GREEK ORTHODOX COMMUNITY OF SA INC v ERMOGENOUS No. SCCIV-99-653 [2002] SASC 384

1. DOYLE CJ: By order dated the 7th day of March 2002, the High Court allowed an appeal against the decision by this Court, as presently constituted, in Greek Orthodox Community of SA Inc v Ermogenous [2000] SASC 329; (2000) 77 SASR 523. The High Court remitted the matter to this Court for further hearing and determination: see Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 76 ALJR 465.

The history of the proceedings is summarised by Gaudron, McHugh, Hayne and Callinan JJ in their reasons in Ermogenous at [1]-[2]. For convenience I repeat that summary:

"In September 1994, Archbishop Spyridon Ermogenous made a claim in the Industrial Relations Court of South Australia against the Greek Orthodox Community of SA Inc (the respondent in this Court) for sums he claimed were due to him for annual leave and long service leave. He alleged that he had been employed by the respondent since 18 March 1970 but had never received any payment for annual leave and that, on termination of his employment, he had not been paid his long service leave entitlements. While the claim was being heard, a number of Greek Orthodox Communities (some incorporated, some apparently not) were added as respondents. An Industrial Magistrate (Mr A R Cunningham) found that the present respondent was liable to pay to the Archbishop an amount ($23,989.35) for payment in lieu of accumulated annual leave and a further amount ($10,672.80) for accumulated long service leave. Judgment was given against the respondent for the total of these amounts, together with interest: Ermogenous v Greek Orthodox Community of SA Inc (1997) 64 SAIR 622. The claims made in the alternative against the other Greek Orthodox Communities which had been joined need not be considered. They did not succeed at trial and they have not been pursued in this Court.

The respondent appealed against the judgment to a single judge of the Industrial Relations Court of South Australia who ordered that the order of the Industrial Magistrate should be varied in some respects that need not be noticed but otherwise dismissed the appeal: Greek Orthodox Community of SA Inc v Ermogenous (1998) 65 SAIR 514. The respondent appealed against this decision, this time to the Full Court of the Industrial Relations Court, but that Court dismissed the appeal: Greek Orthodox Community of SA Inc v Ermogenous (1999) 66 SAIR 136. Again the respondent sought to appeal, this time to the Full Court of the Supreme Court of South Australia. That Court, by majority (Doyle CJ and Bleby J; Mullighan J dissenting) granted leave to appeal, allowed the appeal, set aside the order of the Full Court of the Industrial Relations Court and (in effect) substituted an order that the Archbishop's claims be dismissed: Greek Orthodox Community of SA Inc v Ermogenous [2000] SASC 329; (2000) 77 SASR 523. By special leave, the Archbishop now appeals to this Court."

The matter is now before this Court once again on the appeal against the decision of the Full Court of the Industrial Relations Court, pursuant to the grant by this Court of leave to bring the appeal, the grant being made pursuant to s 191(1)(b) of the Industrial and Employee Relations Act 1994 (SA). In this Court's previous decision I was prepared to grant leave to appeal, without deciding whether or not an appeal lay as of right: Greek Orthodox Community at [2]. Mullighan J was of the view that no appeal lay as of right, but was prepared to grant leave to appeal for the reasons given by me: Greek Orthodox Community at [32]. Bleby J was of the view that an appeal lay as of right, because the appeal was based "on an alleged excess or deficiency of jurisdiction": Greek Orthodox Community at [85]-[88]. He would have granted leave to appeal, if necessary, because the appeal involved "a significant question of some general importance as to the circumstances (if any) in which a minister of religion may be an employee": Greek Orthodox Community at [94].

On the hearing of further submissions, the following issues arose. First, the respondent submitted that the Court should now rescind leave to appeal. Second, if leave to appeal was to be rescinded, the issue then arose as to whether there is an appeal as of right. As I have said, I did not decide this point, Mullighan J decided there was no appeal as of right, Bleby J decided there was an appeal as of right. Third, the High Court having held that the Industrial Magistrate did not err in holding that there was a contract between the appellant and the respondent, the issue arose as to whether the contract was a contract of employment: see Ermogenous at [46].

I granted leave to appeal because the submission by the appellant that the respondent was "not capable in law of being an employee of the Community, raises an issue that warrants the grant of leave:" Greek Orthodox Community at [2].

That submission was rejected by all members of the Full Court. It was rejected by the High Court by implication. In the Full Court, although Bleby J and I decided that in the circumstances there was no contract between the appellant and the respondent, we did not accept the submission that there could not be such a contract. The High Court has rejected the submission by implication because, at the basis of the submission on this point, was the submission that there could be no contract at all between a minister of religion and a church, or an entity providing material benefits to the minister to enable the minister to exercise his or her ministry. As well, the High Court noted that the submission in its absolute form had not been pursued before the High Court: Ermogenous at [37].

Accordingly, a grant of leave to enable that absolute submission, that there cannot be a contract between a minister of religion and a church or such an entity, is not a reason now to give or to continue leave to appeal. That issue having been disposed of, my view is that leave to appeal granted on that ground should be rescinded. Although the hearing of the appeal now resumes, it resumes on the basis that that issue is no longer a live issue.

The issue of whether the contract between the appellant and the respondent is one of employment is not an issue that warrants the grant of leave to appeal. The issue involves the application of well established principles. Although well established, their application to particular circumstances can give rise to difficulty. If anything, that is a reason for caution in granting leave to appeal to raise such a point. Admittedly, the circumstances to which those principles are to be applied in the present case are out of the ordinary. But, to my mind, no general principle will be established in this case for cases involving a contractual relationship between a minister of religion and a church or an entity that in some way retains a minister to exercise his or her ministry. Each case will turn on its own facts, and the most that can be determined in this case is the correct application of the relevant principles to the facts of this case. And, for what it is worth, I think it likely that cases involving the key elements of this case are unlikely to occur at all often. In short, a grant of leave to appeal will involve a close examination of the application of established principles to particular facts, and will not lead to the establishment of any relevant or helpful general principle. That in itself is a reason not to grant leave to appeal, or to rescind leave to appeal. The fact that on three occasions the Industrial Relations Court has held that the contract is one of employment is a further reason for refusing to grant leave to appeal, or for rescinding leave to appeal.

For those reasons I would rescind the grant of leave to appeal. In a sense, the grant of leave to appeal has served its purpose. The point on which I was prepared to grant leave to appeal has been resolved.

Mullighan J and Bleby J have expressed conflicting views on this point. Because I have reached a firm view on the outcome of the appeal, if one lies as of right, I am content to assume that an appeal does lie.

Gaudron, McHugh, Hayne and Callinan JJ summarised the Industrial Magistrate's conclusion on this point as follows in Ermogenous at [17]:

"The Industrial Magistrate concluded that the appellant had been employed by the respondent under a contract of employment. Three steps on the way to that conclusion may be noted. First, the respondent's contention that there could be no binding agreement for employment of a minister of religion was rejected. Secondly, the Industrial Magistrate found that the respondent reserved the right to control the way in which the appellant went about his duties. He found that the respondent's officers insisted that the appellant:

'should adhere to their will and preference in the running of the affairs of the church, whether the issues related to mundane matters of organisation, property and finance, or to the designated reserved area of "spiritual" matters such as the consecration of priests, the exercise of discipline over the clergy of the church or the calling and conduct of a synod. Those officers clearly reserved to themselves the right of final arbitration over issues as to what matters lay within the [appellant's] jurisdiction of spiritual affairs, and appear to have left very little indeed to the [appellant]. All questions of the basic organisation of the church were theirs to decide, and they appear to have intervened strongly to resist any initiative which the [appellant] himself thought of taking in, for example, the resolution of the fundamental differences with the Ecumenical Patriarch.'

Thirdly, the Industrial Magistrate found that the appellant was recruited to join an existing organisation in the evolution of which he was allowed no say and in which he was required to play his role and discharge his duties. He was, in the view of the Industrial Magistrate, a part of the organisation of the respondent." (Footnotes omitted.)

I have reconsidered the Magistrate's findings of fact and their significance. They include a finding that the respondent was told by representatives of the appellant that he would be one of the appellant's employees. There is also the concession and finding that the relationship between the appellant and priests whom it recruited was one of employment. Third, there are the findings by the Magistrate that the appellant maintained records as though the respondent were its employee, and the further finding that the appellant treated the respondent "as an integral part of its organisation": (1997) 64 SAIR 622 at 760. The Industrial Magistrate made findings to the effect that a significant degree of control, including control over matters spiritual, was exercised by officers of the appellant over the respondent. For example, the Magistrate said (at 692):

"The committee of the SA Community, and its officers, from time to time urged the applicant to attend at particular churches, or to take some other action in his official capacity, and the applicant had no doubt that these were intended to have the force of directions. None of them seemed so fundamental as to raise any great problems, and he was not seeking to contest issues of control. Overall, he clearly saw himself as being subject to the detailed direction and control specifically of the SA Community, its management committee and its officers on a broad and detailed range of matters that overlapped with and extended into whatever areas of independent discretion he was thought to have."

With reference to the respondent attending to the needs of communities in other States, the Magistrate said (at 704):

"His evidence was that he always responded to these requests by reporting to the officers of the SA Community and seeking their approval to take up the temporary postings. Sometimes, when the vacancy appeared to be long-term, he suggested that priority be given to consecrating or recruiting another priest for the vacancy so that his own period as locum tenens could be kept as brief as possible."

The Magistrate made some general findings, expressing the effect of his conclusions on particular matters. He said (at 755):

"To ensure their control, it was necessary for them to maintain an ultimate authority over all aspects of the church, including even those matters of ritual and the administration of sacraments that are at the heart of spiritual authority. As the lengthy canvass of the facts has shown, they were constantly alert to detect and reverse any and all attempts by the applicant to assert some independent and unappealable discretion to act contrary to the wishes of the communities (as expressed by their officers), whatever the nature of the particular issues in dispute.

The applicant did not have any real degree of independence of control, or a distinct sphere of competence, from the time of his appointment to that of his resignation. When one reviews the whole history of his responses to the various requests and demands made of him, it also becomes clear that the applicant never considered himself to have one (at any rate, outside the established areas of interpretation of Scripture and the original seven Ecumenical Councils, as to which neither he nor the communities had any personal discretions if they were to continue to adhere to Orthodoxy)."

"The evidence appears to me preponderant that the officers of the SA Community considered that they had an extensive right of control over the functions and activities of the applicant. Whenever one turns to the evidence of the various issues and disputes that arose, the dominant feature is the insistence of the officers of the respondent that the applicant should adhere to their will and preference in the running of the affairs of the church, whether the issues related to mundane matters of organisation, property and finance, or to the designated reserved area of 'spiritual' matters such as the consecration of priests, the exercise of discipline over the clergy of the church or the calling and conduct of a synod. Those officers clearly reserved to themselves the right of final arbitration over issues as to what matters lay within the applicant's jurisdiction of spiritual affairs, and appear to have left very little indeed to the applicant."

As these extracts from the Magistrate's reasons indicate, if the relationship was contractual, there were a number of pointers towards the relationship being a contract of employment. That being so, this Court should be slow to overturn a decision by the Industrial Court that the contract is one of employment, as Mullighan J said, and for the reasons that he gave, in Greek Orthodox Community at [41]. On the hypothesis that the relationship is contractual, I agree generally with the approach taken by Mullighan J.

Accordingly, proceeding on the assumption that there is a right of appeal, I would rescind the grant of leave to appeal made previously, refuse the application for leave to appeal made in the Notice of Appeal, and dismiss the appeal.

MULLIGHAN J: I agree with the orders proposed by the Chief Justice for the reasons which he has given. The appeal should be dismissed.

BLEBY J: The view I expressed in the previous decision of this Court (Greek Orthodox Community of SA Inc v Ermogenous [2000] SASC 329; (2000) 77 SASR 523) was that there was an appeal as of right to this Court from the Full Court of the Industrial Relations Court. I allowed the appeal because I considered, on the authorities then discussed, that, in the case of a member of the clergy in a Christian church there was a rebuttable presumption that the authority which engaged the member of the clergy and the member concerned did not intend to enter into contractual relations. I also considered that no intention to enter into contractual relations had been proved in this case.

The High Court has now held (Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 76 ALJR 645) that it is not to be presumed that an intention to create legal relations does not exist. It further held that in this case there was evidence on which the Industrial Magistrate could properly hold and did hold that an intention to enter into contractual relations between the appellant and the respondent did exist. The matter has now been remitted to this Court to determine whether that contractual relationship was one of employment or not.

Given that the relationship between the parties was contractual, I agree that, by reference to the findings of the Industrial Magistrate to which the Chief Justice has referred, there were many pointers in this case to the relationship being one of a contract of employment. Such a finding was open to the Industrial Magistrate. This Court should be slow to overturn the findings of the Industrial Relations Court in that regard. Accordingly, I would dismiss the appeal.

I too would stress that those findings depend on the particular facts of this case. Those facts will not necessarily be replicated in arrangements between other clergy and those persons or bodies who engage them.

If I am wrong in holding that there was a right of appeal and that, in truth, an appeal could only be brought by leave, I indicated in the previous decision that I would grant leave to appeal. That was because there arose a significant question of some general importance as to the circumstances (if any) in which a minister of religion may be an employee. It involved questions as to whether and when an intention to enter into contractual relations should be inferred as a matter of course. Those matters have now been resolved against the appellant. There are no other grounds which would have warranted the grant of leave to appeal to this Court. In that regard, I have nothing to add to what the Chief Justice has said. If it were necessary I too would rescind leave to appeal.