Takeover dirty laundry heads to court

By Deborah Hill Cone

Friday 19th July 2002

SEE YOU IN COURT: Josephine Grierson's case centres on a contract involving the takeover of Bendon

Economist Josephine Grierson is taking on the Eric Watson empire in the High Court.

Jowada Holdings, a company wholly owned by Ms Grierson, has filed proceedings in the High Court at Auckland suing Cullen Investments, Mr Watson's private investment company, and Pacific Retail Group, the listed retailer 77% owned by Mr Watson's Logan Corporation.

Ms Grierson, a well-connected former member of the Commerce Commission, was one of the top 20 shareholders in lingerie marketer Bendon, which was taken over by PRG in March after a complex and bitter-fought takeover battle.

But the court action has not been filed in Ms Grierson's role as a former major shareholder - like other minority shareholders she was paid out by PRG. Rather it relates to an alleged deal done between Jowada and Cullen before PRG took over the lingerie marketer Bendon.

The case centres on a written contract for Jowada Holdings to take a role in the Bendon transaction.

The details of how Jowada Holdings fitted in to the machinations in the takeover battle for Bendon are not clear and Ms Grierson declined to comment on the case.

But a well-placed contact observed Ms Grierson and her then fellow director of Jowada Holdings, merchant banker David Hayde, had been doing research on Bendon and were closely involved in the takeover.

Jowada Holdings had been "formed for a single transaction which didn't come off," the source said.

Mr Hayde, a former KPMG accountant, resigned from Jowada on April 25, a month after Bendon was taken over by PRG. He said he had nothing to do with Jowada's current court action and did not even know proceedings had been filed.

The contract between Jowada and Cullen was apparently signed by Cullen managing director Phil Newland, and Jowada Holdings will argue the contract was not honoured.

Jowada Holdings has applied for a summary judgment against Cullen and PRG, with the case set down for first mention on August 22.

Summary judgment is an accelerated court process used when written documents provide a party's complete case, such as a cheque that has not been honoured.

They are used when the plaintiff believes it has such a strong case it could lead to an automatic judgment in its favour.

Applications for summary judgments are taken out of the fast track if the other party, in this case Cullen and PRG, can show it has an arguable defence.

Mr Newland said Cullen, which is represented by Chapman Tripp, would ask the court to dismiss the claim: "We believe it to be an absolutely supercilious claim and it is a nonsense," Mr Newland said.

He would make no further comment.

It is not the first time Ms Grierson and Mr Newland have come head to head in the legal sphere.

As a junior lawyer at Russell McVeagh, Mr Newland acted for Telecom in a drawnout bid to take a stake in Sky Television, which was turned down by the Commerce Commission in 1996 when Ms Grierson was a member.

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