The now-closed Auckland restaurant Clooney has been ordered to pay $383,000 after Inland Revenue brought a case against the business and its owner Tony Stewart in the High Court.
Antony Bruce Stewart and Clooney Restaurant, formerly of Freeman's Bay, were defendants in the case, where the IRD commissioner sued for tax liabilities.
Justice Pheroze Jagose said the restaurant was previously owned by four separate companies, of which Stewart was a director and shareholder of one.
But in 2014, that business was transferred. Stewart became the sole director and shareholder of Clooney Restaurant. That transfer excluded the vendor companies' liabilities to IRD, which amounted to $383,000, the decision noted.
Also in 2014, Stewart put the vendor companies into liquidation.
IRD issued statutory demands for tax those businesses owed and served liquidation proceedings in 2014, the judge noted.
Clooney shut last October and the Herald published a feature article where Stewart was interviewed. Financial issues including tax and ill health were cited as reasons for the closure at that time.
But the judge said in the decision out last week that Stewart was liable for IRD debts, which grew with penalties and interest.
IRD told the court the transfer of the original Clooney business to Stewart in 2014 was a disposition of property intended to disadvantage creditors. It sought that Clooney Restaurant pay tax of $383,000 as compensation to the vendor companies.
IRD also claimed Stewart breached his directorship duties to the vendor companies and it wanted him to either pay those companies the amount claimed or pay IRD directly.
Stewart was personally liable to IRD for the debts and IRD sought the court rule in its favour.
The judge ordered Clooney Restaurant to pay the vendor companies compensation of $383,958 plus interest. It declared Stewart had breached his duties to the vendor companies.
The case noted no appearance by either Clooney Restaurant nor Stewart in the matter and the decision also noted no defence in the proceedings.
Stewart said: "I've got no comment to make."