Bishop Irinej Dobrijevic v Free Serbian Orthodox Church, Diocese for Australia & New Zealand Property Trust (No. 2)

The case involved the Bishop Irinej Dobrijevic as the plaintiff and the Free Serbian Orthodox Church, Diocese for Australia & New Zealand Property Trust as the defendants. The dispute centred around the settlement of terms for a cy-près scheme for the administration of a charitable trust. Both parties proposed competing schemes, and the court was required to determine whether these proposed terms were in line with the earlier reasons for judgment and if they would lead to conflict. Additionally, the court needed to decide on the indemnity of the trustee for costs properly incurred, particularly in light of a prior breach of trust finding.

The court examined whether the proposed terms for the cy-près scheme adhered to the earlier reasons for judgment and whether they would be productive of conflict. It found that the proposed terms did accord with the earlier reasons and did not foresee any conflict arising from their implementation. Regarding the indemnity of the trustee, the court held that there was no reason to deprive the trustee of its right to be indemnified for costs properly incurred, despite the trustee’s prior breach of trust. The court reasoned that the trustee had sought and obtained judicial advice that it was justified in defending the proceedings, and its conduct during the defence was not open to criticism.

The court also addressed the issue of costs, considering whether the defendants unreasonably declined to accept the plaintiffs’ open offer of compromise. Although the issues at trial were distinct, they were not entirely severable in terms of evidence. The court noted that a significant part of the plaintiffs’ success was due to the Attorney-General’s submissions. In granting a stay of orders pending an appeal, the court found that the appeal raised arguable issues, and strong discretionary factors favoured a stay. The current religious organisation would suffer prejudice that would not be remedied by a successful appeal, and the court had to weigh this against the public interest in the administration of charitable trusts.

Ultimately, the court granted a stay of orders pending appeal, allowing the current religious organisation to retain control of the monastery until the appeal was resolved. This decision balanced the arguable issues on appeal, the potential prejudice to the current religious organisation, and the public interest in the proper administration of charitable trusts.