Voidable Dispositions Under The Conveyancing And Law Of Property Act ' An Underutilised Tool In The BVI Asset Tracing Toolbox

• Published date: 12 January 2024
• Subject Matter: Real Estate and Construction, Conveyancing
• Law Firm: Conyers
• Author: Ms Tameka Davis

Voidable dispositions in the BVI are governed by section 81 of the Conveyancing and Law of Property Ordinance. The Act was passed in 1961 and is often overlooked in the heady world of fast-paced litigation where fraudsters need to be caught and assets seized quickly. It is an underutilised yet useful provision.

Under section 81(1) of the Act, every conveyance of property with the intent to defraud creditors "shall be" voidable at the instance of any person prejudiced, reversing the burden of proving damages in favour of prejudice alone, alongside the discretionary remedy of avoiding the transaction if so desired. Property is widely defined as "including anything in action and any interest in real or personal property". Under this provision "any person" prejudiced would have the locus standi to bring a claim even though the person against whom the intent is formed is the creditor. Since the only requirement is that the person affected be prejudiced, there is a wide cohort of potential claimants. This is an obviously attractive feature of this provision because it allows a potential claimant who may not be a creditor, or comfortably defined as such, but has been prejudiced by the conduct complained of, to obtain relief. Further, once the claim has been made out the court must order that the transaction is voidable - there is no discretion to do otherwise.

As in any other instances where the court is being asked to determine "intent", whether an intention to defraud was or had been formed is always a question of fact. While in seeking to persuade the court that there was a fraud there is no requirement to show actual deceit, there should be "some element of dishonesty" or sharp practice. Further, fraud is a serious allegation and must be sufficiently particularised and failure to do so may result in the claim being struck out.

Of the relief available under section 81, the transaction is voidable at the instance of the creditor, but what then is the relevant point in time? In a nineteenth century case, Re Mouat Kingston Mills Company v Mouat [1899] 1 Ch 1, it was held that this was when the claim is...