Casper Corp Pty Ltd v Gorman[2011] QSC 3

SUPREME COURT OF QUEENSLAND

[1] FRYBERG J:  In 2002 five discrete Brisbane entities decided to form an unincorporated joint venture to carry out development projects.  Some years later, differences developed among them over funding the joint venture.  A director of one of the joint venturers, Mr Gorman, has lodged caveats over two areas of land owned by the joint venture.  Three of the other joint venturers now seek orders for the removal of the caveats.

The joint venture

[2] The joint venture was established by an agreement taking effect on 24 May 2002.  The parties to the agreement, the number of units presently held by them and the persons representing them are:

Under the agreement the joint venture assets belong to the participants as tenants in common in proportion to the number of units held by them from time to time.

[3] The deed envisaged that the joint venture would undertake projects from time to time as determined by the management committee.  The projects undertaken seem to have been land development projects.  At the same time as they executed the deed, the participants signed an agency agreement by which they appointed Premier Pacific (Holdings) Pty Ltd ACN 100 766 907 (“PPH”) as their agent to manage all of the activities and operations of nominated projects and to deal with the joint venture assets.  An extensive list of powers was given to the agent.  It was at all times subject to the direction of the management committee.

[4] In 2005 PPH acquired land for the purpose of carrying out two separate projects.  In September of that year it acquired an existing shopping centre on two allotments at Middle Park, Queensland, with a view to its expansion and resale.  In December it acquired a property at Tinnanbar on the Fraser Coast, for the purpose of development, subdivision and resale.  In relation to the Tinnanbar land, Westpac provided a $2 million funding facility for development costs.  A condition of that funding was that Mr Gorman lodge $2 million with Westpac as a term deposit and make it available as security for the funding, and this he did.

[5] Toward the end of 2008 PPH contracted with Beech Constructions Pty Ltd to carry out the building work necessary for the development of the Middle Park shopping centre.  Substantial funding was obtained for the development, initially from the Commonwealth Bank of Australia and subsequently by way of refinance from Suncorp-Metway Ltd.  It is not in dispute that this finance was not sufficient to complete the development, a matter which was always known to all parties.

[6] During 2009 and 2010 the joint venture encountered funding difficulties.  Various advances were made to it (ie to PPH) by Mr Gorman and entities associated with him and by the Cottee and Parker interests.  In December 2009 PPH contracted to sell some land at Browns Plains owned by the joint venture, but finance remained a problem.

[7] The net proceeds of the sale of that land were $798,000.  When that amount was received in late April 2010, it was used to repay Westpac in partial reduction of the two million-dollar loan facility.  This reduced Mr Gorman's exposure through the security of the term deposit but it meant that less finance was available for development of Middle Park and Tinnanbar.

[8] On or about 13 May 2010 Mr Gorman entered into a further funding agreement with the joint venturers and PPH. That agreement provided:

“Background

A.The joint Venturers are party to joint venture agreements establishing the joint ventures known as the Premier Pacific (Holdings) Joint Venture and the Premier Pacific (Developments) Joint Venture (the Joint Ventures).

B.The Joint Venturers agree to sell certain assets and that the proceeds of the sale of those assets are to be reinvested in the Joint Ventures to fund the completion of Middle Park.

C.Gorman also agrees to provide funding to the Joint Ventures on the terms of this document and the Joint Venturers accept the funding to be provided by Gorman on the terms of this document.

D.Robert Cottee Architects Pty Ltd and Geoffrey John Parker and Barbara Catherine Parker also agree to provide funding to the Joint Ventures on the terms of this document and the Joint Venturers accept the funding to be provided by Robert Cottee Architects Pty Ltd and Geoffrey John Parker and Barbara Catherine Parker on the terms of this document.

2. Tinnanbar Property

2.1 Agreement to purchase

Gorman agrees to purchase the Tinnanbar property from PPH for one million five hundred and fifty thousand dollars ($1,550,000) on terms contained in the standard REIQ contract for the sale of residential or commercial property (as is applicable) amended so that the sale of the Tinnanbar Property is on an “as is, where is” basis (without warranty or representation by PPH as to any fact, matter or thing) and subject to any changes PPH may otherwise reasonably require, with settlement of the purchase to occur within:

(a)thirty (30) days of the date of this document; or

(b) the completion of the agreements made or to be made amongst the Joint Venturers in relation to the joint venture as to Pelican Waters, those involving Noosa Fair Shopping centre and properties held by KGS (Holdings) Pty Ltd,

whichever is latter.

2.2 Dispute Resolution

If there is any dispute as to which standard REIQ contract is to apply to the sale of the Tinnanbar Property or in relation to the contract for the Tinnanbar Property referred to in clause 2.1, or the bill of mortgage referred to in clause 3.2 then any party may refer the matter to the President of the Queensland Law Society Incorporated for determination by the President or a delegate, who will act as an expert and not as an arbitrator and whose decision as to the contract and the “as is, where is” terms will be final and binding on the parties. The cost of the determination of the President or a delegate will be borne by the parties equally.

3.Sale of Browns Plains

3.1The parties acknowledge that all actual proceeds from the sale of Browns Plains are to be used to partially repay the amount owing by PPH to Westpac Banking Corporation which amount is secured by a deposit of $2,000,000.00 by Gorman.

3.2For the purposes of this Deed “actual proceeds” means the amount actually received by PPH following settlement of the sale of Browns Plains, which is to take into account not only the discharge of all mortgages, charges, rates and land tax, but also payments to Clarke Kann Lawyers, commission payable to Colliers International and Knight Frank Gold Coast, money to be retained by the purchasers as a rental guarantee for the 12 month’s following settlement (the retention money) and money to be paid to General Merchant Pty Ltd.

4.Funding by Gorman

4.1 Agreement to provide funding

Gorman agrees that:

(a)on the completion of the sale of Browns Plains and the receipt of the actual proceeds he will provide the amount equivalent to the actual proceeds, in funding to the joint Ventures for the Completion of Middle Park;

(b)in the event that the retention moneys, or some part thereof is received by PPH then provided that the moneys received are paid to Westpac Banking Corporation as provided in clause 3.1 hereof, Gorman will increase the amount of the Gorman Funding by an amount equivalent to the retention moneys so received and paid;

(c) within seven (7) days of written notice to Gorman by Joint Venturers, Gorman will provide in his absolute discretion such further amount which is necessary for the Completion of Middle Park as resolved by the Majority Vote of the members of the management committees of the Joint Ventures;

(together referred to as the Gorman Funding).

4.2 Mortgage

(a)The Gorman Funding together with the existing loan moneys currently owing to Gorman by PPH (Gorman Existing Loans) listed in Schedule 2, the amounts of which to be calculated and agreed by BDO and KPMG, are to be secured by bill of mortgage in a form to be prepared by the solicitors for Gorman and agreed by all the Joint Venturers, to be registered over Middle Park.

(b)The bill of mortgage will be limited to security for the Gorman Funding and the Gorman Existing Loans the amounts of which are to be calculated and agreed by BDO and KPMG.

...

4.5Cottee Parker Funding

Robert Cottee Architects Pty Ltd and Geoffrey John Parker and Barbara Catherine Parker will provide additional funding to the Joint Ventures in an amount of $1,200,000.00 pursuant to Schedule 2 (the Cottee Parker Funding), for the purpose of assisting in the completion of Middle Park.

4.6Mortgage

(a)The Cottee Parker Funding together with any existing loan moneys currently owing to Robert Cottee Architects Pty Ltd and Geoffrey John Parker and Barbara Catherine Parker by PPH (Cottee Parker Existing Loans) listed in Schedule 2, the amounts of which to be calculated and agreed by BDO and KPMG, to be secured by bill of mortgage in a form to be prepared by the solicitors for Robert Cottee Architects Pty Ltd and Geoffrey John Parker and Barbara Catherine Parker and agreed by all the Joint Venturers, to be registered over Middle Park.

(b)The bill of mortgage will be limited to security for the Cottee Parker Funding and the Cottee Parker Existing Loans the amounts of which are to be calculated and agreed by BDO and KPMG.

...

5.Miscellaneous

5.1Time

Time is of the essence under this deed.

...

6.Dispute Resolution

6.1Notice of Dispute

If a dispute between the parties arises out of or in connection with this Deed including a dispute concerning the Gorman Funding, Cottee Parker Funding, the Gorman Existing Loans and the Cottee Parker Existing Loans, then either party shall deliver by hand or send by certified mail to the other party a notice of dispute in writing adequately identifying and providing details of the dispute.

...”

The Gorman existing loans

[9] Schedule 2 to that agreement sets out details of the Cottee Parker Existing Loans as envisaged in cl 4.6, but not of the Gorman Existing Loans as envisaged in cl 4.2. That was because the process envisaged by cl 4.2(b) remained to be completed.  No party has suggested that any consequence flows from the fact that the relevant section of sch 2 is blank.  Although Mr Gorman made the new agreement in his personal capacity, all parties have accepted that the Gorman Existing Loans were meant to include loans made not only by Mr Gorman personally but also loans made by entities associated with him.

[10] Following execution of the agreement Mr Gorman referred the matter to his accountants, KPMG, and Mr Cottee or Mr Parker on behalf of the other joint venturers did the same to accountants BDO.  KPMG completed their calculations by 10 June, when Ms Dowling (Mr Gorman’s administrative assistant) forwarded them to Mr Parker.  She wrote, “Dylan [Byrne, of BDO] needs to agree with these or give me a call if he has any issues.”  The figures showed that following completion of the transactions envisaged by the deed, loan amounts owing to the Gorman interests were $9,836,461.  BDO's calculations were completed in draft on 9 June 2010.  They showed the amount of the loan to be $7,325,551.77 as at approximately mid-May 2010. The major difference between the two calculations arose from the inclusion in the loan amounts by KPMG of the term deposit lodged by Mr Gorman with Westpac (which might be characterised alternatively as a contingent liability to Westpac under the security).  The responsible partner at BDO, Mr Byrne, told Messrs Cottee, Parker and King by e-mail on 9 June that his figures included no interest expense except for 2008. He said he would clarify these amounts.  There is no evidence of any attempt by him to do so.

[11] There seems to have been no serious attempt by either firm to reach agreement with the other as envisaged by cl 4.2(b).  There is no evidence that either side in this dispute instructed either firm to make such an attempt.

[12] There is no evidence that Mr Gorman's solicitors ever prepared a bill of mortgage for the purposes of cl 4.2(a) or sought to have a form of mortgage agreed by the joint venturers.

The Tinnanbar sale

[13] There must have been some dealings between the parties regarding the transfer of the Tinnanbar land before the further funding agreement was signed because in early May 2010, PPH executed a transfer of that land to Mr Gorman's nominee, his company Seamark Pty Ltd.  The transfer was signed on behalf of the transferee on 24 May.  Whether it is in registrable form may be doubted (the signatures are un-witnessed), but that is of no present consequence.

[14] Mr Gorman was a party to the agreements referred to in cl 2.1(b) of the further funding agreement.  Those agreements were not completed within the 30 days referred to in cl 2.1(a).  At least two of them contained a clause making the unconditional release of mortgage number 710685270 held by Suncorp-Metway Ltd over the Tinnanbar land a condition precedent of the agreement.

[15] On 8 June 2010, in the context of discussing settlement arrangements for the Tinnanbar land, Ms Dowling on behalf of Mr Gorman agreed with Ms Curtin of the solicitors for PPH that Mr Gorman would procure a release from Suncorp of mortgage number 710685270 before settlement of the sale of the Tinnanbar land.  It was also agreed that Mr Gorman's obligation to pay the purchase price would be satisfied by a reduction of the amount owed to him (meaning him or his entities) by PPH.

[16] On 8 July, Mr Gorman signed the following undertaking:

“I, James Mortimer Gorman … undertake to obtain the following documents as soon as possible and, in any event, prior to 4 August 2010:

(a)the release of mortgage number 710685270 by Suncorp regarding the Tinnanbar property; and

(b)the release of any personal guarantees provided to Suncorp by Jonathan King and his associated entities.

The KGS deed, the Noosa Fair Developments deed and the Pelican Waters deed were settled contemporaneously on 12 July 2010.  The other parties to those deeds accepted Mr Gorman's undertaking, waiving reliance on the condition precedent referred to above.

[17] Since then, Mr Gorman has not procured the release from Suncorp.  There is no suggestion that he is unable to do so.  He has refused to procure it.  He deposed, “Had the Gorman existing loans been recognised and secured, I would have secured a release of the Suncorp Metway mortgage over Tinnanbar.”  PPH has refused to settle the sale unless the release is procured.

The Middle Park development

[18] Mr Gorman also refused to make any payment under cl 4.1(a) of the further funding agreement.  He justified his position in his affidavit:

“65.I was always willing and able to advance the monies promised in the funding deed provided the quantum of the existing Gorman loans was agreed by the joint venturers and were [sic] secured in accordance with the funding deed.

66.Jonathan King never acknowledged the quantum of the Gorman existing loans.  In those circumstances, until there was an agreement by all joint venturers of the quantum of the Gorman existing loans and until the security was in place in accordance with the funding deed, I was not prepared to advance any further funds.”

[19] Those funds were required by PPH to pay Beech Constructions.  As a result of not being paid what was due, that company suspended work on 21 July 2010.  Negotiations took place between PPH, Suncorp and Beech from August to October and in principle agreement was reached for Beech to be granted a mortgage and Suncorp to provide further funds to complete construction.  Mr Gorman was a party to that agreement, having signed the relevant document on 4 October.

[20] It has not been possible to implement that agreement because on 26 October Mr Gorman lodged the caveats the subject of the present application.  One of his companies, Namrog Investments Pty Ltd, also lodged caveats over the same land.  Those caveats prevent the registration of any mortgage granted to Beech and I infer that was their purpose.

The application

[21] The application has been brought by three of the joint venturers, being those representing the King, Cottee and Parker interests. The respondents are the two caveators, the remaining two joint venturers and PPH.  There has been no appearance on behalf of Dajanilu Pty Ltd (the Shand interests) or PPH.  Mr Gorman and his two companies were represented.  At the beginning of the hearing, their counsel conceded that the application should succeed in relation to the Namrog caveats.

[22] It is not immediately obvious why the application was not brought simply by PPH.  It is the registered proprietor of the land the subject of the caveats.  I can only presume that for some reason it is deadlocked and unable to give instructions to solicitors.  That is not a problem as PPH as agent plainly holds the land in trust for the joint venturers.  It is not a discretionary trust.  Each joint venturer has an interest as a tenant in common in the joint venture assets and is therefore a beneficiary under the trust.  The applicants submitted that the trust is a bare trust, but having regard to the duties imposed on the agent I doubt the correctness of that submission.  It does not matter.  The applicants are still persons with an interest in the land[1] and as such, they fall within the definition of “caveatee” in the dictionary set out in sch 2 of the Land Title Act 1994.  The respondents did not submit otherwise.

[23] The onus lies upon Mr Gorman to demonstrate that there is a serious question to be tried that he has the interest claimed in his caveats, and to establish that the balance of convenience favours the maintenance of the caveats until trial.[2]

The Middle Park caveats

[24] The caveats were badly drafted, but it is common ground that the interest which they claim to support is as equitable mortgagee pursuant to the agreement for mortgage in cl 4.2 of the further funding agreement.

[25] Mr Gorman submits that the agreement created an equitable mortgage capable of supporting a caveat.  The applicants do not challenge that submission, but submit that the right to a mortgage was conditional upon provision of the Gorman funding under cl 4.1, or it least so much of that funding as was described in cl 4.1(a).  They submit that by refusing to provide the funding Mr Gorman has demonstrated he is not ready, willing and able to perform the condition and specific performance is not available to him.  Alternatively they submit that the agreement to mortgage is a mere contract for loan that remains wholly executory and cannot be specifically enforced.[3]  Consequently in either case, Mr Gorman now has no equitable interest in the land.  In reply Mr Gorman submits that cl 4.2 is independent of cl 4.1 on the proper construction of the agreement and perhaps (it is not quite clear), that in the alternative until the accountants have reached agreement, cl 4.2 cannot be performed and therefore the obligation under cl 4.1 has not arisen.  To that submission the applicants say that the obligation to provide the funding was not conditional on the amount of the Gorman existing loans being agreed.

[26] In my judgment all of these submissions failed to focus on a key question which arises under cl 4.2.  That question is whether that clause requires the mortgage in terms to specify the agreed amount.  If it does, then it cannot be prepared until agreement is reached or some other solution found.  However nothing in the clause so provides in as many words and I see no reason to imply such a requirement.  On the contrary there would seem to be no reason why the mortgage should not simply reflect the clause, though perhaps using rather more elegant legal drafting.  Such a mortgage makes far more commercial sense and avoids the potential for delay of the type which has occurred.  I hold that the clause does not require the mortgage to specify the limit of the security in dollar terms.

[27] It follows that the provision of the mortgage was not dependent on the amount of the Gorman existing loans being agreed.  A fortiori the obligation of Mr Gorman to provide the funding was not dependent on any such agreement.  On that point I accept the submission by the applicants.

[28] Against that background I turn to the primary issue which divided the parties: the relationship between cl 4.1 and cl 4.2.  In my judgment the promises contained in cl 4.1(a) on the part of Mr Gorman and in cl 4.2 (implicitly) on the part of PPH were mutual promises. They were to be performed contemporaneously.  Mr Gorman was entitled to receive his mortgage in exchange for payment of his money.  I so hold not only on the basis of the relationship of the clauses in the drafting of the agreement but also because that is the arrangement which makes commercial sense.

[29] It follows that I reject Mr Gorman’s submission that the clauses are independent.  Mr Gorman submitted that the potential timing under each clause operated independently, an example being where the obligation for the provision of the mortgage might have occurred before the requirement to provide the funding.  That is true in relation to paras 4.1(b) and (c).  The conditions giving rise to the obligation under those paragraphs have not arisen.  However that is not an obstacle to the inclusion in the mortgage of terms securing any future payments under those paragraphs.  The obligation under para (a) arose forthwith upon the execution of the agreement, because the actual proceeds therein referred to had been received before the agreement was signed.

[30] I accept the applicants’ submission that the continued existence of the alleged equitable mortgage depends upon whether the court would grant Mr Gorman specific performance as against the applicants.  Resolving the point depends on the circumstances of the case.  Both sides have been guilty of delay and both have misinterpreted the agreement; but neither has terminated it.  On the contrary, it seems that both continue to affirm it.  I reach that conclusion somewhat hesitantly, because Mr Gorman's evidence set out above has been challenged.  Mr King deposed:

“19.In relation to paragraph 65 of Mr Gorman's Affidavit, the statement that Mr Gorman was always willing and able to advance the monies promised in the Funding Deed provided the quantum of the existing Gorman loans was agreed is not correct.  In particular, at a meeting of the PP JV on 7 June 2010, Mr Gorman made it clear that he would not be providing any further funding to the PP JV (including that funding which was required by the Funding Deed).  During that meeting, Mr Gorman said in words to the effect that:

(a)he was not putting another cent into the PP JV; and

(b)the tax office had issued a writ against him in regards to his loan accounts being assessed as deemed dividends in his hands, because there were issues with the loan documentation.

Mr Gorman was abusive during the meeting and stormed out immediately after making those statements.”

It was not possible to hear oral evidence to resolve that conflict on the hearing of the application.  For the reasons which follow it is unnecessary for present purposes to do so.

[31] In Mehmet v Benson Windeyer J wrote:

“It is necessary that the plaintiff in an action for specific performance should allege in his pleading and prove at the hearing his readiness and willingness to perform the contract on his part: and readiness involves an ability to perform it.  At the date when the suit is commenced the plaintiff must then be in a position to say that he is ready and willing to do at the proper time in the future whatever in the events that have happened the contract requires that he do.  And he must show too that he has performed or been ready and willing to perform the terms of the contract on his part.  But if, notwithstanding earlier breaches, the contract remained on foot, then it seems to me a plaintiff is not necessarily barred from having a decree for specific performance if those breaches, not having resulted in a valid rescission, can be made good by the payment of interest.”[4]

In The Commonwealth Oil Refineries Ltd v Hollins, Sholl J was even more explicit:

“In order to obtain specific performance of a contract, a plaintiff must ordinarily show that he is ready and willing to perform his part of the bargain.  But if in the past he has not been ready and willing to do so, and the other party has nevertheless elected to keep the contract on foot, the plaintiff may put himself right, even at the trial, and apparently at any time up to judgment, subject only to the risk of being ordered to pay costs.”[5]

[32] Those passages demonstrate that where a plaintiff seeking specific performance has in the past refused to perform an essential term of the contract, he may yet be granted specific performance if he is ready and willing to perform at the time of action.  They do not demonstrate that he must be granted the remedy.  Specific performance is a discretionary remedy.  If the plaintiff's earlier refusal has caused irremediable harm to the other party, for example, it may be refused.

[33] Payment of the $798,000 was doubtless an essential obligation on Mr Gorman, but it was not an obligation which he was obliged to perform without receiving a mortgage in return.  He was obliged to instruct his solicitors to prepare the mortgage and submit the form for agreement by the joint venturers.  He did not do so.  Instead, he required agreement by all joint venturers of the quantum of the Gorman existing loans as well as having the security in place before making the advance.  He was entitled to neither of these things.  It is unnecessary to determine whether his omissions would have entitled the other parties to terminate the agreement.  They chose not to do so.  They affirmed the contract.  They wrongly demanded payment of the $798,000 on the basis that the Gorman was obliged to pay it without receiving the mortgage in exchange.  They did not demand that he fulfil his obligations with regard to the preparation of the mortgage.

[34] In these circumstances I do not think equity would refuse Mr Gorman specific performance on the basis that at some previous time he was not ready willing and able to perform his obligations.

[35] I also reject the applicants’ submission that the agreement to grant a mortgage is equivalent to a mere contract for a loan.  Lucia Heights Pty Ltd v Comptroller of Stamps[6] involved such a contract, not a contract to grant a mortgage.  It has no application in the circumstances of the present case.

[36] Provided he remains ready, willing and able to perform his obligations under cl 4.1, Mr Gorman retains a caveatable interest in the Middle Park land.  He has not deposed in terms that he does so remain, but having regard to the fact that his past attitude may have been based upon a misinterpretation of the deed, I am not prepared to find that he is not presently ready and willing to perform.  His affidavit suggests that he may be willing and able to perform.  It follows that I am not prepared to find that he no longer has any interest in the land.

[37] I shall deal with the question of the balance of convenience below.

The Tinnanbar caveat

[38] Mr Gorman's caveat was founded on an alleged equitable interest in the Tinnanbar land as purchaser.

[39] Mr Gorman submitted that he was entitled to an equitable interest in the land as purchaser under an incomplete contract for the sale of the land. He also put forward submissions on the basis that one of his companies had provided the money which PPH originally used to purchase the land and that it was therefore entitled to an equitable interest by way of resulting trust.  The latter submissions may be rejected summarily.  They cannot assist in demonstrating that Mr Gorman had an interest as purchaser – that was what was claimed in the caveat.

[40] The applicants accepted that a purchaser under an uncompleted contract for the sale of land was entitled to an equitable interest in the land, but submitted that the interest was commensurate with the availability of specific performance.[7]  They submitted that specific performance was not available to Mr Gorman because he had not performed his obligation to release the mortgage and that he had no right to compel the transfer of the land until that had occurred.[8]

[41] It is common ground that the agreements referred to in cl 2.1(b) were completed on 12 July 2010.  Clause 2.1(a) therefore had no application.  No submissions were made to me regarding the interpretation of cl 2.1(b). It is unclear whether the clause was meant to read “upon” or “within 30 days of” completion of the specified agreements, but that does not now matter.  On either interpretation, the time for settlement has long since passed.

[42] Settlement of the sale under cl 2.1 did not require Mr Gorman to tender any money.  Under the arrangements agreed between Ms Dowling and Ms Curtin, PPH had to make a journal entry in its books reducing the amount owed to Mr Gorman and deliver to him the executed transfer in registrable form.  Mr Gorman had to deliver the release of mortgage from Suncorp.  PPH did not settle because Mr Gorman refused to obtain the release.  However it has not sought to terminate the deed or this part of it.

[43] Is Mr Gorman presently ready and willing to obtain and deliver the release?  His past refusal was deliberate and cannot be explained on the basis of any misinterpretation of the further funding agreement.  He refused to obtain the release until his collateral demand for agreement between the accountants was satisfied.  He has not deposed to being ready and willing to perform.  There is no reason to suppose that his attitude has changed.  The onus of proof lies upon him, particularly in relation to a matter so peculiarly within his own knowledge.  Notwithstanding the fact that PPH has not terminated the deed or the particular transaction under cl 2.1, Mr Gorman has not proved an entitlement to specific performance.  He has therefore not proved the continued existence of any interest in the Tinnanbar land.

[44] It follows that his caveat should be removed.

[45] In case that finding be incorrect, I add that I am satisfied that the balance of convenience strongly favours removal of the caveat.  At the outset of the hearing the applicants undertook to the court not to cause PPH or the joint venture to take any steps to deal with the land subject to certain exceptions, including any rights of Suncorp-Metway Ltd, Beech Constructions Pty Ltd and others.  They also undertook not to cause those entities to disburse the balance of any proceeds of sale that would otherwise be payable to PPH in the event that the land were sold by a receiver, mortgagee or otherwise by compulsion.  PPH has not terminated the further funding deed and the applicants seek to have it performed.  No other person claims any interest in the land.  Mr Gorman can easily procure a transfer of the land simply by delivering the release of mortgage from Suncorp, a document which he has admitted is within his power to obtain.  There are other less salient features which point in the same direction.

[46] For this reason also I would order the removal of the Tinnanbar caveat.

Disposition of the application

[47] The Tinnanbar caveat must be removed.  Subject to the issue of the balance of convenience, Mr Gorman has shown just enough to avoid the immediate removal of the Middle Park caveats.  However he is obliged under the further funding agreement to have his solicitors draft the required mortgage for consideration by the joint venturers.  That should not take long.  Once that process is completed he will be obliged to pay the $798,000 in exchange for the executed mortgage in registrable form.

[48] It may emerge in the near future that my conclusion regarding his present willingness to perform is wrong.  To cover that eventuality the balance of convenience favours a short adjournment of this part of the proceedings.  That would obviate any need for the applicants to issue fresh proceedings.  A week should be sufficient time for the mortgage to be drafted; the form ought to be agreed within another week; and the money should be paid within three weeks from now.  Subject to any submissions by the parties I propose to adjourn the application for three weeks for further hearing.

[49] Some peripheral matters have emerged about which the parties may wish to have the benefit of a preliminary view.  I emphasise that these expressions of opinion are subject to any submissions which the parties may wish to make and may not be based on all of the relevant evidence.  As matters presently stand it seems to me:

• if Mr Gorman pays the $798,000 he will be entitled to have his mortgage registered with equal priority to that of the Cottee Parker interests under cl 4.6 of the further funding agreement and ahead of any mortgage which may be granted to Beech Constructions Pty Ltd;
• the security limit under cl 4.2(b) should probably be calculated by reference to the position as at the date of the further funding agreement, 13 May 2010; but there is no need for the limit to be expressed in dollar terms; and
• the $2 million deposited by Mr Gorman by way of term deposit in Westpac forms no part of the Existing Gorman Loans.

Orders

[50] By consent I order that caveats number 713590193, 713590204 and 713535832 lodged by Namrog Investments Pty Ltd be removed. I order that caveat number 713590187 lodged by James Mortimer Gorman be removed.  I shall hear the parties as to the form of other orders to be made and on costs.