Last year, Harlequin made a $60m claim against its former accountants Wilkins Kennedy for “breaches of contract and/or duty arising in connection with the development of a luxury resort at Buccament Bay, St Vincent and the Grenadines in the Caribbean”.
In December, it won one of its claims against Wilkins Kennedy, which was also acting for the resort’s building company ICE.
In a scathing verdict, the judge in the case blasted the conduct of both parties but eventually found in favour of Harlequin relating to one case of overpayments of $25.7m after Harlequin paid ICE $50.5m for its services, when it should have been $24.8m.
The judge ordered the accountancy firm to pay Harlequin the reduced compensation of £11.6m.
However this week Wilkins Kennedy has filed for an appeal against this decision at the Court of Appeal.
Tom Govan, communications director of Wilkins Kennedy said: “Although the court rejected all liabilities apart from one, we have spoken to our legal team and believe there is justification for an appeal. We have therefore applied to the court for permission to appeal against the judgment on a number of grounds.”
Harlequin claims
Founded in 2005, Harlequin is an unregulated property scheme based on luxury villas in the Caribbean and other exotic locations, promising ‘guaranteed returns’ of 10% a year, which have never materialised.
More than 6,000 pension savers invested around £400m into the scheme via financial advisers.
It ran into trouble in 2013 after the Financial Conduct Authority (FCA) issued several warnings, while the Serious Fraud Office is looking into the fund amid several legal cases.
Last month, Harlequin entered interim receivership – a type of bankruptcy – while its flagship resort was closed after the electricity was disconnected.
The UK’s Financial Services Compensation Scheme (FSCS) has already picked up the tab of £100m to investors who received poor advice from financial advisers regarding investments in Harlequin, with many advisers being declared bankrupt after failing to cover client claims.
In October, Harlequin Property SVG, officially entered insolvency proceedings – a decision likely to result in hefty losses for thousands of investors.
However, the company’s chairman David Ames, said at the time that the legal move to wind up its Saint Vincent and the Grenadines headquarters was designed to protect investors.
Harlequin response
A Harlequin spokesperson said: “On 12 December 2016, Wilkins Kennedy’s first application for permission to appeal was rejected by Justice Coulson on the basis that he believes Wilkins Kennedy have no real prospect of success.
“Harlequin understands that this second and last opportunity for Wilkins Kennedy to apply for permission to appeal will be resolved by 27 January.
“To be clear, whilst Justice Coulson found that loss flowed from one of the allegations, his Judgment also found that: Wilkins Kennedy were in breach of contract/breach of duty for failing to give necessary advice on a major contract; there were no effective Chinese walls in place; Wilkins Kennedy were in conflict of interest; and Wilkins Kennedy breached their confidentiality obligations to Harlequin.”
