An exhaustive process to find a tenant for one of the Christchurch City Council's prestige sites failed to detect a vital fact, documents show.

The council selected Good Company Canterbury to run its Botanic Gardens cafe, now called ilex, after an apparently rigorous process last year.

The site is key to one of Christchurch's major tourist attractions and returns about $120,000 to ratepayers each year.

One of Good Company Canterbury's directors then was Jonny Schwass, an accomplished and popular chef known for donating his time to charity events. The other was Daniel Shanks, a former executive chef for VBase, who is now Good Company Canterbury's sole director.

When the council selected Good Company Canterbury staff were unaware Schwass's company BTS Restaurants, which owned the Harlequin Public House restaurant, had gone into voluntary liquidation with apparent debts of $1.1m only days before applications for the gardens cafe opened.

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Schwass is expected to be sentenced this week after pleading guilty and being convicted on 21 charges of mis–applying tax deductions and withholding tax of more than $300,000 related to BTS.

Only two candidates made the final cut for the gardens cafe and both were given a financial "pass". Schwass and Shanks were preferred because they offered more flair and sophistication. Good Company remains the operator of ilex.

David Hallett Dan Shanks when he was working for VBase at the CBS Arena in Addington in 2011.

Documents obtained by The Press under the Official Information Act show an exhaustive process used to find the best tenant provided numerous opportunities for the council to discover the company collapse and for Good Company to provide the information.

Candidates (of whom there were six) were required to set out their track record in similar businesses, and disclose "any significant events matters or circumstances which may significantly affect the operations of the respondent's business?"

They were also asked if any factors existed that "could adversely impact on the financial ability of the respondent to successfully perform the obligations stated".

Candidates warranted all information was complete and accurate and the documents clearly indicated the council would do due diligence and make inquiries, including credit checks. A external evaluator from the industry was on the selection panel.

Council staff on the evaluation team had to determine whether the candidate had any negative financial constraints or history, and demonstrated sufficient financial stability.

In their final evaluation, council staff noted "Jonny" being involved in several successful profitable businesses.

Schwass remained a director of Good Company Canterbury until March this year and was a shareholder until October last year.

BTS Restaurants (BTS) was put into liquidation on May 11 last year, a month after Schwass resigned his directorship.

The initial liquidator's report estimated the company had debts of $1.1m, including $670,000 to IRD and $63,000 to suppliers.

The liquidator's June report shows it has recovered $70,000 in a legal settlement and IRD's debt has come down to about $450,000 including penalties. Suppliers are still owed about $63,000.

PAYE tax payments, Kiwisaver, student loans, and child support deductions were included in the money withheld from IRD.

Schwass declined to comment on Sunday. Shanks could not be reached.

The council is expect to comment this week on whether any consequences followed the apparent non-disclosure.