Eric Watson 'unable to pay rival' Sir Owen Glenn, court told

Eric Watson (left) says he doesn't have assets to pay Owen Glenn (right).

Eric Watson says he doesn't have the assets to pay rival Sir Owen Glenn the £29.1 million ($54m) which an English judge ordered him to hand over, a New Zealand court has heard.

Glenn celebrated a major legal victory over his former Warriors co-owner in July when the High Court in England and Wales ruled Watson had engaged in "deliberate deception" when the pair set up a joint venture investment company.

Glenn had seen a large chunk of his fortune tied up in the arrangement, and had spent the past five years fighting in English, Californian and British Virgin Islands courts to extricate himself and his £129m ($250m).

The UK High Court ordered that Glenn's company Kea Investment is entitled to up to £43.5m in compensation from Watson, as well as interest compounding at 6.5 per cent per annum.

Watson has appealed over the interest rate and Kea says if he is successful the compensation awarded will drop by about £20m.

The court also ordered that Watson make an interim payment of £25.3m and £3.9m on account of costs.

However, Kea says that Watson has not yet paid that money.

Kea has also told the High Court at Auckland that Watson's lawyer says the Kiwi businessman was "unable to pay the sums ordered by the court as he does not have the assets to do so".

Kea's submission over Watson's ability to pay was detailed in a decision from Justice Matthew Palmer over whether Glenn's company could have access to court documents in an unrelated dispute between Cullen Group and the Inland Revenue.

Cullen Group, associated with Watson, is challenging assessments by IRD that a complicated series of related-party loans using Cayman Islands vehicles in 2002 amounted to tax avoidance, requiring the payment of back taxes, and interest, totalling $112m.

Justice Palmer has heard the case but is yet to release his decision.

Glenn's Kea, while considering how to enforce the UK judgment, applied to the High Court at Auckland for access to details of the tax dispute.

Kea was keen to see documents and evidence relating to Watson's direction and conduct of the affairs of Cullen Group and his other interests held through trust or corporate vehicles.

Justice Palmer said there was a reasonable basis to assume the documents sought may contain relevant information to enforcement of the UK judgment.

"Enforcement of a foreign judgment in these circumstances constitutes a public purpose, not just a private purpose. It contributes to the orderly and fair administration of justice," the judge said.