Steven Goran Stevanovich v Matthew Richardson and another (as Joint Liquidators of Barrington Capital Group Ltd (In Liquidation)) (Virgin Islands)

Standing to challenge an insolvency office-holder’s decision depends on whether the applicant has a legitimate interest in the relief sought, assessed in the statutory context and the capacity in which the application is made. The statutory categories are not exhaustive, but the exceptional category for persons other than creditors, bankrupts or contributories remains narrow. It requires rights or interests arising specifically from the insolvency regime, a direct effect from the office-holder’s exercise of an insolvency power, and ordinarily no adequate alternative route of challenge. A defendant to contribution proceedings does not acquire standing merely because the challenged decision is an essential step in the claim against him, where the validity of that decision can be determined in those proceedings. The same limits apply to an application invoking the court’s inherent supervisory jurisdiction over its liquidators.

Barrington Capital Group Ltd was restored to liquidation in the British Virgin Islands after a United States Chapter 11 Trustee brought proceedings concerning transfers made to the company. The Trustee submitted a substantial proof of debt, which the liquidators admitted. That admission rendered the company insolvent and led the liquidators to bring proceedings against the former sole director, Mr Stevanovich, alleging fraudulent trading and misfeasance and seeking a contribution to the company’s assets.

Mr Stevanovich defended those proceedings on the basis that the admitted claim was not enforceable in the British Virgin Islands. He later applied under section 273 of the Insolvency Act 2003 to reverse the admission, alternatively seeking a direction that the liquidators apply under section 210(2) to expunge the claim. The Court of Appeal dismissed his appeal for lack of standing. The central issues before the Board were whether he was a person aggrieved, whether the court could direct a liquidator to apply under section 210(2), and whether he could invoke that jurisdiction.

1. Appeal dismissed. The Board advised His Majesty accordingly.
2. Section 273 of the Insolvency Act 2003 contains no definition of “person aggrieved”. Its meaning is construed in the structure, context and purpose of the Act, with guidance from analogous provisions. The relevant inquiry is whether the applicant has a legitimate interest in the relief sought, assessed by reference to all the circumstances and the capacity in which the applicant applies.
3. The categories identified in Brake v The Chedington Court Estate Ltd [2023] UKSC 29 are not exhaustive. Ordinarily, creditors must challenge an office-holder only in their capacity as creditors, while bankrupts and contributories must show the required interest in the estate. A third party may qualify only in the very limited case where the challenge concerns a matter arising specifically from the insolvency regime, directly affects that person’s rights or interests, and the person has a legitimate interest in the relief sought.
4. The liquidators’ power to admit claims is peculiar to the insolvency regime. Nevertheless, Mr Stevanovich was not directly affected in the relevant sense. His interest was that of a defendant facing a contingent contribution liability in separate proceedings, and the admissibility of the claim was already capable of determination in those proceedings. The existence of that alternative avenue was a significant factor against allowing use of the special section 273 procedure. He therefore lacked standing as a person aggrieved.
5. The court’s inherent jurisdiction to supervise its officers extends to controlling liquidators, but a person seeking to invoke it must have a legitimate interest in the liquidation. Since Mr Stevanovich failed to establish standing under section 273, he was likewise not a proper person to require the liquidators to apply under section 210(2) of the Insolvency Act 2003. The Board did not endorse every observation of the Court of Appeal, but its conclusion on standing stood for the reasons given.

• Privy Council: Appeal from the Court of Appeal of the Eastern Caribbean Supreme Court was dismissed on 15 April 2025.
• Court of Appeal of the Eastern Caribbean Supreme Court (British Virgin Islands): On 7 March 2022, dismissed Mr Stevanovich’s appeal against Wallbank J’s judgment and order.
• BVI Commercial Court: On 5 December 2018, Wallbank J held that Mr Stevanovich lacked standing under section 273 of the Insolvency Act 2003 and dismissed the application.