His Eminence Petar The Diocesan Bishop Of The Macedonian Orthodox Diocese Of Australia And New Zealand v Lambe Mitreski

Supreme Court of NSW|2012-08-07|Before: Brereton J

Judgment (ex tempore) 1HIS HONOUR: Consequent on a judgment given on 3 February 2012 [Metropolitan Petar v Mitreski [2012] NSWSC 16], on 5 March 2012 I made orders that included the following: 4. Order that in its control and administration of the Trust Property, the Sixth Defendant, by itself, its servants and agents: (a) be restrained from excluding the First Plaintiff (and his successors as Diocesan Bishop from time to time) from the parish church of St Petka, and/or from preventing, hindering or impeding him from accessing and/or conducting services in the church; (b) be restrained from excluding the Second Plaintiff (and any other parish priest appointed by the First Plaintiff or his successors as Diocesan Bishop) from the parish church of St Petka, and/or preventing, hindering or impeding him (and/or any other priest licensed by the Diocesan Bishop to do so) from conducting services in the church; (c) be restrained from employing or engaging any person to perform any duty ordinarily performed by a priest of the Macedonian Orthodox Church unless such person has been licensed by the Diocesan Bishop to do so; (d) by 2 April 2012, admit into its membership those who are the subject of the membership applications referred to in paragraph 47 of the Affidavit of the Second Plaintiff sworn 4 August 2010 (except to the extent that any such applicant has by then informed the Sixth Defendant in writing that he or she no longer wishes to proceed with such application); and thereafter take all reasonable steps to facilitate the obtaining or renewal of membership by believers in the doctrines of the Macedonian Orthodox Church who satisfy the criteria for membership of the Parish Assembly for St Petka Rockdale specified in the Constitution of the Church, the Diocesan Statute and any Parish By-Laws; and be restrained from accepting or renewing any application for membership from any person who does not satisfy those criteria. 2Upon the undertaking of the sixth defendant to prosecute an appeal from order 4(d) with reasonable diligence and expedition, I stayed the operation of that order until further order. Whether or not that was granted formally by consent - and the record does not so indicate - the stay was granted in circumstances where counsel for the plaintiffs had accepted that for practical purposes, such a stay was necessary in order to preserve the subject matter of any appeal; in any event, it was not the subject of any serious opposition. In due course, an appeal was filed, and has been set down for hearing in February 2013. 3Orders 4(a), (b) and (c) were not stayed, and were not the subject of an application for a stay. As a result, the Church has been re-consecrated, and Father Mitrev has commenced conducting services at the Church. In compliance with those orders, the defendants have not prevented him from conducting such services. Nonetheless, there has been ongoing disputation in respect of the conduct of the affairs of the Church, and the Parish. Unless some step is taken now to resolve it, that disputation will continue, at least until the hearing of the appeal. 4In order to endeavour to bring about that result, the plaintiffs filed a motion, initially on 1 June 2012, and amended at the hearing on 7 August 2012, claiming interlocutory orders, many mandatory in nature, in respect of various affairs of the Church and the Parish. Broadly, they can be broken into four categories: first, the remuneration of Father Mitrev as Priest; secondly, matters pertaining to the Church and services therein, such as access to the Church by the Priest, access to the altar area and the environment within the Church, including air conditioning and security; thirdly, matters relating to property the subject of the trust, but ancillary to the Church, such as the provision of an office and other facilities for the Priest, access by the Priest to the Church hall, and the performance of priestly functions by persons other than Father Mitrev; fourthly, and finally, financial matters, and in particular moneys raised or received in the Church and otherwise in respect of trust property. 5Although initially characterised as an application for further interlocutory relief, ultimately Mr Parker of Senior Counsel, for the plaintiffs, embraced the proposition that, if such orders were to be made, the proper basis on which they were to be made were as conditions attached to the stay of order 4(d). This characterisation of the relief sought is of fundamental importance. It means that what the Court is being asked to do is not to give effect to provisions of Church law that are not necessarily fundamental, so as to be terms of the trust, by orders enforceable by sanction of contempt of Court; nor to enforce provisions of Church law that had been neither found nor, for that matter, alleged to this point to be fundamental terms; nor to grant interlocutory relief in respect of final relief that had been neither sought nor granted, but simply to establish an interlocutory regime, as part of the stay that had already been granted, pending the hearing of the appeal. 6It is clear that the plaintiffs submitted to a stay because they appreciated the overwhelming force of the argument that, were order 4(d) not stayed but implemented, there was a high degree of probability that the Association would be "taken over" by followers of Father Mitrev, the current executive removed and replaced, and opposition to the plaintiffs would cease, and with it the appeal would likely be discontinued. That reflected an observation made in the 3 February 2012 judgment (at [188]) to the effect that, upon the voting membership of the Association being brought into line with the requirements of the Diocesan Statute, the state of hostilities between the Association and the Church would probably come to an end. That was certainly the predominant reason underlying the grant of a stay. 7A second reason for granting the stay was that a substantial amount of bureaucratic effort would be involved in considering and dealing with the applications for membership in question - and amending the relevant membership registers to reflect that - which would then have to be reversed if the appeal were to succeed. In other words, the stay would avoid some unnecessary duplication of effort and disruption, which would be rendered superfluous if the appeal were to succeed. 8However, it was not a reason underlying the stay to preserve opportunities for obstruction or impediment or hindrance of the Bishop and the Parish Priest, who were effectively reinstated by orders 4(a) and (b), nor to permit the continuation of activities by unauthorised priests, inconsistent with the intent of order 4(c). In effect, the stay was for the purpose of avoiding irremediable detriment that would be occasioned to the defendants by implementation of order 4(d), but not to preserve, pending the appeal, the ability of the defendants to continue to resist the authority of the Bishop and the Priest. 9The effect of the relief sought in the notice of motion, framed as it now is as conditions imposed on the stay, is to establish, so far as practicable, the regime which would obtain but for a stay; that is, one in which there is co-operation by the Association with Father Mitrev to facilitate the performance of his function as Parish Priest. Such a regime would go beyond the requirement of the final orders that have been made - to the effect that he be permitted to access the Church, and conduct services, which it is not presently suggested have been contravened - and would extend to requiring such further more general co-operation as might ordinarily be expected from a co-operative Parish Association. 10Counsel for the defendants posed the question, rhetorically, why should this state of affairs be expedited while the stay is on foot, and while the appeal is pending. The answer to that question is that the argument has been heard, and judgment has been delivered; until an appeal determines to the contrary, it is presumed to be correct. A stay is granted to avoid irremediable prejudice, lest that judgment be wrong and be reversed, and it is granted having regard to considerations of the balance of convenience. A stay as far as possible should involve the minimal interference with the position established by the judgment as is necessary to avoid irremediable detriment. As a very simple example, if on an appeal in a claim for damages it is clear that the plaintiff will still retain a judgment, but that its quantum might be reduced, then the Court will require payment of the judgment to the extent below which it is not likely to be reduced. A stay should not detract from the successful party's enjoyment of the fruits of its victory, except to the extent necessary to avoid irreversible detriment. 11In this case, if a stay had not been granted, first, Father Mitrev's adherents would have been admitted into membership, and, in all probability - although having regard to the evidence of Mr Kotevich as to the number of current members of the Association, I cannot be certain - they would have control of the Association, and replaced the Executive Committee. Secondly, that would have resulted in the Parish Association being co-operative with, rather than hostile to, the Priest, and, more particularly, conducting the affairs of the Parish in accordance with Church law, including its non-fundamental as well as its fundamental respects. Thirdly, that, in turn, would have resulted in the abandonment of the appeal. The stay was granted in order to avoid the first and third of those consequences. There is no reason why a stay on the second of the consequences - essentially that the Bishop and the Priest be permitted to act as such in a co-operative context rather than a hostile one, and one in which the affairs of the Parish are conducted in accordance with the non-fundamental as well as fundamental provisions of Church law - should be granted. 12That then brings me to the various particular conditions sought. It is convenient to deal with them in the four categories that I have foreshadowed.

Remuneration of Father Mitrev 13The first, paragraph 1(a) of the amended notice of motion, is concerned with the Priest's stipend. The evidence establishes that it is the established practice of the Macedonian Orthodox Church that the Priest is supported by the altar. Thus, Young J, in his Honour's judgment on the separate questions [Metropolitan Petar v Mitreski [2009] NSWSC 106], observed (at [465] - [468]) that there were a number of provisions of Church law, culminating in Apostolic Canon 51 - to which the defendant's expert, Professor Erickson, referred - to the effect that those who wait at the altar should be nourished by the altar. Professor Erickson acknowledged a general principle that the clergy were entitled to compensation for their services out of Church funds, although he concluded that this was not a fundamental provision of Church law. For present purposes, and having regard to the basis upon which this application is put, it does not matter that this was not established to be a fundamental provision of Church law and a term of the trust. The evidence referred to in Young J's judgment establishes that it is a provision, if a non-fundamental one, of Church law. 14A Diocesan decision of 21 March 2012 determines that Father Mitrev's remuneration should be $665 per week, after tax, plus telephone, plus an allowance for telephone costs of $60 per month. If the Association were applying, and acting in accordance with, those provisions, and/or if it were under the control, as but for the stay it likely would be, of persons supportive of Father Mitrev, then it would pay him in accordance with the Canon, and the Diocesan decision. Moreover, refusal to remunerate the Priest in those circumstances is calculated ultimately to exclude him from the Parish. It is true that there is no evidence of hardship to Father Mitrev, although it is not difficult to infer that substantial imposition on him is involved in having him minister to the Parish for no remuneration. It was argued that because he is effectively the Bishop's agent, the Diocese should pay, but there is no suggestion that that is the practice of the Macedonian Orthodox Church anywhere. It was suggested that there was some potential for difficulty in recovering moneys paid to Father Mitrev if the appeal were to succeed, but there was no attempt to establish any inability on his part to repay, and the submission that there was no evidence of hardship on his part points in the opposite direction. In any event, just as one of the de-frocked priests who had acted as a priest was effectively exonerated from liability to restore his salary or his remuneration to the trust by a just allowance for the services rendered, it is even clearer that Father Mitrev would be in a similar and stronger position, because unlike the de-frocked priest in question, he would have been acting with the authority of the Bishop. 15But for the stay, Father Mitrev would be remunerated for his services. I can see no reason why he should be kept out of that remuneration in the meantime, and expected to serve without any compensation. Accordingly, I would impose a condition to the effect of paragraph 1(a) of the amended notice of motion.

Access to and control of the Church 16The second category concerns access to the Church, access to the altar area within the Church, and the management and control of the environment of the Church. This is covered by paragraphs 1(d), (f) and (m) of the amended notice of motion. 17The evidence reveals that there have been disputes about the access by persons, in particular the caretaker, to the altar area. It seems that the light switches in the Church are located in the altar area. The defendants contend that they or their caretaker needs access, in order to operate the light switches. Father Mitrev and the Bishop contend that the light switches were located in that area by mistake, and should have been located at the entrance to the Church, but that while they remain located in the altar area, Father Mitrev is prepared to be responsible for their operation. 18There is some evidence - admittedly not highly satisfactory but on the other hand not difficult to accept - that the altar area has particular religious significance, or a particularly sacred aspect, such that access to it is restricted. The only justification advanced for the incursions onto it that have been taken place is the location of the light switches. It seems to me that this, like the other matters that arise under this second class, involves issues of religious significance, and it is difficult to imagine circumstances in which the Parish Priest would not have control and superintendence of such matters. 19Essentially, what is happening in this respect is that a matter of religious significance in the Parish Priest's Church is not being attended to in accordance with his wishes as Parish Priest. It is inconceivable that if Father Mitrev's followers were in control of the Association, it would permit persons not authorised by him to enter the altar area. Given the significance of the role of the Parish Priest, particularly in respect of religious matters under Church law, even in its non-fundamental respects, it is improbable to a high degree that an Association conducting its affairs in accordance with Church law would authorise or permit persons not authorised by the Parish Priest to enter the altar area. I do not see why control of religious matters within the Church itself should not be exercised by the Parish Priest, nor any necessity that this be deferred pending any appeal. I will therefore impose a condition to the effect of that in paragraph 1(d). 20The next related aspect is that referred to in paragraph 1(f), namely, the keys to the Church. Prima facie, it seems self-evident that a Parish Priest as the religious leader of the Parish should have unfettered access to, and control of access to, the Church. Counsel for the defendants referred to material, emanating from Father Mitrev, that historically the caretaker had held the keys, and that appears to be so. However, that was at a time when the caretaker had the confidence of the Priest. That is no longer the situation, because the caretaker is an employee of the Association or its executive. It seems to me inconceivable that the Parish Priest should not be able to access the Church, when and as he may require. This is incidental to the performance and discharge of his functions as Parish Priest. There is no reason why this should be deferred pending the outcome of the appeal. 21I would therefore impose on the stay a condition substantially to the effect of that in paragraph 1(f), provided that, at least to this point, I would limit it to keys providing access to the Church. Whether that ought to be extended to ancillary property is a matter to which I shall come. 22The final aspect of this issue is the environment within the Church. There is a large body of evidence, which I think can be said to indicate that, on a number of occasions, while Father Mitrev has been conducting services in the Church, the atmosphere has been very cold. The more objective aspects of the evidence on this include photographs of thermometers showing temperatures ranging between 14 and 16 degrees. What cannot be resolved clearly on the evidence is whether this has been as a result of defects in the air conditioning system, or deliberate acts on the part of the defendants. The competing evidence, un-cross-examined, does not enable a finding to be made in that respect. 23As seemed to be implicit in the affidavit of Boris Minchevski, sworn 4 August 2012, the invoice of the repairman makes clear that the system is capable of, and does, heat as well as cool. In any event, given that the environment within the Church, whether the air temperature or the presence of security surveillance, impacts on and potentially impedes the delivery or provision of religious services, it seems to me entirely reasonable and proper that those be matters under the control of the Parish Priest. Accordingly, and subject to the undertaking to which I shall come, I would impose a condition to the effect of that in paragraph 1(m) of the amended motion.

Ancillary property 24That then brings me to the third category of relief sought, which relates to ancillary property, in particular the provision for the Parish Priest of an exclusive lockable office, and access to the Church hall. At this point, it is to be borne in mind that all of the trust property - that includes the Church hall as well as the Church itself - is the subject of the charitable trust, and all is to be used for the religious purposes of the Macedonian Orthodox Church, and purposes ancillary thereto. However, it was fundamental to the conclusion that there was a valid charitable trust that the ancillary purposes were sufficiently tied to religious purposes as not to be so extraneous that the trust could not be properly characterised as a charitable trust for religious purposes. 25There is competing evidence as to whether, prior to the outbreak of the present disputes, the Parish Priest had an office in the Church hall together with a computer and telephone. It is improbable that he had no office. One would think it an inevitable concomitant of being a Parish Priest that there would be some office from which he could attend to administrative aspects. On the other hand, I am unable to tell on the evidence whether he previously had an exclusive lockable office, to which none other had access except with his consent. To provide him with an exclusive lockable office at this stage would potentially involve some disruption to present arrangements for use of the property, which might require reinstatement in the event of a successful appeal. On the other hand, I see no reason why he should not be provided with at least some office space from which he can attend to administrative matters. The evidence indicates that he has, in any event, access to a telephone and to a computer, albeit not at St Petka. To perform his functions as Parish Priest of St Petka, and not via some other Church premises, however, seems to me to require that he have access to a computer at St Petka. Accordingly, I would be prepared to impose a condition that required that he be provided with office space and a computer, but I am not inclined to require that that be separate exclusive space. 26So far as the Church hall is concerned, it is part of the trust property. Again, it is unthinkable that if Father Mitrev's adherents were in control of the Association, or if the affairs of the Association were being conducted in co-operation with the Parish Priest, that the Parish Priest would be excluded from the Parish Church hall. I would impose a condition to the effect that he be permitted access to the Church hall, and, concomitant with my conclusions in respect of the office and the Church hall, that he should have a key that provides access to the Church hall and such office space as is allocated to him.

Financial matters 27The fourth category is financial matters. Again, there is conflict in the evidence, which it is not necessary to resolve, as to the involvement of the Parish Priest historically in the collection, receipt and banking of donations and gifts at the Church. What is clear is that, while ultimate control of those moneys remains, at least for the time being, with the executive of the Association - because of the stay that is in place - moneys will be collected between now and the determination of the appeal, that were a stay not in place might be dealt with differently. 28In those circumstances, it seems to me manifest that there must be a process in place, which first requires accounts to be strictly maintained, and, secondly, permits some transparency or observation of those accounts. I would not impose a condition to the effect of paragraph 1(h) in the terms in which it appears, because as I perceive it "participation" as described in that paragraph will involve such physical interaction as to be highly undesirable in this case; but, I think a condition that required the defendants to permit the second plaintiff to observe the collection, counting, recording and banking of moneys raised, donated or received in the Church or in the hall would be appropriate. 29So far as the order sought in paragraph 1(i) is concerned, I would impose a condition that the defendants maintain a strict and accurate record of all moneys raised, donated or received in the Church or in the hall, until the hearing and determination of the appeal or further order. With those conditions, the additional relief sought in paragraphs 1(g) and 1(j) is unnecessary.

Performance of functions by other than the parish priest 30The remaining matter that I have not addressed is paragraph 1(c), which is concerned with the performance of priestly functions in and around the Church by persons other than the Parish Priest. 31There is some evidence of the performance of priestly functions in the Church hall by a de-frocked and ex-communicated priest. I am unconvinced that the evidence shows that participation in Bible Study activities, or even leading them, is the performance of a function that can only be carried out by a Priest of the Church, but there is some evidence of other functions, including the saying of prayers in a ceremonial setting, that reveals some performance of priestly functions by a de-frocked priest. 32Order 4(c) made on 5 March 2012, plainly prohibits the employment or the engagement of non-licensed priests by the defendants. It is inconceivable that an Association conducting its affairs in accordance with Church law would permit de-frocked or ex-communicated priests to perform priestly functions on its premises. Amongst other things, to do so would be plainly contrary to the authority of the Bishop and of the Parish Priest. The Association, as the registered proprietor and occupier of the property, has the ability to prevent those things from happening. In those circumstances, and in particular as permitting them to continue is inimical to the performance by the authorised Parish Priest of his duties, and to his authority, it is appropriate to impose a condition to the effect that the performance of priestly functions by de-frocked and/or ex-communicated priests not be permitted. That is substantially to the effect of paragraph 1(d), although a little narrower than it.

Orders 33The convenient course is to afford the plaintiffs an opportunity to bring in short minutes to give effect to this judgment. 34It is conceivable that some of these conditions may require some amount of expenditure, probably modest, to implement: the provision of additional keys, the creation of office space, and the adjustment of security cameras may all involve an element of expenditure, as might the adjustment of the air conditioning system. If it transpires that the plaintiffs are not entitled to effectively control the affairs of the Parish in the way in which I have hypothesised for the purpose of this judgment, then it would be appropriate that they should recompense the Association for any expenditure occasioned by compliance with these conditions 35Accordingly, I think it proper to impose a requirement that the plaintiffs undertake to reimburse the sixth defendant for the costs of compliance with any of the conditions I have imposed, if orders 4(a), (b) and (c) made on 5 March 2012 be set aside by the Court of Appeal. 36The plaintiffs have been substantially successful on the motion, and there should be an order that the defendants pay the plaintiffs' costs of the motion. I do not think in respect of this application it can be said that the plaintiffs have unnecessarily and unduly exacerbated the costs and extent by the evidence that has been adduced. I see no basis to depart from the ordinary costs order.

10 August 2012 - Short Minutes of Order 37Upon the undertaking of the Plaintiffs to the court, if orders 4(a), (b) and (c) made on 5 March 2012 are set aside on appeal, they will compensate the Sixth Defendant for any loss reasonably incurred in complying with the conditions below (but noting that this undertaking is without prejudice to any contention that the Plaintiffs may ultimately make that donations from the congregation should be taken into account in assessing any such loss): 38Order that the further continuation of the stay granted on 5 March 2012 be conditional upon compliance by the Sixth Defendant with the following conditions: (1)The Sixth Defendant shall pay to the Second Plaintiff (and any other parish priest appointed by the First Plaintiff or his successors as Diocesan Bishop) the weekly stipend and other entitlements, to the extent permitted under Australian law, specified in Decision DRC No 6 dated 21 March 2012 of the Diocesan Church Court or any subsequent decision of the Diocesan Church Court, such payment to be made out of moneys collected by offertory or otherwise received by the Association or by means of its ownership of the property of the Association (except for the funds, if any, which the Sixth Defendant holds as the product of donations received by the Sixth Defendant otherwise than by means of its ownership of the Trust Property and for the sole purpose of conducting its defence of these proceedings, including its defence or prosecution, as the case may be, of any related judicial advice or appellate proceedings); (2)The Sixth Defendant shall permit the Second Plaintiff (and any other parish priest appointed by the First Plaintiff or his successors as Diocesan Bishop) to access and use the church hall adjacent to the parish church of St Petka for the purpose of performing any function ordinarily performed by a priest of the Macedonian Orthodox Church; (3)The Sixth Defendant shall not permit any defrocked or excommunicated former priest to perform on the Trust Property any function ordinarily performed by a priest of the Macedonian Orthodox Church, unless such person has been licensed by the Diocesan Bishop to do so; (4)The Sixth Defendant shall not permit any person other than the Second Plaintiff (and any other parish priest appointed by the First Plaintiff or his successors as Diocesan Bishop), or any person permitted by him or by the Diocesan Bishop, to enter the altar area of the church; (5)The Sixth Defendant shall provide to the Second Plaintiff (and any other parish priest appointed by the First Plaintiff or his successors as Diocesan Bishop) office space and a computer so as to permit him to carry out the functions of parish priest; (6)The Sixth Defendant shall provide to the Second Plaintiff (and any other parish priest appointed by the First Plaintiff or his successors as Diocesan Bishop) a key (or keys) which provides access to the church gates, the church doors, the hall, the toilets and such office space as is allocated to him; (7)The Sixth Defendant shall permit the Second Plaintiff (and any other parish priest appointed by the First Plaintiff or his successors as Diocesan Bishop), or a person nominated by him, to observe the collection, counting, recording and banking of moneys raised, donated or received in the church or in the hall; (8)The Sixth Defendant shall prepare and maintain an accurate record of all moneys raised, donated or received in the church (including from the sale of candles, icons and other items sold to parishioners or worshippers) or in the hall; (9)The Sixth Defendant shall comply, during the period of any services conducted by the Second Plaintiff or any other priest authorised by the Diocesan Bishop, with any reasonable request of such priest with respect to the air-conditioning, security, lighting or other services and utilities within the church. 39Note that in these orders the term "Trust Property" has the same meaning as defined in order 1 made on 5 March 2012. 40Order that the Sixth Defendant pay the Plaintiffs' costs of the Notice of Motion filed on 1 June 2012.

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