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...

[2016] NSWSC 226

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

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]; Commonwealth Bank of Australia –v– The Right Reverend Ian Palmer, Bishop of The Diocese of Bathurst - [No.2] [2016] NSWSC 226

Hearing dates:

10 March 2016

Decision date:

10 March 2016

Jurisdiction:

Equity - Commercial List

Before:

Hammerschlag J

Decision:

See paragraphs 2 and 3

Catchwords:

ORDERS

Category:

Consequential orders (other than Costs)

Parties:

Proceedings 2014/75940
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) – Plaintiff
The Right Reverend Ian Palmer, Bishop of The Diocese of Bathurst – First Defendant
Ellen Sharp – Second Defendant
The Venerable Francis Hetherington – Third Defendant
The Very Reverend Anne Wentzel – Fourth Defendant
Robert Woods – Fifth Defendant
The Reverend Canon Craig Moody – Sixth Defendant
The Reverend Canon Margaret Finlay – Seventh Defendant
The Reverend Canon Grahame Yager – Eighth Defendant
The Reverend Brett Watterson – Ninth Defendant
The Reverend James Hodson – Tenth Defendant
The Reverend Gary Neville – Eleventh Defendant
The Reverend Dr Max Wood – Twelfth Defendant
The Reverend Leigh Gardiner – Thirteenth Defendant
Marilyn Baker – Fourteenth Defendant
Graham Leatherland – Fifteenth Defendant
Coral McFarland – Sixteenth Defendant
Ray Norman – Seventeenth Defendant
Janet Price – Eighteenth Defendant
Sue West – Nineteenth Defendant
Leigh Edwards – Twentieth Defendant
Anglican Property Trust Diocese of Bathurst (ABN 15 968 693 964) – Twenty-first Defendant
All Saints’ College Bathurst Council (ABN 43 418 897 717) – Twenty-second Defendant
Bathurst Endowment of the See Board (ABN 89 509 521 070) – Twenty-third Defendant

  Proceedings 2014/75947
Commonwealth Bank of Australia (ABN 48 123 123 124) – Plaintiff
The Right Reverend Ian Palmer, Bishop of The Diocese of Bathurst – First Defendant
Ellen Sharp – Second Defendant
The Venerable Francis Hetherington – Third Defendant
The Very Reverend Anne Wentzel – Fourth Defendant
Robert Woods – Fifth Defendant
The Reverend Canon Craig Moody – Sixth Defendant
The Reverend Canon Margaret Finlay – Seventh Defendant
The Reverend Canon Grahame Yager – Eighth Defendant
The Reverend Brett Watterson – Ninth Defendant
The Reverend James Hodson – Tenth Defendant
The Reverend Gary Neville – Eleventh Defendant
The Reverend Dr Max Wood – Twelfth Defendant
The Reverend Leigh Gardiner – Thirteenth Defendant
Marilyn Baker – Fourteenth Defendant
Graham Leatherland – Fifteenth Defendant
Coral McFarland – Sixteenth Defendant
Ray Norman – Seventeenth Defendant
Janet Price – Eighteenth Defendant
Sue West – Nineteenth Defendant
Leigh Edwards – Twentieth Defendant
Anglican Property Trust Diocese of Bathurst (ABN 15 968 693 964) – Twenty-first Defendant
All Saints’ College Bathurst Council (ABN 43 418 897 717) – Twenty-second Defendant
Bathurst Endowment of the See Board (ABN 89 509 521 070) – Twenty-third Defendant

Representation:

Counsel:
Proceedings 2014/75940
A.G.Bell SC with E.L. Beechey - Plaintiff
D. Calabria, Solicitor - First to Twenty-Third Defendants

 

Proceedings 2014/75947
A. McGrath SC with S. Aspinall - Plaintiff
D. Calabria, Solicitor - First to Twenty-Third Defendants

 

Solicitors:
Proceedings 2014/75940
Henry Davis York – Plaintiff
Bridges Lawyers – First to Twenty-Third Defendants

  Proceedings 2014/75947
Henry Davis York – Plaintiff
Bridges Lawyers – First to Twenty-Third Defendants

File Number(s):

2014/75940; 2014/75947

Publication restriction:

Unrestricted

ORDERS

1. HIS HONOUR: I delivered the principal judgment in these proceedings on 10 December 2015 - [2015] NSWSC 1856. What follows are the orders, in the terms agreed by the parties which I made on 10 March 2016.

2. In proceedings 2014/75947:

In these orders:

ADF means the Anglican Development Fund, Diocese of Bathurst.

ADF Ordinance means the Anglican Development Fund Diocese of Bathurst Ordinance 1998-2010.

Bank means the plaintiff (Commonwealth Bank of Australia).

BIC means Bishop in Council of the Diocese.

Current BIC Members means those of the first to twentieth defendants who are members of BIC for the time being.

Church Trust Property means all or any part of any real and personal property which may for the time being be subject to any trust whether by dedication, consecration, trust instrument, or otherwise, for or for the use, benefit, or purposes of the Anglican Church in the Diocese.

Diocese means the Anglican Diocese of Bathurst.

Facilities means the facilities referred to in the Letter of Comfort.

Finance Ordinance means Bathurst Anglican Church Finance Ordinance 1959-2010.

Letter of Comfort means the letter dated 24 April 2008 under the hand and seal of the Right Reverend Richard Hurford as Bishop of the Diocese to the Bank, described and set out at paragraph 17 of the Reasons.

Parishes has the meaning set out at paragraph 254 of the Reasons.

Reasons means the Court’s reasons for Judgment in these proceedings given on 10 December 2015.

1.   Declare that the Letter of Comfort gives rise to the following obligations which are legally binding on the members of BIC for the time being:

(a)   the obligation reflected in cl 4 of the Finance Ordinance to cause ADF’s default to the Bank in respect of the Facilities to be rectified;

(b)   the obligation reflected in cl 5 of the Finance Ordinance to ensure that the principal, interest and other monies owing to the Bank under the Facilities are paid to the Bank out of the Diocese of Bathurst Synod Management Fund; and

(c)   the obligation reflected in cl 32 of the ADF Ordinance to make up any deficiency in the Bank’s funds by promoting an ordinance to levy the necessary funds from the Parishes,

but only to the extent that such obligations may be met from Church Trust Property.

2.   Declare that the Letter of Comfort gives rise to a legally binding obligation on the Bishop of the Diocese for the time being to assent to an ordinance or ordinances giving effect to any part of these orders.

3.   Declare that s 26 of the Anglican Church Trust Property Act 1917 empowers BIC to direct that Church Trust Property be sold or otherwise dealt with to honour the Letter of Comfort or to make up the Bank’s deficiency, regardless of the terms of trusts on which such property is held.

4.   Declare that there is available Church Trust Property, both real and personal, which can be utilised to honour the obligations arising from the Letter of Comfort and to make up the Bank's deficiency without breaching any trust.

5.   Order that the Current BIC Members take such action, by ordinance or otherwise, to cause ADF's defaults to the Bank in respect of the Facilities to be rectified but limited to recourse to Church Trust Property to rectify such defaults.

6.   Order that the Current BIC Members cause the BIC to promote an ordinance to levy the necessary funds from the Parishes in order to make up the deficiency in ADF's funds in the sum of $14,063,074.92 or such lesser amount as will remedy the then current deficiency in ADF's funds (recourse in respect of such a levy to be limited to Church Trust Property).

7.   Order that the Current BIC Members ensure that the sum of $37,771,238.35, together with interest accruing in accordance with the Bank's applicable Terms and Conditions for Business Finance as amended and updated from time to time, owing to the Bank under the Facilities (or such lesser amount as will repay the then current amount owing to the Bank under the Facilities) is paid out of the Diocese of Bathurst Synod Management Fund but limited to recourse to Church Trust Property.

8.   Order that as between the plaintiff and the first to twentieth defendants, there be no order as to costs.

9.   Order that the twenty-first, twenty-second and twenty-third defendants pay the Bank’s costs of the proceeding.

10.   Liberty to the parties to apply on three days’ notice.

3. In proceedings number 2014/75947:

In these orders:

ADF Ordinance means the Anglican Development Fund Diocese of Bathurst Ordinance 1998-2010.

BIC means Bishop in Council of the Diocese.

Certificate means each of the following letters issued by Bishop Hurford in his capacity as the then Bishop of the Diocese to the plaintiff in respect of certain of the Loans:

(a)   letter dated 11 December 2008 in respect of OAGS Loan 5022 (Tranche 1);

(b)   letter dated 26 May 2009 in respect of MAGS Loan 5012, MAGS Loan 5013, MAGS Loan 5014 and MAGS Loan 5023;

(c)   letter dated 17 December 2009 in respect of OAGS Loan 5003, OAGS Loan 5010, OAGS Loan 5011, OAGS Loan 5017, OAGS Loan 5022 (Tranche 1), OAGS Loan 5022 (Tranche 2), OAGS Loan 5029, and OAGS Loan 5033;

(d)   letter dated 20 October 2010 in respect of MAGS Loan 5036;

(e)   letter in respect of MAGS Loan 5042 referred to at paragraphs 573 to 576 of the Reasons;

(f)   letter in respect of OAGS Loan 5043 referred to at paragraphs 577 to 580 of the Reasons;

(g)   letter in respect of OAGS Loan 5044 referred to at paragraphs 581 to 582 of the Reasons;

(h)   letter in respect of OAGS Loan 5049 referred to at paragraphs 583 to 584 of the Reasons.

Church Trust Property means all or any part of any real and personal property which may for the time being be subject to any trust whether by dedication, consecration, trust instrument, or otherwise, for or for the use, benefit, or purposes of the Anglican Church in the Diocese.

Current BIC Members means those of the first to twentieth defendants who are members of BIC for the time being.

Diocese means the Anglican Diocese of Bathurst.

Finance Ordinance means Bathurst Anglican Church Finance Ordinance 1959-2010.

Loan means each of the following loans made by the plaintiff to the OAGS (being those loans designated OAGS Loan) or to the MAGS (being those loans designated MAGS Loan):

(a)   MAGS Loan 5012;

(b)   MAGS Loan 5013;

(c)   MAGS Loan 5014;

(d)   MAGS Loan 5023;

(e)   MAGS Loan 5036;

(f)   MAGS Loan 5042;

(g)   MAGS Loan 5045;

(h)   MAGS Loan 5050;

(i)   OAGS Loan 5003;

(j)   OAGS Loan 5010;

(k)   OAGS Loan 5011;

(l)   OAGS Loan 5017;

(m)   OAGS Loan 5022 (Tranche 1);

(n)   OAGS Loan 5022 (Tranche 2);

(o)   OAGS Loan 5029;

(p)   OAGS Loan 5033;

(q)   OAGS Loan 5043;

(r)   OAGS Loan 5044;

(s)   OAGS Loan 5049.

MAGS means the Macquarie Anglican Grammar School.

OAGS means the Orange Anglican Grammar School.

Parishes has the meaning set out at paragraph 254 of the Reasons.

Reasons means the Court’s reasons for Judgment in these proceedings given on 10 December 2015.

1.   Declare that the Certificates give rise to the following obligations which are legally binding on the members of BIC for the time being:

(a)   the obligation reflected in cl 4 of the Finance Ordinance to cause the defaults of the OAGS and the MAGS in respect of the Loans to be rectified;

(b)   the obligation reflected in cl 5 of the Finance Ordinance to ensure that the principal, interest, and other monies owing to the plaintiff by OAGS and MAGS are paid out of the Diocese of Bathurst Synod Management Fund; and

(c)   the obligation reflected in cl 32 of the ADF Ordinance to make up the deficiency in the plaintiff’s funds by promoting an ordinance to levy the necessary funds from the Parishes,

but only to the extent that such obligations may be met from Church Trust Property.

2.   Declare that the Certificates give rise to a legally binding obligation on the Bishop of the Diocese for the time being to assent to an ordinance or ordinances giving effect to any part of these orders.

3.   Declare that s 26 of the Anglican Church Trust Property Act 1917 empowers BIC to direct that Church Trust Property be sold or otherwise dealt with to honour the Certificates or to make up the plaintiff’s deficiency, regardless of the terms of trusts on which such property is held.

4.   Declare that there is available Church Trust Property, both real and personal, which can be utilised to honour the obligations arising from the Certificates and to make up the plaintiff’s deficiency without breaching any trust.

5.   Order that the Current BIC Members take such action, by ordinance or otherwise, to cause the defaults of the OAGS and the MAGS in respect of the Loans to be rectified but limited to recourse to Church Trust Property to rectify such defaults.

6.   Order that the Current BIC Members ensure that the sum of $11,050,762.90 owing to the plaintiff under the Loans is paid out of the Diocese of Bathurst Synod Management Fund but limited to recourse to Church Trust Property to meet such liability.

7.   Order that the Current BIC Members cause BIC to promote an ordinance to levy the necessary funds from the Parishes in order to make up the deficiency in the plaintiff’s funds in the sum of $14,063,074.92 or such lesser amount as will remedy the then current deficiency in the plaintiff’s funds (recourse in respect of such a levy to be limited to Church Trust Property).

8.   Order that as between the plaintiff and the first to twentieth defendants, there be no order as to costs.

9.   Order that the twenty-first, twenty-second and twenty-third defendants pay the plaintiff’s costs of the proceedings.

10.   Liberty to the parties to apply on three days’ notice

Amendments

11 March 2016 - Citation included paragraph 1