Harlequin Property, the UK-based property development company that has become best-known for its regular appearances in the financial press in connection with lawsuits mainly brought by entities representing out-of-pocket investors, has won a US$11.6m (£9.14m) claim against it former accountants, Wilkins Kennedy.
However the judge in the case said the money should not be paid directly to Harlequin, “at least at this stage”, pending the resolution of other matters, including “in particular” the needs of the company’s investors.
In the 183-page judgment, published on Monday, Justice Coulson observed early on that the case did not “lack startling features”, including an ongoing Serious Fraud Office investigation into Harlequin, “significant findings of fraud and dishonesty against [Padraig] O’Halloran” – one of the contractors retained to build one of the Harlequin resorts – and “defamation proceedings”, ultimately resolved “by an apology and a payment of money” to a Harlequin director and his wife.
He then went on to detail precisely why he agreed that Harlequin had a case in its claims against Wilkins Kennedy on one point, for failing to advise Harlequin to enter into a contract with ICE Group – its contractor – but that he rejected “every other claim for loss or damage”.
“The exception is my finding that if Mr MacDonald [Martin MacDonald, a partner in Wilkins Kennedy] had given proper advice as to the necessity of a contractually-binding, straightforward valuation process, the agreement between Harlequin and ICE would have incorporated such a process and would have ensured that ICE were only paid a reasonable amount for the work that that they did, in accordance with their rates.”
Harlequin had been seeking US$60m in its claim against Wilkins Kennedy, in connection with the construction of a resort in Buccament Bay, in St Vincent and the Grenadines in the Caribbean.
Harlequin was founded in 2005 to develop resorts in the Caribbean, and was heavily marketed to investors by UK advisers. Based in the Southeast England town of Basildon, it originally was promoted by former Wimbledon champion Pat Cash, golf legend Gary Player and footballer Andy Townsend, before filing for administration in 2013.
To read and download the judgment, click here.