New South Wales Supreme Court CITATION : Metropolitan Petar & Anor v Mitreski & Ors [2001] NSWSC 414 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 3369/97 HEARING DATE(S) : 11/05/01 JUDGMENT DATE : 11 May 2001 His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (P1) The Very Reverend Father Mitko Mitrev (P2) Lambe Mitreski (D1) Pero Damceski (D2) PARTIES : Boris Minovski (D3) Eftim Eftimov (D4) Mile Marcevski (D5) Macedonian Orthodox Community Church St Petka Incorporated (D6) Naum Despotovski (D8) JUDGMENT OF : Young CJ in Eq COUNSEL : A Fernon (P) J Sheahan SC and M J Heath (D) SOLICITORS : Michie, Shehadie & Co (P) McConnell Jaffray (D) CATCHWORDS : CHURCHES [10]- Proceedings to enforce church trusts- Whether security for costs should be ordered. PROCEDURE [665]- Security for costs- Church case- Those behind Bishop supporting his claim ought to provide guarantee for costs as if case relator suit. LEGISLATION CITED : Charitable Trusts Act 1993, s 6 Supreme Court Rules Pt 53(2) CASES CITED : Morris v Hanley [2000] NSWSC 957 Uniting Church in Australia Property Trust (NSW) v Monsen [1978] 1 NSWLR 575 DECISION : See para 17. THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION YOUNG CJ in Eq FRIDAY 11 MAY 2001 3369/97 - METROPOLITAN PETAR & ANOR v MITRESKI & ORS JUDGMENT (On application for security for costs) 1 HIS HONOUR: The present proceedings have been commenced by the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand and a member of the clergy of that church against a corporation and various individuals with respect to certain disputes over one of what might be called the parishes of the church. 2 The proceedings were commenced in 1997. There has been some time out for mediation which, unfortunately, was unsuccessful but they have not proceeded past the stage of the filing of a further amended statement of claim. No defence has yet been filed. The indications are, however, that when the matter is ready (and it would seem that the majority of the affidavit evidence has been prepared and filed), it will occupy some four weeks of hearing time. 3 The present motion is one by the defendants to require the plaintiffs to provide security for costs. That motion was originally filed in 1997. It was heard to an extent by another Judge, and interrupted by the mediation. Subsequently the other Judge, who is the trial Judge, considered it inappropriate for him to determine the matter. Accordingly, today the motion was called on before me and by consent the parties re-tendered material which was tendered before that other Judge, with some slight supplementation. 4 Security for costs is provided for under Pt 53 r 2 of the Supreme Court Rules 1970 and in addition, the court has an inherent power to order security for costs in order to provide a just procedure for the trial of issues. 5 The Rules provide that the court may order security where the plaintiff is ordinarily resident outside the State or where the plaintiff is suing, not for his own benefit, but for the benefit of some other person and there is reason to believe that the plaintiff will be unable to pay the costs of the defendant if ordered to do so. The ordering or not ordering of security is, of course, always a matter of discretion. 6 The first plaintiff is, in my view, on the evidence before me, not resident within the State. His travel, as disclosed by the Department of Immigration and Multi Cultural Affairs shows that he comes and goes from Australia at regular intervals. When he is in Australia he is mainly in Melbourne, though for constitutional reasons that fact is actually irrelevant. Furthermore, it is common ground that the first plaintiff is suing for the benefit of the Macedonian Orthodox Church and not his own benefit and he is personally unable to pay the costs. The second plaintiff is a resident but the prime thrust of the action is to protect the integrity of the Macedonian Orthodox Church. 7 Up until recently there was no real problem with this sort of case. The only possible plaintiff was the Attorney-General and the practice that had been in place for a couple of centuries was that the Attorney-General would, as of course, become the plaintiff provided that counsel certified the Attorney-General that complete relief could not be given without the Attorney-General's intervention and the solicitor for the persons submitting the papers to the Attorney-General certified that their relators were persons who were competent to answer the costs of the proceedings. The usual endorsements of the process in the practice before the Supreme Court, is set out in the Supreme Court Practice at note 4.5.4. Accordingly, in all charity cases, there was a procedure whereby actions could be brought to protect charities and there would be someone standing behind the plaintiff or Attorney-General who would answer the costs. Thus, the defendants were protected. 8 The present proceedings seem to have proceeded in a singular sort of way. At one stage in the last four years there was consideration given to whether the Attorney-General was the plaintiff or whether either the operation of s 6 of the Charitable Trusts Act 1993 or the decision of Rath J in Uniting Church in Australia Property Trust (NSW) v Monsen [1978] 1 NSWLR 575 meant that the action was competent without it. 9 It would seem that at the present stage of the proceedings it is not possible to determine on which side of the line the present case falls. It may be that after the defence is filed the matter will become plain. It may be, though perish the thought, there should be another interlocutory motion in these proceedings that someone will move to dismiss the suit as incompetent and the point will be decided then. 10 However, if as a result of the future conduct of this case, it is thought that the Attorney-General should be the proper plaintiff, a procedure will be put in place whereby the defendants' costs will be guaranteed, at least on the assumption, which I think is a valid assumption, that no solicitor would sign the requisite certificate unless he or she was satisfied that it was correct as a matter of fact. 11 Why should the matter be any different if the proceedings are dealt with by some more modern procedure? 12 I do not think that it should. Although it is true that the Bishop purports to sue on behalf of the Church to protect the Church, the defendants are at great risk. The defendants seem to be justifying what they are doing as involving no breach of trust. If they are unsuccessful, they will have to pay the costs. The Bishop is suing not for his own behalf but is suing on behalf of the Church. Now, one does not have to be involved in many ecclesiastical law cases to realise that churches are very strange bodies. It is often said that churches are asset rich and income poor. Hidden behind this statement, however, is the fact that not only do they have relatively little income, but most of their assets are in the form of churches or other buildings which are subject to trusts. It is thus a matter of speculation as to whether any of the assets are able to be taken in execution for the payment of any costs. Indeed, it is quite an unsatisfactory state of affairs in many ways that because of the way all church assets are held on trust, they are protected, to a great degree, from any litigation. 13 Is it appropriate in this day and age, in the light of the authorities to which I have been referred by both sides, that a church can maintain litigation to protect itself yet not have any real risk of paying costs if it is unsuccessful? 14 In the instant case there is the added factor, a factor that I considered in Morris v Hanley [2000] NSWSC 957 that there has been some talk that the case will go on a long while because the plaintiffs have no assets and they are determined to ensure that their version of the trusts is maintained no matter what the cost. 15 I have been provided with some authority for the proposition that people in the role of trustees should not be ordered to provide security for costs. However, there are trustees and there are trustees. There is a very real distinction between a person who is a liquidator or a trustee of a bankrupt's estate on the one hand and a person like a Bishop of a church who, as Mr Sheahan SC for the defendants pointed out, is not really a trustee at all but is really more in the position of a person who is managing the affairs of a conglomerate. 16 Accordingly, in my view this is a case where some sort of security for costs should be ordered. 17 However, I will not pronounce any order at this stage. It seems to me that the appropriate thing is that at the stage when a defence has been filed, and alternatively, when any motion to strike out has been dealt with, an order for security should be made. However, first an opportunity should be given for guarantees from members of the Church community who wish to support the plaintiffs to be provided as if it were a relator suit, in an appropriate sum. Reasonable time should be given for this to occur. If no satisfactory guarantees of the required amount are received within the time limited, then the matter should be brought back for an actual order for security for costs by way of deposit of funds or bank guarantee in the normal way. 18 Accordingly I merely publish these reasons at this stage and stand the matter over to my list on 4 December 2001 at 9.30 am. for mention with liberty to restore on five days' notice. I set that date as a nominal date, for the computer. I reserve the question of costs. *************** Last Modified: 05/23/2001 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.