CDK & Ors v AMA [2009] QSC 190

SUPREME COURT OF QUEENSLAND CITATION: CDK & Ors v AMA [2009] QSC 190 PARTIES: AMA (Respondent/Plaintiff) v CDK (Applicant/Defendant) AND S HOLDINGS PTY LTD AS TRUSTEE FOR THE S HOLDINGS TRUST (Second Defendant) AND CDK AS TRUSTEE FOR THE C TRUST (Third Defendant) AND S INVESTMENT PTY LTD AS TRUSTEE FOR THE S INVESTMENT TRUST (Fourth Defendant) FILE NO/S: BS 10180 of 2006 DIVISION: Trial Division PROCEEDING: Application ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 29 July 2009 DELIVERED AT: Brisbane HEARING DATE: 22, 23, 24, and 30 April and 20 June 2009 JUDGE: P Lyons J ORDERS: 1. The Payment Order is varied by extending the time for payment. 2. The parties are invited to provide further submissions on the question of the additional time to be allowed and whether any other orders should be made with a view to ensuring that payment occurs within the time specified. 3. The parties are invited to provide submissions as to any costs to be awarded on the basis of the outcome of this application. CATCHWORDS: FAMILY LAW AND CHILD WELFARE – PROPERTY AND MAINTENANCE OF PARTIES – ORDERS – Setting aside, variation, modification and discharge of orders – Setting aside orders altering property interests – Where impractical for orders to be carried out – Where the parties -- 1 of 25 -- 2 were in a de facto relationship – Where the de facto relationship has ended – Where the Applicant was ordered to comply with a Payment Order –Where the Applicant attempted to raise funds to comply with the Payment Order – Where the Applicant has attempted to satisfy but has not satisfied the requirements of the Payment Order – Where the Applicant seeks a variation of the Order to comply with the obligations of the Order – Where the Applicant seeks to vary the time for payment or the amount payable under the Order – Where the Applicant claims that circumstances have arisen since the order was made which make compliance with the order impracticable – Consideration of the word “impracticable” in s334(1) Property Law Act 1974 (Qld). FAMILY LAW AND CHILD WELFARE – PROPERTY AND MAINTENANCE OF PARTIES – ORDERS – Setting aside, variation, modification and discharge of orders – Setting aside orders altering property interests – Whether default of party makes it just and equitable to set aside an order of the Court – Whether miscarriage of justice – Suppression of evidence – Other matters – Where the Applicant alleged that the Respondent engaged in intermeddling conduct which prevented the Applicant from satisfying the obligations of the Payment Order, making it just and equitable to vary the order. Family Law Act 1975 (Cth), s 79A. Property Law Act 1974 (Qld), s 334. Jones v Dunkel (1959) 101 CLR 298, followed Jackson v Lithgow [2008] NSWCA 312, followed La Rocca and La Rocca (1991) 14 Fam LR 715, distinguished Cawthorn v Cawthorn (1998) 23 Fam LR 86, followed In the Marriage of Paskandy (2005) 33 Fam LR 509, considered Rohde and Rohde (1984) FLC 51-592, applied COUNSEL: D W Elliott for the Applicant/Defendants P J Baston for the Respondent/Plaintiff SOLICITORS: Lillas & Loel Lawyers for the Applicant/Defendants Hopgood Ganim Lawyers for the Respondent/Plaintiff [1] P Lyons J: On 28 October 2007, Mackenzie J made orders under Part 19 of the Property Law Act 1974 (Qld) (PLA) for the alteration of the interests of the parties in property (the Property Order). One of those orders required CDK (“Mr K”) to pay to AMA (“Ms A”) the sum of $3.5 million by 1 June 2008 (the Payment Order). Mr K has failed to comply with this order. He now seeks to have the -- 2 of 25 -- 3 Payment Order varied under s 334 of the PLA, either by an extension of the time for compliance, or an alteration of the amount payable. Grounds of application [2] Section 334 of the PLA is in the following terms: “334 Variation and setting aside of orders (1) On the application of a person in relation to whom an order has been made under this part, a court may vary the order if satisfied— (a) there has been a miscarriage of justice because of fraud, duress, suppression of evidence, the giving of false evidence, failing to disclose matters as required by this part or another circumstance; or (b) because of circumstances that have arisen since the order was made, it is impracticable for the order or part of the order to be carried out; or (c) a person has defaulted in carrying out an obligation imposed on the person by the order and, because of circumstances that have arisen because of the default, it is just and equitable to vary the order; or (d) a child of the de facto partners (or the applicant if the applicant has the care of a child of the de facto partners) will suffer hardship if the court does not vary the order because of circumstances of an exceptional nature relating to the welfare of the child that have arisen since the order was made. (2) In this section— vary includes— (a) set aside; and (b) set aside and substitute another.” [3] The principal ground for relief advanced on behalf of Mr K draws on s 334(1)(b). It is contended that Mr K has made a number of attempts to raise funds to enable him to comply with the order, but these have been unsuccessful, partly or entirely because of the behaviour of Ms A in dealing with parties by whom funds were to be provided (the intermeddling allegations). Accordingly it is submitted that circumstances have arisen since that order was made, by reason of which it is impracticable for the relevant part of the order to be carried out, and thus relief might and should be granted under s 334. [4] The second ground advanced on behalf of Mr K is that the order, by implication, imposed on Ms A an obligation to co-operate in the taking of steps necessary to enable the order to be carried out, and the intermeddling allegations are relied upon -- 3 of 25 -- 4 as showing that she has defaulted in that obligation, so that it is just and equitable to vary the order. [5] The third ground, as finally advanced at the end of the case, is that there was a miscarriage of justice because, prior to the order, Ms A had transferred from the assets available to Mr K the sum of $72,553.60, which was not disclosed to Mr K and of which he was unaware, with the result that the making of the order was a miscarriage of justice. [6] At the end of the hearing, Counsel for Mr K abandoned any reliance on s 334(1)(d). [7] On 18 June 2009, I heard an application on behalf of Mr K to re-open his case, having been notified of this application some time previously. The application was refused. Background [8] Before embarking on a detailed consideration of the grounds, it is useful to set out some background matters. [9] Mr K is a property developer and grazier. It appears that he has engaged in those activities for a period of some 30 years. [10] The case has been conducted on the basis that assets to which Mr K might have resort for the purpose of complying with the original order include properties owned by S Holdings Pty Ltd as trustee for the S Holdings Trust; properties owned by Mr K as trustee for the C Trust; and Properties owned by S Investment Pty Ltd as trustee for the S Investment Trust (together, the Properties). Ownership of the Properties is the result of Mr K’s career as a grazier and property developer. It is unnecessary for the purpose of disposing of this application to identify specifically which of the Properties are held by which person or entity. [11] It is, however, useful to identify some of the Properties. The most significant property appears to be the K property, which, although it is a grazing property, Mr K considers to have considerable development potential. Another significant property is the Kl property, located in New South Wales. Yet another relevant property is the G property, where the parties lived for some time. A property located near the G property is the L property. [12] Ms A was previously married. There were three children of that marriage. [13] About the end of 2003, Ms A commenced to work for Mr K. Initially she was employed as Mr K’s personal assistant and driver, but she claims to have developed a considerable knowledge of his property and business affairs. -- 4 of 25 -- 5 [14] A relationship developed between Mr K and Ms A, resulting in them living together. For at least part of the period of the relationship, they lived at the G property. [15] It seems to be common ground that the de facto relationship ended on 26 August 2006. This followed an attempt by Ms A to transfer $400,000 from the account of a company associated with Mr K, Mr K being informed of this on that date. [16] At this time, Ms A was pregnant. Ms A gave birth to the child C on 16 December 2006. Mr K has at times paid support for C. There have been disputes about his having contact with her. [17] There appears generally to have been a high level of conflict between the parties since the de facto relationship ended. [18] Ms A instituted proceedings seeking orders under Part 19. The final hearing took place on 18 October 2007. At the hearing, Mr K was represented by Counsel, and by solicitors other than those who now represent him. The only issue contested at that hearing was whether the parties had reached agreement about the orders to be made in the proceedings. It was common ground that if agreement had been reached, it represented a just and equitable adjustment of the property and interests of the parties for the purposes of Part 19. 1 Mackenzie J determined that the parties had reached an agreement. The Property Order gives effect to that agreement. [19] The Property Order required that security be provided for the Payment Order, originally over the K property. [20] Ms A has made a number of attempts to enforce the Payment Order. Most recently, on 24 March 2009, after this application had been set down for hearing, she issued bankruptcy notices against Mr K. One was for the amount of the Payment Order. The other was for costs orders totalling $33,603.70. I was told, without objection, that Mr K’s application to have these notices set aside was unsuccessful. [21] It is convenient at this point to turn to the attempts by Mr K to raise funds to enable him to comply with the order. Mr K’s attempts to raise funds [22] The first matter advanced as an attempt by Mr K to raise funds in the written submissions presented on his behalf is what is referred to as a loan from EI. [23] It is one of a number of curious features in the presentation of the case for Mr K that Counsel for Mr K objected to reliance by Counsel for Ms A on an affidavit sworn 1 See the reasons for judgment of Mackenzie J of 26 October 2007 at [20]. -- 5 of 25 -- 6 by Ms A on 21 April 2009 on the grounds of lateness, but subsequently himself read that affidavit. Another curious feature of the presentation of Mr K’s case is that the only evidence identified in support of the contention that the loan from EI represented an attempt to comply with the order is a reference to Sheet 43 of the affidavit of Ms A. That sheet contains a single paragraph referring to EI. It is there stated that on 9 January 2008, Mr K granted equitable mortgages to EI. The obligation secured by the equitable mortgages is not identified. If that obligation was an obligation to repay moneys borrowed by Mr K, there is no evidence of the amount borrowed, or the purpose of the borrowing. I note that the affidavit sworn by Mr K on 30 March 2009, which does contain some discussion of attempts to raise moneys to comply with the Payment Order, makes no reference to the EI transaction. [24] I do not accept that any dealing with EI was an attempt by Mr K to raise moneys to enable him to comply with the Payment Order. [25] The next act said to demonstrate an attempt by Mr K to raise funds to enable him to comply with the Payment Order, is the entry into a contract of sale of the K property to A on 27 February 2008. Given the significance of this contract, it is somewhat surprising that no attempt was made by Mr K’s legal representative to place a copy of it in evidence. [26] The existence of the contract seems to be accepted on behalf of Ms A. Indeed, she deposes that on 16 April 2008, her solicitor received a “redacted” copy of the contract from Mr K’s former solicitors; and that a full copy of that contract was not produced to her until after an order of Byrne J made on 11 June 2008. [27] I accept that a contract was made with A for the sale of the K property. [28] Mr K said that the price which appeared in the contract was $34.6 million, but that there was a 20% rebate through a trust, and a requirement that he lease the property for 2 years, with the consequence that there would have been about $25 million made available as a result of settlement. He estimated the debts secured on the K property at that time to be about $16 million or $17 million. I accept that this contract was entered into to enable Mr K to get funds to carry out the Payment Order. [29] The contract was apparently initially due for settlement on 23 April 2008. Mr K said that the date for settlement was extended, but the contract was ultimately terminated. Ms A deposes that her solicitors received a copy of a letter from solicitors then representing Mr K’s interests dated 21 July 2008 terminating the contract, and I accept that the contract was terminated at about that time. [30] The next event identified in the written submissions on behalf of Mr K in relation to his attempts to obtain funds is described as the signing of CBA loans on 27 May 2008. The evidence relied upon in respect of this event is again the affidavit of Ms A. It records that, in August 2008, Ms A caused title searches to be carried out -- 6 of 25 -- 7 which showed that on 30 May 2008, Mr K had executed documents described as “the CBA mortgage”, and that a mortgage had been registered on 6 June 2008. It seems that this mortgage was over the L property. Ms A associates this transaction with a loan of $100,000; $60,000 of which she was informed had been paid to a company PC, and the remaining $40,000 was used as “survival” for Mr K. [31] No attempt has been made on Mr K’s behalf to present a coherent account of the dealings with PC, nor has any documentation relating to those dealings been put into evidence. In his oral evidence, Mr K made passing reference to a loan intended to be taken out for some $2.4 million or $2.5 million from PC, to be secured over the G property or another nearby property, which would have enabled a payment to Ms A of $80,000 described by Mr K in his oral evidence as payable “under the Court order”. This is a reference to an order of the Chief Justice of 23 September 2008 requiring such a payment by 16 October 2008. An attempt to obtain funds to comply with this order could not have been the explanation for the payment to PC of funds borrowed from the Commonwealth Bank about the end of May 2008. The submissions made on behalf of Mr K in any event do not identify any application to PC as relevant to attempts by Mr K to obtain funds to carry out his obligations under the Payment Order. [32] The evidence does not establish that dealings with the Commonwealth Bank in May 2008 were an attempt by Mr K to raise funds to comply with the Payment Order. [33] The next matter relied on in the written submissions made on behalf of Mr K as an attempt to obtain funds to comply with the Payment Order relates to an attempt to obtain finance through a broker. Again, the evidence relied upon in the written submission made on behalf of Mr K is the affidavit of Ms A. That affidavit records that she was told on 7 August 2008 by Senior Counsel and the solicitor then acting for Mr K that re-financing through C Finance was not proceeding. As a result of that, she called a representative of C Finance who told her otherwise, but in a series of subsequent conversations, the representative gave different versions of the arrangements. Mr K’s affidavit filed 9 April 2009 makes passing reference to this attempt to obtain finance. His oral evidence dealt briefly with this attempt, in the context of efforts made to raise funds to comply with the Payment Order. [34] A statement from the representative from C Finance was tendered and admitted as Exhibit 3 on the basis that the representative would be available for cross- examination. However, Counsel for Mr K subsequently informed the court that this witness would not be called to give evidence.2 From this I infer that no regard is to be paid to his statement. [35] I accept that an attempt was made through a broker to obtain finance. Mr K gave evidence that this led to an introduction to another broker, C Finance, who in turn identified another source of finance, EH, discussed below. The only sensible conclusion available on the evidence is that approaches were made through C Finance to obtain finance to enable Mr K to carry out the Payment Order, but that 2 Transcript p 247. -- 7 of 25 -- 8 these approaches were otherwise unsuccessful. Indeed, Mr K’s evidence was that approaches through C Finance “didn’t work out”. [36] The written submissions on behalf of Mr K make reference to a communication about an application made to the Commonwealth Bank of Australia. Again, the only reference to evidence is to a page of the affidavit of Ms A. That page deals, to a significant extent, with the advance made at about the end of May 2008. However, there is also reference to a communication on 21 August 2008 by Mr K to Ms A that he had received an offer of finance from the Commonwealth Bank. Ms A’s affidavit also refers to a draft letter prepared by Mr K’s solicitors. A copy of the draft letter is exhibited to an affidavit of Mr G J Wilson sworn 3 March 2009. That letter states that the Commonwealth Bank “has recently funded 60% of the value” of one property under Mr K’s control (the L property); and the bank had indicated that it would “quickly approve a loan of 60% of the value of (three other such Properties) namely $5.8 million”. Passing reference appears to have been made to these matters in the affidavit of Mr K sworn 30 March 2009, where he states that “(a)nother realistically strong source of finance was from the Commonwealth Bank”. [37] It must be said that this is a highly unusual way to attempt to establish attempts to obtain funds in a case like the present one. [38] I propose to proceed on the basis that there were some dealings with the Commonwealth Bank in about August 2008 for the purpose of obtaining funds, the total amount of which cannot be identified, but which, if advanced, may have enabled Mr K to pay a part or all of the amount to be paid under the Payment Order. While the evidence could at best be described as sparse, I am prepared to infer that no significant amount was advanced by the Commonwealth Bank; and certainly no amount sufficient to enable Mr K to carry out the Payment Order. [39] On 19 September 2008, S Holdings as Trustee for the S Holdings Trust entered into a contract with EH to borrow €17 million. [40] A copy of the contract for the loan from EH is exhibited to an affidavit of Mr Loel sworn on 28 October 2008. It was a pre-condition of the loan that the borrower provide insurance in respect of the funds to be advanced. The amount required for the insurance apparently exceeded $1 million. This sum also had to be borrowed, as Mr K could not otherwise provide it. [41] On 16 October 2008, Mr K’s solicitors wrote to Ms A’s solicitors stating that the amount payable for the insurance had been paid and enclosing, as evidence of payment, a bank statement from St George Bank dated 8 October 2008, recording a payment of $800,000 on that date. 3 3 Although the letter is exhibited to the affidavit of Mr Loel sworn on 28 October 2008, the bank statement is not included in the material. -- 8 of 25 -- 9 [42] A subsequent letter dated 20 October 20084 stated by way of clarification that the sum of $800,000 had been credited to the account of CL, the proposed lender of the money required for the insurance, with the St George Bank. A letter from Mr K’s solicitors to Ms A’s solicitors of 23 October 2008 stated that the sum of $800,000 was to remain in the lender’s account with St George Bank, until the EH loan proceeded. [43] However, it seems that half of those moneys were paid to a representative of EH. They seem to have been paid, not as a payment of the premium for the proposed insurance, but as a fee in relation to the loan. [44] For some months, Mr K pursued this loan. 5 He continued to do so until about the end of March 2009. The principal reason given for the transaction not proceeding was that it was not possible to get insurance for the loan. Some attempt has been made to recover the $400,000 paid to the representative of EH, and there is evidence that an investigation is being conducted into the activities of this representative by the New South Wales Fraud Squad. [45] Towards the end of February 2009, a further application was made for funding to another potential lender. Because of concerns expressed by Mr K’s legal representatives about previous contact by Ms A with potential lenders, I directed that she remain out of court when evidence was taken on this topic, and that the evidence be kept confidential. It is however clear that one of the purposes identified in the application was to obtain funds to enable Mr K to comply with the Payment Order. The outcome of that application is as yet unknown, though a “pre-approval” has been issued. [46] In addition, Mr K gave evidence, which I accept, that in the past he has usually borrowed money from what he described as “traditional” lenders; but because of his current personal circumstances and current difficulties in the economy generally, he has tried to obtain finance from other sources. [47] There are some further matters which it is necessary to consider as background to the current application. The first of these relates to valuations of Properties which formed part of the pool of assets at the time of the Property Order, and which are relied upon as a source of funds to enable Mr K to comply with the Payment Order. Properties and valuations [48] In an affidavit sworn on 27 April 2007, Mr K identified relevant property as: realty (including interests in two developments through a joint venture), cattle and horses, plant and machinery, and shares. The realty included the following: (a) The K property; 4 To Corrs Chambers Westgarth, who represented both the ER Bank, and receivers appointed by them, to Ms A’s solicitors under cover of letter of 22 October 2008, all of which correspondence is exhibited to the affidavit of Mr Loel sworn 28 October 2008. 5 See Exhibit 5. -- 9 of 25 -- 10 (b) Properties in New South Wales (including the Kl property); (c) The G property; (d) The joint venture properties; (e) Three properties purchased during the relationship; (f) Two properties acquired after separation; and (g) One property which S Holdings had contracted to acquire. [49] The most significant property was the K property. In an affidavit sworn on 14 March 2007, 6 Mr K deposed to this property having been valued by the SB Group at $19,000,000. It seems that the date of valuation was 2 May 2006.7 In Ms A’s affidavit, she deposed that Mr K’s then solicitors had, in September 2007, given a value for the K property of $20,000,000 as at 23 May 2007. On 15 February 2008, the K property was valued by Tony Sergiacomi & Associates Pty Ltd at $34,600,000. [50] Ms A also deposes that in February 2006, Heron Todd White commenced to prepare a valuation of the K property which was not completed, but indicated a value “as is” of $6,050,000. In about September 2008, she was advised by Herron Todd White, who were again valuing the K property, that it was expected that the valuation would be approximately $6,000,000. [51] In an undated document, apparently provided in early 2007, Ms A accepted Mr K’s valuation of the Kl property at $13,735,000. 8 [52] By a letter dated 11 September 2007, the solicitors then acting for Mr K asserted a value of the Kl property, updated as at 23 May 2007, to be $17,275,000.9 There is no more recent evidence of the current value of the Kl property. [53] There was some evidence of valuations in the past of some of the other Properties. I do not propose to set out the details. I note, however, that the loan contract for the EH loan refers to a total value of the land holding of $45,000,000 apparently based upon material lodged as part of the application. I shall later refer to evidence of sales of some of these properties and a tender for one of them, involving amounts substantially below their valuations. Mr K’s financial position [54] Another matter of relevance for the determination of this application is the financial position of Mr K and his associated companies. [55] In March 2007, Mr K swore that the group debt was $15.3 million, of which almost $15 million was borrowed from the ER Bank. At that time, he was intending to 6 CFI 24. 7 CFI 113, Ex CDK-2. 8 See Exhibit CDK-5 to the affidavit of Mr K sworn 28 October 2008. 9 See the affidavit of Ms A at para 30(c). -- 10 of 25 -- 11 borrow a further $2.82 million to purchase another three Properties. Those purchases have been completed. [56] On 17 October 2008, ER Bank issued a notice of exercise of power of sale to S Holdings. The notice stated that the debt owed was $16,588,874.92. There were other debts owed by Mr K and/or the companies with which he was associated at this time. On 23 October 2008, Mr K’s solicitors wrote to Ms A’s solicitors stating the indebtedness of Mr K and his associated companies to the ER Bank was approximately $17 million; to PC, approximately $2.3 million; to other mortgagees, approximately $1 million; and to CL, $800,000 plus interest and fees. This indebtedness was in addition to the amount payable to Ms A under the Payment Order. [57] Ms A’s solicitor swore on 3 March 2009 that on 21 August 2008, Mr K had provided a statement of financial position which showed the total indebtedness of Mr K and his associated companies at approximately $23 million. [58] Mr S, a finance broker, gave oral evidence to the effect that, when making the application for the EH Loan, the group indebtedness was of the order of $24 million to $25 million. [59] No evidence has been adduced by those representing Mr K of the current total indebtedness of Mr K and the companies associated with him. [60] In an affidavit sworn 2 March 2009, pursuant to an order of Douglas J of 16 February 2009, Mr K purported to set out his financial position. The document identified that he owed an unquantified debt to the C Discretionary Trust and that there was a “cross-collateralised” debt owed by it in an unstated amount. The document did not identify the group debt, or Mr K’s potential liability for it as a guarantor. [61] Although the evidence is limited, I am satisfied that the amount owing by Mr K and his associated group of companies has not been substantially reduced below the figure of approximately $23,000,000 owing in the latter part of 2008. In saying that, I am conscious that there have been sales of two of the Properties at prices (significantly below valuation) totalling a little over $1.6 million; and that the cattle owned by Mr K and his associated companies have been sold over the last 12 months for about $1,000,000. However, I have not been able to identify specifically the amount currently owed by Mr K and his associated group of companies. Effect of Conduct of Ms A [62] Counsel for Mr K relies on a number of matters attributed to Ms A, some of which are said to have occurred prior to the Property Order, in support of his submission that the failure of Mr K to comply with the Payment Order is due to conduct of Ms A, which has affected the obtaining of funds. -- 11 of 25 -- 12 [63] The first such matter is a communication from Ms A to the ER Bank, on about 22 January 2007. The ER Bank was a major provider of funds to Mr K and his associated entities. In March 2007, the level of indebtedness to the ER Bank was some $15 million. 10 [64] In her e-mail to the ER Bank, Ms A described herself as the ex-de facto partner and ex-business partner of Mr K. She had lodged caveats over his properties, on the basis of her claim under Part 19 of the PLA. She stated that although the SB Group had valued the K property at $19,000,000, she had obtained a valuation from Heron Todd White of the same property at $6,000,000. She stated that a proportion of income relied on in a cash flow projection provided to the ER Bank had not eventuated and would not eventuate. She also stated that Mr K and his companies were currently being investigated by the Department of Natural Resources in New South Wales for land-clearing activities, and there might be an obligation to carry out restoration work. The value of the New South Wales properties would be dramatically affected if they could not be retained in their current improved condition. In an attached e-mail, she also said that she had no intention of removing the caveats she had lodged over the Queensland properties owned by Mr K and his associated entities. [65] The e-mails plainly had considerable potential to damage the relationship between Mr K and his principal financier. One of the stated purposes of these communications was to discourage the ER Bank from advancing further funds to Mr K and his associated entities to enable the completion of the purchase of other properties. Another apparent purpose of the e-mail was to communicate Ms A’s reason for refusing to remove caveats she had lodged over a number of the Properties. It is clear that the communications were designed to damage the relationship between Mr K and the ER Bank. They also demonstrate an awareness of the impact of any complaint to the New South Wales Department of Natural Resources about the condition of the New South Wales properties. [66] However, this conduct occurred well before the Payment Order was made. There is no evidence of any attempt to obtain funds from the ER Bank at a later point in time, to enable Mr K to carry out the Payment Order. Nor is there evidence from any person associated with the ER Bank, to demonstrate that Ms A’s conduct had any effect on any relevant decision of the ER Bank. [67] I do not accept that the e-mails from Ms A to the ER Bank in January 2007 had any adverse effect on any attempt by Mr K to obtain funds to enable him to carry out the Payment Order. [68] The submissions made on behalf of Mr K also rely on the complaint to the New South Wales Department of Natural Resources about the land-clearing activities, the complaint being attributed to Ms A. No references to relevant evidence were provided. However, it is apparent from what has been set out above that this 10 See Mr K’s affidavit sworn 14 March 2007, para 32. -- 12 of 25 -- 13 complaint was made prior to January 2007, and obviously well before any attempt to raise funds to comply with the Payment Order. [69] I do not accept that any complaint to the Department of Natural Resources in New South Wales relating to the land-clearing activities has had any affect on Mr K’s ability to carry out the Payment Order. [70] Another matter relied upon in the submissions made on behalf of Mr K as establishing that the failure by Mr K to comply with the Payment Order is the result of conduct by Ms A, is a complaint made to the local authority about unlawful building work having been conducted on the G property. The documents tendered in relation to this matter 11 record that Ms A made the complaint on 30 April 2007. [71] On 10 May 2007, the Local Government wrote to S Holdings pointing out the need to get approval for the work. There is no evidence to show whether an approval was sought or granted. No evidence was led to demonstrate that the complaint had any effect on any attempt by Mr K to raise funds to carry out the Payment Order. [72] I am not satisfied that the complaint made by Ms A to the Local Government about the absence of approval for building work on the G property has had any effect on Mr K’s attempts to carry out the Payment Order. [73] Ms C was a friend of Ms A until about mid-April of 2008. She gave evidence of having heard Ms A speak on the telephone to persons who generally were unidentified. In the course of these telephone conversations, Ms A made statements to the effect that Mr K had no money and was bankrupt and that the person to whom she was speaking should not lend money to Mr K because he was not in a position to repay it. On one occasion, Ms A identified the entity to whose representative she was speaking as the ER Bank. On a number of these occasions, Ms A did not use her own name. There were also occasions, including 31 July 2008, when Ms A expressed an intention to bankrupt Mr K. In cross-examination, Ms C acknowledged that the statements about bankrupting Ms K were made in the context of the expression by Ms A of concerns that Mr K might not be able to comply with the Payment Order. Otherwise, the evidence of Ms C was not challenged, and I accept that it is reasonably accurate. [74] Although this evidence was led on behalf of Mr K, as mentioned above, no attempt was made to prove that an application had been made to the ER Bank for funds to enable Mr K to carry out the Payment Order. Nor was anyone called from the ER Bank to demonstrate that the conduct by Ms A had any effect on any decision of the ER Bank which might affect the capacity of Mr K to carry out the Payment Order. Nor was evidence called from any other potential lender to Mr K about the effect of any telephone conversation with Ms A upon any decision about lending money to Mr K or any of the companies associated with him. 11 Exhibit 7. -- 13 of 25 -- 14 [75] I do not accept that the conversations of which Ms C gave evidence had any adverse effect on any attempt by Mr K to obtain funds to carry out the Payment Order. [76] The contract for the sale of the K property entered into on 27 February 2008 was due for settlement on 23 April 2008. The time for settlement was extended. Pursuant to the Property Order, Ms A had a mortgage over this property to secure the amount the subject of the Payment Order. Ms A caused her solicitors to write on 30 April 2008 to the solicitors then acting for Mr K, stating that Ms A was concerned that the contract was a sham, or that it would have the effect of defeating either wholly or partially her entitlement under the Property Order, but also stating that she would provide a release of her mortgage over the K property in exchange for payment of $3.5 million. There is no evidence of a similar communication to the purchaser, A. On 18 June 2008, Ms A’s solicitors wrote to the solicitors for the purchaser, to note her interest in the transaction. In July 2008, Ms A’s solicitors spoke with the solicitors for A. Reference was made to a valuation of the K property.12 Ms A’s solicitors wrote to the solicitors for A on 10 July 2008, but the contents of that letter are not in evidence. On 11 July 2008, a copy of an Originating Application and an affidavit of Ms A sworn on 8 July 2008 were sent by Ms A’s solicitors to A’s solicitors. Neither document has been identified. Nor is there any evidence of the effect of these communications on A’s attitude to completing its contract to purchase the K property. [77] In view of the history of the contract with A (which was terminated by solicitors then representing Mr K’s interests on 21 July 2008), and the absence of any better evidence of the communications between Ms A’s representatives and A, I do not accept that Ms A’s conduct had any material effect on A’s failure to proceed with the purchase of the K property. [78] Another matter relied upon in this context is a conversation between Ms A and Mr S, who is Mr K’s accountant, on 4 July 2008. 13 In that conversation, Ms A apparently said that she was intending to sell the K property, and that if the funds were not sufficient to satisfy the Payment Order, she would bankrupt Mr K as soon as possible. She also identified other actions she could take to cause damage to Mr K. [79] This evidence demonstrates a level of hostility on the part of Ms A towards Mr K; but again, there is no evidence that this conduct had any affect on any attempt by Mr K to obtain funds to carry out the Payment Order. I am not prepared to find it had any such effect. [80] The next matter is the lodging of caveats over some of the Properties in August 2008, and over others in September 2008. It is, however, necessary to refer to some earlier events. 12 See the affidavit of Ms A at para 55. 13 See Exhibit 9. -- 14 of 25 -- 15 [81] When the relationship between Mr K and Ms A came to an end, Ms A lodged caveats over a number of the Properties. That led to an application by Mr K for an order for the removal of the caveats.14 [82] On 19 March 2007, Byrne J ordered the removal of four caveats from the Land Titles Register. Mr K gave certain undertakings, and Ms A gave other undertakings, including undertakings to withdraw a number of caveats, and not to lodge any caveat over any of the Properties. The lodging of further caveats in August and September of 2008 is said to be in breach of these undertakings. [83] The matter came before the Chief Justice on 23 September 2008. The Chief Justice ordered the removal of three caveats lodged by Ms A on 15 August 2008, and that Ms A be restrained from lodging caveats over any of the Properties until 14 November 2008, or (relevantly) default in compliance with a number of the orders made that day. Those orders included an order restraining the doing of any act with a view to selling or further encumbering any of the Properties, without first giving Ms A’s solicitors 14 days notice; paying the sum of $80,000 by 16 October 2008; and providing full and frank disclosure of all transactions undertaken by Mr K and his associated companies in respect of the Properties, including the provision of a weekly report. The sum of $80,000 has not been paid to Ms A, and there have been substantial disputes about whether or not Mr K has otherwise complied with these orders. [84] Further caveats were lodged in October 2008.15 [85] Obviously, the lodging of caveats by Ms A in August and September 2008, at least prior to 23 September, could not be justified by alleged breaches of the orders made by the Chief Justice. However, to decide the present application, I do not find it necessary to determine the extent to which Ms A breached her undertaking given on 19 March 2007, or the order of the Chief Justice. [86] Again, no evidence has been led to demonstrate that the lodging of these caveats has had any affect on any attempt by Mr K to obtain funds with a view to complying with the Payment Order. [87] I do not accept that the lodging of caveats by Ms A over the Properties in August, September and October of 2008 has had any adverse effect on any attempt by Mr K to obtain funds to enable him to carry out the Payment Order. [88] The submissions made on behalf of Mr K rely upon conversations between Ms A and representatives of the ER Bank which took place in September of 2008. Again, the only evidence relied upon is that found in the affidavit of Ms A.16 In the course of these conversations, Ms A stated that she was obtaining a further valuation of the K property from Herron Todd White. She also stated that she would appreciate the 14 See the affidavit of Mr K sworn 14 March 2007, para 2. 15 See pp 94-95 of Exhibit JBL-3 to the affidavit of Mr Loel sworn 28 October 2008. 16 Paras 122 ff. -- 15 of 25 -- 16 ER Bank doing whatever could be done to carry out the Payment Order. There is no evidence that at this time (or subsequently) Mr K was attempting to obtain funds from the ER Bank with a view to carrying out the Payment Order. [89] I do not accept that the conversations between Ms A and representatives of the ER Bank in September 2008 had any adverse effect on any attempt by Mr K to carry out the Payment Order. [90] Another matter relied upon is described in the submission on behalf of Mr K as Ms A’s interference with Mr B as agent of the receivers in respect of the G property. It is said to be evidenced by her complaint to police of trespass, and by her assertion of illusory rights. [91] It seems that Mr B was engaged by the receivers and managers of the G property on 11 February 2009, and took possession of that property by having locks changed. Shortly afterwards, Ms A contacted Mr B and told him she had driven over the gate with her vehicle to gain access to the property. She subsequently made a complaint to the police about the change in the locks. Documents tendered in relation to this matter 17 indicate an early reluctance by Ms A to provide keys to the receivers and managers, or otherwise to make possession of the property available to them. [92] Again, there is no evidence that the conduct attributed to Ms A has had any effect on any attempt by Mr K to obtain funds to carry out the Payment Order. I do not accept that any conflict between Ms A and Mr B in relation to possession of the G property has had any adverse effect on Mr K’s ability to carry out the Payment Order. [93] In the submissions on behalf of Mr K, reliance is also placed on contact with a representative of the Commonwealth Bank in September 2008. Again, the only evidence relied upon is evidence from Ms A about that contact. The evidence discloses that Ms A was told the amount of one loan ($1.3 million); and that an application had been made for another loan of $1 million; and that she had inquired whether an application had been made to enable the sum of $3.5 million to be paid to her in accordance with the Payment Order. She also asked whether the Commonwealth Bank was considering advancing moneys on security of the K property. [94] The timing of this communication suggests some relationship with dealings with the bank in August of 2008; but the amounts referred to are not identical. [95] Again, there was no evidence from a representative of the Commonwealth Bank, or from anyone else, that the conversations between Ms A and the representative of the Commonwealth Bank had any effect on any attempt by Mr K to carry out the Payment Order. There is no evidence of an application to the Commonwealth Bank for funds to enable Mr K to do so. 17 Exhibit 7. -- 16 of 25 -- 17 [96] I am not satisfied that Ms A’s conversation with representatives of the Commonwealth Bank in September 2008 has had any adverse effect on Mr K’s ability to carry out the Payment Order. [97] The submissions made on behalf of Mr K also assert that Ms A’s conduct as mortgagee of the K property has contributed to the inability of Mr K to perform the Payment Order. The material identified in the submission is contained in correspondence from Mr K’s solicitors, complaining of the fact that Ms A had advertised the K property for sale at a time when there was an order precluding her from selling the property. The submission also refers generally to the role of Ms A in the appointment of a receiver to the K property. [98] The orders made by the Chief Justice on 23 September 2008 included an order (subject to there being no default on the part of Mr K) that Ms A postpone the auction of the K property which had been scheduled for 3 October 2008 to a date not before 14 November 2008. On 27 September 2008, an advertisement appeared in a newspaper to the effect that the auction had been postponed to 16 October 2008. On 29 September 2008, Mr K’s solicitor wrote to Ms A’s solicitor, protesting about the advertisement. On 30 September 2008, Ms A’s solicitor replied, saying that there had been a mistake made by the newspaper. There been no evidence to show that the advertisement of 27 September has had any effect on any attempt by Mr K to raise funds to enable him to carry out the Payment Order. Nor does it seem to me to be likely that the advertisement would have any effect on any attempt by Mr K to raise funds. [99] On 2 October 2008, the ER Bank appointed receivers and managers to a number of the Properties, including the K property. In each case, the deed referred to the indebtedness secured by the mortgages over these Properties, but did not identify the events which led to the appointment. 18 [100] A notice of exercise of power of sale was issued by the ER Bank on 17 October 2008.19 However, it does not relate to the K property (the properties to which it relates are identified at pages 7-8 and 17-18 of the order of the Chief Justice made on 23 September). The notice relies on the failure to repay an amount approaching $16.6 million as a result of the demand of 1 October 2008; the making of the Payment Order; and the attempt by Ms A to enforce her security interest over the K property. No evidence was called from any representative of the ER Bank as to the relative significance of each of these events in the decision by the ER Bank to take action under the mortgages over these Properties. [101] The evidence does not disclose whether the K property, or the other properties in respect of which receivers and managers have been appointed, have been sold. [102] There is some evidence to suggest that Ms K’s actions in enforcing her mortgage over the K property has played some role in the decision of the ER Bank to act on 18 See Exhibit CDK-3 to the affidavit of Mr K sworn on 28 October 2008. 19 See p 112 of Exhibit JBL-3 to the affidavit of Mr Loel sworn 28 October 2008. -- 17 of 25 -- 18 its securities. Ultimately, she was entitled to enforce her security over the K property pursuant to the Property Order. The evidence, however, does not show that her actions in enforcing this security played a significant role in the decision of the ER Bank to appoint receivers and managers of the Properties. Nor does it show that Mr K has, by reason of the appointment of the receivers and managers, been unable to carry out the Payment Order. While the appointment of receivers and managers may have inhibited his ability to deal with some of the Properties, not all of the Properties have been the subject of these appointments. [103] I am not satisfied that any action taken by Ms A to enforce her security over the K property has had any effect on the ability of Mr K to carry out the Payment Order. In any event, it was plainly the intention of the Property Order that Ms A would be permitted to take such action. [104] There is also some suggestion that the conduct of Ms A as mortgagee “denigrated” the K property. This appears to be a reference to the fact that she placed the sale of the K property in the hands of real estate agents who treated it as a rural property, and not as a property with considerable development potential. There has, however, been no evidence to show what the consequences of her conduct were in this regard. [105] There are some other matters raised in the submissions made on behalf of Mr K, namely the misappropriation by Ms A of “company funds” (in August 2006); damaging the residence on the G property; and claiming false status as a “partner”, and then denigrating the business activities of Mr K and his associated companies. There is no evidence showing that any of these matters has had any effect on the attempts by Mr K to raise funds to enable him to carry out the Payment Orders, and I do not find that it has. [106] There are also disputes about a matter referred to as SI. Mr K had some years ago paid $20,000 described as a “punt”; and there was some hope that this might result in the payment to him in the near future of many millions of dollars. However, to obtain the money, he needed a password said to have been retained by Ms A. That claim was disputed on behalf of Ms A. This matter can only be described at best as highly speculative. It is difficult to place serious reliance on this matter as a means by which Mr K might carry out the Payment Order. [107] Finally in this context, I should refer to a submission made on behalf of Mr K that there is “circumstantial evidence” from which it can be inferred that Ms A’s conduct is the cause of Mr K’s failure to date to carry out the Payment Order. In essence, this amounts to a submission that, from the totality of Ms A’s conduct, it can be inferred that it has had unspecified influence on some unidentified person which has had an adverse effect on Mr K’s attempts to obtain funds to enable him to carry out the Payment Order. It is apparent that those representing Mr K have chosen not to call any person representing any entity from which Mr K has attempted to obtain funds to give evidence about whether any conduct of Ms A influenced any decision by that entity. No sensible explanation has been advanced for that choice. -- 18 of 25 -- 19 [108] In reality, I am asked to make a “guess” (and not necessarily the most likely guess) from such evidence as has been put forward that there is some conduct of Ms A in relation to one or more entities from which Mr K has attempted to obtain funds, and that her conduct had an adverse effect on Mr K’s attempts to raise funds. I am not prepared to do so. That does not appear to me to be the correct approach to drawing inferences about causation from proven facts: see Jones v Dunkel; 20 Jackson v Lithgow City Council. 21 [109] If I accepted that conduct of Ms A had had some effect on attempts by Mr K to obtain funds to carry out the Payment Order, it would still be necessary for Mr K to demonstrate that one of the grounds in s 334 of the PLA had been established. Impracticability: test considered [110] Section 334 of the PLA gives the court the power to vary an order made under Part 19 if it is satisfied that: “(b) because of circumstances that have arisen since the order was made, it is impracticable for the order or part of the order to be carried out.” [111] To some extent, an understanding of this ground is assisted by the legislative context. For example, it is to be contrasted with the ground set out in paragraph (d), which relates to a child of the de facto partners suffering hardship if an order is not varied. Hardship alone will not satisfy paragraph (b); it must be impracticable for the order to be carried out. Moreover, it is notable that the other grounds set out in s 334(1) are not particularly broad. Thus, the ground in paragraph (a) depends upon the occurrence of a miscarriage of justice. The ground in paragraph (d), relating to the prospect of hardship for a child of de facto partners, is qualified: the hardship must arise because of circumstances of an exceptional nature relating to the welfare of a child, that have arisen since the order was made. The ground set out in paragraph (c), though somewhat different in character, is also limited: its operation depends upon there having been default by one party in carrying out that party’s obligations under an order, as a result of which it is just and equitable to vary the order. [112] Section 334(1) is similar to s 79A of the Family Law Act 1975 (Cth) (FLA). Not surprisingly, s 79A(1)(b) of the FLA, the equivalent to s 334(1)(b) of the PLA, has been considered by the Family Court of Australia. In Rohde and Rohde,22 it was recognised that the expression “impracticable” in s 79A(1)(b) was something different from impossible. 20 (1959) 101 CLR 298, 305. 21 [2008] NSWCA 312 at [9]-[13]. 22 (1984) FLC 91-592 para 51-592, at 79, 768. -- 19 of 25 -- 20 [113] Mr Baston of Counsel who appeared for Ms A has helpfully referred me to a number of cases dealing with s 79A of the FLA, including La Rocca and La Rocca. 23 Kay J there set out the history leading to the introduction of s 79A. His Honour noted that the report of the Joint Select Committee of the FLA explained that the difference in the legislative treatment relating to property orders and maintenance orders was due to strong policy considerations for not re-opening property orders after the time for appeal has elapsed. However, the Committee recommended that there be a wide discretion given to the Family Court to set aside property orders made under the FLA, to be exercised only if the court was satisfied that hardship would be caused to a party to the marriage, or to a child of the marriage. Parliament did not adopt that course in full; it adopted a ground based on hardship, related to a child of a marriage; and introduced a different ground, based on impracticability, rather than hardship to a party to a marriage. [114] His Honour then, in applying the test set out in s 79A(1)(b), turned to the law relating to the frustration of contracts. The appropriateness of this approach is not immediately apparent. This area of the law is concerned with how the courts have resolved the question as to the continued existence of obligations freely undertaken by parties by entering into a binding contractual relationship, if the circumstances change significantly; whereas s 79A(1)(b) is a statutory conferral of power in stated circumstances to vary a discretionary order by which the court imposes a solution to property disputes consequential on a breakdown in a familial relationship between the parties. Accrued liabilities survive the frustrating event, 24 whereas s 79A of the FLA gives the court the power to vary the obligation which may be said to have created an accrued liability. [115] The statement of the doctrine of frustration relied upon by his Honour does not seem to reflect the current state of the law. Thus, modern authority does not treat the implication of a term as a basis for the doctrine. 25 Further, the view currently appears to be that the foreseeability of an event does not necessarily have the consequence that the contract is not frustrated on the occurrence of that event.26 [116] By analogy with the law relating to the frustration of contracts, his Honour went on to express the view that the ground set out in s 79A(1)(b) can only be made out where circumstances have arisen “that could not reasonably have been contemplated”. His Honour’s application of that test excluded changes in property values and the failure of a business, which his Honour considered to be a consequence of “the vicissitudes of life”. It is clear that his Honour’s comments related to whether the condition stated in s 79A(1)(b) had been established, for his Honour considered separately whether, if he was wrong, the discretion should be exercised. 23 (1991) 14 Fam LR 715. 24 See Seddon and Ellinghaus, Cheshire and Fifoot’s Law of Contract (9 th ed) pp 976-977; Carter. Peden and Tolhurst, Contract Law in Australia (5 th ed) p 785. 25 See Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 357, 367, 380, cited in Cheshire and Fifoot p 965 note 51; together with other cases there cited. 26 Cheshire and Fyfoot at para 19.12, particularly at note 48. -- 20 of 25 -- 21 [117] His Honour’s approach was considered by the Full Court of the Family Court in Cawthorn v Cawthorn.27 In Cawthorn, Counsel for the appellant elected not to argue that La Rocca was wrongly decided. Nevertheless, the Full Court of the Family Court expressed agreement with the approach adopted by Kay J on the basis that the dichotomy between maintenance orders which are variable under other provisions of the FLA, and orders for settlement of property, must be preserved. Their Honours did not accept that a downturn in the business of the party, nor the fact that that party’s financial position had worsened as a result of embezzlement by a professional partner of one party, could come within the ground. Such matters were regarded as being amongst “the vicissitudes of commercial life”, and accordingly, were foreseeable by the party. However the court also pointed out that reliance on the doctrine of frustration would not always be of assistance, and the task was to interpret and administer the legislative provision in each case. [118] In Paskandy,28 the Full Court of the Family Court cited with approval the passage from the judgment of Kay J in La Rocca to the effect that the commercial failure of one of the parties after the making of a property order did not amount to a basis on which to set the order aside. However, the court pointed out factual findings determining the issue of impracticability adversely to the party seeking to have the order varied. [119] I am very conscious of the desirability of consistent interpretation of statutory provisions which are in substance the same. 29 It seems clear to me that in Cawthorn, the Full Court of the Family Court was at pains to point out that its endorsement of the approach taken in La Rocca did not amount to a determination about the correct interpretation of the statutory provision. It seems to me that the Full Court of the Family Court has not determined, as a matter of law, that the proper construction of s 79A(1)(b) means that a business failure or the reduction in value of assets subsequent to the making of an order for property settlement cannot result in impracticability which would permit a variation of the order. Nor do I think that that Court has determined, as a matter of law consequent on the proper construction of s 79A, that an event which was foreseeable cannot give rise to impracticability that would satisfy the test in s 79A(1)(b). Moreover, I think that there are difficulties with the approach taken in La Rocca. In particular, to take a very broad view of what is foreseeable and then excluded anything which is foreseeable from the scope of the provision may in effect deprive the provision of any operation. I think the correct approach, for which there is support in Cawthorn, is simply to apply the language of the provision. [120] In my view, s 334(1)(b) calls for three steps. The first is to determine whether it is impracticable for the order, or part of the order, to be carried out. The second is to determine whether that is a consequence of circumstances that have arisen since the order was made. The third, which arises if the condition set out in s 334(1)(b) is 27 (1998) 23 Fam LR 86. 28 (2005) 33 Fam LR 509. 29 See Australian Securities Commission v Marlborough Gold Mine (1993) 177 CLR 485, 492; see also Body Corporate Strata Plan N04303 v Albion Insurance Co Pty Ltd [1982] VR 699, 705; both cases being cited in MacAdam and Pyke, Judicial Reasoning and the Doctrine of Precedent In Australia, at [7.15] and [7.4] respectively. -- 21 of 25 -- 22 satisfied, is whether to exercise the discretion to vary the original order. The first step calls for the application of an ordinary English word, “impracticable”. It does not seem to me to give rise to questions of construction of the legislative provision; rather the result will depend on matters of fact. Likewise, it seems to me that the second step will depend on the resolution of factual issues to be determined by reference to a simple expression, not on the construction of the legislative provision. Impracticability: disposition [121] The Payment Order required the payment to Ms A of the sum of $3,500,000 by 1 June 2008. There is no suggestion that, at any time between the making of the order and that date, that Mr K had funds available to him to make that payment. Nor has there been any serious suggestion that funds would become available, except as a result of a sale of assets, or possibly through borrowing. Indeed, the fact that payment was to be secured over the K property rather suggests that sale of it was the contemplated mechanism. [122] In view of the history of the A contract to which I have referred, I am satisfied that it became impracticable for Mr K to carry out the payment order by 1 June 2008. I am satisfied that this is the result of circumstances that have arisen since the Payment Order was made, namely, the failure on the part of the party who had entered into the contract to purchase the K property, to complete that contract. [123] I am therefore satisfied that it was impracticable for Mr K to make the payment to Ms A by 1 June 2008, because of circumstances which have arisen since the making of the Payment Order. [124] The obligation to carry out the Payment Order has, however, continued after 1 June 2008. I am satisfied that Mr K has made a number of attempts to raise funds, which have been unsuccessful. Indeed, Mr K has (or companies associated with him have) incurred significant liabilities in attempts to do so. Those attempts have, to date, not been successful. There has been no evidence to suggest that there is a substantial prospect that, had Mr K taken some other action, it is likely that he could by now have borrowed sufficient funds to enable payment to be made. [125] That is not particularly surprising. It is notorious that the Australian economy has in recent times experienced a major reversal; and that financial institutions are significantly more reluctant to advance funds now than they were in 2007. Some evidence of that appears in the affidavit material relied on by Mr K.30 [126] In those circumstances, I propose to vary the date by which money is to be paid to Ms A. [127] Mr K also seeks a variation of the amount payable. 30 See for example the affidavit of Clinton Sarina filed 27 January 2009 at para 4; affidavit of James Beresford Loel filed 23 October 2008, at paras 12 and 18. -- 22 of 25 -- 23 [128] There is a distinct lack of evidence advanced on behalf of Mr K in support of such a variation. I have previously referred to the limited valuation evidence which has been available to me. I am conscious that its utility in establishing Mr K’s financial position is somewhat doubtful. [129] In that regard I note the evidence 31 that one of the Properties owned by Mr K or an associated company, which had been purchased for $1,700,000 and valued at $3,000,000, had recently been sold for $1,111,000; that another such property which had been purchased for $900,000 and valued at $1,500,000 had recently sold for $530,000; and that the highest tender made as a consequence of a recent tender campaign for the K property had been in an amount of $2,900,000. [130] Nevertheless, no effort has been made to establish the extent of the resources currently available to Mr K. I note that in the EH loan contract, apparently signed by Mr K, the value of land holding available to Mr K and his associated companies was said to be approximately $45 million. [131] I note that no attempt has been made by those representing Mr K to lead evidence about difficulties selling sufficient of the assets available to Mr K to enable the Payment Order to be carried out. [132] The evidence does not establish that it would be impossible, or particularly difficult, for Mr K to sell sufficient assets to enable the Payment Order to be carried out. [133] On the evidence available to me, it seems likely that the level of the indebtedness of Mr K and the companies associated with him is at least $23 million, but it has not been established that the debt is significantly greater. [134] There is evidence of substantial efforts to borrow money to enable Mr K to carry out the Payment Order. That has involved attempts to borrow money from what might be described as “unusual” sources. However, the most recent application has not yet, on the evidence, proven unsuccessful. It would be difficult to conclude that it will continue to be impracticable to carry out the Payment Order because it is not possible to borrow sufficient money to enable this to occur. [135] Mr K’s solicitor has deposed that, if the Payment Order is enforced, Mr K will be made bankrupt. I have already made mention of the bankruptcy proceedings against him. The solicitor’s affidavit and the reference to the bankruptcy proceedings are no substitute for proper proof that it is impracticable for Mr K to carry out the Payment Order, and proof of the facts which have brought about that result. [136] In those circumstances, I would not be prepared to find that it is now impracticable for Mr K to pay the amount specified in the Payment Order. Nor, on the assumption that I am in a position to exercise the discretion afresh, would I be prepared to vary 31 See the affidavit of James Beresford Loel filed 7 April 2009 at para 16. -- 23 of 25 -- 24 the amount which the parties agreed upon in 2007, on the evidence which has been put before me. Alleged breach of implied obligation [137] The second ground relied upon on behalf of Mr K is said to arise from an implied obligation on the part of Ms A to do things necessary to enable Mr K to carry out the order. However, the evidence seems to have been directed at demonstrating that Ms A’s conduct prejudiced Mr K’s attempts to carry out the Payment Order, rather than identifying steps which she needed to take but did not take to enable Mr K to carry out that order. [138] I was not assisted with authority showing that, in the case of an order of the court, there is an implied obligation on the part of the party for whose benefit it is made to assist the other party in any way in carrying out the order. Nor was I directed to authority on the consequences of the conduct of a party in whose favour an order is made which prevents or hinders the other party from carrying out the order. [139] I would be reluctant to find that s 334(1)(c) would apply to an obligation not apparent from the order. However, it is not necessary to determine this question. For reasons previously stated, I am not satisfied that the conduct of Ms A has materially affected the ability of Mr K to carry out the Payment Order. If there was an obligation not to engage in such conduct, and breach of that obligation would come within s 334(1)(c), that breach has had no relevant consequence, and accordingly, I would not vary the order on account of it. Alleged miscarriage of justice [140] No written submissions were provided on behalf of Mr K in support of this ground. In oral submissions, Counsel for Mr K referred to a total amount of $72,953.60 alleged to have been removed from accounts of Mr K without his knowledge, and said to have been the subject of evidence from Mr Sheehy.32 Mr Sheehy did not give evidence. Part of an affidavit and another document from him became an exhibit, but they do not deal with this matter. [141] Amounts of $17.393.92 and $15,000 which were charged to Mr K’s credit card were said in oral submissions by Counsel for Mr K to form part of the total amount. 33 I was not provided with any references to evidence in support of this ground. However, in cross-examination, Mr K said that he was aware that these amounts had been charged, at the time when he agreed to the Property Order.34 I also note that an attempt to take a significantly greater amount was known to Mr K at the time the order was made. 32 See T 4-10. 33 See T 4-11. 34 See T1-86; see also 1-89, 90. -- 24 of 25 -- 25 [142] On the basis of the evidence, I am not prepared to find that there was a miscarriage of justice in the making of the Payment Order. Conclusion [143] I am satisfied that, because of circumstances that have arisen since the Payment Order was made, it became impracticable for that order to be carried out by 1 June 2008. I am not satisfied that because of circumstances which have arisen since that order was made, it is impracticable for Mr K to pay the amount stated in the order. I therefore propose to vary the time for payment, but not the amount. [144] Accordingly, I propose to vary the Payment Order by extending the time for payment. I propose to invite further submissions from the parties on the question of the additional time to be allowed; on the question whether any other orders should be made with a view to ensuring that payment occurs within the time specified; and on costs. -- 25 of 25 --