Torobert v Torobert [2012] PGSC 31; SC1198 (24 September 2012)

SC1198

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO 68 0F 2010

HENRY TOROBERT
Appellant

V

MARY TOROBERT
Respondent

Waigani: Salika DCJ, Cannings J, Murray J
2012: 26 June, 24 September

FAMILY LAW – settlement of property by National Court – Matrimonial Causes Act, Section 75 – matrimonial property – "settlement of property ... as the court thinks just and equitable in the circumstances".

The appellant appealed on 35 grounds to the Supreme Court against a settlement, upon dissolution of marriage, of matrimonial property by the National Court under Section 75(1) of the Matrimonial Causes Act, arguing that the settlement was not just and equitable by virtue of the trial judge making ten categories of errors of law: (1) failing to attribute monetary values to assets comprising the matrimonial property; (2) including as matrimonial property shares in and properties acquired by a company in which the respondent had no legal interest; (3) including as matrimonial property a residential property in Australia in which the respondent had no legal or beneficial interest; (4) overestimating the respondent's contribution to acquisition and management of assets of the family company of the appellant and the respondent; (5) finding that the appellant failed to disclose all property in which he had an interest; (6) ordering transfer to the respondent of a residential property beneficially owned by the appellant's brother; (7) taking irrelevant considerations into account concerning the personal conduct of the appellant; (8) ruling that costs of the trial be awarded to the respondent; (9) finding that the appellant had the ability to create significantly more wealth than the respondent; and (10) finding that the appellant had failed to account for a substantial amount of funds of the family company.

Held:

(1) While it is conventional and may be preferable for the Court to attribute values to each asset comprising the pool of matrimonial property before ordering what settlement of property is just and equitable, it is not necessary to do so as nothing in the Act requires that it be done. There was no error in that regard.

(2) The trial judge focussed unduly on the particular properties owned by the company in which the respondent held no shares rather than on the appellant's interests in the shares of that company but made no overall error by including the assets of the company in the pool of matrimonial property or in concluding that the contribution of the parties to the company's properties was the appellant 85% and the respondent 15%.

(3) The appellant's 50% share of the residential property in Australia was matrimonial property as it was purchased during the period of the marriage.

(4) There was an overestimation of the contribution that the respondent made (60%) to the acquisition of properties and income of the jointly-owned company. The most appropriate assessment of the contributions was the appellant 50% and the respondent 50%.

(5) The finding of lack of disclosure of property that was made against the appellant was unsupported by the evidence.

(6) It was not just and equitable to order transfer from the appellant to the respondent of a property that was beneficially owned by the appellant's brother.

(7) The trial judge did not err by taking into account the personal conduct of the appellant, in particular betrayal of financial trust and engaging in extra-marital affairs.

(8) The trial judge did not err in awarding costs of the trial to the respondent as the question of costs is inherently a matter of discretion and the trial judge exercised the discretion judicially.

(9) The finding that the appellant had the ability to create significantly more wealth than the respondent was not supported by the evidence.

(10) The appellant had failed to account for a substantial amount of money held by the jointly-owned company.

(11) The appeal was upheld and the orders of the National Court were quashed; and the Supreme Court, having under Section 6(2) of the Supreme Court Act for the purposes of determining an appeal all the powers, authority and jurisdiction of a Judge exercising the jurisdiction of the National Court and under Section 16(c) of the Supreme Court Act power to give such judgment as ought to have been given in the first instance, directed the parties to settle the matter failing which the Court may order appointment of a mediator under the ADR Rules.

Cases cited

The following cases are cited in the judgment:

Application by Herman Joseph Leahy (2006) SC855
Bean v Bean [1980] PNGLR 307 Bean v Bean [1980] PNGLR 307
Coulson v Coulson [1961] FLR 379
John Mur v Les Kewa (2010) N4016
Lewis v The State [1980] PNGLR 219
Mainland Holdings Ltd v Paul Robert Stobbs (2003) N2522
Medaing v Ramu Nico Management (MCC) PNG Ltd (2011) SC1154
Nadesalingam v Nadesalingam (1998) N1754
Papua Club Inc v Nusaum Holdings Ltd (2005) SC812
Papua New Guinea v Barker [1977] PNGLR 386
PNG Ports Corporation Ltd v Canopus No 71 Ltd (2010) N4288
ToRobert v ToRobert (2010) N4003
White v White [2000] UKHL 54; [2001] AC 596
William Moses v Otto Benal Magiten (2006) SC875

APPEAL

This was an appeal to the Supreme Court against an order by the National Court as to settlement of matrimonial property under Section 75(1) of the Matrimonial Causes Act.

Counsel

I Molloy & W Neill, for the appellant
G Gorua, for the respondent

24 September, 2012

1. BY THE COURT: This is an appeal against an order of the National Court for settlement of matrimonial property upon dissolution of marriage. The appellant, Sir Henry ToRobert, and the respondent, Mary ToRobert, married in 1981. They ceased living together as husband and wife in 2001 and their marriage was dissolved in 2005. The appellant filed a petition proposing division of matrimonial property which was contested by the respondent, who filed a cross-petition. A trial was conducted in the National Court before Justice Gavara-Nanu and an order under Section 75(1) of the Matrimonial Causes Act was made on 31 March 2010, allocating various property to the parties and ordering the transfer of interests to reflect the findings of the Court (ToRobert v ToRobert (2010) N4003). The appellant is aggrieved by that order as he feels that too much has been awarded to the respondent.

NATIONAL COURT PROCEEDINGS

Identification of matrimonial property

2. The trial judge identified 22 items of matrimonial property, comprising:

• 16 residential properties (12 in Port Moresby, two in Kokopo and two in Cairns), some held in the individual names of the appellant or the respondent, some held jointly and some held by companies, Midal Enterprises Ltd ("Midal") and Hema Investments Ltd ("Hema"), in which the appellant and/or the respondent held shares;
  
• shares in three companies, Midal, Hema and Alhambra Ltd;
  
• two bank accounts;
  
• household and personal property, including motor vehicles.
  

Valuation

3. His Honour rejected the appellant's submission as to the values to be attributed to each item of property as the respondent had no input into how the figures were arrived at. His Honour found that it was unnecessary to have each item valued as there was sufficient material before him to arrive at a just and equitable outcome. It was preferable, his Honour held, to take a "global approach ... by determining the global value of the total number of properties given to each party from the property pool".

Findings

4. His Honour made the following findings for the purpose of apportioning the matrimonial property:

• The appellant made special contributions to the properties held by Hema because of his financial expertise and entrepreneurial skills. However, he had exclusive control over finances generated by the Hema properties, enriched himself from those finances and used substantial funds from Hema's account without the respondent's knowledge which remain unaccounted for.
  
• The respondent made significant contributions to the properties held by Hema, including providing land, which she held in her own name, on which a block of five residential units was constructed, and the rental income from those units was used to acquire all the other Hema properties. The appellant was a very busy person and this required the respondent to attend to the Hema properties.
  
• The respondent also attended to the properties held by Midal, making significant non-financial contributions.
  
• The appellant, without the respondent's knowledge, acquired one of the Cairns properties (Kewarra Beach) by using money withdrawn from a Hema bank account.
  
• The appellant withdrew approximately K543,000.00 from Hema's account without the respondent's knowledge, which has reduced the value of the pool of matrimonial property.
  
• The appellant deliberately failed to disclose to the court all the properties which he owned or in which he had a direct interest, displaying a "lack of candour", and only made full disclosure when "forced by the respondent".
  
• The appellant's non-disclosure demonstrated that he had during the marriage done things without the respondent's knowledge that she had a right to know about, eg expenditure on renovation of various properties of Midal and Hema. The respondent trusted the appellant to manage and control the marital finances, but he betrayed that trust and this weighed against his credibility.
  
• The appellant also betrayed the respondent's trust in him during the course of the marriage by having extra-marital affairs.
  
• The contribution of the parties to the Hema properties was the appellant 40% and the respondent 60%.
  
• The contribution of the parties to the Midal properties was the appellant 85% and the respondent 15%.
  
• As for future needs the appellant remains a person of considerable wealth, power and influence and has the ability to create more wealth; by contrast the respondent is in a less advantageous position.
  

Apportionment

5. His Honour held that the aim of a property settlement is not to allocate matrimonial property in equal shares but to ensure that "the number of properties given to each party is just and equitable in the circumstances of the case". His Honour emphasised that the guiding principles of justice and equity are derived from the provision of the Matrimonial Causes Act under which the orders were made, Section 75(1) (powers of court with respect to settlement of property), which states:

In proceedings under this Act, the Court may by order require the parties to the marriage, or either of them, to make, for the benefit of all or any of the parties to, and the children of, the marriage, such settlement of property to which the parties are, or either of them, is entitled (whether in possession or reversion) as the court thinks fit just and equitable in the circumstances. [Emphasis added.]

6. His Honour proceeded to apportion the 22 items of matrimonial property in the following manner.

7. As to the 16 residential properties:

• eight were allocated to the appellant (five were held by Midal, two were already in the appellant's name as sole registered proprietor and one, held by Hema, was ordered to be transferred by the respondent to the appellant);
  
• five were allocated to the respondent (three were held by Hema, two were held by the appellant and the respondent as joint tenants and the appellant was ordered to transfer his interest in them to the respondent, and one, held by Midal, was ordered to be transferred by the appellant to the respondent);
  
• two were ordered to be sold, with the proceeds of sale to be divided equally between the appellant and the respondent;
  
• one, held as joint tenants in equal shares by the appellant and the respondent, was ordered to be transferred to the only child of the marriage, and managed on the child's behalf by the respondent.
  

8. As to the three parcels of company shares:

• all of the appellant's shares in Midal, in which the respondent had no legal interest, would remain with him;
  
• the appellant was ordered to transfer all his shares (50% of the total shareholding) in Hema to the respondent;
  
• the appellant and the respondent would be the sole beneficial owners of an equal number of shares in Alhambra Ltd.
  

9. As to the two bank accounts:

• one (an IBD account in the name of Hema with a credit balance of approximately K105,000.00) was ordered to be transferred to the respondent;
  
• one (a joint savings account in the names of the appellant and the respondent with a credit balance of approximately K12,400.00) was ordered to be managed by the respondent for and on behalf of the child of the marriage.
  

10. As to the household and personal property:

• this was allocated according to which assets the appellant and the respondent owned or possessed at the date of the order.
  

GROUNDS OF APPEAL

11. The appellant relies on 35 grounds, many of which are repetitious or overlap. The respondent's counsel, Mr Gorua, has helpfully reduced them into ten categories, and we largely adopt his categorisation (the exceptions being the categorisation of grounds 14 and 31). The appellant argues that the settlement was not just and equitable by virtue of the trial judge making ten types of errors of law or mixed law and fact:

(1) failing to attribute monetary values to assets comprising the matrimonial property (grounds 1, 2, 3, 4 and 26);

(2) including as matrimonial property shares in and properties acquired by Midal Enterprises Ltd, a company in which the respondent had no legal interest (grounds 5, 6, 16, 21 and 32);

(3) including as matrimonial property the residential property at Kewarra Beach, Cairns, a property in which the respondent had no legal interest (grounds 7, 9 and 25);

(4) overestimating the respondent's contribution to acquisition and management of assets of Hema Investments Ltd (grounds 8, 10, 11, 14, 22, 23, 24 and 31);

(5) finding that the appellant failed to disclose all property in which he had an interest (grounds 12, 13, 15, 27, 28, 29 and 30);

(6) ordering transfer to the respondent of a residential property beneficially owned by the appellant's brother (ground 17);

(7) taking irrelevant considerations into account concerning the personal conduct of the appellant (grounds 18 and 19);

(8) ruling that costs of the trial be awarded to the respondent (ground 20);

(9) finding that the appellant had the ability to create significantly more wealth than the respondent (grounds 33 and 34);

(10) finding that the appellant had failed to account for a substantial amount of Hema funds (ground 35).

12. A feature of the grounds of appeal is that they all invite the Supreme Court to find error in the exercise of discretion of the trial judge. An order under Section 75(1) of the Matrimonial Causes Act necessarily involves an exercise of discretion (as distinct from an objective determination of entitlement) by virtue of the governing obligation to order such settlement of property as the court thinks just and equitable in the circumstances. The trial judge's opinion as to the justice and equity of the case is thus a paramount consideration. As recently stated in Medaing v Ramu Nico Management (MCC) PNG Ltd (2011) SC1154 the Supreme Court will not lightly interfere in discretionary judgments of the National Court and will do so only in limited circumstances, eg if the trial judge exercised the discretion upon a wrong principle or allowed extraneous or irrelevant matters to guide or affect the exercise of discretion or has mistaken the facts or if the decision is plainly unjust (Papua New Guinea v Barker [1977] PNGLR 386, Lewis v The State [1980] PNGLR 219, Bean v Bean [1980] PNGLR 307). We have taken that approach in determining the 35 grounds of appeal.

(1) FAILING TO ATTRIBUTE MONETARY VALUES TO ASSETS COMPRISING THE MATRIMONIAL PROPERTY

13. The trial judge found that it was unnecessary to value each item of matrimonial property as there was sufficient material before him to arrive at a just and equitable outcome. It was preferable, his Honour held, to take a "global approach ... by determining the global value of the total number of properties given to each party from the property pool".

14. The appellant argues that the trial judge erred by:

• failing to attribute monetary values to the items of property said to comprise the pool of matrimonial property before apportioning the property (ground 1);
  
• holding that the aim of a settlement should be to ensure that the number of properties allocated to each party is just and equitable (rather than the value of the properties) (ground 2); and
  
• not accepting the valuations proposed by the appellant (grounds 4 & 26);
  

the result being that his Honour unjustly benefited the respondent over the appellant (ground 3).

15. We accept that the conventional approach is for the court, having identified the pool of matrimonial property, to attribute monetary values to the various items of property on the basis of evidence adduced at the trial (Nadesalingam v Nadesalingam (1998) N1754). However, we do not agree that such an approach must be undertaken in every case. Section 75(1) requires the court to "require the parties ... to make ... such settlement of property ... as the Court thinks just and equitable in the circumstances". It does not mention valuation of properties. It follows that the manner in which the court arrives at a determination of what is a just and equitable settlement is a matter of discretion, and provided it is exercised judicially the failure to attribute values to particular properties will not of itself constitute an error of law.

16. The learned trial judge took what he described as a "global approach" by determining "the global value of the total number of properties given to each party from the property pool", while stressing "that the apportionment of properties to each party should be commensurate with the level of contributions the party made". Further, his Honour held at para 127:

The overall result of the division of the matrimonial properties between the parties must, in the circumstances of the case be just and equitable to both parties. This should be determined by the overall facts and circumstances of the case. This is a pivotal consideration which underpins the property settlement between the parties. The aim of property settlement in this case should not necessarily be whether the parties have equal share of the matrimonial property but whether the number of properties given to each is just and equitable in the circumstances of case.

17. We reject the appellant's submission that such an approach was impermissible or lacking methodology or that by referring to a just and equitable number of properties being given to each party his Honour's exercise of discretion miscarried. His Honour, having properly taken a global approach, was not bound to engage in a property-by-property valuation of each item of matrimonial property and therefore did not err in not accepting the valuations proposed by the appellant. We find no errors of law in the manner contended for by the appellant. We dismiss grounds of appeal 1, 2, 3, 4 and 26.

(2) INCLUDING AS MATRIMONIAL PROPERTY SHARES IN AND PROPERTIES ACQUIRED BY MIDAL ENTERPRISES LTD, A COMPANY IN WHICH THE RESPONDENT HAD NO LEGAL INTEREST

18. The trial judge acknowledged that the respondent held no legal interest in Midal Enterprises Ltd but accepted her evidence that she made significant non-financial contributions to the Midal properties, as the appellant was often out of Port Moresby.

19. The appellant argues that the trial judge erred by:

• failing to take into account that Midal was formed prior to the marriage and that the appellant was (with his sister and brother) one of three shareholders (ground 5);
  
• regarding properties owned by Midal as owned by the appellant (ground 6);
  
• failing to find that the respondent made virtually no financial or other contribution to the acquisition, maintenance or management of the Midal properties and finding that she made significant contributions to their upkeep and maintenance (grounds 16, 21 & 32).
  

20. It is not correct to say that his Honour failed to take into account that Midal was formed prior to the marriage or that the appellant was only one of three shareholders. We find nowhere in his Honour's judgment any misapprehension of the history or status of Midal. We consider that the appellant's shares in Midal were properly part of the pool of matrimonial property.

21. However we respectfully consider that his Honour focussed unduly on the particular assets of Midal (six residential properties) rather than on the value of the appellant's shares in the company and we agree with the appellant's contention that his Honour erroneously regarded the properties owned by Midal as being owned by the appellant.

22. We consider his Honour's finding that the respondent contributed to the upkeep and maintenance of the Midal properties, given that there was conflicting evidence by the appellant and the respondent, was one that was reasonably available on the evidence. His Honour concluded that the contribution of the parties to the Midal properties was the appellant 85% and the respondent 15%, and we find no error in that regard.

23. Subject to upholding the appellant's argument about his Honour focussing unduly on the particular assets of Midal and regarding the properties owned by Midal as being owned by the appellant, we find no other error in the manner of treatment of the Midal properties. We uphold ground 6 and dismiss grounds 5, 16, 21 and 32.

(3) INCLUDING AS MATRIMONIAL PROPERTY THE RESIDENTIAL PROPERTY AT KEWARRA BEACH IN WHICH THE RESPONDENT HAD NO LEGAL OR BENEFICIAL INTEREST

24. The trial judge found that the appellant, without the respondent's knowledge, acquired the Kewarra Beach property during the course of the marriage.

25. The appellant argues that the trial judge erred by:

• including the property in the pool of matrimonial property (ground 7);
• failing to take into account that the property was owned by the appellant and his current wife (ground 9);
• finding that the property was acquired with rents from a property at Ororo Crescent, Boroko (ground 25).
  

26. The appellant and his current wife purchased the Kewarra Beach property in the period after he and the respondent ceased living together as husband and wife and before the date of dissolution of their marriage. We consider that the learned trial judge made no error, in principle, in treating the appellant's interest in the property as part of matrimonial property as it was acquired during the period of the marriage. However, we respectfully find that his Honour erred by treating the property as if it were owned solely by the appellant. Only the appellant's 50% share of the property should have been included in the pool of matrimonial property. We also agree that the evidence did not support a finding that it was acquired largely from rents from the Ororo Crescent Boroko property (land which was originally owned solely by the respondent but later transferred to Hema and on which a block of five flats was built, which generated regular rental income for Hema). We uphold grounds 9 and 25 and dismiss ground 7.

(4) OVERESTIMATING THE RESPONDENT'S CONTRIBUTION TO ACQUISITION AND MANAGEMENT OF ASSETS OF HEMA INVESTMENTS LTD

27. The trial judge found that Hema Investments Ltd was established as a family company with the appellant and the respondent holding all shares on an equal basis. It owned four properties:

• Ororo Crescent, Boroko;
• Boroko Drive, Boroko;
• Lot 4, Islander Village, Hohola;
• Lot 6, Islander Village, Hohola.
  

28. Its other substantial asset was an IBD account with Credit Corporation, holding K105,000.00.

29. His Honour assessed the contributions to these assets as the appellant 40% and the respondent 60% and apportioned them as follows:

• Lot 4, Islander Village, Hohola to the appellant;
• all other properties and the IBD and all of the appellant's shares in Hema to the respondent.
  

30. The appellant argues that the trial judge erred by:

• failing to take into account that the appellant primarily met the cost of acquiring properties by Hema and repaid loans from his own funds (grounds 8, 11);
  
• failing to calculate the rents from the Ororo Crescent Boroko property and incorrectly finding that those rents had funded acquisition of other Hema properties (grounds 10, 22, 23);
  
• finding that the respondent made a very significant contribution to the development, management and maintenance of the Hema properties (grounds 14, 24, 31).
  

31. We are persuaded by the submissions of Mr Molloy that the finding that three Hema properties were funded by rents generated by the Ororo Crescent property was not supported by the evidence. The learned trial judge, we consider, relied rather too much on qualitative evidence by the respondent, which was speculative, not independent and not corroborated by evidence as to the actual source of funding. As to the respective contributions of the parties to the properties we consider that the learned trial judge properly took into account non-financial as well as financial contributions, which accords with the approach taken in leading overseas authorities such as the decision of the House of Lords in White v White [2000] UKHL 54; [2001] AC 596. However, we respectfully consider that the finding that the respondent made a significantly greater contribution to the development, management and maintenance of the Hema properties than the appellant was not one that was reasonably available on the evidence; an error of law was made in making that finding. The evidence warrants a finding that the contribution of the parties should have been assessed as 50% for each party. We uphold grounds 8, 10, 11, 14, 22, 23, 24 and 31.

(5) FINDING THAT THE APPELLANT FAILED TO DISCLOSE ALL PROPERTY IN WHICH HE HAD AN INTEREST

32. The trial judge found that the appellant deliberately failed to disclose all property and that the true position as to the pool of matrimonial property only became clear in the course of the trial due to his being forced by the respondent's evidence to make full disclosure. The appellant argues that the trial judge erred by:

• finding that the appellant's failure to disclose his interest in properties affected his level of contribution to them (grounds 12, 15);
  
• finding that the appellant was forced to disclose his interest in some properties (ground 13);
  
• finding that the appellant had deliberately concealed his interest in some properties (ground 27);
  
• finding that the appellant had enriched himself by using substantial amounts of money from Midal and Hema to purchase concealed property (grounds 28, 29);
  
• finding that the pool of matrimonial property was greater than that demonstrated by the appellant's evidence (ground 30).
  

33. We are persuaded by the submissions of Mr Molloy that the adverse findings against the appellant, which were based on the list of properties included in the appellant's petition, were unwarranted. We consider with respect that the learned trial judge should have accepted the appellant's explanation that the list of properties represented his bona fide belief as to what should be included based on legal advice. The respondent's reply to the petition and her cross-petition set out a contrary view, which was accepted by the trial judge, and led to the pool of matrimonial property being more extensive than that proposed by the appellant. We respectfully consider that his Honour erred by regarding this as a concealment of matrimonial property or a case of forced disclosure. In a similar vein we consider that the finding that the appellant had enriched himself by using substantial amounts of money from Midal and Hema to purchase concealed property was unsupported by the evidence. We uphold grounds 12, 13, 15, 27, 28, 29 and 30.

(6) ORDERING TRANSFER TO THE RESPONDENT OF A RESIDENTIAL PROPERTY BENEFICIALLY OWNED BY THE APPELLANT'S BROTHER

34. The trial judge found that the appellant established Midal Enterprises Ltd prior to his marriage to the respondent and that he and his brother and sister were the only shareholders. By the time of the trial the appellant owned all shares in the company, which owned six properties:

• Logohu Place, Boroko;
• Turuha St, Gordons;
• Lot 8, Islander Village, Hohola;
• Lot 68, Tokarara;
• Lot 14, Leke Place, Gordons;
• Lot 16, Leke Place, Gordons.
  

35. His Honour assessed the contributions to these assets as the appellant 85% and the respondent 15% and apportioned them as follows:

• Logohu Place, Boroko to the respondent;
• all other properties and all of the appellant's shares in Midal to the appellant.
  

36. The appellant argues that the trial judge erred by:

• failing to take into account that the Logohu Place property was beneficially the property of his brother (ground 17).
  

37. We have already found that the learned trial judge did not err in including the appellant's shares in Midal Enterprises Ltd in the pool of matrimonial property or in assessing the contribution of the parties to the Midal assets as 85% to the appellant and 15% to the respondent. However, we agree with the appellant that there was an error of law in the apportionment of the Logohu Place Boroko property to the respondent as the unchallenged evidence was that that property was controlled and managed by the appellant's brother, a state of affairs that had existed since the appellant bought out his brother's shares in the company. We uphold the appellant's argument that his brother was the beneficial owner of the property, ie that his brother had an equitable interest in the property, a fact that was disregarded by the court by virtue of the order that the property be transferred by Midal Enterprises Ltd to the respondent (who had no equitable interest in the property). This was not in our respectful opinion a just and equitable apportionment of this property. Ground 17 is upheld.

(7) TAKING IRRELEVANT CONSIDERATIONS INTO ACCOUNT CONCERNING PERSONAL CONDUCT OF THE APPELLANT

38. In determining a just and equitable settlement of the matrimonial property the trial judge took into account amongst other things that the appellant had during the marriage without the respondent's knowledge engaged in a number of financial transactions that the respondent had the right to know about; she had trusted him to manage and control the marital finances, but he betrayed that trust and this weighed against his credibility. He also betrayed the respondent's trust by having extra-marital affairs.

39. The appellant argues that the trial judge erred by:

• wrongly taking into account the betrayal of trust, both financially and through extra-marital affairs (ground 18); and
  
• wrongly taking into account the appellant's failure to inform the respondent of expenditure on renovation of Midal and Hema properties (ground 19).
  

40. These arguments raise two issues, first did the trial judge err in fact in finding that the appellant committed a betrayal of trust and failed to inform the respondent of expenditure on renovations? If his Honour did not err in fact, were those matters nonetheless irrelevant to the exercise of discretion as to settlement of matrimonial property? On both issues, we find against the appellant.

41. We consider that the findings of fact referred to were reasonably available to the court. The trial judge preferred the respondent's evidence that significant financial transactions and application of expenditure, particularly of Hema funds, were not disclosed to her by the appellant. As to the extra-marital affairs their existence was not seriously challenged by the appellant, so it was open to his Honour to find as a fact that they had occurred.

42. The reason that such findings should not be dismissed as irrelevant is the direction given to the National Court by Section 75(1) of the Matrimonial Causes Act to order such settlement of property ... as the Court thinks just and equitable in the circumstances". The apportionment of property is inherently a matter of discretion and the Court is obliged to take into account principles of equity. The Court must always consider the conduct of the parties. Maxims such as 'those who seek equity must do equity' and 'those who come to a court of equity must come with clean hands' apply (Mainland Holdings Ltd v Paul Robert Stobbs (2003) N2522, John Mur v Les Kewa (2010) N4016). We agree with the appellant that the court's discretion is not to be exercised so as to punish a party to a marriage (Coulson v Coulson [1961] FLR 379) but nothing in the learned trial judge's exercise of discretion can properly be regarded as amounting to punishing the appellant for a betrayal of trust or for unauthorised expenditure on renovations. We dismiss grounds 18 and 19.

(8) RULING THAT COSTS OF THE TRIAL BE AWARDED TO THE RESPONDENT

43. The trial judge ordered that the appellant pay the respondent's costs of and incidental to the proceedings.

44. The appellant argues that the trial judge erred in that:

• neither party succeeded in the claim or cross-claim for matrimonial property settlement and the respondent's claim for spousal maintenance was refused (ground 20).
  

45. We find little merit in this argument. The nature of a costs order is inherently a matter of discretion for the trial judge (PNG Ports Corporation Ltd v Canopus No 71 Ltd (2010) N4288). Provided the discretion is exercised judicially an appeal court should rarely intervene. Costs usually follow the event but if they don't it does not necessarily follow that there has been a miscarriage of discretion. As it turned out in the present case costs did, in effect, follow the event as the respondent emerged with more property than the appellant says she was entitled to. The fact that neither party succeeded entirely with their petition or cross-petition is inconsequential. Likewise the respondent's unsuccessful claim for spousal maintenance does not prevent her being awarded costs. The maintenance issue did not occupy much of the court's time, which was largely devoted to the settlement of property. We dismiss ground 20.

(9) FINDING THAT THE APPELLANT HAD THE ABILITY TO CREATE SIGNIFICANTLY MORE WEALTH THAN THE RESPONDENT

46. The trial judge held that in making orders for settlement of property that are just and equitable he was obliged to determine the future needs of each party. His Honour found that the appellant remains a person of considerable wealth, power and influence and has the ability to create more wealth; and that by contrast the respondent is in a less advantageous position.

47. The appellant argues that the trial judge erred by:

• finding that the appellant had the ability to create more wealth now and in the future given evidence of his age, health, ongoing medical needs and his retirement from remunerative employment (ground 33); and
  
• finding that the appellant would derive benefits from his positions with the PNG Sports Federation and the PNG Olympic Committee (ground 34).
  

48. We uphold these arguments. At the date of judgment the appellant was 67 years old. The evidence supported a finding that his health was poor, he had high-level medical needs and his long and distinguished professional career as a central banker and financial manager was in effect over. Evidence as to his continuing involvement in sports administration through the holding of essentially honorary positions with the PNG Sports Federation and the PNG Olympic Committee did not in our view support the findings of fact the learned trial judge made as to the relative future needs of the parties. We uphold grounds 33 and 34.

(10) FINDING THAT THE APPELLANT HAD FAILED TO ACCOUNT FOR A SUBSTANTIAL AMOUNT OF HEMA FUNDS

49. The main reason the trial judge found that there had been a betrayal of trust as to financial matters was his acceptance of the respondent's evidence of approximately K500,000.00 of Hema funds being unaccounted for over several years.

50. The appellant argues that his Honour erred by:

• making that finding of fact contrary to the evidence (ground 35).
  

51. We have already determined that his Honour made no error in making the finding that there had been a betrayal of financial trust by the appellant. We consider that there was sufficient evidence to make that finding. His Honour identified two sets of withdrawals of funds from Hema accounts (first in 1995-1996, when eight cheques totalling K203,000.00 were drawn against Hema's account; secondly when K340,000.00 cash was withdrawn). The evidence suggests that the financial affairs of Hema were conducted in a rather casual manner. It was open to his Honour to draw the conclusion that this substantial amount of money was unaccounted for. That finding was not contrary to the evidence. Ground 35 is dismissed.

CONCLUSION

52. Our assessment of the ten categories of grounds of appeal is summarised in the following table:

ASSESSMENT OF CATEGORIES OF GROUNDS OF APPEAL

No	Assessment	No	Assessment
1	Dismissed	6	Upheld
2	Largely dismissed	7	Dismissed
3	Largely upheld	8	Dismissed
4	Upheld	9	Upheld
5	Upheld	10	Dismissed

That is:

• four have been upheld and one has been largely upheld; and
• four have been dismissed and one has been largely dismissed.
  

53. Our determination of the 35 grounds of appeal is summarised in the following table.

DETERMINATION OF GROUNDS OF APPEAL

No	Determination	No	Determination	No	Determination
1	Dismissed	13	Upheld	25	Upheld
2	Dismissed	14	Upheld	26	Dismissed
3	Dismissed	15	Upheld	27	Upheld
4	Dismissed	16	Dismissed	28	Upheld
5	Dismissed	17	Upheld	29	Upheld
6	Upheld	18	Dismissed	30	Upheld
7	Dismissed	19	Dismissed	31	Upheld
8	Upheld	20	Dismissed	32	Dismissed
9	Upheld	21	Dismissed	33	Upheld
10	Upheld	22	Upheld	34	Upheld
11	Upheld	23	Upheld	35	Dismissed
12	Upheld	24	Upheld

That is:

• 21 have been upheld; and
• 14 have been dismissed.
  

54. These figures considered in isolation do not mean much as the number of grounds of appeal is excessive and many overlap or are repetitious. They do, however, show that the appeal has been partially successful: the appellant has proven that a number of errors of law were made and this raises the question whether the orders of the National Court should be quashed or whether this court should simply amend the orders of the National Court or substitute its own opinion as to a just and equitable settlement of property or remit the matter to the National Court, perhaps for a retrial. All of these options, and others, are available due to the combined effect of Sections 155(2) and (4) (the national judicial system) of the Constitution and Sections 6(2) (appeal to be by way of rehearing), 8(1)(e) (supplemental powers of supreme court) and 16 (decision etc on appeal) of the Supreme Court Act.

55. Section 155(2) of the Constitution states:

The Supreme Court—

(a) is the final court of appeal; and

(b) has an inherent power to review all judicial acts of the National Court; and

(c) has such other jurisdiction and powers as are conferred on it by this Constitution or any other law.

56. Section 155(4) of the Constitution states:

Both the Supreme Court and the National Court have an inherent power to make, in such circumstances as seem to them proper, orders in the nature of prerogative writs and such other orders as are necessary to do justice in the circumstances of a particular case.

57. Section 6(2) of the Supreme Court Act states:

For the purposes of hearing and determining an appeal, the Supreme Court has all the powers, authority and jurisdiction of a Judge exercising the jurisdiction of the National Court.

58. Section 8(1)(e) of the Supreme Court Act states:

For the purposes of this Act, the Supreme Court may, if it thinks it necessary or expedient in the interests of justice to do so ... exercise in relation to the proceedings of the Court any other powers that may for the time being be exercised by the National Court on appeals or applications.

59. Section 16 of the Supreme Court Act states:

On the hearing of an appeal, the Supreme Court shall inquire into the matter and may—

(a) adjourn the hearing from time to time; or

(b) affirm, reverse or modify the judgment; or

(c) give such judgment as ought to have been given in the first instance; or

(d) remit the case in whole or in part for further hearing; or

(e) order a new trial.

60. We do not think the orders of the National Court should remain unaffected by this appeal. But nor are we in a position without further argument to properly exercise the power under Section 16(c) of the Supreme Court Act and "give such judgment as ought to have been given in the first instance". We do not think that it would serve the interests of justice or the interests of the parties to remit the case to the National Court under Section 16(d) for further hearing or to order a new trial under Section 16(e). The best course of action in the peculiar circumstances of this case, we consider, is to remit the matter to the parties and give them the opportunity to digest our reasons for judgment and to reach agreement on how best the determination of the appeal should be reflected in an order of the court; or even to agree to settle the matter out of court.

61. A dispute over matrimonial property by its very nature lends itself to negotiation, mediation and settlement. We have in PNG through recent amendments to the National Court Act and the making by the Judges of the ADR Rules 2010 embraced the concept of alternative dispute resolution and put it increasingly into practice. We consider that these practices should be adopted by the Supreme Court which has the power under Sections 6(2), 8(1)(e) and 16(c) of the Supreme Court Act to exercise the powers available to the National Court (William Moses v Otto Benal Magiten (2006) SC875). This includes the power to order parties to attempt settlement and, in the event of a failure to settle, to order mediation. Those are the type of orders that we will seriously consider making here.

62. Before pronouncing the orders of the Court we wish to comment on the manner in which the appeal has been conducted by the appellant. The amended notice of appeal was prolix and repetitious. The 35 grounds of appeal were not set out in any logical order and it was only through the good offices of Mr Gorua for the respondent that they were able to be categorised and dealt with systematically. The lack of finesse in prosecution of the appellant's arguments was exacerbated by both the written and oral submissions. The 13-page written submission made no mention of the grounds of appeal. It was a collection of arguments arranged with no coherent structure. A number of valid points of law were made but the submission bore no relation to the amended notice of appeal. Likewise with counsel for the appellant's oral submission; though it generally followed the written submission, references to the grounds of appeal were sporadic and gave the appearance of being afterthoughts. The practice of appeals being prosecuted in such an ill-disciplined manner drew adverse comment from the Supreme Court in Papua Club Inc v Nusaum Holdings Ltd (2005) SC812 and it is worthwhile repeating what was said there:

This appeal has taken longer than expected to resolve because the appellant's notice of appeal was not clearly drafted and its written submission did not mesh with the grounds set out in the notice of appeal. ...

It defeats the purpose of having a controlled appeal, in which an appellant is expected to concisely state the grounds of appeal and the orders sought on the appeal and is subject to constraints as to when and whether leave is to be sought to amend the notice of appeal, if the appellant makes submissions that seem to forget about the grounds of appeal. An appellant's written submission is constrained by and should dovetail into the grounds of appeal. The primary task of the Supreme Court, which is to identify and expeditiously resolve the issues in dispute, is made harder when, as in this case, the respondents also do not follow the grounds of appeal. When this happens the hearing of the appeal is at risk of becoming a confabulation about the merits of the case rather than a rigorous and intense determination of clearly defined issues. It makes the task of the Supreme Court unnecessarily burdensome and time-consuming.

63. Those comments were adopted by the Court in Application by Herman Joseph Leahy (2006) SC855 and we apply them here, subject to making it clear that our criticism is of the manner of presentation of argument by the appellant's legal team, not by the respondent's legal team, and it is not a criticism of the conduct of the appellant himself.

64. We will reserve the question of costs of the appeal, which can be addressed when the matter returns before us. It might be that our criticism of the manner of prosecution of the appeal is something that will be relevant to who should bear the costs of the appeal. It might be something on which the parties can agree.

65. We think that the parties will need some time to consider their positions on the issues that are raised by this judgment, so we will allow a reasonable period before the matter returns before us.

ORDER

66. We order that:

(1) The appeal is allowed.

(2) The judgment of the National Court of 31 March 2010 in MC 6 of 2003 is reversed.

(3) The order of the National Court of 31 March 2010 in MC 6 of 2003 is quashed.

(4) The parties shall forthwith make genuine and good faith efforts to settle on the terms of an appropriate order of the Supreme Court under Section 75(1) of the Matrimonial Causes Act, which reflects the reasons for judgment, in substitution for the order of the National Court, and at a time notified by the Registrar the parties shall appear before this Court and notify the Court whether settlement has been reached, failing which the Court shall consider whether to appoint a mediator under the ADR Rules.

(5) The question of costs is reserved for further hearing.

Judgment accordingly.

_____________________
Ashurst Lawyers: Lawyers for the Appellant
PANG Legal Services: Lawyers for the Respondent