THE PARISH of ST MICHAEL No. SCCIV-03-1783

THE PARISH OF ST MICHAEL OF THE UKRAINIAN
AUTOCEPHALIC ORTHODOX CHURCH IN ADELAIDE INC.
[2004] SASC 69

SULAN J: The Parish of St Michael of the Ukrainian Autocephalic Orthodox Church in Adelaide Inc. is an association registered pursuant to The Associations Incorporation Act 1985 (SA). It seeks an order that the rules of the association be varied to incorporate changes to its Constitution.
The Act
Section 24A of the Act provides:
“24A (1) The rules of an incorporated association may be varied, on the application of the association, by the Supreme Court.
(2) Where the rules of the incorporated association provide for the membership of the association, a meeting of the members must be held, before an application is made under this section, to explain the purposes of the proposed application and seek the views of the members in relation to the proposed application.
(3)Notice of an application under this section must be given as the Supreme Court directs.
(4)    The Supreme Court may, on application under this section, order that the rules of an incorporated association be varied in a manner the Court thinks fit, if it is satisfied that –
(a)     the rules unduly limit the conduct of the association’s affairs; and
(b)     the variation of the rules –
(i)is consistent with the objects of the association; and
(ii)will not prejudice any member of the association; and
(iii)is justified in the circumstances of the particular case.
(5)    Before making an order under this section the Supreme Court must have regard to any views expressed by members of the association in relation to the proposed variation at a meeting held in accordance with subsection (2).
(6)    The Commission is entitled to appear and be heard in relation to an application under this section.”
The section was introduced in 1997. No other Australian jurisdiction provides for a court to vary the rules of an incorporated association in the manner provided by s 24A. In other jurisdictions, as it was the case in South Australia prior to 1997, incorporated associations could only alter, remove from or add to their rules by the passing of a special resolution at a general meeting. Such special resolutions are, in general, subject to the rules of the association. An association in South Australia may still alter its rules by way of special resolution. The addition of s 24A contemplates unusual circumstances preventing members of an association from considering and passing a resolution in the usual way.
Background
The unusual circumstances relied upon by the applicant have their basis in a dispute which commenced over a decade ago between members of the Parish as to which body is the governing body of the church.
On 13 July 2000, proceedings were issued in this Court by a number of members of the association seeking declarations, including a declaration that the Parish was in breach of the Constitution.[1] Clause 3 of the Constitution provides:
“The Parish is a constituent part of the Australian and New Zealand Diocese of the Ukrainian Autocephalic Orthodox Church. This jurisdictional status and the complete ecclesiastical and religious subordination may not be altered without the consent in writing of the Governing Bishop and of the Governing Authorities of the Diocese.”
[1] Solowij & Ors v The Parish of St Michael & Ors (2002) 224 LSJS 5
Prior to proceedings being issued, there had been an ongoing debate between members of the association relating to a decision by the Parish to place itself under the jurisdiction and religious subordination of the Patriarch of Kyiv, Patriarch Filaret. The governing Authorities of the Diocese and the Governing Bishop do not recognise the jurisdiction of Patriarch Filaret. They recognise as their spiritual head the Metropolitan of the Ukrainian Autocephalic Orthodox Church in Diaspora (outside the Ukraine), who is simultaneously the Metropolitan of the Ukrainian Orthodox Church of the USA. The Metropolitan is a term used to describe the Primate, or head of the church, in a particular region.
In about 1991, when the Ukraine was regaining its independence from the Soviet Union, the Ukrainian Autocephalic Orthodox Church was re-establishing itself as an independent body in the Ukraine and the head of the church in Kyiv was elevated to Patriarch. The dispute within the Parish related to the recognition by the majority of the members of the Parish of the Kyiv Patriarchate, Patriarch Filaret, as the spiritual head of the church when the Diocese and Synod in Australia recognised the Metropolitan of the Ukrainian Orthodox Church of the USA as its spiritual head.
The action was heard by Williams J. On 12 December 2002, he dismissed the action. He concluded that the action was not justiciable. In his judgment, he dealt in detail with the history of the dispute, and the organisation of the Ukrainian Orthodox Church, its Constitution, the Constitution of the Diocese in Australia and New Zealand and the Constitution of the Parish. It is not necessary for me to repeat in detail, the matters dealt with by Williams J, but I adopt his judgment insofar as it deals with the historical seeds of the dispute and what he describes as the schism which occurred in the Parish.[2]
[2] Ibid pp 7-36 paras 12-99
Events since the decision of Williams J
A majority of members of the Parish now wish to amend the Constitution to give effect to their views that the Parish is spiritually an inseparable part of the Ukrainian Orthodox Church, Kyiv Patriarchate, having its ecclesiastical centre in Ukraine of which Patriarch Filaret is presently the spiritual head.
Clauses 100 and 101 of the Constitution provide:
“100. If an amendment of the parish constitution is required, the parish council shall submit the proposed amendment with the supporting argumentation for consideration of the diocese and council. The diocese and council submits the proposed amendment or alteration with its comments for consideration and approval by the next scheduled or an extraordinary diocese and synod.
101. Changes and alterations to the constitution come into force on their approval by the diocese and synod.”
It is clear that in order for the Constitution of the Parish to be altered the Parish Council must submit the proposed amendment for consideration of the Diocesan Council, which must submit the proposal to an extraordinary meeting of the Diocese and Synod which must approve any changes. The current dispute puts the majority of the members of the Parish in conflict with the Synod, which would be unlikely to approve the proposed Constitution which seeks to recognise the Parish’s allegiance to the Kyiv Patriarchate.
After judgment had been delivered by Williams J, an extraordinary general meeting of Parish members was convened on 2 November 2003. The meeting approved changes to the Constitution and agreed to submit the proposed Constitution to the Supreme Court for approval, pursuant to s 24A of the Act. The proposed Constitution ensures that the Parish clearly defines the historical fact of its spiritual link to the Ukrainian Orthodox Church Kyiv Patriarchate.
The application to approve a new Constitution
The application is supported by an affidavit of Lidia Sukacz, the secretary of the Parish, sworn on 10 December 2003 (“the affidavit”). At the time of the extraordinary general meeting on 2 November 2003 there were 120 financial members, of which 76 attended the meeting and voted. At the meeting, letters of opposition to the motion were presented, and four members addressed the meeting opposing the proposed changes. I have had regard to those objections and to comments made in opposition to the proposed changes. I am satisfied that those who opposed the changes were given an opportunity to voice their opposition, both orally at the meeting and in writing. The meeting resolved by a majority vote of 60 to 16 to apply to the Supreme Court to adopt the proposed Constitution.
The application before me was brought ex parte and the applicant seeks an order that the rules of the Parish be varied in the manner and form of the variations incorporated in a document which had been put before the extraordinary general meeting of the members of the Parish, held on 2 November 2003.
Prior to the matter being listed, I received a letter from Mr Bohdan Solowij, a member of the Parish, seeking permission to be present at the hearing. In that letter, he stated:
“I do not wish to take any steps concerning the application that may make me liable for any legal costs, however, I would like to ensure that the court is aware of the tabled objections in order that it may have regard to any views expressed by the members of the association.”
The matter came before me on 6 February 2004. Mr Solowij was present. I had also received a letter from Ms Victoria Smagala, who was present, and a letter from Reverend Kvasniuk. I was informed that they had been parties to the proceedings before Williams J. Mr Solowij and Ms Smagala informed me that they objected to the application, but they did not want to become parties to the proceedings.
The matter was adjourned to 18 February 2004. During the interval, further submissions were presented to me by way of correspondence. At the resumed hearing on 18 February 2004, Mr Niarchos, on behalf of the applicant, objected to the admission of the correspondence unless it was supported by affidavit. He submitted that if Mr Solowij and Ms Smagala wished to oppose the application, they should seek to be joined as parties. Both Mr Solowij and Ms Smagala were present in court. They repeated their earlier expressed position that they did not wish to become parties. They did not wish to submit information to me by way of affidavit. They understood that I would not have regard to material put before the Court informally by them. I upheld the objection of the applicant.
In accordance with the Act, I have had regard to the opposing views which were expressed at the general meeting, including the statements of Mr Solowij, Reverend Kvasniuk and Messrs Bondaruk and Stankewutsch-Janusch, which are exhibits to the affidavit (LS11, LS12, LS13, LS14).
The ambit of s 24A
In order to understand the ambit of s 24A of the Act, I have had regard to the second reading speech of the Minister.[3]
[3] See Owen v The State of South Australia (1996) 66 SASR 251
He said:
“ … in 99 per cent of cases, associations can change their own rules by resolution. Only under extraordinary circumstances (and we must think of reasons why that would occur) is there a need for some form of intervention or some capacity to change the rules.
…
Having belonged to a number of associations over a period of time, I know that we always attempted at least to comply with the law and occasionally, when there was a fight on about something, we would look up the appropriate statute. As far as I am aware, the associations feel comfortable with this arrangement. Indeed, where for a range of reasons they become non-functional whether it be financial, quorum or some other issues that makes their operations difficult to undertake the provision is there if they cannot competently move a resolution for them to have an outlet which would allow them to change the rules to be able to accommodate the problem that has arisen. In terms of the number, we do not expect it to be very large, but I have been assured that the associations feel that it is an appropriate way to deal with this difficulty that has remained in the system for some time.” (Emphasis added)
In my view, the primary purpose of s 24A is to give an association more power and flexibility with respect to the alteration of its rules. Once the application is made, the role of the Court is to determine whether the requirements of the section are made out.
Do the rules unduly limit the conduct of the association’s affairs?
The current Constitution does not permit the financial members of the Parish to amend it, because any amendment requires the consent in writing of the Governing Bishop and of the Governing Authorities of the Diocese.
Having regard to the history and background of this application, it is clear that the Governing Bishop and Governing Authorities of the Diocese have accepted the authority of the Ukrainian Autocephalic Orthodox Church in Diaspora. It is also clear that the Parish wishes to adopt a Constitution which affirms its spiritual allegiance to the Ukrainian Autocephalic Orthodox Church in Kyiv under the head of Patriarch Filaret.
It cannot reasonably be contemplated that the Governing Bishop and Diocese in Australia and New Zealand would give effect to the resolution of the Parish. The association is, therefore, not able to operate in accordance with the majority views of its members.
It was submitted by Mr Niarchos, for the applicant, that the current rules unduly limit the spiritual dimension of the association’s affairs, and that this has had a long-term impact on all of its affairs. There have been major disagreements between members of the association. The existing Constitution requires Parish members and the Parish Council to act in accordance with the directives of the Diocese and the Council of the Diocese. The Parish has, for a number of years, been in conflict with the Diocese. There is evidence in documents referred to and annexed to the affidavit of the Parish’s long-standing allegiance to the church in Kyiv and its concern that the Diocese has not accepted the authority of the Patriarch Filaret.
The Constitution limits the conduct of the association’s affairs in that the rules invest a power of veto in the Governing Bishop and Governing Authorities of the Diocese which usurps the autonomy of the financial members of the Parish as an incorporated association in its own right, to give effect to their democratically decided resolutions.
I am satisfied that the existing rules limit the conduct of the association’s affairs. It is, therefore, appropriate to invoke the provisions of s 24A of the Act.
Section 24A(4)(b)(i)
Section 24A(4)(b)(i) requires the Court to be satisfied that the variation of the rules is consistent with the objects of the association. The stated objects of the association are set out in the Introduction to the Constitution as follows:
“The faithful united in the Parish for the glory of the Holy Consubstantial and Indivisible Trinity with the blessing of The Lord adopt this CONSTITUTION for the purpose of:
a.    study of the Holy Scriptures and the Commandments of Jesus Christ;
b.     study, preservation and practising of the traditions and customs of the Holy Ukrainian Orthodox Church; and
c.     endeavouring to adopt the spiritual and moral guidance of the teachings of Christ and Christian morals.”
The Preamble to the proposed Constitution, as set out in paragraph 2.1, is:
“2.1The faithful united in the Parish for the glory of the Holy Consubstantial and Indivisible Trinity with the blessing of The Lord adopts this CONSTITUTION for the purpose of:
a.      Study of the Holy Scriptures and the Commandments of Jesus Christ;
b.     study, preservation and practising of the traditions, rites and customs of the Mother Church; and
c.     endeavouring to adopt the spiritual and moral guidance of the teachings of Christ and Christian morals.”
The proposed changes to the Constitution concern the direction of the Parish’s spiritual allegiance. They do not seek to change the beliefs, traditions, customs or practices of the Ukrainian Orthodox Church which the Parish currently observes. Under the proposed Constitution the Parish remains a religious organisation of the Ukrainian Orthodox Christian faith. I am satisfied that the changes are consistent with the objects of the association.
Section 24A(4)(b)(ii)
The Court must be satisfied that the variation of the rules will not prejudice any member of the association. A strict interpretation of that provision would render the section largely ineffective. Any member opposed to change would, in most cases, be able to point to some prejudice in respect of a change. I consider the section should be interpreted liberally to give effect to the intention of the legislature that the Court can give effect to the express wishes of the members of an association so that they can control the affairs of their association. In my view, the prejudice must be substantial and would, in most cases, be related to proprietary rights of existing members. The proposed new Constitution does not affect property rights or rights over the assets of the Parish. Under the Constitution all assets of the Parish, being the church buildings, land and other assets are the property of the Parish and are legally registered in the name of the Parish or the elected trustees of the Parish on trust for the Parish. The Constitution provides that the Parish Council and not the trustees shall control the Parish assets and the Council shall be responsible to the Parish members for the proper management of the Parish assets. The proposed Constitution provides that the assets of the Parish remain under the control of the Parish for its purpose and for the use of its members. There is no substantive change in proprietary rights.
During the hearing, I expressed concern that those members of the Parish who were opposed to the Parish being spiritually an inseparable part of the Ukrainian Orthodox Church Kyiv Patriarchate and were, therefore, opposed to the adherence to the teachings of its Kyiv Patriarchate under its spiritual leader Patriarch Filaret, may be in breach of the proposed Constitution and therefore subject to proceedings by the Parish Council for violation of the new Constitution. In that regard, the current Parish members who disagree with the changes may be prejudiced. To avoid any doubt, the applicant instructed Mr Niarchos to consent to the inclusion in the proposed Constitution of a provision in the following terms:
“No existing Parish Member (i.e. a person who is a member as at the date on which this Constitution comes into legal effect) shall be liable to suspension or expulsion or disciplinary proceedings of any kind which does or may cause prejudice to them as members by reason of any actual or alleged failure to adhere to the religious rights, customs or teachings of the Mother Church or failure to promote the objects, values, traditions, rights or customs of the Mother Church.”
The Mother Church is defined in clause 1.1:
“1.1 The “Mother Church” shall mean the church now called the Ukrainian Orthodox Church – Kyiv Patriarchate having its ecclesiastical centre in Ukraine which as the Holy Ukrainian Autocephalic Church traces its genesis to the Apostle Andrew The First Called and established in Ukraine in 988AD which following years of suppression and repression from 1686AD was finally restored in Ukraine in 1989 and with the enthronement of Patriarch Mstyslav (Skrypnyk) in November 1990 became known as the Ukrainian Autocephalic Orthodox Church – Kyiv Patriarchate now the Ukrainian Orthodox Church Kyiv Patriarchate of which Patriarch Filaret is presently the spiritual leader.”
It was submitted that the proposed Constitution does nothing more than express what has been the position of the Parish all along and that, therefore, there is no prejudice. The addition of the provision which protects members who do not accept adherence to the teachings of the Mother Church make it unnecessary for me to resolve that question. The adoption of the new Constitution does not change the ability of any member to direct his or her spiritual allegiance toward the Ukrainian Autocephalic Orthodox Church in Diaspora, because that is a matter entirely private and beyond the influence of the Constitution. It does not prevent any member from practising their faith. The beliefs, customs and teachings are still those of the Ukrainian Orthodox Church.
The proposed addition to the Constitution as set out above ensures that those members who oppose the new rules and who do not share the majority spiritual allegiance to the Kyiv Patriarchate will not suffer prejudice because of the variation to the rules. Their right to maintain their spiritual allegiance to the Ukrainian Autocephalic Orthodox Church in Diaspora is properly and sufficiently guarded. I am satisfied that the variation of the rules will not prejudice any member of the association.
Section 24A(b)(iii)

Section 24A(4)(b)(iii) requires the Court to be satisfied that the variation of the rules is justified in the circumstances of the particular case. I recognise that there is opposition to the proposed variation. The proposed variation of the Constitution is, as I have said, limited to the acknowledgment of the ultimate spiritual allegiance of its members. I agree with the observations of Williams J in Solowij & Ors v The Parish of St Michael & Ors, when he said:
“If the rules of an incorporated organisation prescribed a toast to be offered and drunk on formal occasions I would not expect such a requirement to be treated as creating a binding obligation (see Lloyd v Loaring 31 ER 1302 at 1304-1305 per Lord Eldon where a distinction was drawn between the toast itself and control of the silver cup used in the ceremony). Likewise a departure within a church from the observance of a prescribed liturgy may not be regarded as a breach of an enforceable legal obligation (see Wylde’s case at 275). However, it may be that in some circumstances rules of this nature become attached to property so as to affect the operation of trusts (the use of a Sanctus bell) or involve proprietary rights (the entitlement to a stipend). The court may then have jurisdiction to intervene. However, in the present case I am of opinion that the issue is confined to a “spiritual and non secular matter”; the issue is one as to acknowledgement of ultimate spiritual allegiance.”[4]
[4] (2002) 224 LSJS 5 at 51 para 152
In my view, the Court cannot engage in an exercise of inquiring into the correct location of authority in the Church.[5] That is a question for individual believers. It is not disputed that a significant majority of financial members of the association wish to enshrine in their Constitution their allegiance to the Ukrainian Autocephalic Orthodox Church Kyiv Patriarchate. The variation of the Constitution will return democratic autonomy over decision making to members of the Parish, whilst also protecting the rights of existing members who stand in the minority. I am satisfied that the application is therefore, justified.
[5] See also Scandrett v Dowling (1992) 27 NSWLR 48
Section 24A(5)
Lidia Sukacz has deposed that on 14 September 2003 it was resolved to hold an extraordinary general meeting of members of the Parish, and that meeting took place on 2 November 2003. The purpose of the meeting was to explain this application and to explain the purposes of the proposed application and to seek the view of members in relation to the proposed application. I am satisfied that the meeting took place. I am satisfied that at the meeting those members who were opposed to the resolution were permitted to speak in opposition and to put their views, both orally and in writing before the meeting. I have had regard to the views expressed by members of the association in opposition to the proposed variation. I do not consider that they provide sufficient reasons for refusing the application.
Order
I order that the rules of the applicant be varied in the manner and form of the variations incorporated in a document headed “Constitution of the Parish of St Michael of the Ukrainian Autocephalic Orthodox Church in Adelaide, South Australia” as approved by the Court and initialled by me.
JUDGMENT CITATIONS

LISTED IN ORDER OF APPEARANCE IN JUDGMENT

[1] Solowij & Ors v The Parish of St Michael & Ors (2002) 224 LSJS 5
2 Ibid pp 7-36 paras 12-99
3 See Owen v The State of South Australia (1996) 66 SASR 251
4 (2002) 224 LSJS 5 at 51 para 152
5 See also Scandrett v Dowling (1992) 27 NSWLR 48

[2004] SASC 69

19 March 2004