Wednesday 7 December 2016

Grafton Street jewellers sues accountancy firm over skills of finance employee

Tim Healy

Published 04/06/2015 | 16:46

Jewellery (Getty stock image)
Jewellery (Getty stock image)

A jewellery shop in Dublin's Grafton Street says accountancy firm Grant Thornton appointed someone who did not have the necessary skills to act as the jeweller's chief financial officer (CFO), the High Court heard.

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Paul Sheeran Jewellers (Johnson's Court) Ltd is suing Grant Thornton for negligence, breach of contract and misrepresentation over  the accountants' choice of its own employees to work as CFO in the jewellery store.

Grant Thornton denies the claims and asked the High Court to order Sheeran to provide security for legal costs should the jewellers lose the case.   The accountants estimated the cost to them of defending the case at €637,076 although this figure was disputed by Sheeran.

Grant Thornton sought the security order because, it claimed, Sheeran had substantial liabilities over assets and was substantially insolvent. 

Sheeran denied this and said that following restructuring of its debt, it is trading profitably and is wholly solvent.

Mr Justice Paul McDermott said he would not order Sheeran to provide security for costs.

While there may be a number of questions over the financial restructuring, and while the jewellers may face serious challenges as it emerges from the recession, he was not satisfied, as a matter of probability, that it would not be able to discharge an award of costs in the future.

In its action,  Sheeran says that in 2005 they engaged Grant Thornton to provide advisory services and carry out a number of reviews of the business.

One of the main recommendations from the review was for the recruitment of a CFO.  Grant Thornton agreed to find a candidate but, Sheeran says, a successful candidate declined to accept the post and the accountants said one on their own employees would be suitable for the role.

Sheeran say the man chosen was incapable of carrying out the role as he did not have the necessary skills or expertise.  Grant Thornton also failed to supervise the CFO in breach of an agreement that it would mentor him, it was claimed.

It was also claimed the CFO caused the jewellers to install a defective information technology system which was recommended by Grant Thornton.

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