(f) The types of Religious Trusts
147 Although trusts for the advancement of religion are a discrete heading in virtually all the books on charitable trusts, there are a heterogeneous mass of different types of trusts which may fall under the heading.
148 It is open to any individual or group of individuals to set up a charitable trust for the advancement of religion. There is no need to focus on any existing religious group, though the law does require the promotion of spiritual teaching or religious doctrine in some sense even though the religious doctrine might be the thoughts of "a foolish, ignorant woman"; see Keren Kayemeth le Jisroel Ltd v IRC [1931] 2 KB 465, 477 and Re Thackrah [1939] 2 All ER 4. The quotation is from Thornton v Howe (1862) 31 Beav 14, 18; 54 ER 1042, 1043.
149 If a trust for the advancement of religion is set out in some formal document in full and complete terms, there is no problem in ascertaining what the trusts are which affect the fund or property. However, in many instances the trusts will be imperfectly spelt out. It has long been recognized that to ascertain what are the terms of the trusts is a most difficult matter of fact for a court. What must be discovered is the intention of the founders.
150 The problems that were encountered in this area with dissenting chapels in the early 19th century led to the enactment in England of Lord Lyndhurst's Act (Non Conformist Chapels Act 1844 7 & 8 Vic Chapter 45). However that Act has not been adopted in Australia.
151 If there is evidence as to the founders' intention, that prevails. If there is insufficient evidence, then the Court can act on evidence of long practice in the relevant religious body and from that deduce what the founders' intention was. No particular length of time is necessary to establish usage. Further, the Court will be loath to hold that longstanding practice is in breach of trust; see Tudor op cit at pp 171-2; AG v Smythies (1831) 2 R & M 717, 749; 39 ER 568, 580 and see also AG v Pearson (1817) 3 Mer 353; 36 ER 135; AG v Murdoch (1849) 7 Hare 445; 68 ER 183 affirmed (1852) 1 De GM & G 86; 42 ER 484; AG v Gould (1860) 28 Beav 485, 501; 54 ER 452, 458-9 and McPherson op cit at p 167.
152 However, unless there is provision in the trusts as laid down by the founders' intention for development in the sense of development within a living church or amendment or change by resolution of a particular majority or a unanimous resolution, then it is not open to the members for the time being even over a long period of time to change the trusts. Accordingly, if one finds that the founders' intention was to have a church which was completely free from any control by the Pope, yet otherwise accepted the doctrine and tenets of the Church of Rome, there might well be a valid charitable trust to that end but even if there had been evidence of 30 to 50 years recent practice whereby the hierarchy in Rome in fact appointed priests and otherwise controlled the Church that would not be enough to displace the original trust. These principles are deduced from cases such as Craigdallie v Aikman (1813) 1 Dow 1, 16; 3 ER 601, 606 (subsequent proceedings (1820) 2 Bligh 529; 4 ER 435); Foley v Wontner (1820) 2 Jac & W 245; 37 ER 621.
153 In Attorney-General v Gould (1860) 28 Beav 485, 501; 54 ER 452, 458-9, Romilly MR said:
"Usage is only important in a legal point of view, where there is an absence of any instrument of endowment, or where the words of the instrument produced are ambiguous; in such cases, usage constitutes presumptive evidence of the trusts on which the charity was established, but when the deed of foundation is produced, and is precise, that presumption is excluded."
154 In the present case there is the material which I have already abstracted from the initial meetings of the founders of the Church School Community and the 1950 Rules.
155 However, it must be remembered that in a religious trust not every provision of the rules or every matter of doctrine will necessarily be a term of the trust, breach of which will give rise to an action.
156 The law was well and truly summarized by McPherson JA writing extra judicially in "The Church as Consensual Compact, Trust and Corporation" (2000) 74 ALJ 159, 168.
157 Gould's case itself is an illustration of this principle. The practice of strict or free communion was found to be no part of what was essential for the faith and maintenance of a congregation of particular Baptists and consequently not to form a part of the foundation trusts on which the Church was held (see 54 ER 452 at p 459).
158 When one thinks about it, this must be so. It is absurd to think that every word spoken in every sermon in one of the mainstream churches in Australia could be analysed to see whether it involved a breach of trust by perverting part of the doctrine or rules of the Church. Moreover, just because a person in authority in the Church such as a bishop or priest preaches a sermon which, for instance, condemns communism or abortion or gambling does not (apart perhaps from 30 years long usage) make that a term of the trust.
159 A recent illustration is provided by the decision of the Court of Appeal in Scandrett v Dowling (1992) 27 NSWLR 483, where a rule of a church, assuming it existed that priests must be male, if flaunted, would not constitute a breach of trust and indeed even as a breach of a rule of a voluntary association it was not justiciable.
160 The matter was discussed by the High Court of Australia in the Red Book case, Wylde v Attorney-General (1948) 78 CLR 224. The High Court was equally divided in that case. Latham CJ and Williams J held that uniformity of worship in the Anglican Church of Australia as it existed in 1948 was a fundamental principle of the Church and that breach of that uniformity constituted a breach of trust. Rich and Dixon JJ thought to the contrary. Rich J at page 281 considered that focusing on whether a particular rule was a fundamental rule of the Church begged the question. He said:
"The rule may be fundamental if departure from it is a breach of trust. But a breach of trust is not established merely by calling a rule fundamental. Rules relating to mere forms of services confer no juridical rights in property on members of the Church. The relators have failed … to establish that the objects of the charity, the purposes of the trust have not been fulfilled or that the members of the Church… have been deprived of their rights with reference to the property by reason of the properties being diverted from the trusts imposed."
161 Dixon J at 289-90 said:
"Ultimately of course the question whether strict adherence to the formularies and ceremonies of the Church is involved in the performance of the trusts of property must depend upon the trusts themselves. These are to be ascertained from the trust instruments and from an examination of the history, doctrines and organisation of the community or body whose religious purposes they serve. My conclusion is that none of the practices complained of involves any diversion of property from the purposes to which the trusts, so ascertained, devote it."
162 Latham CJ said at 263 that it was not proper to distinguish between what is important and unimportant in a matter of doctrine or ritual where property has been given in trust for a particular church which can be identified by the doctrines in association with which ritual is prescribed.
163 Williams J at 303 considered that uniformity of worship was a fundamental law of the Church and so breach of that principle was a breach of trust; see also p 310.
164 The actual decision in the Red Book case can be distinguished because of the finding that the principle of uniformity was an essential principle. However, it seems to me that although there are some cases that go the other way as illustrated by McPherson JA's article, the Court does need to find in this sort of case what are the fundamental principles of the trust on the one hand and permitted practices of the Church or prohibitions laid down by the rules of the Church on the other. A church officer breaching a regulation made for the good order of a church or a non-fundamental principle will not be breaching the charitable trust in that he will not be affecting the property that is held in trust for the members or for the charitable purpose.
165 The matter is important in the instant case because essentially, I need to evaluate whether the anti-communist provisions in the 1950 Rules and the fact that there was a complete separation between the Belgrade hierarchy and the Mona Vale Church up to 1952 are terms of the trust or whether they are merely incidental matters of regulation which do not go to the core of the trust.
166 Passing to another matter, the cases show that it is necessary to classify Church Trusts. The classical typecasting derives from the judgment of Miller J who gave the opinion of the United States Supreme Court in Watson v Jones 80 US 679 (1871). At page 722, the court said, in my paraphrase, that a religious trust might be of three types, viz: (1) Where the founder expressly laid down the rules of a new church; (2) where the donor gave funds to an existing independent congregation owing fealty to no higher authority; and (3) where the gift was to an ecclesiastical body which was sub-ordinate to some general church organization.
167 One also sees in that judgment another classification of churches into: (a) Hierarchical; (b) Presbyterian; and (c) Congregational.
168 In AG v Holy Apostolic & Catholic Church of the East (1989) 37 NSWLR 293, 315 (affirmed by the Court of Appeal (1989) 18 NSWLR 291, though this point was not considered on appeal), I said:
"By hierarchical, Miller J meant a church which has superior clergy and in which the government of the church is committed to those superior clergy. Ordinarily a church which has bishops will fall into this class and this will be so notwithstanding that some governmental powers are given to clergy of inferior rank or to laity. … With a congregational model, the local congregation is the body which makes or unmakes the rules. … With (an hierarchical) church American courts would apply their 'neutral principles' one of which is that a strong presumption operates in favour of the property being the property of the national church not of a local parish. The fact that the physical property of the local church was purchased by the local congregation without any financial assistance from the parent body has no effect on this rule: see Pilgrim Holiness Church v First Pilgrim Holiness Church 252 NE (2d) 1 (1969)."
169 This was reinforced by the Michigan Supreme Court in Hanna v Malick 193 NW 798, 803 (1923) which I set out at p 315 of my earlier judgment.
170 There is a very large difference between a trust for a congregational church and a trust for an hierarchical church.
171 The first difference is that it is usually more difficult to ascertain the objects of a trust for a congregational church as the church often commences in a most informal manner. In such cases, it is usually necessary to resort to what has been the custom in the church over a period of years in order to see what the original consensual compact must have been; see eg AG v Pearson (1817) 3 Mer 353; 36 ER 135; AG v Murdoch (1852) 1 De GM & G 86; 42 ER 484.
172 It should be noted that with an hierarchical church in the words of McMorrow J, delivering the decision of the Appellate Court of Illinois in Aglikin v Kovacheff 516 NE (2d) 704, 708 (1987), "a court may presume a local church has relinquished all power to an hierarchical body which may, in some instances, frustrate the actual intent or goals of the local church and deprive the local church of legal remedies that otherwise would or should be available to it."
173 In Bishop of Natal v Gladstone (1866) LR 3 Eq 1, 37, Lord Romilly said:
"…If a class of persons in one of the dependencies of the English Crown … should found a church calling themselves members of the Church of England , they would be members of the Church of England - they would be bound by its doctrines, its ordinances, its rules and its discipline, and obedience to them would be enforced by the civil tribunals of the colony over such persons. …"
174 In the Holy Apostolic & Catholic Church of the East case, after quoting this passage, I said at p 316:
"It is not an unwarranted extension of that principle to say that when one finds in Australia a group of persons of ethnic origin proclaiming that they are members of a church with an identical name of an overseas church which services their people, one can assume that they are members of that overseas body or alternatively, that their canon law and the discipline of their church is mutatis mutandis identical with that of the overseas body."
175 It would be a mistake, however, to assume that all religious trusts fall into the neat categories outlined above and the United States cases show that this is not so.
176 In Dragelevich v Rajsich 263 NE(2d) 778, 783-4, the Ohio Court of Appeals said:
"...the Serbian Eastern Orthodox Church is almost hierarchical in (the appointment of a parish priest); however, there is also a congregational element in the procedure for the selection of a parish priest. ...
"The Constitution of the Serbian Orthodox Diocese for the United States and Canada provides that the property of each church school congregation belongs exclusively to the respective congregation and the Diocese has no rights to such property."
177 In New York Annual Conference of the United Methodist Church v Fisher 438 A (2d) 62 (Conn SC) (1980) it was recognized that the situation might exist even within an hierarchical church that the local church's property belonged to it and was not subject to control by the hierarchy.
178 Thus, although the extracts from the Constitution of the worldwide Serbian Orthodox Church show that the church is hierarchical and episcopal, this may not necessarily permeate all the way through to be the controlling factor in a dispute between diocese and parish over property. It should be noted that such constitutional statements do not provide the basis for deciding that there is a theological principle of the Serbian Orthodox Church that all must "Obey the Bishop".
179 Turning to another point, as I have already noted, religious trusts can comprehend some ancillary purposes which are not essentially religious, but only up to a point.
180 Thus, it is clear that not every trust for a religious purpose will be a religious charitable trust. Nor will be a trust for the benefit of parish purposes of a church because many of those purposes may well be non-charitable; see eg Farley v Westminster Bank Ltd [1939] AC 430 and Re Stratton [1931] 1 Ch 197 and the discussion in Bradshaw, The Law of Charitable Trusts in Australia (Butterworths, Sydney, 1983) pp 25 and following. However mostly the courts can construe these gifts as being for exclusively charitable purposes; see eg Re Macgregor (1932) 32 SR (NSW) 483. As Dal Pont notes at p 157, Re Stewart's Will Trusts [1962] QWN 24 represents the furthest courts have been prepared to go. It must always be remembered, however, that in Roman Catholic Archbishop of Melbourne v Lawlor (1934) 51 CLR 1, 24, a trust to set up a Catholic daily newspaper was not a religious trust.
(g) The effect of the 1952 reorganization of the Church
181 The reabsorption of the American-Canadian Diocese into the Mother Church in 1952 appears to be the commencement of the present problem. Up until then, it was quite feasible to be associated with the American Diocese of the Church or the Church in the Diaspora, but not be controlled by Belgrade. However, when the schism was healed, it no longer became possible to be so associated.
182 This situation has been before the courts before. In Balkou v Gouleff (1989) 51 DLR (4th) 561, and on appeal (1989) 68 OR (2d) 574, 575 the Ontario High Court and Court of Appeal had to consider a case where a church of Bulgarians had removed itself from the Bulgarian Orthodox Church and joined itself to the Russian Orthodox Church in Exile because the former was too closely associated with communists. Property was purchased by trustees for the church whilst one of its tenets was "that it have no connection or establish any relations whatsoever with any atheistic or communist organizations, authorities or regimes operating anywhere."
183 At first instance, Holland J held that the anti-communist clause in the trust prevented any reunion with the Bulgarian Orthodox Church.
184 On appeal, the decision was reversed seemingly (the report is one of those tantalizing memorandum decisions on appeal in Ontario) because the trial judge erred in finding that the anti-communist clause was a term of the trust and that the prime trust was for the purposes of the Eastern Orthodox religion.