It is a case which has shocked Ireland's 'horsey' set, setting tongues wagging in some of the country's most thoroughbred homes. Yet Julie Lynch could hardly have thought it would ever come to this when she first began an affair with her married boss, John Clarke, in 2006.

Lynch, a 31-year-old stallions nominations manager at the state-owned Irish National Stud (INS) in Kildare, had been seeing Clarke for over a year when she called it a day in April 2008.

She might reasonably have expected some amount of awkwardness to remain between the two former lovers, forced to interact on a strictly professional basis from then on.

But the man in question was no ordinary individual.

From his position at the head of the Irish National Stud, Clarke (59) had access to many of the most influential and wealthy people in Irish society.

And if Lynch is to be believed, nothing could have prepared her for how she would be treated once she called time on the affair.

Nasty

Lynch joined the National Stud in 2006, having previously worked for John Magnier's world-renowned Coolmore operation.

She was soon promoted to stallions nominations manager, and began the affair with Clarke that same year.

As she tells it, it was not until she cooled things with him that events began to get nasty.

As part of her High Court legal action, she alleges that Clarke, who retired in January with a generous once-off goodbye payment of almost €65,000, effectively made her life "hell" after she broke up with him.

She says he intimidated, bullied and harassed her, and that he sexually assaulted her in the office on numerous occasions after the affair ended.

This had a terrible effect on her, leading the young woman to attempt suicide by overdosing on pills at one stage last year.

She says she told various people, including the board chairwoman Lady Chryss O'Reilly, wife of Sir Anthony, that she was being bullied and victimised by Clarke.

When she made complaints to stud management, they arranged for an investigation by former Labour Court chairman Finbarr Flood.

His report found Lynch was subjected to "repeated inappropriate behaviour, direct and indirect, that would be regarded as undermining her".

The stud's business had also been damaged by the "extremely tense and hostile" relationship between the pair, the report also found.

But despite these findings, Lynch says the alleged victimisation has continued, and she also had to cope with her sanity being questioned.

It is this situation which led her to seek a High Court injunction earlier this year, looking for orders restraining the INS placing her on medical leave or being evicted from the house she lives in, provided as part of her job.

The orders were sought pending the outcome of her full action against the company.

On 23 March, the court heard the sides came to an arrangement which meant the injunction proceedings could be struck out, in advance of the full hearing of her claim for damages.

Denial

Up to this point, however, the National Stud had denied Lynch's claims, contending she was put on sick leave for medical reasons and could return to work when medically certified to do so.

It has also denied various claims by her concerning discussions with Lady O'Reilly and others about her situation, including that the stud did nothing about her allegations.

It said the allegations of sexual assault were not previously put to them or Clarke. As result, it added that Clarke ? who has instigated his own legal action against the stud in an attempt to overturn the finding of its internal investigation ? was not a party to the injunction proceedings and therefore not in a position to respond to the allegations.

Meanwhile, the INS also claimed Lynch had sent inappropriate communications to staff and customers.

Clarke himself is no shrinking violet when it comes to generating media headlines through his actions, however.

Just last week it emerged that his former employer picked up a travel bill of more than €800,000 over a period of eight years, money which was spent on both Clarke and his wife Monica.

Between January 2002 and January of this year alone, the well-travelled Clarkes made 40 such trips together.

His wife's flight and chauffeur expenses cost the stud €95,000 and Clarke's expenses, including flights, accommodation, chauffeur and other credit card bills, cost more than €700,000.

The trips were taken so that Clarke could attend horse sales and race meetings.

His former employer also paid more than €130,000 in household bills alone for the pair, including electricity and heating, over a 10-year period, according to details released under the Freedom of Information Act.

Julie Lynch's case is by no means the first industrial relations case during Clarke's 27-year tenure at the helm of the INS.

Amazingly, the semi-state company, which recorded a loss of €2.3m for the year ended December 2008, has paid out more than €700,000 in legal costs and settlements related to internal employment issues with its staff over the last five years.

Bills and settlement costs incurred by the semi-state company in relation to one employee ? its former farm and tourism manager Pat Mullarkey ? came to over €364,000. In 2004, Mullarkey had also taken an action alleging harassment and bullying.

Harassment

Meanwhile, another out-of-court settlement of €120,000 was made in 2008. This related to employee Andrew Lacey, a horticulturist who alleged harassment, bullying and intimidation.

His case was initiated in 2006 and settled after two trips to the High Court. The total cost for his case, including the settlement, was almost €220,000.

Following last week's revelations of what the Oireachtas heard is the INS's "Fás-like expenses regime", agriculture minister Brendan Smith appointed two new directors to its board.

In a statement on Thursday, Smith also said he intends to make four other appointments.

Meanwhile, Lynch's overall case for damages from the INS – which has cost it €40,000 in legal costs from May to December 2009 alone – was adjourned to July.

Judge Mary Laffoy was also told that Lynch has initiated separate personal injury proceedings over her alleged treatment.

The Irish National Stud

Established in 1946, the Irish National Stud is owned by the government and is based in Tully, Co Kildare.

Its function is to promote Irish bloodstock internationally, as well as to offer boarding facilities for racehorses, stallions and mares in foal.

As the only stud farm in Ireland open to the public, it is also involved in tourism, and is the home of the Japanese Gardens tourist attraction.

According to its website, its most expensive stallion is Invincible Spirit, who carries a fee of €4m.