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[2012] VSC 223
Supreme Court of Victoria
2012-06-04
Sifris J
Original judgment source is linked above.
UNICORPORATED ASSOCIATIONS - Purported merger of two churches - Validity of merger meeting.
UNINCORPORATED ASSOCIATIONS - Expulsion of members - Justiciability.
UNINCORPORATED ASSOCIATIONS - Removal of trustees - Validity - Justiciability - Failure to comply with constitution and declarations of trust.
INCORPORATED ASSOCIATIONS - Whether true successor to unincorporated association.
1 Prior to 2 January 2010, there were two separate Serbian Orthodox churches in Wodonga. These two proceedings, which were heard together, relate to the Free Serbian Orthodox Church - School Congregation St Peter and Paul Wodonga ("the First Church") and the Serbian Orthodox Church ("the Second Church").
2 By the first proceeding (the "2010 Proceeding"), Mr Tomasevic and Mr Milutinovic (the "Merging Trustees" or the "Plaintiffs") seek orders restraining Mr Jovetic, Mr Juzbasic (the "Continuing Trustees" or the "Defendants") from dealing with certain properties held on trust for the First Church, removing Mr Jovetic as a trustee of the First Church and other associated orders relating to the properties.[1]
3 By the second proceeding (the "2011 Proceeding"), "Free Serbian Orthodox Church - School Congregation of St Peter & St Paul Wodonga Inc"("the Incorporated Association"), and the Continuing Trustees seek possession of certain properties and the delivery up of personal property by the Merging Trustees, as well as damages and other associated orders.
4 The First Church was established in or around 1953. It owns three properties which are held on trust for it by its trustees. In 1964 the First Church became affiliated with the Free Serbian Orthodox Church Diocese for Australia and New Zealand.
5 The Second Church was established in Wodonga under the auspices of the Serbian Orthodox Church in Belgrade in the early 1980s. The Second Church acquired a property at 198 Melbourne Road, Wodonga, which it uses for its meetings and religious services.
6 The Merging Trustees contend that on 2 January 2010 a meeting of the members of the two churches was held with the effect of merging the First and Second Churches. The Continuing Trustees question the validity of this meeting for various technical and procedural reasons.
7 Whether or not there was a merger, the Merging Trustees also contend that the Continuing Trustees are no longer trustees of the First Church, following their removal in 2011, or that alternatively they should be removed as trustees pursuant to s 48 of the Trustees Act 1958 (Vic) (the "Act"). The Continuing Trustees deny that they have been validly removed as trustees or that they should be removed pursuant to the Act.
8 Further, on 29 June 2011 the Incorporated Association was formed, purportedly as the true successor entity of the First Church. The Continuing Trustees are seeking orders transferring the property of the First Church to the Incorporated Association.
9 There are three main issues in these proceedings:
(a) First, was the purported merger of the churches on 2 January 2010 effective;
(b) Secondly, were the Continuing Trustees properly removed as trustees of the First Church?
(c) Thirdly, what is the status of the Incorporated Association.
10 The resolution of the first issue requires a consideration of the steps taken leading up to the 2 January 2010 meeting and the conduct of the meeting itself, in light of the two churches' constitutions. Further, an overarching issue that must first be resolved is whether the court will intervene in the internal affairs of a voluntary association and adjudicate on the validity of the 2 January 2010 meeting. If the 2 January 2010 meeting was valid, consideration needs to be given to what precisely was resolved at that meeting and the effect of the purported merger. If on the other hand the meeting was invalid consideration needs to be given to precisely what the position was immediately prior to the purported merger. In such a case the most important question will be the identity of the trustees, the subject of the second issue.
11 The resolution of the second issue requires a consideration of the constitution of the First Church and its requirements for the removal of trustees and the various Declarations of Trusts relating to the appointment and removal of trustees.
12 The resolution of the third issue requires consideration of whether, given the circumstances of its incorporation, the make up of its membership, and other relevant matters, the Incorporated Association is the successor in law to the First Church.
13 As with many Eastern Orthodox churches following the fall of the iron curtain, a split occurred within the global Serbian Orthodox Church in the early 1960s. Some of the Serbian Orthodox churches outside of Yugoslavia remained under the jurisdiction of the Serbian Orthodox Church in Yugoslavia, while others affiliated themselves with the Free Serbian Orthodox Church Diocese of the United States of American and Canada. This split also occurred in Australia resulting in a number of towns having two Serbian Orthodox churches, including Wodonga.
14 Since the fall of communism there has been a global move towards re-unification of the Serbian Orthodox Church. Unification of the churches has been discussed in Australia since at least 1991. In 1992 a set of Transitional Regulations governing relations between the churches was agreed upon between the two church bodies (the "Transitional Regulations"). The Transitional Regulations relate to a number of issues regarding the merger of the two church authorities and their parallel existence until a merger takes place. It is the process of unification between the First and Second Churches in Wodonga that gives rise to the present proceedings.
15 The property the subject of these proceedings was acquired by the First Church prior to 2 January 2010 and was held on trust for it by a number of trustees, including the Merging Trustees and Continuing Trustees.
16 The property includes money in bank accounts and real estate comprised of three properties, namely:
(a) the property located at the corner of Wilson and Leonard Streets, Wodonga (the "Hall"), which was acquired in 1953 and is Torrens law land (Certificate of Title V 7597 F123);
(b) the property located on High Street, Wodonga (the "Church Building"), which was acquired in 1962 and is common law land (Memorial Book 815 No 370); and
(c) the property located on Fern Street, Wodonga (the "House"), which was acquired in 1999 and is Torrens law land (Certificate of Title V 09021 F167).
17 Mr Tomasevic and Mr Milutinovic (the Plaintiffs), and Mr Jovetic (the first Defendant) are the registered proprietors of the Hall and the House. Mr Palavestra and Mr Milovanovic (both deceased) are also listed as registered proprietors on the titles of the Hall and House, and a caveat has also been lodged by Mr Juzbasic (the second Defendant). All of the certificates of title are currently held by Mr Jovetic.
18 The Church Building was last conveyed on 1 April 2009 to Mr Jovetic, Mr Palavestra, Mr Milovanovic, Mr Tomasevic and Mr Milutinovic, as trustees of the First Church, by a Deed of Conveyance.
19 Each of the abovementioned registered proprietors of the properties hold the properties on trust for the First Church.
20 On 1 August 1981 the original trustees of the First Church executed a Declaration of Trust, the object of which was the First Church, in relation to the Church Building and the Hall. The trust deed contained the terms of the trust pursuant to which the properties of the First Church were held by the trustees.[2]
21 Following the death or retirement of the majority of the original trustees, and several appointments and replacements of trustees by Special Resolutions of the First Church, the First Church appointed several new trustees on 4 July 2004 by a Deed of Appointment of New Trustees and Declaration of Trust (the "2004 Deed"). The 2004 Deed also contained relevant terms governing the trust and how trustees could deal with trust properties.[3]
22 On 7 September 2008 the First Church, by a resolution passed at a general meeting, appointed the following as trustees of the property of the First Church (the "2008 Trustees"):
23 The appointment of the 2008 Trustees by the First Church was confirmed on 1 April 2009 by a Deed of Appointment of New Trustees made by the Executive Board of the First Church (the "Deed of Appointment"), which required the trustees to observe the obligations imposed on trustees by the First Church's constitution. On 13 April 2009, Mr Palavestra died. He was replaced as trustee by Mr Juzbasic on 31 May 2009. Mr Milovanovic is also now deceased.
24 Since 31 October 1964, the First Church has been governed by the Constitution of the Free Serbian Orthodox Church Diocese for Australia and New Zealand, which was amended on 30 December 1976 (the "1964 Constitution"). Further, on 5 April 1981 the First Church adopted an additional constitution (the "1981 Constitution").
25 The First Church's constitution deals with a variety of matters relevant to these proceedings including church governance,[4] the powers and duties of the congregation and the church's committee,[5] the calling and running of meetings,[6] the ownership of church property,[7] trustee duties and obligations,[8] dispute resolution and appeals from decisions of the church,[9] and details regarding church membership (including when membership ceases).[10] The relevant clauses from each constitution are extracted in Schedule A to this judgment.
26 The Second Church is governed by the Constitution of the Serbian Orthodox Church in Australia and New Zealand (the "1983 Constitution"). The 1983 Constitution is also alleged by the plaintiffs to govern the merged church, although Mr Tomasevic was under the mistaken belief that a new constitution had been approved in respect of the merged church.
V. The Removal of Members and Trustees of the First Church
27 In late December 2007, the Australian Serbian Orthodox Church's Diocesan Assembly, or "sabor", was held. In the past, sabors had been held at a Serbian Orthodox monastery near Canberra. However, in 2007 Bishop Irinej, the relevant Serbian Orthodox Church Bishop for Australia, decided to conduct the December sabor in Alexandria, near Sydney. A number of members of the First Church disagreed with this decision and attended an alternative sabor held at the Canberra monastery.
28 Following their attendance at the Canberra sabor, a number of members of the First Church purportedly had their membership revoked. At the following Annual General Meeting of the First Church, conducted on 17 February 2008, Mr Tomasevic, the then president of the First Church, confirmed the removal of these members from the First Church. The Defendants take issue with this purported removal of members, arguing that the expulsion of members had no basis in the First Church's constitution.
29 On 9 September 2009, a meeting of the committee of the First Church was held pursuant to which further members of the First Church were purportedly expelled from membership, including Mr Juzbasic. The expulsions were said to be for a number of reasons including allegations that the expelled members had disturbed meetings and frozen church bank accounts. The Defendants also take issue with the validity of this meeting and the resulting expulsions, submitting that it was held contrary to the First Church's 1964 Constitution's prohibition against consanguinity amongst committee members, which is contained in Article 181 of that constitution.
30 On 8 February 2011, Bishop Irinej purported to remove Mr Jovetic as trustee of the First Church. This removal was said to be effected by an "Executive Decision of the Diocesan Executive Board", which was communicated to Mr Jovetic by a letter dated 14 February 2011 from Mr Norquay, the solicitor for "The Wondonga Congregation of the Serbian Orthodox Church".
31 On 7 March 2011, Bishop Irinej also purported to remove Mr Juzbasic as trustee of the First Church. This removal was again purportedly done by an "Executive Decision of the Diocesan Executive Board", which was also communicated to Mr Juzbasic by letter dated 8 March 2011 from Mr Norquay.
32 The Defendants submit that each of these purported removals of trustees was invalid.
33 On 2 January 2010, a meeting was held between the members of the First and Second Churches. At the meeting a resolution was passed purportedly dissolving the First and Second Churches and creating a merged church. The Defendants contest the validity of this meeting arguing it was held contrary to the constitution of the First Church in that the notice given to members of the meeting was deficient and that the meeting was improperly run.
34 Notice of the 2 January 2010 meeting was given to members of the First and Second Churches in two separate forms. The notice provided to First Church members was given 14 days prior to the meeting and noted that an Extraordinary General Meeting was being called without stating the purpose of the meeting. The court was not provided with a list of members provided with the notice, or a list of members of the First Church. Conversely, the notice provided to the Second Church members was sent two months prior to the meeting and included the meeting's purpose.
35 Eight members of the First Church participated in the 2 January 2010 meeting - six attended in person and two sent proxies. The Defendants also allege that there were a number of other First Church members, purportedly removed as members in 2008 and 2009, that had not received notice of the meeting and did not attend.
36 Nineteen members of the Second Church participated in the 2 January 2010 meeting - eighteen attended in person and one sent a proxy.
37 The 2 January 2010 meeting was presided over by Bishop Irinej. At the meeting the members of both churches met as one group and purported to, together, dissolve the two separate churches and create a merged church.
38 Minutes from the meeting show that at the meeting, among other things, it was ascertained that two-thirds of the financial members of the First and Second Churches were present. The minutes also record that the Bishop dissolved the existing committees of the First and Second Churches, members were elected to a committee for the merged church and it was decided that the merged church would belong to the Diocese of Australia and New Zealand. By letter dated 30 March 2010 Bishop Irinej confirmed the merger.
39 Much occurred after the 2 January 2010 meeting including:
(a) As deposed to by Mr Tomasevic various church celebrations and family activities have taken place, on the basis of a merged church; and
(b) As deposed to by Mr Jovetic and others, bitter disputes arose between those that did not recognise the merger and those that did. Each believed in the rightness of their cause and endeavoured to take control of the property of the First Church. Correspondence and litigation inevitably followed.
40 On 15 October 2010, a group of former members of the First Church incorporated a separate association under the Associations Incorporations Act 1981 (Vic), called "Free Serbian Orthodox Church School Congregation of St Peter and Paul Wodonga Inc." The Incorporated Association purports to be the true successor of the First Church, but has not been recognised as such by the Bishop, the Merging Trustees or other church authorities.
41 As referred to earlier, the meeting of 2 January 2010 ("the Meeting") purported to effect a merger between the First Church and the Second Church. If the Meeting was not a valid meeting, each church will retain its separate and independent identity and the remaining critical question will be the identity of the trustees of the First Church. If the Meeting was valid and effected a merger it will still be necessary to determine precisely what was resolved by the Meeting and the identity of the trustees of the merged church.
42 As a preliminary matter, Mr Harvey, of counsel who appeared for the Merging Trustees, submitted that the validity of the Meeting was not a matter that members were entitled to agitate in court. The First Church was a voluntary association and as such it was submitted that unless members could identify a contractual right, they could not enforce the rules or constitution of the First Church. Even if they could identify a contractual right, it was submitted that unless the right was a proprietary right, it should not be enforced by the court. Mr Harvey relied on various authorities for the propositions advanced.[11]
43 I did not understand Mr Upjohn, of counsel who appeared for the Continuing Trustees, to contest the applicable principles and their applicability to the members. However, he submitted that the trustees - whoever they might be - did have a proprietary interest in the assets of the church, a proposition accepted, with respect correctly, by Mr Harvey. As such, it was submitted that the trustees had a right and indeed a duty to enforce the First Church's constitution.
44 Although courts are reluctant to intervene where religious or spiritual matters are at stake, interference may be warranted where "civil, economic, or proprietary rights are alleged to have been infringed".[12]
45 In Kostovski's case, a dispute involving the Macedonian Orthodox Church and in particular the real property of a Parish, Byrne J specifically recognised that trustees were in a different position. His Honour said:[13]
"A person with standing to litigate such a right would, in my view, not be turned away from the court by the application of the rule in Cameron v Hogan. It may be, of course, that the 28 parishioners as members of the parish have no right to seek the assistance of the court because the rights which they assert in respect of the parish property are not 'civil rights susceptible of private enjoyment.' "
46 Both the Merging Trustees and the Continuing Trustees need to know (aside from the determination of who the trustees are) with precision pursuant to what trusts and on what basis, and over which properties, they are trustees. These matters all depend on the validity of the Meeting.
47 Accordingly, I am of the opinion that the court has jurisdiction to determine the validity of the Meeting. Apart from the recognised standing of trustees of voluntary associations on the basis of a proprietary interest in the assets, the court has clear inherent supervisory[14] and statutory jurisdiction over trusts and trustees.
48 Mr Upjohn submitted that the Meeting was invalid for a number of reasons and that any resolution passed at the Meeting was null and void. Mr Harvey submitted that the matter was not justiciable and in any event there was sufficient compliance with the relevant constitutional requirements.
49 The first issue relates to the validity of the notice convening the Meeting. The notice sent to members of the First Church is not dated. It is titled "Invitation" and the nature of the Meeting and business to be conducted or matters to be discussed are not identified at all. There is reference to "an Extra Ordinary [sic] Meeting". By contrast, the notice of meeting sent to members of the Second Church is much more informative.
50 Article 105 of the 1964 Constitution requires the Managing Committee to convene an Extraordinary General Meeting at the request of one-third of the Church-School Congregation members or the Diocesan Council and to deal "only with questions for which it has been [convened]". The 1981 Constitution effectively repeats Article 105 and arguably adds the Executive Board as being entitled to call a Special Assembly. However Article 14(a) of the 1981 Constitution adds that the Special Assembly can only decide matters "for which it was specially convened".
51 In my opinion the notice, or Invitation as it is called, is invalid for a number of reasons.
(a) First, there is no evidence that one-third of the Church-School Congregation or the Diocesan Council or the Executive Board requested the meeting. This is a necessary pre-condition to convening the meeting. There is no list of members in evidence.
(b) Secondly, the meeting must be convened for a particular purpose and it is only such a purpose that may be dealt with at the meeting. No such purpose is identified in the notice. Given the importance of the matter, the purpose should have been referred to specifically in the notice.[15] Indeed the requirement applies even if the matter is insignificant. Identification of the purpose is also important for proxy purposes. The notice contains a proxy form. However, for the purpose of what resolution would the proxy be given?
(c) Thirdly, I am not satisfied on the evidence that the notice was served on all members. As pointed out there is no list of members. Given the nature of the dispute I am not simply prepared to accept the evidence of Mr Tomasevic to the effect that he personally served or posted the notices to the eligible members and that those members were the only members as at 2 January 2010. It is relevant to note, and whether justiciable or not, there is bitter disagreement about the process and manner in which members were expelled. The correct procedure does not appear to have been followed.
52 The second issue relates to the conduct of the Meeting. Mr Upjohn submitted that separate meetings of each church was required. Each church, it was submitted, was required to deal with the matter of dissolution and merger as part of its own agenda or business before any joint meeting was to be held.
53 As pointed out, a meeting convened under Article 105 or Article 14(a) of the 1981 Constitution is required to deal with, and only with, the specific matter identified in the relevant notice. The notice or invitation was to members of the First Church and as such only members of that Church were called upon to discuss and deliberate on the identified matter. Leaving aside the fact that no specific matter was identified as required, it was not permissible for others to influence or participate in the debate or discussions or indeed, and more importantly, affect any vote. Thus, the Meeting itself was not properly conducted and I do not consider it to be a valid meeting.
54 Further I do not regard Article 10 of the Transitional Regulations as providing a basis for a valid merger. Article 10 provides that no Church-School Congregation can be forced to merge "without the consent of three fourths of the members of the Congregation". Whatever the status of the Transitional Regulations they cannot override the Constitution of each Church. Further the minutes of the Meeting refers to a presence of two thirds of financial members. This appears to be a quorum requirement rather than a voting requirement.
55 The third issue concerns what precisely was resolved at the Meeting. In view of the decision I have come to, it is strictly not necessary to deal with this issue. However, if the notice convening the Meeting was valid, and the combined meeting properly held, it is not entirely clear what was resolved in relation to the applicable constitution of the merged Church or the identity of the trustees of the property of the merged Church.[16] This last matter is of fundamental importance. A trustee cannot simply be told that they are no longer holding a property on trust for A but rather for B. Proper procedures need to be followed. It is one thing to merge the Churches. It is quite another to fundamentally alter the objects of a charitable trust. That is not to say that it cannot be done. Rather it needs to be done in accordance with the Constitution and Declarations of Trust and the law applicable thereto.
56 Accordingly, I find that the Meeting was invalid. The next question is the identity of the trustees of the First Church as at 2 January 2010.
II. The First Church Trustees as at 2 January 2012
57 There is no dispute that by Deed of Appointment made 1 April 2009, the following people were appointed and continued as trustees of the First Church, namely:
58 Clause 2 of the Deed of Appointment imposed an obligation on the trustees -
"to observe the obligations imposed upon them as Trustees by the Church Constitution and, if and when so required by the Church, to account to the Church for their activities as Trustees."
59 It is common ground that Mr Palavestra and Mr Milovanovic are deceased. It is also common ground that Mr Juzbasic was appointed as a trustee on 13 May 2009 following the death of Mr Palavestra.
60 Accordingly, unless they have been validly removed, the Trustees of the First Church as at 2 January 2010 remain the following:
61 That there is a deadlock is immediately apparent. Mr Tomasevic and Mr Milutinovic are the Plaintiffs and the remaining parties the Defendants.
62 Mr Harvey submits that Mr Juzbasic was validly removed as Trustee on 7 March 2011. Mr Upjohn submitted that the removal was not valid.
63 The removal of a trustee is a serious matter and a trustee is entitled to require strict compliance with the relevant constitution and any Declarations of Trust.
64 The letter communicating to Mr Juzbasic his removal as trustee states that the "Executive Decision" is made "in accordance with Article 95.9 of the Constitution of the Serbian Orthodox Church - Diocese of Australia and New Zealand".
65 The Executive Decision is in the following terms:
"Mr Slobodan Juzbasic, expelled as a member of the Wodonga Church-School Congregation by the Executive Board on 9 September 2009, to be removed as a Trustee of the (former) 'Free Serbian Orthodox Church-School Congregation Property' of Sts. Peter and Paul in Wodonga; come New Gracanica Metropolitanate; come Serbian Orthodox Church, Diocese of Australia and New Zealand, for refusing to accept the will and legal right of the majority of the members of the said Congregation in merging with their sister Church-School Community of the same name; and for attempting to take possession of both the Church and Community Centre of the said Church-School Congregation/Community on behalf of a group of schismatics that are no longer in the Serbian Orthodox Church and outside of canonical Orthodoxy."
66 The first issue is whether the Executive Decision and notification to Mr Juzbasic constitute a valid removal from the office of trustee.
67 In my opinion, the purported removal of Mr Juzbasic as a trustee by the Bishop either alone or together with others was not valid for a number of reasons.
68 First, there is no Article 95.9 of any constitution of the First Church. No other constitution is relevant.
69 Secondly, the Bishop does not have the power to remove a trustee. Neither the 1964 nor the 1981 Constitution provides for such removal. Any power needs to be specific given the importance of the office of trustee. There is a procedure for removal in the 1981 Constitution (Article 28(b)) but it does not involve the Bishop. Further the various declarations of trust do not give the Bishop such power. Again, there is a procedure for removal and it is not by the Bishop. Further, the Executive Decision purports to remove Mr Juzbasic as a Trustee of the First Church. There are two difficulties with this articulation. Mr Juzbasic was not a trustee of the First Church. He was a joint trustee over certain properties of the First Church. Further a ground relied on was his refusal to accept the merged church. I have found that the merger was not effective.
70 As an alternative Mr Harvey submitted that Mr Juzbasic was automatically removed under Article 28 of the 1981 Constitution. Article 28(2)(vii) provides that if a trustee acts "in a manner contrary to the Constitution of the Church" the trustee "shall be deemed to have vacated his office".
71 Regarding automatic removal, Mr Harvey submitted that by failing to "help [the] Congregation Board fulfill its intention of improving the moral and material life of the Church-School Congregation and Parish", a duty imposed on members under Article 8(d), Mr Juzbasic fell within Article 28(2)(vii) and was, as a consequence, deemed to have vacated his office.
72 The specific conduct relied on was Mr Juzbasic's alleged disruption of meetings and his conduct in freezing the funds of the First Church.
73 I am not prepared to find that Mr Juzbasic was deemed to have vacated the office of trustee.
74 First, automatic removal of a trustee is a very serious matter and any such provision should only be enforced in the clearest of cases and on proper evidence. Where the conduct relied on is easily ascertainable or is an objective fact such as a sequestration order the matter is much easier. Where however, the conduct requires a value judgment or subject assessment or consideration of the conduct, the matter is much harder, particularly where the prohibited conduct is expressed in general terms and the party asserting automatic termination and making the value judgment is the adversary. Mr Juzbasic was entitled to take the view that the merger was invalid. I have no doubt that Mr Juzbasic was passionate about his position and said so. However the evidence does not establish sufficient disruption of meetings so as to lead to automatic disqualification.
75 Secondly, the duties referred to under Article 8(d) are those of members. Mr Juzbasic was purportedly removed as a member on 9 September 2009. Whatever may be said of Mr Juzbasic's conduct in freezing the bank account, at the time this conduct was engaged in - April 2010 - it was not (on the Plaintiffs' or Merging Trustees' case) as a member. In any event, I have reservations about the validity of his expulsion as a member because of the consanguinity prohibition. However this matter may not be justiciable and is not in any event relevant to the issues and my findings.
76 Thirdly, the Merging Trustees have only sought to rely on those provisions in a retrospective sense. Indeed the letter from the Bishop dated 7 March 2011 - although of no effect - rather suggests that the Merging Trustees regarded the Continuing Trustees as trustees until their purported removal, a position entirely inconsistent with deemed or automatic termination.
77 Fourthly, when would such deemed termination take effect? At what point? Would a mere comment or statement of opinion or belief adverse to the church suffice?
78 Finally, the specific provisions for the removal of a trustee both in the 1981 Constitution (Article 28(b)) and the Declaration of Trust (Article 10(ii)) of the same year suggests that the preferred course for removal of a trustee was by recourse to those provisions.[17]
79 Accordingly, so far as Mr Juzbasic is concerned, I am of the opinion that he remains a trustee of the First Church. The merger is invalid and his purported removal as trustee is not valid. He was not removed under the deeming provision and remains a trustee. In view of my findings Mr Juzbasic was probably entitled to lodge a caveat. However, I do not propose to deal with this aspect at this stage.
80 Whether Mr Juzbasic should remain as trustee is another matter entirely. All of the matters so far involve legal, technical and procedural analysis. The inquiry under s 48(1) of the Trustee Act is different. I am entitled to place his conduct so to speak under a microscope.
81 I do not propose to deal with this matter at this stage.
82 The letter communicating to Mr Jovetic his removal as trustee states that the "Decision" is made "in accordance with Article 59.9 of the Constitution of the Serbian Orthodox Church - Diocese of Australia and New Zealand".
"Mr Dushan Yovetich, a Trustee of the (former) 'Free Serbian Orthodox Church-School Congregation of Sts. Peter and Paul; come New Gracanica Metropolitanate; come Serbian Orthodox Church, Diocese of Australia and New Zealand, for refusing to accept the will and legal right of the majority of the members of the said Congregation in merging with their sister Church-School Community of the same name; and for attempting to hand over the title and archives in his possession of the said Church-School Congregation/Community to a group of schismatics who are no longer in the Serbian Orthodox Church and outside of canonical Orthodoxy, upheld his being removed from the said Trust by the canonical Diocesan Bishop, his Grace Irinej of Australia and New Zealand."
84 For similar reasons to those applicable to Mr Juzbasic and referred to above I find that the removal of Mr Jovetic was not valid. There is no Article 59.9 or 95.9 in any relevant constitution. Further the Bishop did not have power and there is no suggestion of deemed or automatic removal as trustee.
85 Accordingly, so far as Mr Jovetic is concerned I am of the opinion that he remains a trustee of the First Church. The merger is invalid and his purported removal as trustee is not valid. He remains a trustee.
86 Whether Mr Jovetic should remain as trustee is another matter entirely. All of the matters so far involve legal, technical and procedural analysis. The inquiry under s 48(1) of the Trustee Act is different. I am entitled to place his conduct so to speak under a microscope.
87 I do not propose to deal with this matter at this stage.
III. The Status of the Incorporated Association
88 The Incorporated Association purports to be the successor of the First Church and together with others, commenced the 2011 proceeding against Mr Tomasevic and Mr Milutinovic seeking access to the Church Building and the Hall and other relief.
89 This aspect of the case can be disposed of with short reasons. Whatever the status of the Incorporated Association, it is not the successor to the First Church and is not entitled to any property or assets of the First Church whether as trustee or otherwise.
90 First, no notice was given to members of the First Church about the proposed incorporation and no member had the opportunity to vote on the matter. Those that did vote were all (rightly or wrongly) expelled members of the First Church. As pointed out, this matter may not be justiciable.
91 Secondly, and of more relevance is the fact that the purported appointment of new trustees was not valid according to the 1964 and 1981 Constitution and the Declarations of Trust.
92 Thirdly, the Bishop - whatever his authority - did not give his consent to the establishment of the Incorporated Association. To this extent it could not possibly operate as a successor to the First Church.
93 Accordingly in my opinion, the merger is not valid and the Incorporated Association is not the successor to the First Church. The trustees remain as they were on 2 January 2010 subject to the present application for removal and the courts general supervisory jurisdiction over trusts and trustees.
94 Before making any declarations and orders and dealing with the application for removal I propose to give the parties an opportunity to resolve their differences. At the outset I informed the parties that church and community disputes of this kind are not suitable for resolution by a court. Over 25 affidavits have been filed and the dispute has become acrimonious and costly. The court is limited in what it can do.
95 I will hear from the parties as to the further disposition of these proceedings.
Art. 2
This Free Serbian Orthodox Diocese is governed on the basis of:
(1) The Holy Scriptures and Holy Tradition according to the teachings of the Holy Orthodox Church
(2) Canons of the Ecumenical Councils and by them recognised Canons of the Apostles, Regional Councils and Holy Fathers.
(3) Ordinances, by-laws and general rulings of the competent Church authorities as stipulated by this Constitution.
Art. 4
This Free Orthodox Diocese is not subject to, or under the authority or patronage of any higher ecclesiastical or hierachical authority. This Diocese is free to independently regulate its own spiritual and secular affairs as well as to affiliate or disaffiliate with any group or hierachial entity, in accordance with the resolution by its own Diocesan Church National Assembly.
Art. 7
The Free Serbian Orthodox Church - Diocese for Australia and New Zealand, Church-School congregations, Monasteries, Memorials, independent establishments, and some of the Temples, are lawful bodies, i.e., may have the right to handle their own affairs and obligations, lend-lease, etc.
Art. 12
Every organ and church committee in the Diocese is subordinated in all executive matters directly to the higher executive organs of the Diocese.
Art. 13
The time for lodging of complaints against decisions of the Diocesian authorities is 15 days, in which the day of lodging is not counted, and it is considered that the complaint has been lodged on time, if it has been handed out by 6. pm on the 15th. day from the day the decision has been received.
If the complaint has been mailed, the day of positing shall be considered as the day of lodging to the authority which has brought the relevant decision.
This timing is valid for all Diocesian organs, and for all decisions in as far as a special timing has not been stipulated otherwise by this Constitution.
Art. 14
The Diocesian authorities decide independently, in accordance with this Constitution, on all matters which pertain under their jurisdiction. Against their decision there can be no protection and intervention cannot be sought of the civil authorities, except if same are contrary to the Australia and New Zealand Laws and By-Laws.
Art. 70
The Dispute Committees are being created, which will, as a separate organ, with the Diocese and with Church-school Congregations perform the duties prescribed by this Constitution.
Art. 71
The Dispute Committee of the First degree will exist with every Church-school Congregation and the same shall be elected at their regular annual meetings, together with other committees, each year.
It shall consist of three regular members and two alternates. The same judge in the first degree, in the presence of all parties.
Art. 71
A Second Degree Disputes Committee, which shall be elected by the regular Diocesan Assembly with all other committees for three years, will consist of five members and two alternates. It will judge in the second degree complaints and decisions on disputes and decisions brought down by the First Degree Dispute Committee with the Church-school Congregation.
This Dispute Committee deliberates and judges without presence of parties concerned and it is called the Diocesan Dispute Committee.
Art. 73
First Degree Dispute Committees with Church-school Congregations are competent to hear and judge cases against their own members members of their own congregation, while the Diocesan Dispute Committee is covering the entire Diocese, and is judging complains against any other Disputes Committee within the Diocese.
Art. 74
The real competence of the Dispute Committee covers cases of: Offences, malicious accusations, litigations and the similar commotions against the members.
Art. 75
The Dispute Committee has the power to pronounce the following penalties:
(1) A reminding
(2) an admonition, verbal or written,
(3) exclusion from membership for a limited period of time, and
(4) a permanent exclusion from membership from Church-school congregations.
Art. 84
Each church-school Congregation is considered an integral part of the Free Serbian Orthodox-Church - Diocese for Australia and New Zealand and as such is subject to all the statutes of this Constitution, church canons and other regulations, rules and orders of the Diocesan authorities headed by the Diocesan Bishop.
Any person who desires to become a member of the Congregation reports to the Congregation's Committee by making a written application, and who is to be recommended by two regular members. The managing Committee of the Congregation may accept the application or reject it by a majority of votes.
A Persons not admitted to membership is entitled to ledge his complaint against the decision to the regular Annual General Meeting within 15 days of the day the decision of the School Congregation was submitted unto him. The Congregation Meeting's decision remains valid until the Annual General Meeting. Should the decision of rejection be declared void - not valid, the complainant shall become a member of the Congregation, but if the Annual General Meeting confirms the decision of the Congregation, the complainant has no one to complain to - the Resolution is Final.
Art. 90
The following persons cannot be members of a Church-school Congregation:
(1) Persons under eighteen years of age.
(2) Persons who have proven to have scandalised others by their immoral life and conduct.
(3) Persons who can be proven to be working against the Church-school, Diocese and Orthodoxy.
(4) Those who openly admit and who can be proven to be anarchists, communists, nihilists and bigamists.
Art. 91
The membership of a Church-School congregation terminates:
(1) By death.
(2) By members' resignation; by free will.
(3) By moving from one Parish to another - transfer.
(4) By exclusion from membership by the decision of the Managing Committee or General Meeting.
(5) If a member discontinues to pay his due fees for more than twelve months.
Art. 92
The exclusion from membership is carried by the resolution of the Managing Committee when there are proven cases referred to in Article 90 of the Constitution, or when there is an undeniable proof that the presence of a member is detrimental to the nest interests of the Church-school Congregation, either by his activities or by his behaviour.
The excluded member may lodge his complaint to the Annual General Meeting whose decision will be final.
Art. 105
At the request of one-third of the Church-school Congregation members, the Managing Committee is bound to convoke an Extraordinary General Meeting, as well as at the request of the Diocesan Council. In both cases it deals only with questions for which it has been convoked.
Art. 167
The property of the Church-school Congregation in any particular State or locality, being exclusively to those Church-school Congregations, with the Diocese having no rights on proprietary claims whatsoever.
Art. 174
The direct management over the properties belongs to the Church-school Congregations under supervision of the Diocesan Council.
Art 181
The members of the Diocesan Council, as well as the Church-school Congregation Committee members, cannot be amongst themselves related up to the fourth degree of the canonic computation - either by blood or spiritually
Article 4.
Free Serbian Orthodox Church-School Congregation of "St. Peter and Paul" shall be a part of the Free Serbian Orthodox Church-Diocese for Australia and New Zealand and as such subject to all statutes of the Diocesan Constitution, Church canons and other regulations and rules and orders of the Diocesan authorities headed by the Diocesan Bishop.
Article 7.
MEMBERSHIP
(i) (a) Membership of the Congregation shall be restricted to those followers of the Serbian Orthodox Church who have
voluntarily assumed upon themselves the duties and burdens
prescribed by this Constitution.
(b) Any person who desires to become a member of the Congregation must apply personally or in writing to the Congregation Board. This Board must then decide at its next meeting whether the application shall be accepted.
(c) Persons either not admitted or expelled from membership may appeal to the Docesan Council within thirty days of the date when the decision of the Church-School Board is communicated in writing to that person.
(d) The decision of the Diocesan Council shall be final and no appeal lies therefrom.
(e) Subjects of the Church who do not abide by the Constitution shall be considered to be parishoners only and shall not enjoy those rights and duties under the Constitution which pertain only to members.
(ii) The following persons shall not be admitted to membership of this Church-School Congregation:
(a) Persons who it can be shown work against the Church, Diocese or Orthodoxy.
(b) Persons who openly admit to and who can be proven to be anarchists, communists, nihilist or bigamists.
(c) Persons who are proven to entertain coexistence with the Communist Regime which is ruling Yogoslavia today.
(d) Persons less than eighteen years of age. However, in special cases the Executive Board has the right to accept younger members.
(e) Persons who are proven to be of immoral character.
Article 8.
DUTIES OF MEMBERS:
The Duties of Members shall be:
(a) To come to Church Services regularly.
(b) To make confession and take the Holy Sacraments at least once a year.
(c) To take part in regular and special assemblies.
(d) To help Congregation Board fulfil its intention of improving the moral and material life of the Church-School Congregation and Parish.
(e) To regularly pay membership fees as prescribed by this Constitution.
(f) To pay for any damage caused by that member to property belonging to the Congregation.
(a) Upon the death of a member.
(b) Upon a member leaving the territory of the Church-School Congregation.
(c) Upon voluntary renunciation. Membership ceases when a member tenders and the Church-School Congregation Board accepts his resignation. A member must pay all his fees and debts before his resignation is accepted.
(d) On expulsion. Expulsion from membership may be temporary or permanent.
(i) Temporary expulsion shall be for a period from three months to one year and is imposed by a majority vote of the Congregation Board. During a period of expulsion an expelled member may attend all Church Services and the Annual Assembly but cannot attend any other functions.
(ii) Permanent expulsion may only be imposed by a regular or special assembly upon the proposal of the Congregation Board, and only for:
(b) Physical attacks upon members or other guest during any congregation function.
(d) Non payment of membership fees. If a member has failed to pay his membership fees for a period of one year and after a written reminder still fails to pay such fees he shall cease to be a member until the fees are paid.
(iii) When a member is expelled the Congregation Board must report this to the members at the next General Meeting.
(iv) A person who has ceased to be a member ceases to have any rights in respect of the Congregation's property and has no right to recompense in respect of the value or any portion of monies paid by him.
The Church-School Congregation shall be governed by three organs:
(a) The Assembly of the Church-School Congregation.
(b) The Executive Board.
(c) The Controlling Board.
(a) The Assembly of the Church-School Congregation shall comprise all members of good standing.
(b) The regular annual assembly shall be held in December each year but an Assembly may be called and held in accordance with Article 14.
(c) The Executive Board shall set the date of the convening of and Assembly at least 15 days prior to the date of such a meeting.
(a) The Executive Board shall prepare the agenda for the holding of an Assembly at regular meetings and this must be strictly followed by the President of the Assembly. If unforeseen questions and proposals arise the President of the Assembly can include them only under the item "Questions and Proposals".
(b) The President for the time being of the Executive Board shall open the Assembly and call upon the members present to elect the Presidium which shall be made up of:
(i) A President of Assembly.
(ii) A Vice President.
(iii) A Secretary.
(iv) Two other members to verify the minutes.
(c) After election of the Assembly Presidium the meeting shall deal with the matters on the agenda which shall include the following:
(i) Submission of the reports of the activities of the retiring executive and controlling Boards for the past year.
(ii) Receipt and discussion of the submitted reports.
(iii) Release of the retiring Boards.
(iv) Discussion of the matters and proposals upon which the Boards could not arrive at a decision.
(v) Discussion of the salaries of the Priest and Teacher.
(vi) Discussion of questions of Church-School economy.
(vii) Questions and Proposals.
(viii) Election of the new boards and their taking of the oath before the Priest and in the presence of the entire assembly (If there is no Priest present then the oath may be administered by any orthodox Priest).
The name of members elected to the incoming Boards shall be sent to the Secretary of the Diocese within ten days from their election and shall there be recorded.
(d) Any member who abuses his privileges as a member of the Congregation by creating disorder and/or obstructing the procedure of the Assembly may be barred from the meeting by the members present upon the proposal of the presiding officer.
(e) All decisions of a Regular or Special Assembly shall be made by a simple majority vote of the members present. In the vent that a vote is tied the President shall exercise a casting vote.
(f) A quorum for an Assembly shall be one half of the members of good standing.
(a) Where important matters arise during the year which ought to be dealt with promptly and with which the Church-School Congregation Board is not empowered to deal with, the Executive Board may call a Special Assembly which can decide only the matter for which it was specially convened.
(b) If the Diocesan authority or one third of the members of the Church-School Congregation demand a special meeting, the Executive Board must call one.
(c) The President of the Executive Board shall preside over a Special Assembly.
Should the Assembly of the Church-School Congregation overstep the Boundaries of its jurisdiction and prevent the execution of the directives of the Diocesan authorities then the Diocesan authorities are empowered to annul those decisions and to entrust the governing of this Church-School Congregation to the retired Board and may refuse permission to call a new Assembly until they, the Diocesan Authorities, receive sufficient evidence and guarantee from membership that the Assembly shall be conducted in peace and in the manner prescribed by the Diocesan Constitution and its By-Laws.
(1) Decide the date and venue for the regular and special Assemblies.
...
(3) Prepare all proposals for placing before the regular and special Assemblies.
(4) Execute the decisions of the Assemblies and the directions of the Diocesan authorities.
...
(6) Govern the handling of property and funds of the Congregation and care for the maintenance of all real estate.
...
Article 28.
REAL ESTATE OF THE CHURCH-SCHOOL CONGREGATION AND TRUSTEES (DUTIES):
The term the Trustees for the Church shall mean and include every such person or corporate body as is appointed by a resolution passed by a majority of the members of the said Church entitled to vote and being present and voting in the matter at a General extraordinary or annual meeting of members duly held in accordance with the Constitution of the Church of which notice shall have been duly published or given in accordance with such Constitution and notwithstanding that notice of such meeting was published or given prior to the passing of this Article of this Constitution.
(i) If any trustee or in the case of a Corporate Trustee any director Trustee Company die;
(ii) become or be declared insane;
(iii) become bankrupt or insolvent or make any composition or enter into any scheme or arrangements with his creditors;
(iv) be absent from the State of Victoria for the space of three calendar months without leave of the Church by resolution at a properly convened annual, general or extraordinary meeting of the Church;
(v) wilfully refuse to act; or
(vi) become incapable of acting;
(vii) act in a manner contrary to the Constitution of the Church;
(viii) become a member of any other Church-School Congregation or similar body of Church organisation which is not under the jurisdiction of the Free Serbian Orthodox Diocese for Australia and New Zealand;
(ix) become a member of any other club committee society or group which is or is recognised as being Communist of Nazi-Facist or which is known to be receiving sponsorship from any Communist or Nazi-Facist organisation or body;
then and in every such case he shall be deemed to have vacated his office which shall be available for the appointment of a new Trustee or new Trustees at the first extraordinary, general or annual meeting next following and in the case of a director of any Trustee Company he shall not be eligible for re-election as a director.
(a) Subject to the provisions of the last preceding clause the Trustee shall continue in office during the pleasure of the Church and shall be removable whether it is desired to remove any or all or some of them at an annual, extraordinary or general meeting in the manner described in Clause 12 hereof.
(b) Any of the Trustees may retire from trusts hereof by giving one calendar month's notice in writing of his intention to retire to the Secretary of the Church and to each of his co-trustees for the time being whereupon he shall execute all requisite assurances and documents for vesting the trust property in the other Trustees.
(b) The resolution referred to in sub-clause (a) of this clause shall be deemed to refer to a resolution passed by a majority of the members of the said Church entitled to vote and being present and voting in the matter at a general meeting of members duly held in accordance with the Constitution of the Church of which notice shall have been duly published or given in accordance with such Constitution.
(c) ...
...
[illegible] decision of the Church-School Congregation to cease existing [illegible] only be made by an absolute majority of the assembly, and with the approval of the Diocesan Bishop. If this occurs, the property of the Congregation shall be deemed to belong to the Free Serbian Orthodox Church Diocese for Australia and New Zealand and steps [illegible] be taken to assign such property accordingly.
[1] Orders were also sought against Mr Milovanovic but he is now deceased.
[2] Declaration of Trust, 1 August 1981, cl. 6.
[3] Deed of Appointment of New Trustees and Declaration of Trust, 4 July 2004, cl. 6.
[4] 1964 Constitution, Arts. 2, 4, 12, and 84,; 1981 Constitution, Art. 11.
[5] 1964 Constitution, Art. 7; 1981 Constitution, Arts. 18 and 31.
[6] 1964 Constitution, Arts. 105; 1981 Constitution, Arts. 12-15.
[7] 1964 Constitution, Art. 167; 1981 Constitution, Art. 28.
[9] 1964 Constitution, Arts. 13, 14, 70-75, and 92.
[10] 1964 Constitution, Arts. 87, 90, 91 and 92; 1981 Constitution, Arts. 7, 8 and 10.
[11] Cameron v Hogan [1934] HCA 24; (1934) 51 CLR 358; Smith v South Australian Hockey Inc (1988) 48 SASR 263; Plenty v Seventh Day Adventist Church of Port Pirie (1986) 43 SASR 121.
[12] Marshall v National Spiritual Assembly of the Baha'is of New Zealand [2003] 2 NZLR 205, [31].
[13] His Grace Metropolitan Petar v Kostovski (Unreported, Supreme Court of Victoria, Byrne J, 27 October 1997), 24.
[14] The Will of Meshakov-Korjakin, deceased [2011] VSC 372, [54]; Monty Financial Services Ltd and Anor v Delmo (Unreported, Supreme Court of Victoria, Ashley J, 11 September 1995), [73]-[74]; Schmidt v Rosewood Trust Ltd [2003] UKPC 26; [2003] 2 AC 709, [36]; Letterstedt v Broers (1884) 9 AC 371, 386; Pope v DRP Nominees Pty Ltd and Others [1999] SASC 337, [45]; Stevedoring Employees Retirement Fund Pty Ltd v The Association of Employers of Waterside Labour (Unreported, Supreme Court of New South Wales, Young J, 1 March 1995), 3; Jacobs on Trusts (5th Ed), [1529]; Ford and Lee, Trusts (2nd Ed), [826]; Rinehart v Welker [2012] NSWCA 95, [173]; McLeans v Burns Philp Trustee Co Pty Ltd (1985) 2 NSWLR 623, 633, 637.
[15] It is no answer to say that the purpose of the meeting was generally known; Juzbasic v Tomasevic (Unreported Ruling, Supreme Court of Victoria, Davies J, 29 December 2009).
[16] The minutes record that the Bishop dissolved the two existing committees, board members were appointed, and the "United Parish" would "belong to Diocese of Australia and New Zealand". There was no specific reference to any constitution. Mr Tomasevic was admittedly confused over which constitution applied to the merged Church (it may have been intended that the 1983 Constitution of the Second Church apply because the "United Parish" was not part of the "New Gracanica Metropolia Diocesan).
[17] Clause 11(ii) of the 2004 Declaration of Trust contains the same provision as Clause 10(ii) of the 1981 Declaration of Trust. These provisions were not affected by the 2009 Declaration of Trust.
Tomasevic & Anor
Jovetic & Ors [2012] VSC 223
(1934) 51 CLR 358
(1988) 48 SASR 263
(1986) 43 SASR 121
(1985) 2 NSWLR 623