Standing tall: BVI Commercial Court clarifies who can be heard on an application to appoint liquidators
In Wealine International (Shanghai) Co. Ltd v Total Fortune Investments Limited and others, the BVI Commercial Court clarified that there is a wide scope of persons who can be heard when considering an application for the appointment of liquidators over a company.
The applicant, Wealine, was a judgment creditor of three debtor companies by virtue of a judgment from the People’s Republic of China. The applicant sought the appointment of liquidators over the companies in the BVI on the basis that they were each insolvent as they:
- Failed to satisfy and/or set aside a duly served statutory demand; and
- Were unable to pay their debts as they fell due
In an interesting turn of events, the widow of the deceased sole member and director of the companies sought to oppose the applications. Wealine argued that the widow had no standing to oppose the applications as, consistent with English law, only the classes of persons set out in section 162(2) of the BVI Insolvency Act were entitled to be heard, that is, insofar as relevant to the applications, the company, a creditor, a member and the supervisor of a creditor’s arrangement in respect of the company. The Court considered that although the widow did not fall within the classes of persons listed in section 162(2), the BVI Insolvency Act and Rules were less restrictive than their English counterparts and once she satisfied the requirements of Rule 162 of the BVI Insolvency Rules she was entitled to file a notice of intention and appear at the hearing. Rule 162 simply prescribes certain administrative requirements that must be complied with by a person who wishes to appear at the hearing of an application to appoint liquidators.
Although the Court held that the widow was entitled to be heard on the applications, the Court stated that the weight to be afforded to her opposition would be affected by the fact that she was neither a creditor nor member of the companies. Despite the widow’s opposition, the Court ultimately found that the companies were insolvent within the meaning of the Insolvency Act and ordered the appointment of liquidators over the companies.
This decision clarifies that the Court has a wide discretion when considering an application for the appointment of liquidators, including as to who is entitled to be heard and the relief which is granted. However, a person’s entitlement to be heard does not guarantee that the Court will give significant weight to their evidence and this will depend on the particular circumstances of the case.
Harneys acted for the successful applicant, Wealine.