Watson ordered to fork out $1m

By PAUL PANCKHURST

The Court of Appeal yesterday declared Auckland economist Josephine Grierson the $1 million winner of a battle with the Eric Watson business empire.

The court said Watson's Cullen Investments owed $886,727 plus GST - $110,840 - to Grierson's Jowada Holdings, as a fee for work on plans to take over lingerie company Bendon.

Interest and costs will bump up the figure.

"It has been very hard fought and I think the outcome is fair," said Grierson. "I've been very determined about it."

Cullen managing director Phil Newland was overseas last night and could not be contacted to comment on the decision and whether Cullen would appeal to the Privy Council.

Newland has previously described Grierson's case as "entirely without merit".

Grierson and her then business partner David Hayde, a former director of corporate finance for KPMG, approached Newland in 2001 with the idea of a largely debt-funded buy-out of Bendon.

Jowada ended up out of the action when another company in the Watson empire, Pacific Retail Group, last year bought the lingerie maker for $59 million.

The case centred on a written agreement from March 29, 2001, that was headed up "Straps" - a code name for Bendon.

The document said Cullen could trigger an advisory fee to Jowada if Cullen, or its associates, went ahead with the transaction without giving Jowada the opportunity to take part through a significant equity investment.

The Court of Appeal said Jowada never got an opportunity that met the terms of the agreement and so Cullen owed a fee of 1.5 per cent of the value of the Bendon transaction.

The win is Grierson's alone. She and Hayde are no longer business partners and she is the sole owner of Jowada.

Hayde's affidavit evidence featured as part of the Cullen side of the court proceedings.

Grierson and Jowada went to the Court of Appeal after Master Faire last November rejected an application for a summary judgment.

In April, Watson's Pacific Retail Group settled a dispute with Bison Holdings, the former owner of Living & Giving, a retail chain bought by Pacific Retail.

The dispute had been whether Pacific Retail could withhold some of the purchase price after Living & Giving failed to meet projections for turnover and earnings.

Watson has also been at legal odds with Greg Lancaster, a former managing director of Pacific Retail, who said he was unfairly cut out of a deal to buy the company.