Ermogenous v Greek Orthodox Comm SA Inc

[2001] HCATrans 278

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A22 of 2001

B e t w e e n -

SPYRIDON ERMOGENOUS

Appellant

and

GREEK ORTHODOX COMMUNITY OF SA INC

Respondent

GAUDRON J
McHUGH J
KIRBY J
HAYNE J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT ADELAIDE ON THURSDAY, 16 AUGUST 2001, AT 10.15 AM

(Continued from 15/8/01)

Copyright in the High Court of Australia

GAUDRON J:   Yes, Mr Besanko.

MR BESANKO:   Thank you, your Honour.  Your Honour, might I say something briefly about the nature of the parties to this alleged contract, or as Mr Justice Windeyer referred to in the case that I took the Court yesterday, the status of the parties. 

Your Honours, to some extent, some of this material was covered yesterday so I will try and move through it very quickly.  But, your Honours, in the reasons of Justice Bleby in paragraphs 103 and 106, his Honour recites some of the evidence given in the court below, uncontentious evidence, as to how this community broke away from – if I can call it the established church – and the reasons why that occurred and, essentially, your Honours will see from those two passages that it was a question of control over the property of the community, the Patriarch and his representative in Australia, seeking control over the property of the community and other communities and that being resisted and the community breaking away and, in effect, employing its own priests and joining with some other communities ‑ ‑ ‑

GAUDRON J:   You say “in effect”, but there is no dispute that they, in truth, did employ their own priests.

MR BESANKO:   That is so, your Honour, yes.  I was going to say, your Honour, in effect, establishing their own church.  There is a question, of course, as to what is a church and Justice Bleby found that there was, although an unincorporated body, an institution which he called a church.  It seems, your Honours, from the evidence that there were a number of communities that had broken away.  Each employed their own priest.  Each practised the Greek Orthodox faith.  There was no evidence suggesting that the precepts and doctrines were any different, but the one point of difference as noted by his Honour Justice Bleby was the non‑acceptance of the control of the Patriarch through his representative in Sydney.

Your Honours, there were other bodies referred to in the course of the evidence and in the reasons in the courts below and could I just briefly allude to them so that the context is clear?  There was a body referred to as “a federation”.  That was an unincorporated body.  It was a body that was not limited to considering religious matters, nor were the communities that were members of the federation all supporters of the Autocephalic Church.  There were some who supported that church.  There were some who supported the traditional church.

The industrial magistrate found that the federation was, in effect, a coordinating committee.  That was how he referred to it.  There was evidence that some communities participated for certain purposes and others participated for different purposes.  That is the federation.

Your Honours, the other body that was referred to in the course of the evidence was the incorporated body.  That body, I think, was incorporated in about June 1970.  The industrial magistrate found that that body, in effect, never really got going and he referred to it as a “dead letter” and he made a finding, your Honours, that none of the communities, other than the South Australian community, formally joined that body.  That is at page 949 of the appeal books.  The findings he made about that body not, in fact, operating at any time are at page 953.

Now, none of those findings, your Honours, were disturbed by his Honour Justice Bleby and it is clear from his Honour’s reasons, and if I might refer the Court to paragraph 227 that his Honour accepted that.  It was accepted, in effect, that that body never really operated.  I should say, your Honours, that your Honours might see in the appeal book that there were some agreed facts about various bodies joining that church during the course of the relevant period.

GAUDRON J:   You have just referred us to paragraph 227 in Justice Bleby’s judgment.  What do you say about his Honour’s – I do not know if it is the same paragraph to which you referred, it does not seem to be, but it says:

Although it was not incorporated, there was, nevertheless, an identifiable institutional church. 

What do you say about that?

MR BESANKO:   Well, your Honour, it may be a question of definition.  As we understand the evidence and the findings below, there were never any meetings of those communities who only belonged to the independent church.  So, if one looks at the federation, the federation from time to time included communities supporting both the independent church and the established church.  The incorporated body never, in effect, got up and running so that there was only an independent institutional church.

To this extent - and could I ask your Honours to go back to paragraph 106 on page 1155?  His Honour there says:

The religious communities involved continued to share the same beliefs and to carry out the same religious practices and rituals.  They merely rejected the authority of the Sydney archdiocese over what they considered to be their temporal affairs.

So, in a sense, the church that his Honour is identifying is, for example, take four communities which may have been at one time, each of whom employed their own priests.  There was an archbishop before this Archbishop.  They shared similar beliefs to the established church but did not accept the authority of the Sydney Archbishop.  It may have been, your Honours, that at federation meetings, if a religious matter came up, then the communities that were members of the established church withdrew and there was some discussion about religious matters at the federation meetings.  But, that is as far as it went in terms of whether there was an institutional church.

HAYNE J:   But is his Honour referring there to what might be called a civil, as distinct from canon law concept?  Is his Honour making some point about the ordinary law, or is his Honour making some point that is to be understood in terms of ecclesiology or canon law?

MR BESANKO:   Your Honour, it is not clear.  I do not think it is the latter.

HAYNE J:   Because, in civil law terms, what does his Honour mean?

MR BESANKO:   Yes, yes.  Well, it is clear that it is not incorporated in any way.  No doubt there would be people who would say, “I am a member of the independent church because I am a member of a community and I follow the independent church”.  To that extent one might be able to identify a group.  But, whether his Honour is referring to people who practise that form of belief, or whether he is saying there is a structure of clergy, so there is an archbishop and there are priests, is not really clear from his Honour’s reasons.

KIRBY J:   The respondent is incorporated.

MR BESANKO:   Yes.

KIRBY J:   Did it include participants who were members or adherents to the Sydney archdiocese?

MR BESANKO:   I think it did, your Honour.  The evidence was not very precise, but I think that you could be a member of this community and not practise any particular religious belief.

KIRBY J:   How then do you explain a contract with the respondent employing your client, although it included people who were loyal to the Archbishop in Sydney?

MR BESANKO:   There is no dispute that the priests who were part of the independent church were employed by the community.

KIRBY J:   You say that if they can employ priests, they can employ a bishop.

MR BESANKO:   Yes.

McHUGH J:   Well, Mr Manos’ evidence was that the constitution required them to employ the priests.

MR BESANKO:   Yes.  We say, your Honours, that that is a factor which assists us because it reinforces what one sees in his evidence as cited by Justice Bleby in paragraphs 106 and 109, that is that there was a clear intention to retain control.

KIRBY J:   But, would it not be an example of that slightly discredited doctrine of expressio unius that, having expressly provided for priests it must be assumed that some different regime covered the bishops?

MR BESANKO:   We submit, your Honour, that that would really be taking it too far.  At the end of the day, the constitution did not go into evidence for one reason or another – I do not know.  But, one would really need to look at the constitution to see what it said about that but an archbishop, in one sense, there is only going to be one archbishop.  There might be a number of priests.

McHUGH J:   Well, the history of the matter probably shows the constitution does not throw much light because, no doubt, when the constitution was brought into existence the community looked to the Archbishop in Sydney as its spiritual head.

MR BESANKO:   Yes.

McHUGH J:   And it was only after the schism that they started to search for an archbishop.  What about the Russian Archbishop Sergei?  What was his position?  Was he regarded as an employee?

MR BESANKO:   I do not think the evidence established that one way or another, your Honour.

KIRBY J:   That was a break hundreds of years before.

MR BESANKO:   Yes.

KIRBY J:   There was reference in the industrial magistrate’s reasons to a provision whereby the Archbishop could be removed for incapacity, but also for misconduct, but it said expressly misconduct as found by a court of law, which rather suggested that, at least, in that particular it was agreed that the court of law would have jurisdiction over the relationship between the parties.

MR BESANKO:   Yes.

KIRBY J:   Now, how does that provision fall?  On one view, that falls in your favour because it indicates that the parties did not assume that this would be an entirely extra‑legal relationship but had clear anticipation that in certain circumstances it would go to a court of law but, on the other hand, the other way of looking at it is that where they contemplated it might go to a court of law, they expressly said so.  I just do not know where that falls.

MR BESANKO:   Yes.  Your Honours will have seen from the reasons that - your Honour is referring to a provision in the constitution of the incorporated body and there were findings made about that incorporated body not really ever coming ‑ ‑ ‑

KIRBY J:   It is page 958 at line 27.

MR BESANKO:   Yes.

KIRBY J:   It says:

The registered constitution of this Church –

GAUDRON J:   That is the church that never got going.  That is the registered corporation that never got off the ground.

MR BESANKO:   Yes.  But, your Honour, I have to say that the Archbishop was taken through a number of the provisions in the constitution and asked whether those provisions reflected his understanding of what his position was and what would happen and so on and so forth and he did indicate assent to a number of the provisions, the greater number of the provisions in the constitution.  Our submission would be, your Honours, that if that is a term of the contract, it would not be construed, in effect, as excluding the jurisdiction of the court in all other cases.

HAYNE J:   Would it have been within the constitutional competence of the respondent to engage a medical practitioner employed by them to whom members of the community could resort as they chose?

MR BESANKO:   I do not know that there is any specific evidence on that, your Honour.  The evidence, of course, is that the incorporated body engaged in a wide range of activities, including conducting an aged‑care facility and other types of facilities.  It might be a bit of a guess but one would think, if one had to answer that on the evidence, that it would be within the competence.

Your Honours, I was putting the submission that, although your Honours might see in the papers some agreed facts about various communities joining the incorporated church, the industrial magistrate found on evidence before him that there was no formal joining of the incorporated church by any of the communities.  The only body that was a member of that incorporated body was the South Australian community.

So, your Honours, the background really is, at the end of the day, a community here, a federation, nothing that is identifiable, whether incorporated or unincorporated, in our submission, as a church and we submit that his Honour Justice Bleby was incorrect, in effect, saying the Archbishop came here to carry out functions for the Church, not for the South Australian community and he put significant emphasis on that because there was, in our respectful submission, other than in a very loose sense, no recognised church.

KIRBY J:   Is that entirely right, because the organisation, the respondent itself, is called the Greek Orthodox Community, so it seems to postulate a Greek Orthodox Church.  It may not be very clearly defined but, I mean, after the Reformation many of the Protestant people claimed that they were the true church.  So, it may be that in the situation of the division of the Greek Orthodox Community, they were each claiming to be the true representatives of the church as a postulate.

MR BESANKO:   Yes.

KIRBY J:   I just do not know enough about the evidence at the moment to know whether that was this case.

MR BESANKO:   Well, your Honour, our submission would be one needs to ask the question, obviously, what do you mean by church?  Do you mean an incorporated body?  Do you mean a set of precepts and beliefs?  Do you mean the laity, do you mean the clergy?  That would be the ‑ ‑ ‑

KIRBY J:   But the Archbishop would have regarded himself as an archbishop of the Greek Orthodox Church, of a particular branch of the church, but he would not have regarded himself as an archbishop of a community in South Australia.

MR BESANKO:   No, that is probably so, your Honour, but he would do so on the basis that he had a particular religious belief and a particular allegiance.  But, in law there was no body.

KIRBY J:   This is why, really, a lot of the evidence and discussion of churches and their particular relationship seems, at the moment, to be a bit of a red herring because you could be a servant of the church or, as some of the English cases say, a servant of God, you have given your whole life to God, but still have a side contract for your daily needs.

MR BESANKO:   Yes.

KIRBY J:   And that, as I understand it, is the way you present the case.  Forget about the relationship to God and the church, they are matters beyond our ken, but, so far as the daily needs of the Archbishop, they were made by a contract with this community.  Now, query whether it is contract of employment or a contract for daily needs.

MR BESANKO:   Yes.

KIRBY J:   That is a lesser question.

MR BESANKO:   Yes.  We submit to the Court that, if the findings of the industrial magistrate are upheld and a contract was made in Adelaide with the South Australian community ‑ ‑ ‑

GAUDRON J:   Let us just stop there.  If the findings of the magistrate are upheld.

MR BESANKO:   Yes.

GAUDRON J:   By whom?

MR BESANKO:   Perhaps, if one accepts the findings of the industrial magistrate ‑ ‑ ‑

GAUDRON J:   Who is the “one”?

MR BESANKO:   We say your Honour have put it correctly, is that Justice Bleby interfered with those findings.  If he had not have interfered with the findings then they would have supported the conclusion that there was a binding agreement as a result of the Adelaide meeting.  But the point we do wish to make, your Honours, is that his Honour spent considerable time, with respect, looking at what was the church, what was the role of the federation and what was the role of the incorporated body.

None of that need trouble this Court, in our respectful submission, if one accepts the finding of the industrial magistrate that in March 1970, the parties in Adelaide reached an agreement.  Those factors, a number of which are after that date, could only be relevant if it was being suggested in some way that the legal relationship was altered and we do not understand that to be suggested.

Your Honours, might I just very briefly make some submissions about the question of payment?  This came up yesterday in the course of argument.

KIRBY J:   After that, I saw there are some cheques reproduced in the appeal papers and they are payments to the archdiocese.

MR BESANKO:   Yes, yes.

CALLINAN J:   Could I just ask you one question?  It is relevant to payment.  At page 1204 the Chief Justice, at lines 5 to 10, said that:

The fact that throughout the period the appellant made PAYE tax deductions from the amount paid is, in my opinion, of little significance –

because people –

who are plainly not employees, have such deductions –

made.  But, when the deductions are made from payments that are due to people other than employees, that must surely be as a result of special or exceptional statutory provision, must it not?

MR BESANKO:   Yes.  I think that is so, your Honour, yes.

CALLINAN J:   I mean, for example, one can think of building contractors now, I think, are contractible to $10,000 or something to that effect.

KIRBY J:   Well, Justices in the High Court have their PAYE paid by the Attorney-General, but we are certainly not employees of the Attorney‑General.

CALLINAN J:   But only because of the special constitutional provisions.
But, leaving aside the very special position, perhaps, of this Court, unless there is statutory exception made, why is not the deduction of tax instalments a significant factor, perhaps not decisive but ‑ ‑ ‑

MR BESANKO:   In our submission, it is, and the other authorities which deal with it say that it is a factor or a significant factor, but not decisive and we submit that that is the correct position.

CALLINAN J:   The Chief Justice refused to attach any significance to it at all, which gives it a significance, to me, anyway.

MR BESANKO:   Yes, your Honour.  We would adopt that, with respect.  Your Honours, on the question of payment, can I just say this?  The evidence may distinguish between the payment of salary and the payment of travelling and other expenses, and can I take those two in turn and take salary first?  There was no dispute on the evidence and these were the findings by the industrial magistrate that the salary was paid by the South Australian community.  To whom it was paid was a little less clear.  There was evidence from Mr Niarchos that there were payments made to the archdioceses and, your Honour Justice Kirby referred to some of the documents there.  The Archbishop ‑ ‑ ‑

KIRBY J:   Are the references to all this in your written submissions, because otherwise they should be put on the record?

MR BESANKO:   Yes, your Honour.

KIRBY J:   Or a note should be handed in setting them out because we have to check these things.

MR BESANKO:   Yes, your Honour.  Perhaps if I can hand in a note.  The question of to whom the payments were made, there was conflicting evidence as between Mr Niarchos, who said it was paid to the archdiocese and the Archbishop, who said that but for a brief period of time it was paid to him, but during a brief period of time and I think he mentioned a couple of months, it was paid to the archdiocese.  We submit, your Honours, that it does not really matter.  There was a finding by the industrial magistrate at page 974 of the appeal book.

KIRBY J:   The only cheques appear to be cheques to the archdiocese, not to the Archbishop personally.

MR BESANKO:   That is so, your Honour.

KIRBY J:   The only ones in the appeal papers.

MR BESANKO:   Yes.  But, with great respect, your Honour, we submit that unless the archdiocese is a separate legal entity, which it is clearly not, or the account was being used for purposes other than the Archbishop’s salary, it does not really matter.

KIRBY J:   You say that, but the way the cheques were drawn is, on one theory, supportive of the proposition that the community was not employing the Archbishop but was merely giving a subvention to the church.  This undefined concept, to which the Archbishop had pledged his whole life, not employment but a calling.

MR BESANKO:   Yes.

KIRBY J:   I mean, that is the opposite case.  However, you were saying the findings of the industrial magistrate.

MR BESANKO:   Yes, your Honour, at page 974 where, at line 17, he refers to the fact that:

The applicant himself had established this account; it does not appear in any way to be connected with the accounts or the funds of the SA community.

He, at the end of the day, placed no significance on it.  He did not make a precise finding as to how long payments might have been made into that account, but it was an account that the Archbishop opened.  He called it that and there was no suggestion that the priests or other people were being paid out of that account.  The evidence was that the payments of the Archbishop’s salary were made into that account and it would seem no other payments.

Your Honours, there were contributions from time to time to the payment of salary from the other communities but they were, in some cases, irregular and in other cases not demanded at all, and I refer to the evidence of Mr Manos at page 532.  As far as travelling and other expenses are concerned, the position was that there was a bank account, it would seem, in the name of the Autocephalic Greek Orthodox Church Incorporated and this topic is dealt with in the evidence of Mr Niarchos at page 642.

That bank account, your Honours, was, in our respectful submission, really just a bank account in name only because the evidence was that the only signatories to that account were members of the South Australian community and the evidence was that the only funds that were placed into that account were placed into it by the South Australian community.  So, whatever its name might have been, it was an account operated by the South Australian community.

GAUDRON J:   And how did that relate to the travelling and other expenses, do you say? 

MR BESANKO:   We say the evidence supported the proposition that the funds came from the South Australian community; they were put into an account operated by the incorporated body; and moneys were then taken out of that account and used for those expenses. 

GAUDRON J:   Now, I am just wondering what the purpose of the analysis of this evidence is.  Could you just tell me where it leads, in your view? 

MR BESANKO:   Your Honour, it really is picking up on a matter yesterday as to the question of payment.  In so far as the Court might look at how the contract was worked out, either in the short term or the long term, these are relevant considerations.  Your Honours will know, of course, there is principle that says that one does not look at post-contractual conduct, but there are some exceptions to that.  There is an ability, certainly, if the contract is evolving, to look at the conduct whilst the contract is being put into place. 

CALLINAN J:   Brogden v Metropolitan Railways is a case you can look at the way the parties acted over a period, and you can not only tell whether there has been a contract, but also what the terms of it were by looking at what they did. 

MR BESANKO:   Yes.  Your Honour, I had in mind some comments made by the Chief Justice, when Chief Justice of New South Wales, in the case of Connelly v Wells, where his Honour said that, generally speaking, post‑contractual conduct was unhelpful, as to the issue of whether it was a contract of employment or some other contract ‑ ‑ ‑

CALLINAN J:   Well, I do not see why you should look at it differently from an ordinary commercial contract, so far as those principles are concerned.  Who said that?  When ‑ ‑ ‑

MR BESANKO:   The Chief Justice, Chief Justice Gleeson, when a member of the Court of Appeal of New South Wales.  I will not take your Honours to the case, but it appears in our book of authorities, as case No 12. 

GAUDRON J:   I remind you, of course, that it was a limited grant of special leave in this matter. 

MR BESANKO:   Yes. 

GAUDRON J:   So you are still dealing with the first issue, namely, the intention to create legal relations. 

MR BESANKO:   Yes, your Honour.  Might I, in relation to the case of Connelly v Wells, give your Honours two references to, first, the passage of the Chief Justice at pages 74 and 75.  Your Honour Justice Kirby, in our respectful submission, took a different view as to the use that could be made of evidence after the date of the alleged contract, at page 85.  Mr Justice Clarke discusses the matter at pages 90 to 91, and, in our submission, draws at least a distinction between using post-contractual conduct to determine whether or not there is a contract, by contrast to determining whether or not it is a contract of employment. 

Your Honours, might I also ask your Honours to note that, despite the fact that Justice Bleby reached the conclusions he did, he accepted the findings that had been made by the industrial magistrate that the question of payment and terms had been discussed at the Adelaide meeting.  We refer in that regard to paragraphs 232 and, importantly, paragraph 248, namely that there probably were discussions about annual leave and long service leave with the respondent in Adelaide.  Now, your Honour, could I briefly say something about the second matter that I identified at the start of the submissions yesterday. 

There are two examples in the reasons of his Honour apparently taking into account the subjective intention of one of the parties.  The first, your Honours, is at paragraphs 246 through to paragraph 249.  I would just ask the Court to note at 246, his Honour says:  the evidence of Mr Manos is of “great significance”.  He then proceeds to set out what Mr Manos had said about his approach, and what he thought he was doing, and so on – and I will not go through those.  But at 249, he says: 

It is clear from Mr Manos’ evidence as a whole that, from his point of view, as one of the chief negotiators for the Federation, there was no intention to enter into contractual relations. 

Now, in our respectful submission, it is an objective question.  There are exceptions, but they are not relevant here, and ‑ ‑ ‑

GAUDRON J:   Mr Manos did not address that issue in terms, did he? 

MR BESANKO:   No. 

KIRBY J:   He could not really have said, “We had no intention to enter.”  That is a legal question.  So it is really a question of looking retrospectively at all the facts, and asking:  was there a contract entered into with the community?  If so, what are its terms?  It may, as Justice McHugh suggested yesterday, be a bit of a side-issue as to whether you label it as a contract of employment – with all the baggage that that brings in – or whether you say:  well, they just agreed that they would fund the Archbishop’s daily or monthly needs, weekly needs. 

MR BESANKO:   Yes.  But, your Honour, one thing that is clear, in our submission, from paragraph 247, for example, is that his Honour is referring to the thoughts of Mr Manos, the uncommunicated thoughts about the position.  We say that in determining whether there is an intention to create legal relations, that is an impermissible course. 

KIRBY J:   It is a bit of a problem for you, though, if the theory is that this is a special contract for particular needs, because as I understand the reasoning of the industrial magistrate, it was:  there was a contract; it was an employment contract; and therefore that picks up long service leave, entitlements to annual leave, and all the other paraphernalia of employment.  Now, it may be a dangerous territory for you if it is simply in terms of the Adelaide and/or Melbourne agreements, may it not? 

MR BESANKO:   Yes, it may be, your Honour. 

KIRBY J:   You have to have it as an employment contract in order to pick up all these entitlements that, by law, attach to employment. 

MR BESANKO:   We do, yes. 

KIRBY J:   Are you left with anything, if it is – was unpaid salary part of the dispute? 

MR BESANKO:   No. 

KIRBY J:   So it has to be an employment contract, for your purposes. 

MR BESANKO:   Yes. 

GAUDRON J:   Or it has to be a contract which expressly provides for those arrangements. 

MR BESANKO:   Yes. 

GAUDRON J:   There really are two strings to your bow in this regard, are there not? 

MR BESANKO:   Yes, there are.  There is, of course – the long service leave is a statutory right that is given to parties in the case ‑ ‑ ‑

GAUDRON J:   Was there not evidence of an agreement that he would get the same as the other priests? 

MR BESANKO:   Yes. 

McHUGH J:   But that may create problems for you, may it not, because of the jurisdiction of the Industrial Relations Court?  Because if it be right, the jurisdiction is dependent upon him being an employee.  It would not assist you merely to have a contract which incorporated the same benefits as employees got.  You are in the wrong jurisdiction. 

MR BESANKO:   With respect, your Honour is correct. 

McHUGH J:   So I think, ultimately, in this jurisdiction, you have to stand or fall on the basis that is employment. 

MR BESANKO:   Employment.  Yes, your Honour. 

CALLINAN J:   By the way, you mentioned what Chief Justice Gleeson said in Connelly.  Justice Clarke, at page 90 of the report in that case, collects a number of the authorities which establish that “subsequent conduct”, although not admissible to aid in the interpretation of a written document: 

is, or may be, admissible on the question of whether a contract was ever concluded between the parties. 

A number of authorities, that his Honour collects there. 

MR BESANKO:   Yes.  Thank you, your Honour.  Your Honours, the other example where his Honour may have relied on the subjective intention of the Greek community appears at paragraph 264, page 1204.  His Honour there refers to an express disavowal of an intention and I am not sure what his Honour means by that, because it has never been suggested by anybody that, in effect, one of the parties specifically said:  there is no contract.  So it is not clear what his Honour means by that, but he may be alluding to the subjective intention of Mr Manos. 

GAUDRON J:   Is it correct to say, where the evidence is overwhelming, that the association, through its officers at the time, expressly disavowed such intention? 

MR BESANKO:   The answer, your Honour, is no, but what his Honour seems to be saying there is:  “one common party” - would seem to be the Archbishop - “intends to enter into contractual relations”, but the other party “expressly disavows” such an intention. 

GAUDRON J:   If his Honour is stating a question of principle, that is one thing, and I suppose the more charitable view is that that is what he was there doing.  But if his Honour is there stating the effect of the evidence, that does not seem to be correct. 

MR BESANKO:   No.  No, it is not, your Honour, and we would say that his Honour probably is stating the evidence, because of what immediately precedes ‑ ‑ ‑

GAUDRON J:   Well, there was no express disavowal of an intention to enter into contractual relations.  There may have been an express disavowal of the intention to enter into an employment relationship, but not of the intention to enter into a legally binding relationship. 

MR BESANKO:   Yes.  No suggestion of that, if the Court pleases.  Your Honours, the third matter that we indicated at the outset of our submissions, concerned the extent to which his Honour reviewed findings of fact ‑ ‑ ‑

GAUDRON J:   Does this bring you to your second ground of appeal? 

MR BESANKO:   Yes, it does. 

GAUDRON J:   The two overlap to some extent. 

MR BESANKO:   They do.  Your Honours, in essence, what we submit is that the critical issue was addressed in the courts below, addressed by the industrial magistrate, addressed by a majority of the Full Industrial Relations Court, and in our written submissions in reply, we have set out references to various passages in the judgments – and I will not take your Honours to those passages.  But they indicate, in our respectful submission, that the question of whether there was an intention to enter into contractual relations was addressed in the courts below; and indeed, one could say, in the case of the single judge. 

GAUDRON J:   We have heard you on this before.  This is where you started. 

MR BESANKO:   Yes, it is, your Honour. 

GAUDRON J:   The real question is:  what is this jurisdictional argument that is encompassed in the grant of special leave? 

MR BESANKO:   The argument that ‑ ‑ ‑

GAUDRON J:   I take it, it is a jurisdictional argument:  whether it was open to the Full Court to make the findings of fact it did, in an appeal under section 191 of the Industrial and Employee Relations Act. 

KIRBY J:   Is it jurisdictional, or is it an appellate restraint point? 

MR BESANKO:   It is the latter.  What we submit in relation to that is that there were concurrent findings of fact in the court below.  His Honour Justice Bleby has approached the matter by saying, “Having regard to Warren v Coombes, I can draw inferences in the same way that they were drawn by the courts below.”  We submit that his Honour ‑ ‑ ‑

GAUDRON J:   Which inferences are you talking about?  Are you talking only about the inference that there was no intention to enter into contractual relationships – which is, perhaps, not purely a factual matter – or are you talking more widely than that? 

MR BESANKO:   Well, that is the critical one.  There are, of course, a whole series of primary facts, and inferences from those primary facts, that ultimately lead to that critical inference.  But his Honour has just approached the matter, in our submission, by, in effect, saying, “I can draw the inferences” - Warren v Coombes.  We submit that where there are concurrent findings of fact, there is an additional limit on an appellate court.  We rely primarily on, as a convenient reference, what his Honour Justice Deane said in Louth v Diprose, which is case 11 in the applicant’s book of cases.  We set out there at page 634, your Honour, where his Honour explains the rationale for non-interference with concurrent findings of fact ‑ ‑ ‑

GAUDRON J:   Well, now, is there somewhere where you can set out in a single document the findings of fact by the Full Court about which you complain?  Or do we, at the end of the day, just come to the intention to enter into legal relationships? 

MR BESANKO:   I think it is the latter, your Honour, yes.  It is that final inference that his Honour drew.  There are two areas, I think, referred to ‑ ‑ ‑

GAUDRON J:   Then there is a question whether we are really talking about a pure finding of fact, or even an inference of fact – or something which the law imputes. 

MR BESANKO:   Yes, there is and we would submit that it is a question of fact, at the end of the day, but it is an ‑ ‑ ‑

HAYNE J:   How does that sit with the objective test that you posit?  I can understand that contention, if intention to create legal relations involves the subjective intention of the parties, that would be – it would seem to me ‑ likely to be a pure question of fact.  But if it is an objective test, founded in what the parties have said and done, and the subject matter of the alleged agreement, what is the finding of fact? 

CALLINAN J:   Well, is it the finding, for example, of Chief Justice Doyle at page 1127, line 17: 

that the Respondent was not providing services to the Community, but to members of the local Greek Orthodox church. 

Is it possible to view the magistrate’s findings as findings that the respondent was – or rather the appellant, here – was in fact providing services to the community, albeit that he may have been providing them also to the local Greek Orthodox Church?  I mean, neither excludes the other, but do you say that it is wrong to say that the appellant was not providing services to the community? 

MR BESANKO:   We do. 

CALLINAN J:   That is one finding of fact that you say is contrary to what the magistrate found. 

MR BESANKO:   Yes.  And one of the ‑ ‑ ‑

CALLINAN J:   There may be others, but that seems to me to be a fairly critical one. 

MR BESANKO:   Yes, it is, your Honour.  One of the difficulties is that his Honour has reviewed the findings of fact and looked at two issues – they are closely interrelated – but one issue is whether one can infer an intention to create legal relations and the other is:  was there an intention to contract with the community?  The two issues that overlap. 

CALLINAN J:   It seems to me there are a number of findings of fact which, on one view, arguably, are contrary to what the magistrate found, in that paragraph 17 of the Chief Justice’s reasons.  He goes on to characterise it as a provision of a “subsidy”.  Now, that may have a legal component, but it also certainly has a factual one, it seems to me. 

MR BESANKO:   Yes.  In answer to your Honour Justice Gaudron, I think we would have to say we would need to set out what findings of fact ‑ ‑ ‑

GAUDRON J:   Yes, but it is a little bit late in the day for that, Mr Besanko.  Certainly, you can do it, but ideally, if this Court is to discharge its business effectively and efficiently, we should have that sort of information before the argument is embarked upon, really. 

MR BESANKO:   Yes.  Your Honours, I do not wish to add to what we say in our written submissions concerning the court’s reluctance to interfere with concurrent findings of fact, and what we say are the relevant principles.  I have already addressed the Court on the fact that the critical issue was addressed in the courts below.  Unless there are any other matters, your Honour, those are our submissions. 

GAUDRON J:   Yes, thank you, Mr Besanko.  Yes, Mr McRae. 

MR McRAE:   Your Honour, can I begin by asking you to look at our list of authorities, our little book of documents, and included in the book, at item 9, is an extract from Chitty on Contracts, which we say, with respect, fairly represents the state of the law in relation to how one deals with the issue of contractual intention.  Without for a moment proposing to read the whole, I would like to specifically refer to some parts.  Chitty begins with a general proposition at paragraph 2-145.  He says: 

In a number of situations to be discussed in § 2-146 to 2-169 below, it has been held that an agreement, though supported by consideration, was not binding as a contract because it was made without any intention of creating legal relations. 

His next paragraph is also, I think, with respect, significant.  He says: 

In the case of ordinary commercial transactions it is not normally necessary to prove that the parties to an express contract in fact intended to create legal relations.  The onus of proving that there was no such intention is on the party who asserts that no legal effect is intended, and the onus is a heavy one.  In deciding whether the onus has been discharged, the courts will be influenced by the importance of the agreement to the parties, and by the fact that one of them acted in reliance on it. 

On the next page at paragraph 2‑148 he puts the proposition that in deciding the issues of contractual intention the courts normally apply an objective test, and then he gives examples that are not particularly relevant here.  With that I, with respect, agree and that seems to have been the proposition that was put by Justice Windeyer in those cases to which my learned friend referred.

Having then dealt at paragraph 2‑149 with circumstances where the intention was expressly negatived, which is not the case here, he then goes on to give some examples of circumstances in which it has been held that contracts are not binding.  He gives the examples at 2‑153 “Social agreements”, “Domestic agreements” at 2‑154, and the Balfour v Balfour Case that was referred to yesterday.  Turning the page, at 2‑156 “promises between parents and children”, then a couple of pages on he refers to, at 2‑161, “Collective agreements”.  At 2‑163 he refers to “Statements of governmental policy” and, again, I think that Justice Windeyer had some such thing in mind in the remarks that he made in one of those cases.  Then, for my purposes, at 2‑164 he says this:

The cases in which there is no intention to create legal relations cannot be exhaustively classified.

Then he goes on to give some examples.  Turning the page, at about point 5 of the following page, he says:

The context in which an agreement is made may negative contractual intention.

And he refers to President of the Methodist Conference v Parfitt.  Two pages on, at 2‑167, the final paragraph of the page, says this:

The cases on this topic, and in particular those discussed in §§2‑164 to 2‑166 above, show that the question of contractual intention is, in the last resort, one of fact; and in doubtful cases its resolution depends, in particular, on the incidence of the burden of proof and on the objective test which generally determines the issue.

GAUDRON J:   The learned author there says it is a “question of fact”.

MR McRAE:   Yes.

GAUDRON J:   Is that your submission?

MR McRAE:   Not entirely because I think that when, in an appeal context, one ‑ ‑ ‑

GAUDRON J:   This may be a matter of some significance in this case.

MR McRAE:   Yes, your Honour, I appreciate that, and I say with respect ‑ ‑ ‑

CALLINAN J:   How can it be a question of law, whether there is an intention or not?  It is a matter to be inferred in most cases, and perhaps objectively inferred, imputed if you like, but how can it be a question of law?  How can it have any legal component?

MR McRAE:   Your Honour, there may be a question of whether the trial court properly and objectively made the inferences that they did.

HAYNE J:   Is it a question of inference or is the question what the words and conduct of the parties concerned would reasonably convey to the hearer or observer?

MR McRAE:   I think it is what your Honour has just said.

HAYNE J:   That formulation being founded in Lord Diplock’s speech in a different context in Christopher Hill v Ashington Piggeries [1972] AC, but if the proposition just advanced is right, what would the words and conduct reasonably convey, is that a question of fact or is it a question of law?

MR McRAE:   I submit, with respect, that that is a question of law.

KIRBY J:   Would it not only be a question of law if there was no evidence upon which the words and conduct could reasonably convey the conclusion?

MR McRAE:   Or, your Honour, if on balance, with respect, on the whole of the evidence one could not reasonably have come to that conclusion.

KIRBY J:   But once you are getting into the balance and it sounds like a question of fact for the evaluation of the fact finder, unless you can demonstrate that the fact finder omitted to look at the question in the correct way or looked at irrelevant considerations in coming to the conclusion that he or she did.

MR McRAE:   I am obliged to put it two ways.  Firstly, that it is a question of law if there is a clearly wrong inclusion, and it is also a question of law if it is a conclusion which should not properly have been come to in an objective way.

There is, however, your Honours, in this case another aspect, and that is the question of onus or presumption.  Justice Bleby relied upon a number of English cases to put the proposition that in these circumstances there was such a presumption.  I would like to take the Court ‑ ‑ ‑

KIRBY J:   Chief Justice Doyle seemed to deny presumption, but the way in which he expressed it sounded very like, to me, a presumption.  He suggested that you start from certain propositions in the case of clergy.

MR McRAE:   Yes, your Honour.

KIRBY J:   I may be wrong and I may be being unfair to his Honour ‑ ‑ ‑

MR McRAE:   I think, with respect, that Chief Justice Doyle ‑ ‑ ‑

KIRBY J:   ‑ ‑ ‑ but I am thinking of the top of page 525 of the report, paragraph 4, he said:

But, it is important to emphasise, that is no more than a starting point –

but he does accept it is a “starting point”, which sounds a bit like a presumption.

MR McRAE:   Yes, I think that is right.  He did say ‑ ‑ ‑

KIRBY J:   It may be a play on words as to whether it is a presumption or a starting point.

MR McRAE:   He did say at the top of page 1124, paragraph 7:

In the present case, the Respondent had to satisfy the Industrial Relations Court –

and so on.  So that sounds as though he had in mind an onus, although ‑ ‑ ‑

KIRBY J:   That is no more than the obligation of a party seeking from a court an order to satisfy that it has the basis on which the court should make the order.

MR McRAE:   Yes.  Although, your Honour, he did clearly support Justice Bleby’s further proposition that there was, in fact, a presumption.

KIRBY J:   Yes, he says:

For the reasons given by Bleby J, the starting point in such a case is that usually there is no intention to enter into a contractual relationship on such matters.

ie, church relationships, that is paragraph 4.  So that sounds as though it is an endorsement of a starting point or presumption.

MR McRAE:   Yes.

KIRBY J:   But all of that is so if you are dealing with a case like the Methodist Case or Knowles v The Anglican Church, where there is no dispute that the person is in a relationship with a church which has either a statutory or internal set of rules.  This was a case of an unusual kind in a church which was of an unusual character because of a division within the church, and with a side arrangement, not with the church but with a community which was an incorporated body, which, in a sense, had promised to fund the Archbishop’s needs in order that he should come from the United States to this country.  So it is not quite the ordinary case.

MR McRAE:   I take your Honour’s point.  Can I not take up a great deal of time, but attempt to answer it in this way.  Firstly, although, just supposing for the moment that the relationship was with the Adelaide Community, the incorporated body, and not with any institutional church, which we do not accept, but suppose that that was the case, nonetheless it was a relationship of a purely spiritual kind.  The duties ‑ ‑ ‑

GAUDRON J:   What does that mean “purely spiritual kind”?  It may have had a spiritual component, but nothing is ever of a purely spiritual kind, Mr McRae, when you have questions of ‑ ‑ ‑

KIRBY J:   You have to put bread on the table.

GAUDRON J:   ‑ ‑ ‑ where he would live, the telephone, travelling, how he was going to get from America to Australia.  There was certainly a spiritual component, but you cannot put it higher than that.

MR McRAE:   Your Honour, the way I would seek to put it, that it was a pre‑eminent factor in the carrying out of his duties that his duties were of a spiritual kind.  After all, he himself had made it quite clear that that is what he was going to do.  His duties were those of the usual Archbishop of the Greek Orthodox faith, or for that matter the Catholic and Anglican churches too, I suppose, in that he did things like ordaining priests and bishops and saying mass and celebrating the sacraments, but unlike the Archbishops of those bodies, traditional bodies, he had nothing whatsoever to do with the material circumstances or, for that matter, most of the cultural or social circumstances of which the laity were dealing with.           So it was a distinct division of activity.

CALLINAN J:   Mr McRae, can you help me with this please.  Does the evidence explain why the South Australian Community took such a leading role in this and made the payments that they did make, rather than the federation or members of the federation other than South Australia?

MR McRAE:   Yes, it does, and the brief explanation is this, that the Archbishop had family in Adelaide ‑ ‑ ‑

CALLINAN J:   He had a sister in Adelaide.

MR McRAE:   He had a sister in Adelaide, and I think other family as well.  The other Archbishop, Stergious or Serjei, had been in Adelaide as well.  I mean, I cannot really take it much beyond that.  It was seen to have been ‑ ‑ ‑

CALLINAN J:   It just seems to be that the South Australian Community, to put it at its lowest, took a leading role in his engagement – and using that in a neutral sense now – but in his engagement and in the provision, as Justice Kirby said, of the bread on his table.

MR McRAE:   Your Honour, in terms of his engagement, he was invited out, quite clearly, not by the Adelaide Community but by the four communities of Sydney ‑ ‑ ‑

CALLINAN J:   Ignore the engagement.  Why did the South Australian Community – and they did, did they not – pay whatever was being paid to him and make the PAYE deduction?

MR McRAE:   They did, yes.

CALLINAN J:   They were subsidised, I think the evidence was, by some of the other communities from time to time; is that right?

MR McRAE:   I put it higher than that.  The other communities contributed, although not always on time, to ‑ ‑ ‑

CALLINAN J:   But the contribution was to the South Australian Community and not directly to the Archbishop; is that right?

MR McRAE:   That is correct, your Honour, yes.  Yes, I agree with that.

CALLINAN J:   Why was it done that way, because the South Australian Community was benefiting most from his activities?

MR McRAE:   Yes.  Mr Manos, in his evidence, suggested something like that, that the fact that he was located in Adelaide meant that he could more easily, for instance, act as a locum priest from time to time.  So, yes, I think that is the specific answer to your Honour’s question.

CALLINAN J:   Thank you.

MR McRAE:   I wanted again, if I may briefly, to return to the issue that was raised by Justice Kirby concerning this presumption and where it might apply.  I wanted specifically to refer to some observations that were made in Rogers v Booth, which is case No 2 of our book.  That case involved the Salvation Army and I agree, not only did it involve a very detailed set of regulations and rules, but there was also a specific declaration between the parties that the Salvation Army officer was not an employee.  However, before he reached that point, the Master of the Roll said at page 754, between A and C:

It is a relationship pre-eminently of a spiritual character.  They are united together for the performance of spiritual work, and, in order to carry out efficiently the ends they have in view, they submit to a very strict discipline, and a very strict command.  On the face of that, it appears to me that the necessary contractual element which is required before a contract of service can be found is entirely absent.

HAYNE J:   That was a hierarchical church in which the contract alleged was between the officer concerned and the principal person in the hierarchy.

MR McRAE:   Yes, your Honour, it was.  I suppose my point has to be that, given all that, there appears to be nonetheless a statement somewhat wider than that.   Interestingly, on the next page that follows, page 755, between E and G, in speaking of the money his Honour said:

The circumstance that a monetary sum is paid to officers who enter into this relationship is, in my opinion, quite insufficient to change the relationship from what it otherwise would be.  It is quite obvious that, if officers are devoting the whole of their lives to this service, the Army would make provision to maintain them, and that it in effect does.  But that does not mean that the sum which is paid has any similarity to wages or salary, or any payment given contractually for services given or for services rendered.  It is a maintenance payment, to enable them to carry on the work that they have undertaken.  It appears to me, therefore, that the appellant cannot establish, not merely a contract of service, but also any contractual relationship at all which could possibly become a contract of service ‑ ‑ ‑

There was another English case to which I wish to make reference, and that is the decision in the House of Lords of Davies v The Presbyterian Church of Wales ‑ ‑ ‑

KIRBY J:   Is this all relevant to presumption in religious arrangements?

MR McRAE:   It is, your Honour, yes, directly.  Yes it is.  The Rogers v Booth Case and the Davies Case are two of the cases on which Justice Bleby significantly and importantly relied.

KIRBY J:   Booth was another case like Knowles and like the Methodist Case, where the arrangement was with the church – it was with General Booth, who was the commander of the Army – whereas you ultimately have to come to grapple with the peculiarities, uncomfortable as they may be, of this particular case where there is sort of a side contract.  It is not entirely within the church.  I assume – I do not know, but I assume that the Greek Orthodox Church has very well established canon law going back centuries.

MR McRAE:   It does, no question of that.

KIRBY J:   That governs, ordinarily, the arrangements of priests and bishops and archbishops within the Greek Orthodox Church.  We are not dealing with that.  We are dealing with this very unusual, special, peculiar arrangement, for the Australian divided church.

MR McRAE:   Yes.  Your Honour, I quite agree and I quite understand the point that you are putting to me.  I am simply endeavouring to suggest that while Davies and Rogers are examples of these hierarchical structures, nonetheless the observations that are made in them are of wider import.

HAYNE J:   In each case the contract asserted was a contract said to be found in the relevant document regulating the conduct of ministers, was it not?

MR McRAE:   Yes, it was, your Honour, that is so.

KIRBY J:   I was not stopping you from going to Davies at all.  I cannot see it in your list of ‑ ‑ ‑

MR McRAE:   No.  In fact, we did not incorporate it because my learned friend had.  So it is in the appellant’s book of authorities.  It is No 6.  I want ‑ ‑ ‑

KIRBY J:   Does it say anything more than the Methodist Case and Rogers v Booth?

MR McRAE:   No, I have had everything that I wanted to say about the Rogers v Booth matter.  Davies v The Presbyterian Church was a decision of the House of Lords.  My learned friend has included it in his book of authorities.  At page 329, between A and D, there are some observations of Lord Templeman.  He begins by saying:

My Lords, it is possible for a man to be employed as a servant or as an independent contractor to carry out duties which are exclusively spiritual.  But in the present case the applicant cannot point to any contract between himself and the church.  The book of rules does not contain terms of employment capable of being offered and accepted in the course of a religious ceremony.  The duties owed by the pastor to the church are not contractual or enforceable.  A pastor is called and accepts the call.  He does not devote his working life but his whole life to the church and his religion.  His duties are defined and his activities are dictated not by contract but by conscience.

HAYNE J:   That case concerned dismissal from a particular charge, did it not?

MR McRAE:   It did, your Honour.

HAYNE J:   The minister’s induction to that charge was said to found the contract, was it not?

MR McRAE:   It was.

HAYNE J:   The induction to the charge was the essentially religious ceremony conducted in accordance with the then governing documents of the church?

MR McRAE:   Yes.

HAYNE J:   Does it not therefore stand distinctly apart from the kind of circumstance with which we are concerned?

MR McRAE:   With respect, I say no, your Honour, because, in my respectful submission, the observations of Lord Templeman, particularly at B, remain of relevance.

He ‑

meaning the Minister ‑

does not devote his working life but his whole life to the church and his religion.  His duties are defined and his activities are dictated not by contract but by conscience.

KIRBY J:   That might have been an answer if he had sued the Greek Orthodox Church, but he sued this Community with its peculiar and special and separate side contact.  It may or may not be a contract of employment, which is a very important practical question, but it was a special contract.

MR McRAE:   Your Honour, I point to that purely ‑ ‑ ‑

KIRBY J:   It is not answered by these principles which govern the relationship of a minister of religion or priest with his or her church.

MR McRAE:   Your Honour, it is my submission that embedded in these cases, although they deal with hierarchical churches, is a principle which is of wider ‑ ‑ ‑

HAYNE J:   I think the Presbyterian Church of Wales would resent that, Mr McRae, but there we are.

MR McRAE:   I am sorry.

HAYNE J:   The Presbyterian Church of Wales would resent reference to it as a hierarchical organisation, I rather suspect.

MR McRAE:   I am sorry, yes, I understand.

KIRBY J:   Tread very warily in this case.  We all have to.

MR McRAE:   Yes, I know, as we have all learnt as we have gone, your Honour, yes, very warily.  So if I could use just the expression, while I accept that the authorities have dealt largely with bodies which are closely regulated by their internal rules, nonetheless I submit, with respect, that embedded in these remarks are observations of wider application and I think it was on ‑ ‑ ‑

McHUGH J:   Why would you approach it that way?  If you analyse this, as I often do, in terms of the old system of pleading, which I always think helps thinking on these matters, you would have pleaded it in this way.  You would say that for that, in consideration that the Archbishop would provide spiritual services to members of the church, the Community promised to pay him X dollars annually.  Why would that not be a binding contract?

MR McRAE:   Because, in my submission, it then offends against the principle that where the duties are pre‑eminently spiritual certain presumptions arise.

McHUGH J:   It does not.  You see in what I have put to you the provision of the spiritual services is the consideration for the promise to pay and, according to the opening line in the passage of Lord Templeman’s speech to which you refer, it is possible for a man to be employed as a servant to carry out duties which are exclusively spiritual.  So the provision of spiritual services can be a valid consideration, and why is that not the valid consideration for the promise to pay a certain amount?  It may be another question altogether as to whether it amounts to a contract of employment.

MR McRAE:   Yes.

McHUGH J:   Why is it not an enforceable contract, just the same as if the South Sydney Leagues Club offered to pay a player a certain amount per year in consideration that he would provide his services to the Souths Leagues Club?  I am talking about rugby league or some similar arrangement in respect of the sport that is played south of the Yarra – I am sorry, south of the Murray I should say, not south of the Yarra.

HAYNE J:   Yes, not played south of the Yarra.  It is played north of the Yarra.

KIRBY J:   You are not expected to know much about – I think we had better steer clear of rugby league.  Spiritual guidance to rugby league players, for example.  I mean, you can have a side contract which would be enforceable.

MR McRAE:   The cases say so, because they speak of provision of a house and provision of superannuation and the like, but it has to be, in my respectful submission, that in respect of the central agreement between the parties there is a presumption that there is no intention to enter into contractual relations, that presumption arising from two things:  firstly, the pre‑eminently spiritual nature of the relationship and, secondly, the nature of the duties carried out by the minister.

HAYNE J:   The pre‑eminently spiritual content to which you refer, leading, does it, in your submission, to some tension between performance of a contract of employment and performance of spiritual obligation?

MR McRAE:   That is one thing that could arise, your Honour, yes.

HAYNE J:   What other consideration or factor would be important as following from the spiritual dimension?

MR McRAE:   I think that one of the judges gave the example of a court being called upon to inquire into whether a minister had, or had not, properly carried out duties that were spiritual.

HAYNE J:   Thus, the injection of the community into this agreement, may serve to resolve the tension that would otherwise exist if you said that minister and parish stood in contractual relationships.  Here, if the contract be, you will provide your spiritual services, if you like, in accordance with the governing law of the church, some of those tensions evaporate, do they not?

MR McRAE:   Yes, I can see that, your Honour.  If you treat the cases in a more narrow way, then that must follow, but I am suggesting, with respect, that one ought not to treat the observations quite so narrowly, a little more widely.

KIRBY J:   You say that this principle colours the whole of the engagement of the Archbishop?  It is of the nature of his engagement and of the nature of his calling that he is not in the legal business, he is in a spiritual business, he owes his entire life to his calling.

MR McRAE:   Indeed.

KIRBY J:   That is something that colours all of the engagements that were necessary to ensure that he comes to Australia.

MR McRAE:   Indeed, that is so.  That very correctly expresses what I am endeavouring to convey.  What I say, with respect, is that insofar as Justice Bleby reached the conclusions as he did as to presumptions, he was correct, but of course ‑ ‑ ‑

KIRBY J:   Could I just ask you to pause there, because you will remember that I called attention to the Industrial Magistrate’s reference to the arrangement whereby in the case of dismissal it was agreed that the parties should go to law.  You have, as it seems to me, two rather strong points against you.  One, that you agree – and you have never resiled from this – that the priests were employed by the Community?

MR McRAE:   Indeed.

MR McRAE:   Again, your Honour, I think we are back to that difficulty of what the relationship was between the various parties.  According to the magistrate, and not disputed, the priests were employed by the communities.  According to the magistrate, the Archbishop was employed by the Adelaide community.  According to the Full Court, the priests were employed by the communities.  The Archbishop held a position in the church.

GAUDRON J:   Then, let us assume that that is so, that that is what they found.  Then you have to come to the question whether they were entitled to so find, having regard to the findings below.  You have to come to the second ground of appeal, and whether or not they were entitled to so find you have to deal with the question:  what is the ratio of the case.

MR McRAE:   Yes, I accept that, your Honour.

GAUDRON J:   That there was no intention to enter relationships with any one or no intention to enter relationships with the South Australian community.

MR McRAE:   It has consistently been our case that there was ‑ ‑ ‑

GAUDRON J:   No, do not worry about what is consistently been your case.  Let us deal with the factual findings made at various points because we are not here to reconsider what you say should be the factual findings.

MR McRAE:   I appreciate that, your Honour.  I am only endeavouring to support what, with great respect, I consider to be the findings of the Full Court.  If I could endeavour to go to Justice Kirby’s point and to do that I need to refer to the constitution which is set out in book 3, page 835.

McHUGH J:   But was this constitution ever followed?

MR McRAE:   The magistrate held, your Honour, that it was a “dead letter” yet the evidence, overwhelmingly, in our submission, shows that it was followed and, moreover, the Archbishop, in his evidence, agreed that it did apply.

KIRBY J:   It would be handy to get a reference to that.  I know Mr Besanko said that. 

MR McRAE:   I am sorry, your Honour?

KIRBY J:   It would be handy to get a reference to where that was embraced.

MR McRAE:   Yes, I will certainly go – I cannot, of course, go straight to that.

KIRBY J:   Perhaps you can just tell us that at some later stage or give us a note on it.

MR McRAE:   I have in fact got the references to that, your Honour.  At page 212 of book 1 I put to the Archbishop whether that constitution in fact reflected the agreement that he reached with the communities.  At line 10, I said:

I have now taken you through all of the provisions of the registered constitution of the Autocephalic Greek Orthodox Church of America and Australia, and I put to you that that constitution as registered in fact reflects the agreement that you had reached with the communities?

His answer was:

Yes.

It is highly significant that he agreed to the plural “communities”.  It was not as though I had in any sense rushed him to that conclusion.

HAYNE J:   Can I just understand what the exercise is we are engaged in at the moment, Mr McRae?  Are we retrying this case?  Are you supporting the capacity of the Full Court to intervene for error?  What are we doing?

MR McRAE:   I am endeavouring to support the reasonableness of the Full Court’s conclusion.

HAYNE J:   Well, why were they entitled to substitute their views for the views that had been found, at least by the magistrate, and on one of view of things, both by the magistrate and the intermediate court after the magistrate?  Why were the Full Court entitled to retry the case?

MR McRAE:   For two reasons, your Honour, firstly, that there was a presumption at work which the learned magistrate took no account of and, secondly, there were conclusions he reached which were in fact not correct.

CALLINAN J:   But what part of the constitution negatives a contract?

MR McRAE:   Your Honour, what I am saying is that the constitution, ran as a whole, is not in any way supportive of a contract with the Adelaide community.

CALLINAN J:   But does it negative it?

HAYNE J:   It is a straw dummy, Mr McRae.  That was never the case put against you.  The case put against you was, there were some conversations.  The conversations were to this effect:  the objective interpretation of what was the outcome of those conversations was there was an agreement.  Why are we into the constitution? 

McHUGH J:   It must be extraordinarily weak evidence, compared with the admission contained in the group tax certificates which the community issued year after year that the Archbishop was its employee.  I mean, in days of old when there was casual employment on the waterfront often the only way you could prove employment was to tender a group tax certificate issued by a stevedore and that was usually regarded as fairly compelling evidence of a relationship between employer and employee.  I do not see why you cannot draw the same inference here.

CALLINAN J:   You seem to be making an argument now that he was employed – if employed at all – by the communities and not by the South Australian community.  Is that the purpose of what you are putting to us?

MR McRAE:   Specifically what I am putting is that he was appointed to a position in the Autocephalic Church as ‑ ‑ ‑

CALLINAN J:   But even still, I mean, even leaving aside “community” or “communities” clause VIII of the constitution provides that:

The Communities in the Church shall pay to the Archbishop such a salary –

to be determined by him.  That is the language of a contract, is it not, a contract of service?  Page 839.

MR McRAE:   I am sorry, your Honour?

CALLINAN J:   Page 839, clause VIII.

MR McRAE:   Yes, I am sorry, I have it.  The use of the word “salary” in the context of an archbishop is not necessarily definitive.

CALLINAN J:   It may not be definitive but it is indicative of something, is it not?

MR McRAE:   It may be, in certain circumstances.  All I am seeking to put is that if the magistrate’s findings in relation to the Adelaide meeting were inappropriate, given the nature of the events which immediately or almost immediately followed.  That is what I am seeking ‑ ‑ ‑

GAUDRON J:   Which findings are you talking about?

MR McRAE:   I am sorry, your Honour?

GAUDRON J:   Which findings?  That there was a meeting?  No.

MR McRAE:   No.

GAUDRON J:   That some arrangement was made?

MR McRAE:   No.

GAUDRON J:   That that arrangement involved the payment of money to the Archbishop on a regular basis.

MR McRAE:   No.  At that point, then, we would part company because it would be simply on the basis of appropriate maintenance and support.  I suppose you read into that, “Yes, at appropriate intervals” yes.

GAUDRON J:   Yes.  The question then is whether there was an intention to enter into a contractual relationship at that point.  That was the question that was determined in your favour.  If there was not, if the Full Court was correct in finding that there was not intention – was no intention to enter into contractual relationships we need not worry about the terms of the contract.  If, however, there was an intention, it will then become relevant to look at the terms of that contract.

MR McRAE:   I see your Honour’s point and I am sorry, but what I have sought to do is to support the proposition – the first proposition that your Honour put, that is that although there may well have been arrangements as to maintenance and support, they were not, in the circumstances, intended to create contractual relations for the reasons given by the Full Court.

McHUGH J:   But I do not see what you get out of your reliance on the constitution or on the use of the plural in the question that was put to the Archbishop because article XXI of the constitution defined:

“Community” or “Communities” –

to:

mean a Community or such Communities as are members of the Federation –

So, when article VIII spoke about:

The Communities in the Church shall pay to the Archbishop –

it was quite consistent with a single community paying it, such as the respondent.

MR McRAE:   But the basis of the totality of the questioning I have put to him was always in the plural, that is, “Were your dealings with the communities?”

CALLINAN J:   I do not know about that.  I mean, you had taken him through every part of the constitution, you say, and the constitution defined “communities” in the way that Justice McHugh has pointed out to you.  It may have been in your mind that you were talking about communities but it seems to me, at the very least, to be capable of having exactly the same meaning as it has in the document, by definition, because you were going to the document elaborately and it seems to me that by putting the question and soliciting that agreement or that acceptance you went a long way to proving the Archbishop’s case.

MR McRAE:   But it was the Full Court’s proposition that the magistrate was wrong in finding that there had been concluded in Adelaide an agreement which was intended to be contractually binding.  Justice Bleby had strong reason for that.

CALLINAN J:   I have trouble with this, any way.  I mean, conversations being recounted 20 years after the event.  It seems to me that subsequent conduct might, in this case, provide a far better guide to what the parties agreed.

MR McRAE:   It is my proposition that as a matter of common sense the Archbishop was afforded welcome and honour in Adelaide.  He was provided with accommodation and maintenance and support, the very sort of things that you would accept.  There must have been discussions at various levels but not just necessarily contracts or agreements about certain things.  Those would be the validity of his orders and his future financial provision.  I accept all of that but there was no suggestions that the payments that were made in Adelaide prior to the Melbourne meeting were, as it were, contingent upon religious duties being performed.

It was only to be expected, I say as a matter of common sense, that a visiting archbishop would perform those ceremonies and rituals and it was only to be expected that a greeting community would supply him with support.  When you go to Justice Bleby’s analysis of that specific conversation in Adelaide - effectively what I am saying is that Justice Bleby correctly discusses and reaches appropriate conclusions in relation to those discussions at pages 1197 through to 1199.

HAYNE J:   In particular, do you accept at 1198, paragraph 235, the second sentence, the discussions upon which:

the Industrial Magistrate relied . . . in a particular context, could well lead to a conclusion that a contract was formed.

MR McRAE:   Yes, I think I have to.

HAYNE J:   Thus the question comes, does it not, entirely to the significance of context?

MR McRAE:   Yes, I think you are right, your Honour.

HAYNE J:   Have we had from you all that you would say about context and its significance?

MR McRAE:   I want to be sure of my answer to that.  I believe that the immediately subsequent events are relevant indicating that the arrangements in Adelaide were of a particular nature and those immediately subsequent events are the meeting in Melbourne and the writing of the constitution, both of which tell against the inference that there was an intention to contract in the way that the magistrate found.

CALLINAN J:   But, Mr McRae, I have read what you put to the appellant about clause VIII or article VIII at pages 194 and 195 and you do not seem to have to have suggested to him, for example, that his understanding was that he was not to be paid a salary.  At the foot of page 194 you begin it.

Article 8 provides in summary that the communities will pay the archbishop a salary –

Now, he did not accept that, but you put:

Was that the arrangement that you reached with the communities?

You seem to be putting that ‑ ‑ ‑

MR McRAE:   I am sorry, which page, your Honour?

CALLINAN J:   Page 194.  You are putting that there was an arrangement that he would be paid a salary.  As I say, the Archbishop does not seem to have accepted that but the answer was not entirely responsive.  But your case, as it was put, was that clause VIII or article VIII reflected the arrangement.

MR McRAE:   But the difference between our case and the magistrate’s finding was this in that regard, the magistrate said that the terms of the constitution reflected the Archbishop’s agreement with the Adelaide community alone, whereas we say, and Justice Bleby says, that the terms of the constitution reflect the position which the Archbishop subsequently occupied in the Autocephalic Church.  That is the difference, your Honour.

CALLINAN J:   I do not know.  You see, the Archbishop – and I may have misstated what he said at page 195, line 5 – seems to be saying:

that the community of Adelaide will take over –

He seems to be rejecting the plural.  What he says there seems to me to be consistent or at least arguably consistent with the view that in the first instance the Adelaide community will be responsible but that the other communities will put money in, as it were, from time to time, but with that qualification clause VIII or article VIII defines the arrangement, as you put it and as it states.

MR McRAE:   But the arrangement, we say, being with the church rather than the individual community.

CALLINAN J:   I will not say any more about it.  I understand your submission.

MR McRAE:   You see, for example, at page 212 I put to him, and this is line 25:

Well, I put it to you that before – in the time you were in South Australia before the meeting in Melbourne you were simply a guest of the community.

He said:

From the time I – since I arrived – from the second week they gave me my salary and they promised me that in the general meeting that would be officially arranged.

I continued:

What I’m putting to you is that whatever happened in Adelaide to begin with was purely temporary pending the meeting of the federation in Melbourne.

He said:

I know that I was getting paid.  The rest would be arranged in the Pan community, so the other communities will pay also.

What I am putting, with respect, is that that is entirely consistent with what the Full Court found, that is to say, that any payment made by the Adelaide community was in the context of the later formation of the church.  Otherwise it would mean - and I think this is a significant point in the respondent’s favour – that at that meeting in Melbourne both the Adelaide community and the Archbishop failed to give a proper account of what had happened because it was entirely significant for that Melbourne meeting to know whatever arrangements may have been made in Adelaide and if in fact in Adelaide the Archbishop – well, I will not use the word “employed” because that has got difficulties, but was appointed, one would expect that that was something that would have been said if it was not.

I wanted also to refer to the specific analysis by Justice Bleby of the discussions between the parties because that is central – these two parties.

GAUDRON J:   Yes.  Where do we go?  We are running very short of time.

MR McRAE:   Yes.  I am just endeavouring to pick up the reference, your Honour.  It is starting at page 115 of book 1.

KIRBY J:   Which paragraph?

GAUDRON J:   I thought you were going to the analysis of Justice Bleby.  The note I took was that you were going to the specific analysis by Justice Bleby of the discussions.

MR McRAE:   I beg your Honour’s pardon.  That appears at page 1161.

KIRBY J:   Which paragraph?

MR McRAE:   I am sorry, I am just coming to that, your Honour.  Paragraph 128.  His Honour, starting at paragraph 128, refers to the Archbishop’s arrival in Adelaide and to the fact that it was:

Crucial to the Industrial Magistrate’s conclusion as to the respondent’s claim was a finding that an enforceable contract was then made between the respondent and the appellant that he should serve the South Australia community as archbishop, and that that contract was a contract of employment.

He then refers to the evidence which he took into account at paragraph 130:

The South Australian community had arranged accommodation for the respondent ‑ ‑ ‑

HAYNE J:   Again, Mr McRae, at the risk of interrupting and prolonging, if you accept, as I thought you had, that Justice Bleby rightly held that the conversations could in a particular context lead to a conclusion that a contract was formed and the critical question was whether the context dictated the contrary result, why are we going to this evidence and this analysis?  What is the point?

MR McRAE:   I take your Honour’s point.  Can I say that that analysis, in case it becomes significant, is based on certain passages of the evidence.  Can I refer to the passages of the evidence; not to read them, but simply to indicate what they are so that the Court can assess the accuracy or otherwise of what Justice Bleby said.

KIRBY J:   I may be wrong, but I understood that your case has two prongs:  one, that whatever agreement existed it was not one which engaged a legal relationship and is not enforceable.

MR McRAE:   Yes, indeed.

KIRBY J:   Two, if you are wrong on that, that it was not an agreement with your client, it is an agreement with someone else.

MR McRAE:   Yes, that is quite right, your Honour.  So if I just give these passages in the evidence and then I will turn to the second point.  The relevant evidence, in my respectful submission, appears at pages 115, lines 10 to 40, 116, lines 1 to 15, 119, lines 5 to 20 and 35 to 40, 120, lines 1 to 5, 178, lines 25 to 40, 179, lines 1 to 5, 180, lines 25 to 40, 214, lines 1 to 15 and 216, lines 1 to 20.  That having been said and having put what I want in relation to the context in which that discussion took place, I then turn to the issue to which Justice Kirby just raised, and that will be a short matter.  If I can just identify my notes as to that.

GAUDRON J:   No.  I do not understand how the second – I understand that it was always part of your case that the contract, if there was one, was with somebody else and if it was not a contract, even if the arrangement was with somebody else, but there was a limited grant of special leave in this matter.  The grounds of appeal conform to that limited grant.  You have no notice of contention.  How do you say the question that the contract was with somebody else arises in these proceedings?  It may be a matter that, if you do not succeed, will have to be agitated before the Full Court.

McHUGH J:   Because the Full Court never seems to have finally made any view about it.  Having raised the issue, Justice Bleby then seems to move onto the question of intention.

MR McRAE:   Yes.  There is truth in what your Honour says, I agree.

McHUGH J:   Yes, he never came to a concluded view about it, so if you lose on this point, well, it may well be open to you to argue to a Full Court that that is another matter that has to be determined.

MR McRAE:   I would, just as a matter of courtesy, like to be able to give at least the reference to the discussion by Justice Bleby on that point, and I have it.

McHUGH J:   It finishes in paragraph 239, does it not?  It says the magistrate “assumed”:

there had to be a contract with the South Australia community.  However, as I have already pointed out, the Industrial Magistrate did not address the question –

et cetera, et cetera, and then he goes on to deal with the question of intention to create “a legally binding contract”.  He himself never expressed any concluded view, so far as I can see, as to who were the parties to the contract.  That is an issue that seems to be still open.

MR McRAE:   Well, it was my submission that the Full Court did conclude that the Archbishop had been appointed to a position of that title in the Autocephalous Church.

GAUDRON J:   By whom?  By whom had he been appointed?  Let us consider that.

MR McRAE:   One can only assume, by the parties who made up that body, which were largely the communities.

GAUDRON J:   Well the only party that ever joined the Church, it seems, the constitution of which is in the appeal book and which was never followed, seems to have been the South Australia community.  That was the evidence, was it not?

MR McRAE:   Your Honour, two things to that:  firstly there are the agreed facts that there were other parties who ‑ ‑ ‑

GAUDRON J:   Anyway, perhaps this is a red herring.

MR McRAE:   Yes.  With respect, I think that is all I can usefully put to the Court.

GAUDRON J:   Yes, thank you.

KIRBY J:   Could you just give me where the agreed facts are?

MR McRAE:   Yes, your Honour.  They are in the pages 36 to 38 of book 1.

GAUDRON J:   Thank you.  Yes, Mr Besanko.

MR BESANKO:   I have nothing in reply, if the Court pleases.

GAUDRON J:   Thank you.  Now Mr Besanko, you are to provide a note of the factual findings that you say were overturned by the Full Court.

MR BESANKO:   Yes, your Honour.

GAUDRON J:   And you will provide references to the Full Court’s findings in that regard and to the facts as analysed, or as found, by the magistrate and subsequently in, I think it was before a single Justice of the Industrial Court, was it, and later by the Full Court of the Industrial Court.  You will have seven days in which to do that and Mr McRae will have a further seven days in which to respond to that.  Is that adequate for you, Mr McRae?

MR McRAE:   Yes, if it please your Honour.

GAUDRON J:   Otherwise the Court will reserve its decision in the matter.

AT 12.43 PM THE MATTER WAS ADJOURNED