The Royal Gazette has reported that the legal battle to claw back millions of dollars that went “missing” during financial negotiations to build the Par-la-Ville hotel in Hamilton, Bermuda is set to be played out in London’s High Court this year.
Three claimants have launched civil proceedings against businessman Robert McKellar in a bid to retrieve $12.5 million that they say Mr McKellar used to buy a luxury Aston Martin car, an engagement ring and two countryside properties in the south of England.
The $12.5 million was transferred from Par-la-Ville Hotel and Residences Ltd through a trust to Mr McKellar’s firm, Argyle UAE Ltd, to help arrange financing for the multimillion-dollar Hamilton hotel project that never got off the ground.
Liquidators for PLVHR and Argyle Limited — a Gibraltar-based firm run by Mr McKellar — as well as receivers for the trustees of the Skyline Trust, set up to enable the funding arrangement, have alleged “unjust enrichment, fraudulent misrepresentation and procuring a breach of contract” against Mr McKellar, Argyle UAE Ltd and his wife, Susan Hawes.
Hamilton Mayor Charles Gosling has expressed hope that the money will be recovered and the legal proceedings will finally bring to an end a two-year financial fiasco that plunged the Corporation into turmoil.
Last August the three claimants obtained an injunction against Mr McKellar and Argyle UAE Ltd freezing their assets worldwide to a total value of $12.4 million. A second proprietary order prevents Mr McKellar from selling his two homes in East Sussex, England, and an Aston Martin Vanquish motor car.
In response to the injunctions, Mr McKellar provided sworn affidavits outlining how he received two sums of $499,999 and $500,000 between October and November 2014 into a Barclays Bank account in London and a further $11.5 million into an Argyle UAE account in the Cayman Islands.
He says he converted the $999,999 into sterling and put the money into a personal HSBC account “as director’s remuneration to him as director of Argyle UAE”. The claimants allege he used £73,000 of the money transferred to the HSBC account to buy an engagement ring for Ms Dawes.
The claimants further allege that Mr McKellar’s affidavits show that of the $11.5 million sum, he converted $328,158 into sterling and bought a £210,985 Aston Martin Vanquish by way of a director loan to him personally.
They also claim he transferred $9.9 million into an Argyle UAE account in Zurich and converted more than $8 million of that sum into sterling to buy two properties in East Sussex worth £2,675,000 and £1,250,000, as well as paying for $1.3 million worth of work to be done on one of the properties.
The Royal Gazette applied to the Chancery Division of the High Court to obtain all documents relating to the case, which show that Mr McKellar and Miss Hawes filed defence statements with the court last month.
In a nine-page defence, Mr McKellar and Argyle UAE Ltd asserts that he is entitled to the $12.5 million as a fee and he provides several defences as to why he is entitled to the money.
Meanwhile, Ms Hawes admits that Mr McKellar gave her an engagement ring and they jointly own one of the East Sussex properties. However, she makes “no admissions” relating to the claimants’ allegations and will “abide by such order as the court shall make”.
Mr Gosling told The Royal Gazette: “With regards to the missing monies from the release of the final escrow payment: joint liquidators were appointed to Par-la-Ville Hotel and Residences Limited on October 9, 2015, and subsequently joint receivers were appointed to the Skyline Trust — through which the funds were released — in Bermuda on February 18, 2016.
“Additionally, on July 1, 2016, joint liquidators were appointed to Argyle Ltd in Gibraltar.
“The Corporation of Hamilton has assisted by meeting some of the immediate costs of this exercise. The issue is now before the UK courts, and besides stating that we hope a significant amount of the funds will be recovered, our counsel is advising us against making further comment.”
A spokesperson for KPMG added: “The Joint Provisional Liquidators and the Joint Receivers and the Joint Liquidators have jointly brought proceedings in the High Court of Justice in England against a number of parties.
“As matters pertaining the affairs of the above companies and trust are subject to litigation and are commercially sensitive, the aforementioned appointees are not in a position to make further comment at this time.”