The man who took on the IRD and won

By Leah Haines

You know the story about the razor. The guy liked it so much, he bought the company. Dave "Hendo" Henderson has a twist on that. He hated the company - in this case the Inland Revenue Department - so much, he bought its building. Driven to bankruptcy by the tax department, Henderson survived to become its landlord, evictor and nemesis.

He ended a five-year fight with the taxman as a millionaire, not only able to prove the bill for a phantom $1 million tax debt was wrong, but also that it owed him $65,000.

It's a classic David and Goliath tale which has already become a best-selling book and now Kiwi film producer John Barnett is poised to make a movie out of it.

Ordinarily, that would be enough delicious revenge for one man. But for Henderson, the sweetest victory came in the form of the seven floors of steel and prefabricated concrete at 165 Cashel St in Christchurch.

"Henderson House," the property magnate exclaims and the tall silver lettering on the building twinkles back over the road at him.

"Look at it. Isn't it great?" Not that the 51-year-old ever dreamed of having his name on an office block. Just the other day, he overheard a bunch of guys at an intersection saying: "Look at that! F***ing Henderson's named a building after himself."

"No," Henderson says, "in the normal course of events, I certainly wouldn't want to name a building after myself. But that's one of those rare opportunities when you're allowed to indulge those things."

It's hard to think which star should play him. He suggests Christopher Walken - an interesting choice of Hollywood bogeyman. But honestly, Walken's a bit tall and fierce. I'm thinking Christian Slater, at a stretch. They have the same M-shaped hairline and ability to look at home in ill-fitting suits.

For a self-made rich guy, Henderson is unusually down to earth and not given to big noting. He is a little dishevelled and even has a little splash of something on his lapel.

Over a three-course lunch, shouted by him, he comes over remarkably normally. He has neither the newly rounded vowels nor the boorish foul-mouthed cockiness of other nouveauriches I've encountered.

But, as you would expect in such a story, his beginnings were humble and very Presbyterian. He grew up in Southland, the son of a teacher who died of leukaemia shortly after bringing his family to Christchurch when Henderson was just 8.

His canny Scottish mother raised her three children - Henderson and two older sisters - on a widow's benefit, stretching the pennies by knitting her own dishcloths and making handmade soap.

Young Henderson started wheeling and dealing when he was a kid - buying and selling bikes, then cars while still at school and making leather necklaces which he sold in stores around Christchurch.

He married early, then divorced early. She got the dog and he got the cat. Spinach the cat lived to be 20 and, like most transactions in Henderson's life, he says: "I got a great deal out of it."

Now he owns a lot of property. And not just large hunks of central Christchurch. If I'm ever down towards Queenstown, I must pop in and visit his new vineyard at Gibbston Valley. Bring the whole family, he says.

Later, he hands me a flier. It reveals he's building a village there. Then he mentions the exciting Five Mile project he has got going just outside of Queenstown. He means the new $2 billion town he is building. Yes, THAT guy.

Fuel

All the more fuel for the movie makers' flames. Then there's the love interest. He met and married Kristina just as he was coming out of bankruptcy six-and-a-half years ago.

She could be played by Anjelica Houston, he reckons. That's the future. Back to the past.

Henderson's battle with the IRD started in 1994 when he applied for a GST refund for his property development company Tannadyce. The IRD asked for more information. It was hand-delivered by his staffer and friend Kath Cooke. When she returned in tears, Henderson's back went up and the war with the taxman started.

He maintains a tax officer asked Cooke if she was sleeping with him, told her to put out her hands and made a comment to the effect that she had small wrists and the handcuffs wouldn't need to be big.

A four-year audit followed, with the taxman and Henderson blaming each other for the drawn-out affair.

Instead of a refund, IRD said he owed $500,000 in taxes and $500,000 in penalties. Haemorrhaging money from his ambitious radio venture, Radio Liberty, Henderson was forced into bankruptcy.

It's always hard to believe rich people when they talk about being broke, especially libertarians who believe taxation is a moral evil, but Henderson insists he really was. "Seriously broke. Bankruptcy is tough because people actually frown on you. I can show you. I walk the streets now and people want to stop and talk to me. The same people would have crossed the road to avoid me five or six years ago. It's just bizarre. I was a pariah."

His home was sold, he borrowed a crappy car (with no brakes, he insists), did the odd copywriting and marketing job for friends and hunkered down to fight the department. Eventually, with help from Act MP Rodney Hide, the department conceded there were no grounds for the $1 million debt and Henderson got his tax refund.

Shortly after coming out of bankruptcy, with almost no cash up front, he did a deal on Christchurch's Chancery Lane. Other property deals followed. He made a lot of money. Then, in 2003, an estate agent called with an offer out of the blue.

"He said: 'I've got a building that you've just got to own'." It was the Canterbury headquarters of the IRD. Without even inspecting it, Henderson cut the deal and "for three years the IRD staff, particularly the ones who beat the crap out of me, had to come to work at Henderson House".

It's "delicious irony", he concedes. But the real joy came on December 31 last year, when the tax department's lease expired and it moved out. The next day, Henderson gutted the place.

Evaporate

"I was elated. There were 500 people in there working for the IRD. Everyone who beat me up was working in that building. I spent four years going in there, spending literally hundreds of thousands of dollars fighting and seeing a lot of my life evaporate in the process."

Nope, he didn't need to see the building. He knew every nook and cranny of it intimately. So well, in fact, that he used to play tricks on staff as he visited over the years. He found out where the air conditioning control was and used to turn it up and watch auditors sweat during meetings.

He would sneak into meeting rooms, turn back the large pieces of paper used in presentations and write "F*** the IRD" on the third or fourth sheet. Another time, he found out the extension number of the IRD waiting room phone and would call it from his mobile, watching as receptionists left their counter, walking past queues of people, only to have him hang up just as they reached to answer it.

"And just as she got back to her desk, it would start ringing again." He cracks up. "At least it gave me some mild entertainment through the craziness of it all."

The craziness has never really ended. Politicians of all persuasions attack him. Finance Minister Michael Cullen called him "the greatest tax evader" in the country who runs the Christchurch sex industry. In fact, he is landlord of one strip bar.

And the IRD is at him again. The only woman in the tax department allowed to talk to him recently called to say they were auditing him again.

Where there's smoke, there's fire, I suggest, as the lunch moves on to coffee and Henderson's favourite, an afghan biscuit. He sighs.

"I understand that but probably the only smoke there is is that I am a loudmouth. I am very ideological and I've had several debates with IRD staff before all of this. It's just the culture. It is enormous authority and power without a commensurate amount of responsibility attached to it.

"I actually feel very sorry for the IRD staff because they lead very insular lives. Imagine going to a party and someone asking you what you do and you say 'I'm an IRD officer'." He laughs. "The room's going to empty very quickly."

So when the woman called the other day, Henderson told her he wasn't surprised. "I said, 'well, I suppose that's to be expected, your children's children are going to be coming after me. I'll live with that'."

Is he worried? Goodness, no. He's a picture of calmness as he takes another bite of his afghan.

It's about then that I notice it's not biscuit crumbs on the lapel of Henderson's suit jacket. A little blob of plaster has rubbed off from Henderson House which he is fast turning into a flash, new hotel. Hendo the victorious has just had the IRD for lunch.

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_a2 at 29 Jul 2014 22:41:43 Processing Time: 1599ms