Gallagher was 'far from insolvent', court told

"I was in awe of him completely, I did not know where he got his energy from. Business was booming," Hurley told defence counsel, Deirdre Hughes BL, giving evidence on day three of Gallagher's trial.

She was giving evidence on day three of the trial of Mr Gallagher who denies stealing three abstract Felim Egan paintings from the Fitzwilliam Hotel on St Stephen's Green on dates unknown between November 2 and November 22, 2000.

Gallagher, aged 32, formerly of Killiney Hill Road, Killiney, and with an address at Pembroke Road, Ballsbridge, also pleaded not guilty to obtaining money by false pretences on November 21, 2000 at The Lodge, Killiney Hill Road with intent to defraud through getting Ir£9,000 from Mr Bryan Greene by falsely pretending that three Felim Egan abstract paintings were his property to sell.

Holland had told the court on day one of the trial that Gallagher was Ir£92,000 in debt before he came into the Fitzwilliam Hotel.

He said Ampleforth Ltd, of which he is the Managing Director, had loaned Gallagher Ir£50,000 to ease his dire cash-flow problems, waived rent for a period and paid Ir£40,000 for consultants to set up a financial control system for him.

Hurley said coming up to the time when Gallagher had decided to move his restaurant to Fitzwilliam Hotel, the business had been thriving. "I saw what was in the bank," she told Hughes.

She said that in September 1997 he had been a primary guest on the Late Late Show and in January 1998 he received the Michellin Award, an event which was publicised heavily in the newspapers.

The previous Christmas had been the best the restaurant had ever had, and tables were booked weeks in advance.

"He was making money, and all his staff were very well paid, right down to kitchen porter. In August 1998, less than a year after she began to work for Gallagher, she said, "I had bought my second home."

Besides his famous reputation, Gallagher also brought several other valuable assets to the Hotel with his restaurant, she said.

His wine cellar alone was around Ir£200,000; one set of dining plates he brought could be valued at Ir£20,000 while the whole delph system was around Ir£90-100,000; and in addition to all this, he also brought with him his art collection, she said.

Ms Hurley said she herself was not very supportive of the move to Fitzwilliam Hotel as she thought things were going pretty well for Gallagher as they were.

He was his own boss, he owned the lease of for the premises of Peacock Alley; and he "ran the ship well."

She said she was also concerned about the fact that Gallagher did not take any advice from lawyers or accountants about the move as she felt "he was giving up something he had worked very very hard for."

Asked if he had been a good businessman, she said: "He ran his business well enough to suit his requirements at the time, but when these requirements changed, so should have his attitude to business - but it did not."

"His expenses went through the roof when he moved to Fitzwilliam Hotel," she said. The first few months at Fitzwilliam Hotel were 'testing times'.

Things, however, were expected to get better as the plan had been to expand all over Europe with Fitzwilliam Hotel.

However, rent at the hotel was approximately £Ir80,000 as opposed to the Ir£25,000 he used to have to pay for the premises on South William St, and Gallagher was asked to pay approximately 20% of the overall electricity bills and 15% of the overall water bills of the Hotel, which she said, was a

very unfair arrangement.

She denied in cross-examination by prosecuting counsel, Melanie Greally BL, that as she had resigned as Mr Gallagher's accountant and was working as his Personal Assistant when he made the move to Fitzwilliam Hotel, she had 'no overall picture of his finances'.

She said she opened his post and had access to bank account statements. She also saw the wage sheets and knew what was being paid to suppliers.

She agreed however, that her assumption of how good a shape Gallagher's finances were based on what she saw of his lifestyle and on the fact that all concerned with the restaurant "were making pots of money, there was expensive wine in the cellar and everyone was enjoying a high

quality of life."

Sophie Flynn Rogers, Gallagher's Personal Assistant from October 1999-2001 and a director of the company he co-owned with Ampleforth, told defence counsel, Richard N Kean SC, describing Gallagher's temperamental personality would be like "picking mercury with a fork."

He was "erratic, volatile, assiduous" and "very bad at the business end of things." She said the day after he was arrested by gardai on suspicion of stealing the paintings he was extremely upset and fearing he might harm himself she had hidden all the tablets and knives in his kitchen.

He had also heard from a source that the story about his alleged theft of the paintings would be in the Sunday papers and he was "very very depressed."

"They can call me anything, but not a thief," he told her when she went to see him at his place after he was released from the garda station following questions.

She said she thought the paintings that Gallagher had allegedly stolen were his and she testified to knowing that they were "taken" by a supplier whom Gallagher owed money to.

She told Kean that Gallagher retrieved the paintings from the supplier 90 minutes after he had taken them.

In cross-examination by Greally she said neither she nor Gallagher were allowed to sign cheques from the company account that Gallagher had jointly set up with Ampleforth to run the restaurants.

She conceded that since all investment in the company had been made by Ampleforth and none by Gallagher, it was not unreasonable for them to try and keep some form of control over its finances.

But, she said: "I always felt it was a way for them to control Conrad."

The hearing continues before Judge Yvonne Murphy.