Pacific Retail faces legal stoush over soured deals

By Deborah Hill Cone

Friday 23rd August 2002

Eric Watson and his Pacific Retail Group were yesterday being sued twice for deals that have turned sour.

A judgment is due any day now on a multimillion-dollar High Court case taken by former PRG shareholder Greg Lancaster and PRG executive John Hunter against Mr Watson and his firm Cullen Investments.

"There was a difference of opinion [but] it's in the private domain," Mr Lancaster said.

Christchurch-based Mr Lancaster, who was also one of the investors in failed airline Qantas New Zealand, said the amount involved was in the millions but one estimate of $20 million was "overstating it a bit."

Meanwhile, the former owner of retail chain Living and Giving, Bison Holdings, has also gone to the High Court to seek $1 million it claims it was owed last October under PRG's contract to buy the homeware stores for $5 million.

PRG is countersuing Bison and its shareholders Sally Bisley and Peter Jackson (no relation of the film-maker) claiming there have been breaches of a number of warranties in the agreement, including guarantees of future sales and earnings.

Mr Lancaster's case is notable for the length of time it has taken to resolve.

His dealings with Cullen began in 1999 when Cullen subsidiary Logan Corporation bought 74% of PRG from Mr Lancaster, his former business partner Roger Bhatnagar and Scotland-based Murray Investments.

Mr Lancaster's proceedings were initially filed in the High Court but the parties agreed the case should go to arbitration before retired Court of Appeal judge John Henry.

The outcome of that hearing, which like all arbitration was kept confidential, was appealed by Mr Lancaster.

The resulting High Court hearing was held in December 2001 but nine months later there has still been no judgment.

When he does release his ruling Justice Robert Chambers will also have to make a call on the issue of confidentiality. The High Court can respect the confidentiality of arbitration by suppressing the judgment, which Mr Watson's lawyers want it to do, but is also free to release it.

A spokeswoman for Justice Chambers said yesterday the judgment could be expected "very shortly." No reason was offered for the lengthy delay.

PRG chief executive Peter Halkett said it could not comment on the legal proceedings. "I'm not hiding anything. It's just not appropriate."

Cullen Investments also declined to comment.

In a separate case involving Cullen Investments, economist Josephine Grierson has filed an application in the High Court for a summary judgment against Cullen Investments, claiming it reneged on a contract it signed with her company Jowada Holdings relating to its acquisition of lingerie company Bendon.

That case was due to come up in court this week but has been put off for a fortnight to allow time for Cullen to file further affidavits.

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