Hunt Walsh Leech v R Stanley Stokes

• Jurisdiction: Ireland
• Judgment Date: 01 January 1939
• Date: 01 January 1939
• Court: Supreme Court

(S.C.),

Hunt Walsh Leech

and

R. Stanley Stokes

Auditors preparing annual profit and loss account of firm of solicitors for purposes of income tax - Duty of auditors and accountants in preparing such accounts - Failure to detect embezzlement by solicitor's clerk - Books produced to auditors not showing any grounds for suspicion of embezzlement -No breach of duty.

The plaintiff, the last-surviving partner of a firm of solicitors, claimed damages from the defendants, a firm of chartered accountants, for alleged negligence and breach of duty by the defendants as accountants and auditors in preparing profit and loss accounts for income tax purposes. The defendants had furnished such accounts annually for many years on the instructions of the plaintiff's deceased partner, on each occasion submitting a report and giving a certificate that the accounts were correct and had been prepared from the books of the firm. For several years a clerk of the plaintiff's firm had been embezzling monies received by him for the firm as agency fees for the collection of rents and this had continued during the years in which the defendants had given certified accounts. The misappropriations were discovered later, after the death of the partner who had given instructions to the defendants. The plaintiff alleged that the defendants were negligent in certifying the correctness of the accounts without seeing that the books of the firm were properly kept and that but for that...