A former solicitor who helped to set up offshore accounts in tax havens has been ordered to pay more than £760,000 compensation for approving an unauthorised transfer of funds.

Stuart Creggy, now in his 70s, acted for more than 25 years for restaurant-chain owners Jeffrey and Peter Barnett.

The brothers established a successful pizza business in Canada and then set up a venture of English-styled pub restaurants called Elephant & Castle.

The arrangement with Creggy lasted successfully until 2002, but was halted after the brothers claimed several payments were unaccounted for.

In particular, relations broke down after the transfer of more than £760,000 to a Maltese lawyer, Dr Patrick Spiteri, from whom they never recovered any funds.

Mr Justice David Richards, sitting in the High Court, rejected the brothers’ claim for an account for payments made before 1998, but agreed to an account of all sums received by or to the order of Creggy after August 1998.

He also ordered that Creggy pay Jeffrey Barnett the entire sum involved in the Spiteri transfer by way of compensation for breach of duty in procuring an unauthorised payment.

Over a three-day hearing, the court heard how the claimants first started working with Creggy in the mid-1970s when they asked him to act for them in holding funds outside Canada.

Creggy helped them set up two separate offshore companies, Pound and Glacier, which could not be traced back to them.

These companies were central to the corporate structure set up by Creggy for the brothers, with significant amounts being paid to and from Swiss accounts.

Creggy would hold funds for them and invest on their behalf, although he denied promising to double their income within seven years.

The first evidence of their arrangement was in 1986 when Elephant & Castle won a contract for a restaurant at the EXPO World Trade Fair and remitted around £550,000 to Creggy.

Further sums were paid in subsequent years, as well as to another company established on the claimants’ instructions, called Hospitality Marketing Limited.

But the brothers alleged that several payments, adding up to a seven-figure sum, were not authorised. The claims are disputed by their former solicitor.

The Spiteri transfer happened at the end of July 1998, with Creggy giving instructions for the sums held in the Swiss bank accounts of Pound and Glacier to be transferred to Spiteri. Creggy said Spiteri was senior partner at ‘one of the most respectable law firms in Malta’ and that they had been introduced by the Maltese minister of justice.

Creggy said his recently-acquired Swiss visa meant any account on which he was authorised signatory would become subject to Swiss tax revenues.

The solicitor said it was understood he could deal with the claimants’ money as if it was his own, but the claimants argued he breached his duties as signatory of the accounts of Pound and Glacier.

The judge said they were correct to contend that transfers were unauthorised and not agreed in advance.

Richards added: ‘It is enough to say that [Creggy] owed duties of care and good faith to the claimants in the exercise of his powers as signatory and that it was a breach of duty to make these transfers without authority and to a person unknown to the claimants.

‘Such information as was available about Dr Spiteri was clearly inadequate to qualify him as a suitable custodian of these funds.’

Richards said none of the parties had an ‘unblemished reputation’ and noted that Jeffrey Barnett had described the receipt of £650,000 as a ‘perk’.

The court heard that as well as running a practice whose sole purpose was to enable his clients to conceal large funds in offshore locations, Creggy was convicted in 2007 of money-laundering offences, for which he received a suspended term of imprisonment of 18 months and a fine of £900,000.

The charges and offences were unconnected with the claimants.

Creggy, formerly with City firm Talbott Creggy, is no longer on the roll.