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The Bathurst Diocese Decision in Australia and its Implications for the Civil Liability of Churches
Published online by Cambridge University Press: 20 December 2016
Abstract
In the New South Wales Supreme Court decision of Anglican Development Fund Diocese of Bathurst v Palmer in December 2015, a single judge of the court held that a large amount of money which had been lent to institutions in the Anglican Diocese of Bathurst, and guaranteed by a letter of comfort issued by the then bishop of the diocese, had to be repaid by the bishop-in-council, including (should it be necessary) levying the necessary funds from the parishes. The lengthy judgment contains a number of interesting comments on the legal personality of church entities and may have long-term implications (and not merely in Australia) for unincorporated, mainstream denominations and their contractual and tortious liability to meet orders for payment of damages. The article discusses the decision and some of those implications.
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References
2 [2015] NSWSC 1856 (10 Dec 2015).
3 There has been a subsequent decision, reported as Anglican Development Fund Diocese of Bathurst in its own capacity and in its capacity as trustee of the Anglican Development Fund Diocese of Bathurst (receivers and managers appointed) v The Right Reverend Ian Palmer, Bishop of The Diocese of Bathurst [No 2] [2016] NSWSC 226 (10 March 2016) (hereafter ‘Bathurst Diocese No 2’). This was in effect a judicial pronouncement of orders that the parties had agreed following the first decision. It offers no new legal insights, but is useful as an example of the implications of the findings in the first decision.
4 A case in point is the United Kingdom decision of Aston Cantlow and Wilmcote with Billesley Parochial Church Council v Wallbank [2004] 1 AC 546, in which the House of Lords famously declared that, ‘the Church of England is not itself a legal entity’ (per Lord Hobhouse of Woodborough at para 84).
5 In New South Wales, for example, the current such legislation is the Associations Incorporation Act 2009 (NSW). Similar provisions are available in other states and territories in Australia.
6 In Australia, these matters are the subject of a major ongoing Royal Commission into Institutional Responses to Child Sexual Abuse; for the latest developments and interim reports, see <http://childabuseroyalcommission.gov.au>, accessed 10 October 2016. The Royal Commission is not confined to investigating major denominational churches, as it also covers government institutions, para-church organisations and smaller churches, among others, but issues related to the major churches have occupied a major part of its time. The Royal Commission has already issued a Redress and Civil Litigation Report (September 2015), chapter 16 of which (‘Identifying a proper defendant’) helpfully reviews a number of matters discussed in this article; <see https://www.childabuseroyalcommission.gov.au/getattachment/65eccf58-ec82-45b6-934d-023f80b946c9/Redress-and-civil-litigation-report>, accessed 10 October 2016.
7 See Dixon J in Wylde v Attorney-General (1948) 78 CLR 224 at 284: ‘the better opinion appears to be that the Church of England came to New South Wales as the established Church and that it possessed that status in the colony for some decades’. However, as the judge noted at 286, by about the middle of the nineteenth century this status had gone.
8 [2007] NSWCA 117, (2007) 70 NSWLR 565.
9 Ibid at para 47.
10 [2013] VCC 71 at para 24(b).
11 Ibid at para 132.
12 Ibid at para 17.
13 (1995) 18 ACSR 333.
14 [2005] NSWSC 381 at para 22.
15 See Cameron v Hogan (1934) 51 CLR 358.
16 [2012] NSWSC 400.
17 Ibid at paras 44–47, emphasis added.
18 See ibid, discussion concluding at para 86. A full discussion of the employment status of ministers of religion is beyond the scope of this article. For an overview of the issues, see N Foster, ‘Employment status of clergy’, Law and Religion Australia, 3 May 2015, <https://lawandreligionaustralia.wordpress.com/2015/05/03/employment-status-of-clergy/>, accessed 10 October 2016. In the UK, see Frank Cranmer, ‘Employment status of clergy: goodbye to the “servant of God”?’, Law & Religion UK, 9 May 2016, <http://www.lawandreligionuk.com/2016/05/09/employment-status-of-clergy-goodbye-to-the-servant-of-god/>, accessed 10 October 2016.
19 (1948) 78 CLR 224.
20 (1992) 27 NSWLR 483.
21 Sturt at para 102.
22 See, eg, MacQueen v Frackelton (1909) 8 CLR 673; Baker v Gough [1963] NSWR 1345.
23 Sturt at paras 142–146, emphasis added.
24 Ibid at para 163.
25 All references to the Bathurst Diocese case are given in the main text and not otherwise identified.
26 Unusual because, in general, a ‘body corporate’ may only be created under specific legislation which is administered by public servants. Here the power to create artificial legal entities of this sort is given to a religious body.
27 See paras 204–206, referring to Bradley Egg Farm Ltd v Clifford [1948] 2 All ER 378.
28 Harrington v Coote (2013) 119 SASR 152, per Kourakis CJ at 162–163, para 25, emphasis added.
29 Peckham v Moore [1975] 1 NSWLR 353, discussed in Bathurst Diocese at paras 210–212.
30 Formally, of course, Ellis was a tort, not a contract, decision, and the distinction seems correct. But it has to be said that the two decisions sit oddly together.
31 Emphasis added.
32 Emphasis added.
33 For an overview of the rule, see Dan Meagher, ‘The principle of legality as clear statement rule: significance and problems’, (2014) 36:3 Sydney Law Review 413–443.
34 G Conger, ‘Insolvent Anglican diocese to sell church schools and properties’, Anglican Ink, 25 April 2016, available at <http://www.anglican.ink/article/insolvent-australian-diocese-sell-church-schools-properties>, accessed 10 October 2016.
35 See above, n 6.
36 Royal Commission into Institutional Responses to Child Sexual Abuse, Redress and Civil Litigation Report, p 511.
37 In relation to the unincorporated De La Salle Brothers, for example, Lord Phillips in Catholic Child Welfare Society v Various Claimants & The Institute of the Brothers of the Christian [2012] UKSC 56, [2013] 2 AC 1 at para 33 dealt with the issue very briefly: ‘Because of the manner in which the Institute carried on its affairs it is appropriate to approach this case as if the Institute were a corporate body existing to perform the function of providing a Christian education to boys, able to own property and, in fact, possessing substantial assets.’