Go to content
${facet.Name} (${facet.TotalResults})
${item.Icon}
${ item.ShortDescription }
${ item.SearchLabel?.ViewModel?.Label }
See all results
${facet.Name} (${facet.TotalResults})
${item.Icon}
${ item.ShortDescription }
${ item.SearchLabel?.ViewModel?.Label }
See all results

EC Court of Appeal resurrects company

30 Nov 2021

On 6 October 2021, the Court of Appeal allowed an appeal against the decision of Justice Jack not to restore a BVI company on the basis of lack of standing on the part of the applicant.

The ultimate beneficial owner of the company was the sole holder of the company’s issued bearer shares. As a result of the company having not exercised any of the statutory options available for dealing with the bearer shares on or prior to the transition date of 31 December 2009 the company’s bearer shares were automatically disabled such that the holder of those shares was prevented from exercising the rights afforded to a “member” of the company. Following the disablement of the bearer shares, the company was struck off the Register of Companies and subsequently dissolved for non-payment of fees in 2013. In a bout of bad fate, the company’s corporate director was also then dissolved in 2016.

The company was an “old IBC” company by virtue of having been incorporated pursuant to the International Business Companies Ordinance of 1984 which is the predecessor Act to the currently in force, BVI Business Companies Act, 2004. The company was not automatically reregistered pursuant to the transitional provisions of the BCA and as such, the Court’s power to restore the company is found in paragraph 57(4) of Schedule 2 (the Transitional Provisions) of the BCA.

The standing to bring an application to restore a company under the Transitional Provisions is more restrictive than the main provisions under the BCA in that it excludes "a person who can establish an interest in having the company restored". As a result, the UBO of the company was debarred from applying either as a member (due to his disabled bearer shares) or as "a person with an interest". Given that the company’s director was also dissolved by the time the application for restoration was made, the UBO brought the application in the name of the company pursuant to his authority as ade facto director of the company.

Justice Jack refused to exercise his discretion to restore the company on the basis that the UBO did not have standing as ade facto director. Following this initial decision, Harneys was instructed to act on behalf of the company. The company then asked Justice Jack to reconsider his decision pursuant to the Court’s Barrell jurisdiction as the order refusing restoration was not yet sealed on the basis that his decision was made per incuriam. The company argued that its corporate director had issued the UBO with a power of attorney to act on the company’s behalf and that that power of attorney remained valid at the date on which the company was dissolved. The company argued that the relevant date for considering the validity of the power of attorney was the date of the company’s dissolution and not the date on which the company filed its application for restoration. This latter date was the date on which Justice Jack found that the company’s attorney-in-fact to have lacked capacity to make the application for its restoration. In a second judgment, Justice Jack again refused to exercise his discretion to restore the company. The company appealed his decision.

By the time the matter was heard by the Court of Appeal, the Respondent, the Registrar of Corporate Affairs, conceded the Appellant’s ground of appeal that the relevant date to consider standing was the date of the company’s dissolution and not the date on which the application for restoration was filed. On this basis, the parties weread idem as to the validity of the power of attorney at the date of the company’s dissolution, and thus its establishment of the standing and authority of the UBO as attorney-in-fact to cause the company to petition the Court for its restoration. Harneys acted for the successful Appellant.

Authors

More about

2 items