Receiver moves in on cafe owner

05:42, Feb 18 2013
Hogs Breath
STOPPED: The Courtenay Place restaurant before it closed down after the company went into liquidation.

The owner of failed Wellington restaurant The Hogs Breath Cafe bought himself a BMW with company money, then traded it in for an Audi when liquidators began knocking on his door.

Simon Mark Baker began running the Courtenay Place restaurant in 2006 until it was placed into liquidation in June last year, owing creditors $828,707.

In October, liquidators Deloitte demanded $315,817 after learning the balance of Mr Baker's shareholder's account was overdrawn. He refused to pay, claiming he did not owe the company any money.

Simon Baker
Simon Baker

The liquidators also assert that a BMW X5 bought by Mr Baker in 2008 was company property, as it was listed in its financial statements as an asset.

A month after the company was placed into liquidation, Mr Baker traded in the BMW for an Audi and registered it in his own name.

When Deloitte demanded the Audi, Mr Baker refused and said he had bought it personally. He later told the liquidators he had sold the Audi "at a loss".


The receivers filed a claim in the High Court in November, but Mr Baker did not appear when a hearing was held in Wellington last month.

In his decision issued this week, Judge David Gendall said no defence of any kind had been advanced, and ordered Mr Baker to pay $315,817, plus $37,510 for the car.

"Furthermore, at the time Mr Baker was already receiving from the company a reasonably substantial salary, making it less likely the vehicle repayments were part of his salary package, as he now alleges."

Liquidator David Vance said Mr Baker had not made things easy during the liquidation process.

"From the start of the liquidation, he hasn't been totally evasive and non-responsive, but it would be fair to say he's been pretty difficult and at times evasive about how soon he's told us things."

He had failed to respond to several letters from Deloitte, including one informing him that he should not sell the company vehicle.

"He chose to ignore all that, and even when we sort of said you're wrong . . . he still went off and sold the vehicle."

Deloitte would write to Mr Baker informing him of the High Court decision and warning him that it would start bankruptcy proceedings if he did not pay.

Speaking from Christchurch, where he now lives, Mr Baker told The Dominion Post he was unaware he needed to appear in court.

There had never been any intention to hide any money. He had been following advice from his accountant to stop drawing a salary, but instead pay himself out of the shareholding account to reduce tax. The car had been bought as a family vehicle and had been considered part of a salary package, he said.

He had "lost everything" and would be unable to pay back the money.

The Dominion Post