The former owner of a Ponsonby cafe is being chased through the High Court for an alleged debt of $132,000 used to renovate its premises.
Inland Revenue has also launched court action against Santos Ponsonby Ltd, which operated the Santos Cafe.
The company recently sold the cafe in a dealthat is due settle later this week.
The claim for the $131,609 was argued at the High Court in Auckland yesterday and was initiated by Victor Davis, the former partner of Santos Ponsonby's director Anne Sim.
Davis and a fellow trustee of his family trust are seeking summary judgment for the amount, which their lawyer Robert Hucker said was loaned by them to Santos Ponsonby to refurbish its premises.
A summary judgment is a legal procedure where one party alleges there is no arguable defence to a claim and does away with the need for a full trial.
While there was no term specified for the loans to Santos Ponsonby, Hucker said the advances were part of a commercial arrangement and that it must be presumed they were repayable on demand.
Santos Ponsonby's lawyer, Jeff Ussher, said Sim didn't accept all of the claim and that Davis had been the one driving the cafe refurbishment.
Ussher said his client believed that only 50 per cent of what was advanced would need to be repaid and only if the business was making a profit.
While this may seem "particularly loose and uncommercial", Ussher said Davis and Sim were partners and then friends and such arrangements were not unusual in this context.
Because of the "clear conflict of evidence" between Davis and Sim, Ussher said summary judgment was not appropriate and the disparities could only be resolved at trial.
Ussher, during his submissions, said Inland Revenue had launched liquidation proceedings against Santos Ponsonby, which was due to come to court next month.
He also said it was not likely creditors would be paid in full by the sale of the business, which is due to settle on Wednesday.
Associate Judge Hannah Sargisson reserved her decision on the summary judgement.
