Baptist Churches of New South Wales Property Trust Act 1984

The Act defines several key concepts. The Trust is a corporation of seven persons elected by the Assembly (s 6(1)). The Assembly means an Assembly constituted under the by-laws of the Baptist Union (s 4(1)). The Baptist Union means the body corporate under the Baptist Union Incorporation Act 1919 (s 4(1)). A Baptist Church means a congregation affiliated with the Baptist Union (s 4(1)). Congregation means all persons whose names appear as church members in the roll of an association or society that holds the doctrines in Schedule A to the Incorporation Act and habitually meet for public worship (s 4(1)). Deacon includes persons elected to a position of leadership in the congregation, regardless of title (s 4(1)). Secretary means the person elected to that position, or if none, the person exercising the responsibilities of a secretary (s 4(1)). District means an area of land determined by the Executive Committee (s 4(1)). District Association means an association of Baptist Churches recognised by the Baptist Union under the by-laws (s 4(1)). Trust property means property vested in the Trust by or pursuant to the Act (s 4(1)). The appointed day is the day proclaimed under s 2(2). The Executive Committee is the Executive Committee of the Baptist Union (s 4(1)). The Incorporation Act is the Baptist Union Incorporation Act 1919 (s 4(1)). Property includes real and personal property and any estate or interest (s 4(1)). The Act also distinguishes between property held beneficially by the Baptist Union (which is not transferred) and property held on trust (which is transferred) , s 16(2)(b)(i) expressly excludes property vested beneficially in the Baptist Union. The concept of a qualifying corporation appears in s 22(8): a corporation whose objects are consistent with the Baptist Union’s objects, whose membership is limited to members of a specific congregation, whose constitution cannot be amended without Trust consent, and whose directors and officers are members of the congregation or other approved persons. A direction from a congregation to the Trust is a formal resolution process governed by s 42, requiring a 75 per cent majority and at least ten voters (s 42(4A)). The common fund is a consolidated investment pool managed by the Trust under ss 23-24, with income allocated ratably to participating trusts and a management commission chargeable at a rate fixed by the Executive Committee (s 24(1)-(2)).

The Act directly affects several categories of persons and bodies. First, the seven members of the Trust (s 6(1)) are subject to eligibility requirements (must be members of a Baptist Church affiliated with the Baptist Union , s 6(3)), term limits (generally three years , s 7(2)), and mandatory vacation of office in specified circumstances including bankruptcy, mental incapacity, absence from three consecutive meetings without leave, ceasing to be a Baptist Church member, becoming an employee of the Trust or Baptist Union, or removal by Assembly resolution or by-laws (s 9). The Trust itself is the central actor, holding all trust property and exercising statutory powers. Congregations affiliated with the Baptist Union are affected because the property they use is held by the Trust on their behalf; they must give directions under s 42 for major decisions, and they are subject to the s 29AA provisions if membership falls below ten. Individual members of congregations are affected as they must vote on directions to the Trust, and the Act sets procedural requirements for those meetings (s 42). District Associations are affected because they can also give directions (s 43) and property may be held on their behalf. The Baptist Union is affected because it retains a supervisory role: the Executive Committee can give directions to the Trust (s 22(1)), consents are required for certain actions (e.g., s 19(2) for trusts imposed otherwise than by the Act; s 41 for altering trusts), and the Baptist Union assumes functions for dissolved or dispersed congregations (s 29) and small congregations (s 29AA). The secretary and deacons of congregations are affected by service of notices (s 28(3)). Existing trustees of congregational property are affected by s 18, which allows property to be transferred to the Trust with their consent or, if disabled, the President’s consent. The President of the Baptist Union and members of the Executive Committee have evidentiary functions (s 35(3)). Purchasers, mortgagees, lessees and other persons dealing with the Trust are protected by s 37 from any need to inquire into the propriety of the Trust’s exercise of powers. The Registrar-General and other registering authorities are also exonerated from inquiry (s 37). Employees and officers of the Trust (s 12) may be appointed and remunerated. In essence, the Act governs the entire Baptist denominational property holding system in New South Wales, touching congregations, their members, trustees, the Baptist Union, the Trust itself, and third parties dealing with the Trust.

The Act imposes duties on the Trust and confers rights on congregations, the Baptist Union, and third parties. The Trust’s primary duty is to hold and manage trust property in accordance with the Act and the terms of any trust (s 22(2)). It must ensure that expenses incurred in dealings with trust property are paid out of trust property, other than land (s 22(6)). When dealing with trust property held for a congregation, the Trust must act in accordance with the congregation’s directions for sale, mortgage, lease, repair, alteration, enlargement, demolition, or rebuilding of church buildings, schools, or manses (s 22(2)(g), s 22(4)). For property held for a committee or agency, the Trust must act as trustee at the committee’s request (s 17(2)). The Trust has the right to request directions from the Executive Committee (s 22(1)). It may borrow money by mortgage over trust property, but if borrowing at the direction of a congregation, only for specified purposes (s 22(2)(f), (5)). It may invest money in a common fund or separately (s 23(1)), and charge a management commission at a rate fixed by the Executive Committee (s 24(1)). It may act as executor or trustee in certain circumstances (s 27). It may decline to act as trustee for property not vested by ss 16-19 (s 30(1)). Congregations have the right to give directions to the Trust on matters affecting property held on their behalf, subject to the procedural requirements of s 42. District Associations have a similar right under s 43 with a three-quarters majority requirement. Congregations with between 10 and 20 members require Executive Committee consent before a direction can be given (s 42(1)(b)). Congregations also have the right to direct payment of money to their secretary or treasurer (s 22(7)). The Baptist Union has the right to exercise trust property functions for dissolved or dispersed congregations (s 29) and congregations with fewer than ten members (s 29AA), subject to consultation and time restrictions on sales. The Executive Committee has the power to alter trusts by resolution with Trust consent when it becomes impossible or inexpedient to carry out the original trusts, provided the new purposes are as nearly as possible the same (s 41). Third parties dealing with the Trust have the right to rely on a receipt under seal or signed by authorised persons (s 36) and are exonerated from inquiring into the necessity or propriety of the Trust’s actions (s 37). The Trust may also issue certificates as prima facie or conclusive evidence of certain matters (s 35).

The Act does not create criminal offences or prescribe fines or imprisonment for non-compliance. Its enforcement mechanisms are civil and administrative. The primary enforcement tool is the Trust’s power to mortgage or sell trust property to recover money owed to it, where a congregation fails to pay money that the Trust has paid on its behalf. Under s 28, if the Trust pays money because it complied with a congregation’s direction or lawfully incurred liability on behalf of the congregation, and the congregation does not reimburse the Trust within six months of a written notice served personally on the secretary or deacon (or, if none, on two members and affixed to the church building , s 28(3)), the Trust may mortgage or sell any trust property held for that congregation and apply the proceeds to the debt, interest and expenses (s 28(1)). Any residue remains held for the congregation (s 28(2)). This is a statutory power of sale that does not require a court order. The Act also provides for vacation of office of a Trust member as a consequence of certain events: death, resignation accepted by the Trust, bankruptcy, mental incapacity, absence from three consecutive meetings without leave, removal by Assembly resolution after the member is given an opportunity to address the meeting, ceasing to be a Baptist Church member, becoming an employee of the Trust or Baptist Union, or removal by by-laws (s 9). These are automatic or resolvable consequences that do not involve court enforcement. The Trust is indemnified out of trust property for expenses and liabilities incurred by members and other persons bona fide exercising functions under the Act (s 38). The Act does not provide for disputes between congregations and the Trust to be resolved by any external tribunal; presumably such disputes would be resolved through civil proceedings in the Supreme Court of New South Wales, which has jurisdiction over trusts. The Trust may sue and be sued for the purpose of ascertaining whether property is trust property and the trusts upon which it is held (s 40(2)). The evidence provisions (s 35) give certificates of the Trust or the President and Executive Committee certain evidentiary weight, which could be relevant in litigation. The Act also provides that nothing in it deprives a person of rights arising out of contract or tort that were vested immediately before the appointed day, and those rights may be enforced against the Trust (s 5).

The Act interacts with several other statutes. It expressly references the Baptist Union Incorporation Act 1919 (the Incorporation Act) as the source of the Baptist Union’s constitution, the by-laws, and the doctrines in Schedule A (s 4(1)). Section 16(2)(a) provides that vesting includes property held under s 10 of the Incorporation Act, and s 16(7) confirms that nothing revives trusts extinguished by s 11 of the Incorporation Act. The Trust’s investment powers under s 23(2)(a) allow investment in any manner in which trust money may be invested by a trustee under the Trustee Act 1925, or any other Act or any Act of the Commonwealth or a State or Territory. The Trust may also invest in accordance with orders of the Supreme Court under s 23(2)(c). The Act interacts with the Real Property Act 1900: s 35(2) provides that a certificate under the Trust’s common seal is conclusive evidence for the purpose of an application to be registered as proprietor of land vested by the Act. Section 16(2)(b)(ii) expressly excludes land under the Real Property Act (folio Volume 7037 Folio 147) from vesting. The Stamp Duties Act 1920 is relevant: instruments executed only for purposes ancillary to the vesting under s 16(1) are not chargeable with stamp duty (s 16(6)). The Associations Incorporation Act 2009 is excluded: Schedule 2 to that Act does not apply in relation to trust property (s 44(1)), which means the statutory vesting provisions for incorporated associations do not override the Act’s vesting regime. The Interpretation Act 1987 applies generally: s 12 officers and employees of the Trust provision is without affecting the generality of s 50 of the Interpretation Act (s 12(2)), and the Trust’s general powers under s 21(1) are also without affecting the generality of s 50 of that Act (s 21(1)). Schedule 4 contains transferred provisions from the Saint Andrew’s Cathedral Site Agreements and Central Baptist Church Act 1936, and by s 4(3) the Act does not affect the operation of that Schedule. Clauses 1 and 2 of Schedule 4 re-enact sections 8 and 9 of the repealed Act and are transferred provisions to which s 30A of the Interpretation Act 1987 applies (Sch 4 cl 3). The Mental Health Act 1958 is referenced as a ground for vacation of office for Trust members who become patients or protected persons (s 9(d)). The Act also preserves rights arising out of contract or tort against the Trust (s 5). The by-laws made under the Incorporation Act can make provision for election, admission, retirement and removal of Trust members and regulation of the first meeting (s 11).

The Act has been amended on multiple occasions. The original Act was assented to in 1984 and commenced on a day to be proclaimed. Section 3 was repealed by 1999 No 31, Sch 5.10. The Act was amended by the Statute Law (Miscellaneous Provisions) Act 1987 No 48, Sch 32, which affected ss 12 and 21. In 1990, amendments were made by 1990 No 46, Sch 2 (affecting s 34) and 1990 No 99, Sch 4 (affecting s 9(d) to repeal and update mental health references). Major amendments were made by the Baptist Churches of New South Wales Property Trust (Amendment) Act 1992 No 76, which inserted s 21A (certain property held in trust), substituted s 29A (dissolution or dispersal of an organisation), inserted s 44 (Associations Incorporation Act provisions not to apply), inserted s 45 and Schedule 3 (savings and transitional), and made other changes to ss 21, 22, 25, 26, 30, 33. The 1992 amendment also inserted a saving provision for the repealed s 30(2) in Schedule 3. In 2009, the Associations Incorporation Act 2009 No 7, Sch 3.1 amended s 44 to update the reference from the old Associations Incorporation Act 1984 to the 2009 Act. In 2011, the Statute Law (Miscellaneous Provisions) Act 2011 No 27, Sch 3.1 inserted Schedule 4 (transferred provisions from the Saint Andrew’s Cathedral Site Agreements and Central Baptist Church Act 1936) and amended s 4(3) accordingly. In 2013, two amending Acts affected the Act: 2013 No 27 (Baptist Churches of New South Wales Property Trust Amendment Act 2013) and 2013 No 47 (Statute Law (Miscellaneous Provisions) Act 2013). The 2013 No 27 amendments were substantial: they inserted s 29AA (Baptist Union temporarily has trust property functions of congregations with small membership), substituted s 29 (Baptist Union temporarily has trust property functions of dissolved congregations), amended s 42 (directions of congregation to Trust) to insert the 75% majority and 10-person minimum requirement, replaced the quorum and majority provisions, and made associated changes to ss 4, 22, 28, and 43. The 2013 No 47 amendment (Sch 2.2) made a minor amendment to s 4. In 2017, the Statute Law (Miscellaneous Provisions) Act 2017 No 17, Sch 4.3 amended s 34 to repeal subsections (2) and (3) dealing with Crown grant conditions. The Act has not been the subject of a major consolidation; section numbers and Schedule references reflect the current in-force version as at the date of this analysis.

The Act itself does not record any specific litigation history. No cases are cited in the text of the Act. However, the Act provides several evidentiary provisions that would be relevant in any litigation concerning trust property. Section 35(1) makes a certificate under the Trust’s common seal that property is held on trust for the Baptist Union, a committee or agency, or a Baptist Church or District Association prima facie evidence in any civil or criminal proceeding. Section 35(2) makes a certificate under seal conclusive evidence for the purpose of an application to be registered under the Real Property Act 1900. Section 35(3) makes a certificate signed by the President and two Executive Committee members conclusive evidence of determinations about objects, district boundaries, whether property is within a district, whether a congregation exists or has been dissolved, or whether a congregation has fewer than ten members. In proceedings, such certificates would be difficult to challenge given their conclusive evidentiary weight. Section 42(5) provides that a declaration in writing signed by the chairman that a resolution was passed by the required majority is prima facie evidence unless a poll is demanded by at least five members. Section 43(3) has a similar provision for District Association meetings. Section 5 preserves rights of action in contract or tort that existed before the appointed day, meaning that the Trust can be sued on pre-existing claims. Section 40(2) expressly permits the Trust to sue and be sued for the purpose of ascertaining whether property is trust property and the trusts upon which it is held. This suggests the Act contemplates that declaratory proceedings may be brought. Section 37 protects purchasers, mortgagees, lessees and others dealing with the Trust from being concerned to inquire into the necessity or propriety of the Trust’s exercise of powers, and they are not affected by notice that the exercise is unauthorised, irregular or improper. That provision would likely be pleaded as a defence in any challenge to a transaction. The Act also provides for service of legal process on the secretary of the Trust or a person authorised to accept service (s 39). There is no internal dispute resolution mechanism; any disputes between congregations and the Trust, or between the Trust and the Baptist Union, would be resolved in the ordinary civil courts.

Several provisions in the Act contain traps that practitioners should watch for. First, the definition of congregation in s 4(1) requires three elements: names on a roll or register, holding the doctrines in Schedule A to the Incorporation Act, and habitually meeting for public worship. A group that does not meet all three is not a “congregation” under the Act, and the Trust may not hold property on behalf of such a group as a congregation. Second, the direction-giving process under s 42 is highly prescriptive. A resolution is passed only if 75 per cent of personal votes of members aged 18 or over who are present and vote are in favour, and at least ten persons vote in favour (s 42(4A)). This double requirement means that even if 75 per cent vote in favour, the direction fails if fewer than ten people vote. For congregations with between 10 and 20 members, Executive Committee consent is also required (s 42(1)(b)). The notice requirements are strict: the notice must be posted on the door or notice board on at least two successive Sundays before the meeting, and read during part of the public worship services on those Sundays (s 42(3)). However, a notice sent by prepaid post to each voter at least five and not more than 21 days before the meeting can substitute for the reading requirement (s 42(7)), but not for the posting requirement. Accidental omission to give notice does not invalidate a resolution (s 42(9)). Third, for congregations with fewer than ten members (s 29AA), the congregation loses all functions with respect to trust property; the Baptist Union assumes those functions but must consult the members (s 29AA(2)-(3)). However, for the first two years of the small membership, the Baptist Union cannot direct a sale and the Trust cannot sell unless the members consent (s 29AA(4)). This creates a two-year standstill period. Fourth, for dissolved or dispersed congregations, s 29 imposes a six-month moratorium on sales: the Baptist Union may not direct a sale and the Trust must not sell during that period (s 29(3)). Fifth, the Trust’s power to invest in company securities under s 23(2)(d) is limited: the company must have a paid-up capital of at least $5 million and have paid dividends of at least 5 per cent for the preceding ten years, and the total invested under that paragraph cannot exceed one quarter of total funds under the Trust’s control (s 23(3)). Sixth, the Trust may not exercise certain powers without consent of the Executive Committee: for example, acting as trustee for property subject to a trust imposed otherwise than by the Act requires Trust consent with Executive Committee concurrence (ss 19(2), 17(5)(c)). Seventh, s 30(1) allows the Trust to decline to act as trustee for property that would otherwise be vested in it, except property vested by ss 16, 17, 18, or 19. This means the Trust cannot refuse to accept property that vests automatically under those sections. Eighth, the Trust’s power to mortgage trust property under s 22(2)(f) is broad, but if the borrowing is at the direction of a congregation, the purposes are limited to those in s 22(5). A direction to borrow for an unlisted purpose would be invalid. Ninth, the repeal of s 30(2) by the 1992 amendment is not retrospective for directions given before the repeal (Schedule 3). Tenth, s 37 exonerates purchasers from inquiring into the propriety of the Trust’s actions, but this does not protect the Trust itself from liability if it acts in excess of power. Finally, Schedule 4 preserves the trusts and conditions from the Saint Andrew’s Cathedral Site Agreements and Central Baptist Church Act 1936; anyone dealing with those lands must refer to the Fourth Schedule of that Act for the specific trusts.

Compliance with the Act requires different steps for different actors. For the Trust itself, the primary compliance obligation is to hold trust property in accordance with the Act and the terms of any trust. The Trust must maintain proper records of all property held, including the identity of the congregation or other body for whose benefit it is held. It must ensure that any direction from a congregation is properly given under s 42: verify that a resolution was passed by a 75 per cent majority with at least ten votes, and that if the congregation has between 10 and 20 members, the Executive Committee has consented. The Trust should obtain the written declaration of the chairman under s 42(5) as prima facie evidence and keep it on file. When exercising its powers, the Trust must respect the limitations in s 22: for example, if borrowing at a congregation’s direction, ensure the purpose falls within s 22(5); if selling property held for a congregation, act in the manner directed by the congregation; if repairing or demolishing a church building, school or manse, obtain a direction from the congregation under s 22(4) unless the matter is determined minor by the Executive Committee. The Trust should ensure its common seal is used properly: affixed only pursuant to a resolution, signed by two members and countersigned by the secretary (s 13(2)). For investments, the Trust must comply with the prudential limits in s 23, especially the 25 per cent cap on equity investments under s 23(2)(d). It must keep the common fund books showing the current amount credited to each trust (s 23(5)). The Trust should also charge the management commission at the rate fixed by the Executive Committee and allocate income ratably under s 24.

For congregations, compliance means following the s 42 procedure before purporting to give any direction to the Trust. This includes: holding a meeting with proper notice (two Sundays posting plus reading in services, or posting plus mailed notices), ensuring the chair is chosen by majority vote and has no casting vote (s 42(4)), and ensuring the resolution achieves the 75 per cent/ten-person threshold. Congregations must also keep their membership roll current so that eligibility to vote can be determined. If a congregation has fewer than ten members, it must recognise that it no longer has the power to direct the Trust regarding trust property; the Baptist Union assumes that function, but the congregation members should be consulted (s 29AA(3)). The congregation should also ensure its secretary and deacons are aware that they may be served with notices under s 28, and should respond promptly to any notice from the Trust seeking reimbursement.

For the Baptist Union and Executive Committee, compliance requires issuing determinations as needed (e.g., district boundaries, minor matters under s 22(4)), consenting to directions from small congregations (s 42(1)(b)), and when assuming functions for dissolved or dispersed congregations under s 29 or small congregations under s 29AA, respecting the moratorium periods on sales. The Executive Committee must also fix the management commission rate (s 24(1)) and may need to consent to the Trust acting as trustee for property subject to external trusts (ss 19(2), 17(5)(c)). The by-laws regulating Trust membership must be made and kept consistent with the Act (s 11).

Practitioners advising parties should always check the current by-laws and any Executive Committee determinations. They should also be aware of the interaction with the Incorporation Act and the Real Property Act. For any transaction involving trust property, obtaining a certificate under s 35 can provide evidentiary certainty. Finally, all parties should keep in mind that the Act provides indemnity out of trust property for members and others bona fide exercising functions (s 38), but that indemnity does not extend to deliberate wrongdoing.