Henderson loses one case, delays another

Christchurch developer David Henderson has lost another round with Inland Revenue over land deals with the Christchurch City Council.

The embattled businessman applied to the High Court in Christchurch to have it endorse a time-to-pay arrangement proposed for three of his indebted companies – Property Ventures Investments, FM3 and FM1.

In 2008, the companies sold property in central Christchurch to the city council in a controversial $16 million deal but did not pay GST on the transactions to Inland Revenue.

Last year, the department moved to liquidate the companies over the continued failure to pay.

The time-to-pay compromise was resisted by Inland Revenue, which is owed $2,395,628 in GST, interest and penalties and is the only affected creditor of the companies.

The compromise suggested by Henderson offered $1m, about 62 per cent of the core debt, to be paid over five years by one of his companies, Hotel So Corporation, the shares in which are owned by ILR Holdings.

Inland Revenue said Henderson had in 2008 "cynically disbursed" to his entities amounts that "should have been earmarked to meet the applicants' GST liabilities as they fell due".

The ability of Hotel So to pay was uncertain and Henderson's tax record was "such as to occasion concern over his pivotal role in relation to the compromises".

Justice Panckhurst said he agreed with the department's submissions and could not see any good reason for not liquidating the companies, "let alone positive persuasive reasons".

"In my view, the affairs of the applicant companies warrant investigation and I am satisfied that this may be best achieved upon the making of liquidation orders," he said.

The judge said he found the motivation for the compromise initiative "elusive".

Inland Revenue's liquidation applications for the companies will be considered by the High Court on March 15.

The ruling from the High Court was made before Henderson's cornerstone company, Property Ventures, was put in receivership last Friday by Allied Farmers.

In a separate case, Henderson has won a stay in court proceedings taken by the IRD against another company, Tannadyce Investments.

The department claimed Tannadyce had tax arrears of $356,686 and should be wound up. Henderson says Tannadyce denies any arrears.

- © Fairfax NZ News