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[2020] VSC 50
General information, not legal advice.
Supreme Court of Victoria
2020-02-19
Ginnane, J
Original judgment source is linked above.
CHURCH - Incorporated Association - Committee's control and custody of Church property - Position of minority members using Church property - Associations Incorporation Reform Act 2012 ss 46, 68.
FREE WESLEYAN CHURCH OF TONGA IN AUSTRALIA (VICTORIA) INC
1 In previous judgments, I decided disputes about membership issues in the Free Wesleyan Church of Tonga in Australia (Victoria) Inc ('Association') and gave directions for the election of a new management committee ('Committee'),[1] but unfortunately further disputes have arisen. They concern the validity of decisions about membership applications by about 116 persons and about the custody and control of the Werribee Church property, being is the land and building at Lock Avenue, Werribee and the control of activities conducted at it.
2 On 23 February 2017, the Association and the plaintiffs entered into a mediation agreement in both the 2014 and 2015 proceedings. The parties agreed that the 2014 proceeding be struck out and that:
3 The steps set out in paragraph 1(b)-(g) included:
That a meeting be held (the First Meeting) at which each of the members of the current committee would stand down from their positions and a new committee be elected; (cl 1(d))
All necessary steps [be] taken as soon as possible to return custody and control of the Werribee Property to the Association, including returning all keys to that property to the Secretary of the committee elected under s1(d)(ii)(2) (i.e. the Secretary elected at the First Meeting). The current committee undertakes to ensure that Werribee Property will remain open and available for use by all persons who frequent the church for all the Association's purposes including the conduct of services (cl 1(b).
4 The First Meeting held under the mediation agreement occurred on 25 October 2019 and a new Committee and secretary, Ms M Fonua, were elected.
5 The agreement for the return of the custody and control of the Werribee Church property is at the centre of one of the disputes that has now arisen.
6 The Association asserts that some of the plaintiffs have not complied with their obligations under cl 1(b) of the mediation agreement and refuse to take the necessary steps to return custody and control of the Werribee Church property to it. After the Association changed the locks, they gained entry by force and continue to run a 'shadow church' at the Werribee Church property beyond the supervision of the elected Committee and of the Minister. The Association's case is that it has responsibility under the 1991 Rules for both the Werribee Church property, and together with the Minister, for the spiritual and social activities of the Church. The Association seeks an order enforcing the obligations which the plaintiffs accepted under the mediation agreement by returning to it custody and control of the Werribee Church property, including returning all keys to the property.
7 The affidavits of Ms Fonua contain evidence that some plaintiffs have sought to control the Werribee Church property and obstruct the Association gaining custody of it.
8 Ms Fonua says that she is scared to go to the Werribee Church property and that the plaintiffs have refused to recognise the authority of the defendant or the Committee over it. She says that they are operating the Werribee Church as if it is separate from the rest of the defendant Association and its congregations at Sunshine and Dandenong and are conducting services and activities at the Werribee Church, which the defendant wishes to conduct. She provided a list of proposed church activities that the Committee and Minister wish to conduct at the Werribee Church property, which in some cases they wish to conduct at the same time as those being conducted by the plaintiffs and others who attend the Werribee Church. The defendant regards as particularly important that the Committee and the Minister have direction of the principal church services held on Sunday and Wednesday.
9 Counsel for the defendant provided a list of the significant activities that the Association wished to control, including services, class groups, youth groups, Sunday school and the collection of misinale. The defendant has no objection, in principle, to the plaintiffs using the Werribee Church property for activities like Kava House activities, prayer and discussion groups and feasts and celebrations. However, they would have to obtain permission from the secretary beforehand.
10 Section 9 of the 1991 Rules sets out the 'Power of the Management Committee' including in relation to the property including:
It is not clear what the proviso at the end of s 9 is intended to mean.
11 Rule 9 also gives the Committee power to buy land, (cl 9(ii)), hold, manage, lease, rent and deal in any legal manner whatsoever with any property to aid and further the object of the Church (cl 9(iii)); and provides that the Committee may let the Church premises for the purposes of permitting meetings of a religious character, including meetings for the preaching of the gospel (cl 9 vi).
12 Clause 10 is headed 'Conditions and Restrictions' and includes:
13 The Association explained that the Committee and the Minister play significant roles in guiding and supervising the spiritual and social activities of the Church. Thus, the Minister designs the programs for Church services and arranges for Sunday services to be run by Malanga members, and Wednesday services to be run by Lotu Fehu'i, and Akonaki members. He presides over the celebration of Holy Communion at a whole Church service on the first Sunday of every month. He allocates persons to class groups and is the person primarily responsible for the spiritual life of parishioners.
14 The Minister's role is set out in s 2 of Part II of the 1991 Rules which govern Church administration and which states:
The Minister of the Church is the head representative and the chairperson of every meeting. He is responsible to the management of the Church "subject to the advice from the main Conference of the FREE WESLEYAN CHURCH OF TONGA". Moreover, he will organise both the spiritual and social activities of the Church in Australia.
15 The statement of purposes for which the Association was established includes:
1. OBJECT:
To promote religion and to uphold christianity and christian teachings and principles of the bible are observed and practised by the FREE WESLEYAN CHURCH OF TONGA IN TONGA.
16 The Committee oversees the Sunday school, the youth programs, the choir and other activities that support the spiritual life of the Church and the leaders of these activities are elected by the members. It also oversees the raising of misinale, and has statutory obligations for financial reporting regarding fundraising, and insurance of the Church's property. The Association argued that its effective governance requires that the Committee exercises oversight and control of the spiritual and social activities in the congregations. The Committee must be able to see how services are being conducted and by whom and who is attending services and class groups. It must receive reports about the issues discussed and moneys raised in class groups about the teaching occurring in Sunday school, about youth programs and the choir and the condition of the property.
17 The Association stressed the importance of the three congregations functioning as a single entity and that the Committee should not be prevented taking steps to achieve that outcome.
18 The plaintiffs' recent correspondence appears to assert rights in relation to the Werribee Church property greater than those afforded to members generally. But the Association contended that the mediation agreement does not entitle the plaintiffs to exercise custody and control of the Werribee Church. It is true that the Association agreed in the mediation agreement that the Werribee Church would remain open and available for use by all persons who frequented it for conducting activities in accordance with the Association's purposes, including church services, pending the resolution of the 'occupation dispute'. But now, after that resolution has occurred, the plaintiffs have no right under the 1991 Rules to be treated differently from the Association's members in general, or from other persons who wish to worship at the Werribee Church.
19 Counsel for the defendant stated that to the best of his knowledge there was no proposal to sell the property that has been put before members.
20 The plaintiffs pointed to developments since this matter was last in Court in December 2019. These were that members of the Dandenong and Werribee congregations were invited to apply for membership of the Association in late December 2019 and a total of 142 applications were submitted. Only 26 were accepted. The Association wrote to some of the applicants stating that the applications did not comply with the rules and enclosing a form of application acceptable to it.
21 On 1 February 2020, the Association convened a meeting which elected a further four members to the Committee, including Mr R Wall. This meeting was convened following the Court order of 19 December 2019 with the additional members required to enable satisfaction of the quorum requirements for Committee meetings.
22 The plaintiffs contended that while the Committee was not required to provide reasons for rejecting applications for membership, it was bound by the rules of the Association and was required to exercise its powers in good faith. The plaintiffs say that the Committee ought properly to have admitted the 116 rejected applicants as members of the Association and its failure to do so was an arbitrary use of its power. They also argued that the Committee was not properly convened to consider the applications and that if an applicant met the threshold for membership under the rules, the Committee was bound to accept that applicant as a member. The plaintiffs say that the election of the four additional members of the Committee on 1 February 2020 was tainted by the arbitrary rejection of the membership applications made by members of the Werribee and Dandenong congregations. They also say that Mr Wall is not a fit and proper person to be on the Committee and by operation of cl 5(b)(vii) of the rules is disqualified from eligibility because of criminal convictions. That clause states that a person is ineligible for membership on the Committee if he or she:
commits an unlawful act or crime or is found guilty of any misbehaviour in law...
23 The plaintiffs rely on affidavits suggesting that Mr Wall has passed himself off as the registered proprietor of the Werribee Church property and has said that he wishes to sell it.
24 In summary, the plaintiffs do not recognise the Committee and say that applications for membership of the Association from the Werribee and Dandenong congregations have been rejected to bolster the numbers of Committee members who support the defendant. They seek orders compelling the Committee, as it was constituted prior to February 2020, to comply with the rules and seek leave to cross examine its members to ascertain what, if any, criteria was used in rejecting the 116 applications.
25 As discussed in submissions, I do not propose to deal as part of this judgment with the issue of rejected membership applications or the election of the four additional members to the Committee. These issues were only raised shortly before the hearing and the defendant mentioned the possibility of discussions occurring in respect of the rejected applicants. In order for the Court to decide these issues, lengthy hearings might be required. The issues do not affect the eight members of the Committee who were elected last year. In those circumstances, the parties should discuss the position of the 116 applicants and further information may need to be provided to support their applications. Before hearing any claims by the plaintiffs about the rejection of the 116 applications, I would also need to be satisfied that the applicants agreed to that course and were aware of any possible costs consequences that they may incur. I would also need to be satisfied that the existing plaintiffs were aware that this new dispute was being argued in this proceeding and were aware of any possible cost consequences to them that may follow. If the Court is required to determine the 116 membership claims, appropriate directions for that to occur will have to be given.
26 So far as the defendant's arguments about control or custody of the Werribee Church property is concerned, counsel for the plaintiffs submitted that the reference in the mediation agreement to custody and control of the Werribee Church property should be read as only applying to legal ownership and possession of the property. It did not give the Minister the right to conduct services at the same time as 'local services' in circumstances where the plaintiffs are using the Werribee Church for legitimate church purposes. He submitted that the words 'custody and control' need to be seen in the context of the words in the mediation agreement. They referred to custody and control of the Werribee Church property, not the church building or the activities conducted in it. The Committee's custody and control is limited to legal control and entitlement to deeds and certificates of title and the exercise of legitimate legal rights. But it is a step too far to impose a regime whereby the Minister can virtually take over the conduct of activities in the Werribee Church. After all, the Werribee Church congregation has been conducting its own church services and activities in recent years during the dispute.
27 The plaintiffs' counsel accepted that the keys of the property will have to be returned to the Committee and that it is entitled to the deeds and documents of title of the property.
28 The present unfortunate dispute reflects the divisions in the Free Wesleyan Church of Tonga community in Melbourne during the years of this litigation.
29 A new Committee has been elected and it appears that the plaintiffs and those associated with them do not have a voting majority on it, either in its original composition of eight members, or since the election of the additional four members. For reasons mentioned, I will not deal in this judgment with the rejected membership applications issue and the challenge to the election of the four additional Committee members.
30 So far as the principal legal issue argued by the Association is concerned, in my opinion the Committee of the Association is entitled to the custody and control of the Werribee Church and buildings. They are property vested in the Committee, which in this context, means that it and the Association are entitled to immediate possession of them and to control the activities conducted on them. The Association has legal responsibilities for them and to members of the public who enter them. It is entitled to the keys to the properties. The rules, which provide for the custody and control of property, constitute the terms of the contract between the Association and its members.[2] In this respect, the mediation agreement has the same effect as the rules by entitling the Committee to custody and control of the Werribee Church property.
31 I also consider that, subject to what follows, the Committee is entitled to decide what activities occur in the Werribee Church and church buildings and who is to conduct them. It is entitled to decide that the Minister, as the spiritual leader of the Church, is to conduct Sunday and midweek services and other core church activities. If necessary, I will, after hearing further submissions, identify those core activities, although it is desirable that the parties agree on this issue.
32 However, I also consider that any reasonable request by the plaintiffs, or by any other Church members, to use the Werribee Church property at a time when it is not being used for core church activities, cannot be unreasonably refused. The Werribee Church was built in 1998 and a number of the plaintiffs have played significant roles in its operation and maintenance and made significant financial contributions to it. It is noteworthy that the terms of the mediation agreement provided that the then committee undertook to ensure that the Werribee property would remain open for use by all persons who frequented the church for all the Association's purposes, including the conduct of services.
33 The defendant conceded that the Association must act reasonably in considering any request from the plaintiffs to use the Church buildings. Churches are places where people gather to worship God as a community of believers and engage in related activities. It is important to keep in mind that the Associations Incorporation Reform Act 2012 empowers the Court to make orders preventing an Association from engaging in oppressive conduct: s 68. The term 'oppressive conduct' is well known in corporations law,[3] in which there are a broad range of curial protections available to the members of a company, particularly if they are in a minority.[4]
34 Turning to the question of appropriate orders, as I said during the hearing, a court is reluctant to grant injunctions restraining church goers from using church property. But the Court must enforce the law and the Association has legal responsibilities over its property and to those who enter it.
35 Subject to any further submissions about appropriate orders or their wording, I consider that I should make declarations that custody and control of the Werribee Church property vests in the Management Committee of the Association and that it can decide the activities that occur there and who conducts them. I will also declare that the Committee cannot unreasonably refuse any request by any Church member, including the plaintiffs, to use the Werribee Church property for church activities or related social activities. I repeat that the Committee does not have to consent to requests to use the Werribee Church property at a time when it is to conduct church services or other core activities.
36 The remaining question is whether I should also make orders restraining people, who the defendant's affidavit evidence suggests have obstructed the defendant, from obtaining control of the Werribee Church property from engaging in that conduct.
37 I want all parties to understand that I will issue such injunctions if further obstruction of the Committee gaining custody and control of the Werribee Church property occurs. That conduct is unlawful.
38 But, at present I will only make the declarations I have mentioned. I will give the parties an opportunity to consider what I have said in this judgment as it may be that some parties have not yet understood the consequences of the Court's previous decisions and of the election of a new Committee. Control of the Committee has to occur under the rules and through lawful elections. I expect all parties to act in accordance with my declarations.
39 If further conduct occurs interfering with the Association's custody and control of the Werribee Church property, then I will issue appropriate injunctions. If such injunctions are issued, any person who breaches them will be liable to significant penalties, even possibly imprisonment. No one would want that to happen as a result of this dispute, but it may happen if injunctions are made and they are not observed.
40 From time to time disagreements may occur about whether requests made to the Association for use of the Werribee Church property should be granted. However, the Church and its leaders should be able to resolve them. Compromises are required to enable the Free Wesleyan Church of Tonga to continue and to flourish in Victoria. At the end of any long dispute there needs to be a period in which the parties can attempt to reconcile, in this case, at least to the extent necessary to enable the Church to operate for the good of all its members.
[1] Moala v Free Wesleyan Church of Tonga in Australia (Vic) Inc [2019] VSC 205; Moala v Free Wesleyan Church of Tonga in Australia (Vic) Inc (No 2) [2019] VSC 544; Moala v Free Wesleyan Church of Tonga in Australia (Vic) Inc (No 3) [2019] VSC 831.
[3] See the Corporations Act 2001 s 232.
[4] Wayde v NSW Rugby League Ltd [1985] HCA 68; (1985) 180 CLR 459 at 473, per Brennan J citing Viscount Simonds in Scottish Co-operative Wholesale Society v Meyer [1959] AC 324 at 342.
Moala
Free Wesleyan Church of Tonga in Australia
(1985) 180 CLR 459