Auckland dental businesses in liquidation, Inland Revenue goes to court over unpaid taxes

Dentist Dr Scott Ariki Waghorn. Photo / Herald on Sunday

Four Auckland dentistry companies have gone into liquidation after Inland Revenue took legal action to try to recover unpaid taxes from the connected businesses directed by dentist Dr Scott Waghorn.

The related companies are Dentalcare Group, Dentalcare West, Epsom Dental Care and Greenhithe Dentalcare, which were all previously in receivership.

Companies Office records show Waghorn of Glen Eden is a director of all four. The New Zealand Gazette showed they were placed into liquidation late last month.

IRD was in each case the petitioning creditor and is regarded as first-ranking.

Reports are now being issued on the four companies, showing what went wrong. But unpaid tax is at the heart of issues with at least one.

Dentist Dr Scott Ariki Waghorn in September, 2020. Photo / Herald on Sunday

The first liquidators’ report from the Official Assignee is now out on Greenhithe Dentalcare. That showed the IRD went to the High Court at Hamilton to have the Official Assignee appointed to the business.

“The cause of this liquidation appears to be related to a failure to account for taxation. The liquidator is in the process of establishing communication with the director to obtain the company’s financial statements and a statement of affairs.

“In the meantime, the liquidator is conducting searches and investigations through various databases and other avenues open to him to locate any assets of interest that are of benefit for creditors in this liquidation,” the first report said.

Dr Waghorn was today contacted for comment on the situation with his four companies going into liquidation but did not respond.

A statement of current financial position showed IRD wants $23,246 from that one company alone. Other creditors listed are two dentists: Scott Waghorn and Talha Ayaz Gul.

Ariki No. 1 Trustee Company also appears on the creditor list.

No liquidators’ reports are out yet on the other three companies but those are due in the next few days.

Sir Peter Blake Trust Leadership Awards aboard HMNZS Canterbury in 2018: Dr Lance O'Sullivan, Julie Chapman and Dr Scott Waghorn. Photo / Norrie Montgomerie

All four of his companies were in receivership until April last year when they were released after repaying $5 million to creditors.

The Bank of New Zealand was then a first-ranking registered security holder.

A final receivers’ report from Lara Bennett and John Fisk of PwC earlier last year listed the financial position of those four dentistry businesses and a fifth connected business: Avondale Smilecare.

PwC Partner John Fisk was a receiver of five of Waghorn's companies previously but those are now out of receivership and in liquidation.

Distributions of $5m were paid to security holders throughout the receivership of the five companies, they said.

BNZ held a cross-guarantee for the debts of all five companies.

Bennett and Fisk said during the course of receivership, Dentalcare Group had repaid $2.5m to creditors, Epsom Dental Care had repaid $507,000, Dentalcare West repaid $1.7m, Greenhithe Dentalcare had repaid $224,000 and Avondale Smilecare repaid $44,400.

All employee preferential claims for outstanding wages and salaries as well as accrued holiday pay had been paid. They totalled $253,000.

Inland Revenue had provided amended proofs of debt for the five companies which increased their preferential claim to $474,000, PwC said. That was for outstanding GST.

Asset sales or realisations were made during the receivership.

Companies Office records show Waghorn is also a previous or current director or shareholder of other companies not in liquidation: Mouth Matters New Zealand, Avondale Smilecare, Panmure Smilecare, Smileplan, Customs Street Smilecare, Tikipunga Dentalcare and Ariki Dental Works.

IRD isn’t expecting payment from at least one of his companies.

The Official Assignee said the chances of any dividend being paid by Greenhithe Dentalcare was “unlikely”.

In 2021, the Herald reported complaints from patients of one of the five businesses, Dentalcare Group, when it went into receivership.

Katherine Campbell (right) and her mum, Deanna Eagles in 2021 - former patients of one of the businesses which went into receivership, leaving them unhappy. Photo / Michael Craig

Katherine Campbell, then aged 19, was fitted with braces, which her mum paid $6500 for.

After the company’s receivership, she couldn’t receive any of the follow-up care her mum paid for.

Waghorn’s Dentalcare Group was reported then as owning other Auckland clinics and four mobile dental stations, some with Government-funded district health board contracts to provide care to secondary schools.

Fisk said at the time that 1661 patients who made prepayments before Dentalcare Group’s receivership were owed a total of $770,000 and it was unlikely they would get any refund.

Asked today about the liquidations of four Waghorn businesses he was previously a receiver of, Fisk said: “The Dentalcare Group receiverships came about largely due to the director’s personal health issues at the time and this led to losing control of the finances, etc.”

Work and Income showed Waghorn’s Dentalcare Group got $554,000 Covid cash for 43 to 52 staff during lockdowns in 2020 and 2021.

Dentalcare West got $303,000 for 22 to 29 staff. Greenhithe Dentalcare got $47,000 for four to five staff.

Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.