Glenn’s war with Watson advances
Sir Owen Glenn is not giving an inch in a quest to claim back money owed by his multimillionaire nemesis, Eric Watson.
Sjohn.anthony@stuff.co.nz
ir Owen Glenn is considering asking an international court to appoint receivers to the business interests of his former Warriors co-owner, Eric Watson.
In September a United Kingdom court ruled Glenn’s company Kea Investments was entitled to £43.5 million (NZ$80.2 million) compensation from Watson, as well as interest compounding at 6.5 per cent per year.
The long-running legal battle related to hundreds of millions of dollars Watson and Glenn put into a joint European property venture called Spartan Capital.
Following the proceedings, brought by Glenn, a judge found that two loan agreements totalling £129m set out between Kea Investments and Watson and paid to Spartan Capital were void. The loans had been repaid to Kea Investments, and it was entitled to claim proceeds from the £129m.
Watson has appealed the interest rate. If successful, the compensation would be about £20m lower.
There was also an order for interim payment of £25.3m and £3.8m for costs, an order to provide financial documents and information about all his assets, and an order meaning Watson could not dispose of, deal in or diminish assets worth more than £100,000 without notice.
Now a New Zealand judgment has been handed down, giving Kea Investments a leg-up in finding out where Watson is holding his assets.
Kea applied to the High Court in Auckland for access to court documents in a $60m New Zealand tax avoidance proceeding between Watson’s company Cullen Group and the Commissioner of Inland Revenue in August and September.
In a judgment updated on December 10, Justice Matthew Palmer said access by Kea was in the interests of open justice and ‘‘facilitates the orderly and fair administration of justice’’ in contributing to the enforcement of a foreign judgment.
Kea successfully applied to the High Court of England and Wales for freezing orders restraining companies, including Cullen Group, from disposing of, dealing with or diminishing the value of assets up to the value of £47m, the judgment said.
Kea was now considering its enforcement options, including whether to invite the English court to appoint receivers in respect of Watson’s interest in a company called Valley Trust, which Kea understands holds the shares in Cullen Group, the judgment said.
Valley Trust featured in the ‘‘factual matrix’’ of the Inland Revenue proceeding, Palmer said.
In a UK judgment from July, Kea said Watson’s modus operandi was to use a complex web of trusts and companies as nominees for him, and that he held companies via third parties. He also entered into arrangements, often undocumented, which meant that relationships set out in formal legal documents did not reflect a true position, Kea alleged.
Glenn said one such vehicle was Valley Trust.
‘‘Mr Watson should be in no doubt over my determination to do whatever is necessary to ensure he meets his obligations under judgments in my favour – if necessary, pursuing him to the ends of the earth and taking action against his trust and company structures,’’ Glenn said.
Glenn said Watson had been ordered to appear before a UK judge to answer questions about his assets in two days of crossexamination on December 19 and January 24.
‘‘I understand that these hearings will take place in open court and that if he fails to answer questions Mr Watson will be in contempt of court.’’
In Palmer’s judgment Kea said Watson’s solicitor stated the millionaire was ‘‘unable to pay the sums ordered by the court as he does not have the assets to do so’’.
‘‘I do not accept this. I believe that he is being untruthful and hiding assets behind trust and company structures he controls,’’ Glenn said.
Cullen Group abided by the court’s decision to grant access to the court record but opposed the rest of the application.
Kea was granted access to the formal court record, including judgments, orders and minutes of the court, the pleadings of both parties, both parties’ opening and closing submissions at trial and the index to an agreed bundle of documents Kea’s request for access was granted, provided the documents were used only for the purpose of the related proceedings.
‘‘Kea is not fishing for information in order to consider whether to initiate private litigation,’’ Justice Palmer said.
‘‘Rather, Kea’s purpose is to seek to enforce a judgment of the High Court of England and Wales which has been issued and in respect of which that court subsequently granted freezing orders and disclosure orders.
‘‘That is a reasonable and legitimate purpose.’’
Justice Palmer is yet to issue a judgment on the Cullen Group versus Inland Revenue case.