Underbelly 11 Page 3

  ‘Derek put his head in his hands and began to sob again. He said, “I cannot remember”.’

  The constable, who had never interviewed a murder suspect, encouraged Percy to think, telling him that if he could recall past crimes it could help decide his mental state – implying it might assist him later to plead insanity.

  Again Percy cried and said he couldn’t remember. This was the same response he had given two days earlier to homicide detectives over the Tuohy murder, until confronted with incontrovertible evidence.

  The schoolmate, who had been a policeman for only six months, began the push. ‘Well, look, Derek, I’ll ask you about some of the ones that I know about. You don’t have to say anything. If you remember I will jot it down and it could be used in court. I will try and get it heard all at the same time.’

  Asked about Linda Stilwell, Percy again said his memory was blank but then, according to the young policeman, volunteered: ‘Yes, I drove through St Kilda that day. I had been at Cerberus in the afternoon and was driving along the Esplanade on the way to the White Ensign Club for some drinks.’

  Asked directly if he killed her he said: ‘Possibly, I don’t remember a thing about it.’

  Questioned on Simon Brook, he admitted he was in Sydney at the time and said he had driven his brother to work, turning off at the railway cutting where the body was found and returning along the same route.

  ‘I came back home that way.’

  The inexperienced policeman, who cannot be named because of a court suppression order, began to pursue his suspect. ‘So you drove past the same spot in Sydney on the day Simon Brook was killed?’

  Percy said: ‘Yes.’

  Question: ‘Do you remember if you killed him?’

  Percy: ‘I wish I could. I might have. I just don’t remember.’

  Question: ‘What do you know about the Beaumont children in South Australia?’

  Percy: ‘I was in Adelaide at the time.’

  Question: ‘You were what? You remember being in Adelaide when they went missing?’

  Percy: ‘Yes.’

  Question: ‘Whereabouts were you, when they disappeared?’

  Percy: ‘Near the beach. But nothing else.’

  They were making startling progress with the suspect placing himself at the crime scenes. Perhaps with more time and pressure Percy would have confessed, as he had done over the Tuohy murder.

  But at that moment, the watch-house keeper, a more senior policeman who was perhaps more concerned at protocol than progress, told the junior constable he had no business being in the cell. In order to justify his presence, the young copper had to tell him he was there on an official homicide squad investigation.

  The spell was broken. Percy knew his former schoolmate was no longer a friend. He was just another outsider trying to find the secrets of his dark past.

  In April 1970 Percy was found not guilty of the murder of Yvonne Tuohy on the grounds of insanity. He has never been convicted of murder but prison officers, psychiatrists, judges, police and welfare officers who have to deal with him consider him the most dangerous man in Australia.

  But how reliable are the memories of the policeman, now retired and recalling events of many years ago?

  Another school friend, who was called to Russell Street Police Headquarters to make a statement to the homicide squad, saw the young man return from Percy’s cell.

  ‘He was visibly upset and shaking. (He) then said, “That fucking bastard, I hope they hang him”.’ He hasn’t changed his mind in almost 40 years.

  FOR the cold case unit, the disappearance of Linda Stilwell from St Kilda 36 years earlier was to be a case of tidying up loose ends. It was to be a quick review to provide the coroner with a summary of facts so an inquest could finally be held.

  With no realistic chance of finding a body, the unit did not want to be tied up for long when there were other cases seen as more solvable.

  But when Senior Detective Wayne Newman started to delve into the disappearance in January 2004 he began to discover evidence, solid and circumstantial, that pointed towards Percy as the hot suspect.

  To build a convincing case he would have to show that Percy had an overwhelming propensity to commit crimes in such a unique way, that they were as identifiable as a signature. And to prove that, he would have to examine all the murders and disappearances that police had loosely linked to Percy in the 1960s.

  For Newman the quick investigation turned into a two-year journey that connected Percy to many of the baffling murders that had appeared destined to remain unsolved.

  It would involve police from four forces, supported by psychiatrists and forensic experts. The investigators, many of whom who were not born when the murders were committed, combined together in a unique operation, codenamed Heats.

  First, there were several obvious similarities in the cases. The nine victims were all children. They were taken from public places, and were often last seen near beaches and close to yachts. Experts say child stalkers usually try to find an isolated individual to attack but in the 1960s the killer twice took more than one victim and in another case tried to take a second child.

  The same experts say sex killers usually have a crime history. They begin with smaller offences, ultimately building to murder. Yet Percy had no police record before he was arrested for the Tuohy murder.

  To establish that Percy had killed more than once, Newman would have to prove the suspect was a serial offender and to do that he would have to examine the quiet country boy who became the monster.

  ERNEST Percy had been a NSW railway electrician for nearly 25 years, but with no opportunity for career advancement he took a job with the expanding State Electricity Commission in Victoria, first moving to Chelsea and then relocating his young family to Warrnambool in 1957.

  It was a perfect fit. Ernest Percy’s passion was sailing and he was a top-level dinghy yachtsman. His eldest son Derek, just nine when they moved to Warrnambool, shared his father’s hobby and helped build their Moth class yachts and small catamarans.

  Later, the quiet and intense Derek was drawn to the sea and beaches – eventually joining the navy. Even after his arrest he would begin building model boats inside bottles to while away thousands of hours in his prison cell.

  In 1961 Ernie Percy was promoted and left Warrnambool for Mount Beauty, near Bright. While the job was more lucrative, sailing opportunities were limited. As compensation the Percys spent their holidays in their caravan, often travelling interstate to yachting competitions in their powerful V8 Studebaker Lark.

  Much later police would track these holidays against their murder map from the 1960s with intriguing results.

  On February 7, 1961, Derek Percy walked into the small Mount Beauty High School wearing his new uniform – grey shorts, woollen v-neck pullover with green and gold trim, grey shirt and a green and gold striped tie.

  He soon became friends with the son of a local tobacco farmer who had also just moved to the town.

  This newcomer was one of only a handful of students from the school who liked Percy. Some found him intense, abrupt and at times unsettling. But most found him to be one of those kids who seemed to melt into the background. No-one though he was dangerous – at least not back then.

  When police from Operation Heats approached the high school friend he was 55 and had long since left Mount Beauty to forge a successful career as an engineer. He told them: ‘One thing that stood out about Derek was that he was very intelligent. Most or nearly all of us at school had to work and study very hard but not Derek. Derek just seemed to float along and get excellent grades. Who knows what he could have achieved if he’d applied himself.’

  He said that when the teenage boys went to talk to the local girls Percy would always hang back. ‘I got the impression that Derek was shy, quite shy around girls. I never knew Derek to have a girlfriend.’

  Percy was fit, quick and strong enough to play cricket as an accomplished middle-order batsman and to exc
el at table tennis, but his parents refused to let him play football – fearing he would be injured.

  In a rare display of disobedience Percy would sometimes borrow a friend’s gear for the occasional game, persuading his mate’s mother to wash the clothes so he would not be caught.

  If the Percys were over-protective it was understandable. Their third-born, Brett, died from diphtheria when aged only ten months. They were to have three surviving sons.

  Back then many of the students at the school saw Percy as intensely private and content with his small circle of friends. Many noticed his tie was a rough hessian design and not a perfect match for the school pattern – although it was considered close enough to pass. But while sometimes shabbily dressed he did have an object that stood out in the small community. He had a freewheeling red bike with racing ‘ram’s horn’ handlebars. The usually passive boy wrote to the school magazine to ask for a shelter to be built to protect students’ bicycles, signing under the name ‘Rusty Bike’.

  As a boy Derek Percy carried his sharp knife ‘everywhere’ but in country Victoria that did not make him unusual. In the 1960s a pocketknife was more a tool than a weapon, used to solve a problem rather than create one.

  But when Percy used his to help a mate make running repairs to the sole of a shoe during a handball game, there was a glimpse into his future. ‘I remember Derek getting his pocketknife out and telling me that he would cut the sole off. I put my foot on Derek’s left thigh in similar fashion to when a blacksmith shoes a horse. Derek began to cut the sole off my shoe and all of a sudden the blade went into Derek’s left thigh about three quarters of an inch (about 2cms). The blade went deeply into his thigh and I recoiled back in surprise. I was amazed that Derek just looked fascinated with what had happened. He didn’t scream, cry or really show any sort of emotion that you would expect from someone with a knife in their leg.

  ‘I thought his reaction was extremely odd,’ the friend said.’ He seemed happy about it.’

  KIEWA Valley’s hydro-electric scheme was nowhere near as grand as the Snowy Mountains scheme, but in post-war Victoria it gave hard-working tradesmen the chance to live in an area long considered one of the prettiest in the state.

  So much so that when a small town was built in 1949 to house the workers at the foot of Mount Bogong it was simply named Mount Beauty.

  With a population of less than 2000 and access to some of Victoria’s best ski fields and trout streams it was considered an ideal spot to raise a family.

  It was so peaceful that hundreds of police and their families regularly holidayed there – the Police Association providing a house to help members with cheap accommodation.

  There was little violent crime, virtually no nightlife and no need to lock houses or cars.

  But in late 1964 a small crime wave began. More annoying than threatening it soon became the subject of local gossip – and the whispering nominated the young Percy boy as the likely suspect.

  In 1964, clothes – particularly women’s underwear – began to disappear from washing lines around the town. Until around this time Percy had been a model student and teachers appointed him a school prefect for 1965. They couldn’t understand why in that year the bright boy’s marks plummeted. They didn’t know then that he was beginning a losing struggle with his inner demons.

  As the locals began to suspect Percy was the mystery thief the word spread around the cricket club that Ernie Percy threatened to sack any hydro worker who suggested his son was the snowdropper. But by late 1964 at least two locals knew that Derek Percy was the culprit and that he was much worse than just a petty thief. He was dangerously disturbed and, they believed, a potential killer.

  On a warm Sunday afternoon two teenagers, Kim White and Bill Hutton, walked about five kilometres out of town to the local swimming hole known as the Gorge. From their vantage point above the West Kiewa River they saw what they thought was a girl in a petticoat. They crept closer, hoping they had stumbled on someone skinny-dipping, when they realised it was Percy in a pink negligee.

  Hutton disliked Percy, recalling he had a habit of repeatedly spitting and seemed to enjoy hitting fellow students with his leather and metal key chain. ‘I can remember that Derek was very good at whipping the other kids and used to take great delight in inflicting pain on others.’

  Now from their moral and physical high ground they had their chance to get some dirt on the strange kid at school. At first Hutton picked up a rock ready to throw near Percy to startle and humiliate him but White suggested they should sit quietly and watch.

  With typical laconic country humour, White’s comment on seeing a schoolmate in a negligee was, ‘Well, at least it fits’.

  But any humour evaporated when Percy began to slash wildly at the clothing, then cut and stabbed at the crotch of a pair of female underpants. From Hutton’s vantage point he could see Percy’s face. ‘I would describe Derek’s eyes as being full of excitement, a glazed look, but I recall there was something very cold and sinister in the look,’ he told police from Operation Heats.

  Percy then dressed and left. The shaken pair went to the river’s edge looking for a body because they believed they had looked into the eyes of a killer.

  So disturbed were the boys they reported the incident to a senior teacher at the school the next day. So bizarre were their claims the teacher lectured them on the dangers of making up stories. White remembers the teacher warned him: ‘Don’t go bringing those sorts of things up, it’ll only cause you trouble.’ Both Hutton and White confronted Percy, who denied what they had seen. Most of the students thought the two had fabricated the story.

  After all, Percy was the obedient student seen as prefect material, while his accusers were knock about teenagers who loved a little mischief. Five years later, when Percy was arrested for the Tuohy murder, several old classmates rang to apologise.

  It was not the only time that clear signs of Percy needing psychiatric help were ignored.

  The following year Ernie Percy took a job with the Snowy Mountains Scheme and moved his family across the border to Khancoban in NSW. But Derek stayed and boarded with a family in Mount Beauty to allow him to finish school.

  The woman who lived next door remembers how the new boarder would sit outside with his red bike upturned watching the wheels spin. She said that while hanging out the washing she could feel the teenager watching her.

  Now in her 70s, she says that one Saturday she took her two daughters, then aged seven and nine, out to visit a relative. She locked the house, putting the key in a tin outside the door.

  When they returned they found the girls’ wardrobes had been rifled and their underwear and dresses stolen.

  The mother reported the theft of the twenty dresses to the local police sergeant who asked her if she suspected anyone. ‘I told him that I did suspect someone but I didn’t want to name him. The person I suspected was Derek Percy.’

  A few weeks later a local found some of the dresses in a bundle hidden under some blackberry bushes. But it was what was found with the clothing that made the discovery particularly disturbing.

  There was a girl doll, with the eyes marked as if blinded, and newspaper clippings of women in bikinis. In each case the eyes were pencilled out and the bodies mutilated with razor blades discovered with the package. The slashes would match some of the wounds inflicted on the children murdered around Australia in the 1960s.

  The blinded doll belonged to the girl next door to where Percy was living.

  Percy finally moved from Mount Beauty to join his family in Khancoban after he failed his leaving certificate (Year 11) exams in 1965 – a disappointing result for a student with an IQ of 122 and deemed to be of ‘superior intellect’.

  In his entry in the Mount Beauty school magazine the secretive Percy revealed a little of his concealed thoughts.

  His favourite saying was: ‘It depends’. Perpetual occupation: ‘Isolating myself’. Ambition: ‘Playboy’. Probable fate: ‘Bachelor’. Pet aversi
on: ‘Girls’.

  When Percy left the town the incidents of snowdropping stopped – only to begin near his new home in Khancoban. There were also reports of a peeping Tom in the town. One local woman said she had seen someone in a school uniform running away from her house.

  Percy repeated his leaving certificate at Corryong High School. He seemed shy to the point of reclusive. He was now in the same class as his younger brother, who was a popular boy. The younger Percy ‘distanced myself from Derek and they did not socialise at school.

  But Derek and his brother did form a small band, the Rising Sons, with the elder one on lead guitar. The band shocked their small local following when Derek Percy took to the stage dressed in a frock, years ahead of the androgynous glitter rock of the next decade. Meanwhile, a neighbour found that Percy had lured her six-year-old daughter into the family caravan to sexually assault her.

  When the girl’s father found out he decided to deal directly with Ernie Percy rather than call police.

  ‘Ernie took the matter seriously and was obviously concerned about what I was telling him,’ the parent was to recall. ‘Ernie gave me an undertaking that this would not happen again.’

  And it didn’t. At least not in Khancoban.

  It is now clear that while both parents said they thought their eldest son was shy, bright and normal, deep down they had growing fears about his tendencies.

  One Mount Beauty local said that while Mrs Percy allowed her middle son freedom to wander the district, big brother Derek was kept on a much tighter rein.

  ‘Derek had to get permission to go anywhere with us outside of school hours and she would question his intentions,’ he recalled.

  Ernie Percy would later tell NSW police he had once found the troubled boy dressed in women’s clothing. It appears he kept the incident a secret – perhaps hoping it was just a phase.

  The parents also found some disturbing sexual writings from their son and immediately burnt them.

  Later, Percy’s grandmother found letters filled with thoughts she would only describe as ‘rude’. Percy denied they were his, saying they had been written by another boy. Again they were burnt.