Ermogenous v Greek Orthodox Community of SA Inc A41/2000 [2001] HCATrans 232 (1 June 2001)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No A41 of 2000

B e t w e e n -

SPYRIDON ERMOGENOUS

Applicant

and

GREEK ORTHODOX COMMUNITY OF SA INC

Respondent

Application for special leave to appeal

KIRBY J

HAYNE J

TRANSCRIPT OF PROCEEDINGS

FROM ADELAIDE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 1 JUNE 2001, AT 12.13 PM

Copyright in the High Court of Australia

MR A.J. BESANKO, QC: If the Court pleases, I appear with my learned friend, MR A. ROSSI, for the applicant. (instructed by Mantzoros & Partners)

MR T.M. McRAE: If the Court pleases, I appear for the respondent. (instructed by Niarchos & Co)

KIRBY J: Yes, just excuse me for a minute. Yes, we worked you too hard in the last case, Mr Besanko, we would like to hear first from the respondent.

MR BESANKO: Thank you, your Honour.

MR McRAE: Your Honours, there are a number of issues raised in this matter. Perhaps I can mention them one by one and the Court can tell me what they wish to hear me on. The first of the issues was jurisdiction. That was a question on which it was argued that the - - -

KIRBY J: I would like to hear you on that point.

MR McRAE: Yes, your Honour.

KIRBY J: You list what you say are the points and then we will tell you if we have anything else on our shopping list.

MR McRAE: Thank you. They appear to be jurisdiction; leave - because leave was granted in the event that the Court did not have jurisdiction; intention to enter into an enforceable contract in the case of ministers of religion and generally; the circumstances of the appeal before the Court and whether the principles in Warren v Coombes and cases which followed applied; next, whether, if those principles did apply, the Full Court correctly interpreted the situation so as to reconsider the facts and then, finally on my list, whether in doing so it reached a correct conclusion.

KIRBY J: Yes, I suppose I could say all of the above, but obviously the important and interesting point from the point of view of legal discourse is the third point, the question of intention to enter into legal relations and, in particular, in the context of a priest or a minister of religion. So maybe you could start with that proposition and the way in which the Full Court dealt with it. It is true, I think, that that matter has not been the subject of at least recent examination by this Court. Am I wrong in saying that or not?

MR McRAE: I believe your Honour is correct in saying that.

KIRBY J: That is really quite an important point of contract law and alone would justify the grant of special leave, apart from the other matters on your shopping list, or Mr Besanko's shopping list, more correctly.

MR McRAE: Yes, I am sorry, your Honour, I was not going to make any concession in that regard, except in relation to the shopping list being accurate.

KIRBY J: No, no, no.

MR McRAE: Your Honours, it was noted by both judges constituting the majority that a necessary element of every contract is the intention to create legal relations. Justice Bleby went on to say that although an intention to enter into contractual relations is presumed in most cases, the position regarding ministers of religion is noticeably different. Cutting the whole thing short, what his Honour did was to examine the authorities as they stand in England, Australia - - -

HAYNE J: The English position is altogether different, is it not, in that at least in the Anglican Church, if you are appointed to a living, you are appointed to an office, you are appointed to an item of property, and that may have some significant effect on whether there is a contract, and the - - -

MR McRAE: Your Honour, the cases in England were not only those related to the Anglican Church, but also decisions relating to other churches such as the Methodist Church, the Presbyterian Church and, indeed, non-Christian churches of which the same point cannot be made, and the - - -

KIRBY J: But these things are stated in England in a context of a country with an established church and a long history of that. Australia is, under the Constitution, a secular country and it just seems an odd result to say this group of people, though they reach agreements and though they are paid money and though they have all the indicia of an agreement which the law will maintain, are put outside the protection of the law. It seems an odd result, looked at with Australian eyes. That is at least just an intuitive response.

MR McRAE: Your Honour, I can only say in answer to what is put to me that the cases in England do cover a wide range of Christian and non-Christian religions and, rightly or - - -

KIRBY J: But why should they be put outside, save for maybe particular circumstances or an agreement not to be subject to legal norms? Why should those agreements - is it because God is involved in the agreement or is there something else that gives this particular group of people an inability to approach the courts and seek to have the agreements that they made upheld?

MR McRAE: Your Honour, I suspect that this all has its origin in the desire of the churches, and the priests it must be said, to conduct their own affairs their own way. I believe that is where it has its origin, although it is expressed in - - -

KIRBY J: It may go back to old canon law which suggested that people who invoked the civil authority are in breach of the disciplines of the churches, but in Australia, under our Constitution, the Constitution is there for everybody and the courts which are founded on the Constitution are there for all people. They are not beyond the pale, as it were.

MR McRAE: Your Honour, I utterly accept that proposition and it is, of course, perfectly correct; but, nonetheless, I must say in support of the decision of the Full Court that its finding is properly based on a long line of English authority, not only English authority, but authority in Australia, there is one Australian case at least, and authority in New Zealand and elsewhere. So it is not as though it was something - - -

KIRBY J: It could be that the authority that supports the proposition is that the courts themselves do not want to get into meddling in religious affairs because they are likely to be embarrassed or, being made up of people of different religions or no religion, they are likely to make mistakes or to misunderstand the culture of the churches/faiths.

MR McRAE: I can understand that comment, your Honour, but again I must stress that in their reasoning, the courts in England have stayed well clear of notions like that or notions that the whole matter is governed by reference back to Ecclesiastical law and the like. Rather, they have stressed such things as the nature of the duties of a minister of religion which, of course, in the normal course of events, are different from those of most people.

KIRBY J: That is true, their duties are different, but they still have to live, they still have to purchase bread and butter, they still have to get the train, they still have to have money to live by, and if they make agreements - - -

McHUGH J: I cannot dispute any of that.

KIRBY J: - - - if they make agreements with a community to provide for these things, then the notion that it can just be terminated without any regard to the law is a large proposition. It is creating an Alsace within our law that takes a certain group of people outside its protection, and at least it is an interesting and important question. It may be that in the end you can persuade us that that is a correct approach, but it does not seem to have a foundation in much Australian authority.

MR McRAE: As far as I am aware, there is only one specific Australian authority and in that case the President of the New South Wales Industrial Arbitration Commission simply accepted the line of authority to which I have referred.

KIRBY J: When was that decided, that case? What is that case?

MR McRAE: Only a few years ago, your Honour. I will just find it for you. It appears at page 299 of the application book. It was referred to by Justice Bleby and it is the matter of Knowles v The Anglican Church Property Trust, Diocese of Bathurst.

KIRBY J: Yes.

MR McRAE: You will note that at line 25 or thereabouts:

His Honour concluded that the materials showed that the relationship was a religious one, based on a consensual compact to which the parties were bound by their shared faith, based on spiritual and religious ideas, and not based on common law contract.

Your Honours, that it is the way it has been expressed in England, specifically in that manner rather than by reference - - -

KIRBY J: That is an Anglican Church case and it is easy to fall into the trick of the mind of just picking up the English cases on the Anglican Church which either was never established in Australia or, if established, fell out of established position by the 1870s or 1860s.

MR McRAE: I do understand that, your Honour, but, with respect, that proposition has been repeatedly used, not just in the Anglican Church cases in England but also in those which have concerned, for instance, the Presbyterian Church, the Scottish Free Church, the Methodist Church and non-Christian churches such as the Sikhs and Muslims. So it is something that has been a significant and continuing component of the English law.

KIRBY J: But the point Justice Hayne raised with you was, have we simply blindly picked up a doctrine which was developed in England against the history and background of the relationship of church and State in England, and not question whether that is applicable in the courts of Australia under the Constitution of Australia. It is not really a constitutional question, but it is a question of whether it is part of our law.

MR McRAE: I do understand, your Honour. I have to say, in answer to that, that the Full Court did appreciate that issue and did consider it. That was a point that was made by the industrial magistrate. He thought that the English law was completely distinguishable, in fact, by reference or decision of this Court. He was wrong in referring to a decision of this Court but he thought that it was completely distinguishable simply on the ground that it was linked to Anglican tradition and the special position of the Anglican Church in England but our South Australian Supreme Court was well aware of the trap and took that into account.

KIRBY J: Now, can you tell me, what is the situation in the United States where, to some extent at least, the notions of secularism infuse their constitutional and judicial arrangements? Has the same principle been accepted in the courts of the United States?

MR McRAE: Can I endeavour to summarise it this way, your Honour. In the few United States' cases which I have seen there has been no distinction drawn between the clergy and other employees if the point has been reached of whether or not a person is an employee. I must say, on the other hand, that in defence of the South Australian Full Court that the American cases on the whole, as Justice Bleby pointed out, did not give this particularly deep consideration.

KIRBY J: Again, it probably arises out of their culture of the separation in church and State under their Constitution and therefore, there would possibly be a resistance in that country and our constitutional provisions have been interpreted somewhat differently.

MR McRAE: Your Honour, there is another aspect before we leave that point, if you please, and it is this, and it is a significant point, and that is that the respondent in this case was not a church.

KIRBY J: That is true, but that is against you, is it not?

MR McRAE: Your Honour, I put it this way, that the nature of the respondent and its position strongly supported the Full Court's decision, that what the respondent was about was not entering into an enforceable contract, but voluntarily supplying support and assistance as an ancillary measure to one of its numerous responsibilities.

KIRBY J: Well that is one way to put it. The other way to put it is, whatever cloak of unavailability to legal contracts may be brought with a church, it is not brought with a community organisation, and they just are another civil organisation which must accept the rigours and advantages of the law.

MR McRAE: Your Honour, that, of course, then leads us into the factual situation, because it was on an examination of the facts that the Full Court determined as it did, and that was another distinguishing issue.

KIRBY J: But in doing that, they took a different view of the facts to the courts below, did they not?

MR McRAE: They did, your Honour.

KIRBY J: And there is a limitation on their intervention into the facts that has been enacted by the Parliament of South Australia?

MR McRAE: Again, I accept that, your Honour. With respect to that issue, I simply say that they were justified in what they did, on the basis of cases such as State Rail Authority of New South Wales v Earthline Constructions, in that, up to the hearing in the Full Court of the Supreme Court there had been, on my case, not only error of law - I know that this Court will finally determine whether that was the case - but putting the error of law aside, there also had been the fundamental failure to properly analyse the evidence, and we say that it was not until we reached the Full Court of the Supreme Court that our case was properly heard, upon a consideration of the real strength of the body of evidence which was presented and it was in regard to cases like that, we say, with respect, that the Chief Justice and Justice Bleby decided to intervene in what had been decided in the courts below.

Now, there were other points in the shopping list. Does your Honour want me now to proceed with the jurisdiction issue?

KIRBY J: Well, you had better do that, yes, please.

MR McRAE: Your Honour, the parties were in dispute as to whether the appeal to the Full Court of the Supreme Court was as of right. Section 191 of the Industrial and Employee Relations Act 1994 provides that any such appeal must be:

based on an alleged excess or deficiency of jurisdiction -

otherwise the Supreme Court must grant leave. Now, we say that the two claims before the Industrial Relations Court were properly characterised as claims for annual leave and long service leave or moneys in lieu thereof, and that - - -

KIRBY J: And they are available only to employees and you say that if in law the Archbishop was not an employee, then there was a fundamental defect in the invocation of jurisdiction, is that how you put it?

MR McRAE: In a nutshell, we do, your Honour. In that regard, we refer to matters such as the PSA v FCU in this Court and in particular Craig v State of South Australia, where a specific reference was made to cases like this. I think, if I may adopt the terminology of the Court in Craig, there was an "essential condition" of the existence of jurisdiction with regard to a particular matter, namely, that it had to be shown that the claimant was an employee. We say, with respect, that there must be an objective ascertainment that such a person is an employee on normal principles, as distinct from a mere statement of opinion. On the jurisdiction question, we say that the process of analysis of the Full Court of the Supreme Court was entirely in accordance both with the decisions of this Court, in the PSA and Craig, and its own earlier decision in R v Allan; Ex parte AMP Society. I think that is all I can usefully say on that, your Honour.

KIRBY J: Yes.

MR McRAE: The next point was the leave point. Even if there was no strict jurisdiction, the court still had jurisdiction to grant leave to appeal, and all the judges, including Justice Mullighan, who was in dissent on the principal issues, in fact granted leave on various grounds.

KIRBY J: Just explain to me: is that available in the event of a non-jurisdictional appeal, or is it still necessary that the appeal should raise a jurisdictional error?

MR McRAE: Perhaps I should read the provision. My answer to that is to say - - -

HAYNE J: It is the former, not the latter.

MR McRAE: I am sorry, your Honour?

HAYNE J: It is the former, not the latter, is it not? That is, leave can go even if there is no jurisdictional error?

MR McRAE: Yes, that is right, your Honour. And we say that the court had proper regard to the various issues before it and unanimously granted leave, even if they were wrong in relation to the jurisdictional issue. Now, your Honour, I have dealt then with the jurisdictional issue, the leave to appeal, the contractual issue, briefly I dealt with the Warren v Coombes and State Rail points as to whether the Court should have intervened. Logically, that would lead me to - the next points would be the court's process of reasoning in displacing the earlier findings, and as to the validity of that reasoning. Does the Court want me to go to those issues?

KIRBY J: Yes, I think you had better proceed and say what you want to say briefly on that point.

MR McRAE: Thank you, I will, your Honour. Having set out his views on the law, there were two judgments reaching the same conclusion on a very similar basis. They were the judgments of Chief Justice Doyle and Justice Bleby. Having set out his views on the law, Chief Justice Doyle analysed the evidence on the basis of the magistrate's finding and reached a different conclusion. He found that the magistrate's findings about what took place at the meetings in Adelaide were equivocal and, in doing so, he paid specific regard to the magistrate's various findings set out in the original decision.

HAYNE J: Well now, Mr McRae, these are matters, are they not, which, if leave was granted, you would say should lead to the appeal being dismissed?

MR McRAE: In a nutshell, yes, your Honour.

HAYNE J: But are they issues which you say really affect whether leave should be granted?

MR McRAE: I cannot say that if the Court is disposed to grant leave on the contract point, I suppose, putting it briefly. I cannot say that.

KIRBY J: Yes. Very well. Thank you for you assistance, Mr McRae. You have been of considerable assistance. I will just ask Mr Besanko a couple of questions.

Mr Besanko, the notice of appeal is, shall we say, extremely detailed and thorough but there is so much - - -

HAYNE J: Justice Kirby is much kinder than I would have been, Mr Besanko.

KIRBY J: That is true, I concur in that. But Justice Hayne has written out what seems to me to be the essence of it and I would like you to listen to this, if you would, because this is what the Court is minded to grant special leave on.

The grant of special leave will be restricted to the questions:

(1) Whether the Full Court erred in holding that there had in this case been no intention to create legal relations; and

(2) Whether it was open to the Full Court to make the findings of fact it did or, alternatively, whether it erred in making the findings of fact it did:

(a) in an appeal under section 191 of the Industrial and Employee Relations Act 1994 (SA), and

(b) to the contrary of the findings of fact below.

So, essentially, it comes down to the contract point, and in the light of the resolution of that point, the factual points. Is there anything else amongst the verbiage of the draft notice of appeal that you would like to rescue from the wreckage or do those two points allow you to argue the two essential special leave points in the case?

MR BESANKO: No, your Honour, they are the two points that we wish to argue.

KIRBY J: Very well. Yes, well, the Court grants special leave to appeal on the two points which I just indicated. I assume that this would be ready to be heard in the Adelaide sitting of the Court in August?

MR BESANKO: Yes, your Honour.

KIRBY J: And that an estimate of a day would seem appropriate. Do you think a day, or more, or less?

MR BESANKO: No, I would say a day.

KIRBY J: Given that it is limited to these two points, I think it is a day case. Do you agree with that, Mr McRae, given the limitation on the grant of special leave?

MR McRAE: A day or possibly a day and a half, your Honour.

KIRBY J: You think it will be a bit longer.

MR McRAE: Yes.

KIRBY J: I hope that between now and the special leave you will have, both of you, a closer look at the United States authorities in this matter which may be instructive, given the way in which they will have approached the matter, slightly differently from the courts of England.

MR McRAE: Thank you, your Honour.

MR BESANKO: Thank you, your Honour.

KIRBY J: The grant of special leave in that case concludes the list. The Court will now adjourn.

AT 12.39 AM THE MATTER WAS CONCLUDED