Section 59: Personal liability in event of insolvency

59. Personal liability in event of insolvency (1) In any case where— (a) a limited partnership has been dissolved and is unable to pay its debts; and (b) there has been in relation to the limited partnership a contravention of section 54 which— (i) has contributed to the inability of the partnership to pay its debts; (ii) has materially misled or deceived any partner or creditor as to, or has resulted in substantial uncertainty as to, the assets, liabilities, client money or investment instruments of the limited partnership; or (iii) has substantially impeded the winding up of the limited partnership, the Court may, on the application of any creditor or partner or of any person conducting the winding up of the limited partnership, declare that any officer or former officer or any general partner in the partnership who is responsible for the contravention shall be personally liable, without limitation of liability, for the debts of the limited partnership or part of such debts, as may be specified by the Court. (2) Where the Court makes a declaration under subsection (1) in relation to any person, it may— (a) give such directions as it thinks fit for the purpose of giving effect to the declaration; and (b) direct that the liability of that person under the declaration shall be a charge on— (i) any debt due from the limited partnership to him, to any person on his behalf, to any person claiming as assignee from or through him or to any person acting on behalf of such an assignee; or [Issue 4] L15A – 38 Revised Laws of Mauritius (ii) any charge on any property of the partnership or any interest in any such charge held by or vested in him or any such person, and the Court may also, from time to time, make such other orders as it considers appropriate for the purpose of giving effect to any charge imposed under this subsection. (3) In subsection (2), the expression “assignee” includes any person to whom or in whose favour, by the direction of the person liable, the debt, charge or interest was created, issued or transferred, but does not include an assignee for valuable consideration, other than consideration by way of marriage, given in good faith and without notice of any of the grounds upon which the declaration might have been made. (4) The Court shall not make a declaration under subsection (1) in respect of a person where it considers that— (a) he took all reasonable steps to secure compliance by the limited partnership with section 54; or (b) he had reasonable grounds for believing and did believe that a competent and reliable person, acting under the supervision or control of or appointed by the general partners— (i) was charged with the duty of ensuring that those provisions were complied with; and (ii) was in a position to discharge that duty. (5) Subsections (1), (2) and (4) shall be without prejudice to any other penalty, remedy or proceedings, whether civil, criminal or disciplinary, in respect of the contravention. (6) In any case under subsection (1) (a) and (b), any officer, former officer or any general partner in the limited partnership who is responsible for the contravention shall, without prejudice to any civil liability, commit an offence. (7) In a prosecution for an offence under this section, it shall be a defence for the person charged to show that he satisfied the requirements under subsection (4) (a) or (b). (8) For the purposes of this section, a person shall be considered to be responsible for a contravention of subsection (1) (a) and (b), any officer, former officer or any general partner in the limited partnership who is responsible for the contravention shall, without prejudice to any civil liability, commit an offence. (7) In a prosecution for an offence under this section, it shall be a defence for the person charged to show that he satisfied the requirements under subsection (4) (a) or (b). (8) For the purposes of this section, a person shall be considered to be responsible for a contravention of a relevant provision where the contravention— (a) was committed with his consent or participation; or (b) was attributable, to, or facilitated by, any neglect on his part.