Mabon v Conference of the Methodist Church in New Zealand CA250/97 [1998] NZCA 244; [1998] 3 NZLR 513; [1998] 2 ERNZ 440; (1998) 5 NZELC 95,834 (2 July 1998)

Last Updated: 13 February 2014

IN THE COURT OF APPEAL OF NEW ZEALAND CA 250/97

BETWEEN JOHN CRAIG FERRIE MABON Appellant

AND THE CONFERENCE OF THE METHODIST CHURCH OF NEW ZEALAND

First Respondent

AND THE ANGLICAN CHURCH OF AOTEAROA NEW ZEALAND AND POLYNESIA

Second Respondent

AND THE PRESBYTERIAN CHURCH PROPERTY TRUSTEES

Third Respondent

Coram: Richardson P Gault J

Henry J Keith J Tipping J

Hearing: 8 June 1998

Counsel: R P Harley for Appellant

D G Smith and V H Mar for First Respondent

B A Corkill for Second Respondent

B N Davidson for Third Respondent

_{Judgment: 2 July 1998}

JUDGMENT OF THE COURT DELIVERED BY RICHARDSON P

The question of law in this appeal from the Employment Court is whether the personal grievance provisions of the Employment Contracts Act 1991 apply to the

dismissal of a Methodist Minister from his appointment to a shared ministry between the

Anglican Parish of Holy Trinity, Woodville, and the Union Parish of St James, Woodville.

The Employment Contracts Act

Under the 1991 Act personal grievance means a grievance that "an employee may have against the employee's employer or former employer because of a claim (a) that the employee has been unjustifiably dismissed ... " (s27(1)). The other relevant terms defined by s2 are "employee", "employer" and "employment contract". "Employee" means "any person of any age employed by an employer to do any work for hire or reward"; "employer" means "a person employing any employee or employees"; and "employment contract" means "a contract of service ... ".

The Methodist Church and the status of Ministers

The origins of the Methodist Church of New Zealand have been traced to the Evangelical revival of the 18th century in England. The beginning of Methodism in New Zealand dates back to 1822 when the Rev Samuel Leigh arrived in New Zealand to open the Wesleyan Methodist Mission. In 1854 various Wesleyan Methodist Missions were formed into the Australasian Wesleyan Methodist Connexion. Other branches of Methodism in New Zealand retained their connexion with their respective Conferences in England. Eventually, and following the adoption of a "Basis of Union" the first united conference of the Methodist Church of New Zealand was held in February 1913.

The Church is an unincorporated body of persons, the constitution of which is to be found in the Laws and Regulations of the Methodist Church of New Zealand revised annually incorporating decisions of the Annual Conference. The Preamble to the Laws and Regulations records:

The Methodist Church claims and cherishes its place in the Holy Catholic Church which is the Body of Christ. It rejoices in the inheritance of the apostolic faith and accepts the fundamental principles of the historic creeds and of the Protestant Reformation.

The Christian doctrines which Methodism has held from the beginning are based on God's self-revelation as recorded in the Old and New Testaments, and focus on Jesus Christ as Lord and Saviour. These doctrines are shared with other Christians, but Methodism emphasises both personal spirituality and social action as responses to the gospel. Tradition built up in the ongoing life of the church contributes to the understanding of faith and practice within Methodism, but this needs continual reflective checking against the Scriptural bases. The doctrines on which the preachers and teachers of the Methodist Church, both ordained and lay, are pledged to base their teaching, are contained in Wesley's Notes on the New Testament and in the first four volumes of his sermons. Under its constitution the Conference has no power to alter or to vary in any manner these doctrinal standards. The Conference is the final authority within the Methodist Church on all questions concerning the interpretation of its doctrines.

The Methodist Church holds the doctrine of the priesthood of all believers, and so affirms the ministry of the whole church and of all its individual members. In the exercise of its corporate life and worship, the church authorises some persons to carry out specific tasks of leadership, proclamation, and caring, and examines, tests, and approves these persons before so authorising them. For the sake of church order, presbyters are set apart by ordination to the ministry of the word and sacraments, and deacons to the ministries of particular service. Those who are ordained perform acts as representatives of the whole body.

The Methodist Church is convinced that the particular ministries of presbyter and deacon depend upon the call of God. They are not professions to be chosen but vocations accepted from God, who bestows the gifts, graces, and fruits of the Spirit which indicate his choosing.

Those whom the Church recognises as called of God, and whom it receives into the presbyterate or diaconate, are ordained by the laying-on of hands, expressing the Church's recognition of the individual's personal call and the seal of the Church on that call.

All persons are welcomed into membership of the Methodist Church who sincerely express their faith in Jesus Christ, evidence that in their daily living, seek to have fellowship with Christ and his people, and are prepared to

take up the duties and privileges of the Methodist Church by accepting its discipline.

The governing body of the Methodist Church is the Annual Conference. Its decisions are final and binding upon both the ordained and lay members of the Church.

Within the Methodist Church, its Conference and its subsidiary courts, presbyters, deacons and laypersons together possess certain powers and privileges, based on those set out in the Laws and Regulations, and including the exercise of discipline. These powers and privileges are exercised at every stage under the judgement of God, Presbyters, deacons and laypersons are responsible to God as they seek to interpret the mind and will of God in every situation.

The relevant provisions relating to the Ministry are contained in Section 2: "A Minister of the Methodist Church of New Zealand is one who has heard the call of God and whom the Church, under the guidance of the Holy Spirit, accepts and sets apart by ordination, with prayer and the laying on of hands, to the office and work of a particular order of ministry". "Minister" is used as a generic term and includes presbyters as that term is defined. Of crucial significance in the present case is the categorical statement in cl 1.2:

A Minister is not an employee of the Church. Ministers are persons in a special relationship with and appointed by the Conference of the Church, with powers, duties, rights and functions as set out in this Law Book, and entitled to such living allowance (a stipend) as from time to time determined by the Conference.

That clause was adopted in those terms in 1985 following the decision of the English Court of Appeal in President of the Methodist Conference v Parfitt [1984] QB 368 which held that the Minister who alleged unfair dismissal did not have a contract of service with the Church, the parties not intending to create binding legal relations either at the time he was ordained or when he became a minister of the circuit.

Clauses 2.1, 7.1 and 7.7 relating to presbyters provide:

2.1 A Presbyter is called to life-long commitment to the study of the Word of God through the Bible and in history, to the practice of Christian devotion, to preaching and teaching the Christian message, to administering the sacraments, to pastoral care and to witness and service in the community.

7.1 Reception of a Presbyter into Full Connexion with the Conference confers membership of the Conference and involves acceptance of its polity and discipline with responsible mutuality within the Laws and Regulations of the Church.

7.7 A Presbyter in Full Connextion may cease to be recognised as such by the Conference upon either:

(a) The Conference accepting the resignation of such Presbyter, or

(b) By Conference resolving that it ceases to so recognise such

Presbyter.

The deployment of Ministers

Section 3, clause 6.1 specifies the functions of presbyters appointed to a parish: Within their accountability to the Conference, Presbyters in Full Connexion

who have been stationed by the Conference in a Parish shall in respect of the congregation(s) for which they have particular responsibility:

(a) exercise a ministry of Word, Sacrament and Pastoral Care, and

(b) share with the members of the congregation(s) in making disciplines, preparing people for membership, Christian ministry, mission and evangelism, and

(c) enable and ensure that all Leaders' Meeting functions are effectively implemented and responsibilities carried out, and

(d) fulfil Parish, District and Connexional functions and responsibilities with the local congregation(s), and

(e) fulfil such District and Connexional functions and responsibilities as are assigned to that Presbyter, and

(f) represent the Connexion in the local setting, and

(g) do all things necessary to ensure the continuity of ministry, including ensuring the keeping of adequate pastoral records.

(See also Section 3-5.3(p)), and

(h) give oversight to person(s) leading worship and may approve those not authorised by the Church.

The placement of presbyters in a parish is facilitated through a process of matching. As described by the Rev Brookes in evidence,

The aim of the Stationing process is, within the limitations of staff available in any given year and parishes seeking appointments in that year, to provide the most appropriate matchings of personal skills to the Parish needs from a national perspective. There is no guarantee that a Presbyter will be placed in the parish they most prefer.

It is sometimes not possible to place people. This may be due to an inability to match profiles or to some restriction on the locality in which a person is prepared or able to serve. Where the person is fully itinerant and no matching can be made then the Presbyter receives three months stipend and after that is required to fend for themself in terms of providing for their daily needs. Where the Presbyter has restricted geographically their availability and for this reason no appointment can be made there is no provision for financial assistance.

Each appointment is confirmed annually by the Conference.

As noted earlier, the stipend is described in cl 1.2 of Section 2 as a living allowance. It is periodically reviewed by the Stipend Review Committee, a sub-committee of the Board of Administration.

The Minister may elect to retire at the end of the Connexional year in which he or she turns 55 but must retire not later than the year in which he or she turns 65 (s2, cl 18). The term used is supernumerary and the Church has established a superannuation fund in a Supernumerary Trust Deed of 1990 providing for benefits, for contributions by members and employers, the term "employer" being defined in the deed to mean "the notional relationship of the Church or any Board, Mission, Division, Trust, District, Parish,

Incorporated Society, other agency of the Church and other bodies with whom a Member of the Fund serves as recognised by the Church in its List of Stations".

Over recent times and resulting in part from resource constraints the Methodist Church has engaged in a continuing process of the sharing of resources with other denominations. There are now more co-operating and union parishes in which the Methodist Church is involved than there are solely Methodist parishes. The Guide to Procedures in Co-operative Ventures, now in its fifth edition, incorporates regulations approved by the five Churches for use in co-operative ventures. When a vacancy occurs in a co-operative venture the Joint Regional Council for Church Union after negotiation with the Parish and taking account of the previous pattern of appointments advises the parent churches as to the denomination which is asked to fill the vacancy. "Appointments shall then be made according to the procedures of the appointing church and wherever possible after consultation with the parish council or its representatives, any continuing ministers and the other participating churches" (cl 212.4). An initial appointment is for a term of not less than 3 years to be agreed before the appointment is accepted between the parish or its representatives, ordained minister, and the participating churches (cl 212.5). Clause 212.6 continues:

Ordained ministers shall be inducted according to the practice of the appointing church and representatives of other participating churches will take part in the service. At the service of induction, ministers will receive a letter of appointment issued by the appointing church and signed by representatives of the participating churches, the JRC and the parish. This letter will include the length of term agreed upon in 212.5.

Clause 212.2 under the heading "Relationships", is also relevant:

Ordained ministers continue in a primary relationship with their church, responsible to its courts and subject to its disciplines. Pastoral oversight of ministers is not diminished in any way by their relationships with other church courts. Ministers can expect from the officers of regional and national participating church courts encouragement, guidance and support.

Following the enactment of the Employment Contracts Act 1991 the Board of Administration reported to the 1993 Conference and para 6 of the relevant part of the Conference report records the resolution passed by Conference:

Having received and considered the Board's reports on the Employment

Contracts Act and the employment position of presbyters, Conference:

notes that it is the opinion of the Board of Administration that for the purposes of secular Law, Ministers are employed by Conference, and requests the Board of Administration to refer the matter to Synods and bring a Report to Conference 1994.

In April 1994 the Board of Administration under the title "Employment Conditions of Presbyters" issued what it termed a discussion document noting that the purpose of the paper was to facilitate discussion within the Church on the employment conditions of presbyters: "It is not and does not purport to be an employment contract". The Introduction read:

The nature or identity of the "employment" relationship between the Church through Conference and its Presbyters has been raised by the Board of Administration with the Connexion on several occasions and particularly during the last three Conferences.

The Board, after considerable investigation and taking legal advice has the view that Presbyters, contrary to the recital in the Law Book that "Presbyters are in a unique relationship" are in fact employees of Conference and that the terms of their employment do meet the generally accepted secular law tests for employment as employees.

It was noted that there was no debate at Conference 1993 on the Board's view concerning the employment status of Presbyters but there was debate on the terms of the contract between Presbyters and Conference and how this contract could be made accessible to the Church for consideration.

The Board considers that an employment contract does exist and is embodied partly in Church law as set out in the "law book" and partly the decisions of Conference.

This paper endeavours to set out the general principles relating to the employment of Presbyters. It is not and does not purport to be a definitive work on a desirable employment contract for Presbyters. It does not endeavour to consider subsequent questions such as:

"When does the Contract commence?

What special matters need addressing for Connexional appointments?

What is the effect on Deacons?

How does the Methodist Church position affect Co-operative

Ventures?"

These matters will need to be addressed but are considered by the Board, to follow on for the acceptance of the basic principal - that an employment contract does exist.

Following an extended discussion the paper concluded under the heading, "What does it matter":

The Board of Administration, as previously stated, believes that there is the relationship of employer/employee between the Conference and Presbyters and that the terms of the relationship is spelt out in an Employment Contract the greatest part of which has been set out in this discussion paper.

The Board is concerned that Presbyters be given the protection due to them under current law and that the terms of that contract be available to them in a way that is easily accessible and is capable of being clearly understood for the benefit of Presbyters and the people of the Church.

The Board believes that a contract already exists and for the Church to formally maintain a stated opinion to the contrary is misleading and could easily be the point of significant conflict when the matter of the employment status of a Presbyter is the subject of a legal challenge.

Subsequently the Board deferred further action on the matter pending the outcome of particular legal proceedings in which the Church was involved but in its report to the

1996 Conference (held subsequent to the Rev Mabon's dismissal) the Board expressly maintained the position advised to Conference 1993 that it believed the relationship between ministers and the Conference was an employee/employer relationship. However, Conference expressly recorded (p803) that it did not accept that that paragraph in the

Board's report necessarily reflected the current position of the Conference on the issue of the relationship the Church has with its Ministry.

Finally, we record the relevant tax position. As to income tax, the Conference has over the years deducted PAYE tax from ministers' remuneration and issued IR 12 PAYE deduction certificates and since before 1985 it has negotiated with the Inland Revenue Department the categories and quantums of tax free allowances available to employees under the income tax legislation in force for the time being on the basis of periodic surveys of actual expenditures by ministers and inflation adjustments. As to Goods and Services Tax, and again by negotiation with the Inland Revenue Department, Conference secured agreement that ministers would not charge GST under the Goods and Services Tax Act

1985 on the footing that they were excluded from taxable activity, being engaged in employment under contracts of service. There is no early correspondence or oral evidence as to the basis of the relationship between Church and ministers on which the negotiations with the Inland Revenue Department were conducted. But, when taxed with the proposition that the department believed that ministers were employees of the Church, the Acting General Secretary of the Church said he was convinced that the Methodist Church throughout its negotiations with the Commissioner of Inland Revenue had been explicit and quite clear in the way it interpreted its understanding of the relationship the Methodist Church had with its ministers, that a minister was not an employee.

The Rev Mabon

The Rev Mabon was received into Full Connexion by Conference of the Church on

6 November 1959 and was ordained two days later. He served in various parishes and worked as an industrial chaplain and as a prison chaplain. During 1994 while he was in a supply position at Woodville he was involved in negotiations with Holy Trinity Church,

Woodville, relating to setting up a shared ministry there. On 12 February 1995 he was inducted into the Shared Ministry. The Letter of Appointment of that date records:

_{LETTER OF APPOINTMENT}

As a further expression of the Act of Commitment, 1967 and in the spirit of the Statement of Accord, 1983

JOHN CRAIG FERRIE MABON

is now appointed to the fullest possible ministry of Word, Sacrament

and Pastoral Oversight in accordance with the Covenant for Shared Ministry signed on 12 February 1995 between the Anglican Parish of Holy Trinity Woodville and the Union Parish of St. James, Woodville

This supply appointment is made by the Methodist Church of New Zealand in accordance with the Common Provisions for ministry in cooperative ventures and any complementary clauses of the parish agreement.

The appointment is for an initial term of up to 3 years beginning from 12.2.95 to 12.2.98.

It was signed for the appointing church (the Methodist Church), the Joint Regional Committee, the partner churches, the two parishes and by the Rev Mabon as appointee "authorised by and accountable to the Methodist Church of New Zealand". That his was a "supply" appointment is not material.

Following consideration by the Methodist Church of various complaints the

Rev Mabon was dismissed and was required to leave the parish on 30 October 1996.

The Employment Court decision

In its judgment reported at [1997] NZEmpC 283; [1997] ERNZ 690 and following a 5 day hearing a full court of the Employment Court (Judges Finnigan, Palmer and Travis) dealt as a preliminary issue with the question whether the Rev Mabon was at any material time an employee of the Conference of the Methodist Church of New Zealand. The court dealt at some length with the history of the Church and with the extensive affidavit and oral evidence adduced at the hearing. However, as the court noted, the parties' pleadings accepted that the relationship between them was governed by the Laws and Regulations and the resolutions passed at the annual conferences. The issue is essentially a matter of construction of the Laws and Regulations and relevant associated documents which we have already canvassed. Accordingly, it is unnecessary to discuss the historical material further and on well settled principles the evidence of the subjective views of witnesses as to their intentions is not admissible in determining their legal relationships.

The Employment Court rejected the submission for the Rev Mabon that the Laws and Regulations and resolutions at Conferences down to November 1995, including para 6 of the 1993 Conference resolutions, constituted an individual employment contract. In that resolution the Conference did not accept the Board's opinion that presbyters were employees of the Conference and the court found nothing in the Laws and Regulations or resolutions which evidenced a contract of service between the Rev Mabon and the Conference. By signing the letter of appointment the Rev Mabon did not purport to accept a contractual offer of employment but an appointment to the "fullest possible ministry of Word, Sacrament and Pastoral Oversight", in accordance with the laws of the Methodist Church. The court could not find anything in the documentation which conveyed a clear intention on the part of the Rev Mabon and the Conference to be legally bound in the arrangement which led to the Rev Mabon's appointment to the Woodville Parish.

Responding to the submission that the Rev Mabon had been regarded as an employee for tax purposes, the court considered that the taxation consequences were

irrelevant except insofar as there was evidence that those taxation considerations motivated the parties to conduct their affairs in a particular way and there was no such evidence in this case.

On the crucial question of whether there was an intention to create a legal contract between the Rev Mabon and the Conference in the stationing of the Rev Mabon in the Woodville parish, the Employment Court noted that the Rev Mabon stated he believed he was called by God to be a Minister of the Methodist Church. It concluded that expression of an avocation thought to be divinely inspired was inconsistent with an intention on the part of the Rev Mabon to seek to be legally bound in his relationship with the Conference as part of his ordination or stationing. And viewing the matter from the perspective of the Conference, its entire history demonstrated that it did not consider itself an employer of its presbyters, that conclusion applying both to the process of ordination and that of stationing.

The court observed that, had the Conference accepted the opinion of its board and resolved that it was bound by secular law to conclude that it was in an employment relationship with its ministers and had it amended its rules accordingly, then the arrangements made in late 1993, which resulted in the Rev Mabon's induction in the Woodville parish, might well have been able to have been characterised as having been made with an express intention to be legally bound. Provided the Rev Mabon had had notice of such a change and had accepted the arrangements on that basis, a legally binding contract, although somewhat obscure as to its terms and conditions, might have been able to have been established. That did not happen. The Conference did not accept the board's report and requested the matter to be referred to Synods and to be reported to the Conference in

1994. There were no consequent changes to the Conference's position. Objectively viewed, it therefore maintained its earlier position that it was not an employer of its ministers. This situation still prevailed in February 1995 when the applicant was inducted into the shared ministry at Woodville. The Employment Court found that the unchanged laws of the

Conference, to which the Rev Mabon had voluntarily assented, expressly indicated that the parties did not intend to be legally bound.

The court added that it was fortified in that view by the approach taken by the overwhelming majority of courts in the common law jurisdictions, referring to numerous cases in the United Kingdom, Canada, Australia and New Zealand and discussing the English decisions in Re Employment of Ministers of United Methodist Church & Co (1912) 107 LT Rep 143; Re National Insurance Act 1999, In re Employment of Church of England Curates [1912] 2 Ch 563; Rogers v Booth [1937] 2 All ER 751 (Salvation Army); President of the Methodist Conference v Parfitt [1984] QB 368; Davies v Presbyterian Church of Wales [1986] 1 All ER 705; Santokh Singh v Guru Nanak Gurdwara [1990] ICR 309 (Sikh); Birmingham Mosque Trust Ltd v Alavi [1992] ICR 435 (Islam); and Diocese of Southwark v Coker [1997] EWCA Civ 2090; [1998] ICR 140. Because it was not cited by the Employment Court we should add a reference to G v CIR (1961) 12 ATD 378. McCarthy J accepted that no contractual relationship existed between the appellant evangelist and any assembly of Brethren, neither was there any relationship of master and servant. The Judge went on to hold the appellant's activities as an evangelist constituted the carrying on of a business for the purposes of the Land and Income Tax Act 1954 and the donations made to him, apart from purely personal gifts, were assessable income.

The issue

Mrs Harley for the Rev Mabon accepted that ordination as a Methodist Minister does not attract the provisions of the Employment Contracts Act. It was, she submitted, the subsequent appointment to a paid position which did so. Focussing on the appointment to the shared ministry, Woodville, she submitted that there was an intention to create legal relations and the Letter of Appointment of 12 February 1995 was an employment contract or, if not an employment contract as such, the parties entered into an employment contract

although not formally reduced to writing. As contemplated and required under that engagement the Rev Mabon worked for the parish and for the Conference. Mrs Harley relied on the conclusion of the Board of Administration that ministers were employed by Conference, on the discussion paper on employment conditions for presbyters, on the treatment of ministers as employees for tax purposes, reflecting the negotiations by Conference with the Inland Revenue Department, and as members of the Supernumerary Fund, and finally on the Rev Mabon's required contributions as an employee under the provisions of the Accident Rehabilitation and Compensation Insurance Act 1992. Understandably Mrs Harley did not suggest there was any basis for the intervention of equity. Thus there is no need to consider any argument based on concepts such as undue influence or unconscionability.

The issue on which the Employment Court found against the appellant is whether the Rev Mabon and the Conference intended to create a contractual relationship having legal effect on his appointment to the shared ministry at Woodville. Whether that intention to create legal relations existed is a matter for objective determination. Here, and in the absence of a document of the parties recording the terms of the engagement, those intentions are to be derived from the relevant Laws and Regulations and resolutions of the Conference along with the Letter of Appointment. There is no other direct objective evidence as to the parties' intentions when the Rev Mabon entered into the appointment.

Discussion

It is necessary to read cases in other jurisdictions with care and discrimination, particularly where the overhang of history and culture may affect perceptions of what it takes to create or negative intentions to enter into legal relations in a particular context. Unlike England and Scotland, New Zealand does not have a national established church. Ministers of various faiths and denominations do not hold offices protected by legislation.

Members of unincorporated religious associations ordinarily enter into a mutual or consensual compact. In Scandrett v Dowling (1992) 27 NSWLR 483, at 554 and 558, and following an extensive analysis of the cases, Priestley JA summarised the position in this way:

In places where adherents to the faith of the Church of England had to organise their spiritual and Church related temporal affairs without the benefit of their Church law being regarded, as it was and is in England, as part of State law, there was no way by which purely spiritual matters could be dealt with by State courts lacking ecclesiastical jurisdiction. The binding effect of the "voluntary consensual compact" of which Gladstone spoke and of "the contract" referred to by the judges in the Privy Council cases must therefore necessarily have come from something other than the enforceability of such compact or contract in State courts. The bindingness must have come from the shared faith of the members of the Church or, as it may be put in the language of the spirit, their baptism in Christ. The belief of Church members is, as I said earlier, respectfully adopting the words of St Paul, that they are all one in Christ Jesus; one way of describing the Church is to say that it, and this unity, are one and the same.

The basis of the consensual compact or contract thus must be a willingness to be bound to it because of shared faith, or, in the Latin phrase used in some of the materials, in foro conscientiae.

...

In cases where property or civil rights are involved the compact will, in a practical sense, be enforced; and in such cases it may not really matter whether the contract is described as a consensual compact binding in foro conscientiae which is, in those cases, incidentally subject to enforcement in the secular court, or as one partly binding in conscience and partly binding as a common law contract.

Clearly, and reflecting the separation of Church and State, courts must be reluctant to determine what are at heart ecclesiastical disputes where matters of faith or doctrine are at issue. But the courts will intervene where civil or property rights are involved and can be expected to analyse carefully any argument that conventional incidents of a recognised relationship such as work do not give rise to contractual rights (see, for example, the critical

discussion of Davies v Presbyterian Church of Wales in Howarth, "Church and State in Employment Law" (1986) 45 CLJ 404, and Woolman, "Capitis Deminutio" (1986) 102 LQR 356. See, also, Buckingham, "Working for God: Contract or Calling (1994) 24 VUWLR 209 and MacFarlane & Fisher, Churches, Clergy and the Law (Federation Press, 1996) 139 ff).

The common law recognises that not all agreements are intended to give rise to legal relations. The most recently reported decision in this court is Fleming v Beevers [1994] 1 NZLR 385. It concerned a domestic agreement. The court noted that the English cases speak in terms of presumption, but continued (pp389 and 390):

The range of circumstances in cases such as these is likely to be so varied that in any particular case a presumption, albeit of fact, is likely to be of limited assistance. Each case will turn on its own facts and there is no substitute for a careful examination of those facts. The subject-matter and attendant circumstances may well suggest that the parties had no intention of creating a legally enforceable obligation. The converse may equally be true. ... Obviously all relevant circumstances must be examined before a final conclusion can be reached. The plaintiff has the onus of satisfying the Court on the balance of probabilities that it is proper to draw the necessary inference.

Crown service in England is another example of changing attitudes to contractual intentions in a particular context. Chitty on Contracts (27ed para 2-117) notes that at one time it was thought that the relationship between the Crown and one of its civil servants was not contractual because the Crown did not, when the relationship was entered into, have the necessary contractual intention. But in one recent case (R v Lord Chancellor's Department, ex parte Nangle [1991] ICR 743), it was held that the requirement of contractual intention was satisfied in spite of the fact that the terms of appointment stated that "a civil servant does not have a contract of employment" but rather "a letter of appointment". These words were not sufficient to turn a relationship which, apart from them, had all the characteristics of a contract into one which was binding in honour only. They were merely descriptive of what was believed to be the position.

The particular arrangement between Church and Minister must be analysed through a contemporary lens to determine whether the parties intend legal relations. The concept of calling is an important part of the subject matter but is not controlling. And whether the Church assumes the obligation of lifelong support for the minister may also be relevant. It is the actual intention of the parties as expressed in their engagement that must be determined. Clearly it is desirable in order to avoid misunderstanding for the parties to document the terms of the relationship and spell out their intention, particularly where in the secular world the day to day arrangements would readily be characterised as contractually based. And there are no reasons of legal principle or public policy why the parties should not provide for certain distinct matters to be the subject of a legally enforceable contract and at the same time intend and so allow other matters to be resolved in other ways.

In Davies v Presbyterian Church of Wales Lord Templeman at p709 observed that it was possible for a man to be employed as a servant or as an independent contractor to carry out duties which are exclusively spiritual. But in the case before the House of Lords the pastor of the church could not point to any contract between himself and the church. There was an agreement between all members of the Church to perform and observe the provisions of the Book of Rules, but that agreement was only enforceable at law in respect of any property rights to which a member was entitled under the terms of the agreement. By no stretch of imagination could such an agreement constitute a contract of service (p710).

The judgments in Coker v Diocese of Southwark are to similar effect. Mummery LJ concluded that the intention to create a contractual relationship giving rise to legally enforceable obligations was to be objectively ascertained; that unlike the position under an ordinary commercial transaction special features of the appointment and removal of Church of England priests as assistant curates and the source and scope of their duties precluded the creation of a contract unless a clear intention to the contrary was expressed

(p147). At pp150 and 151 Staughton LJ agreed that in general the duties of a minister of religion are inconsistent with an intention to create contractual relations, but that if a curate and his bishop or incumbent intend to create legal relations there will be a contract between them. He added that where there is no contract that the minister will serve a terrestrial employer in the performance of his duty there may still be some subsidiary contract as to a pension or the occupation of a house. Ward LJ agreed with the judgments of Mummery LJ and Staughton LJ (p151).

Again, in President of the Methodist Conference v Parfitt, Dillon LJ said he did not doubt that there probably were binding contracts between the Methodist Church and its ministers regarding some ancillary matters, instancing the compulsory superannuation scheme and the obligation on trainees to repay a proportion of the expenses of their training if they did not remain in the ministry for at least 10 years (p 377). And in Gray v Nelson Methodist Presbyterian Hospital Chaplaincy Committee [1995] 1 ERNZ 672 the Employment Court held that there was an employment contract between the Rev Gray and the Chaplaincy Committee and that there was an underlying assumption in several provisions of the contract that the chaplain would be in a position to fulfil liturgical functions such as administering the last rites and conducting funeral obsequies and marriage ceremonies.

It is not helpful to speculate as to terms a contract might contain if the parties decide to enter into a legal relationship. Where the document deals with such matters as the objectives of the proposed work, perhaps a job description, the length of the appointment and conditions of engagement including remuneration and allowances, pension, housing arrangements, leave entitlements and any provisions for continuing education, it may look like an employment contract. The discussion paper on employment conditions of presbyters provides a framework pointing in that direction. As well, Section 3 clause 6.1 of the Laws and Regulations setting out the functions of presbyters appointed to a parish could be described as a job description. And it is interesting to note the division of opinion in Parfitt and Davies between the no-contract approach of the Judges and the conclusion

of the six lay members of the industrial tribunals that there were contracts of service in those cases. The use of the term "stipend", which in other contexts refers to salary or pay (eg Stipendiary Magistrate), does not tell against a contractual construction. In Poynting v Faulkner (1905) 5 TC 145, 147 Collins MR defined the "stipend" as "the sum paid to the minister in return for his services rendered as a minister in the particular benefice".

Amenability to contract would be subject, of course, to any overriding provisions of the constitutional arrangements binding the parties. And it may be that ministers can and should be given employment protection in respect of the working environment (e.g. the Health and Safety in Employment Act 1992), financial aspects of work, and a range of other conditions and benefits related to the performance of their duties, without impinging on matters of faith and doctrine. But under the common law and the existing legislation those difficult questions are generally for the churches and their ministers to determine.

Conclusion in the present case

The answer in the present case is relatively clear and straightforward. Clause 1.2 of Section 2 of the Laws and Regulations which binds the parties is unequivocal and categorical. It is not inconsistent with other provisions of the Laws and Regulations and so there is no question of having to resolve ambiguities. "A minister is not an employee of the Church". That statement is not confined to the status arising on ordination and being received into Full Connexion. It is also concerned with the position of ministers when they are "appointed by the Conference of the Church". They have the "powers, duties, rights and functions" as set out in the Law Book and are "entitled to such living allowance (a stipend) as from time to time [is] determined by the Conference", although, the Rev Brookes said, they are left to fend for themselves for their daily needs when not stationed.

Under the regulations for use in co-operative ventures the appointment to a shared ministry at Woodville was made according to the procedures of the appointing Church. The Letter of Appointment in this case was "to the fullest possible ministry of Word, Sacrament and Pastoral Oversight". It is entirely consistent with the Laws and Regulations and does not affect the minister's status as expressed in cl 1.2 of Section 2. While the stance taken by the Board of Administration in its recommendation to the 1993 Conference (and after the event in the present case, to the 1996 Conference) and in the discussion paper "Employment Conditions of Presbyters" points up the division of thinking within the Church, Conference, which is the governing body, maintained the constitutional position, including critically cl 1.2 of Section 2.

The arrangements made by the Conference with the Inland Revenue Department are relevant. They were intended to have legal consequences as between the Revenue and ministers affecting the taxation of ministers and administration and reporting by the Conference. But there is no evidence that the negotiations with the

Revenue were conducted by the Conference on the footing that the relationship between Conference and ministers was indeed employment under a contract of employment. To the contrary, the Acting General Secretary of the Church was adamant, and we must accept his evidence, that in the negotiations with the Inland Revenue Department the Church had expressed its understanding that a minister was not an employee. In that regard it is also significant that in the parallel situation of superannuation benefits the Supernumerary Trust Deed itself carefully defines "employer" in terms of "the notional relationship".

Result

For the reasons given the appeal is dismissed.

At their request the Anglican Church in Aotearoa New Zealand and Polynesia and the Presbyterian Church Property Trustees were joined as parties in the Employment Court and again in this court to allow them to make submissions on the general issue in this case. Each case depends on the particular terms of the appointment of the minister concerned and it is unnecessary to refer to the provisions relating to the engagement of ministers in those churches. No questions of costs arise in relation to the attendance of their counsel.

As between the Rev Mabon and the Conference, if any questions of costs arise counsel may submit memoranda.

Solicitors:

Lloyd Dodson & Pringle, Dannevirke, for appellant

Cairns Slane, Auckland, for first respondent

Rudd Watts & Stone, Auckland, for second respondent

Macalister Mazengarb Perry Castle, Wellington, third respondent