Tomasevic v Jovetic
[2011] VSC 131
•8 April 2011
| IN THE SUPREME COURT OF VICTORIA |
AT MELBOURNE
COMMERCIAL & EQUITY DIVISION
PRACTICE COURT
No. 6404 of 2010
| MIRKO TOMASEVIC and PETER MILUTINOVIC | Plaintiffs |
| v | |
| DUSAN RAPHAEL JOVETIC and others (according to the schedule attached) | Defendants |
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JUDGE: | Pagone J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 5 April 2011 | |
DATE OF JUDGMENT: | 8 April 2011 | |
CASE MAY BE CITED AS: | Mirko Tomasevic & Anor v Dusan Raphael Jovetic & Ors | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 131 | |
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TRUSTS – Charitable trust – Identity of trustee in dispute – Standing – Whether Attorney-General is the proper plaintiff.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr M Harvey | Derek Norquay |
| For the Defendants | Mr I Upjohn | Bellbridge Hague Solicitors |
HIS HONOUR:
The plaintiffs in this proceeding raise two issues which their counsel described in written submissions as “the trust issue” and “the caveat issue”. The trust issue challenges the continuing assertion by the first defendant, Mr Jovetic, that he is a trustee of a charitable trust for the benefit of a community of worshipers in the Serbian Orthodox Church in Wodonga. The caveat issue concerns an application by the plaintiffs for an order to remove a caveat lodged by the second defendant, Mr Slobodan Juzbasic. Mr Juzbasic lodged a caveat on titles to properties used as a hall and a church building for a community of worshipers in the Serbian Orthodox Church in Wodonga. The caveat lodged by Mr Juzbasic claimed a caveatable interest pursuant to a resolution passed on 13 May 2009 appointing him a trustee.
Underlying the claims in this proceeding are disputes with roots going back many years. It is neither necessary nor desirable for me to recite the differences which have arisen beyond those facts necessary to set the scene for the disposition of the present proceeding.
A Serbian Orthodox Church and school congregation was first established in Wodonga in around 1953. Property was acquired and both a hall and a church was subsequently built. In about 1963 a split occurred in the Serbian Orthodox Church because of perceived concerns amongst expatriate Serbians of the influence which the then communist government might have had upon the affairs of the church. The Free Serbian Orthodox Church Diocese of the United States and Canada was established in 1963. On 31 October 1964 the Free Serbian Orthodox Church Diocese for Australia and New Zealand was established at an assembly in Melbourne. The Wodonga congregation was one of 14 congregations which affiliated with the Free Serbian Orthodox Church Diocese for Australia and New Zealand. That community, however, was slow to accept newer arrivals from the now former Yugoslavia into its membership. It seems that from about 1964 there were two parallel, but separate and distinct, dioceses in Australia. One was known as the Serbian Orthodox Church Diocese of Australia and New Zealand under the jurisdiction of the Serbian Orthodox Church in the former Yugoslavia. The other was the Free Serbian Orthodox Church Diocese of Australia and New Zealand which was affiliated with the Free Serbian Orthodox Diocese for the United States of America and Canada.
The political disintegration of the former Yugoslavia began sometime around 1991 when talks began between the Serbian Orthodox Church and the Free Serbian Orthodox Church to remove the division within the church outside of the former Yugoslavia. In April 1991 a document was prepared setting out recommendations for a reconciliation between the Serbian Orthodox Patriarchy and the Serbian Orthodox New Gracanica Archdiocese. A series of events occurred between 2009 and 2010 in relation to the two communities of worshipers in Wodonga which, according to the plaintiffs, have resulted in a merger of the two churches. At the time, and at least until 7 February 2011, Mr Jovetic was a trustee to land held for the benefit of at least one of the congregations. On 7 February 2011 the Bishop purported to remove Mr Jovetic as a trustee pursuant to what is said to be the operative clause of the constitution.
The defendants contended that the plaintiffs lack standing to maintain the proceeding without a fiat of the Attorney-General. It is clear that the trusts propounded by the plaintiffs are charitable trusts. They are trusts concerning property held by the trustees for the benefit of the community of adherents to the Serbian Orthodox faith. In Num-Hoi, Pon-Yu, Soon-Duc Society Inc v Num Pon Soon Inc[1] Harper J permanently stayed a proceeding until the Attorney-General sought leave to be substituted as plaintiff in similar circumstances. That case, like this one, concerned a dispute about the identity of the trustees or whether a supposed trustee should be removed as a trustee. His Honour considered that the case could properly be regarded as one concerning the conduct and management of a charity and which, therefore, only the Attorney-General had power to institute.[2]
[1][2001] 4 VR 527.
[2]Ibid [32], [37]-[39].
It is clear that there are some cases where the Attorney-General’s “presence” as a party is required to proceedings where there is a dispute concerning a charitable trust.[3] The necessity for the Attorney-General to be a party depends upon the nature of the dispute. The learned authors of Principles of the Law of Trusts give as one instance when the Attorney-General is required as a party “where there is a dispute between trustees”.[4] The necessity for the Attorney-General to be a party derives from the role of the Attorney-General as the guardian of charities. The Attorney-General also represents the Crown and is the legal protector of all persons interested in charity funds.[5] As representative of those holding a beneficial interest the role of the Attorney-General to a proceeding also binds all beneficiaries to the outcome of the proceeding.[6]
[3]HAJ Ford and WA Lee, Principles of the Law of Trusts, 20-106 [20.170]; Sir Moses Montefiore Jewish Home v Howell & Co(No. 7) Pty Ltd [1984] 2 NSWLR 406, 421 (Kearney J); His Grace Metropolitan Petar v Mitreski [2001] NSWSC 994; G Dal Pont, Charity Law in Australia and New Zealand (1999) 267; Brooks v Richardson [1986] 1 WLR 385.
[4]HAJ Ford and WA Lee, Principles of the Law of Trusts, 20-106 [20.170].
[5]Re Sekeford’s Charity (1861) 5 LT 488; H Picarda, The Law and Practice Relating to Charities (4th ed, 2010) 924; Brooks v Richardson [1986] 1 WLR 385, 390-1 (Warner J); J Warburton (ed), Tudor on Charities (9th ed, 2003) 381; G Dal Pont, Charity Law in Australia and New Zealand (1999) 266.
[6]Vince v Walsh (1845) 3 WR 7; H Picarda, The Law and Practice Relating to Charities (4th ed, 2010) 924-5.
In Num Pon Soon Harper J held that the Attorney-General’s presence was required in proceedings involving a dispute about the identity of the trustees. The circumstances of this case are not, in my view, materially different. The plantiffs’ claims against Mr Jovetic are that he ceased to be a trustee by virtue of the Bishop’s resolution in February, and, if he has not ceased to be a trustee, that the Court should remove him as a trustee. That application is materially identical to the one considered by Harper J in Num Pon Soon. The claims concerning the caveat are fundamentally dependent upon whether Mr Juzbasic is correct in maintaining his claim to be a trustee. That claim is, therefore, also materially identical to the one considered by Harper J in Num Pon Soon. It follows that I should stay the proceeding.
Both parties to this proceeding wrote to the Attorney-General close to the date allocated for the hearing of the proceeding. The plaintiffs informed the Attorney-General of this proceeding by letter dated 29 March 2011 sent by facsimile and marked “urgent”. The letter sought the Attorney-General’s views about whether he wished to intervene in the proceeding by way of fiat. The letter from the plaintiffs’ solicitors provided copies of the initiating processes and a summary of the proceedings. It did not include the affidavits to be relied upon or any of the exhibits. Nor, as far as I can see, did it inform the Attorney-General that the defendants had submitted on 28 March 2011 that the proceeding could not be maintained without the fiat of the Attorney-General by reason of the trust in the proceeding being a religious charitable trust. The defendants did communicate that submission to the Attorney-General on 1 April 2011 but, for their part, did not make an application for the Attorney-General’s fiat on their own behalf. The Attorney-General’s response to the plaintiffs’ solicitors was simply that the Attorney-General did not “propose to intervene” in the matter.
The Attorney-General’s response to the defendants’ solicitors expressed a view of the acting Victorian Government Solicitor that the proceeding did not require the fiat of the Attorney-General. The letter cited in support of that conclusion the decision of Uniting Church in Australia Property Trust (NSW) v Monsen.[7] The letter did not mention the decision of Harper J in Num Pon Soon.
[7][1978] 1 NSWLR 575.
The decision in Monsen is significantly different from that in this proceeding and from that in Num Pon Soon. In Monsen the plaintiffs had sought orders concerning entitlement to names and property as between two churches. The defendants contended that the proceedings could not be maintained by the parties without the fiat of the Attorney-General. Rath J held that the Attorney-General was “not a necessary party in proceedings in which an existing charity, whether incorporated or not, [was] seeking to recover property to which it [claimed] to be entitled, or to protect property in which it [claimed] an actual or contingent interest”.[8] His Honour went on to say:
The plaintiffs in this case are asking the Court to make an order declaring their interest in certain names, and an order restraining the defendants from dealing with those names contrary to the interest so declared. In my opinion, such proceedings are plainly distinguishable from proceedings against trustees for the administration of a charitable trust, and it is not necessary that the Attorney-General should be a party, either as plaintiff or defendant. The Court has before it the parties who have an interest in litigating the issues involved. The Attorney-General would also have an interest, because as parens patriae he also is concerned that property the subject of a charitable trust is used for its proper purposes, but this is not a case in which his presence is required.[9]
Fundamental to his Honour’s decision in Monsen, therefore, is that the nature of the proceedings in that case were distinguishable from proceedings of another kind, namely “against trustees for the administration of a charitable trust”. The decision in Num Pon Soon, as the proceeding before me, is within that class of cases distinguished by Monsen. The decision in Monsen did not concern a case for removal of trustees. Nor was the attention of the Attorney-General or the acting Victorian Government Solicitor drawn to the decision in Num Pon Soon. A case involving a dispute about who the trustees are or about whether one or more trustee should be removed is different from proceedings brought by those who are undoubtedly trustees. Where the trust itself brings a proceeding it may more safely be concluded that the presence of the Attorney-General is not needed except, of course, that the presence of the Attorney-General as a defendant might still be desirable to bind all beneficiaries of the charitable trust.
[8]Ibid 591.
[9]Ibid.
The position expressed by the Attorney-General does not mean that the Attorney-General is not the only party who may bring the proceeding. The legal requirement that only the Attorney-General may bring certain proceedings is not removed by the Attorney-General taking the view (rightly or wrongly) that he or she need not or will not assume that role. It may be that the appropriate course for one or other of the parties to this proceeding ought to have been to join the Attorney-General as a party “in some form” for the suit “to be properly constituted”.[10]
[10]His Grace Metropolitan Petar v Mitreski [2001] NSWSC 994, [1] (Hamilton J); J Warburton (ed), Tudor on Charities (9th ed, 2003) 390-1.
I must next consider whether it is desirable or appropriate for me to deal with the substantive matters raised by the plaintiffs’ claim notwithstanding my conclusions about the plaintiffs’ standing. Counsel for the defendants submitted that I should not do so if I decided the matter in the defendants’ favour on the question of standing. It is plain that anything I might now go on to say on the substantive matters would be obiter dicta and, at best, “provisional”. In Sir Moses Montefiore Jewish Home v Howell & Co (No. 7) Pty Ltd[11] Kearney J expressed views about the substantive issues which had been raised on the basis of the full argument of the matter at hearing but expressed them as being “on a provisional basis only” because of the absence of the Attorney-General and the representatives of the settlors’ estates.[12]
[11][1984] 2 NSWLR 406.
[12]Ibid 421.
In Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd[13] the Court of Appeal said:
Whether in any given case a trial judge should proceed to decide issues which, strictly speaking, do not fall for decision is a matter for assessment in the circumstances of the case. But it is an assessment which trial judges should be astute to carry out. This is consistent with the observation made by the High Court, with respect to intermediate appellate courts:
[A]lthough there can be no universal rule, it is important for intermediate courts of appeal to consider whether to deal with all grounds of appeal, not just with what is identified as the decisive ground. If the intermediate court has dealt with all grounds argued and an appeal to this Court succeeds, this Court will be able to consider all the issues between the parties and will not have to remit the matter to the intermediate court for consideration of grounds of appeal not dealt with below.[14]
It is conceivable that any “provisional” view I might express about the underlying disputes on the trust issue and the caveat issue may assist the parties in resolving their dispute. On the other hand it is conceivable that the articulation of obiter dicta statements from which the parties may have no legal entitlement to appeal may inflame the dispute rather than assist to quell it. In that regard I am mindful that the parties in this proceeding represent different groups within a broad community. The dispute here is unlike that between two private litigants each seeking to maintain a private interest. In this case the dispute between the parties raises the difficulty for trustees to a charitable trust where what is done may not accord with the trustee’s duties. The first defendant was, on any view, a trustee of property held for a charitable purpose. It was not held for the benefit of the trustees nor for a closed group of individuals. The duties of trustees in such circumstances cannot be lessened or avoided by a process if it is not legally effective in doing so. The charitable purpose, and the expectation of those intended to enjoy it, cannot be defeated if the process adopted to alter the trusts were not effective in law. It is, therefore, desirable for the substantive legal disputes between the parties to be resolved by court determination and not by provisional opinion.
[13][2010] VSCA 355.
[14]Ibid [103] (Maxwell P, Tate JA and Habersberger AJA) (footnotes omitted).
I am also mindful that there is, broadly speaking, no dispute about the underlying facts which an appellate court might conceivably need to have determined by a trial judge if it were minded to deal with the substantive dispute between the parties at an appeal rather than to refer the matter back to the trial division. One of the critical areas of dispute, for example, is the effectiveness in law of the meeting which was said to have merged the two church communities in early 2010. That dispute depends in part upon the form of notice and agenda which was given for the meeting and whether the meeting was conducted according to its proper processes. The evidence necessary for conclusions about those matters was tendered in the affidavits and exhibits and does not require any finding upon contested evidence. That is to say, the parties agree on the identity of the document constituting the notice and agree about the document constituting the minutes of the meeting said to have made the various resolutions about merger. What they do not agree about is the consequences of that evidence. Those consequences depend upon a conclusion based upon the submissions and, probably, upon any submissions which the Attorney-General may wish to make. In those circumstances it seems to me appropriate not to deal with the remaining issues.
In Num Pon Soon Harper J ordered a stay of the proceeding before him until the Attorney-General sought leave to be substituted as plaintiff or until further order. I think an order in those terms is appropriate in this case. The defendants contended that in ordering a stay I should impose conditions such as providing that part of the Wodonga congregation have access to the church, requiring that an affidavit be filed by the plaintiffs disclosing what has become of money in church bank accounts and ordering that certain property which had been in the church premises be returned to the church. Such orders do not appear to me to be consistent with the nature of the stay to be ordered in this case. It is not a case of a party requesting a stay of proceedings which might be granted upon conditions but, rather, of a party having a stay imposed upon them tantamount to an inability to proceed with the case. It would be inconsistent with the defendants’ success in the proceeding for the plaintiffs to be bound by orders which might otherwise be imposed as conditions for the right to prosecute a proceeding. The defendants’ success is essentially that the plaintiffs do not have standing to bring the proceeding and the stay is ordered to enable the proceeding to be regularised by substitution of the Attorney-General for the plaintiffs or, perhaps, by the joinder of the Attorney-General as a party. The entitlement of the defendants to the “conditions” they seek is, rather, something for them to establish in proceedings properly instituted themselves.
Accordingly, the proceeding will be stayed pending further order.
SCHEDULE OF PARTIES
| No. 6404 of 2010 | |
| BETWEEN: | |
| MIRKO TOMASEVIC | Firstnamed Plaintiff |
| PETAR MILUTINOVIC | Secondnamed Plaintiff |
| - and - | |
| DUSAN RAPHAEL JOVETIC | Firstnamed Defendant |
| SLOBODAN JUZBASIC | Secondnamed Defendant |
| PREDRAG MILOVANOVIC | Thirdnamed Defendant |
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