Billionaire feared Kiwi bodyguard blackmail

Billionaire businessman Richard Pratt died in 2009. Photo / Getty Images

Late billionaire Richard Pratt told his mistress to have sex with his bodyguard, saying the former mercenary might blackmail him, a Sydney court has been told.

Madison Ashton, a former escort, alleges Mr Pratt urged her to continue a relationship with the man, Sean Bowman, because he didn't trust him, telling her: "You can best serve me by servicing him."

"He's not shy of blackmailing me," he also allegedly told her.

Ms Ashton alleges Mr Pratt believed the bodyguard, whom he hired in 2003, was an ex-mercenary and "government assassin" and had served in New Zealand's military forces, her counsel told the court.

Barrister Francis Douglas SC said there was evidence that Mr Bowman "knew things about (Mr Pratt) that he didn't wish to be known".

Ms Ashton has taken legal action in the NSW Supreme Court against Mr Pratt's widow Jeanne in relation to his estate, seeking damages for breach of contract.

She alleges Mr Pratt promised to provide her with an annual $500,000 allowance, $36,000 for rent, $30,000 for travel expenses, a $100,000 car and two trust funds worth $2.5 million each, but that he failed to deliver.

As the hearing got under way on Monday, the billionaire's long-term mistress, Shari Lea Hitchcock, tried unsuccessfully to have the matter suppressed.

Justice Paul Brereton said much of the "scandalous material" was irrelevant but agreed to suppress parts of an affidavit.

Mr Douglas told the court on Monday his client began a sexual relationship with Mr Pratt in the mid-1990s and resumed the liaison in October 2003.

Ms Ashton claimed Mr Pratt promised the gifts on the condition she gave up working as an escort to become his mistress but that she received only $410,000.

Mr Douglas said Ms Ashton, concerned Mr Pratt wasn't going to fulfil the alleged agreement, wrote a letter in January 2005 asking him to consider a "payment figure for the position I'm in, which is the equivalent of social suicide".

Asked under cross-examination to elaborate, she said her relationship with Mr Pratt had become public knowledge and Ms Hitchcock "was quite vocal in her distaste of me".

The letter also continued: "Due to Shari's effort to damage my reputation and good name ... it is hard to put a cost on this.

"I am forced to ask you for your financial help."

Under questioning from Robert Richter QC for the estate, she said it was a "huge mistake" to leave out of the letter - which was supposed to set out the list of promises - the $500,000 allowance.

The court heard a senior executive at Mr Pratt's company Visy sent an email to Ms Ashton in February 2005, offering a final settlement of $100,000 for claims against Mr Pratt.

Ms Ashton said she replied to acknowledge the email but said Mr Pratt had reassured her in a phone call that the sum wasn't the full and final settlement.

"All we have is your word and the final word of a dead man who can't defend himself," Mr Richter said.

"Unfortunately, yes," she replied.

The hearing continues.