Singleton & Anor v Percy & Anor [2000] NSWSC 889

New South Wales Supreme Court

CITATION : Singleton & Anor v Percy & Anor [2000] NSWSC 889 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 3370/00 HEARING DATE(S) : 29-30 August 2000 JUDGMENT DATE : 30 August 2000

Neil Geoffrey Singleton (First Plaintiff) Benonyx Pty Limited (Receiver & Manager Appointed In Liquidation) (Second Plaintiff) PARTIES : v Graham Henry Percy (First Defendant) Wendy Joan Percy (Second Defendant) JUDGMENT OF : Brownie AJ

COUNSEL : Mr R Angyal (Plaintiffs) Mr M Hadley (Defendants) SOLICITORS : The Argyle Partnership (Plaintiffs) Andrew P Quigley & Co (Defendants) CATCHWORDS : The case turns on its facts LEGISLATION CITED : N/A CASES CITED : N/A DECISION : See paragraph 29

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BROWNIE AJ

WEDNESDAY 30 AUGUST 2000 3370/00 - NEIL GEOFFREY SINGLETON & ANOR v GRAHAM HENRY PERCY & ANOR

JUDGMENT 1 HIS HONOUR: This case has been brought on before me for hearing in circumstances of urgency so that, understandably, the evidence is somewhat imprecise at points. Loosely speaking, the plaintiffs are members of what I will call the Harvey interests, the defendants members of what I will call the Percy interests. 2 The Percy interests are cotton growers in the Narromine area and the Harvey interests acted as financiers providing finance in the Percy interests. The defendants, Mr and Mrs Percy, appear to have been the directors of and the shareholders in Benonyx Pty Limited, which is now in liquidation. Benonyx appears to have been the owner of a property called "Beemery". 3 The defendants assert, and the plaintiffs appear to accept, that generally speaking a partnership trading under the name Percy Developments carried on the business of cotton growing at "Beemery" and at other properties. The partners in that partnership were Benonyx and Mr and Mrs Percy. It is said that the interests of these partners in the partnership were seventy-five per cent, 12.5 per cent and 12.5 per cent respectively, although it is not clear whether these are percentages of capital interest or income interest or both. 4 Exhibit B is an agreement dated 30 September 1998 made between Gretta Nominees Pty Limited as trustee for the Harvey Superannuation Fund as lender and Benonyx as borrower. It recites the making of a loan agreement on 1 December 1997 whereby the lender agreed to provide money to the borrower to pay for the growing of cotton on various properties during the 1997/98, 1998/99 and 1999/2000 seasons. Other evidence refers to farming agreements apparently for those three seasons. None of these agreements is directly in evidence. I do not complain about these matters, I just record them to the extent they are presently relevant. 5 Generally speaking, I take it to be common ground that commencing in late 1997 the Harvey interests provided financial assistance to the Percy interests and from time to time the Harvey interests took various securities. This litigation concerns the legal effect of these securities so far as they operated in the early part of this year. 6 By deed dated 30 September 1998 titled "Fixed Charge" made between Benonyx as the chargor and Gretta Nominees as the chargee, Benonyx created in favour of Gretta Nominees a fixed charge over certain assets. Clause 2 was in these terms: "2. Charge.