The Court of Appeal has given valuable and clear guidance on the circumstances in which applications during an ongoing liquidation may constitute ‘final decisions’ for the purpose of bringing appeals to His Majesty in Council pursuant to the Virgin Islands (Appeals to Privy Council) Order 1967 ( the “1967 Order”). The issue can be an important one in practice – final decisions only require formal or procedural permission to appeal, whereas non-final decisions require substantive permission, based on merit or public importance. In this article, we refer to final decisions being capable of appeal “as of right”.

At first instance, Bannister J of the BVI Commercial High Court refused an application made by the liquidator for Fairfield Sentry Limited (“Sentry”) seeking the Court’s sanction to appeal a decision made by Lifland J of the US Bankruptcy Court approving an agreement made between Sentry and Farnum Place (the “Trade Confirmation”). On 25 February 2013, Sentry was successful on its appeal of Bannister J’s decision but this did not grant sanction to Sentry to pursue any further or other appeal in the US relating to Lifland J’s order.

On 3 July 2013, Hellerstein J of the US District Court affirmed the order of Lifland J and as a result, on 17 July 2013, Sentry made a further application to the BVI Commercial High Court for sanction to appeal that decision to the US Court of Appeals for the Second Circuit (the “SCCA”). On 23 July 2013, Bannister J dismissed the application for sanction and Sentry’s appeal of that decision was ultimately dismissed by the Court of Appeal on 10 March 2022. Sentry sought leave to appeal that decision to His Majesty in Council.  Sentry’s primary case was that the appeal lay as of right pursuant to section 3 (1) of the 1967 Order since the decision under appeal, the refusal of sanction, was said by it to be a final decision.  In the alternative, Sentry sought substantive permission under section 3 (2) (a) of the 1967 Order.

Appeals to His Majesty in Counsel as of Right

Section 3 (1) of the 1967 Order, provides for appeals to His Majesty in Council as of right from decisions of the Court of Appeal “where the matter in dispute on the appeal to His Majesty in Council is of the value of £300 sterling or upwards or where the appeal involves directly or indirectly a claim to or question respecting property or a right of the value of £300 sterling or upwards, final decisions in any civil proceedings.”

In a unanimous decision, the Court of Appeal determined that the order subject to appeal was made in the context of liquidation proceedings brought against Sentry and was therefore ‘interlocutory’ in nature and not a final order within the meaning of section 3 (1) (a) of the 1967 Order. Sentry therefore was not entitled to appeal to His Majesty in Council as of right.

In arriving at its decision, the Court of Appeal relied on the application test which is recognised in Rule 62.1 (3) (b) of the Civil Procedure Rules and provides that “an order or judgment is final if it would be determinative of the issues that arise on a claim, whichever way the application could have been decided”.

The Court of Appeal relied on its earlier decision in Nam Tai Electronics Inc v David Hague et al BVIHCVAP2003/0012 (delivered 21 September 2004), which involved a liquidator seeking a number of orders and declarations by way of summons within the context of winding up proceedings. At paragraph [8] of its decision, the Court of Appeal held that “the summons was by its nature interlocutory in that what it sought would not have finally disposed of the winding up which was the substantive action, of which the summons formed only part.”

Similarly in Nigel Hamilton-Smith et al v Alexander Fundora ANUHCVAP2010/0031 (delivered 31 August 2010), two liquidators sought to appeal a decision made by the Court removing them as liquidators of Stanford International Bank (“SIB”). The creditor who had brought the successful application for the liquidators’ removal, sought to strike out the appeal on the grounds that the order was interlocutory in nature and required leave. The Court of Appeal agreed and held that not only did the removal of the liquidators not resolve the winding up of SIB, it did not bring an end to the issues as between SIB and the creditors within the context of the substantive winding up proceedings. The order was therefore not a final order as it was not dispositive of the winding up proceedings.

In Fairfield Sentry the Court of Appeal dismissed the appellant’s argument that the approach to the application test in Nam Tai and Hamilton-Smith was wrong since those cases did not refer to the Privy Council Australian case of Becker v Marion Corporation 1977 AC 271. In that case, Mrs. Becker by way of originating summons sought a declaration that she was entitled to require the council to examine a plan for the subdivision of her land and to make a decision, and sought two further declarations regarding her right to submit an outer boundary tracing and a final plan. The Full Court of the Supreme Court of South Australia refused the first declaration, treated the other declarations sought as being rendered inappropriate and refused leave to appeal to the Judicial Committee. By special leave, the plaintiff sought leave as of right which was ultimately granted by the Privy Council on the basis that the order of the Full Court was final in nature, as it finally determined the question of whether the plaintiff was entitled to have her plan considered by the council.

The Court of Appeal distinguished Becker on its facts and confirmed that Becker did not deviate from the application test which has been consistently applied by this Court. That is, “once an order is made in an application which is a pre-requisite for commencing substantive proceedings or is made in relation to extant proceedings, such an order would be considered an interlocutory order.” See paragraph [26] of the judgment. Accordingly, the order refusing Mrs. Becker’s proposal for the subdivision of her land was its own stand-alone proceeding and the claim for approval of her proposal was not a procedural first step to any substantive proceedings, nor was the proposal made in the context of any pre-existing wider proceedings.

Concluding Remarks

Sentry’s application for leave to appeal to His Majesty in Council was ultimately granted under the ‘or otherwise’ limb per section 3 (2) (a) of the 1967 Order which provides for appeals to His Majesty in Council with the leave of the Court “…where in the opinion of the Court the question involved in the appeal is one that, by reason of its great general or public importance or otherwise, ought to be submitted to His Majesty in Council…” The Court of Appeal confirmed that the ‘or otherwise’ limb could include questions of law on which the Court could benefit from a definitive statement of law from the Privy Council or where there is some doubt as to the correctness of the Court’s decision. In the current case, the Court of Appeal was of the view that there were material events post-dating the hearing of the appeal on 17 July 2014 which were not considered in its eventual judgment until 10 March 2022 and conditional leave would be justified in those circumstances.

This decision reaffirms the Court of Appeal’s approach in assessing whether an order or judgment is interlocutory or final by applying the application test. In reality, very few if any determinations made during the course of a liquidation are likely to be capable of appeal to the Privy Council as of right. The Court of Appeal has also confirmed that the common law remains consistent in its interpretation of the application test which should be instructive to parties moving forward.


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