Macedonian Orthodox Community Church St Petka Incorporated v Metropolitan Petar

Judgment 1BEAZLEY JA: I agree with Macfarlan JA. 2MACFARLAN JA: TABLE OF CONTENTS Summary of case and conclusions [3] The issues on appeal [6] Conclusions [14] Factual circumstances [15] The Macedonian Orthodox Church [15] The 1974 MOC Constitution [16] The steps to establish a parish church at Rockdale [19] The St Petka by-laws [25] Deed of Trust of 8 March 1977 [34] The St Petka Constitution [37] Other events prior to incorporation [39] Incorporation of the Association [47] 1994 MOC Constitution [50] The 1996 Diocesan statute [58] The disputes that arose [61] Hamilton J's judgment of 4 April 2003 [74] Young CJ in Eq's judgment of 4 March 2009 [81] Brereton J's decision of 3 February 2012 [97] Brereton J's judgment of 5 March 2012 [113] Brereton J's judgment of 21 December 2012 [115] The first issue on appeal: the trust or trusts applicable prior to the Association's incorporation [119] Whether the trust conferred a right on the Association to use the trust property for the stated purpose [123] The Peetz declaration registered in August 1978 [132] The balance of the Schedule A property [137] The Non-schedule A property [142] Property acquired after incorporation [144] Second issue on appeal: whether the trust was extinguished on incorporation [147] The Associations Incorporation Act 1984 [149] The transitional provision [153] The form of Schedule 2 at the time of incorporation [155] The 1992 form of Schedule 2 [171] Third issue on appeal: whether the trust was breached [174] Alleged breach (a): exclusion of the Bishop from St Petka [183] Alleged breaches (b) and (c): exclusion of the bishop appointed priest [185] Alleged breach (e): employing priests not appointed by the bishop [191] Alleged breach (h): taking steps in relation to the church building and contents without the bishop's approval [192] Alleged breach (i): membership of the Association [194] Conclusion on breaches [199] Fourth issue on appeal: injunctive relief [200] Fifth issue on appeal: accessorial liability for breaches of trust [202] Knowledge of transgression of Church law [216] Conclusion on accessorial liability [222] Sixth issue on appeal: whether the association should have been excused for any breaches of trust [226] Seventh issue on appeal: costs [230] Orders to be made on appeal [233]

SUMMARY OF CASE AND CONCLUSIONS 3This judgment relates to decisions of Hamilton J, Young CJ in Eq and Brereton J concerning the Macedonian Orthodox Church St Petka at 65 Railway Street Rockdale. The applicants for leave to appeal (to whom I shall refer as "the appellants") comprise the Macedonian Orthodox Community Church St Petka Incorporated ("the Association"), five members of the Council of the Association ("the Council Member appellants") and Father Dzeparovski whom the Association purported to appoint as priest of the St Petka parish. The appellants were defendants in the court below. 4The respondents in this Court comprise the Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand, Father Mitrev whom the Bishop appointed as priest of the St Petka parish and the Attorney-General of New South Wales in his role as protector of charities. References in this judgment to the respondents or defendants are not intended to include the Attorney-General. The Bishop and Father Mitrev were the plaintiffs in the court below. 5In essence, the dispute is as to who has the right to control the affairs of the St Petka Church, whether it is, on the one hand, the Bishop and his appointed priest, representing the hierarchy of the Macedonian Orthodox Church based in Skopje in Macedonia, or whether, on the other hand, it is those who are presently in charge of the Association and claim to represent the interests of the members of the St Petka parish. Central to the dispute is the question of whether the Association is entitled to act in relation to the St Petka church in accordance with its own Constitution irrespective of the laws governing the Macedonian Orthodox Church generally.

The issues on appeal 6The proceedings have been brought before this Court by way of applications for leave to appeal and cross-appeal. Contrary to the previous position, none of the parties now assert that the orders made by Brereton J, which take into account the earlier decisions of Hamilton J and Young CJ in Eq, are not final orders involving property rights exceeding $100,000 in value (see s 101(2)(r) of the Supreme Court Act 1970). They do not therefore now assert that leave is required. Nevertheless, as there are some limited matters remaining for Brereton J's determination, as the proceedings in this Court are, in form, applications for leave to appeal and cross-appeal, and as grants of leave are in any event appropriate, leave to appeal and cross-appeal should be granted. The proceedings presently before the Court for determination may nevertheless be dealt with as appeals because the hearing in this Court included argument on the merits of the appeals and cross-appeal that would lie if leave were granted. 7The first issue on appeal concerns the terms of the trust or trusts applicable to the property at 65 Railway Street ("the Church Site") and other property held by the Association. 8The second issue is whether the trust applicable to the relevant property was extinguished by the Association's incorporation in 1992 under the Associations Incorporation Act 1984. 9The third issue is whether the Association has committed any, and if so what, breaches of trust. 10The fourth issue concerns the injunctive relief that should be given in respect of any actual or threatened breaches of trust. 11The fifth issue is whether the appellant Council Members other than Mr Minovski have accessorial liability for any breaches of trust of the Association in paying emoluments to the priests it appointed. 12The sixth issue is whether the Association should have been excused pursuant to s 85 of the Trustee Act for those breaches of trust. 13The seventh issue is whether the costs orders made by Brereton J should be set aside.

Conclusions 14My conclusions in relation to these issues are as follows: (1) Hamilton J correctly found that the trust is one "to permit the trust property to be used by The Macedonian Orthodox Church St Petka Rockdale as a site for a church of the Macedonian Orthodox Religion and for other buildings and activities concerned with or ancillary to the encouragement, practice and promotion of the Macedonian Orthodox Religion". Further, it was correctly found at first instance that this trust is applicable to both the so-called schedule A and non-schedule A property and to other property acquired by the Association after its incorporation. (2) The trust was not extinguished by the Association's incorporation in 1992. (3) It was correctly found at first instance that the Association breached the trust by excluding the Bishop and the priest he appointed, by employing priests not appointed by the Bishop, by taking steps in relation to the Church building and contents without the Bishop's approval and by limiting the Association's membership. (4) The challenge to the injunctive relief granted at first instance fails. (5) None of the appellant Council Members have accessorial liability for the Association's breaches of trust in paying emoluments to the priests it appointed. (6) The Association should be excused for those breaches of trust. (7) One of the two challenged costs orders made by Brereton J should be set aside. The other should not.

The Macedonian Orthodox Church 15The Macedonian Orthodox Church ("the MOC") is a self-governing church with its seat in Skopje in Macedonia. At its head is the Archbishop of Ohrid and Macedonia who acts in conjunction with the Holy Archbishopric Synod. It is organised into various dioceses situated throughout the world. Each is headed by a diocesan bishop, and is divided into parishes under the spiritual leadership of a parish priest. On 29 October 1974 the MOC adopted a written Constitution ("the 1974 Constitution") which was operative until a replacement constitution was adopted on 1 November 1994 ("the 1994 Constitution").

The 1974 MOC Constitution 16Article 9 of the 1974 MOC Constitution described the church hierarchy as including, in descending order, the Archbishop and the Synod based in Skopje, the diocesan bishop and the parish priest. Article 13 stated that the MOC is Episcopal, meaning, according to the Macquarie Dictionary, that the Church is "based on an order of bishops exercising pastoral authority and discipline". 17Article 23 provided that every Orthodox Christian was a member of the parish in whose territory he (or she) resided and Articles 166 and 167 provided that for each parish church there was to be a Church Council consisting of the parish priest and all Orthodox Christians belonging to the parish church. Article 164 provided for the parish priest to be appointed by the bishop responsible for the parish and Article 168 provided for a Church Assembly consisting of all Orthodox Christians within the territory of the Church to elect a Church Committee to hold office for four years. Article 169 provided that the Church Committee was to be concerned "with the execution of the regular business associated with the life of the parish church and the Church Council". 18Under the heading "The Church Councils of the Macedonian Orthodox Church Abroad", Article 172 provided as follows: "The organization and work of the Macedonian Church Councils abroad are administered by separate laws (statutes), which in concordance with the Parish Bishop, are determined by the Assemblies of the Church Councils. The laws (Statutes) hereinbefore referred to must be in harmony with Article 19 and the other corresponding regulations in this Constitution and applicable laws of the corresponding country. The laws of the Macedonian Church Councils abroad come into effect after ratification by the Archbishopric Synod of the Macedonian Orthodox Church".

The steps to establish a parish church at Rockdale 19In 1976 an Initiative Committee, comprised of persons of the Macedonian Orthodox faith, identified the property at 65 Railway Street Rockdale as a site suitable for the establishment of a new parish church. 20By a letter from its President, Mr Grbevski, dated 9 November 1976, the Initiative Committee sought the blessing of the MOC Synod in Skopje for the establishment of a Macedonian Orthodox Church at the Rockdale property. This letter stated that the Initiative Committee had resolved that the church "is to be managed only in accordance with the directions ie the Constitution of our Macedonian Orthodox Church with a seat in Skopje, R Macedonia". 21A report by the Initiative Committee, given on 20 November 1976 to a meeting of interested persons, about the proposal to establish a church at the property stated: "The new Church will accept the Church Statute [a reference to the Constitution] of the Macedonian Orthodox Church in Skopje and will apply it in its integrity because this Statute is accepted and implemented by all Macedonian churches in Macedonia and overseas, with exception of some churches in Australia which do not want to accept it. The Church will be managed by a Committee elected in a democratic way, on a general assembly by all the Macedonians from Sydney present at the assembly. Every Macedonian has the right to vote. Every Macedonian has the right to elect and to be elected. There will not be such a thing as the so called 'Foundation Members' like it is the case with some other Churches, and who elect themselves over and over in order to command the Church and the Macedonian believers". 22The report also stated that the MOC and Holy Synod in Skopje should be asked to send "an honest, educated and family oriented priest" to the church. 23As recorded in a later document known as the Souvenir Booklet, the meeting resolved to form an unincorporated association (to which I also refer as "the Association") to purchase the Rockdale property, adopt by-laws and elect a management committee. Some donations were received at the meeting and thereafter. 24Following exchange of contracts on 23 December 1976 for the purchase of the property, the draft by-laws were, on 15 February 1977, sent to the Holy Synod for approval. In the meantime, the Australian diocesan deputy bishop indicated that the new parish organisation should be known as the "Macedonian Orthodox Church Community St Petka Rockdale".

The St Petka by-laws 25Article 4 of the form of by-laws sent to Skopje on 15 February 1977 provided as follows: "The Macedonian Orthodox Church "St Petka" is an integral part of the Macedonian Orthodox Church in Macedonia, and it is under its Canonical Jurisdiction and it is governed by the Holy Bishops Synod of the Macedonian Orthodox Church and the Metropolitan respectively". 26Article 9 excluded from membership of the Church persons whose conduct was inimical to the principles of the Church. Thereafter Article 12 provided that "[o]nly honest persons of the Orthodox faith whose parents are Orthodox Christians are accepted as members of the Church". 27Articles 17 and 19 provided for there to be an Assembly and a Church Managing Committee, with the Assembly to elect the latter. 28Articles 43, 44 and 48 included the following: "Article 43 The parish Priest is [the] Elder of the Church as well as in charge of the Parish Church. He is appointed as a Parish Priest by the Diocesan Metropolitan i.e. by the Macedonian Archepiscopacy. He is responsible for all activities of the Church before the Diocesan Metropolitan, the Diocesan Ruling Committee and the membership Assembly. Article 44 Concerning the canonical duties, the Priest as Elder of the Church is under direct supervision of the Diocesan Metropolitan and the Holy Synod of the Macedonian Orthodox Church, respectively. For any breaches he shall be judged by the Australian Diocesan Church Court or the Archbishopry in Macedonia - Skopje. ... Article 48 The Church Management has no right to dismiss the Parish Priest or to appoint another Parish Priest, without approval by the Holy Synod of the MOC or the Diocesan Metropolitan. ... " 29Article 63 stated that the by-laws were passed at a membership assembly and were to be approved by the Holy Synod in Macedonia. 30With some changes, the by-laws were approved by the Holy Synod on 10 May 1977. To some extent, apparent differences in the language of the two versions arise out of translation differences. 31Relevant provisions of the approved version were as follows: "Article 4 The church-community 'St Petka' with all its assets real and personal belongs exclusively to the members meeting/general meeting/assembly, that is the members of the church community. The same cannot for any reasons be appropriated by a group of people, a company or an institution. ... Article 5 The Macedonian orthodox church community 'St Petka' in Rockdale is an integral part of the Macedonian orthodox church in Skopje, Macedonia. It is under its canonic jurisdiction and the same is governed by the authorised diocesan bishop, that is the Holy Bishops' Synod of the Macedonian orthodox church. ... Article 9 Regular members of the church are orthodox Macedonians of orthodox parents and faith, who voluntarily want to become members and the same have the right to elect and be elected. The regular members in the church community are accepted on the basis of a written application, signed by two witnesses - members of this church community who guarantee for the applicant. ... Article 21 The meeting/general meeting/assembly is comprised of all members of the church community, who have fulfilled the membership obligations to the church community. ... Article 28 The meeting/general meeting/assembly elects a church administration of 13 to 35 members. By virtue of his position the parish priest is a member of the administration. ... Article 46 The parish priest is an elder of the church, as well as guardian of the parish of the church. He is appointed as a parish priest by the Diocesan Bishop, that is by the Holy bishops' synod. He is responsible to the Diocesan Bishop, the Diocesan Administrative Committee and the Holy bishops' synod for all activities in the church. ... Article 63 For that which is not provided for or explained in these by-laws, explanation is to be sought in The Constitution of the Macedonian Orthodox church". 32Following the portion of it quoted above, Article 28 provided that, after their election to the "church administration", members were to take an oath, inter alia, to abide by the MOC Constitution and the St Petka by-laws. 33The Holy Synod's decision to accept the by-laws, as recorded in a letter from its President of 21 May 1977, was as follows: "The newly formed Macedonian Church Community 'St Petka' - Rockdale - Sydney, to be accepted under the spiritual jurisdiction of the Holy Macedonian Orthodox Church - The Macedonian Archdiocese in Skopje. We approve of the committee of Rockdale as a managing committee of the Church 'St Petka' who will deal and follow [sic] the By-laws of the Church constructed in accordance with the spirit of the Constitution of the Macedonian Orthodox Church, its legal and Canonical norms and regulations and being accepted as such by the Holy Synod. ... "

Deed of Trust of 8 March 1977 34By Deed dated 8 March 1977 five members of the Initiating Committee, described as the founder members of the Association, appointed Mr John Peetz, solicitor for the Association, as trustee of the property at 65 Railway Street. Relevant parts of the recitals to and operative parts of the Deed were as follows: "WHEREAS A. The appointors are the founder members of a religious group to be organised and known as 'The Macedonian Orthodox Church St Petka Rockdale N.S.W. Australia (hereinafter called 'the proposed beneficiary'). B. It is intended that certain real estate premises and property more particularly described in the schedule below (hereinafter called 'the trust property') be purchased for use by the proposed beneficiary. C. Certain delays are anticipated in the organisation of the proposed beneficiary. D. The appointors have requested the trustee to acquire the trust property on behalf of the proposed beneficiary. E. The trustee has agreed to accept such appointment and to acquire and hold the trust property upon the trusts and subject to the provisions hereinafter contained. NOW THIS DEED WITNESSETH 1. The trustee shall acquire the trust property and stand possessed of the trust property upon trust to permit the trust property to be used by the proposed beneficiary as a site for a Church of the Macedonian Orthodox Religion and for other buildings and activities concerned with or ancillary to the encouragement, practice and promotion of the Macedonian Orthodox Religion. ... 10. The trustee shall, in addition to powers conferred by statute have the following specific powers to properly perform his obligations hereunder: (a) to borrow moneys, secured or unsecured; (b) to mortgage, lease, transfer, sub-let or otherwise deal with the trust property; (c) to receive gifts. 11. The trustee shall have the right to resign by delivering the appointors 7 days notice of resignation in writing or 7 days notice in writing to the proposed beneficiary after the formation of the proposed beneficiary, by delivering such notice of resignation to the Secretary or Chairman of the proposed beneficiary. 12. The trustee may, with the approval of the management committee of the proposed beneficiary or other governing body of the proposed beneficiary, by deed executed by the trustee or trustees wholly or partially revoke, alter or vary or add to any of the provisions of this Deed. 13. Upon the formation of the proposed beneficiary the management committee or other governing body of the proposed beneficiary shall: (a) by resolution appoint at least 2 and up to 4 further trustees and in default of such appointment, the original trustee, JOHN SERGIUS PEETZ, shall have power to appoint such further trustee or trustees by a document in writing signed by him; (b) have the power at any time by resolution to remove any trustee or trustees or appoint new trustees up to a total of 5 trustees". 35The Schedule to the Deed contained a description of the property at 65 Railway Street Rockdale. 36The Association's purchase of this property was completed by its conveyance on 5 April 1977 to Mr Peetz as trustee.

The St Petka Constitution 37By letter of 7 April 1977, Mr Peetz advised the Association that "[t]he Constitution has been drawn as well as the Trust Deed and we note you hold copies of both documents". 38On 28 October 1977, the members of the Association adopted a written Constitution, the relevant provisions of which were as follows: "1. NAME: The name of the organisation shall be the Macedonian Orthodox Church St Petka Rockdale N.S.W. Australia (hereinafter called 'the Church'). ... 3. OBJECTS: The objects of the Church are as follows: A. Generally, to encourage, practice and promote the Macedonian Christian Orthodox Religion and the activities concerned with or ancillary to the said Religion, and more particularly to B. Remain an integral part of the Macedonian Orthodox Church of Macedonia in Yugoslavia and wherever reasonably possible abide by the Canons of that Church. C. To educate members of the Church in the spirit of Orthodox Christianity. D. To maintain the glorious tradition of the Macedonian Orthodox Church in Macedonia Yugoslavia. ... J. To acquire by gift, bequest, purchase, lease or otherwise howsoever and to hold any real or personal property whatsoever which may be necessary or useful or incidental to the objects herein contained. ... L. To property invest and deal with the moneys raised by the Church. ... 8. MEMBERSHIP: Membership of the Church shall be divided into three categories classified and distinguished as follows: A. MEMBERS OF THE CHURCH - shall be Macedonian or persons born of Macedonian parents or having a Macedonian mother or father or direct descendants of such persons who are adherents to the teachings of the Christian Orthodox Denomination and shall be of the age of 18 years or over. Other persons who are adherents to the teachings of the Christian Orthodox Denomination shall be entitled to take part in the religious rites, ceremonies and services of the Church but only members of the Church shall be entitled to hold office, vote at meetings and otherwise take part in the control of the affairs of the Church. Members of the Church are to be of the highest moral character with unquestionable dedication and devotion to the principles of the Church. B. ASSOCIATE MEMBERS OF THE CHURCH ... C. CONTRIBUTORY MEMBERS OF THE CHURCH - shall be persons of any nationality or religion or institutions based in Australia or based in a foreign country who have contributed money or material value to the Church. i) Application for membership to the Church shall be made in writing signed by the applicant and shall be in such form and contain such requirements as to the Executive Council from time to time prescribes. ii) As soon as practicable after the receipt of an application for membership it shall be considered by the Executive Council who shall thereupon determine upon the admission or rejection of the applicant. In no case shall the council be required to give any reason for the rejection of an applicant. iii) A register of members shall be kept showing in respect of each member, his name, address and the date of commencement of membership. ... 13. MANAGEMENT: EXECUTIVE COUNCIL: 1. There shall be a controlling Council known as the 'Executive Council' (hereinafter called 'the council') comprising five members of the Church. [There then follows provisions relating to the election of members of the Executive Council by members of the Church] ... 16. DUTIES AND POWERS OF THE COUNCIL: 1. The business and operations of the Church shall be managed and controlled by the Council, and for that purpose the Council, except as hereinafter provided, shall have and may exercise the powers of the Church as if they had been expressly conferred on the Council at a general meeting of the Church. ... 24. PRIEST: 1. The Church shall duly appoint a Priest who, upon appointment, shall automatically become an additional member of the Council. The Priest shall be absolutely and exclusively responsible for the administering of the religious rites of the Church. 2. The salary of the Priest will be approved by the Council in accordance with the budget of the Church and such salary guaranteed to the Priest whilstever his position in the Church remains. 25. TRUSTEES: 1. The Church shall appoint up to ten trustees at a properly constituted general meeting. 2. All real estate property of whatsoever kind belonging to the Church and, any other property that may be so designated from time to time by the Church, shall be vested in the Trustees and they shall have the custody of all deed and documents of title relating to the said property of the Church and shall be responsible for safe custody of the same and shall deal with the dispose [sic] of all the said property of the Church whether real or personal for the time being vested in them in accordance with proper directions received from the Council provided that such directions are not in violation of the trusts upon which the property is held ... 27 AMENDMENT OF CONSTITUTION: This Constitution may be amended by resolution passed by a two thirds majority of members at any annual general meeting at which notice of the proposed amendments have been given or at a special general meeting convened for such purpose".

Other events prior to incorporation 39At the time that members of the Association adopted the Constitution, they appointed 10 persons as trustees to hold the property of the Church, as contemplated by Clause 25 of the Constitution. 40On 2 June 1977 the Association advised the Bishop of the Australian Diocese of the terms and conditions that would be applicable to the engagement of the priest to be chosen by the Bishop. 41Father Ivanovski, the priest appointed by the Bishop, arrived at St Petka on 20 November 1977 and the Church was consecrated by the Archbishop and Bishop in February 1978. 42On 16 August 1978 an undated Declaration signed by Mr Peetz, not in the form of a deed, was registered at the office of the Registrar General. The Declaration recited that by Deed of Trust of 8 March 1977, Mr Peetz acquired the property at 65 Railway Street Rockdale "on trust for the Macedonian Orthodox Church St Petka Rockdale in N.S.W. Australia" and purported to vest the property in the 10 persons appointed by the Association as trustees "as trustee for the Macedonian Orthodox Church St Petka Rockdale N.S.W. Australia". 43On 15 August 1978 two of the 10 trustees executed a Declaration of Trust, in the form of deed, relevantly in the following terms: "WHEREAS: A. The Trustees of the Macedonian Orthodox Church St Petka Rockdale N.S.W. Australia (hereinafter called the "Church Trust") have decided to purchase a real estate property at number 7 to 10 Firth Street, Arncliffe, more particularly described in the Schedule of land below (hereinafter called 'the property'). B. The Church trust has obtained from the Federal Government of Australia a grant of funds in the nature of a gift to acquire the property. C. For the sake of convenience of conveyancing the Trustees, have been appointed and are acting as purchasers of the legal estate of the property for the Church Trust. WITNESSETH: THE TRUSTEES HEREBY DECLARE: 1. That the funds provided for the purchase of the property have all been provided by the Church Trust. 2. That they will hold the property in absolute trust for the Church Trust. 3. That upon request by the Church Trust they will transfer the legal estate to the Church Trust in accordance with its constitution and will co-operate and sign all documents necessary to effect such transfer or other legitimate authorised and approved dealing with the property. 4. That in the meantime they will act in accordance with the Constitution of the Macedonian Orthodox Church St Petka Rockdale N.S.W. Australia, its rules and regulations. ... " 44This Arncliffe property was transferred by the two trustees to the Association's 10 trustees on 26 March 1979. 45In 1981 a property at 66 Railway Street Rockdale was acquired by the 10 trustees as "Trustees of the Macedonian Orthodox Church St Petka". This property was subsequently amalgamated with 65 Railway Street, with the result that both properties became known as 65 Railway Street (hereafter referred to as the "Church Site"). 46In 1985, for investment purposes, the trustees became the registered holder of shares giving a right to occupy unit 2 in a building known as 64 Railway Street Rockdale, and in 1991 they acquired shares giving rights to occupy units 1 and 5 in the same building. Shares conferring a right to occupy units 4, 6 and 7 were acquired by the Association after its incorporation.

Incorporation of the Association 47Following approval at a members meeting on 10 February 1992, the Association applied on 19 March 1992 for incorporation under the Associations Incorporation Act 1984 ("the 1984 Act"). The accounts attached to the application recorded receipts by the Association for the year ended 30 June 1991 of donations in excess of $150,000 and, for the previous year, in excess of $140,000. Certificates were issued under Schedule 2 Clause 6(2) of the 1984 Act confirming that the Association was the organisation which had been incorporated. This led to the vesting in the incorporated Association of the property previously held by the trustees for the Association. 48On 28 September 1992 the incorporated Association adopted a new constitution. This was in most respects in the same form as that of the unincorporated Association (see [38] above and Hamilton J's decision [2003] NSWSC 362 at [38]), although many of the paragraph numbers changed. For example Articles 13, 16 and 24 became Articles 18, 21 and 29 respectively. 49One change of present relevance was to Article 12 concerning membership. The new provisions corresponding to the former Article 12C(i) and (ii) were as follows: "8. Membership: ... (1) Application for membership to the Church shall be made in writing signed by the applicant and shall be in such form and contain such requirements as the Executive Council from time to time prescribes. (2) As soon as practicable after the receipt of an application for membership it shall be considered by the Executive Council who shall thereupon determine upon the admission or rejection of the applicant. In no case shall the Council be required to give any reason for the rejection of an applicant."

1994 MOC Constitution 50In 1994 the Macedonian Orthodox Church based in Skopje adopted a new Constitution. There were two versions, or at least two translations, in evidence. They do not appear to differ in substance. The following references are to the version under tab 69 in the appeal papers. 51Articles 9 and 10 stated that the head of the MOC is the Archbishop of Ohrid and Macedonia and the MOC is episcopal in character and internally organised into dioceses consisting of a number of parishes. 52Article 21 described the Holy Synod of the MOC as the highest authority of the MOC, for "all church-spiritual and canonical issues". 53Article 71 was in the following terms: "The Eparchial Bishop [that is the diocesan Bishop], as a spiritual Head, stands at the forefront of the Eparchy, (a territorial unit comprised of a certain number of parishes, organized in Bishop's regencies, as well as the monasteries that are within that territory). The Eparchial Bishop represents the Eparchy and manages the entire church and spiritual life and order of the Eparchy. The Eparchial Bishop discharges his church-hierarchal authority independently, in collaboration with the clergy and the clerical monkhood, on all questions of dogma, religious teaching and liturgy, and on the church-management matters in terms of the material and financial work, together with the clergy and clerical monkhood and the Orthodox people of its Eparchy, represented in the Eparchial bodies and organs" 54Under the heading "PARISH", the following relevant provisions appeared: "Article 104 The parish is a church community of clergymen and believers of the Orthodox Christian faith, residing within a specified territory, under the spiritual leadership of a parish priest, that is, a parson. There may be more parishes within a single populated locality, and more localities may form a single parish. ... Article 106 Every Orthodox Christian belongs as a member to the parish for the region in which he lives and has all the rights and obligations in the Church that belong to him according to this Constitution. Article 107 The members of the parish have an obligation to confess, practice, support, strengthen and spread the faith of the Orthodox Church, to act in such a way that all believers live in accordance with the teachings of the Orthodox faith, to attend the Holy services; to accept the Holy Mysteries; to perform the deeds of Christian mercy/charity/compassion; to sustain and help the Church and its servants." 55Under the heading "PARSON" the following relevant provisions appeared: "Article 113 At the forefront of every parish there is a parson - a parish priest, who is a spiritual elder in his parish, and in the administrative order is a manager of the parish administration and an executive organ of the Church-community Council and Church Committee (Supervisorship). The parson is temporary or permanent. He, by way of a selection process following applications based on an advertised vacancy, is appointed by the Eparchial Bishop. Decisions about a parish priest who is not a citizens [sic] of the Republic of Macedonia (for his appointment to a parish), are made by the Holy Synod, upon recommendation by the Eparchial Bishop. ... Article 116 The Bishop can only displace the permanent parson from the parish only upon his own request or his agreement, or by an order of the appropriate Church court. The Bishop may displace the temporary parish priest according to the needs of the service. ... Article 118 Every parish priests performs his parish duties and conducts his affairs independently, and in relation to his work he is under the supervision of the elder of the church, the bishop's regent and under chief supervision and management of the eparchial bishop". 56Under the heading "CHURCH COMMUNITY AND CHURCH COMMUNITY COUNCIL" the following relevant Articles appeared: "Article 121 Every parish church with its region represents a Church Community. If there are two or more parishes next to one church (temple), all of them together represent one Church Community. The Church Community is represented by the parish priests and all of the orthodox Christians who belong to the parish church. ... Article 122 In every Church Community there is a members' Church Assembly, which is made up of all adult orthodox Christians from the region of the parish church (the parish), who fulfil the religious, moral and material obligations towards the Church and its institutions. Article 123 The members of the church community who have become adults and have fulfilled the criteria from article 107 of this Constitution, gain a right to vote or be voted into the Church-community Council. The right to vote and be voted is lost by those persons: [5 categories were then listed.] " 57Under the heading "EPARCHIES OF THE [MOC] OUTSIDE OF THE TERRITORY OF THE REPUBLIC OF MACEDONIA", the following relevant articles appeared: "Article 188 The eparchies of the Macedonian Orthodox Church outside the territory of the Republic of Macedonia are under canonical and spiritual jurisdiction of the Macedonian Orthodox Church in the Republic of Macedonia. Article 189 At the forefront of each Eparchy outside of the territory of the Republic of Macedonia stands an Eparchial Bishop as its Head. Article 190 The highest church-governing body of the eparchies outside of the territory of the Republic of Macedonia is the Eparchial Assembly. The Eparchial Bishop is President of the Eparchial Assembly, while a Vice President is elected from the laypersons. The composition of the Eparchial Assembly, as well as the organization of the eparchial bodies and organs of the eparchies of the Macedonian Orthodox Church outside of the territory of the Republic of Macedonia are regulated by a separate statute, which in accordance with the provisions of this Constitution, is confirmed by the Eparchial Assembly, after a prior opinion by the Holy Synod of the Macedonian Orthodox Church, in plenary composition, and is approved by the Archiepiscopal Church-people's Assembly. The statute of the Eparchy of the Macedonian Orthodox Church must be in accordance with the Orthodox canons and reconciled with this Constitution and the valid laws of the relevant state. ... Article 193 The organization and operation of the Church Communities outside of the territory of Macedonia is regulated with separate Rules, which are passed in accordance with the Holy Canons and the Constitution of the Macedonian Orthodox Church, and the Statute of the Eparchy, which in agreement with the Eparchial Bishop are proposed by the Church Committees at the general meetings of the Church Communities. The Rules of the Macedonian Orthodox Church Communities outside of the territory of Macedonia, after exhaustive review by the Holy Synod of the Macedonian Orthodox Church, are approved by the Archiepiscopal Church-people's Assembly ... Article 195 The parish priest at the Macedonian Orthodox Church Community outside of the territory of Macedonia, by virtue of his status, is an elder of the parish church and as such is a fully entitled member of the Church Community and Management. He is appointed and discharged by the Eparchial Bishop. ... Selection of the parish priests for the eparchies outside of the territory of the Republic of Macedonia is performed in agreement with the Holy Synod and the Church Community. ... "

The 1996 Diocesan statute 58In February 1996 the Holy Synod approved a "Statute of the Macedonian Orthodox Diocese of Australia and New Zealand". Its validity was in dispute in the proceedings at first instance but is not challenged on appeal. 59In Articles 1 and 2 the statute referred to the Diocese as being "a constituent part of the Mother-Macedonian Orthodox Church ... whose seat is in Skopje" and that "[i]ts spiritual teachings and government is found in the Constitution of the MOC, more particularly in Articles 10 & 11". 60Other relevant provisions were as follows: "Article 12 In relation to the liturgy and questions of religious dogma, the Diocesan Bishop shall exercise his church-diocesan authority independently, in co-operation with the clergy and monastic orders and religious instructors. Questions relating to the liturgy, Church-administrative and financial matters shall be exercised together with the Diocesan Administrative Council and other bodies and agencies of the Diocese ... Article 67 Each church community has a Church Community Elected Assembly which is comprised of all adult orthodox christian Macedonians who are of Macedonian descent and are under the jurisdiction of the parish church (the parish) who meet the spiritual, moral and material obligations of the church and its institutions. Article 68 Members of the church communities, who have attained the age of maturity and have met the conditions of Article 107 of the Constitution of the Macedonian Orthodox Church and Articles 67, 69 and 75 of this Statute may elect and be elected to the church council, save for honorary members of the church community council (Article 29 of the Statute). Article 69 Any orthodox faithful believer may be a congregant and a member of the Macedonian Orthodox Church Community. Those believers who are not Macedonian or of Macedonian descent may be honorary members. ... Article 70 The Church Council of the Macedonian Orthodox Church Community of the Macedonian Orthodox Diocese of Australia and New Zealand is elected at the church council assembly. Every second year one half of the members of the Council whose term has expired are elected. Article 72 The Administrative Council is the executive body of the Church Council. It is comprised of: 1. President - lay person; 2. Two (2) Deputy Presidents; 3. Secretary; 4. Assistant Secretary; 5. Treasurer; and 6. Assistant Treasurer. The Parish priest is an ex officio member of the Administrative Council. He may participate in the work of the Church Council and is one the signatories for documents and matters of finance (Article 195 Rule 2 of the Constitution of the Macedonian Orthodox Church). ... Article 74 Each Macedonian Orthodox Church is a constituent and indivisible part of the Macedonian Orthodox Church and through the competent Diocesan Bishop is within the canonic and spiritual jurisdiction of the mother Macedonian Orthodox Church... The Church Council does not have the right to dismiss its priest and appoint another without the knowledge and authorisation of the competent Diocesan Bishop of the Holy Episcopal Synod of the Macedonian Orthodox Church. Article 75 The Parish is an association of members of the orthodox faith which is under the spiritual leadership of the parish priest. One area may have more than one parish and several areas may constitute one parish. ... Article 78 Every orthodox Macedonian who resides within the area of a parish may belong to that parish and has all the rights and obligations pursuant to this Statute and the Regulations of the Church Community. ... Article 86 The parish Council is a body which assists the priest and the Bishop in christian education, christian charities and in presenting spiritual life, morals and spiritual development as well as the financial status of the parish. The Council works under the direction of the priest. ... Article 88 Rights and Obligations of the Council: (a) elects 5-7 members of the Church Committee; (b) controls the activities of the Church Committee; ... (g) is concerned for the livelihood of the parish priest and the clerical assistants of the Alter and maintaining the prosperity and upkeep of the church and parish buildings in accordance with the directions and decrees of superior church organs and bodies; ... Article 90 The Church Committee is responsible for the carrying out of ordinary/regular aspects of the life of the parish church and the parish. The Church Committee is comprised of the following members: (a) parish priest - elder of the church, the Parish Council and the spiritual leader of the Church Community ie all parish priests of larger parishes and church communities; (b) from 5-7 committee members, who are elected by the Parish Council from its number. The members of the Church Committee have a term of four (4) years."

The disputes that arose 61In April 1996 Bishop Petar, who had been appointed as Bishop of Australia in the previous November, appointed Father Mitrev as parish priest of St Petka. 62At the annual assembly meeting of the incorporated Association on 7 October 1996, 18 persons were elected to membership of a Committee of the Association. The Committee Members (including three of the five Council Member defendants in the proceedings; Messrs Mitreski, Damcevski and Eftimov) took an oath as contemplated by the Association's by-laws (see Article 28 referred to in [31] above). The oaths were recorded in separate documents but appear to have been all in the same terms, all including a promise as follows: "I will honor the Holy Canons of the Orthodox Church, The Constitution of The Macedonian Orthodox Church, The Statute of the Macedonian Orthodox Diocese of Australia and New Zealand, the by-law of the Macedonian Orthodox Church Community 'St Petka' Rockdale as well as all other Legal Policies and Regulations of the Church. I will carry out my duties conscientiously, responsibly and honestly. I will keep the official secrets of the Church. I will represent and protect the interests of the Church". 63On 14 April 1997 a "Special General Meeting" of the Association elected a new Executive Council comprising the five individuals, Messrs Mitreski, Damcevski, Minovski, Eftimov and Marcevski, who are the Council Member defendants in the proceedings and respondents in this Court. They continue to comprise the Council. In a letter to the parish priest and Association Committee of 17 April 1997, the Bishop described this meeting as irregular and asserted that "an illegal Church Committee" was elected. 64The Bishop and the priest on the one hand and the Executive Council members on the other thereafter engaged in bitter disputes. These led to the exclusion by the Council of the Bishop and the priest from St Petka and the appointment by the Council, without the Bishop's consent, of Father Dzeparovski, and subsequently Father Despotski in his stead, as a replacement priest for Father Mitrev whose appointment it purported to terminate. In turn, the Diocesan Church Court defrocked Fathers Dzeparovski and Despotoski for accepting these appointments. 65In an attempt to regain control of St Petka, the Bishop and Father Mitrev commenced the present proceedings by Summons filed on 28 July 1997, with a Statement of Claim of 189 pages being filed on 24 November 1997. Hamilton J heard a number of interlocutory applications and the Statement of Claim was amended on many occasions, the last iteration of it being the 10th version filed on 27 May 2009. 66In the second half of 2002 a hearing for the determination of certain separate questions took place before Hamilton J. In essence, the questions asked whether 65 Railway Street Rockdale and other property held by the Association was vested in any, and if so what, trust and whether any such trust was a valid charitable trust. 67By judgment of 4 April 2003 (Metropolitan Petar v Mitreski [2003] NSWSC 262), Hamilton J found that 65 Railway Street and certain other property was held on a valid charitable trust "to permit the trust property to be used by [t]he Macedonian Orthodox Church St Petka Rockdale as a site for a church of the Macedonian Orthodox Religion and for other buildings and activities concerned with or ancillary to the encouragement, practice and promotion of the Macedonian Orthodox Religion" (at [102]). 68On 24 September 2007 this Court considered an application by the Bishop and Father Mitrev for leave to appeal against Hamilton J's decision ([2007] NSWCA 263). The Court took the view that no appeal should proceed until there had been a final judgment in the proceedings and it stood the application for leave to appeal over until that occurred. 69On 16 April 2004 the Association filed a Summons seeking judicial advice under s 63(1) of the Trustee Act 1925 relating to the Association's defence of the proceedings and payment of its legal costs. Palmer J gave preliminary advice on 7 May 2004 ([2004] NSWSC 388) and an appeal against his decision was dismissed by this Court on 8 December 2004. He gave further advice on 10 June 2005 ([2005] NSWSC 558; 63 NSWLR 441) and on 23 November 2006 ([2006] NSWSC 1247). This Court allowed an appeal from these further orders of Palmer J ([2007] NSWCA 150) but that decision was reversed on appeal by the High Court ([2008] HCA 42; 237 CLR 66). 70After a lengthy hearing at the end of 2008, on 4 March 2009, Young CJ in Eq answered a question posed for his consideration as to what were the terms of the charitable trust insofar as they were relevant to a variety of alleged breaches of trust by the Association, including exclusion of the Bishop and Father Mitrev from St Petka and the appointment of a priest not approved by the Bishop ([2009] NSWSC 106). 71Following this judgment, a large number of applications by supporters of Father Mitrev for membership of the Association were lodged with it. They were rejected upon the ground that they did not meet the requirement stated on the printed membership application form that applicants be proposed and seconded by existing members. The form presumably reflected a requirement for membership prescribed by the Executive Council under clause 8 of the Association's Constitution (see [49] above). 72On 10 September 2009, this Court dismissed an application by the present respondents for leave to appeal against the decision of Young CJ in Eq on the same basis as stated in its decision of 24 September 2007, that any appeal should await the final disposition of the proceedings at first instance. 73After another lengthy hearing, Brereton J held, by judgment of 3 February 2012 ([2012] NSWSC 16), that the Bishop and Father Mitrev were entitled to declarations that additional property held by the Association was held on trust, and that the Association was in breach of trust in various respects, including by its exclusion from St Petka of the Bishop and Father Mitrev. His Honour also made orders concerning moneys paid to Fathers Dzeparovski and Despotoski from the Association's funds and in relation to the Association's application to be excused under s 85 of the Trustee Act for its breaches of trust. Brereton J dealt with the alleged accessorial liability of the Council Member defendants, and questions of costs, in a judgment of 21 December 2012 ([2012] NSWSC 1610).

HAMILTON J'S JUDGMENT OF 4 APRIL 2003 74Hamilton J concluded that the trust of the property at 65 Railway Street declared by the Deed of 8 March 1977 (see [34] above) was not a gift to the then unincorporated Association. He did not consider that the use in the Deed of the words "Proposed beneficiary" in relation to the Association required the contrary conclusion. His Honour continued: "87 ... In my view, the intention of the settlors to be derived from the use of the expression in the particular context of the deed of trust is that there was a gift to a trustee for a purpose. The purpose was to permit the use of the property for a church of the Macedonian Orthodox Religion by a specified entity, namely, the parish organisation denoted by the defined expression 'the proposed beneficiary'. It was not a gift for religious purposes of the Macedonian Orthodox Religion or the MOC in general terms, but a gift to a trustee to permit the use of the property by the specified entity for a specified purpose, ie, its use as a church for the worship of the Macedonian Orthodox Religion, and ancillary purposes. What the unincorporated association received under the terms of the gift was a nomination as the entity to use the land for the specified purpose. But in my view it was not the intention of the settlors by the deed of trust to confer any beneficial interest on that unincorporated association or its members. ... 91 The principle that the parish organisation should be governed on a democratic basis was embodied in the by-laws which were the only existing form of constitution at the time of the execution of the deed of trust. It took the form of provision for openness of membership to all relevant believers on a basis of equality and for election of the committee by democratic vote of the members. (Indeed, those provisions have continued to be embodied in all constitutional documents which have, or may have, applied since that time to the parish organisation.) I infer that the principle was in the forefront of the minds of the settlors at the time of the execution of the deed of trust. It is my view that, if it were necessary, it should be incorporated into the terms of the trust as declared by me in the manner laid down by Young CJ in Eq in the Serbian Church case [Radmanovich v Nedeljkovic (2001) 52 NSWLR 641] at [202]. However, that in my view is unnecessary. This is because that principle is in any event incorporated in the terms of the trust as they appear from the deed of trust itself. The incorporation is effected by the specification of the parish organisation as the body which under this trust is to be permitted to use the property for the purposes of a church of the Macedonian Orthodox Religion and ancillary purposes. Although it had perhaps not taken final form, that body was organised with rules which embodied the contemplated democratic principle by providing for openness of membership and democratic election of the governing body. It is therefore my view, whether one approaches the situation with or without the evidence of surrounding circumstances, the terms of the trust were simply as specified in the deed of trust ... ". 75Hamilton J found that the trust was a valid charitable trust (Judgment [92]). This is not challenged on appeal. 76His Honour expressed the following views concerning the other property held by the Association's trustees (listed, with 65 Railway Street in Schedule A to the judgment): "93 So far as properties other than the first property are concerned, it is my view that, as they were acquired, they became subject to a trust on the same terms as the purpose stated above in respect of the first property. The only one of the properties in respect of which there is a separate declaration of trust is the Arncliffe property. There, in my view, the 'Church Trust' referred to in the Arncliffe declaration of trust upon which that property was to be held was the trust as declared in the deed of trust and set out above. In relation to the other properties, all parties have proceeded on the basis, in the absence of any separate declarations of trust, that they became subject to the same trust upon acquisition. The only ones in relation to which there can be any difficulty arising from this are the second unit and the third unit, where the legal title upon acquisition was vested, not in separate trustees, but in the Macedonian Orthodox Church St Petka, which must be taken to have been at the time the unincorporated association. However, in my view, despite some awkwardness arising from the trustee and the proposed beneficiary being identical in those cases, the second unit and the third unit became subject to the same trust as the other properties. The trust was to permit the use by itself (or itself to use) the properties for the purpose of the original trust. It could be argued that the result would be different if those units were the only properties held on the trust. However, where there is a body of property, of which they were only a small part, held upon the same trust, in my view the trust should be regarded as being identical in respect of each property. I do not see in the evidence any indication that the second unit and the third unit were to be held on different terms. Everything in the evidence points to the intention that the whole body of property should be held on the same trust". 77Hamilton J held that the effect of the incorporation of the Association on its property was to be considered by reference to amendments made in 1992 to the Associations Incorporation Act 1984. These came into force after the Association's incorporation but, on his Honour's view, had a retrospective operation (Judgment [96]). His Honour continued: "... What is vested under the 1992 clause 2 is 'the assets' of the unincorporated association. The operation of the provision in cases where the unincorporated association held, not the whole estate or title, but a limited interest only in property, is to vest only the limited interest in the incorporated association. Anything more than the limited interest could not fall within the denotation of "the assets" which were vested. I have already held that the unincorporated association had no equitable estate or interest as beneficiary in the trust property. It had only a right (which may or may not be a right of property, I do not need to analyse that at this stage) to be the entity to use the property for the charitable purpose which was the object of the trust. The legislative purpose of clause 2(2) is to confirm the preservation of trusts, not to destroy them or indicate their destruction. The charitable trust continues to subsist and to bind the property". 78His Honour took the view that, if he were wrong about the retrospective operation of the 1992 amendments, the same result nevertheless followed from the application of the unamended Act, because even on that basis "all that was intended by the Parliament to be vested in the incorporated Association was the limited interest of the unincorporated Association" (Judgment [97] and [99]). His Honour did not find it necessary to resort to the presumption in favour of the preservation of vested legal and equitable interests in order to resolve the issue (Judgment [98]). 79His Honour's conclusion in relation to the pre-incorporation trust was expressed as follows: "102 ...The property referred to in Schedule A [that at 65 Railway Street] was prior to the transfer of the legal titles to the sixth defendant held upon trust to permit the trust property to be used by The Macedonian Orthodox Church St Petka Rockdale as a site for a church of the Macedonian Orthodox Religion and for other buildings and activities concerned with or ancillary to the encouragement, practice and promotion of the Macedonian Orthodox Religion. I am unable on the evidence to answer the question as to other property". 80In referring to the further steps that would be necessary to be taken in the proceedings, his Honour observed: "104 As [the] charitable trust is undoubtedly a charitable trust for conducting a church for the worship of the religion of the MOC, that church must be conducted in accordance with the tenets of the MOC. On the other hand, whether or not the incorporated association is to remain the legal owner, it remains under the terms of the trust the body which is to conduct the church and associated activities upon the relevant properties".

YOUNG CJ IN EQ'S JUDGMENT OF 4 MARCH 2009 81Young CJ in Eq described the question for his determination as follows: "3 The question is, What are the terms of the Declared Trust or the Church Trust in so far as material for the following alleged breaches of trust:- (a) preventing the Diocesan Bishop from conducting services in the Church Building; (b) preventing a priest appointed by the Diocesan Bishop as parish priest of the St Petka Parish from conducting religious services in the Church Building; (c) preventing a priest licensed by the Diocesan Bishop to conduct religious services in the Church Building from doing so; (d) excluding the priest appointed by the Diocesan Bishop as parish priest of the St Petka Parish from the executive committee of the body responsible for the administration of the St Petka Parish; (e) employing a priest not appointed by the Diocesan Bishop to act as the parish priest of the St Petka Parish; (f) employing a priest under valid ecclesiastical discipline in accordance with Church Law to act as the parish priest of the St Petka Parish; (g) requiring or permitting a priest to conduct religious services upon the Church Land when: (i) that priest has not been authorised by the Diocesan Bishop to do so; or (ii) that priest is under valid ecclesiastical discipline in accordance with Church Law. (h) any or all of: (i) closing the Church Building; (ii) removing the Holy Objects from the Church Building; (iii) installing Holy Objects; (iv) reinstalling Holy Objects; (v) carrying out of building works in and upon the Church Building without the authority and blessing of the Diocesan Bishop. (i) refusing or failing to accept applications for membership from believers in the doctrines of the Macedonian Orthodox Church who have satisfied the criteria for eligibility specified in the Constitution, the Diocesan Statute and the By-Laws; (j) failing to remit to the Diocesan Bishop the contribution from the income of the parish as specified in the Diocesan Statute. (k) are any such terms fundamental terms? 4 The order noted that, 'The Church Trust for this purpose is the trust for using 65 Railway Street, Rockdale as a site of a church of the Macedonian Orthodox Religion and for other purposes concerned with or ancillary to the encouragement practice and promotion of that Religion.' 5 The term 'Declared Trust' refers to the terms of the Trust declared by Hamilton J in an earlier set of preliminary questions to which reference will be made hereafter. 6 The 'Diocesan Statute' means the constitution adopted at a meeting in Geelong in 1996 and thereafter purportedly ratified by the central church authority in Macedonia". 82His Honour referred to expert evidence given by Father John Erickson of the American Orthodox Church concerning the law of the Orthodox Church generally and said: "117 Unless I note otherwise, I have accepted what Professor Erickson has said. However, as noted below one must be careful to realize that what he says are "principles of ecclesiology" are, in reality, no more than how modern clergy are taught leads to best results [sic]. It does not form part of church law in any real sense". 83His Honour then referred to a submission by the defendants (the appellants in this Court) that the MOC is a "Conciliar Church" meaning that whilst the MOC was governed by a constitutional hierarchy which made the ultimate decisions, the entities in the hierarchy were "limited by the constitutions of the various bodies of the church only to adopt what the various local bodies would accept" (Judgment [121]) and continued: "130 The clue is that this conciliarity is a matter of ecclesiology, not of church law and order. That is, the Orthodox Church has a policy and expects bishops and other leaders to exploit the gifts of all members of the church to strengthen the church. However, there is no compulsion for any leader to put conciliarity in place. ... 139 Even if I accept that the church is 'conciliar', that does not justify the Parish Council of St Petka from assuming powers that are not granted to them by the constitutional documents and by laws of the church". 84Next, his Honour noted that the parties accepted that the doctrine of economy applies to the Church, this being a doctrine that "if it is not possible to comply with the law of the church, then it is lawful to do the best one can in the circumstances" (Judgment [160] - [163]). 85As to the role of the Bishop, his Honour said the following: "182 The whole of the material before the Court goes in one direction and that is that possibly subject to some limited exceptions, in the Orthodox Church the bishop has the care of all things pertaining to the church in his diocese. 183 Those exceptions are all in the field where a constitutionally valid provision of the church recognises that the bishop shares his authority or permits a body of clerics or laypersons to perform certain functions. 184 Accordingly, generally speaking, unless I am satisfied that some valid 'law' of the church excludes the bishop from doing what he considers appropriate, his view should prevail". 86His Honour's conclusions in respect of the breaches of continuing relevance were as follows.

Alleged breach (a) - exclusion of the Bishop from St Petka 87His Honour's conclusions in relation to this breach were as follows: "375 I must say that after considering the defendants' submissions, the position they seem to be taking in the ultimate is that they acknowledge that it is part of the law of the Macedonian Orthodox Church that, as a matter of general principle, one must not prevent the Diocesan Bishop from conducting services in the Church Building. 376 As noted above, the expert witness [Father Erickson] accepted the rule to be a fundamental one of ecclesiastical principle (Transcript: p 81). The defendants cavil that an ecclesiastical principle is not the same as a binding fundamental rule. This cavil is considered in sub-question (k). 377 Whilst the defendants accept the general rule, they say that the rule is not absolute and, in particular, there is an exception where a bishop breaches the law of the church he forfeits his rights. 378 There are some basal problems with this view. 379 The first is that the 1994 Constitution and other rules of the church provide procedures for considering charges against bishops who are in breach of the laws of the church. No charge has been made against the bishop. 380 The defendants focus on the abstraction of the surplice fees by the priest appointed by the bishop and the matter of the visa to which I have already referred. As is apparent from what I have already said, neither of these matters, even if it were appropriate for the defendants to be judges in their own cause has been made out".

Alleged breaches (b) and (c) - exclusion of the Bishop-appointed priest from St Petka 88His Honour's conclusions in relation to the alleged breach (b) were as follows: "382 There is little doubt that it is a basic law of the church that a diocesan bishop has the exclusive right to appoint and remove a parish priest of a parish within his diocese. 383 Professor Erickson (see para 14.1) acknowledges this general rule. However, he says that there are some exceptions to this general rule. ... 385 Whether or not there are exceptions to the bishop's powers, the vital question is whether any such exception is relevant in the instant case. 386 Again, the defendants seem to be saying that because of some fault of the bishop, he has forfeited his rights and that under the doctrine of economy, the defendants are forced to act to ensure that the church has a priest. 387 For the reasons set out earlier, I cannot find that this situation comes within the doctrine of economy. There is no other basis for the defendants to appoint a priest. If they have appointed a priest without the bishop's consent, then there would be a breach". 89The reference to the inapplicability of the doctrine of economy by his Honour reflects his earlier conclusion (at [170]) that the doctrine is limited to circumstances where because of lack of time or resources, no alternative course is open. His Honour's conclusions in relation to alleged breach (c) were to the same effect (Judgment [388] - [395]). In addition, his Honour expressed the view that the concept of conciliarity is a principle of ecclesiology only and does not give rise to legally enforceable rights, "let alone make a bishop forfeit his rights" (Judgment [394]).

Alleged breaches (e), (f) and (g) - employing priests not appointed by the Bishop 90As to alleged breach (e), his Honour concluded: "422 Professor Erickson accepts the general rule is of the Bishop's full and exclusive authority. The defendants have not pointed to a convincing exception to this rule. The plaintiffs' case that the Bishop's authority must prevail must be upheld". 91In relation to the alleged breach (f), his Honour noted the defendants' apparent agreement that knowing employment of a priest under valid ecclesiastical discipline would be a fundamental breach of the trust (Judgment [425]). The ecclesiastical discipline to which he referred was the defrocking of Father Despotoski by the Diocesan Church Court (see [64] above). The validity of any decision to discipline was not however before his Honour for determination. 92His Honour found that alleged breach (g) would be a breach of trust, for the reasons given in relation to (b) and (f) (Judgment [432]).

Alleged breach (h) - taking steps in relation to the Church building and contents without the Bishop's approval 93His Honour's conclusions in relation to these alleged breaches were as follows: "433 These allegations are matters for the dispensation or faculty powers of the bishop. 434 The plaintiffs rely upon Articles 71 and 77 of the 1994 Constitution and Articles 13(3), (5), (6) and (19) of the Statute as authority for this rule. 435 The basal rule follows from the Bishop's authority over a church building that he controls what may be put inside the building... 436 Even though there may be some situations where the Bishop's authority may be shared with others, there is no evidence that those in charge of a parish can exercise the Bishop's authority even though they may consider the Bishop to be in bad standing."

Alleged breach (i) - Association membership 94His Honour's conclusions in relation to this alleged breach were as follows: "445 The plaintiffs say that all believers who live within the St Petka Parish and who satisfy the eligibility criteria specified by or under the Church Constitution are entitled to participate in the parish assembly of the St Petka Parish: statement of claim [22.11]. For this rule, the plaintiffs rely upon Articles 106 and 107 of the 1994 Constitution, and Articles 65, 66, 67, 68, 69 and 78 of the Statute. ... 452 Professor Erickson says that Articles 65-69 and 78 of the Diocesan Statute indicate who may be regarded as a member of the community and participate in the parish assembly. He identified as the most important Article 67 which says 'Each church community has a Church Community Elected Assembly which is comprised of all adult Orthodox Christian Macedonians who are of Macedonian descent and are under the jurisdiction of the parish church (the parish) who meet the spiritual, moral and material obligations of the church and its institutions'. ... 454 Professor Erickson agrees that this claimed breach is one of church law, but agrees with the defendants that it is not a 'fundamental provision of Church Law' (Affidavit, [20.4]). He posits that the criteria for participation in parish assemblies given in the documents 'are strictly a matter of positive ecclesiastical law' (Affidavit, [20.5])."

Which breaches are fundamental to the trust 95His Honour's discussion of this question included the following: "485 In Radmanovich, I noted that in a religious trust not every provision of the rules or every matter of doctrine will necessarily be a term of the trust, breach of which will give rise to an action: Radmanovich v Nedeljkovic (2001) 52 NSWLR 641 at 668. 486 A principle has developed in the case law that a church trust embodies only those parts of ecclesiastical doctrine which are 'fundamental' or 'essential'. It should be noted that a rule being a fundamental principle of church law will not automatically make it a term of the trust: for example, it must affect property. ... 493 My conclusion is that it is too difficult and of little use to find where the line is to be drawn in every case, however excluding the Bishop from the church is certainly a breach of a 'fundamental' rule of church law which goes to the heart of the trust. 494 This is because it goes to the heart of an hierarchial church, even one which has provided for involvement of the laity to a significant degree that the basis leadership of the bishop [sic] is excluded. 495 The doctrine of Apostolic Succession as accepted by the MOC heavily relies on the tradition from one set of bishops to the next of the faith of the Apostles. The direction of the church by a person whose orthodoxy is pure and accepted is vital to the framework of the whole church. 496 Thus I have no difficulty in finding that the alleged breaches (a), (b) and (h) and their associated breaches are fundamental. 497 There may be some doubt as to alleged breaches set out in (d)(i) and (j) are fundamental, but this is of little moment as these matters will be subsumed in the more serious matters."

Answer to the question 96His Honour restated and answered the question for determination as follows: "498 The question is: What are the terms of the Declared Trust or the Church Trust in so far as material for the following alleged breaches of trust? 499 The question should be answered by saying that the terms of the relevant trust do not justify the exclusion of the bishop from the parish Church of St Petka nor the employment of any priest not authorised by the bishop nor the closing, alteration, addition to the Church building or its ornaments without the Bishop's approval."

BRERETON J'S DECISION OF 3 FEBRUARY 2012 97In referring to Hamilton J's decision of 4 April 2003, his Honour made the following general observations concerning the issues in the proceedings before him: "34 In this case, the Court is asked to enforce the terms of a charitable trust for religious purposes. This Court does not regulate the practice of religions, nor enforce church law. However, it enforces trusts, and in particular the application of trust property in accordance with the terms of the trust. Where property is given on trust for the purposes of a particular church, there may be a breach of trust if it is applied to a purpose inconsistent with the law of that church. Use of trust property for purposes other than worshipping in accordance with the doctrine for the maintenance and furtherance of which the trust was settled is a breach of trust [ Craigdallie v Aikman (1820) 2 Bligh 529, 545 [4 ER 435, 441]; General Assembly of Free Church of Scotland v Lord Overtoun [1904] AC 515, 613-7; Wylde v Attorney-General (NSW) ex rel Ashelford (1948) 78 CLR 224 , 271, "the Red Book Case "]. In the context of a charitable trust for the purposes of a religion, where it is alleged that trust property is being used in breach of trust in the sense of preaching doctrines inconsistent with those intended by the settlor, the court's role is simply to determine what was the original purpose of the trust and whether it is being observed [Free Church of Scotland, 613 (Lord Halsbury), 644-5 (Lord Davey); Wylde v Attorney-General, 263 (Latham CJ)]. According to Dixon J, albeit in dissent, before the Court finds that the manner of conduct of a religious service amounts to a breach of trust, it must be satisfied that the forms of worship depart so completely from those of the faith for which the property is held that the use of the building for the purpose is in truth the diversion of the property to another object [Wylde v Attorney-General, 295]. Similarly, in Attorney-General v Gould (1860) 28 Beav 485, Lord Romilly said (at 495) that the question was whether the use of the building for the purpose of open communication was 'such a perversion of the objects and trusts for which it was established, that is, whether it is a violation of those trusts which this Court will interfere to prevent.'" 98His Honour then addressed the remaining issues in the proceedings as follows:

Whether the non-Schedule A property was held on trust 99The first issue for his Honour's determination was whether the property his Honour described as the Holy Objects, Ancillary Property, Church Donations and Other Funds of the Association acquired prior to incorporation ("the Other Pre-incorporation Property") was held on the same trust as Hamilton J held applied to the Schedule A property (see [76] above). His Honour concluded as follows. "48 It follows, in my view, from the purpose for which they were made, and their source in the use of trust property, that the Church Donations were trust income. It also follows that, insofar as the Other Pre-incorporation Property was acquired with or comprised of funds sourced in Church Donations, it too represented and constituted trust property. Insofar as such property was acquired with or comprised of funds derived from income generated by the Child Care Centre and the Investment Properties, it was acquired with income generated by trust property, and likewise upon acquisition became trust property. No other sources for the acquisition of the Other Pre-incorporation Property have been identified or are apparent. So far as the evidence reveals, the Other Pre-incorporation Property was acquired for the same purposes as, and as a result of ownership or use of, the Schedule A property; it was therefore held on the same trusts as the Schedule A property. ... 50 Hamilton J's conclusion that vesting of the Schedule A property in the Association upon its incorporation did not affect its trust status is dispositive of the same question in respect of the Other Pre-incorporation Property". 100Following incorporation, the Association acquired three further investment properties (units 4, 6 and 7 in the same building as those units that it already owned), further and replacement Holy Objects and Ancillary Property, as well as receiving further funds by way of donations or income. 101His Honour's conclusions concerning this post-incorporation property were as follows: "66 The characterisation of the non-Schedule A property depends on the Association (and its unincorporated predecessor) receiving it in the capacity of, or because of its status as, a trustee. Before 1993, there was no corporation, and the legal owner was a number of individuals - the Trustees - expressly as trustees. As at 1993, bank accounts were held in names of the Trustees; it could not have been for themselves, and it could not have been for a trust different from that applicable to the Church land. Until 1993, all property was held on the same trust. Later, when the older (trust) properties were used as security for borrowings to acquire the newer properties, and income was generated from use of trust properties, and where there was no segregation of pre- and post-incorporation funds, with all being deposited into general bank accounts, so that all were mixed, there is no basis for supposing that they were held on different bases, and all should be regarded as an accretion to the single pool of trust property. While it is not impossible that accretions to a charitable trust can be held on narrower terms than the original corpus, as in Attorney-General for the State of Queensland; ex rel Nye and Others v The Corporation of the Lesser Chapter of the Cathedral Church of Brisbane and Another (1977) 136 CLR 353, that was in circumstances where the accretion was sourced in donations and intent of the donors that their gifts be for a particular narrower purpose was plain, a situation far removed from accretions arising from the use of extant trust property. 67 Accordingly, the whole of the Association's assets acquired up to May 2004 were and are trust property, as also are its assets acquired since then, except to the extent that the Association demonstrates that identifiable moneys held by it were donated for the purpose of funding the litigation. As expenditure on costs of litigation has exceeded, by a very substantial margin, moneys received from such donations, it is improbable that any remaining property of the Association represents these donations".

Whether breaches of trust 102In relation to the alleged breaches of terms of the trust found by Young CJ in Eq, his Honour concluded: "83 Ultimately, the defendants do not dispute that - as is clear from the foregoing summary of events - there has been a breach of the term of the trust found by Young CJ in Eq relating to exclusion of the parish priest. Although the Association has recently offered to allow Fr Mitrev into St Petka, it is still on terms that he not be the sole officiating priest. Such a conditional offer amounts to a constructive refusal, still, to admit Fr Mitrev. The Association's refusal to permit Fr Mitrev to conduct services and otherwise to act as parish priest is, on the holding of Young CJ in Eq, a breach of trust. Alleged breaches (b) and (c) are established, and are continuing. ... 85 The defendants dispute that it has been established that they have otherwise excluded the Bishop, and point to his presence on 22 March 2004, and on 6 January 2009, and say that he was repeatedly invited to conduct services at the Church, so long as not accompanied by Fr Mitrev. But even if this were the extent of the exclusion of the Bishop, it remains an exclusion; to impose on his attendance conditions that were not in accordance with church law was the equivalent of excluding him. On the holding of Young CJ in Eq, the Association's refusal to allow the Bishop to conduct services, with the assistance of Fr Mitrev if he should so choose, is a breach of trust. Alleged breach (a) is established, and is continuing. 86 The defendants do not dispute that they employed priests - first Fr Dzeparovski, and then Fr Despotoski - who had not been appointed by the Bishop, to act as the parish priest. This falls within the express terms of Young CJ in Eq's answer, and alleged breach (e) is therefore established. 87 The unauthorised 2001 renovations and relocation of icons establishes breach (h), but it is of little more than historical interest, and the plaintiffs sought no particular relief in respect of it". 103His Honour concluded as follows in relation to an alleged breach of a term not found by Young CJ in Eq to be fundamental: "89 ... As to breach (d) (exclusion of the parish priest from the executive body responsible for administration of the affairs of the parish), Young CJ in Eq, while accepting that church law required that the parish priest be a member of the executive council, entertained some doubt as to whether this was 'fundamental'. I have concluded that it was not. Exclusion of the priest from that body could not be said to result in the trust property being used otherwise than for the purposes of the Macedonian Orthodox religion, or being diverted to some other purpose". 104His Honour's conclusions in relation to the alleged breach concerning membership of the Association (breach (i)) were as follows: "95 Following the delivery of Young CJ in Eq's judgment, the plaintiffs' solicitors lodged a large number of applications from Fr Mitrev's parishioners for membership of the Association. Those applications disclosed all details necessary to demonstrate eligibility for membership of the parish assembly under the diocesan statute. Ultimately, the Association refused to entertain the applications, on the ground (reflected in the Association's printed membership application form, and presumably reflecting a requirement prescribed by the executive council) that they were not proposed and seconded by existing members. As a result, voting membership of the Association does not correspond with that required for a parish assembly under the diocesan statute. On the findings of Young CJ in Eq, this is a breach of church law. 96 The practical consequence is that the organisation which has responsibility for the affairs and property of the parish, and which is entitled to use the Church and the other trust property, has a membership that differs from that required by church law. In particular, it excludes a significant number of believing Macedonian Orthodox Christians within the parish. 97 Although I am hesitant, particularly in a field in which his Honour has such unique experience and learning, to go further than Young CJ in Eq was prepared - or perhaps more accurately, found it necessary - to go, I have concluded that this requirement of church law is fundamental in the relevant sense, for the following reasons. This requirement impacts not only on control of the trustee, but more importantly on achievement of the purpose of the trust. When the trust was originally established providing for use of the church by the unincorporated association, no distinction was drawn or recognised between the parish assembly and the unincorporated association. The trust contemplated that the membership of the user of the trust property - originally the unincorporated association, to whose position the Association later succeeded - would be the equivalent of the parish assembly. In my view, it is implicit in the trust 'to permit the sixth defendant to use the trust property as a site for a church of the Macedonian Orthodox Religion and for other buildings and activities concerned with or ancillary to the encouragement practice and promotion of the Macedonian Orthodox Religion' that the membership of the sixth defendant would be substantially in accordance with that of a parish assembly under church law. 98 To exclude from membership a significant number of believing Macedonian Orthodox Christians within the parish is to exclude a portion of those who were intended to be able to use the Church. If a significant number of believing Macedonian Orthodox Christians within the parish are excluded from the body entitled to use the church under the trust, the trust property is not being used for the Macedonian Orthodox Church or religion, but for a schismatic purpose, representing a diversion from the authorised purpose. Accordingly, this is not just a requirement of church law, but a term of the trust. While the Association says that eligibility for membership is determined by its constitution, and that applications for membership must comply with the requirements prescribed by or under its constitution, it is open to the executive council under Article 8(1) to alter the form of application. Breach (i) is established, is a breach of trust, and is continuing." 105His Honour further held that failure to remit to the Bishop contributions from parish income (alleged breach (j)) was not in breach of an obligation that was so fundamental as to be a term of the trust (Judgment [100]).

Pecuniary consequences of breaches of trust 106His Honour held that payments out of trust property to Fathers Dzeparovski and Despotoski for their services as purported parish priests constituted breaches of trust, but that whether there was a breach of trust in payment of litigation costs out of trust property could only be determined after costs orders had been made in the proceedings (Judgment [103] - [106]).

Relief for excusable breaches of trust 107The Association sought to be excused under s 85 of the Trustee Act from personal liability for any breaches of trust. Those breaches which sounded in pecuniary relief were the payments to Fathers Dzeparovski and Despotoski out of trust funds (Judgment [139]). 108The circumstances in which the Court is precluded from granting relief are described in s 85(2), as follows: "The relief may not be given unless it appears to the Court that the trustee has acted honestly and reasonably, and ought fairly to be excused for the breach of trust and for omitting to obtain the direction of the Court in the matter in which the trustee committed the breach." 109His Honour reached the following conclusions on the application for relief: "148 I do not accept without reservation everything that the Committee Members say, and in some respects their credit was significantly damaged: for example, Mr Mitreski falsely denied having sworn an oath of office, including allegiance to church laws. However, for present purposes, I accept that they honestly believed that the Association was beneficially entitled to its property and did not hold it on trust; and that the parish property was Association property and not trust property. That was a not unreasonable position, as until the decision of Hamilton J, there was doubt as to the trust status of the Association's property. 149 I further find - on the totality of their evidence and that of Fr Despotoski, in the light of the surrounding circumstances - that the Association's decision to employ Fr Dzeparovski and later Fr Despotoski was actuated by a perceived need, consequent on the expulsion of Fr Mitrev, to have a priest in the church to perform priestly duties in order to fulfil the main function of the church and administer the sacraments to parishioners. In itself, this is neither dishonest nor unreasonable. But it is affected by two features. 150 The first is that the Association by its officers also knew that such a course would be opposed to the will of the Bishop. This was in circumstances where, but a few months earlier, those officers had sworn a solemn oath of office by which they undertook in substance to uphold the constitution of the Church, the diocesan statute and the by-laws. By employing the priests without the Bishop's sanction, the executive council acted inconsistently with that oath. I readily accept that it is not necessarily dishonest to make a promise and later not adhere to it, at least if it was genuinely intended when made. A change in intentions after a promise is made is not necessarily dishonest, though it is dishonest to make a promise without any intent of adhering to it. But a sworn promise, as an oath is, is somewhat different, because it involves a solemn oath to adhere to the promise, which is absent from the ordinary contractual promise. The repudiation of a sworn promise, unexplained by changed circumstances frustrating its performance, would be judged dishonest by the ordinary standards of honest behaviour. I think there is particular significance in Mr Mitreski's false denial that he had sworn such an oath, and in Mr Eftimov's insistence that the oath was not sworn in the church - the former reflects conscious or unconscious appreciation of the difficulty of reconciling that oath with the subsequent course of conduct, and the latter is an attempt to reduce the significance of the oath for the same reason. 151 The second is that it is a fundamental proposition of the Macedonian Orthodox faith, that if not known to the Committee Members who had sworn to uphold church law should have been known to them, that it is the Bishop who administers sacraments, albeit via the medium of a duly appointed priest as his agent; the corollary of which is that a priest who has not been duly appointed by the Bishop cannot validly administer the sacraments and from the Church's perspective achieves nothing. Accordingly, the Association was paying these priests remuneration for performing a role that, in the eyes of the Church, achieved absolutely no purpose. 152 Notwithstanding that the Association's constitution provides that the priest is appointed by the executive council, I cannot reconcile the conduct of the Committee Members, having sworn an oath of allegiance to church law, in engaging and remunerating the two priests without the Bishop's approval, to achieve no useful religious purpose, with what would commonly be regarded as honest behaviour. While I accept that they did not understand the niceties of church law, they did understand at least (and if they did not, ought to have by reason of the oath they took) the fundamental proposition that the Bishop's approval was essential for the effective appointment of a priest. Resort to the provision of the Association's constitution, in the face of the oath of office, savours of the type of unconscionable insistence on strict legal right on which equity has always frowned. In my judgment, those considerations preclude me from being satisfied that in engaging the two priests, the Association acted honestly and reasonably. Accordingly, I am not prepared to relieve the Association of liability for the established pecuniary breaches under s 85".

Accessorial liability 110Having rejected the plaintiffs' claim that Father Despotoski was liable under the first limb of Barnes v Addy (1874) LR 9 Ch App 244 at 251, his Honour turned to the plaintiffs' claim against the Council Member defendants that they had accessorial liability for the breaches of trust. 111His Honour concluded that no special rules in relation to accessorial liability applied to charitable trusts (Judgment [161]). As a result, he concluded that the plaintiffs "must bring the case within the established bases on which a third party may be held personally liable for a breach of trust" (ibid). His Honour then referred to the two limbs of the rule in Barnes v Addy, the first relating to the liability of agents who receive part of the trust property and the second to agents who "assist with knowledge in a dishonest and fraudulent design on the part of the trustees" (see Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89 at [111]). Before quoting paragraphs 161 to 165 from Farah v Say-Dee, his Honour said: "163 The Court observed that the second limb was not an exhaustive statement of the circumstances in which a third party who has not received trust property and who has not acted as a trustee de son tort nevertheless may be accountable as a constructive trustee, and did not address the situation of a third party who intentionally procures an (unwitting) trustee to commit a breach of trust (footnotes omitted) ..." 112His Honour then concluded that the Council Member defendants were liable as accessories to account for the emoluments paid by the Association to Father Dzeparovski and Despotoski in breach of trust: "164 In my view, the effect of what the High Court here said is that quite apart from accessorial liability under the so-called first and second limbs, a stranger to a trust can still be held liable for breach of trust on the footing of knowingly inducing or immediately procuring a breach of trust. This is consistent with the emphasis that the second limb is not exhaustive. In distinction from the decisions, referred to above, in the Red Book Case, it involves an element of knowledge. 165 Unlike the so-called first limb, but like the second limb, liability on this basis does not depend on receipt of the trust funds. Accordingly, the 'knowledge' requirement should be treated as the same as that for the second limb. This accords with the High Court's description of this basis of accessorial liability in Say-Dee as 'rendering liable a defendant who dishonestly procures or assists in a breach of trust or fiduciary obligation where the trustee or fiduciary need not have engaged in a dishonest or fraudulent design' [Say-Dee, [163]], which in turn requires 'consciousness of those elements of the transaction which make[s] participation transgress ordinary standards of honest behaviour' [Say-Dee, [165]]. 166 For substantially the same reasons that found my conclusion that, for the purposes of s 85, the Association did not act honestly and reasonably, I am compelled to conclude that the Committee Members were conscious of those elements of the engagement of the two priests that made their participation transgress ordinary standards of honest behaviour. They knew, or at the least ought to have known, that what they were doing involved repudiation of a recently sworn undertaking to uphold church law, and yet would achieve no religious purpose in the eye of the Church for want of the Bishop's approval. While I accept that considerable doubt attended whether the Association would be held to be a trustee, about which minds could reasonably differ, until Hamilton J's judgment, and that the Committee Members did not understand the niceties of church law, I cannot accept that it accorded with ordinary standards of honest behaviour for them to repudiate their recent oath of office. Mr Eftimov's evidence establishes that all the Committee members were present when the oaths were taken" (Judgment [164] - [166]).

Brereton J's judgment of 5 March 2012 113After argument concerning the form of orders to be made to give effect to his judgment of 3 February 2012, Brereton J made declarations as to the nature of the trust applicable to the relevant property (these reflected Hamilton J's views as to the terms of the trust) and as to the various breaches of trust that he had found established. He also made orders restraining the Association from excluding the Bishop and Father Mitrev from St Petka, ordered the Association to admit to membership those applicants who were entitled to membership in accordance with MOC laws and ordered an account of payments made by the Association to the priests whom it purported to appoint. He reserved for separate and later determination the question of whether orders should be made with respect to the Association's claimed right to indemnity in respect of litigation costs and in respect of the payments of litigation costs already made by the Association out of trust assets (see [2012] NSWSC 167). 114His Honour did not make any orders to give effect to his conclusions as to accessorial liability and noted that further written submissions would be required on that topic (Judgment [26]).

Brereton J's judgment of 21 December 2012 115On reconsideration of the evidence concerning oaths taken by the Council Member defendants, his Honour concluded that only three of those five defendants took oaths and that they were not given in respect of their offices and period of office that commenced on 14 April 1997. His Honour found that a fourth, Mr Marcevski, had knowledge equivalent to that of those who took an oath but that the remaining one of those defendants, Mr Minovski, did not have relevant knowledge. "14 ... [I]t follows that dishonesty is not established merely by repudiation of that oath following 14 April 1997, and insofar as the conclusion in the principal judgment relied on the contrary view it cannot be supported. 15 However, although that was undoubtedly part of the basis for the conclusion in the principal judgment, it was not the whole basis. Nor is the significance of the earlier oaths limited to whether they "bind the conscience" of the relevant defendant such that departure is thereby dishonest. They have wider relevance, as they establish, on the part of each Committee Member who had in the past taken such an oath, knowledge that officers of the Association were conventionally bound and expected not only to act in accordance with the Association's constitution, but also - to paraphrase the oath - to be loyal to the Macedonian Orthodox Church and its Holy Canons and Constitution, the Statute of the Macedonian Orthodox Diocese of Australia and New Zealand, the By-Law of the Macedonian Orthodox Church Community "St Petka" Rockdale, and all other legal policies and regulations of the Church - in other words, to comply with Church law ... ". 116His Honour concluded as follows: "21 Accordingly, while I have accepted that the Committee Members honestly and not unreasonably believed that the Association was beneficially entitled to its property and did not hold it on trust, they (other than Mr Minovski) also knew that it was implicit in their accepting a role in the governance of the Association that they would observe church law, and in particular that the priest could be appointed and removed only by the Bishop, and that a priest who had not been duly appointed by the Bishop could not validly administer the sacraments and from the church's perspective achieved nothing. In those circumstances, for them - having excluded the Bishop's priest - to remunerate priests not appointed by the Bishop, to no good religious end, transgressed the ordinary standards of honest behaviour. 22 Reduced to the core elements, the Committee Members (other than Mr Minovski) assumed office in the Association knowing that the Association was an integral part of the Macedonian Orthodox Church, and that its substratum included the law and doctrine of the church. They knew that according to the law and doctrine of the church, a parish priest could not be removed or replaced except by the Bishop, and that a priest not appointed by the Bishop achieved nothing. They knew that the Bishop did not approve or authorise the removal of Father Mitrev or the appointment of Father Dzeparovski or Father Despotoski. In that context, belief that their own Constitution authorised them to act as they did is insufficient to dispel the conclusion that, in procuring the Association to appoint and remunerate a priest not approved by the Bishop, to perform acts that were in the eye of the Church a religious nullity, they were transgressing ordinary standards of honest behaviour". 117For these reasons, his Honour found the Council Member defendants, other than Mr Minovski, liable as accessories to account to the trust for the emoluments paid to Fathers Dzeparovski and Despotoski whilst the relevant Council Member was in office (excluding payments prior to November 1997 which were held to be statute barred). His Honour also made a number of costs orders in respect of the proceedings generally, including that the Association pay 75 per cent of the plaintiffs' costs of the proceedings and that the Council Member defendants (other than Mr Minovski) be jointly and severally liable with the Association for one-third of those costs. 118His Honour's reasoning included the following: "31 It is true that the trust declared by Hamilton J, contrary to the plaintiffs' position, recognised and provided for the Association to be entitled to use the trust property. However, that was not the position primarily contended for by the defendants, whose primary position was that there was no trust at all. While the plaintiffs did not achieve a declaration in the terms in which they primarily sought, they did secure a determination to the effect that the Schedule A property - and ultimately, before me, all of the property of the Association - was held by the Association not only subject to its constitution, but upon a charitable trust for religious purposes to be applied in accordance with the tenets of the Macedonian Orthodox Church. In my view, the plaintiffs must be regarded as having obtained substantial success before Hamilton J. They had to come to court to obtain the relief that they did obtain, whereas had the defendants prevailed, the proceedings would have been dismissed there and then on the basis that no trust was established. 32 Ultimately, the plaintiffs secured not only that declaration - and in respect of all the Association's property - but also orders that vindicate the Bishop's authority and the position of Father Mitrev as Parish Priest, and bring the Association's membership into line with that of a Parish Assembly in accordance with the law of the Church. ... 40 The defendants also submit that no order should be made against the individual defendants - that is, the Committee Members. It was submitted that their joinder to the proceedings was not necessary and could only be explained by a desire to punish them. However, the proceedings sought relief against the Committee Members as accessories. In that context - in respect of which the plaintiffs have succeeded as against four of the five Committee Members - they were necessary parties. They defended the proceedings actively, by solicitors and counsel who appeared for them as well as for the Association. It was necessary for the plaintiffs to establish, as against them as well as against the Association, that the Association held its property on a valid charitable religious trust. They have already been ordered by Young CJ in Eq to pay the costs (jointly and severally with the Association) of the proceedings on the questions before his Honour. However, in the proceedings before me, only a relatively small portion of the case was relevant to their liability as accessories: it was necessary for the plaintiffs to establish that employment of Father Despotoski and Father Dzeparovski was in breach of trust, which was not disputed. It was then necessary to establish the criteria of accessorial liability, as they did against four of the Committee Members. Pursuit of accessorial liability certainly occupied some time in evidence, cross-examination and submissions. That said, the magnitude of the plaintiffs' success against them was limited, amounting to their liability in respect of the remuneration paid to Father Despotoski and Father Dzeparovski, during the confined period while they remained committee members. The defendants succeeded on the Limitation Act defence. 41 In principle, the four Committee Members who I have found liable as accessories should be jointly and severally liable with the Association for the costs of the proceedings before Hamilton J, and for about a fourth of the costs to which the plaintiffs are otherwise entitled of the proceedings before me. On a broad-axe overall approach, they should be jointly and severally liable with the Association for one-third of the costs for which the Association is liable - that is to say 25% of the plaintiffs' costs of the proceedings not otherwise the subject of a specific costs order, including reserved costs".

FIRST ISSUE ON APPEAL: THE TRUST OR TRUSTS APPLICABLE PRIOR TO THE ASSOCIATION'S INCORPORATION 119Hamilton J found that prior to the Association's incorporation there was a trust applicable to the Church Site and other Schedule A property in terms that reflected the 8 March 1977 Deed, that is, a trust to permit the property to be used by the Association "as a site for a church of the Macedonian Orthodox Religion and for other buildings and activities concerned with or ancillary to the encouragement, practice and promotion of the Macedonian Orthodox Religion" (Judgment [102]). 120The appellants accept this finding subject to the following contentions: (1) The Peetz Declaration registered in August 1978 (see [42] above) varied the trust so that it became one for the holding of the property by the Association for purposes corresponding to the objects stated in its Constitution adopted on 28 October 1977. (2) Alternatively, the Declaration of Trust of 15 August 1978 (see [43] above) and the acquisition in the name of the St Petka Church of shares giving occupation rights to three home units had that effect. (3) In any event, the Association's incorporation in 1992 extinguished the trust obligations to which the Association's property was subject. 121The respondents accept Hamilton J's finding subject to their contentions that: (1) The description of the trust should not have included any reference to use by the Association of the trust property for the stated purpose. That is, the respondents submit that the trust was simply one for the stated MOC purpose. (2) Alternatively, the description of the trust should have included a statement that the Association's right to use the trust property for the stated purpose was "limited to when it is complying with the rules of the Macedonian Orthodox Church". 122As the respondents' contentions are based on events occurring prior to the Deed of 8 March 1977, and those of the appellants to events occurring after, it is convenient to address the respondents' contentions first. As the respondents' contentions fail on their merits it is unnecessary to deal with the appellants' argument that the respondents are precluded from advancing the contentions by reason of the manner in which their case was pleaded and argued at first instance.

Whether the trust conferred a right on the Association to use the trust property for the stated purpose 123Whilst the Deed of 8 March 1977 referred to the Association's use of the trust property for the stated purpose, the respondents submit that the Deed is not conclusive as to the terms of the trust and that examination of events occurring prior to its date indicates that the trust should have been described as they contend. 124The respondents accept that on the basis of the following statement of principle of Lord Cranworth LC in Attorney General v Clapham [1855] 43 ER 638 at 652 the terms of the Deed were at least prima facie evidence of the terms of the trust that applied to the relevant property: "... Where a fund is raised for a charitable purpose like that of founding a chapel, and the contributors are so numerous as to preclude the possibility of their all concurring in any instrument declaring the trusts, but such a declaration is made by the persons in whom the property is vested, at or about the time when the sums have been raised, that declaration may reasonably be taken prima facie as a true exposition of the minds of the contributors. The presumption is, that the trusts declared were those which the contributors intended. It would be open to them, if the trusts were not so framed as to effect the object they had in view, to take steps for getting any error corrected. If no such steps are taken, it must be assumed that the instrument declaring the trust fairly embodies the intentions of the contributors". See also Attorney General v Mathieson [1907] 2 Ch 383 at 394. 125The respondents however point to the events that occurred prior to 8 March 1977 concerning the establishment of the St Petka Church as support for the contention that the trust created was not intended to involve the Association's use of the trust property for the stated purpose. In particular they refer to the meeting of 20 November 1976 as revealing that intent. However, in my view quite the opposite inference is to be drawn from the evidence of that meeting, as it is clear that those interested in establishing the St Petka Church had in mind not only that it would be a church of the Macedonian Orthodox Religion but that it would be established and conducted in conformity with that religion by an association that was agreed to be formed at that meeting (see [23] above). 126In my view there is thus nothing in the evidence to rebut the prima facie inference that the Deed of 8 March 1977 reflected the terms of the trust intended to be established. 127The respondents submitted that as donations were received prior to 8 March 1977 the trust must have been established prior to that date and on terms that differed from the Deed. Whilst there would have been a trust established prior to that date, the terms of the Deed are the best evidence of the trust's terms. There is nothing in the evidence to which the Court's attention was drawn to indicate that the intentions of anyone whose intentions might have been relevant differed from what was expressed in the Deed. 128The respondents also submitted that the reference in the description of the trust to use of the trust property by the Association was inappropriate because the establishment of the Association was incomplete as at March 1977 and in any event the Association in its unincorporated form ceased to exist upon incorporation in 1992. However the Deed recognised that the Association was at that time inchoate. Its provisions, and the trust which it reflected, operated in relation to such organisation as came into existence and fitted the description given. Clearly the unincorporated Association was in this category, and I consider the later incorporated Association also fits this description. Thus, upon incorporation and assuming that the trust was not extinguished by that incorporation, the newly incorporated Association acquired the right to use the trust property for the stated charitable purpose because it was the only organisation that then fitted the description in the Deed. Clause 3 of Schedule 2 to the Associations Incorporation Act assists in reaching this conclusion (see [150] below). 129The respondents also submitted that a reference to the Association in the description of the trust was inappropriate because the intent of those concerned was that the trust be administered in accordance with the Macedonian Orthodox Religion and that the Association might not do so. This argument does not in my view have any substance as I consider the statement of the religious purpose of the trust to have primacy over the reference to the Association's right to use the trust property in order to advance the Macedonian Orthodox Religion. In other words, the intent was that the Association be the vehicle for achievement of the stated religious purpose, leaving no room for the Association, without breaching the trust, to use it in any other fashion. The vehicle for achievement of the purpose was thus ancillary to achievement of the main purpose, in the same way as in Attorney General for NSW v The Perpetual Trustee Company Limited [1946] HCA 12; 63 CLR 209 where the reference in the trust instrument to the use of the country property Milly Milly as the intended location of a training centre for orphans was dominated by the more general charitable intention of providing a training farm for orphan boys. To use the language of the High Court in Kytherian Association of Queensland v Sklavos [1958] HCA 47; 101 CLR 56 at 70 there is no reason to conclude that the "administration of the trust by the [Association] was an end in itself, or, that its selection as [user of the property] was anything more than a direction as to the manner in which [the settlors'] more general and paramount intention should be carried into effect" (at p 70). 130The result is that if the Association cannot or will not use the trust property in a manner that conforms with the declared purpose a cy-près scheme will need to be settled to replace it with another vehicle for achievement of the purpose. It follows that the inclusion of the description referred to in the respondents' alternative argument stated in (2) of [121] above was unnecessary. The limitation contended for is inherent in the trust as described by Hamilton J. 131For these reasons, I consider Hamilton J's inclusion of a reference to the Association in his description of the trust to have been correct.

The Peetz Declaration registered in August 1978 132The appellants accept Hamilton J's finding that the Schedule A property, including 65 Railway Street, was held, at its inception, on the trust for the charitable purposes described in the Deed of 8 March 1977. However, they contend that that trust was subsequently varied by Mr Peetz's Declaration (see [42] above) such that the property was held by the 10 new trustees referred to in the Declaration "as trustee[s] for the Macedonian Orthodox Church St Petka Rockdale N.S.W. Australia". To found this argument the appellants rely on those words in the Declaration that describe the basis upon which Mr Peetz, in the operative part of the Declaration, purported to vest 65 Railway Street in the 10 new trustees. There are however a number of reasons why I do not consider the Declaration to have varied the trust. 133First, the words relied upon must be considered in the context of the Declaration as a whole. Recital B referred to Mr Peetz having acquired 65 Railway Street, by the Deed of 8 March 1977, "on trust for the Macedonian Orthodox Church St Petka Rockdale N.S.W. Australia". The statement in that Deed concerning the relevant trust was however more extensive (see [34] above). As a result, Recital B must be understood as containing a shorthand reference to the provisions of that Deed. The words in Recital B are relevantly the same as those upon which the appellants rely in the operative part of the Declaration. In accordance with conventional principles of construction, the two phrases should be given the same meaning in each part of the Declaration. The result is that both should be treated as a shorthand description of the trust and not intended to replace the fuller description given in the Deed of 8 March 1977. 134Secondly, there is nothing in the Declaration to suggest that Mr Peetz was intending to take what would have been the significant step of varying the trust upon which 65 Railway Street was held. Rather, the purpose of the Declaration appears to have been to reflect, in the trusteeship of the property, the Association's decision made on 28 October 1977, when it adopted a constitution, to appoint 10 identified persons as trustees to hold the property of the Church. Such an appointment was contemplated by Clause 25 of the Constitution (see [38] above). In these circumstances, there is no basis for implying into the Declaration an intent on the part of Mr Peetz to vary the trust. 135The appellants submitted that Mr Peetz's intention to vary the trust was evident from the fact that, by the Declaration he purported to appoint 10 trustees, whereas the Deed of 8 March 1977 provided for a maximum of five trustees. I do not accept this to be the case as the explanation for his purported vesting of the property in the 10 trustees is to be found in the Association's earlier appointment of them as the trustees of the Association's property (see [39] above). 136Thirdly, in my view Mr Peetz did not, at the date of his Declaration, have any power to vary the trust. Clause 12 of the Deed of 8 March 1977 gave the trustee power to vary the trust but Mr Peetz resigned as trustee by notice of 21 October 1977, effective on 28 October 1977. The date of execution of the Declaration is not known but it was not argued that an inference should be drawn that it was executed significantly before its registration in August 1978 and prior to 28 October 1977. As noted earlier, the Association appointed the new trustees, to replace Mr Peetz, on 28 October 1977. After his resignation and until Mr Peetz divested himself of 65 Railway Street, as he purported to do by his Declaration, he would undoubtedly have had trust obligations. However they would have been obligations as a constructive trustee, not as a trustee having the powers, including to vary the trust, conferred by the Deed of 8 March 1977. Thus, on his resignation as trustee, he ceased to have the power to vary the trust and did not have that power at the date of his Declaration.

The balance of the Schedule A property 137The appellants also contend that the 15 August 1978 Declaration of Trust relating to the Arncliffe property (see [43] above) varied the charitable trust to render it one for the Association, to be held by it on trust to be applied in accordance with the objects stated in its Constitution. 138I do not accept that this Declaration of Trust had this effect. The document is premised upon the prior creation of what it describes as the "Church trust", the terms of which it does not purport to vary. The document simply adds the Arncliffe property to the property subject to the trust. 139Contrary to the appellants' submission, no present significance is to be attached to the reference in Clause 3 of the Declaration of Trust to the Association's Constitution. That reference is to the basis upon which the "legal estate" may be requested to be transferred to the Church Trust. It does not suggest that the charitable trust is to be affected in any way. As the respondents submitted, an inference can be drawn from the terms of the Declaration of Trust that it was convenient for the Arncliffe property to be purchased in the names of two only of the 10 trustees, with the 10 trustees being entitled to call for transfer to them. Such a transfer was made on 26 March 1979 (see [44] above). 140The appellants also place significance on the description of the shareholders on the share certificates for the Rockdale investment units (see [46] above) as "the Trustees for the Macedonian Church St Petka" or "Macedonian Orthodox Church St Petka, Rockdale". The adoption of these descriptions did not display any intention to do otherwise than add the shares to the property of the trust already established. 141It follows from the above that no error has been demonstrated in Hamilton J's conclusion that, at least prior to incorporation of the Association, the Schedule A property was held on the charitable trust that he described.

The Non-Schedule A property 142In his judgment of 3 February 2012 Brereton J found that the non-Schedule A property was held upon the same trust as Hamilton J held to be applicable to the Schedule A property (see [99] above). 143The appellants challenge this finding only upon the basis that the trust was confined to real property, with the result that any personalty of the Association, such as the non-Schedule A property, was held free of the trust. This argument, which was not put at first instance, was founded upon the fact that the 8 March 1977 Deed related only to the real property at 65 Railway Street Rockdale. However I do not consider that that document established the limits of the property subject to the charitable trust found by Hamilton J. In accordance with the statement of principle of Lord Cranworth cited in [124] above, a document such as the Deed is prima facie evidence of the applicable trust. Plainly, the establishment of the Church involved more than the acquisition of the bare real estate to be used for the Church. From the beginning there were donations of money (see [23] above) leading to the acquisition of the Holy Objects and other types of personalty to which Brereton J referred (see [99] above). The Deed related to the central, but not the only, element of the steps to establish and maintain a church. The inference that, in the absence of evidence of contrary intention, associated property, whether personalty or realty, was to be held on the same trust is readily drawn. As a result, I do not consider that the appellants have demonstrated that Brereton J erred in his conclusions concerning the non-Schedule A property.

Property acquired after incorporation 144I shall deal below with the appellants' contention that the charitable trust was extinguished upon incorporation of the Association. This is the second issue on appeal. The appellants however contend in the alternative that if that argument is not accepted, the Court should nevertheless hold that property of the Association that was acquired after incorporation was not acquired, or held, on any trust. They submit that this follows from their proposition that "following the incorporation of the Association the directing minds of that entity did not apprehend the existence of a trust". 145I do not accept this alternative contention. The same church was being conducted both before and after incorporation. Incorporation simply changed the character of the vehicle conducting the church. If what was occurring prior to incorporation was pursuant to the charitable trust described by Hamilton J and that trust continued in operation after incorporation, the inference that further property acquired after incorporation for the purposes of the church was intended to be held on the same basis is, in the absence of any clear evidence indicating the contrary, compelling. 146Contrary to the appellants' submissions, it is not significant that those in control of the Association after incorporation may not have been conscious of the continued existence of the trust. What is important is that the inference can and should be drawn that accretions to the Church property were intended to be held on the same basis, whatever the controllers might have thought that to have been, as was applicable to the remainder of the Church property. The fact that the accretions were in large measure generated through the use of the existing property of the trust assists that conclusion. As a result, I do not consider that Brereton J's conclusions concerning post incorporation property (see [101] above) have been shown to be erroneous.

SECOND ISSUE ON APPEAL: WHETHER THE TRUST WAS EXTINGUISHED ON INCORPORATION 147The appellants contend that upon incorporation of the Association on 27 April 1992, the Schedule A (and presumably also the non-Schedule A) property vested in the incorporated Association free of any trust, but subject to a statutory obligation to hold that property for the objects stated in its constitution. They submit that this resulted from the operation of Clause 2 of Schedule 2 to the 1984 Act, whether in the form existing before the Act's amendment in 1992 or in that which it took after amendment. They contend in the alternative that if the statutory obligation was not one to hold the property for the objects stated in the constitution, it was one that required the property to be held by the Association for the MOC purposes described by Hamilton J. 148In light of my conclusion below that the 1984 Act did not extinguish the charitable trust on the Association's incorporation, it is unnecessary for me to deal with the respondents' submission that the Association's applications for judicial advice, which were necessarily made on the basis that it was a trustee, precluded it from contending otherwise.

The Associations Incorporation Act 1984 149The Act provides for the incorporation of charitable and other not for profit entities. Section 15(3) states that, in relation to the vesting of property in the incorporated Association, Schedule 2 to the Act has effect. 150Prior to the 1992 amendments to the Act, Schedule 2 was relevantly in the following form: "PROVISIONS RELATING TO PROPERTY, LIABILITIES, ETC OF INCORPORATED ASSOCIATIONS Interpretation. 1. In this Schedule, "former association", in relation to an incorporated association, means-- (a) the association or other body which was incorporated under this Act to form the incorporated association; or (b) in the case of an amalgamated association incorporated under section 47-an incorporated association which was a party to the amalgamation. Vesting of property. 2.(1) Upon the incorporation of an association or other body under this Act, any property that, immediately before that incorporation- (a) was vested in a former association of the incorporated association; or (b) was held by a person, in trust or otherwise for or on behalf of a former association of the incorporated association or for its objects, shall, subject to this Act and to the extent that the property was so vested or held, vest in the incorporated association. (2) Property which vests in an incorporated association pursuant to subclause (1)- (a) becomes vested subject to any mortgage, charge, encumbrance, lien, lease, covenant, contract or liability (whether or not contingent) affecting the property immediately before incorporation of the association under this Act; and (b) shall not be dealt with contrary to the provisions of any trust affecting the property immediately before incorporation of the association under this Act, being provisions as to the purposes for which the property may or is required to be applied. Construction of certain instruments. 3.(1) Where under an instrument having effect after the incorporation of an association under this Act (other than a will made by a testator who died before that incorporation) any property would or may, had that incorporation not occurred, be transferable to or recoverable by a former association of the incorporated association or any person for or on behalf of such a former association or for its objects, the instrument shall, on and after the date of that incorporation, be read and construed and take effect as if a reference therein to the former association or, as the case may be, to that person were a reference to the incorporated association. (2) In subclause (1), 'instrument' means- (a) a will; (b) an instrument, testamentary or otherwise, exercising a power of appointment, whether general or special; or (c) any other instrument whereby a person alienates property or confers a power of appointment or other power or authority to dispose of property. ... Certificate evidence. 6.(1) A certificate, in the prescribed form and verified as prescribed, of the public officer of an incorporated association to the effect that property specified in the certificate was, immediately before the incorporation of the association under this Act, vested in a specified former association of the incorporated association or was held by a person, in trust or otherwise, for or on behalf of such a former association or for its objects, shall-- (a) in any action, suit or other proceeding, civil or criminal, be prima facie evidence of the matters so certified; and (b) be prima facie evidence of the matters so certified in favour the Registrar-General and any other person registering or certifying title to land or having the power or duty to examine or receive evidence as to the title to land. ... Requirement for conveyance, etc. 7. The vesting of property in an incorporated association pursuant to this Schedule has effect without any conveyance, transfer, assignment or assurance." 151"Property" is defined in s 3 of the body of the Act as follows: "'[P]roperty' includes real and personal property, any estate or interest in any property, real or personal, any debt, any thing in action, and any other right or interest, whether in possession or not". 152As a result of the 1992 amendments to the Act, Schedule 2 came to be, relevantly, in the following form: "SCHEDULE 2 - PROVISIONS RELATING TO PROPERTY, LIABILITIES, ETC., OF INCORPORATED ASSOCIATIONS Definitions 1. In this Schedule: 'assets' means any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description (including money) and includes securities, choses in action and documents; 'former association' in relation to an incorporated association, means: (a) the association or other body which was incorporated under this Act to form the incorporated association; or (b) in the case of an amalgamated association incorporated under section 47-an incorporated association which was a party to the amalgamation, and includes any or all [of] the members of the former association as members. ... Transfer of assets and liabilities etc. 2.(1) On the incorporation of an association or other body under this Act, the following provisions have effect: (a) the assets of a former association of the incorporated association vest in the incorporated association without the need for any conveyance, transfer, assignment or assurance. ... (2) Assets which vest in an incorporated association by virtue of this clause are not to be dealt with contrary to the provisions of any trust affecting the assets immediately before the incorporation of the association or other body under this Act, being provisions as to the purposes for which the assets may or are required to be applied".

The transitional provision 153The transitional provision relating to the 1992 amendments was inserted in Schedule 3 to the Act in the following terms: "Vesting of property and transfer of assets, liabilities etc. on incorporation 6. The amendments to Schedule 2 made by Schedule 1 (22) of the amending Act apply to the incorporation of an association or other body under the Act whether before or after the commencement of those amendments". 154As noted earlier, although the 1992 amendments came into force after the Association's incorporation, they had, on Hamilton J's view, a retrospective operation. The appellants contended on appeal that this conclusion was erroneous because it did not give effect to s 30(1)(c) of the Interpretation Act 1987 which preserves against amendment by an Act "any right, privilege, obligation or liability acquired or incurred under the Act ... ". As in my view the effect of Schedule 2 in each form is the same, it is unnecessary to determine whether his Honour was correct in holding that the applicable form of Schedule 2 was that enacted in 1992 (see [77] above).

The form of Schedule 2 at the time of incorporation 155Hamilton J's conclusion was, in short, that all that the 1984 Act vested in the incorporated Association was the limited interest of the unincorporated Association in the trust property and that therefore this did not include any equitable estate or interest in the property. At most, so his Honour held, the unincorporated Association had a right (which might or might not have been a right of property) to use the property for the charitable purpose (see [77] and [119] above). 156The basis upon which the appellants challenge these conclusions in the event that Hamilton J's description of the trust is upheld is encapsulated in the following submissions: "The Trustees held the legal estate in the Schedule A property or part thereof in trust for or on behalf of the Unincorporated Association within para (b) of cl 2(1). The words 'for or on behalf of a former Association' in para (b) of cl 2(1) encompassed the trust created by cl 1 of the Trust Deed. As the Unincorporated Association had the right to use the first property, the trust was 'for or on behalf of' the Unincorporated Association. The words 'for its purposes' in para (b) of cl 2(1) also encompassed this trust. As the trust purpose is substantially similar to the objects in paragraph A in cl 3 of the Unincorporated Association Constitution, the Trust being for the main charitable object of the Unincorporated Association ... was 'for its objects'. As the extent of the Schedule A property that was so held by the Trustees was the legal estate, it was that legal estate that vested in the Association pursuant to cl 2(1). The words 'to the extent that the property was so ... held' in the latter part of cl 2(1) are not ambiguous as they refer to the property within the description in para (b): in other words, they refer to property held in trust or otherwise for the former association or on behalf of the former association or for the objects of the former association" (Submissions dated 20 July 2007, [97]). 157I reject these submissions for the following reasons. 158First, contrary to the appellants' assertion, the trustees did not hold the legal estate to any of the property on trust "for or on behalf of the unincorporated Association" (see clause 2(1) of Schedule 2). The trust applicable to both the Schedule A and non-Schedule A property was a trust for a charitable purpose, not a trust for a person or entity. The property, whether held by the 10 trustees or otherwise, was not therefore held "for or on behalf of" the unincorporated Association. As Hamilton J pointed out, the reference in the Deed of 8 March 1977 to the unincorporated Association as "the proposed beneficiary" did not, on the Deed's proper construction, indicate otherwise. This was not, as in Bacon v Pianta [1966] HCA 44; 114 CLR 634, a gift to (or trust for) an unincorporated association. As a result the different possibilities referred to in that case as to how such a gift (or trust) may operate do not arise for consideration in the present case. 159Secondly, the trust here was not one "for or on behalf of" the unincorporated Association "for its objects" (see clause 2(1) of Schedule 2). The fact that there was substantial coincidence between the purpose of the trust and the objects of the unincorporated Association does not mandate a different conclusion. The trust purpose was immutable except as a result of the Court settling a scheme, whereas the unincorporated Association's objects were able to be changed by resolution of its members. Even if the objects of the Association had been identical and immutable, the fact would remain that the trust here was found to be for an identified purpose and not one for the objects of the Association, or any other entity. 160Thirdly, the unincorporated Association's right to use the trust property for the charitable purpose did not, as the appellants submit, render the trust one "for or on behalf of" the unincorporated Association. As Hamilton J observed, it is not by any means clear that the reference in the description of the trust to the trust property being used by the unincorporated Association for the charitable purpose conferred any right of property on the Association. Certainly, the right of user does not confer on the Association any beneficial interest in the property as it is not entitled to use the property other than for the charitable purpose. The right is similar to the right (and duty) of a trustee of a charitable trust to use the trust property for the charitable purpose but does not necessarily involve the Association holding any property. The description of the right in the Deed of 8 March 1977 was consistent with the trust property being held by an entirely separate trustee. Moreover, as pointed out earlier (see [129] above), in the description of the trust the Association was simply identified as a vehicle for the achievement of the trust purpose. Inability or unwillingness on its part to perform that role would thus likely see its replacement as a result of the settlement by the Court of a cy-près scheme. 161Fourthly, the appellants' assumption that the 1984 Act vested in the incorporated Association the legal estate in the trust property held by the trustees is erroneous. None of the elements of clause 2(1) of Schedule 2 was satisfied. That legal estate was not vested in the unincorporated Association but was vested in the trustees (see clause 2(1)(a)) and was not held by them in trust or otherwise "for or on behalf of" the unincorporated Association or "for its objects". They held the property, not for the unincorporated Association or its objects, but for the identified charitable purpose. 162The incorporated Association now holds the trust property. To the extent that that property was previously held by the 10 trustees appointed by the unincorporated Association (as most of the Schedule A property was) the transfer to the incorporated Association was not, for the reasons given above, effected by the 1984 Act. Schedule 2 of the 1984 Act did not operate in respect of that property because it was not property as described in clause 2(1) of Schedule 2. Nevertheless, the transfer has occurred and the incorporated Association holds the property as trustee subject to the same charitable trust as that upon which the previous trustees held it. 163Trust property other than that held by the 10 trustees, for example the non-Schedule A property such as the Holy Objects, appears, as a matter of legal analysis, to have been held by the members of the unincorporated Association (as the Association was not then a legal entity), or by the Committee on behalf of the members. As I have concluded (see [143] above), that property was part of the trust property. As a result, those who held the property had no beneficial interest in it. Upon incorporation, Schedule 2 vested the legal interests in this property in the incorporated Association. The reference in clause 2(1)(a) of Schedule 2 to property vested in the unincorporated Association, must, in light of the Association's lack of legal personality, be taken as a reference to property vested in the members of the Association for its purposes. As Hamilton J held, the vesting in the incorporated Association was, according to the terms of clause 2(1) of Schedule 2, only "to the extent that the property was ... vested or held" by the unincorporated Association. The unincorporated Association held (through its members) only the bare legal interests. No more than that was therefore vested in the incorporated Association by the 1984 Act. 164I add that this analysis applies also to the unincorporated Association's "right", if it can be regarded as that, to use the trust property for the identified charitable purpose. The right did not carry with it any beneficial interest in the property. However, the Association arguably had standing to enforce its right and thus had a chose in action interest that vested in the incorporated Association in accordance with Schedule 2 of the 1984 Act. In any event, upon incorporation the Association became the entity falling within the description in the trust of the permitted user and enforcement of the trust would involve allowing the Association to use the trust property for the specified charitable purpose. 165The appellants placed considerable reliance on clause 2(2)(b) of Schedule 2, submitting that it demonstrated a legislative intent to extinguish any trust previously binding property which the 1984 Act vested in an incorporated association. I do not accept this submission. 166The position can be tested by asking what would have been the effect of incorporation on a private trust of which the unincorporated Association was trustee. It would seem to follow from the appellants' submission that the legislative intent was to extinguish the rights of the individual who was the beneficiary under the trust and, on incorporation, vest the whole of the legal and equitable interests in the property in the incorporated Association. There is nothing in the Act that would support that radical result. Why then, it needs to be asked, should a similarly radical result be concluded to follow in relation to a trust for a purpose rather than for a person? 167In my view clause 2(2)(b) of Schedule 2, far from operating to extinguish charitable trusts, is designed to preserve them by ensuring that the incorporated Association remains bound by them. No doubt clearer language, such as used in some interstate statutes to which the appellants referred, could have been used but the meaning of the words in fact used is in my view tolerably clear. The operative words of the paragraph prohibit the relevant property being dealt with contrary to an applicable trust. A trust is an applicable trust if, first, it is one which affected the property immediately before incorporation of the Association and, secondly, its provisions relate to the purposes for which the property is required to be applied. Both of these conditions were satisfied in the present case, with the result that the incorporated Association became bound by the trust. 168In my view it is not of significance, at least in the present case, that the paragraph refers to "the provisions" of any trust rather than simply to the trust itself. There are no provisions of the present charitable trust other than those relating to the purposes for which the property is to be applied. 169In support of their approach to the construction of Schedule 2, the appellants submitted: "That the object of the 1984 Act was to enable an association carried on for charitable purposes to be incorporated (see s 7(1)(2)(a)) and to carry on its activities subject to the terms of its constitution without the imposition of trust obligations (see s 18(1))" (ibid [99(f)]). 170The submission is not supported by the sections of the Act to which it refers. Section 7 renders associations carried on "for the object of trading or securing pecuniary gain for its members" ineligible for incorporation under the Act and s 18(1), in effect, confines an incorporated association's activities to those authorised by its constitution. The sections say nothing about the freedom of an incorporated association from trust obligations.

The 1992 form of Schedule 2 171As noted above, Hamilton J found that if an unincorporated association held only a limited interest in property, the effect of the 1992 form of Schedule 2 was to vest only the limited interest in the incorporated association. I agree that this is the effect of that schedule and that it therefore had no different operation to that which the form operative from 1984 had. 172The appellants submit that the words "assets of a former Association" in clause 2(1)(a) of the 1992 form "should be construed as encompassing property vested in the former association, or held by a person, in trust or otherwise, for or on behalf of a former association or for its objects within cl 2(1) of the 1984 form of Schedule 2" (ibid [109]). They appear to mean by this that the "assets" referred to comprise the whole legal and equitable ownership of the relevant property even if the unincorporated Association had, as here, no equitable interest in the property. However "assets" is defined by clause 1 to include "any legal or equitable estate or interest" and in my view, only the "assets" held by the unincorporated Association (meaning thereby the Association's interests, such as they might be, in the property) were intended to be vested in the incorporated Association. The notion that the Act intended to vest in the latter more than the former owned is surprising and derives no support from Schedule 2. Clause 2(2) is in my view explicable in the same manner as the corresponding provision in Schedule 2 as enacted in 1984. 173The parties agree that one aspect of Hamilton J's reasoning cannot be supported. This is his view that the 10 trustees held trust property "as members" and for that reason the property they held constituted "assets" of the "former Association", the latter being defined to include "any or all [of] the members of the former association as members". The parties agree that there was no evidence that the 10 trustees were in fact members at the date of incorporation. Hamilton J's conclusions are however supportable without reliance on this aspect of his reasoning.

THIRD ISSUE ON APPEAL: WHETHER THE TRUST WAS BREACHED 174None of the parties took issue with Young CJ in Eq's views that not every departure from the rules of a church in the course of administration of a church or religious trust such as the present constitutes a breach of the trust. They accepted that such a breach will only occur where the rule breached is a "fundamental" rule of church law which affects the trust property (Judgment [485] and [486] quoted in [95] above). The question before his Honour required him to determine whether a number of alleged acts constituted breaches of church laws of this character (see [81] above). It was not for his Honour to determine whether those acts had in fact occurred, although there was little doubt (as subsequently found by Brereton J) that such of the acts as are presently relevant had in fact occurred. It is convenient to take into account Brereton J's factual and other findings in the discussion which follows. 175The orders made by Brereton J on 5 March 2012 were based on findings of breaches of the trust in the respects identified in paragraphs (a), (b), (c), (e) and (i) of the questions before Young CJ in Eq (see [81] above). The appellants challenge each of these findings, as well as Young CJ in Eq's apparent finding of breach in respect of paragraph (h). Before turning to the particular alleged breaches, a number of general points need to be made. 176First, the appellants submit that there is tension between Hamilton J's conclusion that the Association had a right to use the trust property and Young CJ in Eq's conclusion that the Association was confined to using the property in accordance with the dictates of the Macedonian Orthodox Religion, notwithstanding that its own Constitution might permit it to act otherwise. In my view, there is no such tension. The Association only has the right to use the trust property for the purposes of the Macedonian Orthodox Religion. The trust does not give it a licence to do with the property whatever its Constitution permits it to do. This is apparent from the manner in which the trust is described in the Deed of 8 March 1977 and in Hamilton J's corresponding description of the trust. 177Secondly, I do not accept the appellants' contention that a distinction of present significance is to be drawn between the concept of the Macedonian Orthodox Religion, as referred to in the Deed of 8 March 1977, and the Macedonian Orthodox Church. The evidence demonstrated that the latter is the organ for the administration and propagation of the former. The evidence did not suggest that there is any conflict relevant to the present case between the rules and practices of the Religion and the Church. In particular, the appellants' expert, Father Erickson, gave no support to the notion that there is. 178Thirdly, the appellants relied upon evidence of Father Erickson that "in modern ecclesiology, there is greater emphasis on co-responsibility on the faithful, clergy and laity, for the life of the Church", asserting that this concept of "conciliarity" resulted in the Church hierarchy's powers being limited by the constitutions of local Church bodies such as the Association (written submissions dated 18 March 2013, [34]). However, Father Erickson did not assert that there was a general principle that the hierarchy's powers were always limited by the wishes of the local Church bodies. Rather, his statement reflected instances that he identified in Church rules, such as those found at places in the MOC Constitution, in which powers of senior entities in the hierarchy were qualified. As a result, it is necessary to consider the Church rules relevant to particular alleged breaches to determine what, if any, role the local bodies such as the Association have. 179Unlike Young CJ in Eq, I would not reject the relevance of "conciliarity" simply because it is "a matter of ecclesiology, not of church law and order" (see Judgment [130] quoted in [83] above). Rather, as I have explained, the relevance, if any, of conciliarity in this case is to be determined by considering the MOC laws applicable to particular alleged breaches. 180Fourthly, the appellants contend that Young CJ in Eq failed to sufficiently recognise that Hamilton J had concluded that the trust property was not to be used "merely for the practice and promotion of the Macedonian Orthodox Church" (submissions dated 1 May 2013, [25]). They referred in this regard to paragraph [91] of Hamilton J's judgment (see [74] above) in which his Honour said that the concept that the Association, as the parish organisation, was to be governed on a democratic basis in accordance with its Constitution was incorporated in the terms of the trust by reason of their specification of the Association as the vehicle to use the trust property for the identified charitable purpose. 181I do not accept this submission. Accepting that it is implicit in the description of the trust that the Association will be governed by its Constitution and, if regard is able to be had to the events leading up to the establishment of the trust, that that Constitution will be based upon democratic principles, does not mean that the trust purpose includes the advancement of the Association or its objects. The trust purpose as found by Hamilton J was, to put it shortly, the advancement of the Macedonian Orthodox Religion. The Association was simply the vehicle to facilitate use of the trust property for that purpose. I can see no basis for concluding that the characteristics of the vehicle were intended to override or qualify the trust purpose. As I have earlier noted, if the vehicle is unwilling or unable to act in the advancement of the trust purpose, it is liable to be replaced pursuant to a cy-près scheme. Contrary to the appellants' submissions, consideration of the terms of the trust does not therefore indicate that fundamental rules of the Macedonian Orthodox Religion have only a qualified relevance (written submissions dated 1 May 2013, [28] - [38]) and that the terms of the trust were implicitly subject to the provisions of the Constitution of the Association (ibid [48]). The appellants' propositions do not in my view reflect Hamilton J's conclusion, nor are they in any event correct. Radmanovich v Nedeljkovic [2001] NSWSC 492; 52 NSWLR 641, upon which the appellants relied, was a different case to the present as the trust there was expressed to be one for the unincorporated local church community, not, as here, for the use of the church site for the purposes of the religion and its propagation. 182Any relevance of the Association's Constitution to the allegations of breach of trust can only derive from any significance that may be attached to the local church rules by the laws of the Macedonian Orthodox Religion. The trust does not independently attach any significance to the constitution of the vehicle for achievement of that object.

Alleged breach (a): exclusion of the Bishop from St Petka 183In my view Young CJ in Eq's conclusion as to this alleged breach was correct. The MOC Constitution makes it abundantly clear that the Bishop is the spiritual head of the Diocese and the Diocesan Statute specifically includes amongst the bishop's rights and obligations the carrying out of pastoral ministrations and canonic visits in his diocese (Article 13). This must carry with it the right to conduct services in a church in his Diocese. 184The appellants' challenge to this finding seems to be based on the primacy of the Association's Constitution over MOC Church law but, as I have explained, that cannot be sustained as a general proposition and there is nothing in MOC Church law that delegates to a local organisation, such as the Association, the right to exclude the diocesan bishop.

Alleged breaches (b) and (c): exclusion of the Bishop appointed priest 185For the reasons extracted in [88] and [89] above, his Honour found the alleged acts, if proved, would be breaches of the trust. In essence, his Honour found that it was a fundamental rule of the MOC that the diocesan bishop has the exclusive right to appoint and remove a priest of a parish within his diocese. Father Erickson, the appellants' expert, accepted as a general rule that a diocesan bishop has full and exclusive authority within his own diocese but said that there were some exceptions to this general rule (Report [14.1]). He said that Article 195 of the 1994 MOC Constitution (see [57] above) contained such an exception and envisaged that the agreement of the local church community (in this case represented by the Association) would be required for the appointment of a priest to a parish outside Macedonia (Report [14.13.3]). 186This evidence does not assist the appellants in the present case as Bishop Petar's appointment of Father Mitrev as parish priest of St Petka in 1996 was accepted by the local community, at least for a sufficient period to justify the conclusion that he was appointed with the agreement of the local community. 187The only other exception of possible relevance to which Father Erickson pointed was the provision in the Association's Constitution for the Association to appoint a priest (see [38] and [48] above). However he did not suggest that that provision could provide authority to the Association to appoint a parish priest when the appointment had already been validly made by the Bishop, as it had been in 1996. Certainly, no provision of its Constitution purported to permit the Association to exclude a priest properly appointed by the Bishop. 188The appellants assert that the terms of the trust incorporate, and give primacy to, provisions such as Article 29 of the Association's Constitution. They submit that, as a result, the Bishop "cannot unilaterally impose upon the Association a priest unacceptable to its members, and for so long as he purports to do so, the Association is entitled to exclude that priest from the grounds of the St Petka Church" (written submissions of 18 March 2013, [45]). However, as I have explained, the trust does not incorporate the Association's Constitution (except so far as the rules of the Macedonian Orthodox Church may attach significance to that Constitution), nor, even if it did, does it give primacy to it. Moreover, the Bishop did not appoint a priest unacceptable to the Association. When appointed, Father Mitrev was accepted by it. 189In any event, when read in the context of the objects of the Association set out in Article 3 (see [38] above), Article 29 (being Article 24 in the pre-incorporation Constitution) cannot be read as empowering the Association to appoint a priest in conflict with the wishes of the Bishop. Even if it could be construed as allowing the Association to appoint a priest without seeking the Bishop's approval, it could not reasonably be understood as permitting such an appointment when the Association was aware of the Bishop's opposition. 190In these circumstances, no error has been shown in his Honour's conclusion that alleged breach (b) and, by inference, alleged breach (c) (compare Judgment [388] - [395] and [496]) were, if the facts were proved, breaches of fundamental rules of the Macedonian Orthodox Religion.

Alleged breach (e): employing priests not appointed by the Bishop 191As noted above, Father Erickson said that Article 195 of the 1994 MOC Constitution envisaged the agreement of the local church community to the appointment of a priest to the parish. However, the Article does not suggest, nor did Father Erickson, that the local church community could make the appointment without the agreement of the diocesan bishop. In this respect the Article refers to the agreement of the Holy Synod which, in relation to the diocese, is represented by the bishop. As the purported appointments by the Association, successively, of Fathers Dzeparovski and Despotoski were made without the concurrence of the Bishop, and in fact contrary to his wishes, the appointments constituted breaches of church law. As, like alleged breaches (a), (b) and (c), they went to the heart of the obviously cardinal issue for the MOR of its representation and propagation in the communities of people of that faith, the breaches were of fundamental Church laws.

Alleged breach (h): taking steps in relation to the church building and contents without the Bishop's approval 192Young CJ in Eq found that these matters, if proved, would constitute a breach of fundamental rules of the church (see [93] and [96] above), holding that they were matters that fell within the Bishop's authority. The appellants' challenge to this finding is primarily based upon their contention that the Association's Constitution, and therefore its decisions in relation to the governance of the St Petka Church, prevail over the MOC Constitution and its delegation of authority to the Bishop. As I earlier indicated, this contention is not well-founded. There is nothing in the MOC Constitution to which the Court's attention has been directed to indicate that the general authority of the bishop in respect of any presently relevant Church matters relating to his diocese is qualified by any authority conferred upon the local communities, represented here by the Association. 193The appellants further submit that the Bishop's authority in relation to these matters derives only from the Diocesan Statute and not from the MOC Constitution. However Article 71 of the latter confers authority on the Bishop in sufficiently broad terms to embrace the matters. Whilst it is arguable that that authority can only be exercised in conjunction with local bodies, such as the Association, it is clear that neither Article 71, nor any other provision, authorises the Association to deal with such matters in the face of opposition from the Bishop.

Alleged breach (i) - membership of the Association 194In giving the Association the right to use the trust property as a site for a Macedonian Orthodox church, the trust contemplated that the Association would have a role equivalent to, and would in fact be, a parish assembly of the type which the MOC Constitution envisaged would be responsible for the day to day conduct of the local churches. As Brereton J held in his judgment of 3 February 2012, it was implicit in the trust that the membership of the Association would reflect that of a parish assembly under MOC law (at [97]). This was so because the trust required the St Petka Church to be conducted as a church of the Macedonian Orthodox Religion and a disconformity between membership of the organisation conducting it and that of a parish assembly under Church law would be a departure from that requirement. 195Article 104 of the 1994 MOC Constitution describes the parish as "a church community of clergymen and believers of the Orthodox Christian faith". Articles 121, 122 and 123 (see [56] above) make it clear that the local Church Community comprises, subject to limited exceptions, all persons of the Macedonian Orthodox faith living in the parish and that all these persons have a right to vote in the elections of their Community representatives. The 1974 MOC Constitution was to the same effect (see [17] above). These provisions are also reflected in Articles 67 to 70 of the Diocesan Statute (see [60] above) which is given authority in the Australian and New Zealand Diocese by Article 193 of the 1994 MOC Constitution. They can thus be regarded as principles of general application within the MOC. 196The appellants submitted that there was no evidence to support Brereton J's finding that the trust contemplated that the membership of the user of the trust funds would be the equivalent of the parish assembly. However the finding was justified by the terms of the trust when considered against the background of the then current MOC Constitution (its 1994 successor being in relevantly similar terms) and of the Diocesan Statute. These documents contemplated that the day to day affairs of the parish church would be administered by the Church Community or, to use another expression for the same concept, the parish assembly. Thus the user of the church property was to be the Church Community. As the trust identified the user as the unincorporated Association, it can be inferred, in the absence of any indication to the contrary, that the latter was intended to constitute the Church Community (or parish assembly) for the St Petka Parish. 197The effect of Article 8(1) of the Association's Constitution (see [49] above) is that the Executive Council of the Association may, as it has done, limit those who become members of the Association so as to exclude persons who would be entitled under the laws of the MOC to be members of the Church Community and to vote in elections of their representatives. As Brereton J held, this is a breach of trust (at [98]) because it is a departure from fundamental aspects of the Church's laws which entitle adherents to the faith to be involved in the conduct of MOC churches in their local communities. 198The appellants further submit that a conflict with the Diocesan Statute could not constitute a fundamental departure from Church laws because the trust relates to the use of the St Petka site for the propagation of the Macedonian Orthodox Religion generally. The relevant provisions of Church law are thus said to be those that have universal force throughout the MOC and not merely those applicable to a single diocese (written submissions of 18 March 2013, [33]). I do not consider that any such sharp line can be drawn. The question remains in relation to any particular departure from Church law whether that Church law is fundamental in the relevant sense. Simply identifying it as one that is applicable to St Petka because it is the Diocesan Statute rather than the MOC Constitution does not in my view answer that question. For instance in relation to this alleged breach the relevant provisions of the Diocesan Statute conform to the corresponding provisions in the MOC Constitution applicable throughout Macedonia. Both may be considered in determining whether the relevant laws are fundamental.

Conclusion on breaches 199For the reasons I have given, I do not consider that the appellants have established that either Young CJ in Eq or Brereton J erred in his findings concerning breach.

FOURTH ISSUE ON APPEAL: INJUNCTIVE RELIEF 200The appellants' Further Amended Draft Notice of Appeal complains of the mandatory and prohibitory orders made by Brereton J in relation to membership of the Association ([25] and [26]). The complaints appear to be founded upon the appellants' contentions that the terms of the trust incorporate the Association's Constitution and that that Constitution has primacy over other Church laws or that only church laws with universal operation can form terms of the trust. As I have earlier rejected those contentions, the appellants' challenges to these orders must fail. So long as the Association asserts its right to use the trust property for the charitable purpose, it needs to conform to fundamental aspects of MOC law, including as to membership of organisations which conduct local MOC churches. Brereton J's orders were appropriate to ensure that this conformity was achieved. 201The appellants' submission that the Executive Council's rejection of the subject membership applications was mandated by the 1984 Act which had the effect of requiring the Association to abide by its Constitution cannot be sustained as the requirement for membership that led to the rejection of the applications was of the Executive Council's own making. It is not imposed by the Constitution.

FIFTH ISSUE ON APPEAL: ACCESSORIAL LIABILITY FOR BREACHES OF TRUST 202The plaintiffs claimed that the Council Member defendants had accessorial liability in respect of the Association's payment of emoluments to the two priests it appointed. They claimed this on the basis that the Council Members knowingly, in the sense of dishonestly, procured the Association, as trustee, to commit the breaches of trust constituted by the payment of the emoluments. They contended that this claim was maintainable even if the trustee did not act dishonestly and that the second limb of the principle stated by Lord Selborne LC in Barnes v Addy (1874) LR 9 Ch App 244 at 251 - 2 imposing liability where third parties "assist with knowledge in a dishonest and fraudulent design on the part of the trustees" was not exhaustive. 203In Farah Constructions v Say-Dee [2007] HCA 22; 230 CLR 89, the High Court confirmed that in this context liability only arises where a third party acts dishonestly in relation to the breach of trust or fiduciary duty (at [179] and [186]). 204In his judgment of 21 December 2012, Brereton J accepted as incorrect the reasoning that led him to find in his judgment of 3 February 2012 that the Council Member defendants acted dishonestly and were therefore accessorily liable in respect of the payments made by the Association to the two priests appointed by it. Although his Honour did not state that this revised view was applicable also to his finding in the earlier judgment that the Association was not entitled to be excused under s 85 of the Trustee Act because it acted dishonestly, it clearly was because the Association acted solely through the Council Members and it could not have been dishonest unless the Council Members were. 205In the later judgment, Brereton J accepted, contrary to the basis upon which he had proceeded in the earlier judgment, that the Council Members did not take an oath in respect of their periods of office commencing on 14 April 1997 ([14]), these being the periods when the Association appointed Fathers Dzeparovski and Despotoski. However, he took the view that the fact that Council Members, other than Mr Minovski, had taken oaths in the past demonstrated that they "must have known" that the Association "would be governed by Church law as well as by its secular Constitution" (at [15]). In particular, he concluded that, "they understood that the Bishop's approval was essential for the effective appointment of a priest" ([20]). He then held that the Council Members who had previously sworn oaths knew that by appointing priests without the approval of the Bishop the Association was breaching Church law and thereby transgressing ordinary standards of honest behaviour (at [21] and [22]). 206For the following reasons, I do not accept the soundness of this reasoning. 207The primary judge accepted in his first judgment that the Council Members "believed that the Association was not a trustee ... and that the Association's Constitution, not any trust, was the paramount authority" ([141]). He did not depart from this in his later judgment. In my view, these conclusions negate the proposition that by knowingly breaching Church law the Council Members knowingly participated in dishonest breaches of trust by the Association. 208In my view a finding of dishonesty against the Council Members could not be made without a finding that they knew, or reasonable persons in their position would have known, that the Association was not entitled to deal with the St Petka Church and property as it thought appropriate in accordance with its Constitution (see Farah v Say-Dee at [177]). As this Court in US Surgical Corporation v Hospital Products [1983] 2 NSWLR 157 at 253 - 4 (reversed on other grounds: (1984) 156 CLR 41) understood the judgment of Stephen J in Consul Development Pty Ltd v DPC Estates Pty Ltd [1975] HCA 8; 132 CLR 373, there must be knowledge of the circumstances which imposed the fiduciary duty (or, in this case, trust) "and, in addition, the recognition that those facts did bear that character". 209In fact, the primary judge made a contrary finding in concluding that the Council Members believed that the Association's Constitution was the "paramount authority" and that there was no relevant trust binding it. His Honour expressly stated that the latter belief was both honest and reasonable and it is implicit in his findings that he considered the former belief to be of the same character. Knowing participation in a breach of trust must at least involve some awareness that there is a restriction upon the trustees' liberty to deal with the trust property as if it were their own. On his Honour's findings there was no such awareness here. 210The effect of his Honour's conclusions was that the Council Members honestly and reasonably believed, first, that the Association was entitled to deal with the property in any manner authorised by its Constitution and, secondly, that the property was dealt with in such a manner. The fact that they may also have believed that such dealings constituted breaches of Macedonian Orthodox Church law is of no present consequence when they honestly and reasonably believed (although erroneously) that the Association's Constitution prevailed over Church law and that Church law did not impose any binding restriction (for example, by way of trust) on use of the property. Whilst in some circumstances "a person may have acted dishonestly, judged by the standards of ordinary, decent people, without appreciating that the act in question was dishonest by those standards" (Farah Constructions v Say-Dee at [173]), the finding that the Council Members' beliefs were reasonable negates a conclusion that they acted dishonestly even though they did not realise it. 211Brereton J found that notwithstanding that the Association's Constitution authorised them to do as they did, the Committee Members, other than Mr Minovski, acted dishonestly for the purposes of accessorial liability because they knew that the Association was an integral part of the MOC and that the appointment of priests without the Bishop's approval contravened Church law (Judgment [22]). 212I do not agree with this finding as this dishonesty (if it is assumed to be that) was not relevant dishonesty because it did not, according to the Committee Members' beliefs, impact on the trust property. According to their beliefs, the property was not subject to a trust and the Association was free to deal with it in accordance with its Constitution. Whether or not those Committee Members acted dishonestly in the discharge of their duties as such, they could not be said to have knowingly participated in a dishonest breach of trust. 213For the same reason the dishonesty found by his Honour was not relevant dishonesty for the purpose of the Association's application for relief under s 85 of the Trustee Act (see s 85(2) quoted in [108] above). To preclude that relief, any dishonesty must have been in connection with the breaches of trust in relation to which relief is sought. 214I do not consider the oaths taken by four of the five Council Members contradict my conclusions. By the oaths (see [62] above), the Council Members pledged allegiance not only to the Constitution of the MOC but also to the "Statute of the Macedonian Orthodox Church Community 'St Petka' Rockdale". The oaths did not themselves identify which had greater authority and were therefore not inconsistent with the Council Members' views that the local Constitution prevailed. 215Nor were the terms of the local Constitution, at least to lay people, obviously inconsistent with a belief that the Association was entitled to appoint a parish priest who would be able to administer the sacraments in the local church as Article 29 stated that the Association was to appoint the parish priest who would be "absolutely and exclusively responsible for the administering of the religious rites of the Church" (see [38] and [48] above).

Knowledge of transgression of Church law 216In light of these conclusions it is unnecessary to express a final conclusion on the appellants' challenge to the primary judge's finding that the Council Members, other than Mr Minovski, knew that Church law was transgressed by the Association appointing priests who were not approved by the Bishop to perform sacraments at the St Petka Church. 217The respondents' written submissions of 16 April 2013 annexed a Schedule identifying the evidence that they said supported that finding. That Schedule referred to evidence that at least some of the Council Members were not interested in the contents of Church law and that seemingly all of them were aware that the Bishop asserted that the Association was not entitled to appoint priests without his approval. This did not prove that the Council Members knew of breaches of Church law when the consistent position of those of them who gave evidence was that in their mind the Association's actions were rendered proper by it acting in accordance with its Constitution, which they regarded as the source of relevant rules governing the St Petka Church. 218The closest that this evidence came to supporting the finding was Mr Marcevski's acceptance in cross-examination of the following proposition: "Your belief, as I understand your evidence, was that the law of the church was relevant and governing as to the administering of the sacraments and the practice of religion by a priest inside the walls of the church but beyond that the association's constitution was governing?" 219However the impact of this acceptance was diminished by Mr Marcevski's apparent assertion in his next answer of a belief that the Association's Constitution prevailed in respect of the appointment of the priest. 220Furthermore, there are difficulties in supporting the finding when it does not appear that it was put in cross-examination of the Council Members who gave evidence that they were aware, or at least believed or suspected, that sacraments administered by the priests appointed by the Association were not valid for religious purposes. The appellants asserted that if this issue had been raised, they would have tendered before Brereton J the evidence of Father Erickson, given before Young CJ in Eq, that sacraments so administered would be "valid but illicit". 221In light of my conclusions on other issues on appeal and because this Court does not have before it the transcript of all of the oral evidence and his Honour's decision on this point would in any event seem to have been at least in part based upon demeanour, I do not express a final view as to the efficacy of the challenge to the finding.

Conclusion on accessorial liability 222For these reasons, I consider that the appeal in relation to the finding of accessorial liability succeeds and that the judgment entered at first instance against the Council Members other than Mr Minovski must be set aside. 223In these circumstances it is unnecessary to deal with the appellants' contention that the relevance of the oaths on the broader basis identified by his Honour in his later judgment was not part of the respondents' case before him. 224In conclusion on this topic, I note that the parties made detailed submissions on appeal on the issue referred to above of whether the primary judge was correct in finding that a person could have accessorial liability even if the trustee did not act knowingly in committing the breaches of trust. The appellants submitted that the decision in Farah v Say-Dee denied the possibility of liability on this basis and confined the possible bases of liability in this area to those stated in the two limbs of Lord Selborne LC's statement of principle in Barnes v Addy. The respondents submitted that this was not the effect of Farah v Say-Dee and asserted that the broader basis of liability had been recognised in a number of decisions including those of the Victorian Court of Appeal in Marriner v Australian Super Developments Pty Ltd [2012] VSCA 171 and of the Full Court of the Federal Court in Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; 200 FCR 296. 225It is unnecessary and inappropriate for the Court in this case to enter into this debate, as resolution of the issue would not affect the outcome of the present case, there no longer being a finding of dishonesty against the alleged accessories. In any event, it is difficult to see how the issue arises in the present case as the trustee here, the Association, acted solely through the Council Members. Accordingly, if they acted dishonestly, so it would seem, did the Association, with the result that the second limb of the principles in Barnes v Addy is relevant and it is unnecessary to consider whether the principles stated in the two limbs are exhaustive. I note that Brereton J in fact made a finding that the Association acted dishonestly when his Honour considered its application under s 85 of the Trustee Act.

SIXTH ISSUE ON APPEAL: WHETHER THE ASSOCIATION SHOULD HAVE BEEN EXCUSED FOR ANY BREACHES OF TRUST 226The primary judge's finding of dishonesty was central to his finding in relation to s 85 of the Trustee Act. As, for the reasons given above, it cannot be sustained, his Honour's exercise of discretion under that section is vitiated and this Court must re-exercise the discretion, which I now proceed to do. 227In my view, a number of unchallenged findings made by his Honour point strongly to the appropriateness of the Association being excused under s 85 for its breaches of trust in paying emoluments to the two priests it appointed, these being the only breaches that Brereton J considered in relation to s 85. 228First are the findings, expressed or implied, that the Council Members honestly and reasonably believed that the Association was not a trustee, that its Constitution was the "paramount authority" in relation to the way in which the Association's property was able to be dealt with and that the Association's actions were effected in conformity with its Constitution. Second is the primary judge's finding that the Council Members were volunteers - "amateurs who were endeavouring to serve their community" (Judgment of 3 February 2012, [142]). Third is the fact that the employment of the priests, for what was no doubt modest remuneration "generated revenue for the trust, which swelled its coffers but rapidly dried up when Fr Despotoski ceased to minister at St Petka in mid-2003" (ibid at [142]. Fourth is the implicit finding that, whilst they occupied their positions, the priests fulfilled the religious needs of a large number of adherents to the Macedonian Orthodox faith. 229These factors render an order under s 85 of the Trustee Act appropriate.

SEVENTH ISSUE ON APPEAL: COSTS 230The appellants' challenged Brereton J's decision to order the Association (jointly and severally with the Council Member appellants other than Mr Minovski) to pay the other parties' costs of the proceedings before Hamilton J. They submitted that Brereton J failed to apply the principle that, absent special circumstances, costs follow the event and that, they were successful before Hamilton J because, although their primary case that the Schedule A property was not the subject of a trust was unsuccessful, their alternative submission that, under the trust, the property "belonged to the local church" was successful. 231For the reasons given above ([133] - [136] and [140] - [141]), I do not agree that this alternative submission was successful or that, if it had been, the relevant finding would have been correct. As a result, I do not consider that the appellants should be regarded as the successful parties on the issues litigated before Hamilton J. The result is that their challenge to the costs order identified above must fail. 232The appellants' second challenge to the costs orders made below is to the order that the Council Members other than Mr Minovski bear 25 per cent of the costs of the Bishop and Father Mitrev of the proceedings at first instance that were not the subject of any specific costs order. Brereton J made this order upon the basis that those Council Members were liable as accessories. As I have found that they were not so liable, the consequential costs order must be set aside.

ORDERS TO BE MADE ON APPEAL 233As there were a variety of possible outcomes of the appeals and cross-appeal the parties did not make submissions at the appeal hearing concerning costs. They should be given the opportunity to do so now, taking into consideration the Court's conclusions stated in this judgment. 234I propose the orders set out below. In so far as these orders include directions for the filing of Notices of Appeal and Cross-Appeal, they should not be taken as implicitly ruling, contrary to submissions that were made, that the filing party was entitled to advance all the grounds contained in those Notices. (1) Grant leave to the appellants to appeal. (2) Direct that within seven days of the date of this judgment, the appellants file and serve a Notice of Appeal in the form appearing under Tab 6 of the Appeal Papers. (3) Grant leave to Metropolitan Petar (otherwise known as Bishop Petar) and to Father Mitrev to appeal and cross-appeal. (4) Direct that within seven days of the date of this judgment, Bishop Petar and Father Mitrev file and serve Notices of Appeal and Cross-Appeal in the forms provided to the Court on 27 May 2013. (5) Dismiss the Association's appeal except to the extent that it challenged Brereton J's refusal to grant relief under s 85 of the Trustee Act. (6) Set aside Brereton J's order refusing relief to the Association under s 85 of the Trustee Act. (7) Order under s 85 of the Trustee Act that the Association be relieved from personal liability for its breaches of trust constituted by its payment of emoluments to Fathers Dzeparovski and Despotoski. (8) Allow the appeals of the Council Member appellants against order (1) made by Brereton J on 21 December 2012 in relation to the liability of the Council Members other than Mr Minovski as accessories to the Association's breaches of trust. (9) Set aside order (1) made on 21 December 2012. (10) Enter judgment for the Council Member defendants on Bishop Petar and Father Mitrev's claim that they are liable to account as accessories in relation to the Association's breaches of trust. (11) Otherwise dismiss the Council Member appellants' appeal. (12) Dismiss the Bishop and Father Mitrev's appeal and cross-appeal. (13) Direct that the parties file, in accordance with the following timetable, submissions concerning the costs orders made at first instance that should be set aside, the orders that should be made in respect of costs incurred at first instance and the costs orders that should be made concerning the applications for leave to appeal and cross-appeal and the appeals and cross-appeal: (a) The appellants to file and serve their submissions within seven days of the date of this judgment; (b) The respondents (including the Attorney-General) to file and serve their submissions within a further seven days; and (c) The appellants to file any submissions in reply within a further seven days. (14) Direct that none of the submissions so ordered exceed 10 pages in length and that the issue of what further orders should be made be determined by the Court on the basis of the written submissions directed to be filed. 235EMMETT JA: These proceedings are concerned with the affairs of the Macedonian Orthodox Church St Petka in Rockdale. With the benefit of hindsight, it is easy to be critical of the way in which the proceedings have been managed in the past. However, the proceedings constitute a further example of the difficulties that can be encountered when issues in a proceeding are dealt with at different times by different judges. The proceedings presently before the Court of Appeal arise out of a single proceeding in which three different judges have played a part. 236The Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand and Father Mitrev, whom the Bishop appointed as priest of the St Petka parish, commenced a proceeding in the Equity Division of the Court against the Macedonian Orthodox Community Church St Petka Incorporated (the Association), five members of the Council of the Association (the Council Members) and Father Dzeparovski, whom the Association purported to appoint as priest of the St Petka parish. Five judgments of the three judges who dealt with the proceeding at first instance are subject to an appeal, cross-appeal and applications for leave to appeal. The primary issue is whether the Association, and the Council Members, are subject to the authority of the Bishop in relation to the governance of the Parish. 237I have had the advantage of reading in draft form the proposed reasons of Macfarlan JA outlining in appropriate depth and detail the factual background to the disputes that are the subject of the proceedings. His Honour adumbrates seven issues that have been the subject of argument before the Court of Appeal. I respectfully agree with each of his Honour's conclusions in relation to each of the issues and the reasons for those conclusions. I also agree with the orders proposed by Macfarlan JA.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 July 2013