Acting Without Standing: Risks in Litigation
A recent judgment handed down by Mithani J in the Commercial Division of the High Court, in the Eastern Caribbean Supreme Court in ATH v UGX, THA & Ors provides useful guidance for legal practitioners and estate administrators on the rules regarding the administration of BVI estates and related questions of standing. The parties’ names are anonymised in the judgment to preserve their confidentiality.
The proceedings concerned a dispute between two sisters in relation to the division of the BVI estate of their late father (referred to as SSQ). SSQ had executed a holograph will and a codicil in Greece on 1 September 2021. The validity of these documents did not end up forming part of this BVI dispute.
On 16 July 2024, the Applicant, BNU, applied ex parte to the High Court (Civil Division) to be appointed as administrator ad colligenda bona to SSQ’s BVI estate (Probate Application). In her application, BNU sought the power to (i) be registered as legal owner of SSQ’s shareholding in THA and UGX, (ii) apply for leave to bring a derivative action under section 184C(1) of the BVI Business Companies Act (and the right to pursue or defend such action, should leave be granted and any related proceedings), and (iii) complete all tasks which BNU in her capacity as administrator ad colligenda bona deems necessary to preserve SSQ’s BVI estate’s assets. Following a short hearing, Young J granted BNU’s Probate Application (Probate Order).
Probate Order in hand, on 22 July 2024, BNU applied for (i) permission to bring a derivative claim against the Respondents, THA and UGX, (Derivative Leave Application); and (ii) ex parte freezing and proprietary injunctions against the Additional Respondents, WKU and ZPP. The latter, application came before Webster J on 31 July 2024 and the Judge granted an injunction (ex parte) (Injunction).
Upon receiving notice of both the Probate Order and the Injunction (in August 2024), WKU and ZPP sought to discharge the Injunction and set aside the Probate Order. A hearing was subsequently listed before Mithani J on 6 to 8, and 12 to 13 May 2025 to consider the application to set aside the Probate Order, the application to discharge the Injunction and the Derivative Leave Application (Omnibus Hearing).
Following the Omnibus Hearing, Mithani J handed down his judgment in which he held (amongst other things) that (a) BNU had not been given standing to bring proceedings on behalf of the BVI estate, (b) the Probate Order only allowed BNU to take out a grant for her appointment as administrator ad colligenda bona, providing BNU (i) lodged the appropriate documentation in support of that application, (ii) paid the requisite fee, and (iii) finally, the Registrar or Judge of the Probate Court considered the papers to be in order. Moreover, Mithani J held that BNU could have applied to remove the caveat which was in place in relation to the deceased’s estate and have the case dealt with as a solemn form probate claim.
This judgment reaffirms many of the well-established principles in the BVI and specifically that the authority of an executor stems from a person’s appointment in a will and takes effect from the death of the testator. Moreover, the judgment goes onto say that, a person will only be constituted as an administrator of the estate of a deceased person if a formal grant of representation is issued to them. As the Judge explains, it follows that until a person appointed as administrator of an estate obtains a grant of representation to that estate, they will not be able to act as personal representative of that estate.
The question as to whether BNU had authority to act on behalf of the BVI estate was therefore central to the determination of each of the applications before the Court. Mithani J held that the meaning of “personal representative” in the context of a derivative leave claim on behalf of a company (being a claim under section 184C of the BVI Business Companies Act 2004) must have the same meaning as the expression in the Administration of Estates Act 1925, meaning that the person concerned must have a grant of representation (unless they are an executor) before they can fall within the meaning of “personal representative” for the purpose of a derivative leave claim. In so doing, Mithani J concluded that the dispute over the grant of representation should (more appropriately) be determined by the Registrar or Judge in the Probate Court.
These procedural defects turned out to be both fundamental and therefore fatal. Mithani J’s judgment went on to find that BNU was not (and had never been) the properly constituted administrator of the BVI estate. As an unavoidable direct consequence, the Judge struck out both the Derivative Leave Application and the Injunction.
For both legal practitioners and those tasked with administering estates in the BVI, this judgment underscores the critical importance of ensuring that any steps taken are done so with the proper authority and following the correct procedure. Although not an issue which has arisen in the proceedings, those that act without authority risk liability as a trustee de son tort, and lawyers that act without authority risk liability for breach of a warranty of authority.
Appleby acted on behalf of UGX and THA and instructed Tim Collingwood KC in these proceedings.
The judgment is available here: DUK v UGX – Eastern Caribbean Supreme Court
