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Personal liability of officers where adequate accounting records not kept
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115. (1) Subject to subsection (2), if—
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(a) an ICAV that is being wound up and that is unable to pay all of its debts has contravened any of sections 109 to 113, and
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(b) the High Court considers that such contravention—
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(i) has contributed to the ICAV’s inability to pay all of its debts,
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(ii) has resulted in substantial uncertainty as to the assets and liabilities of the ICAV, or
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(iii) has substantially impeded the orderly winding up of the ICAV,
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the High Court, on the application of the liquidator or any creditor or contributory of the ICAV, has the following power.
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(2) The power of the High Court is to declare, if it thinks it proper to do so, that any one or more of the officers and former officers of the ICAV who is or are in default shall be personally liable, without any limitation of liability, for all, or such part as may be specified by the High Court, of the debts and other liabilities of the ICAV.
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(3) On the hearing of an application under this section, the person bringing the application may give evidence or call witnesses.
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(4) Where the High Court makes a declaration under subsection (1), it may give such directions as it thinks proper for the purpose of giving effect to the declaration.
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(5) In particular the order providing for the declaration, or a supplemental order, may include provision for making the liability of any person under the declaration (the “respondent”) a charge on—
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(a) any debt or obligation due from the ICAV to the respondent, or
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(b) any mortgage or charge, or any interest in any mortgage or charge, on any assets of the ICAV held by or vested in—
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(i) the respondent or any person on the respondent’s behalf, or
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(ii) any person claiming as assignee from or through the respondent or any person acting on the behalf of any such person.
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(6) The High Court may from time to time make such further order as may be necessary for the purpose of enforcing any charge imposed under subsection (5) .
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(7) In subsection (5)(b)(ii) “assignee” includes any person to whom or in whose favour, by the directions of the person liable under the declaration, the debt, obligation, mortgage or charge was created, issued or transferred or the interest created but does not include an assignee for valuable consideration (not including consideration by way of marriage) given in good faith and without notice of any of the matters on the ground of which the declaration is made.
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(8) The High Court shall not make a declaration under this section in respect of a person if it considers that—
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(a) the person took all reasonable steps to secure compliance by the ICAV with sections 109 to 113, or
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(b) the person had reasonable grounds for believing and did believe that a competent and reliable person, acting under the supervision or control of a director of the ICAV who has been formally allocated such responsibility, was—
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(i) charged with the duty of ensuring that those sections were complied with, and
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(ii) in a position to discharge that duty.
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(9) This section shall have effect even if the person concerned may be criminally liable in respect of the matters on the ground of which the declaration is to be made.
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