GE Commercial Corporation (Australia) Pty Ltd v Future Network (Albury) Pty Ltd [2013] NSWSC 1228

Supreme Court New South Wales

Medium Neutral Citation: GE Commercial Corporation (Australia) Pty Ltd v Future Network (Albury) Pty Ltd [2013] NSWSC 1228 Hearing dates: 29 August 2013 Decision date: 02 September 2013 Jurisdiction: Equity Division Before: Darke J Decision: I make the following orders: (1) Declare that the instruments of Secured Guarantee dated 17 November 2006, and executed by each of the first, third, fourth and fifth defendants in respect of the obligations of the second defendant, are valid and enforceable in accordance with their terms. (2) Declare that pursuant to the instruments of Secured Guarantee dated 17 November 2006, and executed by the first defendant in respect of the obligations of the second defendant, the first defendant is bound to grant legal mortgages to the plaintiff, in accordance with clause 7.1(a) of those instruments, over the following land: (a) The land situated at XX XX Road XXX NSW, and comprised in Folio Identifier XXXXXX; (b) The land situated at XX XX Road, XXX, NSW, and comprised in Folio Identifier XXXXXX; (c) The land situated at XX XX Drive, XXX, NSW, and comprised in Folio Identifier XXXXXX; (d) The land situated at XX XX Drive, XXXX, NSW, and comprised in Folio Identifiers XXXXXX and XXXXXX; (e) The land situated at XX Street, XXXX, NSW, and comprised in Folio Identifier XXXXXX; and (f) The land situated at XX XX Street, XXXX, NSW, and comprised in Folio Identifiers XXXXXX, XXXXXX and XXXXXX. (3) Order that the obligations of the first defendant to grant legal mortgages to the plaintiff as referred to in declaration (2) above be specifically performed and carried into effect. (4) Order that judgment be entered in favour of the plaintiff against each of the defendants in the sum of $346,854.50. (5) The parties have liberty to apply in respect of any issues arising out of declaration (2) and order (3) above. (6) Order that the defendants pay the plaintiff's costs of the proceedings, other than any costs which are included in the judgment amounts referred to in (4) above, on an indemnity basis. Catchwords: CONTRACTS - general contractual principles - formation of contractual relations - matters not giving rise to binding contract - vagueness and uncertainty - agreement contemplating execution of formal document to contain such additional terms as mortgagee "may require"

MORTGAGES - mortgage contract - agreements for mortgage - agreement contemplating execution of formal document - formal document to include such additional terms as mortgagee "may require" - whether uncertain

EQUITY - equitable remedies - specific performance - jurisdiction and availability - particular contracts - agreements to give security

EQUITY - equitable remedies - specific performance - relevant considerations and defence matters - uncertainty and ambiguity Cases Cited: Axelsen v O'Brien [1949] HCA 18; (1949) 80 CLR 219 Bridge Wholesale Acceptance Corporation (Australia) Ltd v Burnard (1992) 27 NSWLR 415 Farmer v Pitt [1902] 1 Ch. 954 Godecke v Kirwan [1973] HCA 38; (1973) 129 CLR 629 Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (No 2) [2011] NSWCA 171 Malago Pty Ltd v A W Ellis Engineering Pty Ltd [2012] NSWCA 227 Powell & Berry v Jones and Jones [1968] SASR 394 Thorby v Goldberg [1964] HCA 41; (1964) 112 CLR 597 Whitley v Challis [1892] 1 Ch. 64 Category: Principal judgment Parties: GE Commercial Corporation (Australia) Pty Ltd (Plaintiff) Future Network (Albury) Pty Ltd (First Defendant) CJ's Big Twin (Albury) Pty Limited for itself and as trustee for CJ and DH Abbott Family Trust (Second defendant) Donna Helen Abbott (Third Defendant) Christopher John Abbott (Fourth Defendant) CJ's Big Twin Pty Limited for itself and as trustee for The Future Network Unit Trust (Fifth Defendant) Representation: Counsel: A J Bulley (Plaintiff) Solicitors: Dibbs Barker Lawyers (Plaintiff) File Number(s): SC 2012/244346 Publication restriction: Nil

Judgment 1The plaintiff, GE Commercial Corporation (Australia) Pty Ltd ("GEC"), entered into various bailment agreements with companies associated with Mr Christopher Abbott, the fourth defendant. The two companies which entered into such agreements with GEC were the fifth defendant CJ's Big Twin Pty Ltd ("Big Twin") and later the second defendant CJ's Big Twin (Albury) Pty Ltd ("Big Twin Albury"). Each of Mr Abbott, his wife Mrs Donna Abbott (the third defendant), and Future Network (Albury) Pty Ltd (the first defendant, referred to as "Future Network") provided guarantees to GEC in connection with the obligations of Big Twin and Big Twin (Albury) under the bailment agreements. Mr Abbott is the sole director and secretary of each of the corporate defendants. 2The guarantees, including those entered into by Future Network, contained promises on the part of the guarantor to grant GEC legal mortgages of any land held by the guarantor, whether held now or in the future. In these proceedings GEC seeks relief in the nature of orders for specific performance to compel Future Network to execute legal mortgages over six parcels of land, these being: (1)The land situated at XX XX Road XXX NSW , and comprised in Folio Identifier XXXXXX; (2)The land situated at XX XX Road, XXX, NSW, and comprised in Folio Identifier XXXXXX; (3)The land situated at XX XX Drive, XXX, NSW, and comprised in Folio Identifier XXXXXX; (4)The land situated at XX XX Drive, XXXX, NSW, and comprised in Folio Identifiers XXXXXX and XXXXXX; (5)The land situated at XX Street, XXXX, NSW, and comprised in Folio Identifier XXXXXX; and (6)The land situated at XX XX Street, XXXX, NSW, and comprised in Folio Identifiers XXXXXX, XXXXXX and XXXXXX. 3GEC also seeks to recover, from Big Twin and Big Twin (Albury), amounts claimed to be owing under various bailment agreements executed by these companies. GEC further seeks to recover those amounts from each of the guarantors pursuant to various instruments of guarantee executed on 17 November 2006. 4The proceedings were originally commenced against only Future Network. It appears from the court file that the company appeared by a solicitor, Mr Derek Norquay of Wodonga. However, it seems that at least since the further defendants were added to the proceedings, Mr Abbott has acted as the representative of all of the defendants. 5When the matter was called on for hearing on 29 August 2013 there was no appearance for any of the defendants. The matter was called outside the court, and again there was no appearance. That state of affairs had been foreshadowed to GEC's solicitors on the morning of 27 August 2013. An affidavit sworn on 28 August 2013 by Mr Matthew King, a solicitor employed by GEC's solicitors, Dibbs Barker, deposes to a telephone conversation in which Mr Abbott indicated he would not be appearing at the hearing. It appears that this decision was taken in the light of certain asset freezing orders made against Future Network in the District Court of New South Wales, and following the obtaining of advice from Mr Norquay. In these circumstances, the hearing proceeded in the absence of the defendants. 6The plaintiff read three further affidavits going to the substance of its claim. These were affidavits sworn by Mr Garry Antill on 3 August 2012 and 15 March 2013, and an affidavit sworn by Mr Richard Peiris on 23 August 2013. The affidavits sworn by Mr Antill, who is the National Collections Manager of GEC, set out the relevant history of the dealings between GEC and the defendants. Numerous relevant documents, including the bailment agreements and guarantees, are exhibited to those affidavits. 7Big Twin entered into a series of bailment agreements, commencing with an agreement made on 15 September 1998 with Textron Financial Corporation (Australia) Pty Ltd, which is a predecessor of GEC. Big Twin subsequently entered into bailment agreements with GEC on 17 February 2000 and on 18 September 2000. 8These bailment agreements facilitated the retail sale of motorcycle and related accessories by Big Twin which carried on business in Albury and Wagga Wagga. In essence, the agreements established what is described in written submissions as a "floor plan finance facility". Initially, the facility had a monetary limit of $100,000, but over time, following requests made by Mr Abbott, the monetary limit was increased. By October 2005 the facility limit had been increased to an amount of $850,000. 9On 17 November 2006 GEC wrote to Big Twin and Big Twin Albury to advise that a restructure of the "Wholesale Credit Facility" had been approved. A credit limit of $600,000 (made up of a number of limits applicable to particular distributors) was specified. The letter continued: The above limits have been detailed under the assumption that all limits will be under the one account of CJ's Big Twin (Albury). Balances currently outstanding under CJ's Harley Davidson are to be liquidated with balances outstanding to be included in above limit until such time account is paid out in full. Upon acceptance of the Letter of Offer, all limits under CJ's Harley Davidson will be rescinded. The reference in the letter to CJ's Harley Davidson is a reference to the trading name used by Big Twin. 10GEC specified, amongst the terms of the approval, that secured guarantees would be required from Big Twin, Future Network and Mr and Mrs Abbott in respect of the obligations of Big Twin Albury, including guarantees of the obligations of Big Twin Albury in its capacity as trustee of the CJ and DH Abbott Family Trust. The letter of approval was signed by Mr Abbott on 20 November 2006. 11On 17 November 2006 GEC entered into two bailment agreements with Big Twin Albury. One of these was expressed to be entered into with Big Twin Albury as trustee of the CJ and DH Abbott Family Trust. 12The bailment agreements, which were in relevantly identical terms, provided: 1.1 The parties agree and acknowledge that the Bailee carries on the business of importing and/or buying and selling Equipment and for that purpose wishes to source Equipment from manufacturers for on sale to the customers of the Bailee. 1.2 The Bailee has requested GE Commercial Finance to finance the acquisition of such Equipment from manufacturers from time to time under the terms of this Bailment Agreement and for that purpose, at the request of the Bailee, to acquire title to such Equipment from the manufacturer for the sole purpose of bailing it to the Bailee. ... 2.1 The Bailee may during the term of this agreement request GE Commercial Finance to finance the purchase of Equipment. If GE Commercial Finance approves this request it will take title to the Equipment and will place the Equipment on bailment with the Bailee pursuant to the terms of this agreement. ... 4.1 Subject to clause 6.2, title to, property in, and ownership of the Equipment remains in GE Commercial Finance until GE Commercial Finance receives a written purchase order together with payment of Bailment Fees, any amounts stipulated in the Trust Receipt and any other amount payable to GE Commercial Finance under this agreement relating to the relevant item of Equipment. Upon payment of those amounts the bailment of the item of Equipment under this agreement will be terminated. ... 5.1 In consideration of GE Commercial Finance making the equipment available to the Bailee for display or demonstration under the terms of this agreement the Bailee agrees to pay Bailment Fees to GE Commercial Finance. Bailment Fees accrue from day to day from the Commencement Date and are payable monthly in arrears or in such manner as GE Financial Finance may from time to time direct. ... 5.4 If the Bailee fails to pay any amount under this agreement on the due date for payment, the Bailee agrees to pay to GE Commercial Finance on demand interest on that amount at the Default Rate. ... 6.2 Upon the sale of any item of Equipment in accordance with clause 6.1 the Bailee shall be deemed to have purchased the item immediately prior to the sale and the amount payable specified in the Trust Receipt and all other monies due or to become due under this agreement with respect to such Equipment shall become immediately due and payable. The Bailee shall immediately remit to GE Commercial Finance or to its order the total proceeds together with any additional amount necessary to pay amounts due under this agreement. 6.3 Until receipt by GE Commercial Finance of the Proceeds from the Bailee under 6.2, the Bailee shall hold the proceeds in trust for GE Commercial Finance and the Bailee must immediately account for those Proceeds to GE Commercial Finance. ... 14.1 Each of the following is an Event of Default under this agreement: (a) the Bailee does not pay on time any amount payable under this agreement or any other agreement with GE Commercial Finance in the manner required; ... 15.1 Upon the occurrence of an Event of Default: (a) GE Commercial Finance may terminate this agreement immediately and declare any and all amounts owing by the Bailee to GE Commercial Finance, directly or contingently, immediately due and payable without notice or demand; ... 15.3 The Bailee agrees to pay all expenses of GE Commercial Finance relating to the recovery or attempted recovery of the Equipment (whether such attempt is successful or not) by repossession or otherwise, or any action at law or otherwise for recovery of any amounts owing hereunder including in [sic] all legal expenses of GE Commercial Finance upon a solicitor and client own [sic] basis. ... 19.10 If the Bailee enters into this agreement as trustee of any trust or settlement, the Bailee: (a) enters into this agreement in its personal capacity and in its capacity as trustee, and is liable in each of those capacities; ... 21 Definitions and Interpretation In this agreement unless the context otherwise requires: Account Fees means such fees or other charges as GE Commercial Finance may from time to notify the Bailee in writing (or by publication on GE Commercial Finance's website) as being payable by the Bailee to GE Commercial Finance under this agreement. Bailment Fees means, in respect of any Equipment, the amount payable by the Bailee bailed to the Bailee as specified in the Trust Receipt or under the terms of any finance program offered to the Bailee by GE Commercial Finance from time to time. ... Default Rate means such rate specified by GE Commercial Finance from time to time in its absolute discretion (or if no such rate is specified, the maximum rate allowed by law). 13Also on 17 November 2006, instruments described as Secured Guarantees were executed by, inter alia, Mr Abbott, Mrs Abbott, Big Twin and Future Network in respect of the obligations of Big Twin Albury (as debtor). Guarantees were given separately in respect of the personal capacity of Big Twin Albury and in respect of its capacity as trustee of the CJ and DH Abbott Family Trust. Each of the Secured Guarantees contained provisions in the following terms: The guarantor has requested and may in the future request GE to enter into commercial transactions with the debtor under which the debtor will incur liabilities to GE and which, GE may, at its discretion, agree to enter into, upon the guarantor executing this guarantee. The guarantor has agreed to enter into this guarantee and execute this guarantee in favour of and for the benefit of GE. The guarantor acknowledges incurring obligations and giving rights under this guarantee for valuable consideration received by the guarantor from GE. 1. The guarantor unconditionally and irrevocably guarantees to GE that the debtor will pay to GE all amounts payable by the debtor to GE and the due and punctual performance by the debtor of all its obligations to GE under the commercial transactions. 2. The liability of the guarantor is a principal liability. The guarantor unconditionally and irrevocably indemnifies GE against any liability or loss GE suffers or costs GE incurs in connection with the whole or any part of the amounts guaranteed by the guarantor not being recoverable from the debtor, or from the guarantor under clause 1, for any reason, including, because of any legal limitation, disability or incapacity affecting the debtor or any other fact or circumstance. ... 7.1 The guarantor: (a) shall pay to GE all amounts which are actually or contingently owing to GE now or in the future, by any person specified in the Particulars as guarantor; and (b) shall grant to GE a legal mortgage in registrable form (containing such terms and conditions as GE may require) of any land held by the guarantor now or in the future, which mortgage must contain a covenant to the effect of clause 7.1 (a) and which secures the amounts referred to in clause 7.1(a); ... (d) agrees that upon default by the guarantor, the amounts referred to in clause 7.1(a) will at GE's option become immediately due and payable. ... 12. This guarantee is a deed. 13. Meaning of Words ... costs includes charges, expenses, taxes, duties and fees; and includes costs, charges, expenses and legal costs in connection with preparation, execution, stamping, registration, enforcement or discharge of a document, or caveat lodgement or caveat withdrawal. 14Mr Antill deposes to the fact that Big Twin Albury (including as trustee) committed acts of default in respect of its obligations to GEC pursuant to the bailment agreements it entered into on 17 November 2006. Mr Antill also deposes to the fact that Big Twin committed acts of default in respect of its obligations to GE pursuant to the bailment agreement it entered into on 17 February 2000. In each case, the defaults included failure to pay when due amounts owing under the agreement. 15The bailment agreement entered into by Big Twin on 17 February 2000 contains provisions similar to clauses 14.1 and 15.1 of the bailment agreements entered into by Big Twin Albury such that a failure to pay when due an amount owing under the agreement is an event of default, and that, upon default, GEC had the right to terminate the agreement (see clauses 10.1.1 and 11.1 of the bailment agreement entered into by Big Twin on 17 February 2000). 16On 15 February 2012 GEC sent a Notice of Termination and Demand to each of Big Twin and Big Twin Albury. 17By those notices, GEC terminated the bailment agreements and declared that certain Bailment Fees, Account Fees and other charges, interest and costs were now immediately due and payable. In relation to Big Twin Albury the notice stated that the total amount outstanding as at 15 February 2012 was $58,059.77. In relation to Big Twin, the notice stated that the total amount outstanding as at 15 February 2012 was $21,588.11. 18The affidavit sworn by Richard Peiris, who is a Senior Recoveries Officer of GEC, states that a total amount of $346,854.50 is now owing to GEC. That amount, which includes GST, is made up of the following components: (a)$72,017.72 in respect of sales of equipment made by Big Twin Albury; (b)$26,575.92 in respect of sales of equipment made by Big Twin; and (c)$248,260.86 for legal costs. 19The legal costs are stated to relate to steps undertaken by GEC's lawyers to enforce GEC's rights under its facilities "and also in relation to these proceedings". A number of such steps are identified including: the preparation of mortgages and letters of demand; the preparation and lodgement of caveats over numerous properties owned by Future Network; dealing with lapsing notices served by Future Network; negotiations with a first mortgagee concerning priority issues in respect of the property at XX XX Street, XXXX; dealing with a receiver appointed by a different first mortgagee in respect of a number of other properties owned by Future Network, including in relation to the sale of such properties; and legal costs involved with the commencement and conduct of these proceedings and preparation for the hearing. 20The defendants filed an amended defence on 19 June 2013 in answer to the plaintiff's amended statement of claim which was filed on 10 May 2013. A number of matters concerning the agreements entered into between the parties are not admitted or denied, but the plaintiff's evidence clearly establishes the existence of the agreements, and the terms of the agreements, as summarised above. The alleged defaults are also not admitted, but the unchallenged evidence of Mr Antill, which is supported by GEC's records, and which I accept, establishes the existence of the defaults. 21The amended defence positively raises three matters in opposition to the claims based upon the guarantees. These are: (a)that the guarantees are not deeds; (b)that the guarantees are unenforceable as the expressed consideration was illusory because the guarantor had not requested GEC to enter into commercial transactions with the debtor; and (c)that clause 7.1(b) of the guarantee is void due to uncertainty. 22I do not think there is any substance to the matters referred to in (a) and (b) above. Each of the Secured Guarantees was stated, by clause 12 thereof, to be a deed, and above the place for execution each contained the words "Executed as a deed". Moreover, the circumstances in which the existing facility was restructured in November 2006, coupled with the express acknowledgement on the part of the guarantors that the guarantees were given for valuable consideration, leads me to conclude that in any event valuable consideration was given. 23The third matter raised concerns clause 7.1(b) as found within each guarantee. As noted earlier, that clause states that the guarantor "shall grant to GE a legal mortgage in registrable form (containing such terms and conditions as GE may require) of any land held by the guarantor now or in the future, which mortgage must contain a covenant to the effect of clause 7.1(a) and which secures the amounts referred to in clause 7.1(a)". 24The precise argument as to uncertainty is not identified in the amended defence. There can be no complaint that the obligation is uncertain because it extends to any land held by the guarantor now or in the future (see Bridge Wholesale Acceptance Corporation (Australia) Ltd v Burnard (1992) 27 NSWLR 415 at 421B). Presumably, the argument depends upon the words contained in parenthesis, namely "containing such terms and conditions as GE may require". However, I do not think that the presence of those words results in clause 7.1(b) being void due to uncertainty. This is not a case where a matter is left for the further agreement of the parties. Rather, clause 7.1(b) provides that the contemplated legal mortgage, which must contain the covenants described in the clause, may also contain such terms and conditions as required by GEC. 25In Godecke v Kirwan [1973] HCA 38; (1973) 129 CLR 629 Walsh J (with whom Mason J agreed) stated at 642 that, subject to the qualifications referred to by Bray CJ in Powell & Berry v Jones and Jones [1968] SASR 394 at 398, there is no reason in principle for holding that there cannot be any binding contract if some matter is left to be determined by one of the contracting parties. I refer also to the statement made by Kitto J in Thorby v Goldberg [1964] HCA 41; (1964) 112 CLR 597 at 604-605: The outstanding question as to uncertainty or lack of concluded agreement relates to the operation of clause 1(c) upon the provision for altering article 5. Undoubtedly a considerable discretion is committed to the O Group and no doubt it was with that in mind that the parties made their vague stipulation as to careful reconsideration in the light of the latest practices and of the size and importance of the venture. But an agreement is not void for uncertainty because it leaves one party or group of parties a latitude of choice as to the manner in which agreed stipulations shall be carried into effect, nor does it for that reason fall short of being a concluded contract. Nothing is here reserved for determination by future agreement of the O and the G Groups. They have agreed upon all that they intend to be the subject of agreement between them. The case of Loftus v Roberts (1902) 18 T.L.R. 532, which was much pressed upon us, has no application here. It decides only that where words which by themselves constitute a promise are accompanied by words which show that the promisor is to have a discretion or option as to whether he will carry out that which purports to be the promise, the result is that there is no contract on which an action can be brought. Such a situation does not exist in the present case. 26The qualifications stated by Bray CJ in Powell & Berry v Jones & Jones (supra) were that the agreement must not have left to the option of one party "not only the mode of performance but whether there shall be any performance at all" and, further, that "all the terms of the bargain are settled". In my opinion neither of those qualifications operates in this case. No option is reserved as to whether there shall be any performance of the agreement, and in my view all of the essential terms in relation to the grant of a mortgage as contemplated by the clause have been agreed. 27I would construe the words in parenthesis as permitting GEC to insert terms and conditions into the mortgage which are not inconsistent with, and not an enlargement of, the agreed security, being a mortgage over land to secure the amounts referred to in clause 7.1(a) (see Godecke v Kirwan (supra) at 642 per Walsh J; Whitley v Challis [1892] 1 Ch. 64 at 72 per Fry LJ; Farmer v Pitt [1902] 1 Ch. 954 at 959-960). 28Reference should also be made to Axelsen v O'Brien [1949] HCA 18; (1949) 80 CLR 219. In that case, an agreement for the sale of land stipulated that a mortgage, which was to be given to secure part of the purchase price, was to contain such other terms and conditions as shall be required by the solicitor for the vendor "not inconsistent with the above terms". The Court rejected the argument that the presence of that provision meant that no concluded agreement had been reached (see Latham CJ at 224-225; and Dixon J at 226). A decree of specific performance was granted. 29As noted earlier, clause 7.1(b) does not reserve any matters for further agreement to be reached between the parties. The position may therefore be distinguished from that dealt with recently by the Court of Appeal in Malago Pty Ltd v A W Ellis Engineering Pty Ltd [2012] NSWCA 227, especially at [37-[46] per Macfarlan JA. In my opinion, clause 7.1(b) is not void for uncertainty. It presents no bar to an order for specific performance. 30The defendants by their amended defence also do not admit the amounts alleged to be outstanding to GEC. In addition, it is denied that GEC is entitled to payment of its legal costs on a full indemnity basis and it is asserted that to the extent that the legal costs were incurred to prepare and lodge the various caveats, such costs were improperly incurred, excessive and/or unnecessary. 31In the absence of any challenge to the evidence adduced by GEC I am satisfied that the amounts said to be owing in relation to equipment which has been sold are in fact owing. I am also satisfied that GEC has incurred legal costs in the amount stated, namely, $248,260.86. It is not shown that any costs were improperly incurred, excessive or unnecessary. 32The amount of legal costs claimed is undoubtedly large. However, the evidence establishes that a great deal of legal work has been undertaken by the solicitors for GEC in efforts to recover the amounts claimed to be outstanding. By clause 15.3 of each of the bailment agreements entered into by Big Twin Albury on 17 November 2006, the company agreed to pay all expenses of GEC "relating to the recovery or attempted recovery of the Equipment...by repossession or otherwise or any action at law or otherwise for recovery of any amounts owing hereunder including in [sic] all legal expenses...upon a solicitor and client own [sic] basis." In my view the legal expenses, as described in the affidavit of Mr Peiris, fall within that widely drawn provision. Those costs can properly be regarded as expenses which relate to action taken by GEC for recovery of amounts owing under the Big Twin Albury bailment agreements. Accordingly, the amount of those costs forms part of the amount owing by Big Twin Albury to GEC. 33The amount of $26,575.92, being the amount attributable to equipment sold by Big Twin, should also be included in the amount owing by Big Twin Albury. This is because the balances outstanding on Big Twin's account were agreed to be included on Big Twin Albury's account when the restructure of the facility took place in November 2006. When the amount of $72,017.72, being the amount attributable to equipment sold by Big Twin Albury, is added, the total amount owing by Big Twin Albury becomes $346,854.50. As each of the other defendants, namely, Mr and Mrs Abbott, Big Twin and Future Network, gave guarantees in respect of Big Twin Albury's obligations, as described above, each of the defendants is liable to GEC in that amount. 34In addition to judgments for that amount I will make declarations as to the validity of the Secured Guarantees entered into by each of the defendants (other than Big Twin Albury), and orders in the nature of specific performance in relation to Future Network's obligations to grant mortgages over its land to GEC. 35The plaintiff has not yet specified the forms of mortgage which it will seek from Future Network. In these circumstances, the orders for specific performance will not go so far as to order Future Network to enter into any particular mortgages. However, the parties will have liberty to apply in the event that there are any difficulties in obtaining the mortgages as required by clause 7.1(b) of the Secured Guarantees. 36I will also make an order that the defendants pay the plaintiff's costs of the proceedings. Having regard to the terms of clause 15.3 of the bailment agreements entered into by Big Twin Albury on 17 November 2006, it is appropriate that the order for costs be made on the indemnity basis, which approximates solicitor and own client costs (see Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (No 2) [2011] NSWCA 171 at [32]-[37] per Hodgson JA). It should be noted, however, that many of the costs incurred by the plaintiff have been included in the amount owing to it by Big Twin Albury and the other defendants, so the costs order will only include the plaintiff's costs of the proceedings in so far as those costs do not already form part of the amount owing. 37I make the following orders: (1)Declare that the instruments of Secured Guarantee dated 17 November 2006, and executed by each of the first, third, fourth and fifth defendants in respect of the obligations of the second defendant, are valid and enforceable in accordance with their terms. (2)Declare that pursuant to the instruments of Secured Guarantee dated 17 November 2006, and executed by the first defendant in respect of the obligations of the second defendant, the first defendant is bound to grant legal mortgages to the plaintiff, in accordance with clause 7.1(a) of those instruments, over the following land: (a)The land situated at XX XX Road XXX NSW , and comprised in Folio Identifier XXXXXX; (b)The land situated at XX XX Road, XXX, NSW, and comprised in Folio Identifier XXXXXX; (c)The land situated at XX XX Drive, XXX, NSW, and comprised in Folio Identifier XXXXXX; (d)The land situated at XX XX Drive, XXXX, NSW, and comprised in Folio Identifiers XXXXXX and XXXXXX; (e)The land situated at XX Street, XXXX, NSW, and comprised in Folio Identifier XXXXXX; and (f)The land situated at XX XX Street, XXXX, NSW, and comprised in Folio Identifiers XXXXXX, XXXXXX and XXXXXX. (3)Order that the obligations of the first defendant to grant legal mortgages to the plaintiff as referred to in declaration (2) above be specifically performed and carried into effect. (4)Order that judgment be entered in favour of the plaintiff against each of the defendants in the sum of $346,854.50. (5)The parties have liberty to apply in respect of any issues arising out of declaration (2) and order (3) above. (6)Order that the defendants pay the plaintiff's costs of the proceedings, other than any costs which are included in the judgment amounts referred to in (4) above, on an indemnity basis.

Amendments 11 September 2013 - Anonymisation of unique identifiers Amended paragraphs: 2 11 September 2013 - Anonymisation of unique identifiers Amended paragraphs: 37 11 September 2013 - Anonymisation of unique identifiers Amended paragraphs: 19 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 September 2013