Question
Singleton Estate Pty Ltd (Singleton) is a Hunter Valley winery which not only grows its own grapes but does contract wine making for other Hunter
Singleton Estate Pty Ltd (Singleton) is a Hunter Valley winery which not only grows its own grapes but does contract wine making for other Hunter Valley grape growers.
The winery is famous for its Black Dog shiraz which has won both Australian and international wine trophies. In a good year Singleton Estate will buy high quality grapes from local growers to add to the Black Dog vintage.
Most of its wine is exported.
Singleton Estate has invested heavily in winemaking equipment to expand its business. It included:
25,000 litre stainless steel tanks. Each tank is bolted and welded to the floor of one of the estate's sheds and are unable to be removed without dismantling them so they are considered fixtures.
Smaller 1000 litre fermentation vats.
A cellar containing a range of bottled vintages of Black Dog shiraz which is regularly released for commercial sale by auction.
50 French and 50 American oak barrels. Each barrel can hold enough wine to fill 300 bottles. American Oak barrels can cost up to $500 each and French Oak barrels can cost up to $1000.
A grape sorting machine.
A Monster Mash bulk grape crusher and de-stemmer.
The Singleton Estate property was mortgaged to Agrobank.
Shark Finance had an ALLPAP agreed to cover all Singleton Estate chattels, their account receivables, and the funds kept in their Agrobank bank account. The ALLPAP financing statement was registered on 31 January 2020.
The grape sorting and crusher/de-stemmer machines were leased from Bordeaux Wine rentals on a two year lease with a continuing maintenance agreement. The machines are usually upgraded every two years. However, the Monster Mash included an option exercisable by Singleton to extend the lease for another year. The lease commenced in April 2019. Because Bordeaux Wines did not usually enter into higher purchase agreements their leased goods were not registered.
Cessnock Estate had provided two tonnes of grapes to Singleton to be made into Cessnock's Honey Eater Madeira. The Honey Eater Madeira has been in barrels aging since the end of 2018 and will be bottled in another year.
In January 2021 Agrobank lent Singleton $50,000 for a new Mahindra tractor. The loan was secured against the tractor as well by an ALLPAP which had the same scope as the Shark Finance ALLPAP. The respective security agreements were registered in the same month.
Restrictions on trade because of Covid and the 200% Chinese wine tariff resulted in Singleton Estate being in financial difficulty. By April 2021 Singleton Estate ended up being unable to pay its debts and is now in liquidation.
Advise Shark Finance, Agrobank, Bordeaux Wine Rentals, Cessnock Estate and the liquidator as to their respective rights over the property with reliance on the operation of the Personal Property Securities Act 2009. Make sure you apply the relevant provisions and show your reasoning in order to justify your conclusions.
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