June 25, 2013

19 May 2012 – Newcastle Herald | McNaughtons company served eviction notice

Ian Kirkwood

AT its height, the 120-year-old surveying firm operated by former Newcastle lord mayor John McNaughton employed nearly 60 people.

Today, Palmer Bruyn Surveys has just 10 people on the payroll and has been served an eviction notice to quit the offices it has occupied since 1983.

In interviews with the Newcastle Herald this week, Mr McNaughton and his son Chris said a chain of events had led to the point where they and their companies owed about $2 million to various creditors.

They acknowledged a bitter and long-running dispute with other property owners in the group of four terraces between 16 and 22 Watt Street that the McNaughtons and former partners had redeveloped and strata-titled in the early 1980s.

In 2010 the strata managers went to the NSW Supreme Court and had a liquidator appointed to the McNaughton firm – MWPA Finance – that owned the Palmer Bruyn offices.

But this company had mortgaged the building to a private financier who is still owed $670,000, the McNaughtons have confirmed.

The McNaughtons said that until recently there had been a stand-off between the two because the liquidator – Daniel Quinn of SV Partners – could not move to sell the building without the permission of the McNaughtons’ financier.

But the eviction notice served this week on Palmer Bruyn seemed to have broken that deadlock.

‘‘I can confirm we have received it, but at this stage I can’t say what will happen from here,’’ Chris McNaughton said.

‘‘If we have to move we will, but it will cost us more to move and I don’t see how that is going to make it any easier for the body corporate to get the money we are trying to raise.’’

Mr McNaughton was Newcastle’s ALP lord mayor from 1986 to 1995 and he remains active in business and Labor circles.

He still attends Newcastle Business Club functions – he was president of the club in the late 1970s, a position held today, ironically, by Mr Quinn.

Mr Quinn said the Watt Street dispute was a complex and drawn-out affair and he hoped for the sake of all concerned that a settlement could be reached.

Asked how they came to be in their present situation, the McNaughtons said their problems started with a costly and unsuccessful ‘‘injurious falsehood’’ action against former Newcastle councillor Keith Parsons.

The so-called ‘‘McDonald’s’’ case began in 1996 when the McNaughtons objected to a memo that then-councillor Parsons said was a ‘‘personal joke’’ he had faxed to another Labor councillor.

The memo had promised a lifetime’s supply of hamburgers and milkshakes for voting to rezone land at Wallsend to make way for a McDonald’s restaurant.

After the matter became public, McDonald’s terminated a consultancy it had with Palmer Bruyn and Parker – as the firm was at the time – and the McNaughtons launched an unsuccessful civil damages claim that went all the way to the High Court of Australia.

The five-year legal battle cost the McNaughtons many hundreds of thousands of dollars and Mr Parsons told the Herald this week that he was also left well out of pocket despite winning the case.

Chris McNaughton said yesterday that the case reinforced an old maxim.

‘‘Only lawyers and fools go to court, and I am not a lawyer,’’ Mr McNaughton said.

The McNaughtons say that other ill-judged business decisions and failed property transactions had also cost them dearly, to the point where they now owed about $2 million, secured against the McNaughton family home at Merewether, Chris McNaughton’s apartment home at Newcastle Beach and the Watt Street office.

‘‘I can tell you this is not how I expected I would be spending my retirement years, coming in to work every day,’’ Mr McNaughton said.

‘‘I’m 74, turning 75, and we are not running away. ‘‘We are doing everything we can to sort this mess out.’’

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