The former owner of the North Byron Beach Resort site – famous for Byron’s battle against Club Med – is being sued by Belongil identity John Vaughan.
In 2001 Becton claimed it bought the site for $12.8 million, $11 million less than the asking price for the site and well under the $16 million paid by Club Med.
A $130 million development was approved for upscale holiday units on the site by then planning minister Frank Sartor in September 2006.
An article in The Echo at that time quoted Becton as saying the resort would ‘create 50 additional permanent jobs, at least $800,000 a year of additional expenditure in the local economy and 150 jobs during construction’.
But Becton in turn faced opposition, such as this rally on Main Beach in 2003 (pictured), and in turn on-sold the 88-hectare site to its current owner, reclusive mining magnate Brian Flannery, in 2010 for around $18 million.
Now Mr Vaughan, through his superannuation fund, is suing the company, two of its directors and a former CEO, saying the claimed price, as mentioned in a 2006 ASX announcement, was false and misleading.
The collapsed company, its chairman Max Beck, CEO Hamish Macdonald and former director Mark Taylor will face the Federal Court at the end of the month to defend the claims of false and misleading conduct.
While the trio have yet to file formal defences, court records show they will deny each of the allegations.
At the heart of the case is what appears to be a complex scheme of ownership, which Mr Vaughan told Echonetdaily, meant Becton had to pay a further $30 million to own the site outright.
He alleges at the time of Becton’s ASX satement the company only held a minority interest in the former Club Med site.
Mr Vaughan subsequently made a $2 million investment in Becton through his superannuation fund.
According to an article that appeared in yesterday’s Australian newspaper, Mr Beck’s private company, Beck Corporation, ‘had reserved the right to a priority payment from Becton of $5.5m plus 15 per cent interest a year from December 2001, when Mr Beck’s private company first invested in the joint venture’.
To obtain control of the land, Becton had to buy out Mr Beck’s holding plus those of other parties in the joint venture, Mr Vaughan alleges, leading to significant additional costs.
The final nail the coffin for the Becton plan was the global financial crisis, which took a toll on its investments.
The property was sold to Flannery without a sod being turned.