The High Court has rejected expatriate businessman Eric Watson's attempt to delay payment of more than $500,000 in overdue court costs in a decision that rubbishes the tactics used.

In the latest twist in the one-time corporate high-flier's long-running tax avoidance case, lawyers for Watson tried to argue that if his Cullen Group was forced to pay the $505,399.05 in interest costs, it would likely tip the firm into liquidation.

Cullen Group already owes the Inland Revenue Department $114.7 million in unpaid tax and interest, plus as yet undetermined penalties, relating to a March decision in the Auckland High Court that Cullen had avoided some $51.5 million of tax in the first decade of this century.

In his decision on the application for a stay on costs, issued on November 29 and published today, Justice Matthew Palmer noted that while Cullen Group had negative equity in its accounts of $203.4 million, its subsidiary Cullen Investments had assets of more than $148 million in its 2017 financial statements.

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Total liabilities were just over $73 million, and it recorded operating expenses of $6.3 million, including $2.6 million of salaries. Cullen Group's own opex that year was more than $21 million.

"The costs award of some $500,000 that has been owing for almost eight months should not be enough to tip Cullen Group into insolvency and liquidation unless those controlling it, including Mr Eric Watson, wish it to do so. It is likely to be up to him whether Cullen Group is liquidated."

Justice Palmer had already found in the earlier judgment that Watson exercised a "high degree of control" over Cullen assets.

"A party owing costs under a judgment cannot force a stay of the judgment by effectively threatening its own liquidation," the judge said. "Rather, that appears to be a reason in favour of liquidation and against a stay, to enable enforcement of the judgment."

Watson's legal team had argued that Cullen Group was in the process of an asset sale, which had become complicated, but which should yield $1.2 million in proceeds in February when court costs could be paid.

But Justice Palmer was having none of it.

"If Cullen Group wishes to avoid liquidation, it should pay the relatively minor costs award in the time it still has to do so. If it cannot ... it should be liquidated."

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Watson left New Zealand permanently for the UK in 2002 and has tried to argue the avoidance arrangements were part of arranging his affairs to become a British taxpayer.

The avoidance was arranged by turning shares in one of Watson's New Zealand companies into loans to another company, which were then parked in a company in the Cayman Islands, a tax haven.

Justice Palmer ruled in March that Watson had used "a web of entities" designed to avoid paying non-resident withholding tax of 15 per cent on loans to Cullen Investments between 2002 and 2010.

Watson is taking that decision to the Court of Appeal in February.

As well as denying a stay on the costs order and potential liquidation, Justice Palmer also denied an application to extend the September 10 deadline for Cullen Group to file a statement of defence on the liquidation issue as it had "given no reason for that failure other than oversight".