A painting by Australian celebrity Rolf Harris is at the centre of a legal row involving a Birmingham art house.

Harris's £135,000 painting Lovers On The Seine, once stored in a gallery warehouse in Warwick, has mysteriously disappeared and its owner has been fighting a four-year court battle to find it. It is considered to be one of his finest works.

Washington Green Fine Art, in Upper Gough Street, Birmingham, has been accused of dishonestly appropriating the painting after it vanished from the warehouse in October 2005.

The firm, which lists Rolf Harris on its artist profile section, has been ordered to repay £135,000, the painting’s value, any interest and legal costs.

But in the latest development, the firm said it had not taken it and has challenged the Court of Appeal to prove what has happened to it.

Art lover and collector Dean Hardy paid £95,000 for the painting in April 2005 and placed it in a gallery’s warehouse in Warwick.

After his death in 2006, his widow Maxine, from Nottinghamshire, asked the warehouse to return 18 paintings to her.

A court heard that 17 pictures were eventually sent to her in December 2006 but Lovers On The Seine, was not included in the batch.

The warehouse was then taken over by a holding company for Washington Green Fine Art.

Mrs Hardy repeatedly demanded the painting be returned but was told it had not been seen in the warehouse since October 2005.

She took her battle to the courts and in June last year Judge Brown ordered Washington Green to pay £135,000 for her husband’s original investment plus interest and legal costs.

He said: “This is a case where Washington Green has dishonestly appropriated this particular painting. They knew full well that it had not been lost or stolen by third parties because it had in fact been procured by Washington Green as its own property and handled or disposed of as such.”

Judge Brown said the firm’s managing director, Udi Sheleg, “knows full well where that painting is, or where it has gone to, and he is personally and dishonestly responsible for its loss”.

A spokeswoman for the art house said: “Washington Green and its managing director Mr Udi Sheleg has, from inception, categorically refuted any allegations against the company in this matter and, as a result, Washington Green was granted permission to appeal.

“Washington Green and Mr Sheleg have dealt with Mrs Hardy in the most transparent and ethical way possible, consistently maintaining that it had no responsibility for the lost painting.

“Washington Green offered several options to Mrs Hardy in an effort to come to an amicable solution. Surprisingly all of these goodwill efforts were rejected.

“We await the Court of Appeal’s ruling before making any further comment.”