Hotel resort and property developing firm Harlequin has been awarded $15m (£11.8m) in damages from ex-accountants Wilkins Kennedy following the company’s pursuit for damages through the High Court
The top 20 accountancy firm worked with Harlequin between 2006 and 2010 to provide financial and business advice while the developer was creating the Buccament Bay Resort in St Vincent and the Grenadines.
At the High Court on Monday, judge Justice Coulson said that senior representatives of Wilkins Kennedy did not have “the first clue as to any rule relating to client confidentiality” after deciding to take on Harlequin’s building company ICE as a client.
Harlequin and ICE were in a “bitter dispute” over the costs associated with building work at the time, the developer said. It added that Wilkins Kennedy chose to work for both the developer and the builder at the same time, but without telling Harlequin.
The judge said that an “unusually close relationship” developed between ICE’s boss Padraig O’Halloran and Martin MacDonald of Wilkins Kennedy, who was referred to as Harlequin’s chief financial officer or financial director.
The High Court found that MacDonald and another Wilkins Kennedy senior representative, Jeremy Newman, then sided with O’Halloran, who misappropriated over US$12m from Harlequin’s investors’ money in the Caribbean to buy planes, yachts, and live an extravagant lifestyle at Sandy Lane in Barbados.
In an earlier hearing in 2013, the Commercial Court in Dublin had found O’Halloran liable for fraudulent misappropriation from Harlequin.
MacDonald, acting as the main liaison with Harlequin, confirmed he forwarded confidential documents from Harlequin’s in-house solicitor to ICE Group.
David Ames, Harlequin’s founder, said outside court, “We have lived with the failings of Wilkins Kennedy and the nightmare of this case for years. The impact their actions have had on our investors, the success of our business, our public reputation, the happiness of our family and our own health is undeniable.
“Wilkins Kennedy should be holding their heads in disgrace. I trusted them as my accountants, and I cannot believe they were acting behind my back to help a fraudster get away with funding a lavish lifestyle.
“We are delighted the case has now resulted in such a strong judgment in favour of Harlequin and it vindicates what we have been saying for years. Today we have, at last, some justice. Tomorrow, we return to fighting to rebuild our business.”
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.
“This related to the contractual relationship between the builder and the developer, where the judge viewed both parties to have contributed equally to losses arising from deemed overpayments to the builder.”
Wilkins Kennedy said they were taking legal advice with a view to appealing this aspect of the judgement.
economia.icaew.com
