U2's Adam Clayton sues former accountant for €10m in losses following several failed investments - High Court
U2 bass guitarist Adam Clayton has sued his former accountant Gaby Smyth for more than €10m losses, plus damages, as a result of several failed property and other investments.
Among various claims in two sets of proceedings, Mr Clayton alleges he relied on Mr Smyth as his accountant between 2001 and 2010 and for financial and investment advice.
Mr Smyth negligently and in breach of duty advised him to enter high-risk investments when the musician did not want to do so, he claims.
Mr Smyth, of Wyvern, Killiney, Co Dublin, denies negligence or acting as Mr Clayton’s financial and investment adviser as alleged.
He says he acted as the musician’s personal accountant and tax agent and Mr Clayton’s former personal assistant, Carol Hawkins, prepared his financial reports.
He sometimes gave his opinion on investments either entered into or contemplated by Mr Clayton, Mr Smyth also says.
Mr Clayton is a high net worth person with extensive knowledge of and experience in investments, including property, shares, fine art and vintage cars, Mr Smyth said in court documents.
He also got lots of advice from others, had a high appetite for risk and made investments with no capital guarantee and with a risk of loss, Mr Smyth alleges.
Mr Clayton's first case, initiated in 2011, involves a claim for €4.2m losses allegedly suffered by Mr Clayton after he, allegedly on the advice of Mr Smyth, invested in two funds.
He invested €1.2m in the Friends First Orion fund, focusing on the UK and Northern Ireland, and €3m in the Friends First Crystal fund, focusing on potential development land mainly in Munster and Connacht.
It is also alleged Mr Smyth failed to disclose Mr Clayton’s investment would enable a third party benefit from the Orion fund, which resulted in increasing the cost of the investment to Mr Clayton.
It is further claimed Mr Smyth failed to disclose a conflict of interest when investing in investments on behalf of Mr Clayton, as a result of which Mr Smyth, it is alleged, was creating a secret profit or commission.
In the second case, initiated in 2013, Mr Clayton claims Mr Smyth has a liability for some €5.37m losses after he invested in the Timisorara Partnership in Romania.
He also says Mr Smyth has a liabililty for €1.05m losses arising from his 2008 investment in a European Hotel Consortium in Belgium, and for some €270,000 arising from his investment in a pharmaceutical company.
In a pre-trial application, Mr Smyth wants the High Court to quash a decision of February 2014 effectively allowing the continuing prosecution by Mr Clayton of the 2013 case.
Marcus Dowling BL, for Mr Smyth, said he was dismissed by Mr Clayton when the musician ordered a review of all his financial affairs after it emerged he was defrauded over years of several million euro by Carol Hawkins, who was later convicted.
Mr Clayton sued Mr Smyth arising from the “debacle” over Ms Hawkins, counsel said.
Mr Clayton got an order renewing his 2013 summons on the basis of “cursory” information, counsel said.
If certain matters were brought to the court’s attention at that time, it would not have permitted the 2013 summons be renewed in February 2014, he submitted.
Mr Dowling said Mr Clayton failed to make clear what the 2013 case was about until some 18 months after the proceedings issued and that was a “remarkable state of affairs”. Before you allege negligence against a professional person like Mr Smyth, you must specify the basis for that, counsel argued.
Eamon Marray BL, for Mr Clayton, said the 2013 case related to three property investments, one of which was not known about until this year.
Mr Clayton’s solicitors and accountants had been writing to Mr Smyth seeking information about Mr Clayton’s investments so he could have “a window” into what investments were entered into on his behalf.
The President of the High Court, Mr Justice Nicholas Kearns, remarked Mr Clayton was not the first performer in the music business who would not have total knowledge about investments made on his behalf.
The application has been adjourned to resume in November.