‘Missing $18m’ defence rejected

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The prospect of liquidators recovering millions of dollars that went “missing” during financial negotiations to build the Par-la-Ville hotel have moved a step closer after a judgment by London’s High Court.

Three claimants 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.

Now a High Court Judge has rejected Mr McKellar’s defence to the allegations of “unjust enrichment” and said he has no real prospect of successfully defending the claim, so the case should not go to trial.

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, had alleged “unjust enrichment” among other claims against Mr McKellar, Argyle UAE Ltd and his wife, Susan McKellar.

In a summary judgment handed down earlier this summer Deputy High Court Judge Roger Wyland said that Argyle UAE and Mr McKellar had “no reasonable grounds” or “arguable case” for defending the claim for unjust enrichment.

“I find that the first (Argyle UAE Ltd) and second (Robert McKellar) defendants’ defence to the unjust enrichment claim discloses no reasonable grounds for defending the claim and that their defence should be struck out,” Mr Justice Wyland said. “The first and second defendants have no real prospect of successfully defending that claim and there is no other compelling reason why the issue should be disposed of at trial.”

However Mr Justice Wyland ruled that Mrs McKellar did have a “real prospect of successfully defending the claim in unjust enrichment” and he did not grant a summary judgment against her.

Mike Morrison, managing director of KPMG Advisory Ltd, one of the joint provisional liquidators of PLVHR and joint receiver of the Skyline Trust, told The Royal Gazette: “The claimants are pleased to note that the High Court ruled in their favour in a summary judgment application against the first two defendants on July 27, 2017. The first two defendants have now lodged an application for permission to appeal that judgment.”

If that appeal is unsuccessful the three claimants can enforce the judgment and look to recover the funds.

The joint liquidators and receivers embarked on legal proceedings against Argyle UAE Limited, Mr McKellar and Mrs McKellar last September to recover $12.5 million that was transferred to the defendants.

The $12.5 million came from an $18 million bridging loan made by Mexico Infrastructure Finance to PLVHR after a raft of legal fees and expenses had been satisfied to help fund the hotel development.

In August they 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 prevented 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 Mrs McKellar.

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.

In a nine-page defence, Mr McKellar and Argyle UAE Ltd claimed he was entitled to the $12.5 million as a “fee” and provided several defences as to why he claimed he was entitled to the money.

Meanwhile, Mrs McKellar admitted that Mr McKellar gave her an engagement ring and they jointly own one of the East Sussex properties.

However, she made “no admissions” relating to the claimants’ allegations and said she would “abide by such order as the court shall make”.

It is The Royal Gazette’s policy not to allow comments on stories regarding court cases. As we are legally liable for any slanderous or defamatory comments made on our website, this move is for our protection as well as that of our readers.

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