Supreme Court New South Wales Medium Neutral Citation: His Eminence Petar the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia And New Zealand v Lambe Mitreski [2013] NSWSC 1240 Hearing dates: Tuesday 20 August 2013 Decision date: 20 August 2013 Jurisdiction: Equity Division Before: Brereton J Decision: Order that stay granted on 5 March 2012 in order 4(d) made on that date terminate with effect from 4 September 2013 Catchwords: PRACTICE AND PROCEDURE - application for discharge of stay - stay discharged Legislation Cited: (NSW) Associations Incorporation Act 2009 Cases Cited: His Eminence Petar The Diocesan Bishop Of The Macedonian Orthodox Diocese Of Australia And New Zealand v Lambe Mitreski [2012] NSWSC 1207 Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [1986] HCA 84 Macedonian Orthodox Community Church St Petka Incorporated v Metropolitan Petar [2013] NSWCA 223 Metropolitan Petar v Mitreski [2012] NSWSC 167 Rinehart v Welker [2012] NSWCA 1 Category: Consequential orders Parties: His Eminence Petar the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia & New Zealand (first plaintiff) The Very Reverend Father Mitko Mitrev (second plaintiff) Lambe Mitreski (first defendant) Peco Damcevski (second defendant) Boris Minovski (third defendant) Eftim Eftimov (fourth defendant) Mile Marcevski (fifth defendant) Macedonian Orthodox Community Church St Petka Incorporated (sixth defendant) Naum Despotoski (eighth defendant) Attorney-General for the State of NSW (ninth defendant) Representation: Counsel: Mr TGR Parker SC w Mr L Livingston (plaintiffs) Mr G Ng (first - sixth, eighth defendants) Mr M Izzo (ninth defendant) Solicitors: Sachs Gerace Lawyers (plaintiffs) McConnell Jaffray Lawyers (first - sixth, eighth defendants) Crown Solicitor (ninth defendant) File Number(s): 97/ 25609 Judgment (ex tempore) 1On 5 March 2012 I made an order, upon the undertaking of the sixth defendant to prosecute its appeal from order 4(d) of the orders made that day with reasonable diligence and expedition, that until further order the operation of order 4(d) be stayed. The effect of order 4(d) was to require the sixth defendant to admit into its membership those who are the subject of the membership applications referred to in paragraph 47 of the affidavit of the second plaintiff sworn 4 August 2010 (with an exception), and thereafter to take all reasonable steps to facilitate the obtaining or renewal of membership by believers in the doctrines of the Macedonian Orthodox Church, who satisfied the criteria for membership of the Parish Assembly of St Petka at Rockdale specified in the constitution of the church, the diocese and statute and any parish by-laws and be restrained from accepting or renewing any application for any membership from any person who does not satisfy those criteria. 2The Court of Appeal relevantly dismissed an appeal from my judgment on 18 July 2013: see Macedonian Orthodox Community Church St Petka Incorporated v Metropolitan Petar [2013] NSWCA 223. In particular, the appeal from order 4(d) was unsuccessful, and the challenge to the reasoning which led to the conclusion that for the membership of the association did not accord with that of the parish assembly was a breach of trust was also rejected, although the appeal succeeded in some other respects, including in respect of the findings of accessorial liability against certain personal defendants. 3Although it is arguable that the "further order" referred to in the stay was satisfied when the Court of Appeal made its orders otherwise dismissing the appeal, because it did not specifically refer to the determination of the appeal as well as further order the contrary was at least also arguable, and I have proceeded on the basis that it was necessary, or at least appropriate, for the plaintiff to make application for discharge of the stay, although in the circumstances the onus of showing why a stay should continue was borne by the defendants. 4The defendants have advanced two arguments in support of continuation of the stay. The first is that there remain outstanding in the proceedings two issues that were reserved for further consideration. Those issues are as follows: (a) what orders should be made granting or denying the Association a right of indemnity out of the assets of the Declared Trust for any of the costs incurred by it in the proceedings (including the costs the subject of the referral orders made by the Court of Appeal on 19 June 2007 in CA 40313/06 and on 11 July 2008 in CA 40187/08); (b) the Plaintiffs' claims of breach of trust in respect of the Sixth Defendant's payment out of Trust Property of, or encumbrance of Trust Property as security for, its costs of the defence of these proceedings (including its defence or prosecution, as the case may be, of any related judicial advice or appellate proceedings), including the Sixth Defendant's defence to those claims under the Trustee Act, s 63. 5The sixth defendant holds all of its assets upon the trusts initially declared by Hamilton J and now confirmed by the Court of Appeal. It has no property apart from the trust property. On that footing, there is, it seems to me, very little utility in further litigation over those reserved issues. If the sixth defendant, properly constituted, no longer wishes to contest those matters then I do not see why the sixth defendant, improperly constituted, ought to be allowed to contest them. No claim is maintained against any individual defendant in respect of those issues, and it ought to be up to the sixth defendant, properly constituted, to decide whether or not they are to continue to be litigated. 6It was argued that because allegations of improper conduct are inherent in at least the second of those issues they ought to be kept alive so that they can be the subject of appropriate contest and decision. However, if they lapse as a result of the sixth defendant and the plaintiff coming to an accommodation about it, then no adverse finding will ever be made. Persons not themselves parties to proceedings are not entitled to have them prolonged and protracted just because an issue in the proceedings may affect them. 7Reference was repeatedly made to the Court's observations when the stay was granted [see Metropolitan Petar v Mitreski [2012] NSWSC 167at [21]] to the effect that if membership with the association were brought into line with that of a Parish Assembly, it is likely the hostilities would cease, the proposed indemnity would be of no utility and in effect circular and may well not have to be determined. That was a foreshadowing of the situation that has now arisen, and similar observations can be made in respect of the second issue. Reference was also made to the observation [see His Eminence Petar The Diocesan Bishop Of The Macedonian Orthodox Diocese Of Australia And New Zealand v Lambe Mitreski [2012] NSWSC 1207 at [6]] that the plaintiff submitted to a stay because they appreciated the overwhelming force of the argument that were order 4(d) not stayed when implemented there was a high degree of probability that the Association would be taken over by Father Mitrev's adherents, the current executive removed and replaced, opposition to the plaintiffs would cease, and with it the appeal would likely be discontinued. That was said concerning the likely fate of an appeal in respect of which aspects were already pending in respect of the decisions of Hamilton J and Young CJ in Eq, and it was clear there was an appeal as of right to the Court of Appeal which likely would be exercised. 8The present circumstance are quite different, because only an application for special leave is now available - not an appeal by way of right - and until very recently no such application was even pending, and the judgment of the Court of Appeal confirms on relevant issues effectively the unanimous views of the several judges who have dealt with the critical issues. 9That said, I accept that it is a highly relevant consideration that an application for special leave might be precluded if a stay not be granted. Cases such as Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [1986] HCA 84 and Rinehart v Welker [2012] NSWCA 1 deal with the considerations on an application for a stay pending an application for special leave to appeal. I do not think there is any significance in the circumstance that the application is made before me rather than in the Court of Appeal. That is an accident that arises from the circumstances that the stay was granted originally in this Court. 10The observations of Brennan J in Burgundy Royale were, in essence, directed to ensuring that stay applications were ordinarily not brought in the High Court but made in the court from which the appeal was brought. However, it is also clear that the prospects of success of any application for special leave are a highly relevant consideration, even to the point that in Rinehart v Welker the circumstance that the application for special leave would be rendered nugatory if a stay were not granted did not warrant a stay, in view of what were seen as the insubstantial prospects of obtaining special leave. 11In this case, the only grounds for the appeal that have been formulated relate to the impact on the charitable trust of the (NSW) Associations Incorporation Act 2009 in its various iterations. The argument that the Associations Incorporations Act had the effect of extinguishing the charitable trust and vesting the property in the incorporated association has been advanced to and rejected by Hamilton J, me, and a unanimous Court of Appeal. The result contended for is in itself at least a surprising one. The reasoning of Macfarlan JA in the Court of Appeal demonstrates why the provisions of clause 2(2) of the second schedule to the 1986 Associations Incorporations Act are not attracted. The position in respect of the 1992 Associations Incorporations Act is, if anything, a fortiori, as Hamilton J demonstrated. 12It seems to me that the aspects of securing a grant of special leave are, in those circumstances, on the only grounds that have been advanced at this stage, so slight as not to justify the granting of a stay. However, as in Welker v Rinehart (in which a short stay was granted to enable the unsuccessful party to consider the reasons and no doubt take the matter further if it wished), I shall order that the stay terminate 14 days hence. 13I order that the stay granted on 5 March 2012 of order 4(d) made on that date terminate with effect from 4 September 2013. 14I order that the sixth defendant pay the plaintiff's costs of the application for a stay. ********** 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. Decision last updated: 24 February 2014