He told Judge Mahon how he tried to engage the man in conversation as he waited for backup, but Hili was not in the mood to talk.
"He just kept saying 'I'm going to f***ing smash you'," the officer said.
"He kept repeating that mantra. It was quite odd."
Eventually the pair came together and Mr Watson said he sprayed the defendant with his pepper spray for about 20 seconds.
But as the effects wore off, he told the court the pair ended up on the concrete with Hili punching him in the back of the head as he attempted to radio for support.
The alleged blows were initially misdirected but Mr Watson said "about 10 connected really well" after the man had grabbed the back of his stab-proof vest.
The prosecution produced a photo of a cut to the back of the officer's head, which saw him hospitalised for several hours.
Mr Watson told Judge Mahon he had been on blood thinners at the time after suffering a stroke only a month earlier.
Hili also gave evidence, denying the punches or being behind the wheel that night.
He told the court he had been drinking at a Tongan nightclub in Glen Innes that night and got a lift home with two women.
Hili said he was going inside to get them some corned beef and bread when he was suddenly blasted with pepper spray.
"I saw no [police] car, no lights, nothing", he said.
However, he accepted he was not pleased when officers broke down his door and arrested him.
Laiha Holiday, one of the officers who took him to the station to be processed, gave the court a variety of examples of his colourful language.
"Usually as a female officer I can talk people down but he wasn't having a bar of it," she said.
Ms Holiday said Hili was also spitting while in the back of the car.
"Big phlegmy spits rolling down the window," she said.
Judge Mahon will give his decision as to whether the charges were proven tomorrow morning.