estate, depending on the validity of the liquidators' admission of the claim. He was actively defending those proceedings, in which the admissibility of the claim would be resolved.

Where an applicant had an alternative avenue of redress, it was not appropriate without more to allow a challenge under the special procedure provided under s.273. He was therefore not a “person aggrieved” for the purposes of s.273.

For similar reasons, he had failed to show that he was a proper person to invoke the court’s inherent jurisdiction to require the liquidators to apply under s.210 of the BVI Act to expunge the claim.

In reference to Stevanovich v Richardson [2025] UKPC 18.