GE Commercial Corporation v Future Network [2013] NSWSC 1228

The guarantees provided by the guarantor and his wife contained promises to grant GE legal mortgages of any land held by them, whether held now or in the future. The precise wording was 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…“. GE sued for amounts owing under the agreements and specific performance to compel the guarantors to execute the legal mortgages.

The guarantors argued that the guarantees were void for uncertainty of the words “containing such terms and conditions as GE may require“. The court construed the words in parenthesis as permitting GEC to insert terms and conditions into the mortgage not inconsistent with, and not an enlargement of, the agreed security, being a mortgage over land to secure the amounts agreed.

The court declared the guarantees valid and ordered specific performance.

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