Christian Revival Crusade Inc v Milne

[2007] SADC 125

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil)

CHRISTIAN REVIVAL CRUSADE INC v MILNE & ORS

[2007] SADC 125

Judgment of His Honour Judge Tilmouth

27 November 2007

ASSOCIATIONS AND CLUBS - JURISDICTION OF THE COURTS - INTERFERENCE IN INTERNAL MANAGEMENT - GENERALLY

The plaintiff, a congregation of the Christian Revival Church Gawler, sues the defendant claiming that it unlawfully took steps to close the Gawler Church and to sell its land and buildings.   The defendant counter-claimed for orders entitling it to do both.

Held:

1.  The District Court has the jurisdiction to entertain these proceedings, as coming within its general contractual jurisdiction and consequently it has the power to make declaratory orders as a necessary incident of that jurisdiction.

2.  The issues in this matter are justiciable to the extent that they go beyond purely religious or internal management and concern questions of "ultra vires".

3.  CRC(Gawler) affiliated with CRC(SA) by the act of acceptance of the latter constitution and charter.

4.  State Executive of CRC(SA) validly appointed an "Advisory Council" in relation to CRC Gawler under Clause IX of the CRC Gawler constitution.

5.  The first defendant Milne was validly appointed public officer of the CRC Gawler.

6.  The appointment of an Advisory Council did not confer the power of indeterminate intervention, or subrogate to CRC(SA) the powers and functions of the Church Board and did not provide a direct power of closure of CRC Gawler.

7.  The Advisory Council and/or the State Executive in right of the CRC Gawler Church Board, were entitled to authorise and effect the sale of the land, once the obligations of disclosure, consultation and compliance with the due process provisions of the constitution were satisfied and the obligations of natural justice fulfilled.

8.  No validly held meeting or AGM of CRC Gawler was held and as a result no office holders were duly appointed.

District Court Act 1991 (SA) ss8, 37; Associations Incorporation Act 1985 (SA) ss 23, 25, 26, 40, 41, 43A, 44, 61; Supreme Court At 1935 (SA) ss17 and 31; Sherriff v Dudley (2000) 77 SASR 592; Popovic v Tanasijevic [2001] SASC 289; Cameron v Hogan (1934) 51 CLR 358 ; Plenty v Seventh-Day Adventist Church of Port Pirie (1986) 43 SASR 121; Ex rel Ashelford (1948) 78 CLR 224; In Re Wages and Working Conditions of Persons Employed as Clerks and Clerical Workers [1941] SASR 65 ; Green v Page [1957] TAS SR 66; Scandrett v Dowling (1992) 27 NSWLR 483; Solowij & Ors v The Parish of St Michaels & Ors (2003) 224 LSJS; Millar & Ors v Houghton Tablet Tennis Sports Club Inc (2003) 225 LSJS 241; Pacific Carriers Ltd v BNP Paribas (2004) 218 CR 451; Toll (FGCR) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579; Annetts v McCann (1990) 170 CLR 596; Wylde v Attorney-General (NSW) (1986) 43 SASR 121, referred to.
MacQueen & Ors v Frackelton (1909) 8 CLR 673; Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 205; Griffiths v ANZ Banking Group Ltd (2002) 83 SASR 491; Re Merchants and Shippers' SS Co Ltd & Green v Page (1916) 17 SR (NSW) 21 at 27-28; Bishop of Natal v Gladstone (1866) 3 LR Eq 1; Attorney-General; Ex rel Elisha v Holy Apostolic & Catholic Church (1989) 37 NSWLR 293, applied.

CHRISTIAN REVIVAL CRUSADE INC v MILNE & ORS
[2007] SADC 125

Preliminary

1. The very survival of the Gawler Christian Revival Church is at stake in these proceedings.  A central question calling for resolution, is the validity of a purported Annual General Meeting of the plaintiff, Christian Revival Crusade Gawler Incorporated, of 22 October 2006.  The importance of that meeting, and its potential consequences, arise against the background of quite a long history that will require some examination.

2. Although it and the fourth defendant CRC Churches International South Australia Incorporated have endured several name changes over the years,[1] for the sake of simplicity it is convenient to refer to them throughout as CRC Gawler and CRC (SA) respectively.  The plaintiff was incorporated on 7 October 1977.[2]  It is also the registered proprietor of an estate in Fee Simple of the land and buildings located at 28 Hillier Road Evanston, on which it has erected a church and associated buildings and where the congregation gathers for services and other conventional church activities.    Evanston is a suburb of Gawler, a township to the north of Adelaide. 

   [1] Refer Exhibit D2V1 pp 43-45.

   [2] Pursuant to the Associations Incorporation Act 1985 (SA).

   The issues arising from pleadings 

3. First it is necessary to detail the nature of the proceedings and deal with a preliminary issue they have generated.  The parties are in dispute over the fate of the assets of CRC Gawler, especially the land and the Church.  CRC Gawler claims the right to possess and occupy both.  It seeks declarations that certain named persons are officers or members of CRC Gawler, that CRC (SA) has no interest in the property, delivery up of the common seal and certificate of title, together with other items of property allegedly removed from the Church, damages and the taking of accounts.  Although the primary relief sought is declaratory in nature, it can be seen that subsidiary aspects of the proceedings are framed in tort and detinue.  The declarations sought essentially turn on the interpretation of the respective constitutions of both incorporated bodies.  

4. For its part CRC (SA) seeks declaratory relief to the effect that it is now the governing body of CRC Gawler, is authorised to sell the subject land, that certain named persons are or are not members or Board members of CRC Gawler and orders restraining certain third parties from interfering with the proposed sale.

5. It has also brought third-party proceedings seeking identical relief, but that can be more appropriately postponed for discussion later in these reasons.  An order was made at the beginning of the trial to try the issues raised between the plaintiff and the defendants separately from the third party proceedings, under Rule 27 of the 1987 Rules and/or Rule 211 of the District Court Civil Rules 2006.  The third-party proceedings were therefore adjourned, by consent of all parties, pending resolution of the issues in the primary action. 

6. There were originally thirteen third-parties.  As against one, the defendants have discontinued; against four they have signed consent orders; two cannot be located and have not therefore been served with proceedings and one (it is agreed) is a person under disability. As a result, third-party proceedings remain against five active participants, Shane Streeter, Tracey Stevens, Maud Rowton, Terry Stevens and Susan Stevens, respectively the fourth, fifth, eighth, ninth and tenth third-parties.  Maud Rowton is the mother of Susan Stevens and Terry Stevens is her husband.  Tracey Stevens is their daughter and of course, grand daughter of Maud Rowton.  They were the only witnesses called by the plaintiff in the primary proceedings. They had begun attending the local Church from around 1978.

7. The first defendant Neil Milne, and CRC(SA) filed common defences.  They attack the justicability of the issues raised in the proceedings, the standing of the plaintiff to bring them and claim the plaintiff is wrongfully and illegally in possession of the subject property.  The second defendant asserts the governing body is now the State Executive of CRC (SA) and that it is duly authorised to effect the sale of the Hillier Road property.  They further assert valid decisions were made to close all church activities of CRC Gawler, to appoint the first defendant as public officer and to manage its property and business affairs on behalf of the State Executive of CRC (SA).  They also claim one of the third-parties, Tracey Stevens, is unlawfully occupying the Manse on the property and has done so since September 2006 and they seek an account for rent from those occupying the land in the meantime.

8. Further, it is alleged that on or after 27 October 2006, various persons wrongfully took possession and exercised control over the Hillier Road premises without their permission.  Finally the defendants complain that the purported resolutions of 22 October 2006 were not resolutions, or valid resolutions, of the Gawler CRC.

   Jurisdiction

9. At the outset and again on the second day of the hearing, the court raised with the parties the question of jurisdiction, given that both claim principally declaratory relief.  Both vigorously maintained this court had the necessary jurisdiction to hear the matter and to make orders in the nature of those sought, even though essentially declaratory.

10. The District Court of South Australia is invested with limited jurisdiction to proceed by way of declaratory judgment pursuant to s37 of the District Court Act 1991 (SA), which provides:

    DECLARATORY JUDGMENTS

    37. The court may, on matters within its jurisdiction, make binding declarations of right whether or not any consequential relief is or could be claimed.

    This section does not confer original jurisdiction to makes such orders; it merely confers a derivative or accrued jurisdiction.  That is, the power to enter declaratory relief depends on the jurisdiction of the court being first enlivened by a cause of action otherwise within its jurisdiction.  

11. These proceedings were commenced in the civil division of the court,[3] a jurisdiction conferred primarily by s8(1) of the District Court Act.  With certain qualifications not relevant to these proceedings, it provides:

    [3] Ss7(a) and 8(5) District Court Act.

    DIVISION 3 – JURISDICTION OF THE COURT

    Civil Jurisdiction

    8(1)     The Court has the same civil jurisdiction (both at law and in equity) as the Supreme Court at first instance … .

12. The jurisdiction of the Supreme Court includes a like jurisdiction formerly “vested in, or capable of being exercised by … the High Court of Chancery, both as a common law court of equity and the Court of Queens Bench”: s17(2)(a)(i) and (ii) of the Supreme Court Act 1935 (SA). This embraces both contractual and tortious claims.

13. No specific civil jurisdiction to resolve disputes relating to incorporated associations is otherwise “conferred by statute” on this court: ss (8)(4) of the District Court Act.  Indeed several sections of the Associations IncorporationAct 1985 (SA) expressly confer powers on the Supreme Court to make various orders with respect to quite specific subjects touching incorporated associations, including s24A (variation of rules), s41 (winding up), s41A (appeals from decisions receivers, liquidators and managers), s43 (distribution of surplus assets on winding up), s61 (oppressive or unreasonable conduct – subject to the Magistrates Courts jurisdiction in the case of “Minor Statutory proceedings”) and s62A (orders against persons concerned with associations involved in fraud, default, breach of trust or breach of duty).

14. The Associations IncorporationAct is otherwise silent in relation to questions concerning the interpretation of the constitution of incorporated associations, as to the resolution of disputes between members, or as between members and the association.  It falls short of vesting exclusive jurisdiction on the Supreme Court relating to all aspects of incorporated associations.  The only mention this Court receives in the Associations IncorporationAct occurs in relation to the supervisory jurisdiction exercised in its Administrative and Disciplinary Division, with respect to administrative decisions of the Corporate Affairs Commission made under the Act (s50).[4]

    [4] As in for example Konrad t/as Let's Trade v State Business & Corporate Affairs Office (1993) 173 LSJS 100.

15. Section 8 of the District Court Act[5] has the effect of vesting this court with unlimited concurrent jurisdiction with that possessed by the Supreme Court, over contractual and tortious claims, amongst others.  The choice of forum is left to the initiating party, a decision dictated for the most part by the cost sanctions applicable should a plaintiff fail to achieve a judgment above certain specified amounts, in actions of this kind $75,000: R 263(2)(h) Supreme Court Civil Rules 2006.

    [5] Above.

16. There are material differences in the jurisdiction of both courts. As the superior court of record sitting as the highest court of general jurisdiction in this State, the Supreme Court enjoys an unfettered jurisdiction to make the declaratory orders, by virtue of s31 of the Supreme Court Act.  It also retains the power to construe instruments through the mechanism of a “construction summons”.[6]  In contrast, the District Court of South Australia as an inferior court of record,[7] has no such jurisdiction in either respect. 

    [6]    Rule 63 1987 Supreme Court Rules, Rule 96 Supreme Court Civil Rules 2006.

    [7]    Supreme Court Act (above) s6 and District Court Act (above) s5.

17. There is no doubting that plaints issued by members of incorporated bodies may raise justiciable issues capable of resolution by courts of competent jurisdiction: Plenty v Seventh-Day Adventist Church of Port Pirie.[8]  Two particular heads of claim relevant here include those relating to propriety interests in property and the enforcement of the consensual compact embodied in the respective constitutions of the CRC parties, which may operate to create enforceable contractual rights.[9]  Another facet of the claim is one properly described as a denial of the “enjoyment to church recreational property”.[10]  

    [8] (1986) 43 SASR 121.

    [9]    As Matheson J pointed out at p 139 in Plenty v Seventh-Day Adventist Church of Port Pirie (above).

    [10]   As Olsson  J pointed out at p 143 in Plenty v Seventh-Day Adventist Church of Port Pirie (above).

18. As a general rule, a voluntary association of persons furthering a common interest, be it “social, sporting, political, scientific, religious, artistic or humanitarian in character” creates entirely personal as opposed to enforceable rights, Cameron v Hogan.[11]  When it comes to purely religious issues, the courts ordinarily treat such matters as intending to bind only the conscience: Rose & Frank Company v JR Crompton & Brotheas Ltd[12] and Scandrett v Dowling[13].

    [11] (1934) 51 CLR 358 at 371, following Murdison v Scottish Football Union (1896) 23 R (Ct of Sess) 449.

    [12] [1923] 2 KB 261.

    [13] (1992) 27 NSWLR 483.

19. It was strongly urged by both parties that the primary cause of action invoked by them was contractual and thus one over which the court retains jurisdiction to entertain.   Of course their mutual consent cannot confer jurisdiction: Yirrell v Yirrell.[14] Both submitted their respective positions were amenable to the kind of declaratory relief permitted by s37 of the District Court Act (above). 

    [14] (1939) 62 CLR 287 at 295.

20. Reliance was placed on the well known dicta of Isaacs J in MacQueen and Ors v Frackelton,[15] a case involving the Presbyterian Church of Queensland.  It was held that the court could exercise jurisdiction to enforce a compact between the Church and its members in so far as civil rights were conferred by it.  Isaccs J wrote in that case:[16]

    [15] (1909) 8 CLR 673.

    [16] 8 CLR 673 at 704-705.

    There are certain recognized and well defined propositions which govern the consideration of this case, and these may be conveniently grouped together and stated at the threshold … .

    The first is this: that in the ascertainment and enforcement of rights and liabilities among its members, a Church is regarded by the law in precisely the same light as any other society of men who have entered into association for lawful purposes. Whether the objects be sacred or secular, whether for friendly, literary, scientific, or religious purposes the social compact is at once the source and the measure of the rights of those who compose the body. It is a pure question of contract, and contracts of this nature must be construed by the same methods as those by which all other contracts are interpreted. It may take various forms, it may be embodied in one instrument like a Constitution, or in many; these instruments if more than one may have varying importance, there may with the express written word be incorporated usages or unwritten practices, but these circumstances are incidental to all agreements, and when once the terms of the compact are collected, interpretation on ordinary lines follows, and determines the legal relations of the parties.

    The second proposition is of high importance having regard to some of the arguments presented. The contract must be looked to not merely to see what rights are granted to a member, but also to ascertain whether they may be lost, under what conditions and by what means.

    It was gravely, though as it appeared to me not confidently, argued that, inasmuch as the rights claimed by the respondent originated and existed entirely within the confines of the religious association, and could not possibly be exercised or enjoyed beyond the limits of the Church, they were ex natura entirely under the jurisdiction of the Church authorities, a jurisdiction unchallengeable in a Court of law. Needless to say no authority can be found to support so sweeping a contention. It is a universal claim for exclusive jurisdiction in the Church Courts. But these tribunals, though conveniently enough styled "Courts," are not Courts in the legal sense. They have no jurisdiction properly so termed. The law invests them with no coercive power, with no authority to issue process, or to declare, determine, or enforce rights, and they are strictly dependent for such so-called jurisdiction as they possess upon the consent of the parties who are subject to it.

    …

    All powers exercisable by the association, legislative, judicial, or administrative, if intended to bind its own members, must spring from their consent and do not arise from the authority of the general law.

21. The Full Court ruled in Sherriff v Dudley[17] that although section 8 of the District Court Act conferred concurrent jurisdiction with that possessed by the Supreme Court in actions brought at common law or in equity, it did not in matters expressly conferred by statute on the Supreme Court. Accordingly, an application for the removal of a caveat made pursuant to section 191 of the Real Property Act 1886 (SA) was beyond jurisdiction, as that was a subject specifically reserved for determination by the Supreme Court. In those circumstances, the court held that to construe section 8 so as to give the District Court such jurisdiction, “would be to deny the clear intention expressed in the Real Property Act”.[18] 

    [17] (2000) 77 SASR 592.

    [18] At 77 SASR at [36].

22. Perhaps of more significance to the present question, are the following obiter observations in Sherriff v Dudley:[19]

    [49] An example of the recent conferral of exclusive statutory jurisdiction on the Supreme Court is contained in the Associations Incorporation (Miscellaneous) Amendment Act 1997 (SA). Section 24A of that Act provides for an application to this Court to vary the rules of an incorporated association. (See also s 41B of the same Act.) Section 309 of the Co-operatives Act 1997 (SA) provides for the winding up of a co-operative by the Supreme Court. On the face of the Co-operatives Act the Supreme Court has exclusive jurisdiction. They are two examples of Parliament investing this Court with exclusive jurisdiction at first instance, subsequent to the proclamation of the District Court Act.

    [50] In my opinion s 8 does not operate to invest the District Court with all of the statutory jurisdiction given the Supreme Court. Clearly, s 8 does not pick up the statutory jurisdiction given the Supreme Court by the Jurisdiction of Courts (Cross-vesting) Act 1987 (SA). If it was otherwise the District Court could transfer a matter in the Supreme Court to another court. Mr Edmonds-Wilson, counsel for the plaintiff, agreed that the District Court may not have jurisdiction under that Act because of a contrary intention expressed in the Special Act.

    [51] That concession meant that the plaintiff's argument had to be understood as meaning that s 8(1) included in it a conferral of jurisdiction upon the Court of any exclusive statutory jurisdiction invested in the Supreme Court, unless the contrary intention appeared in the Special Act. That would mean, for example, that the exclusive jurisdiction given to this Court by s 103 of the Electoral Act 1985 (SA), constituting this Court as a Court of Disputed Returns, would also devolve upon the District Court. There is nothing in the Electoral Act to indicate otherwise. I cannot think that Parliament intended in such an oblique way to invest the District Court with that particular jurisdiction.

    [52] The better way to construe s 8 is to recognise that the section invests the District Court with the same civil jurisdiction both at common law and equity as the Supreme Court subject to the qualifications mentioned in the subsection. Otherwise the Supreme Court continues to have the exclusive jurisdiction invested in it by the Special Acts of Parliament giving jurisdiction to this Court. That would be consistent with the proposition that in construing State Acts:

    "there is a very strong presumption that the State legislature did not intend to contradict itself, but intended that both Acts should operate. In other words it will commonly be found that the appropriate maxim is not leges posteriores priores contrarias abrogant but generalia specialibus non derogant (per Fullagar J in Butler v Attorney-General (Vic) (1961) 106 CLR 268 at 276)."

    [19]   Lander J (Prior and Bleby JJ agreeing).

1. This conclusion was reached despite earlier comments in Churcher v Edwardstown Carpets,[20] to that effect that s8 was intended to confer jurisdiction on the District Court “in all civil matters which the Supreme Court has jurisdiction from whatever source the Supreme Court’s jurisdiction might derive”.

   [20] (1993) 60 SASR 503 at 508 per King CJ; see also Perry J at 519.

2. The decision in Sherriff v Dudley[21] was distinguished in Griffiths v ANZ Banking Group Ltd,[22] a case raising the jurisdiction of the District Court to make orders for possession of land pursuant to a registered mortgage, under Pt17 of the Real Property Act 1986 (SA). Doyle CJ concluded a claim of that kind was within the general civil jurisdiction of this court under s8(1) of the District Court Act, as it was not one conferred exclusively on the Supreme Court. 

   [21] Above.

   [22] (2002) 83 SASR 491.

3. After referring to a decision of this court suggesting s200 of the Real Property Act did not vest any jurisdiction in ejectment in the District Court under Pt 17,[23] the Chief Justice concluded: 

   [37] Accordingly, the only issue before me is whether, consistently with the provisions of Pt 17 of the RPA, the District Court has jurisdiction over an action for possession of land under the RPA brought by a registered mortgagee against a mortgagor alleged to be in default, the claim being brought in reliance on the provisions of the registered mortgage, and the power to bring "an action for recovery of the land" conferred by s 137 of the RPA, without invoking the procedure established by Pt 17 of the RPA.

   [38] In my opinion the District Court can exercise that jurisdiction. In my experience Pt 17 of the RPA has been understood as creating a form of summary relief, and as conferring jurisdiction in respect of that form of relief only, although possibly also permitting the court to decline to grant summary relief and to direct that the same application be dealt with in the ordinary way. In my experience Pt 17 of the RPA has not been understood to be the exclusive source of jurisdiction for the Supreme Court to entertain a claim for possession by a claimant whose claim falls within s 192 and therefore Pt 17 of the RPA. It has been generally considered that the Supreme Court exercises a general civil jurisdiction over claims to possession of land under the RPA, the jurisdiction arising relevantly from the terms of the registered mortgage and from the provisions of s 137 of the RPA, and that this jurisdiction exists apart from the particular statutory jurisdiction conferred on the Supreme Court by Pt 17 of the RPA. 

   ……..

   [44] Accordingly, I conclude that the provisions of Pt 17 of the RPA are not inconsistent with the existence of a general civil jurisdiction in the Supreme Court to hear and determine an action by the mortgagee of land under the RPA for possession of that land, the action being brought against a registered mortgagor alleged to be in default. Such a claim to possession is made under the terms of the mortgage and pursuant to the provisions of s 137 of the RPA. A claim of that kind is a claim within the general civil jurisdiction of the court. It is not a claim in respect of which jurisdiction is conferred exclusively on the Supreme Court by the RPA.

   [45] Accordingly, that jurisdiction is part of the civil jurisdiction of the Supreme Court at first instance conferred on the District Court by s 8(1) of the District Court Act.

   [46] It follows that the District Court can exercise jurisdiction over such a claim, and that the DCR may validly regulate proceedings in such an action. In particular, the DCR can provide for such a claim to be disposed of pursuant to an application under the DCR for summary relief. 

   [23] National Australia Bank Ltd v Trittenheim (2001) 215 LSJS 227; [2001] SADC 116.

4. It is somewhat surprising that there appears to be no decision directly on point.  The cases cited by the parties during the course of submissions were essentially instances of oppression:  in any event they did not consider the question of jurisdiction of this court.  There is one decision where orders were made for the management of an incorporated religious association, however the question of jurisdiction was not agitated.[24] 

   [24] Khmer Buddhist Assn of SA Inc & Ors v Ngon Nop & Ors [2005] SADC 40.

5. Considering the matter from first principles, the constitution of a voluntary association is a species of multilateral contract, forming a compact between it and its members:  MacQueen v Frackelton[25] and s23 of the Associations Incorporation Act.  The rules of the incorporated association are thus binding on its members: Popovic v Tanasijevic.[26]  In order to obtain any form of relief, a member of a voluntary association must “establish some breach of contract with him, or some interference with his proprietary rights or interests”: Cameron v Hogan.[27] 

   [25] Above.

   [26] [2001] SASC 289 at [46].

   [27] (1934) 51 CLR 358 at 370 and 384 and refer McPherson “Church as Consensual Compact, Trust and Corporation (2000) 74(3) ALJ 159 at 164-165.

6. Jurisdiction to resolve contractual disputes is undoubtedly conferred on this court, so that must necessarily encompass the jurisdiction to determine actions centering on disputes between members of incorporated associations or between them and the associations themselves.  To apply the expression employed by Isaacs J quoted above, this action involving questions – as we shall see - concerning what “rights are granted to … [members] … [and] … whether they may be lost, under what  conditions and by what means.”

7. There is no relevant qualification in s8 of the District Court Act (above) and no other qualification or limitation emerges from any other source.  Given the clear bestowal of jurisdiction on this court over contractual disputes in general, it is illogical to accept that this does not encompass actions of the present kind, simply because they happen to involve the interpretation or application to particular facts, of the constitution of unincorporated associations.  In that situation the remarks of Gaudron J in Knight v FP Special Assets Ltd (Knight's case)[28] are applicable (footnote omitted): 

   It is contrary to long-established principle and wholly inappropriate that the grant of power to a court (including the conferral of jurisdiction) should be construed as subject to a limitation not appearing in the words of that grant. Save for a qualification which I shall later mention, a grant of power should be construed in accordance with ordinary principles and, thus, the words used should be given their full meaning unless there is something to indicate to the contrary. Powers conferred on a court are powers which must be exercised judicially and in accordance with legal principle. This consideration leads to the qualification to which I earlier referred. The necessity for the power to be exercised judicially tends in favour of the most liberal construction, for it denies the validity of considerations which might limit a grant of power to some different body, including, for example, that the power might be exercised arbitrarily or capriciously or to work oppression or abuse.

   [28] (1992) 174 CLR 178 at 205, quoted with approval by Gleeson CJ, Gummow, Kirby, Hayne, and Crennan JJ in Mansfield v Director of Public Prosecutions for Western Australia (2006) 226 CLR 486 at [10].

8. Accordingly the conclusion must be that this court does have the jurisdiction to hear this matter as coming within the contractual jurisdiction of the court. Hence it also has the power to make declaratory orders as a necessary incident of that jurisdiction, under s37 of the District Court Act (above), as “declaratory relief is available on well established principles to vindicate a party’s rights under a contract”: Chiropractic and Osteopathic College of SA Inc v Struthers.[29] 

   [29] (1981) 97 LSJS 49 per King CJ at 51-52.

   History and structure of CRC Churches

9. Having resolved the question of jurisdiction, it becomes necessary to outline the history and structure of CRC Gawler and its relationship with CRC (SA). The following narrative is not, by-and-large, in dispute.  The Christian Revival Church has its genesis in Adelaide, where it was formed in 1947.  It has since expanded to all of the States and Territories of Australia, New Zealand, the Pacific, extensive parts of South East Asia and Africa, Japan and China. There are presently some eight hundred churches within its fold, about one hundred and fifty of them within Australia. 

10. CRC Gawler commenced in 1974 as what has been described throughout these proceedings as an “outreach” church.  It was initially established by the Brahma Lodge “mother” church, a situation described by counsel as a “church planting exercise”.[30]  At that time Brahma Lodge was overseen by Pastor Inglis.  He later became Senior Pastor at Gawler once it was established, and he remained in that position until 1987.  He was followed by Pastors Whyte (until 1991) and Hullah (until 1995). 

    [30] Transcript 257 L25. 

11. Vacant land was purchased by CRC (SA), effectively as Trustee for the proposed church.  Minutes of a State Executive meeting held on the 25 November 1975, record a loan at $24,000 was acquired for a three and a half acre property.[31]  The contract undated, proposed settlement for 30 January 1976.[32]  A certificate of title with respect to the property shows transfer was effected on 15 March 1976, subject to a registered mortgage of $16,000.[33]  The balance of the purchase funds were raised by members of the congregation at the time, most of it being donated by just three members of the congregation.[34] 

    [31]   Exhibit D2V1 p 4 (item 11). 

    [32]   Exhibit D2V1 p 5-8.  

    [33]   Exhibit D2V1 p 9-10. 

    [34]   Transcript 295 L1- L 8. 

12. The property was gifted to CRC Gawler on 24 July 1978,[35] which was incorporated on 7 October 1977. The act of incorporation entitled it to acquire and dispose of real and personal property, enter into contracts and borrow money: ss25 and 26 Associations Incorporation Act and clause V1 of the CRC Gawler constitution. 

    [35]   Exhibit D2V1 p 24-25. 

13. The Church was built during 1978 and 1979 and a manse comprised of a transportable home was placed there in October 1978.[36]  By this time it appears to have graduated from the status of an “outreach church” to that of a “local church”. Upon incorporation, it adopted a constitution in which the local Gawler congregation was collectively referred to as “the Assembly”.[37]  Clause 2 provided:

    The Assembly accepts the principles and objects set down in the Charter and Constitution of the Christian Revival Crusade Incorporated.

    [36]   Exhibit D2 V1 p59. 

    [37]   Exhibit D2V1 p 73.

14. The constitution refers to a membership of believers, based on specified religious criteria, comprising (amongst others) those who attend services regularly.  Formal membership was acquired once the attendees name was placed on “the membership list” and whose “application was approved by the Oversight of the Assembly”.[38]  Office holders were called “Elders”, their chairman being the Pastor of the Assembly, or nominee.  The Pastor as chairman was entitled to choose other members “to form the spiritual oversight” over the Assembly.[39] 

    [38]   Exhibit D2V1 p 73.

    [39]   Exhibit D2V1 p 74.

15. A second constitution of the Gawler church was adopted in 1992.[40]  It was not disputed that this was operative at all relevant times to the matters in issue between the parties.  Clause D recites that as a local church it was “self-governing,” “autonomous, having full authority to manage its own affairs” (Clause D(1)), whilst Clause D(2) recites that it was to be governed by “Overseers, Elders and Pastors”.[41]  The “leader’ of the Assembly was to be the “Senior Pastor” (clause 8.1). Prospective members were required to apply to “the Senior Pastor for membership,” an application that “must be approved by the Church Board”.[42] 

    [40]   T250 L5.

    [41]   Exhibit D2V2 p 7 (clause D).

    [42]   Exhibit D2V2 p 9

16. Of more significance, clause G headed “Denominational Affiliation” read:

    The Assembly accepts the constitution of the Christian Revival Crusade Incorporated in South Australia, and the Charter and National Constitution of the Christian Revival Crusade.[43] 

    This is the equivalent of Clause 2 of the superseded constitution. 

    [43]   Exhibit D2V2 p 9.

17. Officers comprised “members of the Assembly” (Clause IV).  The Church Board of the Assembly was defined to consist of a minimum of four persons “whose appointment shall be confirmed by the members at the Annual General Meeting as in Article III C(4) hereof”.[44]  That Board was said to be capable of exercising “full authority, namely legislative, executive and judicial power over all assembly matters”.[45]   The Assembly was to be financed by “tithes, freewill offerings and gifts” (Article 10) and fundraising activities had to approved by the Church Board, which was obliged to receive a statement of receipts and payments each month (sub Article 3).  Tithes derive from the Old Testament principle of contributing one tenth of income to the Church; very little came into the Gawler coffers by this means. 

    [44]   Exhibit D2V2 p 10, Clause VI A(2).

    [45]   Exhibit D2V2 p 11(clause A (5)). 

18. Significantly, for reasons that will become obvious, Article IX provided:

    IX     MATTERS UNRESOLVED

    In the event of circumstances occurring not envisaged or not resolvable according to this Constitution, any two members of the church Board may conjointly request and authorise the state Executive of the Christian Revival Crusade Incorporated in South Australia to appoint a minimum of three (3) members of the State Executive to resolve the impasse. These members of the State Executive shall be known as the Advisory Council, and their decision, by a simple majority, shall be final.

19. At this point it becomes necessary to say something of the organisation of CRC (SA).  In a constitution approved on 5 March 1998, the preamble and objectives record:

    PREAMBLE
    The Christian Revival Crusade in the State of South Australia has expression through ministers and local self-governing Churches, working together in a co-operative Fellowship which is based on mutual love and respect.

    PRINCIPLES AND OBJECTIVES
    The Organisation accepts the principles and objects set down in the Charter, the National Council Constitution and the approved policy documents of the Christian Revival Crusade.

20. The policy documents referred to therein are those appearing in exhibit D2V2 pp53 and 114 respectively.  Clause 4.1 provided a mechanism for “affiliation”.  Because of its bearing on the issues arising in this matter, it is quoted in full:[46]

    [46]   Exhibit D2V2 p 39 – 41.

    4.1  Affiliation

    4.1.1A letter of application regarding intention to join the Organisation should be submitted on the prescribed form and the State Executive may then accept such an application on being satisfied with:

    ·          The good faith and integrity of the applicants

    ·          The suitability of the local church constitution

    ·          The spiritual maturity of the constituted Oversight and Business Council/Finance Committee

    4.1.2These conditions also apply to any outreach church established through a recognised Christian Revival Crusade local church.  In this case the recognised local church concerned would submit an application for affiliation on behalf of the outreach church.  This would be done after consultation with the outreach church’s leadership team.  For the purpose of this clause it is deemed necessary that an outreach church would function for at least twelve months before lodging any such application.

    4.1.3Leaders of these works (sic) may sit in on State Council Meetings if nominated by the State Executive.

    4.1.4Two or more members of the State Council shall be appointed by the State Executive to oversee outreach churches that are not adequately covered by a mother church.

    4.1.5These State Council members should also have contact with the Oversights and the Business Councils/Finance Committees of these outreach churches as required.

    4.1.6Ideally there should be an average adult attendance at the main worship service of 30 adults in a metropolitan or country town of city status and 20 adults in a country township.

    4.1.7A minimum of 20 active adult members is required before they can qualify for recognition as a local church.

    4.1.8Upon the agreement of the outreach church concerned and the State Executive, in each case affiliation of such outreach churches with the Christian Revival Crusade will be confirmed.

    4.1.9The Christian Revival Crusade name cannot be used by these outreach churches until such time as official recognition as a local church has been granted by the State Executive.

    4.1.10A group may apply for affiliation with the Christian Revival Crusade as an outreach church.  This is in the case of a group not being able to reach the requirements of affiliation of a local church.

    As an outreach church the group would be required to come under the covering of an established Christian Revival Crusade local church or one or more members of the State Executive, for the purpose of building the group up to the point where a successful application can be made for affiliation.

    4.2Affiliated Churches

    Where an established affiliated local church falls below the requirements of affiliation, particularly pertaining to size and its capacity to provide ministry/oversight and to operate according to its own constitution, it would then revert to an outreach church.

    4.3Termination of Affiliation

    4.3.1The State Executive shall also have the right to terminate the affiliation of any local Church with the organisation, if such local Church be considered to have violated the Charter and/or Constitution of the Christian Revival Crusade National Council or this Constitution.

21. This combined structure, erected one of three models of governance common to religious denominations known as the “Presbyterian” model; the others are the hierarchal and the congregational models: Watson v Jones.[47]  Young J in Attorney General for New South Wales ex rel, Elisha v Holy Apostolic and Catholic Church of the East (Assyrian)Australia New South Wales Parish Association[48] described the Presbyterian model as one:

    where there is a succession of committees at national, regional and local level, so that the decision of the local congregation may, in appropriate cases, be overturned by that of a general assembly.

    [47] 80 US 679 (1871).

    [48] (1989) 37 NSWLR 293 at 315B and refer to Radmanovich v Nedeljkovic (2001) 52 NSWLR 641 at [173 –174] and see Solowij v The Parish of St Michaels; (2003) 224 LSJS at [141], [2003] SASC 48.

    Brief History of Gawler CRC

22. After building the Church the congregation grew to upward of a hundred members or more.  However there were a series of difficulties over the years leading to diminished attendances, to the point that by August 1996, the situation had become critical.  On 12 August two members of the congregation including Pastor Wilson, wrote to the State Chairman outlining a number of issues.  He spoke of a letter allegedly signed by 31 members and supporters “listing various grievances they have about Pastor Tim’s leadership” (being a reference to Pastor Tim Work, Senior Pastor from late 1995 to sometime in late 1996).  A formal request for State Executive assistance was made seeking intervention under Clause IX of the local constitution.[49] 

    [49]   Exhibit D2V1 pp 85-86. 

23. This prompted an open letter of response by the Chairman of the State Council, circulated at a meeting of the same date, Tuesday 13 August 1996.[50]  It is not altogether clear exactly how Gawler was managed thereafter, although the minutes of that date speak of “a new interim leadership team”.   At about this time Brett Jenkins become Senior pastor and Mr Hodges was appointed to assist him. 

    [50]   Exhibit D2V1 pp 88-89a.

1. At all events, difficulties came to the surface again in July 2001, when Pastor Jenkins wrote to all members of the congregation confirming his decision to relinquish his role as Senior Pastor, effective by 31 December 2001.  He speaks of beginning the search for a Pastor to replace him.[51]  There followed a meeting of 12 August 2001, of the Angle Vale Church.  The minutes support the Gawler congregation was “currently at thirty five people including children”.  They resolved to “discuss options with a view to amalgamation of the Angle Vale Community Church with the Gawler CRC…”.[52]  This resolution was reported to the state executive meeting of 17 October 2001:[53]

   After considerable discussion it was decided “The Executive do not disagree with the principle of a merger, however, we should only look at that if there is no possibility of a senior pastor coming in to lead Gawler CRC”.  Rather the preference is for two strong churches to co exist in this region.

   Within the next month we will see if any such person is available to pastor Gawler CRC.  If not then we will support their decision to merge.

   [51]   Exhibit P8 pp 179-180.

   [52] Exhibit D2V1 p 90 (item 4)

   [53]  Exhibit D2V1 p 95.

2. The evidence of Pastor Voortman on this topic, then and still now State Chairman for CRC (SA) and who was present at that meeting, was that: [54]  

   … we weren’t against the merger, but we had some concern…our preference was that at that point that both churches continue to function, and we expressed desire to pursue in all ways possible that a church in Gawler continue on”. 

   As a consequence, he wrote to Pastor Jenkins seeking to pursue the option of obtaining a Pastor for Gawler, concluding that: [55]

   … if there was no clear leadership available for the Gawler Church by the end of November, then we would see that the amalgamation path should be pursued”. 

   It was then proposed “the two churches would hold independent votes of their members to decide on an amalgamation.[56] 

   [54] T 390 L 36 – 391 L2.

   [55] Exhibit D2V1 p 99.

   [56] Exhibit D2V1 p99.

3. Thereafter, an extraordinary general meeting of CRC Gawler was held on 17 November 2001. The minutes suggest the third parties, Maud Rowton, Susan Stevens and Shane Streeter amongst others were present, when the proposal for amalgamation was discussed.  Certain questions about the procedure and consequences were explored.[57]  Amongst them was “what would happen to the property?”, the answer recorded being “assets to be passed on to a charitable organisation with similar purpose and objects”. An amalgamation proposal considering the same issue, supposed that “with due regard to wise handling of all assets, a new facility will be either bought or built, which will provide a better location from which to reach and minister to the region …”.[58]  Another prospect on the table was that the:

   “Eldership of the Merged Corporation may investigate and purchase a suitable combined facility. [T]hey may sell any real estate property in accordance with the Constitution of the Merged Corporation”.[59]

   [57]   Exhibit D2V1 p 103.

   [58]   Exhibit D2V1 pp 103 and 104 respectively.

   [59]   Exhibit D2V1 p 107 (clause 1 (c)).

4. As the course of events unfolded, by the time of a meeting of the State Executive of 20 and 21 November, there had been no expression of interest with respect to a new Pastor interested in Gawler.  A vote by a secret ballot of CRC Gawler of 2 December 2001 failed by one to reach the three quarter majority required under the constitution, even though the Angle Vale Church in a similar vote, recorded a ninety eight percent majority in favour of amalgamation.[60]

   [60]   T267 L32 – 268 L3. 

5. As a consequence, a number of members of the Gawler congregation left or resigned – the exact number is a matter of some conjecture.  In the aftermath the membership gradually fell to well below twenty. These resignations included two Pastors who left at the end of 2001, so that there was no duly elected board in existence.   The members of the Gawler CRC Board were Pastors Jenkins and Hodges, Jenkins wife and a Mr Jeff Phillips.  

6. The evidence was that by December 2001 the local Gawler church had as a consequence, reached somewhat of a crisis point, to the extent that Pastor Jenkins, who had been Pastor for five years, considered he could no longer lead the church. He tendered his resignation effective from December 2001.  There were attempts to find a Pastor to replace him, which failed. 

7. The fallout from the failed amalgamation therefore produced another turning point in the troubled history of the Gawler Church.  As noted already, Pastor Jenkins was due to retire along with his wife.  Pastors Hodges and Phillips left effective from 31 December 2001.  Another consequence was the resignations of no less than fifteen and probably nineteen or twenty members of the Assembly, many and if not most, electing to transfer allegiance to the Angle Vale CRC Church.[61]  

   [61] Exhibit D2V1 pp 262-282, Transcript 320 L31.

8. Pastor Voortman then wrote to the Gawler membership and adherents of Gawler CRC on 6 December 2001, stating:[62]

   In the light of the recent decision of the church not to merge with the Angle Vale CRC, and also in the light of the decision of both Ps Brett Jenkins and Kevin Hodges to leave the church by Sunday 23^rd December, I am writing to you to advise of the future directions for the CRC Church in Gawler.

   With the departure of these families together with various other members who have indicated to Brett their intention to leave the Gawler CRC by the 23^rd December, it is apparent that the membership of the CRC church at Gawler will fall below the Constitutional requirement of 20 adult members necessary to be an affiliated church of the CRC SA State Council and reverts to the status of an Outreach Church.

   Constitutionally then according to the SA State CRC Constitution, to which your church is accountable, the Gawler CRC Church will now come under the covering of the State Executive or its nominated CRC local church accountable to the State Executive, to take over the Oversight of the Church and give ongoing leadership and direction concerning its future.

   As such, we advise you that the church at Gawler forthwith will revert to the status of an Outreach Church and that we will work together with Brett over the next few weeks the transition of leadership.

   [62] Exhibit D2V1 p 114. 

9. This left a remaining congregation of around ten adult members, a fact noted by Pastor Jenkins in his letter to Pastor Voortman of 10 December.  That read in part:[63] 

   To assist you as much as possible in your deliberations over the future of CRC Gawler, I have compiled information regarding the people who have indicated their decision to continue their involvement in the church, and the likely financial position of the church to the end of January.

   Those continuing are members Graham and Marilyn Hicks, Susan Stevens, Maud Rowton, Jon and Julie Wade, Debra McCann, Chris Steadman, John Comley, Dot Pool and members Zeljko and Judy Skorup.

   …

   Regrettably, none in the list have been strong financial contributors (sic) to the church, with all but two being on some kind of pension or government support, and most resisting the principles of tithing.  My estimate of the regular weekly offering from these folk (based on past giving patterns in the church) would be around $35 in total.  Reducing known expenses to the bar minimum, and with no allowance for supporting ministry, annual expenses averaged weekly come to about $120.  With rental income from the manse (presently $110 per week) the church would possibly be able to hang on, but under severe duress.  The cash flow projection (enc) I have prepared shows a precarious position at the end of January.  I have also enclosed actual cash flow figures for January-November 2001 for an indication of current annual expenses.

   My concern is that this group has little real maturity, vision or motivation to grow, nor an understanding of what it takes for a church to function.  However, because of their stand they are tying up a sizable asset which could (and I believe should) be used to its maximum potential to reach the lost in our region.  Their main opposition to the merger proposal was their desire to retain “their” church, coupled to a strong underlying distrust of leadership. …

   [63] Exhibit D2V1 pp 116-117. 

10. That this must almost certainly have been the position is reinforced by the minutes of the Gawler CRC AGM of 15 December 2002, although the number of attendees was a little higher than that.[64]  It is also reinforced by Jenkins’ evidence in relation to the letter.[65]   The evidence points to somewhere around eleven or so remaining members, but on any reckoning there were certainly less than the twenty required to make up the minimum necessary to qualify for recognised local Church status.  Mr Whimpress in his final address did not seriously suggest otherwise.[66]   

    [64] Exhibit D2V1 p 156. 

    [65] Transcript 322 L36-T323 L8. 

    [66] Transcript 593 L25. 

11. A meeting of the State Executive of 20 February 2002 records that Gawler continued to hold Sunday services as well as other meetings, was still in need of a senior Pastor and was “overseen” by the St Agnes assembly.[67]  This situation continued through to April 2002.[68]  By June 2002 it was reported there were only ten people attending the church.[69] 

    [67] Exhibit D2V1 p 124.

    [68] Exhibit D2V1 p 127.

    [69] Exhibit D2V1 p 129.

12. However, by mid 2002 the day-to-day oversight was removed from St Agnes to the State Executive, effectively acting as the Advisory Council under CRC (SA).[70]  There was talk of updating the Constitution of Gawler and a meeting of the State Executive of 22 July 2002 records “IX MATTERS UNRESOLVED”.[71]  At that point in time Pastor Allen was providing representation for the Gawler Church on the Council.   It appears Pastor Allen administered interim pastoral care in 2003 as well as 2004. 

    [70] Exhibit D2V1 pp 131-132.

    [71] Exhibit D2V1 p 131.

13. There continued to be talk of “Adelaide overseeing the refiring of our Gawler … Church”,[72] and of reviewing the situation at Gawler by the end of the year. [73]  Minutes of the Annual General Meeting of Gawler CRC of 15 December 2002, record “the Church subsequently came under the covering of the CRC State Executive … because of insufficient numbers to be recognised as an independent assembly”.[74]  By February 2003 Gawler was said to be “going well”;[75] the same position was recorded at the meeting of 30 April 2003.[76]  A meeting of the “interim Management Team” of 30 October 2003 suggests “because of the difficulties of the past with people coming and going, new membership cards have been prepared and those wishing to be members had filled out new/renewed applications”.[77]  The AGM minutes for 2003 recorded about fifteen surviving members and the records for the 2004 AGM put the number at about sixteen.[78]

    [72] Exhibit D2V1 p 137 (State Executive 31 July 2002).

    [73] Exhibit D2V1 p 141, (Item 5). 

    [74] Exhibit D2V1 p 156.

    [75] Exhibit D2V1 p 160.

    [76] Exhibit D2V1 p 163.

    [77] Exhibit D2V1 p 166.

    [78] Exhibit D2V1 pp 166 and 185 respectively.

14. Nevertheless Gawler continued to survive, only just.  By March 2004 it was still looking for a Pastor.[79]  By April 2004 it was thought the vacant position should be advertised at the forthcoming National Conference of the Church.[80]  Then in May a Pastor Harry and his wife, from Victoria, expressed interest.[81]  They came to Adelaide at least twice, resulting in an official invitation issued in September “to take over the Senior Pastor’s position on 1 January 2005 for a small stipend of $110 per week”,[82] an offer unanimously accepted by the Annual General Meeting of Gawler CRC on 12 September 2004.[83]   It was at the same time endorsed by the State Executive.[84] 

    [79] Exhibit D2V1 p 169.

    [80] Exhibit D2V1 p 171.

    [81] Exhibit D2V1 p 172 and 175.

    [82] Exhibit D2V1 p 177 – 178.

    [83] Exhibit D2V1 p 185.

    [84] Exhibit D2V1 pp 179-180 and 182-184.

15. In the meantime, Pastor Voortman continued to express the State Executives’ view that “as the formal accountability has been as an ‘outreach church’ under the State Executive we would envisage this remaining so until the church grew to twenty five adults as per our CRC affiliation guidelines and a formal eldership is in place”.[85]  He corrected himself in evidence to say this should have been twenty – twenty-five  was a typing mistake.[86]  No issue was raised that Gawler was a “metropolitan or country town of city status” within the meaning of clause 4.16 of the Constitution of CRC (SA).

    [85] Exhibit D2V1 p 179, 27 July 2004.

    [86] Transcript 406 L29.

16. The Harrys had moved to Gawler by October 2004 and attended an Interim Management Committee meeting on 17 November that year.  At its subsequent meeting of 27 January 2005, he presented a draft “Vision Document” upon which he sought “feedback”.[87]  Coincidentally these minutes also record they were “quoted $300 to transport a keyboard and sound equipment … from Perth, the State Executive agreeing to pay half”.[88]

    [87] Exhibit D2V1 p 192.

    [88] Exhibit D2V1 p 192.

17. Unfortunately difficulties emerged early on during Pastor Harry’s tenure at Gawler.  Certain issues were raised at the Interim Management Committee Meeting of 17 March 2005 at which it was also noted the State Executive would reimburse the full cost of transport of the equipment from Perth, said to be valued at approximately $5,200.[89]  The evidence was that this equipment was removed later by the State Executive, hence the claim in detinue and for damages.  Further “concerns” were raised at the Committee Meeting of 23 June 2005.  By 27 June 2005 a deep rupture became evident between some members of the congregation and Pastor Harry. 

    [89] Exhibit D2V1 p 194.

18. Even though the parties directed some attention to certain telephone exchanges between Mrs Rowton, Susan Stevens and Pastor Harry about this time, it is not necessary to determine their precise content, except and insofar as bears upon the question of membership.  There is no doubt that during the morning of 27 June 2005 a telephone exchange occurred (for reasons reaming largely unclear), essentially between Mrs Rowton and Pastor Harry, with Mrs Stevens participating at times.  He regarded this as a “verbal attack” on him and from their point of view, he insulted them.

19. The point is however, that from this moment on, it was clear the relationship between many among the small congregation remaining and Pastor Harry, had effectively broken down.  This marked yet another decisive moment in the troubled history of the Gawler Church.  There was some dispute on the evidence whether they actually resigned at this time, but their actions speak louder than their words, as on all accounts they never returned.[90]  Whether they formally resigned or not is beside the point, as they fell into breach of the membership rules requiring them to “attend services as regularly as possible”: Article 111A(4).

    [90] Transcript T53L24, T96 L29-L37.

20. During the telephone call both Mrs Rowton and Mrs Stevens are alleged to have resigned, vowing never to set foot in the church again. By 27 June 2005 Pastor Harry considered, however, that he had “no option but to accept their resignation as members of the Christian Life Fellowship” whatever the precise situation in fact was.[91]  They denied in evidence resigning on this occasion, although it appears that somewhat heated words were exchanged and emotions were running high. 

    [91] Exhibit D2V1 p 224.

21. Whatever the situation, Pastor Milne wrote to them confirming the “outreach status of the church”, noted that “we are satisfied that at a personal level you both apologised to Pastor David Harry in regard to the abusive phone call”, that the State Executive was “still in the process of making a decision on this matter” and that until the matter was “fully resolved and a decision is made you consider visiting another Church in the area … (O)nce a decision has been made by the State Executive, we will advise you and confirm it in writing”.[92]  Four days later on 15 August 2005, Mr and Mrs Allan resigned from the Church.[93]  It was at about this time that Pastor Harry also communicated his intention to resign as he considered it was no longer “feasible and viable to continue”.[94]  As a result Pastor Voortman circulated a letter to the congregation on 19 August 2005 advising that at the next Executive Meeting “decisions would be made concerning the Church’s future direction in light of these and other recent events”.[95] 

    [92] Exhibit D2V1 p 225, August 11 2005.

    [93] Exhibit D2V1 p 226.

    [94] Transcript 356 L5. 

    [95] Exhibit D2V1 p 227.

    The “decision” to close Gawler CRC.

22. The circumstances led to a recommendation of the State Executive of 24 August 2005 to close the Gawler church,[96] a decision communicated to its members by Pastors Voortman and Milne in their letter of the same date.[97]  Because of its importance, it is necessary to set out a lengthy extract:

    To the Gawler CRC Church,

    It is with much sorrow and regret that at the State Executive meeting today the decision was made to close the CRC Church at Gawler effective immediately.  As such there will be no further services conducted.  This has been a difficult and reluctant decision to reach, given that for the past 4½ years during its status as an outreach church under the State Executive, we had hoped and prayed for the church to flourish.  The church’s reversion to that of an Outreach Church was effected on December 6^th 2001 in accordance with Items 4.1 10 and 4.2 of the CRC S.A. State Constitution.  At that time formal membership ceased and the Gawler CRC Incorporated came under the oversight and control of the CRC State Executive.  They then appointed an interim leadership team who effected the day to day running of the church on their behalf and were accountable to them.

    The church’s continued inability to reach the constitutional requirement of 20 adult members so as to become again an autonomous member church of the CRC in South Australia has led us to this decision.

    The CRC Executive will continue to act in a custodial role over the assets of the Assembly and maintain the legal identity of Gawler CRC Incorporated according to its constitution Item IIG and Item IX and the CRC State Constitution as mentioned previously.  The State Executive will ensure that the property is secure, maintained and all property outgoings are covered as well as overseeing and controlling all the Assembly books, finances and documentation.  Lease arrangements with the manse property will remain as at present.

    The State Executive will in due course make determinations concerning the Assembly assets but according to previous precedents set in similar situations in the winding up of CRC churches and in the spirit of the CRC Gawler’s constitution Item IV (4), Assembly assets would ideally be utilised for the future establishment of a new church in the Gawler area.

    [96] Exhibit D2V1 p 228. 

    [97] Exhibit D2V1 p 228 and 230 respectively.

23. From that point on, attention was mostly redirected to the fate of the Gawler Church and its property.  On 26 October 2005 the State Executive considered “further discussion [was] required as to the future of the property”[98] and on 15 February 2006 “directions for uses of property were discussed”.[99]  The matter was still under investigation by the time of the March 2006 meeting,[100] whilst on 31 May 2006 it was moved “that sale of Gawler site by tender be pursued through Lyn Andrews Real Estate …” and that the property needed insurance.[101]   These decisions were made in the belief that the interim arrangements going back to State Executive ‘intervention’ still pertained, permitting the Executive to make that decision under “clause 9 in the constitution”.[102]  As things stood, the local congregation and none of its members or attendees were told of the decision to sell until September or October 2006.[103] 

    [98] Exhibit D2V1 p 232.

    [99] Exhibit D2V1 p 235.

    [100] Exhibit D2V1 p 238.

    [101] Exhibit D2V1 p 240.

    [102] Mr Milne Transcript 503 L37-504 L15. 

    [103] Transcript 181 L2-L3. 

1. One of the third parties and attendee of the church Shane Streeter, wrote to the State Executive urging it to reconsider the decision to close and spoke of the unwillingness of Paster David Harry, “to listen to advise and an inability to communicate with the fellowship”.[104]  This letter was noted by the State Executive at its meeting of 15 February 2006 which resolved “the decision to close the church remains resolute”.[105] 

   [104] Exhibit D2V1 p 194.

   [105] Exhibit D2V1 p 235.

2. Matters came to yet another head through a letter of 15 August 2006 from Bolton’s lawyers, purportedly upon instructions from “the church board of the Christian Revival Crusade Inc” to Lyn Andrews Real Estate seeking to constrain the sale of the church.[106]  Mr Milne promptly responded the same day denying the authority of those concerned to instruct Boltons.[107]  He protested “the parties who you represent who are former attendees of the CRC Church at Gawler have, we understand, illegally entered the premises … this action was done without notification or authorisation and is, therefore, deemed to be illegal”.[108] 

   [106] Exhibit D2V1 p 249.

   [107] Exhibit D2V1 p 260.

   [108] Exhibit D2V1 p 255.

3. Subsequently an offer to purchase the property at $650,000 in December 2005 was increased to $700,000 by 23 August 2006.[109]  This was accepted by the State Executive on 7 September 2006.[110]  The evidence is that the proposed purchaser, one at arm’s length to the defendant, remains ready, willing and able to proceed with the transaction.[111]

   [109] Exhibit D2V1 pp 246-250.

   [110] Exhibit D2V1 p 254.

   [111] Exhibit D2V1 p 246 and 250, and T426 L13-L22.

4. Boltons lodged a caveat over the subject property on 23 August 2006 on the basis that the “CRC State Executive assume control of the assets of the caveator allegedly ultra vires to its own constitution” and further alleging “the caveator has not been consulted in regards to any disposition of its land”.[112]  An application to remove the caveat was lodged on 2 November 2006 and a summons by the plaintiff to extend was lodged in this court on 24 November 2006.  

   [112] Exhibit D2V1 p 251 – 252.

5. The summons of 24 November 2006 sought rather different forms of relief than contained in the further amended statement of claim on which the plaintiff ultimately went to trial.  The former alleged the purported sale of the land to be a “fraud on the plaintiff”, was undertaken in circumstances “such as to unjustly enrich” CRC (SA) and was framed in trespass, unconscionable, misleading and deceptive conduct.  Lyn Andrews Real Estate (second defendant) and Lyn Andrews personally (third defendant) were joined in their capacity as real estate agents engaged by CRC (SA) to sell the property.  So much of the action as against them was dismissed by order of a Judge of this court on 4 December 2006.  A further order was made that “until further order, neither the plaintiff nor CRC Churches International Inc (to be joined as defendant) deal with the property) at Hillier Road”.  This remained in force at the time of hearing, thus protecting the plaintiff’s position pending resolution of the matters now to be considered in this judgment.

   The issue of affiliation

6. A question for determination at this point is that of affiliation, by the plaintiff with the first defendant.  As noticed already, the Gawler branch of the Church adopted the name of the State branch from the very beginning.  It conducted itself in accordance with the principles and objects of the CRC Church throughout.  Parallel name changes took place several times.

7. Clause 2 of the original constitution of CRC Gawler of September 1977, did not  in so many words, state that the local church was bound by, adopted or in some other way incorporated the Charter and Constitution of CRC (SA).   Likewise when it comes to the 1992 constitution; both fall short of expressly binding them to the CRC Church.  And as has been seen, the second constitution establishes a local church that was “self governing … autonomous, having full authority to manage its affairs”.[113] 

   [113] Exhibit D2V2 p 7.

8. It was submitted by Mr Brohier on behalf of the defendants that both clauses amount to unequivocal acts of affiliation with the wider Church.  He submitted that the adverb “accepts” was of itself, sufficient to bind the local church to the State and the National Church.  It was further submitted that there was affiliation in fact, as both parties for over thirty years or so, conducted themselves in their affairs and in relation with each other, on that very basis.

9. It becomes necessary, then, to consider what the effect of accepting the constitution and charter of the State and National Church means, from a legal point of view.  The word “accept” is defined in the Oxford English Dictionary as “to take or receive (a thing offered) willingly, or with consenting mind; to receive (a thing or person) with favour or approval … and “to receive as sufficient or adequate; hence, to admit, agree to, believe,” and refer to Rocha v Hulen.[114]  

   [114] 44 P(d) 478, 482 (1935).

10. As Lord Romilly observed in Bishop of Natal v Gladston :[115]

    ... 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.

    After quoting this passage in Attorney-General; Ex rel Elisha v Holy Apostolic &  Catholic Church, Young J added: 

    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.

    [115] [1866] e LR Eq 1 at 37.

11. With these meanings and those authorities in mind, it becomes tolerably clear the acceptance of the constitution and charter is sufficient to constitute affiliation and that the respective clauses effect affiliation by constitutional means. They express more than aspirational objectives. Such a construction is both consistent with the fact as it is with the objects and purposes of the Constitution itself: Pacific Carriers Ltd v BNP Paribas, [116] and Toll (FGCR) Pty Ltd v Alphapharm Pty Ltd.[117]  At the same time this construction pays attention to the language used, the circumstances addressed, and the objects the respective constitutions intended to secure: McCann v Switzerland Insurance Australia Ltd (Allens Case).[118] 

    [116] (2004) 218 CLR 451 at 461-462.

    [117] (2004) 219 CLR 165 at 169.

    [118] (2000) 203 CLR 579 at [22] per Gleeson CJ.

12. There is one further consideration to dispose of in this connection.  The question of affiliation is complicated by virtue of the fact that the second Constitution of CRC (SA) contains elaborate provision with respect to affiliation (Clause 4.1).  Rather than providing for affiliation through constitutional means, this process requires a “letter of application” (Clause 4.1.1) and in the case of an “outreach church”, an application through the recognised or “mother” church, in each case seeking affiliation with the church.

13. At first sight these procedures appear to provide a complete code with respect to affiliation.  However on closer examination, clause 4.1 deals with two rather different situations than those present in this particular case. It is evident Clause 4.1.1 is intended to cater for applications by unincorporated and unconstituted outside groups seeking affiliation for the first time with the CRC church, whereas Clause 4.1.2 allows for an unincorporated outreach church to secure affiliation, other than by constitutional means.  Read in this way, those respective provisions take on workable meaning and purposes.  These mechanisms of affiliation do not apply to circumstances such as the present, where a group chose to affiliate by incorporation.  Construed in this way, there is no incompatibility with affiliation under Clause 4.1 and affiliation through constitutional adoption on the other.

14. It must follow that CRC Gawler was at all material times since incorporation affiliated with CRC (SA).  This conclusion is wholly consistent with the conduct of the parties throughout, with the objects and purposes expressed in both constitutions, was the position pleaded by both parties and was asserted by the plaintiff when lodging the caveat.

    The powers of the Advisory Council under Clause IX

15. Having determined the question of affiliation, the next issue falling for resolution becomes the proper construction of Clause IX, “Matters unresolved”.  This is quoted in full above.  It can be seen there are three prerequisite conditions to satisfy before the power to ‘intervene’ (to employ a neutral expression) may be exercised. 

16. First and second there must be circumstances “not envisaged” or “not resolvable according to this constitution”.  Almost certainly these are to be read disjunctively, but nothing turns on that in the present situation.  The circumstances called in aid in this case were the resignations following the failed amalgamation resolution of 2 December 2001, together with the resignation of the Board at the time and doubts over the capacity to form a new Board in its stead as expressed by Jenkins in his letter of 10 December 2001 and in his evidence.[119]  It is said that this left the Gawler Church ungovernable for practical purposes.  

    [119] Transcript 342 L14-L19. 

17. It pays to recall at this point in the discussion that at least twenty adult members were necessary in order to constitute a ‘local church’ under clause 4.1 of the State constitution, below which it fell into ‘outreach church’ status.  The evidence of Pastor Jenkins was that not only had the numbers fallen but those remaining “were either unable or unwilling to contribute very much” as most were pensioners.[120] 

    [120] Transcript 334 L L21. 

18. There was no serious contest that this situation was one not envisaged by the constitution or that it was not “resolvable under the constitution”.  The incorporated body is the “Assembly”.  The membership of the Assembly comprises of those obtaining specified spiritual qualifications (Chapter IIIA “Membership of the Assembly.  The local church is administered by a “Church Board”, which must comprise a minimum of four such members and whose appointment is to be confirmed at the Annual General Meeting of the Association (Clause IVA(2)).  The Church Board exercises “leadership and discipline” over the church, and “full authority, namely legislatively, executive and judicial power over all assembly matters” except for those reserved to the Senior Pastor.[121] 

    [121] Exhibit D2V2 p 11 Clause IVA(5).

19. The leader of the church is a designated Senior Pastor who is also Chairman of the Church Board and who retains the power “with the concurrence of at least two thirds of the Church Board to appoint and terminate the appointment of all Officers of the Assembly.[122]  Governance of the local Church may also be assumed in certain circumstances such as death, accident or some other incapacity under Clause B(8), but that is of no relevance to the current situation as this clause seems to envisage circumstances of physical or mental incapacity. 

    [122] Exhibit D2V2 p 12 Clauses IVA(3) and (4).

20. As the church must ordinarily be governed by the Church Board under the leadership of the Senior Pastor, when they all resigned, there was no effective leadership structure in place.  The situation remained unresolved since 31 December 2001.  The fundamental obstacle, that of finding and appointing a Senior Pastor, stood in the way.  On the appointment of Pastor Harry, no further Board was appointed, even though on one view his appointment served to resolve the impasse that provided the foundation for the appointment of the Advisory Board in the first place. 

21. The Church Board was obligated, at least fourteen days before an Annual General Meeting, to present accounts, audited statements of income and expenditure including balance sheets.  It was also required to report to the AGM and to give members the opportunity “to discuss any matters relating to the general running of the Assembly”.[123]  Moreover, under Clause C(4) the Assembly Officers appointed by the Senior Pastor had to be confirmed by the members at the AGM for the ensuing year.  Accordingly the scheme of governance under the constitution of the local church was one exercised by the Church Board under the leadership of the Pastor, with the requirements of reporting and accountability to the Assembly members in general and specifically no less other than annually.  

    [123] Exhibit D2V2 p 10 Clause C “An Annual General Meeting”.

22. Once the Board had resigned there was no remaining constitutional means to effect local governance or administration as provided for under the constitution, so that the second prerequisite to exercise the power given by Clause IX, was also satisfied.

23. A third prerequisite was that two members of the Church Board “conjointly request and authorising the State Executive” to appoint an “Advisory Council” as provided for therein.  As to this it was the evidence of Pastor Jenkins that he and Pastor Hodges approached the State Executive on behalf of the entire Board to “implement the Clause”.[124]  This was followed up by the letter of Pastor Voortman of 6 December 2001 and a letter to the Board of 10 December 2001.

    [124] Transcript 319 L32.

24. It was submitted by the plaintiff that Pastor Voortman’s letter of 6 December 2001 demonstrates the CRC (SA) was too pre-emptive, since the resignations had not taken effect as yet.  That is true enough.  On the other hand the impending situation was certain to mature, would accrue during the Christmas holiday period and would leave CRC Gawler without an effective board in the meantime to administer its affairs.   It would have been foolhardy to keep issues such as insurance, occupiers’ liability and regulatory and Council compliance in abeyance.  In that situation the State Executive was entitled to anticipate the events.  In any case, no act done or step taken between then and for some time, is called into question, so the point is of no consequence. 

25. The State Executive appointed Pastors Voortman the Chairman of the State Executive, Milne the immediate past president of the national body and Poyzner the vice chairman, to act as the “Advisory Council” in relation to CRC Gawler.[125]  They were then members of the Executive, as required by Clause IX.   Milne was registered as public officer of CRC Gawler on 26 August 2005.  This decision was taken in Voortman’s mind because Gawler CRC was no longer “governable according to its constitution”.[126] 

    [125] Transcript 319 L26-L35.

    [126] Transcript 392 L35-393 L1. 

26. No particular steps were taken to appoint a new Board simply because of the unsuccessful search for a Senior Pastor.  Obviously without a Senior Pastor, a new Church Board could not be appointed.  The case for the defendants was that by December 2001 there was no Church Board capable of running the local Gawler church, and the membership had fallen to around nine or ten.  The manner it chose to deal with the situation was to close it down.

27. However that may be, the powers of intervention vested by Clause IX, once enlivened, are specific and restricted; specific in the sense that intervention must relate to circumstances incapable of resolution under the constitution and restricted in the sense that the capacity to intervene endures only for so long as the impasse remains unresolved.  Remembering that Clause IX is entitled “matters unresolved”, does not confer the power of indeterminate intervention, or subrogate to CRC (SA) the powers and functions of the Church Board.   Once the impasse is resolved, the power of “intervention” is necessarily spent.  

28. The precise impasse was that there was no operating Church Board running the affairs of the Assembly and no Senior Pastor to provide leadership, as required by the constitution.  Accordingly the powers and functions of the three members of the State Executive appointed under Clause IX were confined to the resolution of that particular impasse. 

29. The limited and quite specific scope of the powers of intervention do not authorise the State Church to control a local church contrary to the constitution, or mean that CRC Gawler thereby necessarily ceased to exist.  On the contrary, for the period of the impasse the Advisory Council could exercise the functions and powers of the Church Board for the duration, such that it continued to exist and function as a distinct juristic entity.  This effectively meant the Advisory Council stood in the shoes of the local Church Board, exercising its powers and functions.  Even so, it remained bound to resolve the impasse according to the provisions of the constitution, to the extent they were otherwise applicable. 

30. Nevertheless, as an incorporated body, CRC Gawler remained “self governing” and “autonomous”, subject to the administration of the Advisory Council rather than the Church Board.   It was in that capacity, entitled under the constitution of CRC Gawler to appoint a public officer (Part VII), a Senior Pastor or leader (Part IV, B(1) & (2)) and a Church Board (IV, B(3)).  All the same, such appointments, if made, remained subject to confirmation (with the exception of the public officer) of the members, at a duly notified, constituted and conducted Annual General Meeting in accordance with Part III C of the constitution.  The obligations to circulate in advance the balance sheet, present an Assembly report and audited statements of income and expenditure (Clause III C), to present a report of the Advisory Committee in the absence of a Senior Pastor (Clause IIIC C (2)), and to furnish the members an “opportunity to discuss any matters relating to the general running of the Assembly” (Part III, C (3)), remained intact. 

31. It transpires that annual general meetings were held in 2002, 2003, 2004 but not 2005.  The first, a Meeting of December 15 2002, reports the presence of a representative of the International Organisation, Pastor Allen of the State Executive, in addition to approximately sixteen members. It was stated then that the Church “came under the covering of the CRC State Executive” and “Pastor Allen accepted the position of interim Pastor in July 2002”.[127]  Financial statements were presented and accepted.  Minutes of the AGM held on 9 November 2003 suggest several reports of the “interim leadership team” were presented and the congregation was still subject to its direction.  Financial reports were also presented, and there were a number of questions from the membership.[128]  A similar picture emerges, judging by the minutes of the AGM held on 12 September 2004.  This was the meeting at which the confirmation and acceptance of the invitation to Pastor Harry was carried unanimously.[129]  There were also questions from the floor concerning making minutes of the interim oversight committee available.  No evidence was forthcoming as to whether this eventuated.

    [127] Exhibit D2V2 p 156.

    [128] Exhibit LD2V2 P 166.

    [129] Exhibit D2V2 p 185.

32. No Advisory Council instigated AGM was held in 2005 or 2006.  Just why no Church Board was re-instated after the appointment of Pastor Harry, remains unclear except to the extent that it was not considered there were sufficient qualified members to resume that function.  As the Advisory Council exercised the same powers and functions as the Church Board would have had in relation to the subject matter of the impasse, it always remained accountable to the Gawler Assembly as provided for in the constitution.  Equally it remained obliged to observe the rules of natural justice in relation to “any power of adjudication that it may have in relation to the dispute between itself and the members of the Association” by virtue of s40 of the Associations IncorporationAct.  This obligation imports minimum standards of fairness and procedure, certainly when disciplinary type issues might arise, and was apart from this designed to prevent an association from excluding those principles in its constitution.[130]

    [130] As happened in Thorborn v All Nations Club (1975) 1 ACLR 127.

1. Those obligations pertain in this instance because decisions as to the future of CRC Gawler and as to the sale of the land, had the capacity to "destroy, defeat or prejudice [the member’s] rights, interests or legitimate expectations”: Annetts v McCann.[131]  The minority members should have been given reasonable disclosure of the proposed sale and its terms, and provided with the opportunity to seek information at an annual general or special general meeting and to discuss any matters relating to those topics.  CRC (SA) and the Advisory Council did not comply with any of these minimum requirements.  The consequences of this, including the failure to hold an AGM or remain accountable to CRC Gawler, will become apparent later in these reasons.

   [131] (1990) 170 CLR 596 at 598.

2. It was clear enough that the remaining members of the Assembly were unhappy about the course of events in general, as well as central control and the sale of the assets in particular.  They were equally troubled by the terms of sale, especially since no valuation was made.  They had legitimate interests in these questions.  They legitimately considered they were being kept in the dark and kept “out of the loop” so to speak, relating to the sale of the Church and the proposal to close it down.

   The Purported AGM of 22 October 2006.

3. What then of the purported Annual General Meeting of 22 October 2006? A previous annual meeting of the Gawler Congregation was held on 12 September 2004, so that one was due around the same time the following year and of course in 2006. The meeting at this time was within the range, time wise. It was also one for which notice was given, both generally,[132] and as advertised in the local Gawler “Bunyip” on 11 and 18 October 2006.[133]  Minutes of sorts were kept by Tracey Stevens,[134] in as much as she was not sure what she was meant to include or what she “wasn’t meant to include”.[135]

   [132] Exhibit D2V2 p 168 – 169.

   [133] Exhibit D2V2 p 170 – 171.

   [134] Exhibit P8 pp158-163.

   [135] Transcript 159 L38.

4. However no formal notice was given to the State Executive or the Advisory Council of this proposed meeting, as it should have been.  In that situation no valid meeting was capable of being held, since a party entitled to notice was not duly notified: Re Merchants and Shippers’ SS Co Ltd.[136]  It is clear that no one from the defendants’ side, played any part in convening the meeting.  Whether they were aware or not, no member of the State Executive or for that matter the interim Advisory Council, attended. 

   [136] (1916) 17 SR (NSW) 21 at 27-28.

5. Decisions made or meetings held in breach of the principles of natural justice, including the failure to furnish adequate advance notice, are on the present state of authorities, voidable rather than nullities: Forbes v NSW Trotting Club Ltd.[137] The distinction between the two is discussed at length in the dissenting judgment of Kirby J in Minister for Immigration and Multicultural Affairs v Bhardwaj.[138]

   [137] (1979) 143 CLR 242 at 277 per Aickin J.

   [138] (2002) 209 CLR 597; (2002) 187 ALR 117; (2002) 76 ALJR 598 at [101-110].

6. Fourteen people were recorded as being present on this occasion, six of them non-members.[139]  Obviously no financial statements or other reports contemplated by the constitution were presented.  So far as the minutes inform, there was a great deal of discussion as to the proposed sale of the Hillier Road property, as well as questions of ownership and control.[140]  Some expressed difficulties understanding the constitution (which in view of the above discussion may be readily appreciated), whilst others made suggestions that the congregation was at least thirty strong, even though it was to be closed down “due to deficient membership”.

   [139] Christine Streeter, Barry Menzel, Ken Ainsberry, Beverley Lockwood, Bobbie Topper and Sophie Cairnes.

   [140] Exhibit P8 pp 158 – 163.

7. The meeting purported to elect public officers including a chairperson, secretary and board members, even though it was acknowledged there was no Pastor available to fulfil the leadership role.  Quite apart from the number of members then present, the constitution required no fixed quorum to constitute an Annual General Meeting.  The constitution did however presuppose that such meetings were to be held in the presence of a Senior Pastor, as he is required to present a report, and the Church Board, which must table the requisite accounts, and in the case of both, to make themselves accountable to the membership via the mechanism of discussion. 

8. Moreover the constitution premises confirmation by the members at an Annual General Meeting of appointments to the Church Board, rather than the other way around.  As fourteen days’ notice is to be given to members of the meeting together with copies of the financial records under Part III, Clause C, the practical result is that an AGM had to be called by the Church Board, or in its stead the Advisory Council, so in the result none of these requirements were met either. 

9. Nothing like this procedure was followed when the members called an “AGM” independently of the Advisory Council or the State Executive.  It was conceded in evidence that the meeting was called and proceeded without regard to the requirements of the constitution.[141]  Consequently it is impossible to escape the conclusion that the only valid way of constituting the Annual General Meeting in the situation of an Advisory Council validly assuming the functions of the Church Board itself in order to resolve an impasse of governance, was at the behest of the Advisory Council provided it continued to act in the course of resolving an impasse under Rule IX and provided also that it continued to act and make decisions otherwise in accordance with the CRC Gawler constitution, applicable to them. 

   [141] Transcript 152 L4 – 8, T182 L14 – L18, T 183 L25 – L38, T 209 L9 0 L20.

10. Whatever the precise legal situation, it was plainly not open to the meeting of 22 October 2006 - however so called - to appoint office holders direct; that had to be done in the manner described under the constitution.  Accordingly the purported appointment of the Board Members, including the public officer were invalid on any view of the facts.   These “decisions” are compounded by the fact that the person ‘elected’ as Chairman was not a credentialed Minister of the Church, let alone a Pastor as he had to be under the constitution (Article 1V (1) and (2)) and by virtue of the fact that the other members were not appointed in accordance with clause 1V B(3).  Nor was the putative public officer appointed by the Church Board pursuant to clause V11. 

    Power of Advisory Council to close CRC Gawler?

11. This discussion logically leads to the next question calling for consideration, namely the validity of the decision to close CRC Gawler.  This falls for consideration in the context of the conclusions already reached that the Gawler Church remained a functioning autonomous incorporated association, subject to the governance of an Interim Advisory Council, which for that purpose stood in place of the Church Board for as long as one could not be appointed.

12. A preliminary point was taken by Mr Whimpress on behalf of the plaintiff in relation to the decision to close.  He pointed out that three members of the CRC State Executive were appointed to resolve the impasse, created by the resignation of the Church Board and yet it was the State Executive rather than the Advisory Council of three that impermissibly made the relevant operative decisions.

13. The formal records show decisions were either made or ratified at the executive level.  All three of the advisory nominees were present.  This course of events is not surprising given that they remained duty bound to serve the State Executive under the state constitution.[142]   The State Constitution permitted the appointment of sub-committees,[143] which for all practical purposes the Advisory Council was, and it would be surprising to say the least if the Advisory Council was allowed or permitted to make critical decisions relating to Gawler CRC, totally unfettered or unsupervised.   That would have been the antithesis of the Presbyterian model of governance. 

    [142] Exhibit D2 VI p48, clause 15.5. 

    [143] Clause 14.6. 

14. The evidence of Mr Milne and Pastor Voortman was that, as might be expected in a situation this kind, that the team of three held formal and informal meetings “on behalf of the Executive”.[144]  Pastor Voortman confirmed that the State Executive functioned as the “Advisory Committee” and the “Executive as a whole” took over the responsibility for Gawler CRC.[145] 

    [144] Transcript 492 L7-T495 L11, T460 L2-L27, T492 L7-L21.. 

    [145] Transcript 393 L4 T458 L33-L38, T461 L6-T463L33. 

15. Just because they conducted the affairs in that way, does not of itself invalidate the decision making process; in point of fact it might be regarded as being far more responsible and accountable to have exposed their views and decisions to the State Executive, because of the potential for far-reaching consequences to CRC Gawler.   Clause 1X it is to be recalled, merely specified a minimum of three members of the State Executive, not that it be limited to three.  

16. It can be acknowledged that Clause X1 by providing for the decision of the Advisory Council to be final, suggests separate and distinct functions from the State Executive, however this serves to prevent any decision of the Advisory Council being reviewed for a second time by the State Executive, so as to ensure impasses are not allowed to become protracted.  It is illogical to suppose that three members of the State Executive can make conclusive decisions affecting the fate of Gawler CRC, but that the State Executive, to whom they are subject, cannot.  The greater surely includes the lesser. 

17. Be that as it may, the decision to close Gawler was undoubtedly taken at executive level, as the minutes of the relevant meetings noted above so clearly show.  The Advisory Council of its own motion had no such powers – nor did they purport to exercise them, so the objection taken by Mr Whimpress becomes somewhat otiose.

18. Evidence was given on the defendant’s side that because the Church Board no longer existed, CRC Gawler was effectively “defunct”.[146]  As mentioned already that was not strictly correct as it was able to function as a legal entity under the control of the Advisory Council instead of the Board. 

    [146] Transcript 422 L13, T448 L11 – L38.

19. The constitution of CRC (SA) contains no provision for the take-over or closure of affiliated or outreach churches.  It does contain a mechanism for disaffiliation at the insistence of the State Executive, but only after giving due notice and upon complying with certain procedural safeguards (Clause 4.3).[147]  This avenue was not invoked here. Otherwise the only subject matter of direct central control related to changes to the constitution.[148]

    [147] Exhibit D2V2 p41.

    [148] Exhibit 02 V2 p16 Article X and p42 clause 4.4.

20. Equally, the constitution of CRC Gawler contains no provision for take-over or closure by CRC (SA) or otherwise, as such.  Being a voluntary incorporated association, it was open to apply for voluntary or curial winding up (s41 of the Associations IncorporationAct), for deregulation (ss43A(1) & (2)) and it could have been dissolved by the Commission (s44).  Again no such avenues of closure were exercised.  By the same token the members of CRC Gawler brought no application under s61, as they might well have done.

21. In light of the above reasoning, Clause IX of the Gawler constitution provided no basis for intervention by means of direct closure, however construed.  It may well have been open to effect closure by other means, but they were not taken.  The consequence is that the decision to close Gawler CRC, whether it was one taken by the Advisory Council or the State Executive of CRC (SA), or both, was unauthorised. 

22. In reaching this conclusion it cannot be doubted that those involved in taking that decision genuinely believed they had the power to do so, or that they acted bone fide in its exercise.  But as a matter of law it was a wrong view.  No doubt  difficulties in interpreting and applying the respective constitutions may have contributed - enough has been said already in these reasons to illustrate that this is hardy surprising.  It might also be observed, as Pastor Voortman more than fairly observed, that after the resignations following the failed amalgamation, there remained “a very small group of people … zealous for their church and keen for its continuance …”.[149]

    [149] Transcript 394 L24-28.

23. It was submitted by counsel for the defendants, that the decisions to cease church activities, followed by the decision to sell the real estate, were proper exercises of the constitutional powers of the governance.  That depends on the issues of construction resolved above.  It was further submitted those ‘decisions themselves were…internal management decisions, and decisions which involve spiritual considerations’, and were therefore not justiciable. 

24. To be sure the principles to which counsel had resort may be readily accepted as well established by the authorities: Wylde v Attorney-General (NSW); Ex rel Ashelford,[150] In Re Wages and Working Conditions of Persons Employed as Clerks and Clerical Workers,[151] Green v Page,[152] Scandrett v Dowling,[153] Solowij & Ors v The Parish of St Michaels & Ors[154] and Millar and Ors v Houghton Table Tennis Sports Club Inc.[155]  And yet their application to the facts of this case may not.  It is perfectly true that internal management and spiritual decisions are ordinarily out of reach of the jurisdiction of the secular courts.  The fault in the submission of counsel is that it assumes the power to intervene and the subsequent decision-making process were within the constitution of CRC Gawler.  They were not for reasons already articulated.

    [150] (1948) 78 CLR 224 (Red Book case).

    [151] (1941) SASR 65 per Murray CJ at 71-2.

    [152] [1957] Tas SR 66 at 83.

    [153] (1992) 27 NSWLR 483.

    [154] Above at [151];

    [155] (2003) 225 LSJS 241; [2003] SASC 1

25. No doubt, other things being equal, the State Executive or the Advisory Council in right of the Church Board, holds the property of CRC Gawler in trust for the benefit of the Assembly and is therefore amenable to proceedings for breach, but that is a another matter: Radmanovich v Nedeljkovic[156] and   Solowij v Parish of St Michael.[157]    The constitution of Gawler CRC itself provides for that very contingency, upon the “Assembly ceasing to function and distributing its funds, no individual member shall be entitled to receive any part thereof; such surplus shall be paid to a charitable institution having Objects of the  Christian Revival Crusade Gawler Inc”.[158]   As the issues agitated by the parties in this matter stand, they concern matters of  “ultra vires, not of mere irregularity in internal management”.[159] 

    [156] (2001) 52 NSWLR 641 at [90]ff.

    [157] Above at [142].

    [158] Article V1(4). 

    [159] Stevens v. Keogh (above at 13).  

    The Particular relief sought.

26. On the basis of the above findings and conclusions, it is appropriate to examine the precise relief sought, firstly by the plaintiff in its further amended statement of claim.   At this stage of the proceedings, no final orders can be entered until the parties have the opportunity to speak to the formal terms of the proposed orders, and because as anticipated at the beginning of these reasons, their potential impact on the third parties is yet to be considered.

27. Before turning to the many orders the parties claim, it is necessary to bear in mind that the court will decline relief where a breach of the rules or constitution of a voluntary association, amount to no more than mere irregularity.  This principle is described by Burbury CJ in Green v Page[160] in these terms:

    Nor would the court have jurisdiction to entertain the present action if the issues between the parties merely involved questions of irregularities in internal management which could be resolved by a general meeting of the members. In the case of irregularities in procedure laid down by the rules of an organisation for convening meetings and in conducting meetings the court refuses to interfere at the instance of individual members of the organisation. This is in accordance with the rule in Foss v Harbottle.[161] The basis of the rule was explained by the Court of Appeal in Cotter v National Union of Seamen[162]. Romer J. (as he then was) said:[163]

    'In my opinion, if the thing complained of is a thing which in substance the majority of the company are entitled to do, or if something has been done irregularly which the majority of the company are entitled to do regularly, or if something has been done illegally which the majority of the company are entitled to do legally, there can be no use in having a litigation about it, the ultimate end of which is only that a meeting has to be called and then ultimately the majority gets its wishes.'

    But if the issue is one not of mere irregularity in internal management but of an ultra vires act then there is no room for the application of the rule in Foss v. Harbottle and the court will pronounce upon the validity of the act (Stevens v. Keogh).[164]  

    [160] [1957] Tas. SR 66 at 77.

    [161] (1843) 2 Hare 461; (1843) 67 ER 189.

    [162] [1929] 2 Ch 58.

    [163] At 68.

    [164] (1946) 72 CLR 1 at 13 per Latham CJ.

28. The declaration confirming the appointment of certain office holders at the meeting of 22 October 2006 must fail for the reason that no validly constituted AGM was held.  As to a declaration that Marilyn and Graham Hicks, Shane Streeter, Tracey Stevens, Barry Menzel, Kevin Ainsberry, Maud Rowton, Terry and Susan Stevens, Beverley Lockwood, Bobby Topper and Sophie Cairnes are members of the Fellowship of the plaintiff is concerned, the evidence was to the effect that, Barry Menzel, Ken Ainsberry, Beverley Lockwood, Bobbie Topper and Sophie Cairnes were not.

29. It is to be recalled that Shane Streeter, Tracey and Tony Stevens and Maud Rowton remain as third parties in the adjourned proceedings.  It was accepted by the defendants that the Hicks’, Shane Streeter and Terry Stevens were members.[165]  There is no evidence that any of the others mentioned ever had applied or had been approved by the Church Board as required by Chapter III A of the CRC Gawler constitution.  However the parties will be at liberty to make further submissions as to this in light of these findings.  They ought to reconsider the efficacy of any orders on this subject in light of the findings made elsewhere in these reasons.

    [165] Written submissions paras 26 and 65.

30. Paragraph three of the further amended statement of claim seeks a declaration that the first defendant has no proprietary interest in the Hillier Road property. There is no evidence that he has any such rights, even as public officer of the Plaintiff. It is difficult to see, as presently advised, how any substantive relief is available against the first defendant, except perhaps for that in paragraph 4. It seeks the return to the plaintiff of the Common Seal, duplicate Certificate of Title and all other assets of the plaintiff. As to these the appropriate holder would be the duly appointed public officer pursuant to Article VII of the Constitution. That could not be Ms Stevens, as the purported appointment of 22 October 2006 was invalid, for reasons already given. As the first defendant Neal Milne was appointed by the Advisory Committee standing in the shoes of the Church Board, and as that is one appointment not requiring confirmation by the members at an AGM, he would appear to be the proper person to retain custody of the Common Seal and the Certificate of Title.

31. As to the return of all other assets, where ownership is proved, these would belong to CRC Gawler.  The plaintiff, assuming a duly constituted action, could not obtain a judgment as against itself.  Other than the real estate, there was reference during the course of the trial to a sound system and amplifiers donated by a church in Perth, which was closing down.  The evidence discloses, if anything, these were gifted to the CRC Church, but there was no evidence enabling a finding, on balance, whether that was in favour of CRC Gawler, CRC (SA) or any other organ of the Church.  The possibilities favour the latter, simply because it paid freight charges for transport of the items from Perth.[166]  The evidence was that the equipment was allocated to a CRC Church at Goolwa, but that it would be returned to the plaintiff if it could start up again.[167]  In those circumstances, as ownership of that property has not been proved to be held by the plaintiff, no such order, declaratory or otherwise is appropriate.  The same applies to some chairs taken to the CRC Church at Mount Compass and some crockery and cutlery said to be missing – ownership by the plaintiff has simply not been proved.   Quite apart from that, right to immediate possession has not been shown by the plaintiff: The Winkfield[168] and to compound matters no adverse possession by the defendants has been proved either, with respect to any of the personal property in issue: Spackman v Foster,[169] Sydney City Council v West.[170]  For those several reasons the claim for damages in paragraph 6 fails and no basis for taking accounts or for equitable compensation (paragraphs 8 and 9) arises.

    [166] Transcript 424 L16-426 L12., T498 L20-T499 L 13, Exhibit D2 V1 pp 194  

    [167] Transcript 415 L38-416 L6. 

    [168] [1902] P 42.

    [169] (1883) 11 QBD 99.

    [170] (1965) 114 CLR 481.

1. Turning to the orders sought by the defendants by way of counter-claim, the first order is a declaration that the governing body of the Gawler CRC is the State Executive in its capacity as the Advisory Council.   For the reasons already identified a declaration in those absolute terms fails to recognise the limited and restricted terms of intervention contained in clause X1.   Further consideration of the precise terms of any order is necessary in light of the above reasons. 

2. On the other hand it does appear a declaration that the public officer of the Gawler CRC for the meantime is the first defendant Neil Stuart Milne is in order.  So far as  a declaration that the Advisory Council is entitled to authorise and effect the sale of the land, that too as expressed in such unqualified terms presently fails to recognise the obligations of disclosure, consultation and compliance with the due process provisions of the constitution.  Further consideration is also necessary here.  It seems appropriate to declare that the purported AGM held on 22 October 2006 was not an AGM within the meaning or under the constitution of CRC Gawler and that the resolutions passed therein appointing office holders are invalid.

3. Apart from seeking orders for possession, the defendants are wanting an account ‘for any rent paid by Tracey Stevens in relation to her occupation of the manse’.   Although the evidence is vague in detail, there can be no doubting that she has occupied the manse since sometime in September 2006.  She claims to have paid rent to the church; the amount remains unspecified as are the other terms or duration of any lease (if any).  It appears she gained occupancy after Mr Streeter found a spare set of keys secreted under a rock on the church grounds.[171]   It is also apparent that the arrangement, is not formalised in any way, was not one approved by the State Executive or the Advisory Council, as they had no knowledge of it.   It is sufficient for the current purposes to indicate that any valid lease could only be entered into between her and the Church Board, or the State Executive or the Advisory Council in right of the Board.  That being the position, there can be no valid lease, so the question of an account remains open.  Once again the parties ought to be given the opportunity to make further submissions on this topic. 

   [171] Transcript 199 L36-200 L20. 

4. A final question is that of the capacity of the plaintiff to bring the proceedings.   It must follow from these reasons that only the Gawler Assembly so constituted, the Church Board, or the State Executive or the Advisory Council in right of the Board, could lawfully resolve and instruct to bring proceedings.  No duly passed resolution authorising legal proceedings is proved.  In that event the current proceedings initiated by CRC Gawler appear to be incompetent, except in so far as there remain actions by the CRC (SA) against the individual natural persons remain on foot.  

   Conclusion

5. To summarise, the court has the jurisdiction to entertain these proceedings as coming within the rubric of its general contractual jurisdiction and consequently that it has the power to make declaratory orders as a necessary incident of that jurisdiction.  The issues agitated by the parties in this matter are justiciable to the extent that they go beyond purely religious or internal management subjects and concern questions of  “ultra vires”.  The current proceedings initiated by CRC Gawler as presently constituted, are incompetent.  

6. The court finds CRC Gawler affiliated with CRC (SA) by the act of acceptance of its constitution and charter and that the State Executive validly appointed an “Advisory Council” under Clause IX of the CRC Gawler constitution.   The first defendant Milne was validly appointed public officer thereof.

7. The proper role of the Advisory Council was however quite specific to circumstances incapable of resolution under the constitution and restricted to resolving the impasse involved, so that it did not confer the power of indeterminate intervention, or subrogate to CRC (SA) the powers and functions of the Church Board indefinitely.   Clause IX of the Gawler constitution provided no basis for direct closure of CRC Gawler even though that might be effected by alternative means.  Therefore the decision to close CRC Gawler was unauthorised, despite the fact that those involved genuinely believed they had the power to do so, and acted bona fide.   Furthermore, the Advisory Council and/or the State Executive in right of the CRC Gawler Church Board, are only entitled to authorise the sale of the land, once the obligations of disclosure, consultation and compliance with the due process provisions of the constitution are satisfied and the obligations of natural justice fulfilled.  

8. No validly held meeting or AGM of CRC Gawler took place on 22 October 2006 and consequently no office holders were lawfully appointed.  The actions for return of property fail on the grounds that the plaintiff has failed to show it owns the disputed items, a right to immediate possession or adverse possession by the defendants.   On the face of matters CRC Gawler appears entitled to an account for the proceeds of the lease over the manse. 

   Orders

9. Consistently with the above reasons, orders dismissing the action of the plaintiff as incompetent might now be necessary.  All parties have liberty to apply on short notice, to make further submissions as to the terms of appropriate final orders and as to costs.  The third party proceedings are adjourned to the same date.