Auckland property developer David Henderson paid only $17,000 in tax over a 16-year period, a lot less than a person on minimum wage would have paid, a court heard yesterday.
Mr Henderson is fighting a bankruptcy application supported by Inland Revenue, which is owed $3.7 million, and the Bank of Western Australia, owed about $33 million, in the High Court.
The original amount of his debt was $166 million but Mr Henderson's lawyer, Daniel Grove, said that had been reduced to around $130 million, primarily through the sale of his stake in the Victoria Park redevelopment that was used to settle his $28 million debt with Westpac.
On Thursday, Mr Grove said Mr Henderson had been open with the court, had declared all his assets, and wanted to put up $1.5 million for a creditors' proposal to avert bankruptcy. This proposal, if approved by the High Court, would drip-feed creditors $1.5 million, or about 4c in the dollar, of a $130 million debt over a three-year period.
But Inland Revenue lawyer Nick Malarao disputed how candid Mr Henderson had been with the court, and said that despite the fact secured creditors would get a small dividend through the proposal, it did not support unsecured creditors.
"Mr Henderson is holding facts close to his chest. If he doesn't have anything to hide, then why withhold information. There is grave concern of what the final figure will be for creditors," Mr Malarao said.
Mr Malarao said there was no money in Mr Henderson's proposal to pay tax and that he "simply doesn't consider the commissioner [IRD] when doing his calculations".
He added that Mr Henderson had paid very little income tax - $17,000, over a 16-year period.
But High Court Associate Judge Jeremy Doogue said this hearing was not based on how little income tax Mr Henderson had paid but on whether the proposal should be accepted in the interest of creditors or he should be bankrupted.
Mr Malarao said a proposal would not be in creditors' interest and they "shouldn't be denied the opportunity" to have his assets investigated by the Official Assignee - the government executive responsible for assessing a bankrupt's assets and dividing it among creditors.
Associate Judge Doogue reserved his decision.
Auckland property developer David Henderson. Photo / Steven McNicholl
