Metropolitan Petar v Mitreski

Order 1 3Both parties proposed that this declaration, rather than repeating the purpose of the trust as declared by Hamilton J, namely "to permit the trust property to be used by the Sixth Defendant 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", it merely refer to "for the purposes specified in those orders"; and the plaintiffs proposed that it should include the additional matter "or, if the orders be varied on appeal, for the purposes specified in the orders so varied". 4Hamilton J's formal declarations were in the following terms:

1. Declare that the property referred to in Schedule A hereto ("the trust property") 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 NSW Australia 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 ("the trust").
2. Declare that in accordance with the terms of the trust and in the events which have happened the trustee is bound 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. 5The Plaintiffs' proposal was intended to accommodate the observation, expressed in paragraph [68] of the principal judgment, that my reasoning supported the conclusion that, if the Court of Appeal were to uphold the plaintiffs' appeal from Hamilton J's judgment, to the effect that the trust was not as declared by Hamilton J for use of the property by the Association, but rather for religious purposes of the Macedonian Orthodox Religion or the Macedonian Orthodox Church in more general terms, the non-Schedule A property would still be held on the terms of any trust that applied to the Schedule A property, so as to avert the potential necessity for the plaintiffs to incur the costs of instituting an appeal (or cross-appeal) from my judgment, to bring it into line with the outcome of any successful appeal from Hamilton J's judgment. 6While this course has its attractions, on balance I incline to the view that it is preferable to make a declaration that is complete on its face and does not require reference to another, and likewise one that is not ambulatory according to the outcome of any appeal from Hamilton J; it is better that, if the Court of Appeal takes a different view from Hamilton J of the terms of the trust, it substitute another declaration that is complete on its face. My view that the reasoning that underpins my conclusion would result in whatever trust is ultimately held to attach to the Schedule A Property attaching also to the other property of the Association is sufficiently recorded in the principal judgment (at [68]).

Proposed declaration as to terms of trust 8The Plaintiffs proposed that there be a declaration in the following terms: DECLARE that, in its control and administration of the Trust Property, the Sixth Defendant has been, and is, obliged to act in accordance with the rules of the Macedonian Orthodox Church as they apply to the parish of the Church known as "St Petka Rockdale", and in particular the applicable provisions of the Constitution of the Church, the Diocesan Statute adopted in February 1996 (as amended from time to time in accordance with the Constitution), and any Parish By-Laws as adopted or amended from time to time in accordance with the Constitution and the Diocesan Statute; and in particular that the Sixth Defendant has been, and is, obliged: (a) to take all reasonable steps to facilitate, without impediment from any person, the use of the Trust Property by the person from time to time holding or administering the office of diocesan bishop for the diocese of which the parish of St Petka Rockdale forms part ("Diocesan Bishop"), and only by that person, for the purpose of exercising, without impediment from any person, his functions as Diocesan Bishop; (b) to take all reasonable steps to facilitate, without impediment from any person, the use of the Trust Property by the person from time to time holding appointment under the Diocesan Bishop as parish priest for the parish of St Petka Rockdale ("Parish Priest"), or by any person from time to time licensed by the Diocesan Bishop to exercise any function as priest within the parish of St Petka Rockdale ("Licensed Priest"), and only by those persons, for the purpose of exercising their functions as Parish Priest or Licensed Priest as the case may be; (c) to take all reasonable steps to facilitate the obtaining or renewal of membership by believers in the doctrines of the Macedonian Orthodox Church who satisfy the criteria for membership of the Parish Assembly for St Petka Rockdale specified in the Constitution of the Church, the Diocesan Statute and any Parish By-Laws, and only by such persons. 9The chapeau is inappropriate. It would convert into binding rules of law all provisions of Church law, when both in the judgment of Young CJ in Eq [ Metropolitan Peter v Mitreski [2009] NSWSC 106] and in the principal judgment, it was held that only certain provisions of Church law were terms of the trust. Insofar as it picks up the wording of the injunctive relief proposed in [1(3)] above, the wording there proposed was limited to three specific respects, which the Plaintiffs' draft would convert into merely specific illustrations of a more general proposition, inconsistent with the conclusions of both Young CJ in Eq and of the principal judgment. 10Insofar as the specific subparagraphs are concerned, their utility is said to lie in that to some extent they go beyond the injunctive relief contained in order [4], in particular in their reference to the Diocesan Bishop generically rather than the First Plaintiff. 11The practical difficulty is that (a) and (b) seek to express terms of the trust, which were not litigated before me (having been considered by Young CJ in Eq), save as to the question of breach (which was hardly contentious). Young CJ in Eq did not expressly declare the terms found by his Honour, but instead answered (at [499]) the question posed, what were the terms of the trust "in so far as material" to the alleged breaches, as follows: 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. 12That answer is to be seen in the light of the ten alleged breaches of church law said by the Plaintiffs to be breaches of trust, of which the following are relevant [see principal judgment, [38]]: (a) preventing the Diocesan Bishop from conducting services in the church (see Young CJ in Eq at [375]-[380]); (b) preventing a priest appointed by the Diocesan Bishop as parish priest from conducting services in the church ([381]-[[387]); (c) preventing a priest licensed by the Diocesan Bishop to conduct services in the church from doing so ([388]-[395]); (e) employing a priest not appointed by the Diocesan Bishop to act as the parish priest ([398]-[422]); and (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 membership specified in the 1994 Church Constitution, the diocesan statute and the by-laws ([445]-[455]). 13In circumstances where, consistent with the manner in which the proceedings have for a long time been conducted, I have simply taken the conclusions of Hamilton J [ Metropolitan Petar v Mitreski [2003] NSWSC 262], and Young CJ in Eq as to the terms of the trust, insofar as they went, and ascertained whether there was a breach of those terms - and only ventured to find the terms to the extent that some had been left open by the earlier judgments - it would not be appropriate for me to presume to declare more explicitly the terms that have been found in those earlier judgments. Given the course that the proceedings have taken to date, it would in my view go beyond the scope of what has been argued and decided to make declarations to the effect proposed. 14I accept that the orders should address the position of Diocesan Bishop generically and not be limited to the First Plaintiff, but that can be addressed in the injunctive relief

Order 3 15On reflection, breaches (b) and (c) referred to in the principal judgment (see [1(2)] above) are so closely related that they can be consolidated into a single declaration, now 3(b). There was contention as to whether sub-paragraphs (a) and (b) should refer to "the Trust Property" as distinct from the Church, and whether they should express the breach as "refusing access (or agreeing to permit access only upon unjustified terms)". For substantially the same reasons as I have declined to make the proposed declaration as to the terms of the trust, I consider that this declaration should be expressed in terms that reflect the terms in which the case was pleaded and conducted.

Order 4 16As discussed above in respect of the proposed declaration, the chapeau originally proposed for this order was too wide; it was also too imprecise (in referring, for example, to "the applicable provisions of the Constitution" etc, which left unclear what provisions were referred to in the order). Once again, in respect of sub-paragraphs (a), (b) and (c), it is preferable to adhere to the terms upon which the judgments to date have proceeded and the case has been conducted. 17As to sub-paragraph (d), however, I do not see any such requirement as the Defendants propose to re-canvass those who have been nominated for membership; if any does not wish to proceed, they can withdraw. A restraint upon accepting nomination from non-qualified persons is the corollary of my conclusion that membership of the Association must correspond with the requirements of Church law as to membership of a parish assembly.

Orders 5 and 6 18To conclude proceedings in respect of an account or inquiry a final order or judgment of the Court is required. When an account is conducted and certified by an Associate Judge, this may be effected (1) by listing the matter before the Judge for further consideration, (2) by the Associate Judge by consent making a final order for payment, or (3) by the Court prospectively making an order for payment when directing the account: see Neville & Ashe, Equity Proceedings With Precedents (New South Wales) , [319]. Where the account is to be referred to an Associate Judge, there is much to be said for the third course, in order to avoid the cost of further proceedings before a Judge. However, in this case, I do not anticipate that the account under Order 5 will be complex or protracted, and I intend that it should proceed before me. In those circumstances, the reasons that favour a prospective judgment in the case of a reference to an Associate Judge do not apply. Moreover, I have reserved for further consideration the account in respect of the Committee Members, in the light of the indication I gave counsel on the last occasion that I would afford an opportunity for further argument as to which of the Committee Members were shown to be relevantly inculpated to attract accessorial liability. In those circumstances, it is preferable not to make a prospective order for payment, but to make the final order following the taking of accounts.

Costs 19The Plaintiffs proposed the following order: ORDER that: (a) the costs of the Sixth Defendant's cross-claim against the Plaintiffs, including all interlocutory applications relating to that cross-claim, be paid by the Sixth Defendant; (b) the costs of: (i) the Plaintiffs' Notice of Motion filed 5 August 2003 and the proceedings resulting in orders by Young CJ in Eq on 27 August 2003 (relating to the access to the church); (ii) the Sixth Defendant's Notices of Motion filed 3 September and 16 October 2003 (relating to the re-consecration of the church), be paid by the Sixth Defendant; (c) the costs of the proceedings to date not already dealt with, including previously reserved costs, be paid by the First to Sixth Defendants; (d) security given pursuant to the orders of Young CJ in Eq on 11 May 2001 and 19 November 2001 be released. 20The Defendants proposed that there be no order as to the costs of the proceedings before me, and that other costs questions be reserved for later consideration. Mr Leeming SC, who came to the proceedings relatively late in their history, was - quite reasonably - not then in a position to argue costs of the proceedings other than those that were conducted before me. In any event, while the Plaintiffs' submissions at the principal hearing did address some of the outstanding questions of costs - which are potentially of enormous significance in these proceedings - more elaborate submissions on costs will be required, particularly as it is desirable if not essential that I deal with the reserved costs of proceedings before other judges, and all other outstanding costs issues in the proceedings. I propose to make directions to enable that course.

Order 7 21This order was not contentious between the Plaintiffs and the Defendants, although the Attorney questioned whether it was appropriate to defer these questions until after resolution of any appeals. The questions are complex, and will require some days of court time. If membership of the Association is brought into line with that of a parish assembly, as my orders will require, it is likely that the hostilities will cease, and in those circumstances the proposed indemnity would be of no utility - it would in effect be circular. It may well not have to be determined. Although my present intent is that this should be deferred until after the outcome of any appeal, I will not expressly limit the reservation in that way, so that it may be revisited at an earlier point if that appears appropriate.

Orders 8 and 9 22There has been an order of the Court of Appeal on foot since 3 November 2006 restraining use of the trust property for the defence of certain proceedings, subject to a number of exceptions. The Plaintiffs contend that the exceptions are spent, and that a further order, which has the effect of preventing use of trust property to fund any appeal from the principal judgment, is now appropriate. The Defendants submit that there is no need for any further order, and they would likely proffer an undertaking in respect of any appeal; they further point out that the order proposed by the Plaintiffs would apparently foreclose - or at least deprive of utility - any further application for judicial advice. 23In my view, an interim order in the form I propose will impose no hardship, will provide clarity, and will remain open to reconsideration should either party so wish, if an accommodation is unable to be reached. 24The Plaintiffs also proposed that execution be stayed as against the Sixth Defendant on any judgment given for the amount certified pursuant to order 5, or for costs. As I will not at this stage be giving any such judgment or making any costs order, this is best deferred until it is necessary.

Orders 25Accordingly, I propose to make the following orders: 1 DECLARE that, apart from the property already the subject of the declaratory orders made by the Court on 7 February 2007 ("the Schedule A Property"), all the property of the Sixth Defendant (other than such funds, if any, as may be certified pursuant to the account provided for by order 2) (together with the Schedule A Property, "the Trust Property") was acquired and is held by the Sixth Defendant as trustee upon charitable trust to permit the trust property to be used by the Sixth Defendant 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 ("the Trust"). 2 ORDER that, should the Sixth Defendant so elect, an account be taken of the donations received by the Sixth Defendant from May 2004, and that there be certified the funds, if any, which the Sixth Defendant holds as the product of donations received by the Sixth Defendant otherwise than by means of its ownership of the Trust Property and for the sole purpose of conducting its defence of these proceedings (including its defence or prosecution, as the case may be, of any related judicial advice or appellate proceedings). 3 DECLARE that, since April 1997, the Sixth Defendant has breached the Trust: (a) by excluding the First Plaintiff, being the Diocesan Bishop, from the parish church of St Petka, and preventing him from conducting services in the church; (b) by excluding the Second Plaintiff, being the parish priest appointed by the Diocesan Bishop, from the parish church of St Petka, and preventing him, being a priest licensed by the Diocesan Bishop to conduct services in the church, from doing so; (c) by employing each of the Seventh Defendant and the Eighth Defendant to act as purported priest of St Petka Rockdale, when neither had been licensed by the Diocesan Bishop to do so; and (d) by failing to accept applications for membership by believers in the doctrines of the Macedonian Orthodox Church who satisfy the criteria for membership of the Parish Assembly for St Petka Rockdale specified in the Constitution of the Church, the Diocesan Statute and any Parish By-Laws. 4 ORDER that in its control and administration of the Trust Property, the Sixth Defendant, by itself, its servants and agents: (a) be restrained from excluding the First Plaintiff (and his successors as Diocesan Bishop from time to time) from the parish church of St Petka, and/or from preventing, hindering or impeding him from accessing and/or conducting services in the church; (b) be restrained from excluding the Second Plaintiff (and any other parish priest appointed by the First Plaintiff or his successors as Diocesan Bishop) from the parish church of St Petka, and/or preventing, hindering or impeding him (and/or any other priest licensed by the Diocesan Bishop to do so) from conducting services in the church; (c) be restrained from employing or engaging any person to perform any duty ordinarily performed by a priest of the Macedonian Orthodox Church unless such person has been licensed by the Diocesan Bishop to do so; (d) by 2 April 2012, admit into its membership those who are the subject of the membership applications referred to in paragraph 47 of the Affidavit of the Second Plaintiff sworn 4 August 2010 (except to the extent that any such applicant has by then informed the Sixth Defendant in writing that he or she no longer wishes to proceed with such application); and thereafter take all reasonable steps to facilitate the obtaining or renewal of membership by believers in the doctrines of the Macedonian Orthodox Church who satisfy the criteria for membership of the Parish Assembly for St Petka Rockdale specified in the Constitution of the Church, the Diocesan Statute and any Parish By-Laws; and be restrained from accepting or renewing any application for membership from any person who does not satisfy those criteria. 5 ORDER that an account be taken of the payments in money or money's worth by the Sixth Defendant to the former Seventh Defendant and the Eighth Defendant after 26 November 1997, and that there be certified the amount of such payments. 6 RESERVE further consideration of: (a) whether an account should be taken also of the amount of such payments made whilst each or any of the First to Fifth Defendants was a member of the council of the Sixth Defendant; and (b) giving judgment for payment of any amount certified on the taking of any account under these orders. 7 RESERVE for separate and later determination as between the Plaintiffs and the Sixth Defendant: (a) what orders should be made granting or denying the Association a right of indemnity out of the assets of the Declared Trust for any of the costs incurred by it in the proceedings (including the costs the subject of the referral orders made by the Court of Appeal on 19 June 2007 in CA 40313/06 and on 11 July 2008 in CA 40187/08); (b) the Plaintiffs' claims of breach of trust in respect of the Sixth Defendant's payment out of Trust Property of, or encumbrance of Trust Property as security for, its costs of the defence of these proceedings (including its defence or prosecution, as the case may be, of any related judicial advice or appellate proceedings), including the Sixth Defendant's defence to those claims under the Trustee Act, s 63. 8 ORDER that until further order, or pending the determination of the questions reserved under order 7, the Sixth Defendant, by itself, its servants and agents, be restrained from: (a) encumbering any Trust Property as security for; or (b) making payment out of any Trust Property (including any proceeds of sale of Trust Property or any moneys raised by giving security over Trust Property) of, any of its costs of the defence of these proceedings (including its defence or prosecution, as the case may be, of any related judicial advice or appellate proceedings), save insofar as such expenditure is in accordance with judicial advice given to it. 9 RESERVE liberty to the parties to apply to vary Order 8.

Further directions 26It will be necessary to make directions: (a) for written submissions on the questions of costs; (b) for written submissions on further consideration of the accessorial liability of the Committee Members; (c) for the taking of the account referred to in order 5 and, if the Defendants so elect, that referred to in order 2. Until further order at least, the taking of the account under Order 5 will proceed before me.

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