Tomasevic & Anor v Jovetic & Ors  VSC 223 (4 June 2012). (ext. LINK)
Zabrinuti Mirjanin; 04.06.2012
Excerpts outlining critical statements of the judgment have been provided below.
9 There are three main issues in these proceedings:
(a) First, was the purported merger of the churches on 2 January 2010 effective;
10 The resolution of the first issue requires a consideration of the steps taken leading up to the 2 January 2010 meeting and the conduct of the meeting itself, in light of the two churches’ constitutions. Further, an overarching issue that must first be resolved is whether the court will intervene in the internal affairs of a voluntary association and adjudicate on the validity of the 2 January 2010 meeting. If the 2 January 2010 meeting was valid, consideration needs to be given to what precisely was resolved at that meeting and the effect of the purported merger. If on the other hand the meeting was invalid consideration needs to be given to precisely what the position was immediately prior to the purported merger. In such a case the most important question will be the identity of the trustees, the subject of the second issue.
24 Since 31 October 1964, the First Church has been governed by the Constitution of the Free Serbian Orthodox Church Diocese for Australia and New Zealand, which was amended on 30 December 1976 (the “1964 Constitution”). Further, on 5 April 1981 the First Church adopted an additional constitution (the “1981 Constitution”).
27 In late December 2007, the Australian Serbian Orthodox Church’s Diocesan Assembly, or “sabor”, was held. In the past, sabors had been held at a Serbian Orthodox monastery near Canberra. However, in 2007 Bishop Irinej, the relevant Serbian Orthodox Church Bishop for Australia, decided to conduct the December sabor in Alexandria, near Sydney. A number of members of the First Church disagreed with this decision and attended an alternative sabor held at the Canberra monastery.
28 Following their attendance at the Canberra sabor, a number of members of the First Church purportedly had their membership revoked. At the following Annual General Meeting of the First Church, conducted on 17 February 2008, Mr Tomasevic, the then president of the First Church, confirmed the removal of these members from the First Church. The Defendants take issue with this purported removal of members, arguing that the expulsion of members had no basis in the First Church’s constitution.
30 On 8 February 2011, Bishop Irinej purported to remove Mr Jovetic as trustee of the First Church. This removal was said to be effected by an “Executive Decision of the Diocesan Executive Board”, which was communicated to Mr Jovetic by a letter dated 14 February 2011 from Mr Norquay, the solicitor for “The Wondonga Congregation of the Serbian Orthodox Church”.
31 On 7 March 2011, Bishop Irinej also purported to remove Mr Juzbasic as trustee of the First Church. This removal was again purportedly done by an “Executive Decision of the Diocesan Executive Board”, which was also communicated to Mr Juzbasic by letter dated 8 March 2011 from Mr Norquay.
33 On 2 January 2010, a meeting was held between the members of the First and Second Churches. At the meeting a resolution was passed purportedly dissolving the First and Second Churches and creating a merged church. The Defendants contest the validity of this meeting arguing it was held contrary to the constitution of the First Church in that the notice given to members of the meeting was deficient and that the meeting was improperly run.
34 Notice of the 2 January 2010 meeting was given to members of the First and Second Churches in two separate forms. The notice provided to First Church members was given 14 days prior to the meeting and noted that an Extraordinary General Meeting was being called without stating the purpose of the meeting. The court was not provided with a list of members provided with the notice, or a list of members of the First Church. Conversely, the notice provided to the Second Church members was sent two months prior to the meeting and included the meeting’s purpose.
35 Eight members of the First Church participated in the 2 January 2010 meeting – six attended in person and two sent proxies. The Defendants also allege that there were a number of other First Church members, purportedly removed as members in 2008 and 2009, that had not received notice of the meeting and did not attend.
36 Nineteen members of the Second Church participated in the 2 January 2010 meeting – eighteen attended in person and one sent a proxy.
37 The 2 January 2010 meeting was presided over by Bishop Irinej. At the meeting the members of both churches met as one group and purported to, together, dissolve the two separate churches and create a merged church.
38 Minutes from the meeting show that at the meeting, among other things, it was ascertained that two-thirds of the financial members of the First and Second Churches were present. The minutes also record that the Bishop dissolved the existing committees of the First and Second Churches, members were elected to a committee for the merged church and it was decided that the merged church would belong to the Diocese of Australia and New Zealand. By letter dated 30 March 2010 Bishop Irinej confirmed the merger.
41 As referred to earlier, the meeting of 2 January 2010 (“the Meeting”) purported to effect a merger between the First Church and the Second Church. If the Meeting was not a valid meeting, each church will retain its separate and independent identity and the remaining critical question will be the identity of the trustees of the First Church. If the Meeting was valid and effected a merger it will still be necessary to determine precisely what was resolved by the Meeting and the identity of the trustees of the merged church.
43 I did not understand Mr Upjohn, of counsel who appeared for the Continuing Trustees, to contest the applicable principles and their applicability to the members. However, he submitted that the trustees – whoever they might be – did have a proprietary interest in the assets of the church, a proposition accepted, with respect correctly, by Mr Harvey. As such, it was submitted that the trustees had a right and indeed a duty to enforce the First Church’s constitution.
52 The second issue relates to the conduct of the Meeting. Mr Upjohn submitted that separate meetings of each church was required. Each church, it was submitted, was required to deal with the matter of dissolution and merger as part of its own agenda or business before any joint meeting was to be held.
53 As pointed out, a meeting convened under Article 105 or Article 14(a) of the 1981 Constitution is required to deal with, and only with, the specific matter identified in the relevant notice. The notice or invitation was to members of the First Church and as such only members of that Church were called upon to discuss and deliberate on the identified matter. Leaving aside the fact that no specific matter was identified as required, it was not permissible for others to influence or participate in the debate or discussions or indeed, and more importantly, affect any vote. Thus, the Meeting itself was not properly conducted and I do not consider it to be a valid meeting.
54 Further I do not regard Article 10 of the Transitional Regulations as providing a basis for a valid merger. Article 10 provides that no Church-School Congregation can be forced to merge “without the consent of three fourths of the members of the Congregation”. Whatever the status of the Transitional Regulations they cannot override the Constitution of each Church. Further the minutes of the Meeting refers to a presence of two thirds of financial members. This appears to be a quorum requirement rather than a voting requirement.
56 Accordingly, I find that the Meeting was invalid. The next question is the identity of the trustees of the First Church as at 2 January 2010.
65 The Executive Decision is in the following terms:
“Mr Slobodan Juzbasic, expelled as a member of the Wodonga Church-School Congregation by the Executive Board on 9 September 2009, to be removed as a Trustee of the (former) ‘Free Serbian Orthodox Church-School Congregation Property’ of Sts. Peter and Paul in Wodonga; come New Gracanica Metropolitanate; come Serbian Orthodox Church, Diocese of Australia and New Zealand, for refusing to accept the will and legal right of the majority of the members of the said Congregation in merging with their sister Church-School Community of the same name; and for attempting to take possession of both the Church and Community Centre of the said Church-School Congregation/Community on behalf of a group of schismatics that are no longer in the Serbian Orthodox Church and outside of canonical Orthodoxy.”
67 In my opinion, the purported removal of Mr Juzbasic as a trustee by the Bishop either alone or together with others was not valid for a number of reasons.
68 First, there is no Article 95.9 of any constitution of the First Church. No other constitution is relevant.
69 Secondly, the Bishop does not have the power to remove a trustee. Neither the 1964 nor the 1981 Constitution provides for such removal. Any power needs to be specific given the importance of the office of trustee. There is a procedure for removal in the 1981 Constitution (Article 28(b)) but it does not involve the Bishop. Further the various declarations of trust do not give the Bishop such power. Again, there is a procedure for removal and it is not by the Bishop. Further, the Executive Decision purports to remove Mr Juzbasic as a Trustee of the First Church. There are two difficulties with this articulation. Mr Juzbasic was not a trustee of the First Church. He was a joint trustee over certain properties of the First Church. Further a ground relied on was his refusal to accept the merged church. I have found that the merger was not effective.
74 First, automatic removal of a trustee is a very serious matter and any such provision should only be enforced in the clearest of cases and on proper evidence. Where the conduct relied on is easily ascertainable or is an objective fact such as a sequestration order the matter is much easier. Where however, the conduct requires a value judgment or subject assessment or consideration of the conduct, the matter is much harder, particularly where the prohibited conduct is expressed in general terms and the party asserting automatic termination and making the value judgment is the adversary. Mr Juzbasic was entitled to take the view that the merger was invalid. I have no doubt that Mr Juzbasic was passionate about his position and said so. However the evidence does not establish sufficient disruption of meetings so as to lead to automatic disqualification.
75 Secondly, the duties referred to under Article 8(d) are those of members. Mr Juzbasic was purportedly removed as a member on 9 September 2009. Whatever may be said of Mr Juzbasic’s conduct in freezing the bank account, at the time this conduct was engaged in – April 2010 – it was not (on the Plaintiffs’ or Merging Trustees’ case) as a member. In any event, I have reservations about the validity of his expulsion as a member because of the consanguinity prohibition. However this matter may not be justiciable and is not in any event relevant to the issues and my findings.
76 Thirdly, the Merging Trustees have only sought to rely on those provisions in a retrospective sense. Indeed the letter from the Bishop dated 7 March 2011 – although of no effect – rather suggests that the Merging Trustees regarded the Continuing Trustees as trustees until their purported removal, a position entirely inconsistent with deemed or automatic termination.
79 Accordingly, so far as Mr Juzbasic is concerned, I am of the opinion that he remains a trustee of the First Church. The merger is invalid and his purported removal as trustee is not valid. He was not removed under the deeming provision and remains a trustee. In view of my findings Mr Juzbasic was probably entitled to lodge a caveat. However, I do not propose to deal with this aspect at this stage.
83 The “Decision” is in the following terms:
“Mr Dushan Yovetich, a Trustee of the (former) ‘Free Serbian Orthodox Church-School Congregation of Sts. Peter and Paul; come New Gracanica Metropolitanate; come Serbian Orthodox Church, Diocese of Australia and New Zealand, for refusing to accept the will and legal right of the majority of the members of the said Congregation in merging with their sister Church-School Community of the same name; and for attempting to hand over the title and archives in his possession of the said Church-School Congregation/Community to a group of schismatics who are no longer in the Serbian Orthodox Church and outside of canonical Orthodoxy, upheld his being removed from the said Trust by the canonical Diocesan Bishop, his Grace Irinej of Australia and New Zealand.”
84 For similar reasons to those applicable to Mr Juzbasic and referred to above I find that the removal of Mr Jovetic was not valid. There is no Article 59.9 or 95.9 in any relevant constitution. Further the Bishop did not have power and there is no suggestion of deemed or automatic removal as trustee.
85 Accordingly, so far as Mr Jovetic is concerned I am of the opinion that he remains a trustee of the First Church. The merger is invalid and his purported removal as trustee is not valid. He remains a trustee.
94 Before making any declarations and orders and dealing with the application for removal I propose to give the parties an opportunity to resolve their differences. At the outset I informed the parties that church and community disputes of this kind are not suitable for resolution by a court. Over 25 affidavits have been filed and the dispute has become acrimonious and costly. The court is limited in what it can do.