PracticeAccounting FirmsHarlequin wins £7m in damages against Wilkins Kennedy

Harlequin wins £7m in damages against Wilkins Kennedy

Wilkins Kennedy faces a multi-million pound bill after a claim is upheld against the firm in its long-running battle with property business Harlequin

Harlequin wins £7m in damages against Wilkins Kennedy

A MULTI-MILLION POUND damages claim has been upheld against Wilkins Kennedy, in its long-running battle with property business Harlequin.

Mr Justice Coulson has ordered Wilkins Kennedy to pay $11.6m (£7.4m at earlier exchange rate) following a seven-week case and the production of a 350-page document, containing strong criticism of the top 20 firm.

Wilkins Kennedy provided financial and business advice between 2006 and 2010 to Harlequin, focusing on building and creating the Buccament Bay Resort in St Vincent and the Grenadines.

The criticism was prompted by Wilsons Kennedy’s decision to take on Harlequin’s building company, ICE, as a client who was in dispute with Harlequin over the costs of building works. Wilkins Kennedy worked for the developer and the builder at the same time, without telling Harlequin.

Wilkins Kennedy accountants sided with ICE boss Paudie O’Halloran, who misappropriated more than $12m from Harlequin’s investors’ money for an extravagant lifestyle. In an earlier hearing in 2013, the Commercial Court in Dublin had found Mr O’Halloran liable for fraudulent misappropriation from Harlequin.

Mr Justice Coulson stated in paragraph 184 of his judgement that senior representatives of Wilkins Kennedy (Martin MacDonald and Jeremy Newman) did not have “the first clue as to any rule relating to client confidentiality”.

Paragraph ten of the judgement mentioned that the internal documents from Wilkins Kennedy in 2010 reveal an attempt for ICE to be paid as much as possible by Harlequin “whether justified or not”.

Despite the damages awarded, all but one claim against Wilkins Kennedy was rejected. The claim upheld related to the firm’s accountants failing to advise Harlequin about valuing the work undertaken by ICE and paying the builder only for works completed.

Tom Govan, communications director at Wilkins Kennedy, said: “Although disappointed that the court did not dismiss the entire case, we are pleased that it has rejected the vast majority of Harlequin’s claim. The judge has rejected all allegations brought against us, apart from one.

“The court found that Wilkins Kennedy was not liable for building delays and was under no obligation to give Harlequin confidential information about the builder ICE.

“It also found that allegations regarding breach of confidentiality and failure to advise on a formal contract with the builder did not result in any financial loss to Harlequin.

“The only allegation to be upheld was regarding failure to advise on the necessity of a valuation process to ensure that ICE was only paid for completed work. However, the Court found both parties to be equally liable in this respect and reduced the award accordingly.

“As a result, the amount awarded is £7,443,821. Our legal team is currently seeking permission to appeal against the judgment on a number of grounds.”

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