Radmanovich v Nedeljkovic - [2001] NSWSC 492

No judgment structure available for this case.

Reported Decision:
52 NSWLR 641

New South Wales

Supreme Court

CITATION: Radmanovich v Nedeljkovic [2001] NSWSC 492

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 1354/99

HEARING DATE(S): 16, 17 May, 11 July, 25 October 2000 (then written submissions)

JUDGMENT DATE:
15 June 2001

PARTIES :

Maksim Radmanovich (P1)
Stevan Dobrich (P2)
Drago Mijakovac (P3)
Kosta Nedeljkovic (D1)
Nikola Lukic (D2)
Duro Radan (D3)
Attorney-General (D4)

JUDGMENT OF: Young CJ in Eq

COUNSEL : B Coles QC and G Colyer (P)
P W Taylor SC and S Glacken (D1-3)
R Lancaster (D4)

SOLICITORS: McCabes (P)
Nicholas G Pappas & Company (D1-3)
I V Knight (Crown Solicitor) (D4)

CATCHWORDS: ASSOCIATIONS & CLUBS [1]- Amendment to rules- No provision for amendment- Unanimous consent of members required- Court has inherent power to overcome deadlock. ASSOCIATIONS & CLUBS [3]- Gifts- Church built by unincorporated association- Perpetuity- Invalid gift. CHARITY [6]- Advancement of religion- Trust for ethnic church school community- Whether valid. CHURCHES [7]- Trusts- How trusts discovered- On facts trust for hierarchical church with congregationalist overtones. EQUITY [108]- Trust- Involving unincorporated association- Difference between core terms of trust and precatory directions. EQUITY [255]- Rule against perpetual non-alienation effect on gift to operate church.

LEGISLATION CITED: Charitable Trusts Act 1993, s 23

CASES CITED: AG v Cahill [1969] 1 NSWR 85
AG v Calvert (1857) 23 Beav 248; 53 ER 97
AG v Clapham (1855) 4 DeG M & G 591; 43 ER 638
AG v Gould (1860) 28 Beav 485; 54 ER 452
AG v Holy Apostolic & Catholic Church of the East (1989) 37 NSWLR 293; on appeal (1989) 18 NSWLR 291
AG v Murdoch (1849) 7 Hare 445; 68 ER 183
AG v Murdoch (1852) 1 De GM & G 86; 42 ER 484
AG v Pearson (1817) 3 Mer 353; 36 ER 135
AG v Smythies (1831) 2 R & M 717; 39 ER 568
Aboriginal Hostels Ltd v Darwin CC (1985) 55 LGRA 414
Aglikin v Kovacheff 516 NE (2d) 704 (1987)
Anastas v The Greek Orthodox Community of NSW (McLelland CJ in Eq 18.11.1964)
Bacon v Pianta (1966) 114 CLR 634
Balkou v Gouleff (1989) 51 DLR (4th) 561
Ball v Pearsall (1987) 10 NSWLR 700
Bishop of Natal v Gladstone (1866) LR 3 Eq 1
Brylinski v Inkol (1924) 55 OLR 369
Church of the New Faith v Commissioner of Pay-Roll Tax (Vic) (1983) 154 CLR 120
Craigdallie v Aikman (1813) 1 Dow 1; 3 ER 601
Dragelevich v Rajsich 263 NE (2d) 778 (Court of Appeals, Ohio) (1970)
Farley v Westminster Bank Ltd [1939] AC 430
Foley v Wontner (1820) 2 Jac & W 245; 37 ER 621
Free Church of Scotland v Overtoun [1904] AC 515
Hanna v Malick 193 NW 798 (1923)
Hardey v Tory (1923) 32 CLR 592
Harington v Sendall [1903] 1 Ch 921
In re Astor's Settlement Trusts [1952] Ch 534
In re Lipinski's Will Trusts [1976] Ch 235
In re Scowcroft [1898] 2 Ch 638
Keren Kayemeth le Jisroel Ltd v IRC [1931] 2 KB 465
McGarvie Smith Institute v Campbelltown MC (1965) 11 LGRA 321
Metropolitan Petar v Kostovski (Vic SC Byrne J 27.10.1997)
Morice v Bishop of Durham (1804) 9 Ves 399; 32 ER 656
Neville Estates Ltd v Madden [1962] Ch 832
New York Annual Conference of the United Methodist Church v Fisher 438 A (2d) 62 (Conn SC) (1980)
Parkes Management Ltd v Perpetual Trustee Co Ltd (1977) 3 ACLR 303
Porima v Te Kauhanganui o Waikato Inc [2001] 1 NZLR 472
Public Trustee of NSW v AG (Powell J 11.12.1984)
Public Trustee v AG (1997) 42 NSWLR 600
Re Australian Elizabethan Theatre Trust (1991) 30 FCR 491
Re Bryning [1976] VR 100
Re Cain [1950] VLR 382
Re Clarke [1901] 2 Ch 110
Re Denley's Trust Deed [1969] 1 Ch 373
Re Gillingham Bus Disaster Fund [1958] 1 Ch 300
Re Macgregor (1932) 32 SR (NSW) 483
Re Mathew [1951] VLR 226
Re Price [1943] Ch 422
Re Smith [1932] 1 Ch 153
Re South Place Ethical Society [1980] 1 WLR 1565
Re Stewart's Will Trusts [1962] QWN 24
Re Stratton [1931] 1 Ch 197
Re Thackrah [1939] 2 All ER 4
Re Thompson [1934] Ch 342
Re Topham [1938] 1 All ER 181
Re Wilson's Grant [1960] VR 514
Re Wood (dec'd) [1949] Ch 498
Reel v Holder [1979] 1 WLR 1252
Roman Catholic Archbishop of Melbourne v Lawlor (1934) 51 CLR 1
Royal Society for the Prevention of Cruelty to Animals v Coshott (Hodgson J 7.8.97)
Scandrett v Dowling (1992) 27 NSWLR 483
Serbian Orthodox Church Congregation of St Demetrius of Akron v Keleman 256 NE (2d) 212 (Ohio SC) (1970)
Serbian Orthodox Diocese for the United States of America v Milivojevich 426 US 696 (US Supreme Court) (1976)
Serbian Orthodox Ecclesiastical School Community 'St Nikolas' Queensland v Vlaislavljevic [1970] QdR 386
Strathalbyn Jumping Club Inc v Mayes [2001] SASC 73
The Trustees of the Londonderry Presbyterian Church House v Commissioners of Inland Revenue [1946] NI 178
Thornton v Howe (1862) 31 Beav 14; 54 ER 1042
Tidex v The Trustees Executors & Agency Co Ltd [1971] 2 NSWLR 453
Vick v Toivonen (1913) 12 DLR 299
Watson v Jones 80 US 679 (1871)
Williams' Trustees v IRC [1947] AC 447
Wylde v AG (1948) 78 CLR 224

DECISION: See paras 213-218.

THE SUPREME COURT

OF NEW SOUTH WALES

EQUITY DIVISION

YOUNG CJ in Eq

FRIDAY 15 JUNE 2001

1354/99 - RADMANOVICH v NEDELJKOVIC

1 HIS HONOUR: These proceedings concern the trusts affecting land at Elanora Heights on which is erected buildings known as the Serbian Orthodox Church-School, St Sava.

2 The plaintiffs are the trustees of the Elanora Heights property. They seek declarations that they are entitled to hold that property on trust for the First Serbian Orthodox Church School Community St Sava Warriewood-Mona Vale without being bound by directions made under the power and authority of the Bishop of the Diocese of Australia and New Zealand of the Serbian Orthodox Church.

3 The basal question for determination is whether the trusts affecting the relevant land are for the Serbian Orthodox Church as a whole or whether they are solely for the Church Community of Warriewood-Mona Vale or otherwise.

4 The proceedings were commenced by summons on 12 February 1999. It would seem that the event which brought about the issue of the summons was that on 23 January 1999 the people in the defendants’ interests purported to convene an extraordinary general meeting and to elect a new executive board in place of the former board which was controlled by those sympathetic to the plaintiffs. The defendants are members of that board.

5 The matter proceeded by way of statement of claim which was filed on 31 March 1999. The statement of claim sought a declaration that the 1950 Rules were still binding, or alternatively, that rules adopted at a meeting on 8 March 1998 were the rules which governed the Community and declarations that the relevant property was held on trust for the Church School Community as an autonomous body with respect to the management of its real and personal property.

6 A defence and cross-claim was filed on 23 April 1999 seeking declarations that the property was held on trust for the religious and charitable purposes of the Serbian Orthodox Diocese of Australia and New Zealand being part of the Serbian Orthodox Church having its see in Belgrade, Yugoslavia and that two of the plaintiffs who are trustees of the land be removed and replaced with two persons sympathetic to the defendants and a declaration that no former committee member has any right to be involved in the management of the Community. A reply and defence to cross-claim was filed on 28 June 1999 putting those matters in issue.

7 The case was commenced before me on 16 May 2000 when the evidence was taken and then continued on 17 May. At that time Mr G Colyer appeared for the plaintiffs and Mr P W Taylor SC and Mr S Glacken appeared for the defendants.

8 The suit was reformulated on 11 July 2000, principally by adding the Attorney-General as a party and subsequently Mr R Lancaster appeared for the Attorney-General and Mr B Coles QC appeared to lead Mr Colyer. Written submissions were then received from the parties over an extended period.

9 On 25 October 2000, the court reconvened and I issued a document headed “Notes of Judgment” which plainly put the parties on notice as to my then current thinking. I invited further submissions which gradually flowed in up to 5 April 2001.

10 I have found the case a very difficult one to decide. The difficulties have been exacerbated by some of the defects in the law of charitable trusts, but also by the changing alignments within the Serbian Orthodox community over the past 50 years.

11 Although irrelevant to the dispute, the present case possesses all the indicia of the usual causes of problems in the Eastern Churches in Australia. A small group of migrants commence a Church/Community centre without great thought to constitutional issues. Often a local solicitor assists in the drawing up of a constitution from a precedent from a democratically run club or congregational church. No-one at this stage gives thought to the hierarchical nature of such churches. As time goes by and the Church gathers strength, constitutional questions assume greater importance and the tension between the hierarchical principles and the democratic structure of the local constitution escalates to breaking point. The disputants, as in the present case, are men and women of Christian faith and goodwill caught up in the inevitable struggle planted at the community’s foundation.

12 On the first day of hearing, a document was produced, which became Exhibit PX 230 entitled “Statement of Agreed Facts”. This was a slight misnomer as there never was final agreement on the document. I struck out those parts which were not actually agreed on the first day of hearing. Most of what appears in it is common ground and has been incorporated into the following narrative.

13 These reasons are structured as follows:

1. Procedural and Introductory Matters

2. Facts re the Community
(a) The Beginnings
(b) 1965 Litigation
(c) Development of the Mona Vale Site
(d) Acquiring and developing the Elanora Heights site
(e) The 1998 disputes

3. Facts concerning the Serbian Orthodox Church

4 . Plaintiffs’ Contentions

5 . Defendants’ Contentions

6. Attorney-General’s Contentions

7. My Initial Thoughts

Australian branch of the Serbian Orthodox Church in 1952?

(i) Does the Charitable Trusts Act, s 23 apply?

9. Is there a valid trust affecting the Elanora
Heights Property and, if so, what is its content?

10. Subsidiary Issues
(a) The validity of the 1998 Rules
(b) The Excommunications

11. What relief, if any should be given?

14 The proceedings were commenced by summons filed 12 February 1999 without naming the Attorney-General as a party. It is conceded that this was irregular. This is for two reasons, first, the proceedings are in respect of an alleged charitable trust. Secondly, if the trust should fail, the Attorney-General represents the person who would take on bona vacantia if that became a relevant consideration.

15 The Attorney-General has now become a party. All parties are agreed that the Court may treat the proceedings as being validly before the court nunc pro tunc: see Royal Society for the Prevention of Cruelty to Animals v Coshott (Hodgson J 7.8.1997, unreported).

16 The plaintiffs and the defendants are members of an unincorporated body known as First Serbian Orthodox Church School Community, St Sava, Warriewood-Mona Vale and also of the Serbian Orthodox Parish of St Sava.

17 The plaintiffs are the trustees of the land on which the association’s buildings are erected. The defendants are the representatives of the Executive Board of the First Serbian Orthodox Church Community.

18 Essentially, the plaintiffs represent those who hold the position that the association is a group of people of Serbian origin who have control over the association’s property in their own right. The defendants are people who maintain that the hierarchy of the Serbian Orthodox Church is in control.

2. Facts re the Community

19 After the Second World War, there were a number of displaced people of Serbian nationality. Many of these people were staunchly anti-communist and had no desire to return to Yugoslavia under a communist regime. In due course, many of these emigrated to Australia. A sizeable group of them gathered in the Warriewood-Mona Vale area of Sydney.

20 According to the evidence of Mr Grkinic, one of the initial members of the Community, many of the founders of the Community had rejected Yugoslavia and the communist regime and its institutions which included the Serbian Orthodox Church which was heavily influenced by that regime. Almost all the members of the Serbian Community in Warriewood-Mona Vale had similar backgrounds as anti-communist fighters. Their desire was to make a fresh start in a new country based on the culture and spirituality they had previously known.

21 Mr Grkinic was not cross-examined on his affidavit.

22 These Serbian people had a clear need to gather together for mutual protection in a strange land.

23 The founding members of The First Serbian Orthodox Community, St Sava, Warriewood-Mona Vale (“the Community”) met to form the Community in about 28 February 1949. At that meeting Sava Srzentic made an oral declaration that he intended to donate a parcel of land at Mona Vale to the Church School Community. There was a paucity of evidence of what was otherwise said at that meeting. What there is, is set out in the statutory declaration DX100 by Fr Sekulic made on 9 June 1981 to support a building application that was made to the local council.

24 In the Community’s first newsletter of September 1949 Fr Sekulic set out the objectives and purposes of the Community as follows:

“The first and most important objective which the Church-School Community took upon itself is to bring together all good and honest Serbs who in these times, most painful and blackest for Serbdom, have remained faithful to God, King and Fatherland, that greatest ideal which has led the Serbian nation through all of its glory-crowned history. It may seem curious to many that this be the most important objective of the Church Community, but if they reflect on it a little more deeply they will realise that it is indeed the way it has to be. The biggest tragedy of our difficult and painful existence today is the very discord, which still exists among the national ranks in the diaspora. Because, while in our Fatherland there are only two fronts, the communist and the anti-communist, we who find ourselves in full and boundless freedom dispersed throughout the whole world and who as such could do a lot for our martyred and suffering people, instead of agreeing and organising together, are split into different parties, among whom there are too many great differences of views. That is why the Church Community took upon itself as its first and most important task the bringing together of all nationally oriented Serbs.

“That has been the task of the Serbian Church throughout its history. It is sufficient for us to recall the life and work of the first Serbian Archbishop St Sava. As a young man, he left his father’s home and went to the Holy Mount (Athos) to live a life of monastic denial. But when he heard of the discord and quarrel between his brothers, he departed from the Holy Mount, that greatest ideal of his youth, returned to his homeland where he reconciled his disputant brothers, and remained there to serve his people. There are innumerable shining examples like this in the history of the Serbian Church, and there is no need to set them out here; I only want to state that the Church Community will do everything to at last bring about mutual accord and cooperation, because our future activities depend on our accord.

“The second task the Church Community has taken upon itself is the erection of the first Serbian temple in Australia. This objective can be realised only if our first objective is realised; it depends on our mutual accord and cooperation. Australia, like America, is a conglomeration of all nationalities and while all those nationalities have their own places of worship where they meet and in the prayers they address to God find consolation for all the mishaps that beset them in everyday life, only we Serbs still lack such a temple of our own to pray to God, although in that respect we are ahead of all other nations. Our people is a people of church and monastery endowments. Our emperors and kings erected their own endowment churches, masterpieces of architecture and arts, which are admired to this day by all cultured nations of the world. All our history has been evolving in that direction and such endowment temples were the rallying points for all Serbs. They were testimonies of our glorious historical past, and in them our nation found consolation for all misfortunes that beset it during its five-centuries-long servitude. That is where, as from the purest spring, it drank the faith in the ultimate resurrection of its freedom, which finally came its way.

“Following the example of our glorious emperors, kings and princes, many well-off Serbs built their churches using their wealth, and our poor people denied themselves, so to speak, food to contribute to their church, and so throughout all of our Fatherland innumerable endowment churches, monasteries and temples were built, which stand as eternal monuments to the love of our people for its martyred church.

“There is a considerable number of us Serbs in Australia and with a little more determination we could easily realise this objective. We would thus satisfy our vital need, which would provide hope and food to our restless hungry souls, and which at the same time would be a beacon in the twilight of wandering, both ours and that of humanity in general.

“These in the main would be the most important objectives which the Church Community took upon itself at its foundation and the existence of the Community itself depends on their realisation. Putting this before you, I appeal to all brother Serbs to support the Church Community in all its endeavours and in that way facilitate the realisation of its objectives.

Svetozar Sekulic, Priest”

25 The Community adopted a set of written rules in about 15 April 1950. These 1950 Rules were held still to be operative in proceedings 734 of 1965.

26 Articles 1-7 of the 1950 Rules are as follows:

1

“The Serbian Orthodox Church and School Shire ‘St Sava’ for Warriewood-Mona Vale and surrounding District is a community of Serbs, members of the Serbian Orthodox religion, living at Warriewood-Mona Vale and surrounding district until such time as new communities are formed, when all those living in the vicinity of the places concerned become members of them.

2

3

4

5

6

7

27 Rule 6 is significant in that it shows that not all members of the Serbian Orthodox Church were eligible for membership. It highlights that the group was anti-communist in philosophy. (The word “bigamist” appears to be used in the ecclesiastical sense of a person who has remarried whilst his or her first spouse is still alive).

28 The Rules further provided for a parish and a temple. Rule 39 is as follows:-

29 This Rule seems to show that the Community is an ethnic social association with a religious parish loosely attached.

30 Rule 44 provides that the minister is not to be dismissed without the approval of the Bishop, nor is a new minister to be installed without such permission.

31 Rule 50 is as follows:

32 Under Rules 19 and 20, matters were to be decided by a simple majority of all members provided that a quorum of 50% of the members was present.

33 The Rules then concluded, “These Rules of the Serbian Orthodox Church and School of St Sava for Warriewood and the surrounding districts have been approved on 15th April, 1950 in Sydney. They are in force when approved by a competent authority of America-Canadian Diocese.”

34 In proceedings 734 of 1965, Hardie J declared that the 1950 Rules were still in force. His Honour declined to make any further declarations. Significantly, his Honour regarded the suit before him as one for relief with respect to membership of a voluntary association.

35 The evidence shows that a hall was built on the Mona Vale land. The erection of the hall commenced in 1952 and it was officially opened in 1954. According to the evidence of those who were there at the time, the hall was built with the foundations of an altar. However, in the words of Pero Mrkic in a statutory declaration made in 1981, “It was the intention of the committee that the hall be built first as it would provide a focal point for the Community and would provide a place where people could meet and be happy and generally socialise. It was felt that once this building was paid off and the Community was stronger that a church would be built on the site as presently indicated by the existing foundation stone and foundations for the altar which are in front of the Hall.”

36 On 4 May 1955, Sava Srzentic made a declaration of trust in respect of the Mona Vale land which cannot be found.

37 In 1956, the title of the Mona Vale land was put into the name of trustees.

38 Mr Radan as President of the First Serbian Orthodox Church, St Sava, Mona Vale wrote a letter to the Warringah Shire Council on 20 March 1981 which included the following:

“Firstly, with respect to the Covenant, we advise that the proposed Church building will be used solely for religious purposes in accordance with the traditions of the Serbian Orthodox Church. ... However, the Parish Committee is concerned about the limitation in the Covenant because it feels that this will effect its uses of the existing Church Hall. It is proposed to retain this existing Church Hall so as to enable the Church to continue its use as a Sunday School. Furthermore it is intended to use the Church Hall for the teaching of local Community Forkloric Culture of Serbia and other parts of the Balkan region; for the performances of Forkloric Culture; for meetings of the Church Community...”

39 On 28 September 1981, Mr Radan wrote to the Diocesan Executive Committee informing it that local meetings had decided to acquire four acres of land at Elanora Heights and to dispose of the Mona Vale site. The letter sought the Bishop’s approval and blessing of such move. This was duly granted.

40 The land at Elanora Heights was acquired in 1981 for $92,500. $42,500 was donated by parishioners and the balance borrowed from the Westpac Bank.

41 A declaration of trust was made in respect of the Elanora Heights land on 9 September, 1981. This provided that “The property shall be held by the Trustees upon trust for the First Serbian Orthodox Church Community ‘St Sava’ Warriewood-Mona Vale (hereinafter called ‘the Church’) subject to the provisions hereinafter contained.”

42 The Commissioner of Stamp Duties required evidence as to whether the beneficiary actually paid the purchase price in order for him to assess the stamp duty payable on the declaration of trust. Accordingly, a statutory declaration was furnished dated 15 March 1982 which said that $42,500 was received by the trustees “from voluntary donations from the parishioners and other members of the Serbian Community in Sydney, and from funds raised by the Church at its own organised functions such as family evenings, picnics and weekly services held by the parish priest... . The beneficiary, the first Serbian Orthodox Church Community ‘St Sava’, Warriewood-Mona Vale was formed in 27th January, 1949.”

43 The Commissioner was satisfied with this evidence and stamped the declaration with nominal duty.

44 The present trustees of the Elanora Heights land are the first and second plaintiffs and the third defendant.

45 On 10 July 1983, the same Bishop, following a written request granted his blessing to the erection of a temple on the Elanora Heights land. The blessing was said to have been conferred “according to the Constitution of the Serbian Orthodox Church in Australia and New Zealand, Article 9 Clause f”.

46 That provision would seem to be what is in evidence as paragraph (6) of the Duties of Bishops in Article 9 of the 1983 Constitution of the Serbian Orthodox Church Diocese of Australia, New Zealand and South Africa.

47 On 1 October 1983, the same Bishop in a letter co-signed by four senior clergy protested to the Warringah Shire Council against its refusal to grant planning consent. That letter included the following:

“Churches dedicated to St Sava (the foremost Serbian Orthodox Saint) were commenced in Jugoslavia in Belgrade and Split just prior to World War II and since the war, with the accession of a totalitarian communist regime, neither has been allowed to be completed. We pray that here in Australia, where so many Serbian Orthodox faithful fled after the war, St Sava’s church will not meet the same fate and be denied....

“We feel that there is a complete misunderstanding of the divisions and communal ties between spiritual life, cultural activities, social life and education within a Serbian Orthodox Church community. Unlike western Anglo-Saxon churches, the spiritual life is not divorced from day to day cultural/social/educational activities. The Church is one building consecrated and used in spiritual life as in all Christian churches. In the same parish centre the community must have a church hall for ‘Sunday school’ and cultural life (such as the traditional kolo (circle) dancing). Also, required a space for outdoor social, sports and cultural life...”.

48 In due course, Council approval was granted.

49 The local committee sought the approval of the Bishop to the plans of the Temple to be built on the Elanora Heights land. This approval was granted on 10 July 1983.

50 In April, 1983, the members of the organizing committee and the members of the building committee each signed declarations of loyalty in a form such as the following. Those who did not wish to sign it, resigned:

“I ... swear by Almighty God that I will be loyal to the Holy Orthodox Church, that I will conscientiously uphold the Holy Canons, the Church Constitution and other Church Regulations, that I will carry out my duties correctly, that I will guard official secrets, and that I will be always serving and protecting the interests of the Serbian Orthodox Church. As I do this, so let God help me in this and the other world. Amen!”

51 What appears to be an expanded Executive Committee meeting was held on 6 August 1983. It resolved to accept the new Diocesan Constitution.

52 For a reason that is not fully explained, but seems to be connected with the new Constitution of the Diocese, there was a rift in the Community in late 1983. The President of the Committee resigned and no-one would act as President in his place. Some members were accused of insulting the Bishop. The upshot was that those who would sign the new declaration and the new internalised membership form were thenceforth in de facto if not de jure control of the Community, but under pressure from those who did not.

53 When the then trustees were applying for income tax deductibility for their building fund, they informed the Commissioner of Taxation that the project was under the direction of the priests and lay committee guided by the Bishop who in turn was guided by the “Holy Assembly of Serbian Bishops which meets annually in Belgrade”.

54 The Mona Vale land was sold in 1986.

55 On 9 November 1986, Bishop Longin of the Serbian Orthodox Diocese of Australia and New Zealand, together with Archbishop Lavrentijie of the Serbian Orthodox Diocese of Western Europe and Archbishop Vasilije of the Serbian Orthodox Diocese of Srem, consecrated and blessed the foundations to the church buildings on the Elanora Heights land.

56 The church building was commenced in earnest in 1986 and the church hall in 1991.

57 On 22 February 1991, members of the then management committee of the Church School Community entered into a deed with the Warringah Shire Council and gave a guarantee to that Council which included the following: “The Community and each member of it jointly and severally warrant that the committee has been duly constituted under the Constitution (‘the Constitution’) of the Serbian Orthodox Diocese for Australia and New Zealand and that the Constitution empowers the committee to enter into this deed. …”

58 Surprisingly, there is little in the constitutions of the various levels of the church as to who “owns” property devoted to the church. However, there is in Article 78 of the Constitution of the Australian and New Zealand Diocese (and also in other similar documents) a reference to there being parish moveable and real property which is to be managed by local committees. It thus would appear that it is quite in accordance with the constitutional documents that some property of the church is to be held on trust for the parish as opposed to being held on trust for the church generally.

59 The disputes between the plaintiffs and the diocesan authorities continued up until at least the end of 1998. In 1998, a series of letters were sent by the plaintiffs to the church authorities, but not answered. A general meeting was held in the parish in 1998 and the plaintiffs and their supporters were elected to governing positions.

60 Although there was much detailed evidence as to these disputes, this evidence does not go to core issues and it is expedient to say as little as possible about them.

61 The plaintiffs say that by 1998, the 1950 Rules had become lost and no copy could be found despite diligent search. In due course, a new set of Rules was drawn up.

62 On 8 March 1998 there was a meeting of members of the Church School Community of which 58 of the 77 known members attended. At that meeting, the members present purported to adopt a new set of rules for the Community. I will refer to these rules as “the 1998 Rules.”

63 It is clear, despite the plaintiffs’ assertions, that not all members of the Community attended the meeting which adopted the 1998 Rules.

64 The Bishop called a rival meeting which was held outside the gates of the parish property on 28 June and 12 July 1998. According to the plaintiffs, about 15 people attended and purported to remove the committee and elect a rival committee.

65 The plaintiffs were then charged before a Church Court with disobeying the Bishop and were sentenced to be excommunicated.

66 It would seem that in the latter half of 1998 there were some attempts at conciliation. The plaintiffs signed some form of retraction and the Bishop modified the sentences of excommunication to suspension. However, there was a flare-up of hostilities, those sympathetic to the defendants held a fresh meeting in January 1999 which purported to install the defendants’ own committee and the Bishop or the ecclesiastical court then reimposed the excommunications.

67 The history books show that the Serbian Orthodox Church became autocephalous in 1219 under St Sava. In 1346, the head of the Church was styled “Patriarch” and was recognized by the See of Constantinople in 1375. The Patriarchy was suppressed in 1766, but the church became autocephalous again in 1879 with the approval of Constantinople. In 1920, the Serbian Patriarchy was restored, its seat at the same time being moved from Pec to Belgrade.

68 The effect of World War II was that the Kingdom of Yugoslavia ceased and the Tito regime took its place. The connection between that regime and the church has not fully been explored in the evidence.

69 The Constitution of 1931, amended in 1947 of the worldwide Serbian Orthodox Church contains various relevant provisions which I will set out. However, some care must be taken not to assume that all the ecclesiastical terminology used in the Constitution has the same meaning as it would in the Roman or Anglican churches. For example, the word “Diocese” needs to be used with care. Whilst in the Western church it tends to mean an area administered by a bishop, that is not necessarily its meaning for Eastern churches.

70 Article 7 shows that it is governed on the basis of:

(a) The Holy Scripture and Holy Tradition according to the teaching of the Holy Orthodox Church;

(b) Canons of the Ecumenical Councils and by them recognized canons of the Apostles, Regional Councils and holy Fathers;

There was no evidence as to the content of these documents.

71 Article 8 provides that “Ecclesiastical authority, spiritual, church-disciplinal and church-judicial, in accordance with the canons and the order of the Serbian Orthodox Church belongs to the hierarchy solely”.

72 Article 12 provides that “The Serbian Orthodox Church is episcopal.”

73 Article 14 enumerates 24 dioceses of the Church. Article 15 then provides:

“Beside the Dioceses enumerated in the previous article, in matters spiritual and hierarchical, to the Serbian Orthodox Church also belong these dioceses which are abroad:

1. The Serbian Orthodox Church in the United States of America and Canada, with its See in Chicago.

...

74 As indicated earlier, the Warriewood-Mona Vale Community was associated with the American Canadian Diocese. This Diocese functioned and had its problems as outlined in the reports of various decisions of courts in the United States such as Serbian Orthodox Church Congregation of St Demetrius of Akron v Keleman 256 NE (2d) 212 (Ohio SC) (1970); Dragelevich v Rajsich 263 NE (2d) 778 (Court of Appeals, Ohio) (1970) and Serbian Orthodox Diocese for the United States of America v Milivojevich 426 US 696 at 702 et seq (US Supreme Court) (1976).

75 When the 1950 Rules were adopted, Australia was part of the Diocese of the United States and Canada: the Rules refer to that Diocese.

76 In 1952, in the words of the defendants’ submissions, “the Holy Assembly of Bishops of the Serbian Orthodox Church in Belgrade decided that ecclesiastical jurisdiction and responsibility for members of the Serbian Orthodox Church and the Serbian Diaspora, including Australia be assumed by the Serbian Patriarch.”

77 The plaintiffs deny that the absorption of the American Diocese of the Church into the Church ruled from Belgrade was ever accepted by the Warriewood-Mona Vale parish. They say that, whilst it may be historical fact that the authorities in Belgrade subsumed the church in the Diaspora, at no time did they acquiesce in such.

78 The defendants say that, on 4 June 1973, the Assembly of Bishops established the Serbian Orthodox Diocese of Australia and New Zealand.

79 Essentially the plaintiffs say that the founders set up a Community which was for a number of purposes including religious and ethnic social purposes. They did this as fiercely anti-communist people of Serbian origin who wished to retain their culture and traditions and spirituality, but wished nothing to do with the communist regime and what they regarded as its puppet church administration.

80 The plaintiffs say that the 1950 Rules basically bind.

81 They say that the absorption of the American Diocese by Belgrade in 1952 had no effect on the trusts governing the parish property.

82 The plaintiffs say that the trusts governing the Elanora Heights property are for religious purposes which do not involve any control by the defendants.

83 The plaintiffs’ submissions were that they did not apprehend there to be any real disagreement about the principles of law in the case. They agreed that there was a charitable trust for much of the reasons given by the defendants in paragraphs 17 through 46 of their submissions, but the difference between the parties was that the general charitable attention of the donors was to create the necessary and sufficient conditions for the creation and maintenance of a parish of Serbian Orthodox Christians in the Warriewood-Mona Vale district of Sydney who would not be subject to the rules of Church government and the Church in Belgrade unless and until they took the formal step of accepting that authority. They say, quoting the words of McPherson JA writing extra judicially in his paper “The Church as Consensual Compact, Trust and Corporation” (2000) 74 ALJ 159, 16, that this Church, like protestant churches in New England,

“were founded by people bent on escaping what they believed to be its oppressive embrace”

referring to the Americans who never embraced English ecclesiastical law in their Episcopalian Church. They say that all that has happened on the facts is that in July 1952 there is an assertion that the Holy Assembly of Bishops of the Serbian Orthodox Church in Belgrade decided, upon assumption of ecclesiastical jurisdiction over the Serbian Diaspora, including Australia that it be assumed by the Patriarch. There is no evidence, and indeed it is contrary to the fact, that the local Community accepted this. Accordingly, the property is still subject to the 1950 trusts or the trusts fleshed out in the 1998 Rules for the local Community rather than the worldwide diocese.

84 The defendants’ contentions are basically simple. They say that the trust can only be valid as a charitable trust if it is a trust for religious purposes. The only religious purpose is as a branch of the Serbian Orthodox Church now controlled from Belgrade. That church is an hierarchical church and the bishops rule it. The bishops have shown that they wish the plaintiffs to be excluded and that actual control of the property be given to the defendants.

85 The defendants agree that it is common ground that the relevant property is subject to charitable trusts for the advancement of religion and that the difference between the parties relates to the precise nature of the trust. They say that in order to ascertain what are the terms of the trust the Court is not confined to a textual analysis in the Church School rules but there must be recourse to extrinsic evidence. They refer to Dal Pont, Charity Law in Australia and New Zealand (Oxford University Press, Melbourne, 2000) pp 155, 224-237; Tudor on Charities 8th ed (Sweet & Maxwell, London, 1997) pp 169-173 and cases such as Attorney General v Clapham (1855) 4 DeG M & G 591, 627-8; 43 ER 638, 652-3.

86 In paragraphs 17-46 of their submissions of 8 September 2000, counsel for the defendants analysed the 1950 Rules. They say that the most important provision is Article 3 which contains several components, principally:

(1) To maintain and further develop:

(a) The Church;

(c) All institutions beneficial to Serbs and to the Orthodox religion.

(2) To endeavour to have its members:

(b) Living in harmony and brotherly love in keeping with the spirit of St Sava’s Orthodox Church;

(c) Assisting one another in the humanitarian and welfare sense through their institutions; and

87 The first component is the only one which contains specific functions. It lists two of these and one general function. There is the Church function, the School function and the composite function. The second and third components are merely incidental. However, a trust for the purpose of ensuring that members of a particular immigrant community conduct themselves as “good citizens” is clearly for the benefit of the Community; see In re Scowcroft [1898] 2 Ch 638, 642; Re Price [1943] Ch 422, 435; Re South Place Ethical Society [1980] 1 WLR 1565, 1574-7 and Church of the New Faith v Commissioner of Pay-Roll Tax (Vic) (1983) 154 CLR 120, 136.

88 However, when one looks at both the constitution and the surrounding circumstances, the dominant purpose of the Church School Community is the advancement of the Serbian Orthodox religion. Consistently with that purpose, a church building has been built on the land and provides the focal point of the Church School Community.

89 When one looks at the history of the use of the land, one can see an overriding bulk of material which suggests that at all material times up until the 1998 dispute, the worldwide authorities and the authorities of the Australian and New Zealand Diocese were intimately involved in the activities of the Parish. This occurred even after the split in 1963-4 between the Belgrade people in the Church and those in the American Diocese. Most importantly the local Community submitted to Belgrade in the matter of the appointment of priests.

90 The 19th century ecclesiastical law cases produced two complementary principles that govern the characterisation of trusts affecting property held for religious purposes. First, the Church of Scotland cases commencing with Craigdallie v Aikman (1813) 1 Dow 1; 3 ER 601 and ending in Free Church of Scotland v Overtoun [1904] AC 515, show that in the absence of any contrary intention, the courts will presume the trust is for the religious purposes of the founders of the trust. However, where members of a local religious community proclaim they are members of an established church, the trust will be construed as one for the religious purposes of that church and subject to its canon law and discipline; see the cases referred to in McPherson JA’s article referred to above and Anastas v The Greek Orthodox Community of New South Wales (McLelland CJ in Eq, 18.11.1964) as to what is meant by the “Greek Orthodox Church” and Attorney-General v Holy Apostolic & Catholic Church of the East (1989) 37 NSWLR 293, 313 and on appeal (1989) 18 NSWLR 291.

91 Once the trust property has been devoted to particular doctrines, then no practice and no wish of the majority of the members of the association can affect that requirement; see additionally Wylde v Attorney-General (1948) 78 CLR 224, 257. The Church School Community has embraced the Serbian Orthodox Church as the institution of which it formed part, it has subjected both itself and its property to the discipline and practices of that Church and accordingly the defendants must succeed.

92 Should there be any problem about the subsidiary purposes having effect and being non-charitable, then the problem is cured by the application of s 23 of the Charitable Trusts Act 1993.

93 There have been breaches of trust by the plaintiffs in that since March 1998 they have made the land and church buildings available for the use of persons who do not recognize the Church Constitution nor the place of Church and diocesan authorities. They have refused the Bishop and his representatives access; they have without diocesan approval engaged a person to act as parish priest and have purported to act as the management committee of the School despite having been excommunicated.

94 Although secular courts rarely “interfere” in the affairs of religious communities, there has been such a dispute in the instant case that “interference” is appropriate. There should thus be a declaration that the land is held by the registered proprietors on trust for the maintenance, practice and propagation of the Serbian Orthodox faith by the members of the Church School Community subject to the constitution of the Serbian Orthodox Diocese of Australia and New Zealand and as part of the Serbian Orthodox Church having its See in Belgrade Yugoslavia, a declaration that the 1998 rules are of no force and effect, and an order removing the first and second plaintiffs as trustees. It is also appropriate for the necessary representation orders to be made.

95 As submissions flowed from side to side, the defendants filed further submissions noting that the plaintiffs had really changed their case from the commencement of the litigation. Their initial position was that the original donors’ intention and thus the terms of the trust could be discerned from the 1950 Rules of the Church School Community. Later submissions, say the defendants’ counsel, seem to have changed in that they are relying on the subjective thoughts or beliefs of members of the association differently from the proper interpretation of the 1950 Rules.

96 Furthermore, the contention by the plaintiffs in their later submissions that “It is possible for autonomous communities to exist within the Serbian Orthodox Church, so long as their members vigorously adhere to the Orthodox faith” is untenable both in law and in fact because:

(1) The founders intended a particular form of religion be promoted, that is, the Serbian Orthodox Religion and for the Church School Community to be part of the established Church associated with that form of religion; see Attorney General v Calvert (1857) 23 Beav 248, 256; 53 ER 97, 100;

(2) There is no basis for suggesting that a religious community, parish or congregation can be within or belong to an organized church but that the members are not bound by the rules and discipline of that Church;

97 I must confess that my first reaction to this analysis was that it sought to pare down too analytically the words of Article 3 of the 1950 Rules. It relies too much on the comma between “Church” and “School” in the English translation.

98 However, the defendants’ position is clear. They say that the trust is an integral part of the Serbian Orthodox Church and as such, it is a religious charitable trust.

99 Mr Lancaster, for the Attorney-General, accepted that the trust was a religious charitable trust.

100 The position taken by the Attorney-General is that if the trust is a trust for religious purposes, then the defendants succeed. If it is not such a trust then there is no possibility of bona vacantia or some other charitable trust succeeding. The trust fails and the money given must be refunded to the original donors.

101 The Attorney-General as protector of charities, supports the contention that the Elanora Heights land is held on a valid charitable trust for the advancement of religion. Mr Lancaster says in his concluding submissions that he supports the defendants’ contention that there is a valid charitable trust, not simply a trust for an unincorporated association but rather for the purposes of that association which are valid charitable purposes. There is not a trust for the individual members of the Church School Community. The evidence is consistent only with a trust for the purposes of the Church Community rather than its members at a particular time.

102 There could not possibly be any question of bona vacantia arising as the land is owned by the registered proprietors subject to such trusts or interests as the Court identifies. Again, a cy pres scheme is not appropriate in which a declaration of trust fails, because the trust, if it fails, will fail as a trust for non-charitable purposes.

103 If the trust failed, then the question would arise as to whether the property was held on resulting trust for the donors; see eg Re Gillingham Bus Disaster Fund [1958] 1 Ch 300, 310-4, affirmed [1959] Ch 62.

104 At the end of the first tranche of submissions I expressed the following thoughts, notwithstanding the submissions of both counsel for the plaintiffs and counsel for the defendants:

(a) The trusts appeared to be simply for an unincorporated body;

(b) It was necessary to consider what were the trusts formulated by the founders of the Church School Community in 1949;

(c) Although there was a religious element in the trusts there were also a series of other elements which may disqualify the trusts from being charitable trusts for religious purposes;

105 After expressing these thoughts both orally and in writing, further written submissions were made. I have noted this because it might otherwise appear strange why, in the light of the common submissions of counsel I did not just accept that there was a religious charitable trust and why counsel then went into considerable details in their submissions as to why my initial thoughts or some of them were erroneous.

106 I will evaluate the contentions under the following headings:

(a) Trusts for a purpose

(b) Trusts for unincorporated bodies

(c) Trusts for ethnic purposes

(d) Eastern Church decisions of Australian courts

(e) Is this a charitable trust at all?

(f) The types of religious trusts

(g) The effect of the 1952 reorganization of the Church

(h) Essential and non-essential elements of trusts

(i) Section 23 of the Charitable Trusts Act

107 All the textbooks on the law of trusts show that the vital elements of the trust relationship are: (a) a trustee; (b) beneficiaries; (c) trust property; and (d) obligations binding the trust property. A trust needs at least one beneficiary. The only exception is a trust which is charitable, as, in such a case, the Attorney-General as protector of charities may enforce it.

108 Thus, trusts for purposes, will, at least as a general rule, fail.

109 A person can make an out and out gift to a society such as the Redfern Chess Club. That gift will belong to the members of the club subject to its rules. One may also make an out and out gift to a corporation for its purposes. There is no element of a charitable trust in such a gift. However, from time to time one may get a trust from words which, at first blush appear to be an out and out gift. An illustration is Re Smith [1932] 1 Ch 153, where a person gave property “to my country, England”.

110 Further, there is a very real difference between a trust for a charitable institution and a trust for a charitable purpose: see McGarvie Smith Institute v Campbelltown MC (1965) 11 LGRA 321, 323.

111 However, there are some cases, of which Hardey v Tory (1923) 32 CLR 592 is one, where a gift to an unincorporated association can be construed as a gift for the purposes of the association which purposes are charitable. The principle probably also applies where the legatee is a corporation.

112 The general perception is that trusts for unincorporated associations fail unless they can be construed as an immediate gift to the current members, conditionally or unconditionally, or they fall into a recognized exception.

113 The reasons given for this perception vary. One reason given is that, as noted above, one cannot generally have a trust without a beneficiary or, at least a person who can move the court to enforce the trust. The major authorities for this view are Morice v Bishop of Durham (1804) 9 Ves 399, 405; 32 ER 656, 658 and, on appeal (1805) 10 Ves 522, 539; 32 ER 947, 954; Re Wood (deceased) [1949] Ch 498, 501 and In re Astor’s Settlement Trusts [1952] Ch 534.

114 A second reason given is that the trust fails for uncertainty: see In re Astor’s Settlement Trusts [1952] Ch 534.

115 A third reason is that the trust fails because of the collateral principle attached to the Rule Against Perpetuities sometimes called the Rule against Perpetual Non-Alienation.

116 I have carefully researched the origin of the perpetuity rule with respect to trusts for unincorporated bodies. As appears in the principal writings (Bryant Smith, Honorary Trusts and the Rule Against Perpetuities (1930) 30 Columbia Law Rev 60; Marshall, The Failure of the Astor Trust (1953) 6 Current Legal Problems 151; Sheridan, Trusts for Non-Charitable Purposes (1953) 17 Conv (NS) 46) there is considerable academic debate as to how a rule against remoteness of vesting was turned on its head to prevent purpose trusts not being valid if they might endure beyond 21 years, but that is now the law.

117 Apart from the confusion in choosing why such trusts are invalid, there are also cases which tend to show that none of the three invalidating principles is watertight.

118 In his article “The Failure of the Astor Trust”, the well-known equity scholar, O R Marshall said in (1953) 6 Current Legal Problems 151, 158 that there are authorities to the effect that if there is sufficient certainty of purpose, the lack of a beneficiary may be passed over. Thus, in Re Thompson [1934] Ch 342 a gift to X to be applied for the promotion of fox hunting was upheld, Clauson J saying at p 344 that whilst the gift was not charitable, it was sufficiently clear to be given effect. Marshall says that in such cases, as the people who are entitled in default of the trust have the right to apply to the court for the gift over to be implemented, there is a mechanism for enforcement.

119 Marshall also notes at p 170 that there are a number of decisions which show that a gift to an association for its purposes may be valid. He gives as an example Re Clarke [1901] 2 Ch 110, where a trust for the Corps of Commissionaires succeeded.

120 In Re Clarke at p 114, Byrne J said:

“It is, I think, established by the authorities that a gift to a perpetual institution not charitable is not necessarily bad. The test, or one test, appears to be, will the legacy when paid be subject to any trust which will prevent the existing members of the association from spending it as they please? If not, the gift is good. So also if the gift is to be construed as a gift to or for the benefit of the individual members of the association. On the other hand, if it appears that the legacy is one which by the terms of the gift, or which by reason of the constitution of the association in whose favour it is made, tends to a perpetuity, the gift is bad.”

121 Thus, generally speaking, if there is a trust in favour of an association, it will only be valid if it can be construed as a gift to the members personally or to the members subject to their contractual obligations. If one cannot do this, then one cannot have a valid trust at all: Bacon v Pianta (1966) 114 CLR 634 and see Re Wilson’s Grant [1960] VR 514.

122 Thus, in Public Trustee of NSW v Attorney General (11.12.1984 unreported) at pp 15-6 of the transcript judgment, Powell J had to consider the major ways in which a gift to “the ALP Election Fund Canberra” could be valid. His Honour reviewed the authorities and held that in the circumstances the gift passed to the persons who are members of the Australian Labor Party as at the date of death of the deceased subject to their respective contractual rights and liabilities towards one another as members of the Australian Labor Party.

123 Lewin on Trusts 17th ed (Sweet & Maxwell, London, 2000) p 90 para 4-45 says:

“The rule against object trusts, combined also with the rule against perpetuities creates difficulty when property is given to a non-charitable unincorporated association. In general terms, there are three possible constructions of such a gift.”

124 The learned authors then set out the three constructions based on the judgment of Cross J in Neville Estates Ltd v Madden [1962] Ch 832, 849 though realising that such judgment only provides a “working guide”; see In re Lipinski’s Will Trusts [1976] Ch 235, 244.

125 Lewin op cit 4-46 says:

“In the first place, the gift may be construed as a gift to the members of the association at the date of the gift as joint tenants, so that any member can sever his share whether or not he continues to be a member. If this is the true construction of the gift then it will be valid, but it is not likely that this will be the true construction if the unincorporated association is named as the donee of the gift, or when a particular purpose for the gift is specified, since it will be clear from the context that the gift is intended to enure for the benefit of the association itself or its purposes and not for the individual members of the association as at the date of the gift.

“Secondly, the gift may be construed as a gift to the members of the association at the date of the gift, not as joint tenants, but subject to their contractual rights and liabilities towards one another as members of the association. In such a case a member cannot sever his share. It will accrue to the other members on his death or resignation, even though such members include persons who become members after the gift takes effect. This construction is compatible with an intention that the gift should enure for the benefit of the association itself or its purposes, in view of the contract binding the members. It is likely to be adopted where there is a gift simply to a named association, or to a named association for the purposes of the association, even though the association exists solely to promote some outward-looking purpose which is not for the benefit of its members. It is possible to adopt this construction where a particular purpose for the gift is prescribed if the association is itself the beneficiary of the prescribed purpose, the more so where, if the purpose is carried out, the members can by appropriate action vest the resulting property in themselves. It is more difficult to adopt this construction where the purpose prescribed by the donor is outward-looking and not for the benefit of the members of the association, or where it tends towards the permanent endowment, since the prescription of the purpose in these circumstances is not easy to reconcile with an intention that the gift should be subject to no more than the contract binding the members. And this construction cannot be adopted where the recipients are expressly a body which is not the general membership of the association, and which does not control it. …

“Finally, the gift may be construed as a gift in trust to be applied for the purposes of the association, or for other purposes prescribed by the testator. This construction will be adopted in cases where the gift cannot be construed as a gift to the members under the first or second construction. If this construction is adopted, then the gift will fail as an object trust unless it is for the benefit of persons ascertained at the date of the gift. The gift will also be subject to the perpetuity rule…”.

126 Delany, Equity and the Law of Trusts in Ireland 2nd ed (Round Hall Sweet & Maxwell, Dublin, 1999) Chapter 9 pp 267 and following, covers much the same ground though she also refers to a number of supportive Irish cases.

127 As noted in Lewin, a principal escape route from the general invalidating principle (whatever it is) is to say that there is a trust for the members of the association subject to their contractual agreements: Re Denley’s Trust Deed [1969] 1 Ch 373. However, the cases which are listed in Re Cain [1950] VLR 382, 391, and are noted in Ford Unincorporated Non-Profit Associations (Oxford University Press, London, 1959) at pp 25 and following, show that if there is any tendency to perpetuities in the sense of a trust enduring forever, then it will be invalid.

128 The cases were recently examined by Bleby J in Strathalbyn Jumping Club Inc v Mayes [2001] SASC 73, a case involving a trust for a non-charitable unincorporated polo club. Bleby J was concerned that Re Denley’s Trust Deed [1969] 1 Ch 373 might be inconsistent with Bacon v Pianta (supra). In this respect he shared the problems voiced by LW Street J in Tidex v The Trustees Executors and Agency Co Ltd [1971] 2 NSWLR 453, 465 and by Gummow J in Re Australian Elizabethan Theatre Trust (1991) 30 FCR 491, 502. As the encouragement of the playing of polo was not a charitable purpose, the trust failed.

129 In the present case Rule 50 of 1950 shows that the members can never divide up the property between them beneficially but once the association comes to an end the property must be transferred to the Serbian Orthodox Church. Accordingly, the trust can never take effect under the Denley principle. See also Morris and Leach Rule Against Perpetuities 2nd ed (Stevens & Sons, London, 1962) pp 313 and following.

130 Two other points should be made. First, there is a theory that even though a trust for an unincorporated association is not enforceable, it is not illegal. Thus, if no-one complains, there is nothing to prevent the trustees from fulfilling the settlor’s wishes. This thought was originally voiced by Professor Ames in his article “The Failure of the Tilden Trust” (1892) 5 Harvard Law Rev 389, 395 where he said:

“The only objection that has ever been urged against such a gift is that the court cannot compel (the trustee) to act if he is unwilling. Is it not a monstrous non-sequitur to say that therefore the court will not permit him to act when he is willing?”

131 However, the full truth is that, in such a case, the trustees may well hold on resulting trust for the settlor’s successors so that unless they sanction what the trustees are doing, they may be liable to such successors.

132 The second thought comes from Morris and Leach at pp 324 et seq that one applies the rule against perpetual inalienability in much the same way as one applies the modern rule against perpetuities to special powers of appointment. That is, one assumes that the donee has a special power which he or she may or may not exercise within the period, but one has a second look at the time of the exercise. However, there is little support for this view and, in any event, it would not assist the present case.

133 Thus, unless the gift can be considered to be charitable, the present gift will fail as a gift to an unincorporated association at least because of perpetuities.

(c) Trusts for Ethnic Purposes

134 One of the most significant gaps in charity law is that there is no separate class of charities which assist friendly societies assisting ethnic groups settle into a new country.

135 Gifts for recreation or social intercourse, even if they involve ethnic groups in a strange land are not usually held to be charitable; see eg Williams’ Trustees v IRC [1947] AC 447; The Trustees of the Londonderry Presbyterian Church House v Commissioners of Inland Revenue [1946] NI 178.

136 Sometimes, this type of case is able to be comprehended within trusts for poverty. By assuming that aboriginal Australians were poor, trusts have been held to be valid. Thus, in Re Mathew [1951] VLR 226, a trust to X to be used by him at his discretion for the benefit of Australian aborigines was held to be valid. The same occurred in Re Bryning [1976] VR 100 where Lush J in the Victorian Supreme Court upheld as charitable a gift to The Australian Aboriginal League for the benefit of the aboriginal women of Victoria. See also Aboriginal Hostels Ltd v Darwin CC (1985) 55 LGRA 414.

137 In Public Trustee v AG (1997) 42 NSWLR 600, 605, Santow J, relying on a passage in the 2nd edition of Picarda, Law and Practice Relating to Charities (Butterworths, London, 1995) pp 167-8, suggested that in the light of society’s changing attitude, trusts for the promotion of good race relations and the like may possibly now be considered charitable. That case had to consider, whether, with the assistance of s 23 of the Charitable Trusts Act 1993, a failed gift for the advancement of aboriginal Australians and Torres Strait Island people could be saved as a charitable trust.

138 Santow J is certainly correct to note that the law of charity gradually moves as the social spirit of the community. It is only in this way that a list originally compiled in 1601 could have remained relevant for 400 years. It is to be hoped that under the present statutory scheme, that movement will not be halted by charity matters being dealt with administratively by tribunals who have no power to progress the law rather than by courts that have such power and exercise it.

(d) Eastern Church decisions of Australian courts

139 It is useful to note at this point that there have been a number of cases decided in Australian courts over disputes in the Eastern Churches including the Serbian Orthodox Church.

140 The Serbian Orthodox Church was considered by W B Campbell J in Serbian Orthodox Ecclesiastical School Community ‘St Nikolas’ Queensland v Vlaislavljevic [1970] QdR 386. The case does not really assist in the instant one because the plaintiff had been incorporated under the Queensland Religious Educational and Charitable Institutions Act of 1861.

141 In Metropolitan Petar v Kostovski (Vic SC, Byrne J, 27.10.1997) the Victorian Supreme Court dealt with similar problems with the Macedonian Orthodox Church. The flavour of that decision favours the defendant, but it is certainly not on all fours with the issues in the present case.

(e) Is this a charitable trust at all?

142 It is necessary to examine the purposes of the association in order to address this question.

143 The highest that the plaintiffs could put the purposes is that they are a mixture of church, ethnic school and recreational purposes.

144 As has been seen, it is extremely difficult to uphold a trust for social bonding even if it is entwined with an ethnic thread. Furthermore, mixed purposes usually provide a dangerous scenario for litigants in the place of the present plaintiffs as, although it is a question of fact and degree, the more non core purposes are mixed in with a religious trust, the less likely it is that a court will hold it to be charitable; see eg Re Wilson’s Grant [1960] VR 514 where a trust to the Girls’ Friendly Society of the Anglican Diocese of Ballarat failed and AG v Cahill [1969] 1 NSWR 85 where the Court of Appeal held invalid a trust for the formation of a Roman Catholic Boys’ Club in the City of Sydney. To the same effect is Re Topham [1938] 1 All ER 181.

145 The defendants clearly say that the trust is for religious purposes, namely a simple trust for the Serbian Orthodox Church.

146 Thus, both plaintiffs and defendants say (and, indeed, are really forced into saying) that the trust if it is to be valid, must be a religious trust.

(f) The types of Religious Trusts

147 Although trusts for the advancement of religion are a discrete heading in virtually all the books on charitable trusts, there are a heterogeneous mass of different types of trusts which may fall under the heading.

148 It is open to any individual or group of individuals to set up a charitable trust for the advancement of religion. There is no need to focus on any existing religious group, though the law does require the promotion of spiritual teaching or religious doctrine in some sense even though the religious doctrine might be the thoughts of “a foolish, ignorant woman”; see Keren Kayemeth le Jisroel Ltd v IRC [1931] 2 KB 465, 477 and Re Thackrah [1939] 2 All ER 4. The quotation is from Thornton v Howe (1862) 31 Beav 14, 18; 54 ER 1042, 1043.

149 If a trust for the advancement of religion is set out in some formal document in full and complete terms, there is no problem in ascertaining what the trusts are which affect the fund or property. However, in many instances the trusts will be imperfectly spelt out. It has long been recognized that to ascertain what are the terms of the trusts is a most difficult matter of fact for a court. What must be discovered is the intention of the founders.

150 The problems that were encountered in this area with dissenting chapels in the early 19th century led to the enactment in England of Lord Lyndhurst’s Act (Non Conformist Chapels Act 1844 7 & 8 Vic Chapter 45). However that Act has not been adopted in Australia.

151 If there is evidence as to the founders’ intention, that prevails. If there is insufficient evidence, then the Court can act on evidence of long practice in the relevant religious body and from that deduce what the founders’ intention was. No particular length of time is necessary to establish usage. Further, the Court will be loath to hold that longstanding practice is in breach of trust; see Tudor op cit at pp 171-2; AG v Smythies (1831) 2 R & M 717, 749; 39 ER 568, 580 and see also AG v Pearson (1817) 3 Mer 353; 36 ER 135; AG v Murdoch (1849) 7 Hare 445; 68 ER 183 affirmed (1852) 1 De GM & G 86; 42 ER 484; AG v Gould (1860) 28 Beav 485, 501; 54 ER 452, 458-9 and McPherson op cit at p 167.

152 However, unless there is provision in the trusts as laid down by the founders’ intention for development in the sense of development within a living church or amendment or change by resolution of a particular majority or a unanimous resolution, then it is not open to the members for the time being even over a long period of time to change the trusts. Accordingly, if one finds that the founders’ intention was to have a church which was completely free from any control by the Pope, yet otherwise accepted the doctrine and tenets of the Church of Rome, there might well be a valid charitable trust to that end but even if there had been evidence of 30 to 50 years recent practice whereby the hierarchy in Rome in fact appointed priests and otherwise controlled the Church that would not be enough to displace the original trust. These principles are deduced from cases such as Craigdallie v Aikman (1813) 1 Dow 1, 16; 3 ER 601, 606 (subsequent proceedings (1820) 2 Bligh 529; 4 ER 435); Foley v Wontner (1820) 2 Jac & W 245; 37 ER 621.

153 In Attorney-General v Gould (1860) 28 Beav 485, 501; 54 ER 452, 458-9, Romilly MR said:

“Usage is only important in a legal point of view, where there is an absence of any instrument of endowment, or where the words of the instrument produced are ambiguous; in such cases, usage constitutes presumptive evidence of the trusts on which the charity was established, but when the deed of foundation is produced, and is precise, that presumption is excluded.”

154 In the present case there is the material which I have already abstracted from the initial meetings of the founders of the Church School Community and the 1950 Rules.

155 However, it must be remembered that in a religious trust not every provision of the rules or every matter of doctrine will necessarily be a term of the trust, breach of which will give rise to an action.

156 The law was well and truly summarized by McPherson JA writing extra judicially in “The Church as Consensual Compact, Trust and Corporation” (2000) 74 ALJ 159, 168.

157 Gould’s case itself is an illustration of this principle. The practice of strict or free communion was found to be no part of what was essential for the faith and maintenance of a congregation of particular Baptists and consequently not to form a part of the foundation trusts on which the Church was held (see 54 ER 452 at p 459).

158 When one thinks about it, this must be so. It is absurd to think that every word spoken in every sermon in one of the mainstream churches in Australia could be analysed to see whether it involved a breach of trust by perverting part of the doctrine or rules of the Church. Moreover, just because a person in authority in the Church such as a bishop or priest preaches a sermon which, for instance, condemns communism or abortion or gambling does not (apart perhaps from 30 years long usage) make that a term of the trust.

159 A recent illustration is provided by the decision of the Court of Appeal in Scandrett v Dowling (1992) 27 NSWLR 483, where a rule of a church, assuming it existed that priests must be male, if flaunted, would not constitute a breach of trust and indeed even as a breach of a rule of a voluntary association it was not justiciable.

160 The matter was discussed by the High Court of Australia in the Red Book case, Wylde v Attorney-General (1948) 78 CLR 224. The High Court was equally divided in that case. Latham CJ and Williams J held that uniformity of worship in the Anglican Church of Australia as it existed in 1948 was a fundamental principle of the Church and that breach of that uniformity constituted a breach of trust. Rich and Dixon JJ thought to the contrary. Rich J at page 281 considered that focusing on whether a particular rule was a fundamental rule of the Church begged the question. He said:

“The rule may be fundamental if departure from it is a breach of trust. But a breach of trust is not established merely by calling a rule fundamental. Rules relating to mere forms of services confer no juridical rights in property on members of the Church. The relators have failed … to establish that the objects of the charity, the purposes of the trust have not been fulfilled or that the members of the Church… have been deprived of their rights with reference to the property by reason of the properties being diverted from the trusts imposed.”

161 Dixon J at 289-90 said:

“Ultimately of course the question whether strict adherence to the formularies and ceremonies of the Church is involved in the performance of the trusts of property must depend upon the trusts themselves. These are to be ascertained from the trust instruments and from an examination of the history, doctrines and organisation of the community or body whose religious purposes they serve. My conclusion is that none of the practices complained of involves any diversion of property from the purposes to which the trusts, so ascertained, devote it.”

162 Latham CJ said at 263 that it was not proper to distinguish between what is important and unimportant in a matter of doctrine or ritual where property has been given in trust for a particular church which can be identified by the doctrines in association with which ritual is prescribed.

163 Williams J at 303 considered that uniformity of worship was a fundamental law of the Church and so breach of that principle was a breach of trust; see also p 310.

164 The actual decision in the Red Book case can be distinguished because of the finding that the principle of uniformity was an essential principle. However, it seems to me that although there are some cases that go the other way as illustrated by McPherson JA’s article, the Court does need to find in this sort of case what are the fundamental principles of the trust on the one hand and permitted practices of the Church or prohibitions laid down by the rules of the Church on the other. A church officer breaching a regulation made for the good order of a church or a non-fundamental principle will not be breaching the charitable trust in that he will not be affecting the property that is held in trust for the members or for the charitable purpose.

165 The matter is important in the instant case because essentially, I need to evaluate whether the anti-communist provisions in the 1950 Rules and the fact that there was a complete separation between the Belgrade hierarchy and the Mona Vale Church up to 1952 are terms of the trust or whether they are merely incidental matters of regulation which do not go to the core of the trust.

166 Passing to another matter, the cases show that it is necessary to classify Church Trusts. The classical typecasting derives from the judgment of Miller J who gave the opinion of the United States Supreme Court in Watson v Jones 80 US 679 (1871). At page 722, the court said, in my paraphrase, that a religious trust might be of three types, viz: (1) Where the founder expressly laid down the rules of a new church; (2) where the donor gave funds to an existing independent congregation owing fealty to no higher authority; and (3) where the gift was to an ecclesiastical body which was sub-ordinate to some general church organization.

167 One also sees in that judgment another classification of churches into: (a) Hierarchical; (b) Presbyterian; and (c) Congregational.

168 In AG v Holy Apostolic & Catholic Church of the East (1989) 37 NSWLR 293, 315 (affirmed by the Court of Appeal (1989) 18 NSWLR 291, though this point was not considered on appeal), I said:

“By hierarchical, Miller J meant a church which has superior clergy and in which the government of the church is committed to those superior clergy. Ordinarily a church which has bishops will fall into this class and this will be so notwithstanding that some governmental powers are given to clergy of inferior rank or to laity. … With a congregational model, the local congregation is the body which makes or unmakes the rules. … With (an hierarchical) church American courts would apply their ‘neutral principles’ one of which is that a strong presumption operates in favour of the property being the property of the national church not of a local parish. The fact that the physical property of the local church was purchased by the local congregation without any financial assistance from the parent body has no effect on this rule: see Pilgrim Holiness Church v First Pilgrim Holiness Church 252 NE (2d) 1 (1969).”

169 This was reinforced by the Michigan Supreme Court in Hanna v Malick 193 NW 798, 803 (1923) which I set out at p 315 of my earlier judgment.

170 There is a very large difference between a trust for a congregational church and a trust for an hierarchical church.

171 The first difference is that it is usually more difficult to ascertain the objects of a trust for a congregational church as the church often commences in a most informal manner. In such cases, it is usually necessary to resort to what has been the custom in the church over a period of years in order to see what the original consensual compact must have been; see eg AG v Pearson (1817) 3 Mer 353; 36 ER 135; AG v Murdoch (1852) 1 De GM & G 86; 42 ER 484.

172 It should be noted that with an hierarchical church in the words of McMorrow J, delivering the decision of the Appellate Court of Illinois in Aglikin v Kovacheff 516 NE (2d) 704, 708 (1987), “a court may presume a local church has relinquished all power to an hierarchical body which may, in some instances, frustrate the actual intent or goals of the local church and deprive the local church of legal remedies that otherwise would or should be available to it.”

173 In Bishop of Natal v Gladstone (1866) LR 3 Eq 1, 37, Lord Romilly said:

England

174 In the Holy Apostolic & Catholic Church of the East case, after quoting this passage, I said at p 316:

“It is not an unwarranted extension of that principle to say that when one finds in Australia a group of persons of ethnic origin proclaiming that they are members of a church with an identical name of an overseas church which services their people, one can assume that they are members of that overseas body or alternatively, that their canon law and the discipline of their church is mutatis mutandis identical with that of the overseas body.”

175 It would be a mistake, however, to assume that all religious trusts fall into the neat categories outlined above and the United States cases show that this is not so.

176 In Dragelevich v Rajsich 263 NE(2d) 778, 783-4, the Ohio Court of Appeals said:

“...the Serbian Eastern Orthodox Church is almost hierarchical in (the appointment of a parish priest); however, there is also a congregational element in the procedure for the selection of a parish priest. ...

“The Constitution of the Serbian Orthodox Diocese for the United States and Canada provides that the property of each church school congregation belongs exclusively to the respective congregation and the Diocese has no rights to such property.”

177 In New York Annual Conference of the United Methodist Church v Fisher 438 A (2d) 62 (Conn SC) (1980) it was recognized that the situation might exist even within an hierarchical church that the local church’s property belonged to it and was not subject to control by the hierarchy.

178 Thus, although the extracts from the Constitution of the worldwide Serbian Orthodox Church show that the church is hierarchical and episcopal, this may not necessarily permeate all the way through to be the controlling factor in a dispute between diocese and parish over property. It should be noted that such constitutional statements do not provide the basis for deciding that there is a theological principle of the Serbian Orthodox Church that all must “Obey the Bishop”.

179 Turning to another point, as I have already noted, religious trusts can comprehend some ancillary purposes which are not essentially religious, but only up to a point.

180 Thus, it is clear that not every trust for a religious purpose will be a religious charitable trust. Nor will be a trust for the benefit of parish purposes of a church because many of those purposes may well be non-charitable; see eg Farley v Westminster Bank Ltd [1939] AC 430 and Re Stratton [1931] 1 Ch 197 and the discussion in Bradshaw, The Law of Charitable Trusts in Australia (Butterworths, Sydney, 1983) pp 25 and following. However mostly the courts can construe these gifts as being for exclusively charitable purposes; see eg Re Macgregor (1932) 32 SR (NSW) 483. As Dal Pont notes at p 157, Re Stewart’s Will Trusts [1962] QWN 24 represents the furthest courts have been prepared to go. It must always be remembered, however, that in Roman Catholic Archbishop of Melbourne v Lawlor (1934) 51 CLR 1, 24, a trust to set up a Catholic daily newspaper was not a religious trust.

(g) The effect of the 1952 reorganization of the Church

181 The reabsorption of the American-Canadian Diocese into the Mother Church in 1952 appears to be the commencement of the present problem. Up until then, it was quite feasible to be associated with the American Diocese of the Church or the Church in the Diaspora, but not be controlled by Belgrade. However, when the schism was healed, it no longer became possible to be so associated.

182 This situation has been before the courts before. In Balkou v Gouleff (1989) 51 DLR (4th) 561, and on appeal (1989) 68 OR (2d) 574, 575 the Ontario High Court and Court of Appeal had to consider a case where a church of Bulgarians had removed itself from the Bulgarian Orthodox Church and joined itself to the Russian Orthodox Church in Exile because the former was too closely associated with communists. Property was purchased by trustees for the church whilst one of its tenets was “that it have no connection or establish any relations whatsoever with any atheistic or communist organizations, authorities or regimes operating anywhere.”

183 At first instance, Holland J held that the anti-communist clause in the trust prevented any reunion with the Bulgarian Orthodox Church.

184 On appeal, the decision was reversed seemingly (the report is one of those tantalizing memorandum decisions on appeal in Ontario) because the trial judge erred in finding that the anti-communist clause was a term of the trust and that the prime trust was for the purposes of the Eastern Orthodox religion.

185 As I have already noted in the discussion in (f) above, not every detailed provision governing the operation of a trust is a part of the equitable obligation binding the trustee with respect to the trust property. Some provisions will be purely matters of management, others may be precatory requests of the settlor.

186 Thus provisions in a trust deed dealing with the manager’s rights under a unit trust are enforceable as a contract, an example is Parkes Management Ltd v Perpetual Trustee Co Ltd (1977) 3 ACLR 303.

187 At the other end of the spectrum is Scandrett v Dowling (1992) 27 NSWLR 483. It was held by the statutory majority in Wylde v AG (1948) 78 CLR 224 that a breach of a charitable trust occurred if Church Trust Property was used for a church service otherwise than the one contained in the prescribed prayer book. This was because the courts held that uniformity was a central term of the trust. However in Scandrett v Dowling, the Court of Appeal appeared to hold that the ordaining of a woman as a priest was not so central so that there was no breach of trust even if the action was contrary to the rules of the Church. There was a mere breach of the consensual compact which was non-justiciable.

188 There is no doubt that the principle being considered in this sub-section is valid: however it is a very difficult matter of judgment to apply it in this or any other case.

189 This provision saves trusts that are for mixed charitable and non-charitable purposes by compelling the trustees to hold the property for charitable purposes alone. However, it is by no means clear that one can in the present circumstances divorce any non-charitable purposes from the charitable purposes so that the whole trust might fail. There is a limit to how one may recast a trust in order to take advantage of the section; see the consideration of the section by Santow J in Public Trustee v AG (1997) 42 NSWLR 600, 614 and the discussion in Dal Pont Charity Law in Australia and New Zealand pp 238 and following.

190 This brings me to the heart of the decision-making process.

191 The defendants say that the trust is for the purposes of the Serbian Orthodox Church. However, the factual matrix of the foundation of the trust was that not all the members of the Serbian Orthodox Church were eligible to become members, nor did they become members. Further, the 1950 Rules appear to prescribe a management scheme that is not entirely consistent with the law of the Church.

192 As I have said earlier, perhaps the key determination of fact that I have to make is what are the terms of the trust? In particular, do the provisions with respect to no communist being a member and the complete separation at the inception from the Belgrade administration constitute terms of the trust?

193 This, as Lord Eldon said in Foley v Wontner at ER 621, is one of the most difficult questions one has to ask oneself.

194 The consideration of the matter must involve the general guidelines which I have already noted. These all point in the direction of the defendants’ contention. Particularly (1) there is a reference in the body of the constitution to a well recognized church the Serbian Orthodox Church; and (2) the documents before the disputes broke out refer to the acknowledgment of the Church to the local council that the Mona Vale/Elanora Heights properties are part of the Church property generally. Moreover, for almost 20 years until the present dispute broke out there has been recognition of the senior role that the hierarchy of the Serbian Orthodox Church plays in the affairs of the community.

195 As against these matters, is there sufficient in the Rules of 1950 which outweigh these considerations?

196 After much thought it seems to me that the provisions such as Rule 6 of 1950 cannot be considered as part of the terms of the trust. In 1950 there was political division of the Serbian people in Australia, they were anti-communist; however they also were people who were imbued in the spirit of the Serbian Orthodox Church and looked forward to the time when the country would be liberated and the Patriarch would restore normality. Probably the way history panned out was not the way that was expected in 1950, but the expectation there would be developments both in secular life and ecclesiastical life affecting Serbs are a strong indication that one should not put too much store on the anti-communist part of Rule 6.

197 The plaintiffs then say that the spirit of St Sava is the spirit of a man who at great personal inconvenience departed from the Holy Mount Athos, returned to his homeland where he reconciled his disputant brothers and served his people. It will be remembered that when stating the objective and purpose of the Serbian Orthodox Church Community “St Sava” Father Sekulic made the strong point that “The Church Community will do everything to at last bring about mutual accord and co-operation, because our future activities depend on our accord”. This statement was packed full of truth, but I cannot see how it can be said to be a term of the trust or enforceable.

198 The plaintiffs say that they never accepted the subsumption of the American-Canadian Diocese and thus themselves by the Belgrade authorities in 1952. The answer to this point is twofold. First, in a hierarchical and episcopal church there is no requirement that each congregation accept what has happened at the higher levels of the church. The second is that the inference from the conduct of the Community from 1981 until 1998 shows that it is more likely than not that the Community did accept what had happened in Belgrade and accepted that the Patriarch and the diocesan authorities were the supreme governing body which affected their Community.

199 What then are the trusts that govern this land?

200 In my view the defendants’ position is basically correct. The evidence is too strong to contradict the basal contention that the property is part of the worldwide Serbian Orthodox Church and is subject to the Constitution of the Australian and New Zealand Diocese.

201 However, as the defendants’ submissions recognize, the 1950 Rules are part of the scheme of management of the trust. The defendants say that one must look to the broad flavour of those Rules. I agree. However, when looking to that broad flavour, part of the flavour is that there is considerable congregational involvement in the operation of the trust property.

202 The amount of lay involvement is such and the involvement of the laity so touches and concerns the trust property that, in my view, that involvement forms part of the terms of the trust.

203 Thus any declaration of the trusts will have to include congregational involvement and to this extent any absolute regal rights of the hierarchy under the Australian and New Zealand Diocesan Constitution will have to yield.

10. Subsidiary Issues

204 In the light of Hardie J’s decision in the 1965 litigation, I accept the defendants’ proposition that the 1950 Rules still apply. Although these Rules provide for decisions by simple majority, they do not include any provision dealing with alteration. In my view Rule 19 noted earlier does not on its proper construction empower amendment of the Rules by simple majority. A unanimous resolution is required to make a fundamental alteration such as an alteration to the Constitution; see eg Harington v Sendall [1903] 1 Ch 921; Vick v Toivonen (1913) 12 DLR 299; Brylinski v Inkol (1924) 55 OLR 369, 381 and Reel v Holder [1979] 1 WLR 1252, 1265. None of the exceptional situations noted in Fletcher on Non-Profit Associations (LBC, Sydney, 1986) p 39 can apply on the facts of this case. I will leave aside consideration as to whether Rule 20 as to quorum is applicable; see Ball v Pearsall (1987) 10 NSWLR 700, 803. It is clear that there never was any such unanimous resolution.

205 Thus, without the need for discussion the 1998 Rules must be held to be invalid.

206 It follows that there is no need for me to consider the singular fact that the 1950 Rules were lost in 1998 and no copy could be found, yet in 1999 copies were able to be produced to the Court for evidence in the present proceedings.

207 Although little significance was put on the fact of the excommunications in 1998, I considered that they had great significance. Whilst, if the defendants’ arguments were correct, the excommunications might be seen as a necessary step to preserve essential discipline in the church, if the plaintiffs are correct, the excommunications present very considerable practical problems in carrying out the trusts.

208 Whilst the Court will not usually enquire into an excommunication from a church based on theological grounds, the present excommunications, if the plaintiffs are correct, flowed from their attempts to administer the trusts laid on them in a proper and legal manner. Those trusts involved using the buildings inter alia so that the people could worship in the style of the Serbian Orthodox Church. However, by their actions, the hierarchy may have made that impossible and have repudiated the trusts.

209 There have unfortunately been many court cases involving the Orthodox Churches in Australia. In almost all of them part of the problem has been that the European idea of banishing all opponents by excommunication has come up against the Australian ethos of unity in diversity, tolerance and democracy. Experience has shown that if the hierarchy excommunicate the lay leaders of an Australian parish, the whole Church’s mission will be detrimentally affected, not the least by the passing of hundreds of thousands of dollars from the Church’s funds into the pockets of lawyers.

210 The great problem for the defendants is that under the 1950 Rules it requires a unanimous vote of all the members of the Church School Community to change the rules. It would not seem, though the point has not been argued, that the fact of excommunication prevents the plaintiffs from exercising their rights as members. Further, the fact of the excommunication and its status being maintained during the hearing of the suit and the absence of any offer by the defendants to do equity may mean that no meaningful relief can be given on the defendants’ cross-claim.

211 It may be that after publication of these reasons the parties can even yet come to some accord in the interests of the Community as a whole. If they cannot, it would seem that the Court would have to involve itself in promulgating a scheme of management guided by the views of the Attorney-General as protector of charities.

212 Any problem in modifying the 1950 Rules may be able to be met by a scheme of management. Alternatively, this Court probably has inherent power to resolve deadlocks in unincorporated associations: Porima v Te Kauhanganui o Waikato Inc [2001] 1 NZLR 472, 486.

213 I have already set out the respective contentions of the parties and have noted that to a great degree the defendants are successful. The defendants are not wholly successful in that in so far as management is concerned, they must recognize the rights of the members of the Church School Community in accordance with the 1950 Rules.

214 It would seem to me that at present the only orders that need be made are declaratory orders and that the matter should stand over for consideration to be given as to the exact form of the declarations and what, if any, executive orders are needed.

215 So far as costs are concerned, it seems to me that there is a lot to be said for the proposition that the present dispute has come about as a result of two fairly, but firmly held, views as to the meaning of an imperfect foundation document and that it may well be appropriate for the trust fund to bear the costs of both sides. However, I recognize that much could be said about the matter, including the fact that the intransigence of the sides has meant that a lot of time and money has been spent by the lawyers for both sides in advancing their cases to the fullest extent.

216 I think it appropriate at this stage to reserve the question of costs.

217 There is then also the interesting the question as to whether, in this sort of case, it is relevant that the defendants have not offered to do any equity. This factor cannot affect granting declaratory relief, but it may have some effect with respect to executive orders.

218 Accordingly, I will publish these reasons and stand the matter over to my list for mention on 6 July 2001 at 9.50 am. I emphasize that this date is for mention only and I would expect to be told on that day or any subsequent occasion when the matter is in the list for mention, how much time needs to be reserved for discussion of the remaining issues, particularly the form of orders and the question of costs. Although I have specified 6 July, if counsel are in touch with my Associate during the previous week, that date can be altered to a date that is more suitable to them.

219 Finally, might I thank all counsel for their assistance and for their deep learning shown in their submissions in this very complicated case.

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Last Modified: 06/18/2001

Citations

Radmanovich v Nedeljkovic [2001] NSWSC 492

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Cases Cited

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Statutory Material Cited

1

Attorney-General (NSW) v Grant [1976] HCA 38

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CITATION:	Radmanovich v Nedeljkovic [2001] NSWSC 492
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 1354/99
HEARING DATE(S):	16, 17 May, 11 July, 25 October 2000 (then written submissions)
JUDGMENT DATE:	15 June 2001
PARTIES :	Maksim Radmanovich (P1) Stevan Dobrich (P2) Drago Mijakovac (P3) Kosta Nedeljkovic (D1) Nikola Lukic (D2) Duro Radan (D3) Attorney-General (D4)
JUDGMENT OF:	Young CJ in Eq

COUNSEL :	B Coles QC and G Colyer (P) P W Taylor SC and S Glacken (D1-3) R Lancaster (D4)
SOLICITORS:	McCabes (P) Nicholas G Pappas & Company (D1-3) I V Knight (Crown Solicitor) (D4)
CATCHWORDS:	ASSOCIATIONS & CLUBS [1]- Amendment to rules- No provision for amendment- Unanimous consent of members required- Court has inherent power to overcome deadlock. ASSOCIATIONS & CLUBS [3]- Gifts- Church built by unincorporated association- Perpetuity- Invalid gift. CHARITY [6]- Advancement of religion- Trust for ethnic church school community- Whether valid. CHURCHES [7]- Trusts- How trusts discovered- On facts trust for hierarchical church with congregationalist overtones. EQUITY [108]- Trust- Involving unincorporated association- Difference between core terms of trust and precatory directions. EQUITY [255]- Rule against perpetual non-alienation effect on gift to operate church.
LEGISLATION CITED:	Charitable Trusts Act 1993, s 23
CASES CITED:	AG v Cahill [1969] 1 NSWR 85 AG v Calvert (1857) 23 Beav 248; 53 ER 97 AG v Clapham (1855) 4 DeG M & G 591; 43 ER 638 AG v Gould (1860) 28 Beav 485; 54 ER 452 AG v Holy Apostolic & Catholic Church of the East (1989) 37 NSWLR 293; on appeal (1989) 18 NSWLR 291 AG v Murdoch (1849) 7 Hare 445; 68 ER 183 AG v Murdoch (1852) 1 De GM & G 86; 42 ER 484 AG v Pearson (1817) 3 Mer 353; 36 ER 135 AG v Smythies (1831) 2 R & M 717; 39 ER 568 Aboriginal Hostels Ltd v Darwin CC (1985) 55 LGRA 414 Aglikin v Kovacheff 516 NE (2d) 704 (1987) Anastas v The Greek Orthodox Community of NSW (McLelland CJ in Eq 18.11.1964) Bacon v Pianta (1966) 114 CLR 634 Balkou v Gouleff (1989) 51 DLR (4th) 561 Ball v Pearsall (1987) 10 NSWLR 700 Bishop of Natal v Gladstone (1866) LR 3 Eq 1 Brylinski v Inkol (1924) 55 OLR 369 Church of the New Faith v Commissioner of Pay-Roll Tax (Vic) (1983) 154 CLR 120 Craigdallie v Aikman (1813) 1 Dow 1; 3 ER 601 Dragelevich v Rajsich 263 NE (2d) 778 (Court of Appeals, Ohio) (1970) Farley v Westminster Bank Ltd [1939] AC 430 Foley v Wontner (1820) 2 Jac & W 245; 37 ER 621 Free Church of Scotland v Overtoun [1904] AC 515 Hanna v Malick 193 NW 798 (1923) Hardey v Tory (1923) 32 CLR 592 Harington v Sendall [1903] 1 Ch 921 In re Astor's Settlement Trusts [1952] Ch 534 In re Lipinski's Will Trusts [1976] Ch 235 In re Scowcroft [1898] 2 Ch 638 Keren Kayemeth le Jisroel Ltd v IRC [1931] 2 KB 465 McGarvie Smith Institute v Campbelltown MC (1965) 11 LGRA 321 Metropolitan Petar v Kostovski (Vic SC Byrne J 27.10.1997) Morice v Bishop of Durham (1804) 9 Ves 399; 32 ER 656 Neville Estates Ltd v Madden [1962] Ch 832 New York Annual Conference of the United Methodist Church v Fisher 438 A (2d) 62 (Conn SC) (1980) Parkes Management Ltd v Perpetual Trustee Co Ltd (1977) 3 ACLR 303 Porima v Te Kauhanganui o Waikato Inc [2001] 1 NZLR 472 Public Trustee of NSW v AG (Powell J 11.12.1984) Public Trustee v AG (1997) 42 NSWLR 600 Re Australian Elizabethan Theatre Trust (1991) 30 FCR 491 Re Bryning [1976] VR 100 Re Cain [1950] VLR 382 Re Clarke [1901] 2 Ch 110 Re Denley's Trust Deed [1969] 1 Ch 373 Re Gillingham Bus Disaster Fund [1958] 1 Ch 300 Re Macgregor (1932) 32 SR (NSW) 483 Re Mathew [1951] VLR 226 Re Price [1943] Ch 422 Re Smith [1932] 1 Ch 153 Re South Place Ethical Society [1980] 1 WLR 1565 Re Stewart's Will Trusts [1962] QWN 24 Re Stratton [1931] 1 Ch 197 Re Thackrah [1939] 2 All ER 4 Re Thompson [1934] Ch 342 Re Topham [1938] 1 All ER 181 Re Wilson's Grant [1960] VR 514 Re Wood (dec'd) [1949] Ch 498 Reel v Holder [1979] 1 WLR 1252 Roman Catholic Archbishop of Melbourne v Lawlor (1934) 51 CLR 1 Royal Society for the Prevention of Cruelty to Animals v Coshott (Hodgson J 7.8.97) Scandrett v Dowling (1992) 27 NSWLR 483 Serbian Orthodox Church Congregation of St Demetrius of Akron v Keleman 256 NE (2d) 212 (Ohio SC) (1970) Serbian Orthodox Diocese for the United States of America v Milivojevich 426 US 696 (US Supreme Court) (1976) Serbian Orthodox Ecclesiastical School Community 'St Nikolas' Queensland v Vlaislavljevic [1970] QdR 386 Strathalbyn Jumping Club Inc v Mayes [2001] SASC 73 The Trustees of the Londonderry Presbyterian Church House v Commissioners of Inland Revenue [1946] NI 178 Thornton v Howe (1862) 31 Beav 14; 54 ER 1042 Tidex v The Trustees Executors & Agency Co Ltd [1971] 2 NSWLR 453 Vick v Toivonen (1913) 12 DLR 299 Watson v Jones 80 US 679 (1871) Williams' Trustees v IRC [1947] AC 447 Wylde v AG (1948) 78 CLR 224
DECISION:	See paras 213-218.