Supreme Court New South Wales Medium Neutral Citation: Bishop Irinej Dobrijevic & Anor v Free Serbian Orthodox Church, Diocese for Australia & New Zealand Property Trust & Ors (No. 2) [2015] NSWSC 1976 Hearing dates: 1 September 2015; 16 December 2015 Decision date: 24 December 2015 Jurisdiction: Equity Before: White J Decision: Refer to para [109] of judgment. Catchwords: TRUSTS – CHARITIES – CHURCHES AND RELIGIOUS ORGANISATIONS – settling terms of cy-près scheme for administration of charitable trust – competing schemes proposed by plaintiffs and defendants – whether proposed terms accord with, and give effect to, earlier reasons for judgment – whether proposed terms would be productive of conflict TRUSTS – CHARITIES – indemnity out of trust assets for costs properly incurred – whether trustee should be deprived of its right of indemnity – trustee had obtained judicial advice that it would be justified in defending proceedings – trustee's conduct of its defence was not open to criticism – where trustee had been found to have committed a breach of trust, but that finding did not affect the resolution of the real issues in dispute – held that there was no reason to deprive the trustee of its right of indemnity PRACTICE AND PROCEDURE – costs – whether defendants unreasonably declined to accept plaintiffs' open offer of compromise – whether plaintiffs bettered their offer – issues at trial were distinct but not severable in terms of evidence – large measure of plaintiffs' success was due to Attorney-General's submissions PRACTICE AND PROCEDURE – application for a stay of orders pending an appeal – where orders will divest control of a monastery to a different religious organisation pursuant to a cy-près scheme –appeal raises arguable issues, and strong discretionary factors exist in favour of a stay – current religious organisation would suffer prejudice which would not be remedied by a successful appeal – whether the public interest in the administration of charitable trusts outweighs prejudice to the current religious organisation – stay granted Legislation Cited: Charitable Trusts Act 1993 (NSW) Trustee Act 1925 (NSW) Cases Cited: Bishop Irinej Dobrijevic & Anor v Free Serbian Orthodox Church, Diocese for Australia & New Zealand Property Trust & Ors [2015] NSWSC 637 Bunnings Forest Products Pty Ltd v Bullen (1994) 54 FCR 342 Kalifair Pty Ltd v Digi-Tech (Australia) Limited [2002] NSWCA 383; (2002) 55 NSWLR 737 Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66 Radmanovich v Nedeljkovic [2001] NSWSC 492; (2001) 52 NSWLR 641 Roosters Club Inc v Northern Tavern Pty Ltd (No 2) [2003] SASC 143 Category: Procedural and other rulings Parties: Bishop Irinej Dobrijevic (1st Plaintiff) Serbian Orthodox Church in Australia and New Zealand Properties Ltd (2nd Plaintiff) Free Serbian Orthodox Church, Diocese for Australia & New Zealand Property Trust (1st Defendant) Branko Rupar (2nd Defendant) Ratomir Nesic (3rd Defendant) Ilija Cubrilo (4th Defendant) Petar Mandic (5th Defendant) Attorney-General of New South Wales (6th Defendant) Representation: Counsel: S A Glacken QC with P Herzfeld (Plaintiffs) G O Blake SC with W A D Edwards (1st-5th Defendants) N L Sharp with A Hochroth (6th Defendant) Solicitors: N G Pappas & Company (Plaintiffs) Hunt & Hunt (1st – 5th Defendants) Crown Solicitors Office (6th Defendant) File Number(s): 2011/247393 Judgment 1. HIS HONOUR: In my reasons for judgment published on 29 May 2015 (Bishop Irinej Dobrijevic & Anor v Free Serbian Orthodox Church, Diocese for Australia & New Zealand Property Trust & Ors [2015] NSWSC 637) I proposed making declarations and orders as set out at [522] and [523] as follows: "522 … Declare that the land at 453 Wallaroo Road, Wallaroo, NSW, being the land described in Folio Identifier 1/248210 and the buildings thereon ("the monastery") is held by the first defendant upon a charitable trust for the purpose of conducting a monastery, a monastery church and related facilities for the purposes of the unincorporated association known as the Free Serbian Orthodox Church – Diocese of Australia and New Zealand ("the Free ANZ Diocese"). Declare that the trust purpose on which the first defendant holds the monastery has ceased to provide a suitable and effective method of using the trust property having regard to the spirit of the trust. Order that the first defendant be removed as trustee of the trust and that the second plaintiff be appointed as trustee in its place. Order that the monastery vest in the second plaintiff. Order that the first to fifth defendants forthwith do all that is required on their part to transfer title to the monastery to the second plaintiff. Order pursuant to s 9 of the Charitable Trusts Act 1993 that the terms of the trust on which the monastery is held by the first defendant, and is to be held by the second plaintiff, be altered to provide that the trustee hold and use the monastery for charitable purposes of the Metropolitanate of Australia and New Zealand of the Serbian Orthodox Church provided that: to the extent that to do so is not inconsistent with the said purpose; and to the extent that to do so is practicable having regard to the need to avoid conflict, the monastery be available for use not only for the purposes of the Metropolitanate of Australia and New Zealand of the Serbian Orthodox Church, but also be available for use by those individuals and organisations that comprise or form part of the Free ANZ Diocese. Direct that the plaintiffs and the Attorney-General, after consultation with Bishop Ambrose, if he is willing to participate, or any persons nominated by him for that purpose, prepare a scheme, in accordance with the reasons for judgment published on 29 May 2015, to give effect to the trust purpose as so altered. Order that within seven days the second defendant withdraw caveat no. U58320C. Order that the plaintiffs' claim for relief, save as to costs, be otherwise dismissed. 523 I will stand the proceedings over to a convenient date to hear any argument on the declarations and orders to be made to give effect to these reasons, including as to whether an order should be made appointing the first to fifth defendants as representatives of the interests of the individuals comprising the Free ANZ Diocese. I will then deal with any issue as to costs." 1. The parties agreed that declarations and orders should be made in accordance with paras 1, 2, 3, 4, 5, 6, 8 and 9. 2. An order such as that proposed in para [523] was made nunc pro tunc in Radmanovich v Nedeljkovic [2001] NSWSC 492; (2001) 52 NSWLR 641 at 677 (order 2). Such an order is appropriate in this case. A representative order should have been sought by the plaintiffs to ensure that the members of the Free ANZ Diocese were bound by the orders the plaintiffs sought. The litigation was run by the first to fifth defendants on behalf of the members of the Free ANZ Diocese. Bishop Ambrose, prominent members of the laity who claimed to be members of its Diocesan Council, and its church school congregations, were all involved in the litigation for the first to fifth defendants. In my view a representative order should be made. That order is not opposed. 3. In my reasons of 29 May 2015 I proposed making an order for preparation of a scheme. Events overtook the making of such an order. The plaintiffs and the Attorney-General jointly proposed a scheme. The first to fifth defendants proposed a very different scheme. Their solicitors, Hunt & Hunt, suggested that the reasons for judgment contemplated: "… a solution in some respects similar to that which pertains to the Church of the Holy Sepulchre in Jerusalem, whereby that church is shared between a number of different churches (primarily the Eastern Orthodox, Armenian Apostolic and Roman Catholic Churches) not all of which are in full communion with one another." 1. Mr Nesic raised other issues relevant to the settlement of a scheme, including arrangements that should be made in respect of the cemetery site on the monastery. 2. The matter was listed for hearing on 1 September 2015 to deal with questions of costs, the settlement of a scheme, the making of final orders, and the first to fifth defendants' application for a stay of final orders. The first to fifth defendants' proposed scheme was only provided to the plaintiffs on 20 August 2015. On 31 August 2015, the plaintiffs served an affidavit of Bishop Irinej in opposition to the first to fifth defendants' proposed scheme. He deposed, amongst other things, that use of any part of the monastery by a cleric who was not in communion with the Serbian Orthodox Church would be a desecration of the monastery and each time that occurred he, or a delegate priest in his name, would need to conduct a service to re-consecrate or re-bless a building or land that had been used by clergy of the Free ANZ Diocese who were not in communion with the Serbian Orthodox Church. This would mean, for example, that the Free ANZ Diocese could not use the grounds of the monastery for a children's camp which was attended by a priest of the Free ANZ Diocese who opened the proceedings with a prayer, without the monastery having to be re-blessed. Bishop Irinej said that a burial service provided by clergy of the Free ANZ Diocese at the monastery would desecrate the cemetery as a whole. He said that if an individual or an individual's family required a burial service by clergy of the Free ANZ Diocese, then the funeral service and the burial service would have to be performed at a Free ANZ Diocese church, rather than at the monastery cemetery itself, and the casket would need to be transported to the cemetery for burial. 3. Bishop Irinej's affidavit of 31 August 2015 also raised a new matter that was not consistent with evidence given at the hearing. Referring to amendments proposed by the first to fifth defendants to a draft scheme of arrangement propounded by the plaintiffs and the Attorney-General, Bishop Irinej said that use of buildings or land of the monastery for secular purposes by the Free ANZ Diocese created various difficulties. He added that: "A further reason that the changes to clause 5 are not acceptable is that my view is that, in accordance with the Orthodox Church's principles, monasteries are in general not suitable for holding secular events. … I am slowly instilling this principle in all of the monasteries in the Metropolinate's control and over time I would seek to do likewise at the Monastery, in relation to secular events sought to be held there by either the Metropolitanate or the Free ANZ Diocese." 1. Bishop Irinej deposed that in 2009 the Holy Synod of Bishops of the Serbian Orthodox Church had granted approval for the monastery to become a women's monastery. He deposed that there was a nun who was ready to travel to Australia from Serbia to become the monastery's abbess. This evidence was not given at the hearing. 2. Bishop Irinej's evidence arguably raised new matters that cast doubt on whether the use of the monastery by the SOC-ANZ Metropolitanate in the way apparently indicated in Bishop Irinej's affidavit would be in accordance with the spirit of the trust. 3. The hearing on 1 September 2015 was adjourned. Further evidence from Archbishop Chrysostomos and Bishop Irinej was served on the issue of whether use of parts of the monastery, other than the church, by clerics of the Free ANZ Diocese would be a desecration of the whole of the monastery. 4. The first to fifth defendants have submitted that as the orders have not yet been made or entered, the judgment should be reopened because it proceeded on what is said now to have been a mistaken assumption that use of the monastery property for the purposes of the SOC-ANZ Metropolitanate was not inconsistent with its use for conducting a monastery church and related facilities of the Free ANZ Diocese, such as for diocesan camps and as a centre for festivals, including youth festivals. 5. I will deal first with whether I should not make orders as proposed in my reasons of 29 May 2015 because of the possible changes to the use of the monastery property foreshadowed in the affidavit of Bishop Irinej of 31 August 2015. For the reasons below I do not consider that I should change my conclusion. A scheme for the use of the trust property should ensure that the monastery is available to be used for secular events in the same way as it has been in the past. I will then deal with the terms of the scheme, then with issues of costs, including whether the first defendant is entitled to be indemnified for its costs out of the trust property, and then with the application by the first to fifth defendants for a stay of the orders to be made pending the determination of a proposed appeal from those orders. Re-opening the judgment 1. In his affidavit of 19 February 2013 Bishop Irinej had deposed that after the monastery land was purchased in November 1980 it was improved not only by the construction of the church, but by the development of other facilities including a camp complex (which was built and paid for by the Circle of Serbian Sisters) a cemetery, a museum (which was built and paid for by the Veterans' Group) and a large hall. He deposed that at the time of purchase there were buildings on the site that included cabins and monastic flats. 2. The work Serbs in Australia records that the Circle of Serbian Sisters completed the construction of a dining room that was blessed on 29 August 1987 and which became, for the entire monastery, a kind of "cozy room". 3. The monastery and its grounds were used as a diocesan centre until 2006. Summer camps were run for children and youth groups. The monastery was used as a centre for festivals, including youth festivals. 4. In his affidavit of 19 February 2013 Bishop Irinej deposed that from about 2007 the monastery property was reinstated for use as a monastery, that at first it was used as a monastery for monks and then for nuns. Bishop Irinej deposed that: "The Serbian Orthodox Church monasteries are not cloistered. They are all-purposes places, which people can visit from outside of the monastery." 1. In my reasons for judgment I said (at [463]) that the spirit of the trust was that the monastery be available to all the individuals who comprised the church school congregations and organisations associated with the Free ANZ Diocese. I had noted (at [79]) Bishop Irinej's evidence that in the Serbian Orthodox Church monasteries are not cloistered, but are all-purposes places which people from outside the monastery can visit. 2. The first to fifth defendants submitted that my judgment proceeded on the assumption that the use of the monastery property for the purposes of the Metropolitanate of the Serbian Orthodox Church as a monastery would not be inconsistent with its use by individuals and organisations that comprise or form part of the Free ANZ Diocese. They submitted that it has become apparent from the evidence of Bishop Irinej adduced after the reasons for judgment were given that that assumption was mistaken. Bishop Irinej has now deposed that in accordance with the Orthodox Church's principles, monasteries are in general not suitable for holding secular events, that he is slowly instilling this principle in all of the monasteries under the Metropolitanate's control and over time would seek to do likewise at the monastery property in relation to secular events sought to be held there, whether by the Metropolitanate or the Free ANZ Diocese. He also gave evidence for the first time on 31 August 2015 that in 2009 the Holy Synod of Bishops had given approval for the monastery to become a women's monastery. 3. The first to fifth defendants submitted that the intention of Bishop Irinej over time to prevent secular events of the Free ANZ Diocese being held at the monastery property is contrary to the trust purposes upon which the first defendant has held the monastery property, and is contrary to the spirit of the trust. They submitted that in these circumstances I should reverse my finding that the use of the monastery for the purposes of the SOC-ANZ Metropolitanate would be closer to the original trust purpose, having regard to the spirit of the trust, than would its continued application for the purposes of the Free ANZ Diocese. They submitted that I should refuse equitable relief to the plaintiffs because implementation of Bishop Irinej's intention would frustrate the fulfilment of the trust purposes as envisaged in my reasons for judgment. 4. In oral evidence Bishop Irinej said that it was not all secular events that were generally inappropriate to be held on monastery grounds. His comment referred to at para [7] above did not encompass an activity such as the St Sava Festival children's camp and similar activities. He had in mind a bocce ball tournament that he thought was quite unsuitable for a monastery. Bishop Irinej did not explain that qualification in his affidavit of 31 August 2015. I accept that not all secular events would be appropriate to be held on the monastery. But the fact that some such events would not be appropriate does not mean that it would be consistent with the spirit of the trust that the monastery not be used for secular events (see para [7] above). 5. The plaintiffs submitted that as part of the supervision of the monastery by the bishop, the bishop should be able to alter specific aspects of the use of the monastery property, provided that the change in use was not contrary to the purpose of the trust. They submitted that the question was whether an alteration to the use of the property went beyond the degree of freedom which, having regard to the spirit of the trust, as informed by the initial trust purpose, might reasonably be expected of a Serbian Orthodox bishop. They submitted that there was no reason why, consistently with the spirit of the trust, the monastery could not become a women's monastery. All of that I accept. The critical qualification is that any change to the use of the monastery directed by the bishop be made having regard to the spirit of the trust and be informed by the trust purpose. It does not follow that it would be consistent with the spirit of the trust for the monastery no longer to be available for secular activities of the kind previously referred to. 6. The plaintiffs submitted that the circumstances in which the land was acquired that included various kinds of buildings and sporting grounds did not demonstrate that all kinds of secular uses by any individual or group associated with the diocese must always be required in order to promote the purposes and spirit of the trust. No doubt that is true. But it does not follow that it would be consistent with the spirit of the trust for the bishop to change the secular activities to which the monastery could be put so that the monastery would cease to be available to individual members and organisations associated with the Metropolitanate and the Free ANZ Diocese. 7. I think there would be force in the first to fifth defendants' submissions if there were no means of controlling the use of the monastery by the SOC-ANZ Metropolitanate. But the scheme to give effect to the altered trust purpose will implement the spirit of the trust. That includes that the monastery be available for use of all members of the Free ANZ Diocese as it existed when the monastery was acquired and established, and their successors. The scheme will include a provision to ensure that the spirit of the trust is not compromised by the SOC-ANZ Metropolitanate's taking steps to prevent secular events being held at the monastery property. Proposed scheme 1. The plaintiffs and the Attorney-General initially propounded a draft scheme for the administration of the monastery on terms substantially as follows. The draft scheme stated that the Monastery of St Sava New Kalenic Trust is the charitable trust upon which the land and buildings at Wallaroo known as the Monastery of St Sava, New Kalenic is held, being the trust the subject of the declarations and orders made in these proceedings. The scheme provided that the purpose of the Monastery Trust was for the trustee (i.e. the second plaintiff) to hold and use the Trust Property for purposes as set out in proposed order 6 (reasons at [522]). The scheme then provided that an individual who belongs to the Free ANZ Diocese might attend the St Sava church and cemetery for private prayer, and for religious services conducted by the Metropolitanate, and might attend public functions conducted on the Trust Property by the Metropolitanate, on the same terms as members of the Metropolitanate without giving prior notice to the trustee and without the need to obtain consent of the trustee, but within such reasonable hours as the trustee might set. The draft scheme provided that individuals and organisations that comprise or form part of the Free ANZ Diocese might use, for the purposes of the Free ANZ Diocese, and on the same terms as members of the Metropolitanate, buildings or facilities at the Trust Property other than the St Sava church, the cemetery, the bishop's residence and any other building used as a residence, including for clergy. This permission would be subject to the proviso that such individuals or organisations apply for the trustee's consent at least 28 days prior to the proposed use and abide by any reasonable rules made by the trustee governing the use of those buildings and facilities. The trustee's consent was not to be unreasonably withheld. 2. A further clause provided that nothing in the preceding provisions permitted the Trust Property to be used for religious services conducted by priests or clergy who are not in communion with the Serbian Orthodox Church and who are not recognised by the Metropolitanate, or in a manner contrary to the religious doctrines and precepts of the Serbian Orthodox Church. 3. The scheme provided for the establishment of an advisory committee consisting of five persons. Two would be nominated by the Metropolitan and two by the Free ANZ Diocese. The four members would appoint a fifth person who would chair the meetings of the committee. Failing agreement of the four members, the Metropolitan or the Diocesan Council of the Free ANZ Diocese could request the president of the Law Society to appoint as the fifth member a solicitor with at least 10 years' standing who is experienced in the administration of trusts. The draft scheme included provision as to the period of membership on the advisory committee. Membership of the committee would be honorary, save for the fifth independent member who would be entitled to reasonable remuneration as agreed with the trustee, or, if not agreed, as fixed by the court. The remuneration of that member would be paid by the trustee as an expense in the administration of the Monastery Trust. The chair of the committee would have a casting vote. 4. The function of the advisory committee would be to consider any request or dispute about use of the trust property by individuals or organisations that comprised or formed part of the Free ANZ Diocese and to make recommendations to the trustee about the request or dispute so submitted. If the trustee followed a recommendation of the advisory committee the trustee would not be liable for anything done or omitted by reason of following that recommendation. But the trustee would not be required to follow a recommendation of the advisory committee and it could, but would not be required to, apply to the court for directions. It could also do so if a recommendation of the advisory committee were not unanimous. The proposed scheme provided that the trustee should not sell, mortgage or encumber the Trust Property, or lease any part of it for a term exceeding two years, without an order or direction of the court. 5. The first to fifth defendants raised objections to this proposed scheme. One objection specifically related to the use of the cemetery. Mr Nesic deposed that there were existing arrangements for 82 future burials, 54 involving one individual, nine involving a couple, and 19 involving a person whose partner had predeceased him or her. He deposed that a funeral service was normally conducted at the parish of the deceased, followed by a second service at the cemetery by a clergyman of the Free ANZ Diocese. After the burial a memorial service was normally conducted at the cemetery after 40 days, six months and 12 months. Mr Nesic deposed that it would be disruptive and cause distress to members of the Free ANZ Diocese who have deceased family members buried at the cemetery if Bishop Irinej were permitted to conduct religious services at the cemetery. He said, by way of example, that one person, being the daughter of parents who are buried at the cemetery, wished to remove their remains, but was awaiting the final outcome of this dispute. The first to fifth defendants submitted that a member of the Free ANZ Diocese who wished to be buried in the cemetery should be able to be buried there using the services of the clergy of the Free ANZ Diocese, and that it would be particularly distressing if a member of the Free ANZ Diocese who died could not be buried with his or her spouse, except by engaging the services of a priest of the Metropolitanate. 6. The first to fifth defendants proposed an alternative scheme under which the Free ANZ Diocese should be permitted to conduct its own religious services on the trust property at the Dragoljub Draza Mihailovic shrine, that it should be permitted to hold meetings of its legislative and administrative organs in the Great Hall, conference room or some other area designated for that purpose at the monastery, that it should be permitted to occupy an office adjacent to the Great Hall, conference room, or such other area as might be designated, for the purpose of storage of its records and other archival material, its library and for the publication and printing of the Diocesan magazine and other Diocesan communications, and that it should be permitted to occupy three of the Great Hall residential units for the purpose of accommodating monastics of the Free ANZ Diocese. 7. The scheme proposed by the first to fifth defendants made particular provision in respect of the cemetery. They proposed that individuals who had purchased cemetery lots or vaults for themselves or for others should be entitled to have funerals or burials conducted at the cemetery by a clergy of the Free ANZ Diocese in accordance with what were called the rites and customs of the Free ANZ Diocese or by clergy of the Metropolitanate in accordance with what were called the rites and customs of the Metropolitanate. 8. The scheme proposed by the first to fifth defendants also provided that the trustee should not refuse to sell a cemetery lot or vault to a person who was a member of the Free ANZ Diocese or who stated that he or she wished for a burial to be conducted in accordance with what was called the rites and customs of the Free ANZ Diocese and it provided that memorial services could be conducted at the burial sites of persons buried in the cemetery according to what were called the rites and customs of the Free ANZ Diocese by clergy of the Free ANZ Diocese. 9. The first to fifth defendants' proposed scheme provided for a scheme committee to be appointed in the same way as had been proposed by the plaintiffs and the Attorney-General, provided that scheme members should be eligible for reappointment. Its scheme required that for there to be a quorum of the scheme committee a meeting must be attended by at least one nominee of both the Metropolitanate and the Free ANZ Diocese. It proposed that the functions of the scheme committee include resolving any dispute that might arise between the trustee and either the Free ANZ Diocese or individuals or organisations within it or the Metropolitanate concerning use of the trust property by individuals or organisations that comprised or formed part of the Free ANZ Diocese. In other words, the committee's role would be a determinative one, and not merely an advisory one that afforded protection to the trustee if the trustee acted in accordance with the committee's recommendation. 10. In his affidavit of 31 August 2015 Bishop Irinej responded to the draft scheme proposed by the first to fifth defendants. He deposed that a burial service provided by clergy of the Free ANZ Diocese at the cemetery would desecrate the cemetery as a whole and not just a particular plot of land. He said that the whole of the cemetery and not just the church building had been consecrated by Bishop Irinej (Kovacevich) on 25 January 1981. He said the use of any of the buildings, or any of the land, of the monastery by clergy of the Free ANZ Diocese who were not in communion with the Serbian Orthodox Church would desecrate the monastery as a whole. He said that each time that occurred he or a delegate priest in his name would need to conduct a service to re-consecrate or re-bless the building or land so desecrated. 11. Bishop Irinej raised other objections to the first to fifth defendants' proposed scheme. He said that past experiences involving attempts to share facilities at the monastery, even for secular purposes, had led to hostility and aggression between individuals. He said that in his view any permanent occupation by the Free ANZ Diocese at the monastery, even for secular purposes, let alone for religious purposes, would be unworkable. 12. Bishop Irinej also said that in his opinion the presence on the monastery of clergy associated with the Free ANZ Diocese in a religious capacity, even for secular events, and the occupation of part of the monastery by the Free ANZ Diocese, would create confusion among the faithful of the Metropolitanate who might not be able to discern the fact that clergy of the Free ANZ Diocese had been defrocked by the Serbian Orthodox Church or were otherwise not recognised by it. He said such persons might approach clergy of the Free ANZ Diocese for blessings and sacraments. He said that this would not assist in promoting reconciliation with the faithful of the Free ANZ Diocese who might not understand that there existed canonical impediments to their clergy. Clergy of the Free ANZ Diocese assume the same clerical garb as clergy of the SOC-ANZ Metropolitanate. In oral evidence Bishop Irinej instanced a case of a woman in Adelaide who was an adherent of the Serbian Orthodox Church whom he said had wanted a memorial stone for her husband blessed. Bishop Irinej said that she had attempted to contact one of the clergy of the Metropolitanate, but her invitation was diverted to one of the clergy of the Free ANZ Diocese who blessed her husband's monument. Bishop Irinej said that this caused her subsequent serious anxiety because she had not appreciated that the priest of the Free ANZ Diocese was not a priest of the Serbian Orthodox Church. 13. Bishop Irinej was questioned as to his opinion that a permanent presence of the Free ANZ Diocese on the monastery might be productive of conflict. He was asked to accept that it was likely that members of both the Metropolitanate and the Free ANZ Diocese when they met each other at the monastery property would behave civilly towards one another on the basis that the Court had resolved the dispute as to the trust purposes on which the monastery property was held. Bishop Irinej's response was that according to his understanding of the mentality of Serbs he feared that if there were an ensconced presence of the Free ANZ Diocese on the property, it would negate any acceptance by the members of the Free ANZ Diocese that the monastery was held on trust for the purposes of the Metropolitanate. So far as I can discern the likely future behaviour of the members of both churches, I would draw the same conclusion, independently of the Bishop's opinion. 14. Bishop Irinej was of the opinion that the presence of clergy of the Free ANZ Diocese on the monastery property would be an impediment to any future reconciliation between the two churches. He was not able to explain, at least to my satisfaction, why that would be so. I do not accept that opinion. 15. The plaintiffs' objection that use of the monastery property, and any of it, by clergy of the Free ANZ Diocese would involve a desecration of the monastery was ultimately not pressed. The late service of Bishop Irinej's affidavit, and in particular this assertion, persuaded me that I should adjourn the initial hearing on 1 September 2015 to allow the first to fifth defendants to answer that contention. They served a report of Archbishop Chrysostomos to which Bishop Irinej replied. Ultimately, neither Archbishop Chyrsostomos' report nor Bishop Irinej's affidavit in reply was tendered or read. Without conceding the point, the plaintiffs accepted that the Court should proceed on the basis that "… the outstanding uses of the Monastery property in controversy would not desecrate the property, albeit that Bishop Irinej remains of the view that re-blessing would be required". The plaintiffs accepted that the question of desecration would not be advanced as an answer to the first to fifth defendants' submission as to the extent to which the monastery should be available for the use of the Free ANZ Diocese. Nor would it be a reason for the trustee to refuse permission to members of the Free ANZ Diocese to conduct any activity on the monastery. The plaintiffs confirmed that they would not contend that the mere presence of clergy of the Free ANZ Diocese, or of clergy of any other church not in communion with the Serbian Orthodox Church, would be a desecration of the monastery. Accordingly, that issue ultimately fell away. 16. But the other issues remained. 17. As a result of what I was told were negotiations between the legal representatives of the plaintiffs and of the first to fifth defendants, amendments were made to the proposed schemes propounded both by the plaintiffs, whose scheme was supported by the Attorney-General, and by the first to fifth defendants. The scheme ultimately propounded by the plaintiffs is appendix "A" to these reasons. That ultimately propounded by the first to fifth defendants is appendix "B". 18. As appears from appendix "B", the first to fifth defendants proposed an amendment to clause 4 of the plaintiffs' scheme to provide that an individual belonging to the Free ANZ Diocese could attend or visit the cemetery in accordance with clause 7 of the first to fifth defendants' proposed scheme. That right is substantially provided for by clause 4 of the plaintiffs' proposed scheme, except that it should be clear that an individual who belongs to the Free ANZ Diocese might attend the cemetery not only for private prayer, but also to visit peaceably any grave or vault. Clause 4(a) of the plaintiffs' proposed scheme should be amended accordingly. 19. The first to fifth defendants proposed amendments to the plaintiffs' scheme in substance as referred to in para [29] above. They propose a clause as follows: "6. (a) The Free ANZ Diocese shall be permitted to conduct religious services according to the rites of the Free ANZ Diocese on the Trust Property at the Dragoljub Draza Mihailovic shrine at such reasonable times as are designated by the Free ANZ Diocese. (b) The Free ANZ Diocese shall be permitted to hold meetings of any of its legislative and administrative organs at the Trust Property in the Great Hall conference room, or such area as is designated by the Court at such reasonable times as are designated by the Free ANZ Diocese; (c) The Free ANZ Diocese shall be permitted to occupy an office adjacent to the Great Hall conference room, or such area as is designated by the Court for the purpose of storage of records and other archival material of the Free ANZ Diocese, the library of the Free ANZ Diocese library, and the publication and printing of the Diocesan magazine and other Diocesan communications; (d) The Free ANZ Diocese shall be permitted to occupy three of the Great Hall Residential Units for the purpose of accommodating monastics of the Free ANZ Diocese and/or such others as the Free ANZ Diocese deems fit" 1. Ancillary to that proposal the first to fifth defendants proposed amendments to the definitions in clause 1 to identify the Dragoljub Draza Mihailovic shrine, the Great Hall, the Great Hall conference room, the dining hall and the Great Hall residential units. Also ancillary to clause 6 they propose an amendment to clause 5 of the plaintiffs' scheme to provide that individuals and organisations comprising or forming part of the Free ANZ Diocese might use other buildings and facilities for the purposes of the Free ANZ Diocese on the same terms as members of the Metropolitanate, provided that the consent of the trustee was provided. But they proposed that it be a term of the scheme that the trustees' consent not be withheld on the ground that the Metropolitanate was using the building or facility on a particular date or time if it were not impossible for both the Metropolitanate and the Free ANZ Diocese to use separate and discrete parts of the building or facility at the same time, in which case the trustees should offer an alternative building or facility for the use of the Free ANZ Diocese if that were reasonably possible. This was consistent with the first to fifth defendants' contention that the scheme should allow the Free ANZ Diocese to conduct its activities on the monastery property, other than the monastery church, both by way of providing religious services (to be provided at the Dragoljub Draza Mihailovic shrine) and by holding meetings, storing records and other archival material, publishing and printing the magazine of the Free ANZ Diocese, and continuing to occupy three residential units for the purposes of accommodating its monastics or others as it might deem fit. 2. Consistently with this position the first to fifth defendants submitted that the scheme should include amendments to clause 8 of the scheme proposed by the plaintiffs and the Attorney-General, that would provide (in clause 8(c)) that the trustees should not, without a direction or order of the Court, prohibit use of the trust property at a location other than the St Sava Church, the Bishop's residence, and any other building used as a residence for clergy or members of the Metropolitanate, the conduct of religious services by clergy of, or recognised by, the Free ANZ Diocese (Appendix B, clause 8(c)(i)). 3. These proposals by the first to fifth defendants do not accord with my reasons for judgment. I found that the original trust purpose, that the monastery be used for the purposes of the Free ANZ Diocese, has ceased to provide a suitable and effective method of using the Trust Property having regard to the spirit of the trust. It is not consistent with the spirit of the trust that the Free ANZ Diocese have a continued presence at the monastery of the kind contemplated in the first to fifth defendants' scheme. I do not think that on any reasonable interpretation my reasons could have been interpreted as contemplating a situation as described by Hunt & Hunt in their letter referred to at para [4] above, that is, as contemplating that the monastery would be shared between the Australian and New Zealand Metropolitanate of the Serbian Orthodox Church and the Free ANZ Diocese. To the contrary, I said that the monastery should be held for the purposes of the SOC-ANZ Metropolitanate, but that subject to the use of the property by that body, individuals or organisations of the Free ANZ Diocese should be able to use the property to the extent that that could practicably be done whilst avoiding conflict. I did not say that the monastery, apart from the monastery church, could be used by the Free ANZ Diocese for its religious purposes. That purpose of the trust has ceased to be a suitable and effective method of using the monastery having regard to the spirit of the trust. 4. My reasons provided no support for the first to fifth defendants' proposals which have been aptly described by the plaintiffs and the Attorney-General as a "two hubs" approach. I did not say, nor did I imply, that the Free ANZ Diocese should be able to continue to hold religious services on other parts of the monastery property, or be able to continue to use the monastery property as its Diocesan Centre, or as a residence for its own monastics. In these respects the first to fifth defendants' proposal does not give effect to my reasons for judgment. Rather, it seeks to retrieve lost ground. 5. Additionally, the first to fifth defendants' proposal should not be accepted because I think it would be productive of conflict. 6. For these reasons I do not accept the amendments proposed in clauses 5(a)(ii) or 6 or 8(c)(i) of the first to fifth defendants' scheme. 7. Clause 7 of the plaintiffs' proposed scheme met Mr Nesic's objections concerning the cemetery. The plaintiffs now accept that individuals who have purchased cemetery lots or vaults should be entitled to have funerals or burials conducted in accordance with the rites and customs of, and by the clergy of, either the Serbian Orthodox Church or the Free ANZ Diocese. 8. There is no evidence that there is any difference between the rites and customs of the Serbian Orthodox Church and the Free ANZ Diocese concerning the conduct of funerals or burials. The evidence was that the rites and customs of both churches were the same, except in relation to the elevation of the name of the bishop, and there was no evidence that the bishop's name was elevated at a funeral or burial ceremony. Be that as it may, the proposed clause 7(a), (b) and (c) of the plaintiffs' scheme is accepted by the first to fifth defendants as it gives effect to the objections they had made to the original draft of the plaintiffs' scheme. The first to fifth defendants propose an amendment in clause 7(d). The proposed amendment addresses the improbable situation that funeral, burial or memorial services might be proposed to be held at the cemetery at the same time. If that were to occur, there is no reason that the trustee could not deal with that by allocating different times for the holding of the services to accommodate the needs of both parties. A prescriptive provision such as is sought in clause 7(d) is inappropriate. Nor is there any reason to require the trustee to appoint an "Administrator" as provided for in the first to fifth defendants' scheme to administer the cemetery. I do not accept clause 7(d) of the scheme proposed by the first to fifth defendants. 9. The first to fifth defendants propose that it be a term of the scheme (clause 8(a)) that the trustee should not, without a direction or order of the Court, cause or permit the Trust Property to be used only as a monastery. Of course, the Trust Property is a monastery. The question is what the first to fifth defendants meant by clause 8(a). In the course of oral submissions it was made clear that they meant that the trustee should not cause or permit the Trust Property to be used only as a cloistered monastery. That is, the trustee must allow the Trust Property to be used for secular purposes. 10. For their part, the plaintiffs had proposed that it be a term of the scheme that the trustee should not, without a direction or order of the Court, cause or permit the Trust Property to be used only as a women's monastery, nor prohibit a use of the Trust Property only on the ground that it was a secular use. 11. Ultimately, no party submitted that it should be a term of the scheme that the monastery should not be put to use only as a women's monastery. Bishop Irinej gave evidence that when a female monastic, Mother Angelina, resided at the monastery, there was a discernible difference between how not only members of the Metropolitanate, but also members of the Free Church reacted towards her presence. He said there was much less aggression when Mother Angelina was in office as everybody accepted her presence and treated her properly with respect. 12. It could have been implied from Bishop Irinej's affidavit of 31 August 2015 that the intention that the monastery become a women's monastery could have affected secular uses to which the monastery would be put. In his oral evidence Bishop Irinej clarified that that would not be so. Accordingly, it is not necessary that it be a term of the scheme that the trustee not cause or permit the Trust Property to be used only as a women's monastery. That is because the use of the monastery as a women's monastery should not affect the extent to which the monastery should properly be applied for secular purposes. 13. I think it preferable to adopt the plaintiffs' proposed clause 5B(b), that is, that the trustee not, without a direction or order of the Court, prohibit the use of the Trust Property only on the ground that it is a secular use, rather than the first to fifth defendants' proposed clause that the trustee not, without a direction or order of the Court, cause or permit the Trust Property to be used only as a cloistered monastery. The evidence did not establish what a cloistered monastery might be. I think the notion of what might be a secular use would have a clearer meaning to the trustee and to members of the scheme committee. 14. I do not accept either clause 8(a) of the first to fifth defendants' proposed scheme, nor clause 5B(a) of the plaintiffs' proposed scheme. The matter is adequately addressed by clause 5B(b) of the plaintiffs' scheme (replicated in clause 8(b) of the first to fifth defendants' scheme). 15. I have said above why I do not accept clause 8(c)(i) of the scheme proposed by the first to fifth defendants (see paras [45]-[48]). The first to fifth defendants also proposed that without a direction or order of the Court the trustee not be permitted to prohibit the conduct of an event for secular purposes that involves prayers or blessings said, or other participation, by clergy of or clergy who are recognised by the Free ANZ Diocese (clause 8(c)(ii) and (iii)), on any of the grounds specified in clause 8(c)(iv)-(viii)). 16. The plaintiffs accept that the trustee should not, without a direction or order of the Court, prohibit the use of the Trust Property for a secular event that involves the participation of clergy of the Free ANZ Diocese only on the ground that such a use constitutes a desecration of the Trust Property contrary to the religious doctrines and precepts of the Serbian Orthodox Church (plaintiffs' proposed scheme clause 5B(c)). The point of difference disappears on analysis. The terms sought by the first to fifth defendants in their clause 8(c)(vi) and (vii) are based upon the evidence of Bishop Irinej that they say should not be accepted that such a use of the monastery might cause confusion or not promote reconciliation. 17. I accept that a use of the monastery property should not be prohibited by the trustee on the ground that a proposed use might cause confusion or would hinder reconciliation. A proposed use by individuals or organisations of the Free ANZ Diocese that is not inconsistent with the use of the monastery by the SOC-ANZ Metropolitanate should only be refused if necessary to avoid conflict. That purpose is provided for in clause 3 of the plaintiffs' proposed scheme and need not be repeated as proposed by the first to fifth defendants in clause 8(c)(vi) and (vii) of their proposed scheme. 18. As noted above, the plaintiffs have disclaimed any suggestion that a proposed use of the Trust Property by individuals or organisations of the Free ANZ Diocese could be rejected on the ground that the proposed use could constitute a desecration of the Trust Property. The conduct of funeral, burial and memorial services at the cemetery by clergy of the Free ANZ Diocese is provided for by clause 5A of the plaintiffs' scheme. Clause 5B(c) of that proposed scheme prohibits the trustee from refusing consent to a secular event on the ground that participation by clergy of the Free ANZ Diocese would constitute a desecration of the monastery. Taken together these provisions adequately deal with the issue and it is not necessary to adopt clause 8(c)(iv) of the first to fifth defendants' scheme. 19. I do not accept the first to fifth defendants' submission that the trustee should be required not to prohibit a use of the Trust Property on the ground of a belief based solely on events which occurred prior to the making of the scheme that the use would cause conflict (first to fifth defendants' proposed scheme clause 8(c)(v)). In my view that is too prescriptive. The trustee's obligation, consistently with the orders I will make and clause 3 of the scheme, is to permit the Trust Property to be available for use by individuals and organisations comprising, or forming part of, the Free ANZ Diocese if that can be done in a way which is not inconsistent with the holding of the Trust Property for the purposes of the SOC-ANZ Metropolitanate and avoids conflict. I see no reason to limit the matters which the trustee (and the scheme committee that might advise the trustee) can take into account in deciding what might cause conflict. Accordingly, I do not accept the first to fifth defendants' proposed clause 8(c)(v)). 20. The first to fifth defendants did not adhere to their original position that the scheme committee should be empowered to give binding directions to the trustee. They accepted that the function of the scheme committee should be to consider any request or dispute about use of the Trust Property by individuals or organisations that comprise or form part of the Free ANZ Diocese that was submitted to it, and to make recommendations to the trustee about the request or dispute. The first to fifth defendants proposed that a decision of the scheme committee should be made by a majority which was to include one representative of the Metropolitanate and one representative of the Free ANZ Diocese. Such a provision would in effect give both the Metropolitanate and the Free ANZ Diocese a right of veto. I do not consider that to be desirable. 21. During oral submissions a question was raised as to what the position would be if a representative, or both representatives, of either the Metropolitanate or the Free ANZ Diocese was or were absent and could not participate in a meeting either in person or by telephone or other technology, whether for reasons of health, travel or otherwise. One body might obtain a majority of votes, or be unable to command a majority of votes, by reason of the absence of one or more members. That difficulty should be addressed by including a provision in the scheme requiring the appointment of alternates to members of the scheme committee, other than the independent member who is to chair meetings. 22. The plaintiffs propose that the members to be nominated by the Metropolitan and the Free ANZ Diocese should be lay members and not clerics. The first to fifth defendants submitted that there should be no such limitation. 23. I agree with the plaintiffs that members should be drawn from the laity and not from clerics. This is for two reasons. First, committee members, although representatives of the Metropolitan and the Free ANZ Diocese, should exercise an independent judgment, which it might be harder for a cleric than a lay person to do where the cleric is directly answerable to his bishop. Secondly, it would be difficult for representatives of the Metropolitan to sit on a committee with a priest of the Free ANZ Diocese whom that member considered not to hold a priestly office. 24. The plaintiffs propose that current and former officers and directors of the Property Trust not be eligible for appointment to the scheme committee. The reason for this proposal is to avoid conflict and maximise the chance of workable relations between members of the committee. But the current and former directors of the first defendant are prominent members of the Free ANZ Diocese. The Free ANZ Diocese should not be deprived of their services if they are willing to act. At some point the parties will at least have to have civil relations with each other. If there is to be any prospect of future reconciliation it will only come about if at least that much is achieved. Reconciliation will not be advanced if prominent lay members of the Free ANZ Diocese are ineligible to sit on a committee with nominees of the Metropolitan. Accordingly, I do not accept the plaintiffs' proposed exclusion of current and former directors or officers of the first defendant from membership of the scheme committee. 25. The plaintiffs also propose that members hold their positions for two years and be eligible for a single reappointment at the end of the two-year period. The consequence would be that no individual could serve for more than four years. The first to fifth defendants submit that there should be no restriction on the eligibility of any members for reappointment. 26. There is something to be said for both views. If the committee worked well and harmoniously then it could be undesirable to require a change of personnel at least every four years. Particularly could that be so if the person appointed as the independent member who is to chair meetings of the committee had the confidence of both the Metropolitan and the Free ANZ Diocese. On the other hand, if there were acrimony between the representatives of the Metropolitan and the representatives of the Free ANZ Diocese then a turnover of membership would be desirable. In my view, members should hold their positions for two years, but be eligible for reappointment at the end of the two-year period. After a second two-year period of appointment, the independent member should be eligible for further appointment if the other members agree. Otherwise a new appointment should be made in accordance with the same procedure to apply to the initial appointment of the independent member. In the case of the members nominated by the Metropolitan and the Free ANZ Diocese, they should be eligible for reappointment by the respective bodies for subsequent two-year periods if all parties agree, but not otherwise. That is to say, a member who is a representative of the Metropolitan could be appointed for additional periods if the Free ANZ Diocese agreed, and vice versa, but not otherwise. 27. I do not think it necessary to make express provision for review of the scheme at the end of each five-year period. A trustee has a right to seek judicial advice and direction on any question concerning the administration of trust property or the interpretation of the trust instrument, subject to obtaining the approval of the Attorney-General or leave of the Court (Trustee Act 1925 (NSW) s 63 and Charitable Trusts Act 1993 (NSW) s 6). I think those provisions are sufficient. 28. For these reasons I will order the establishment of the scheme as proposed by the plaintiffs and the Attorney-General, subject to the changes indicated above. The scheme is set out as annexure "A" to the orders. Costs 1. The plaintiffs submitted that the first to fifth defendants should pay their costs up to 3 May 2013 on the ordinary basis and from 4 May 2013 on the indemnity basis. The relevance of the date of 4 May 2013 is that that was two weeks after the date the plaintiffs made an open offer to compromise the proceedings. The plaintiffs submit that their offer of compromise ought to have been accepted. 2. The plaintiffs also submitted that the first defendant should have no right of indemnity from the trust property for its own costs or for its liability to pay the plaintiffs' costs. 3. The Attorney-General did not seek costs. 4. The first to fifth defendants submitted there should be no order as to costs and no order precluding the first defendant from being indemnified in respect of its costs out of the trust property. They submitted that all of the costs incurred by the first to fifth defendants were incurred by the first defendant, that is to say, no additional costs would have been incurred in respect of the allegations against the second to fifth defendants. 5. It was common ground that the plaintiffs had mixed success. The plaintiffs submitted that there were six principal issues in the case. These were the identification of the trust purpose, whether in view of the events occurring from the 1990s culminating in the alleged adoption of a new constitution by the NGM-ANZ Diocese and the SOC-ANZ Diocese, the monastery was held on trust for the purposes of the SOC-ANZ Metropolitanate, whether the original trust purposes had ceased to provide a suitable and effective method for using the monastery having regard to the spirit of the trust and the trust purposes should be altered cy-près under s 9 of the Charitable Trusts Act 1993 to the purposes of the SOC-ANZ Metropolitanate, whether the first defendant and its directors had acted in breach of trust by denying Bishop Irinej and persons acting with his authority access to the monastery, whether breaches of trust should be excused, and whether the plaintiffs were disentitled to equitable relief. The plaintiffs submitted that all parties had mixed success on issue 1, that they failed on issue 2, but succeeded on the remaining issues. 6. This is one way of identifying the issues in the case and the parties' success, but it is not the best way. It is possible to identify many more issues. But there were two main questions, namely, whether in the events which had happened, the first defendant held the monastery for the purposes of the SOC-ANZ Metropolitanate, or, if not, whether the trust should be varied cy-près. There were differences in detail in the parties' submissions concerning the identification of the trust purpose, but they occupied little time and were not critical to the resolution of the other issues. (The identification of the trust purpose might have been important if the original trust purpose were as identified by the plaintiffs and if the plaintiffs had succeeded in their submission that the property was now held on trust for the purposes of the SOC-ANZ Metropolitanate without further qualification. There might then have been a later issue as to whether, consistently with the purpose of the trust, the monastery could be disposed of. But there was no evidence that that was the intention of the plaintiffs and the issue was only obliquely addressed in the evidence.) 7. Whether the first defendant had acted in breach of trust and whether the second to fifth defendants had caused it to do so was an issue in the proceedings, but it in turn depended upon whether Bishop Irinej occupied the position of Bishop of the NGM-ANZ Diocese. That issue had wider significance. In any event, as I found (at [403]) the question of whether the first to fifth defendants were involved in breaches of trust was academic, save possibly on any question of costs. I would not have removed the first defendant as trustee had I not found that the trust purposes should be altered so that the property should be held for the purposes of the SOC-ANZ Metropolitanate. 8. The principal questions were whether in the events which had happened the first defendant held the property on trust for the purposes of the SOC-ANZ Metropolitanate, or, if not, whether the trust purposes should be altered. The plaintiffs failed on the first issue, but substantially succeeded on the second. I agree with the submissions of the first to fifth defendants that in broad terms each question took up about half the hearing time and occupied about half of the evidence. The issues were distinct, but not severable because the same evidence was relevant to both. 9. The plaintiffs did not wholly succeed on the cy-près issue because of my conclusion summarised at [521(s)]. Moreover, the plaintiffs succeeded on the cy-près issue, not by reason of the submissions advanced by them, but by reason of the submissions advanced, and to some extent because of the cross-examination, by counsel for the Attorney-General. The Attorney-General was the successful party in the proceeding. But she does not seek costs. 10. The plaintiffs' offer of compromise proposed that the parties consent to orders declaring the existence and purposes of the charitable trust and for the application of the trust property cy-près with each party bearing its own costs of the proceedings and that the constitution of the first defendant be restored to the form it took before amendment in September 2007. The second aspect of the proposal seems to have assumed that the constitution of the first defendant was amended in more than limited respects in September 2007, a contention that I have rejected. The proposed cy-près scheme would have declared that the trust be altered to allow the property to be applied cy-près towards the maintenance and propagation of the Orthodox faith through the SOC-ANZ Metropolitanate. The plaintiffs were not successful in obtaining such a wide form of order. They did not better their offer of compromise. Nor did the first to fifth defendants act unreasonably in not accepting the offer of compromise. The grounds of opposition raised by the first to fifth defendants were properly raised in the interests of the members of the Free ANZ Diocese. I do not accept that any different costs outcome should arise by reason of the service of the offer of compromise. 11. For these reasons I decline to make any order under s 98 of the Civil Procedure Act for the payment of costs with the intention that the parties bear their own costs. 12. I also think that order is appropriate in respect of the costs incurred after the delivery of my reasons on 29 May 2015. Whilst I have generally accepted the scheme proposed by the plaintiffs and the Attorney-General, costs have been incurred and matters have been delayed by the raising of issues concerning the desecration of the monastery which necessitated an adjournment of the hearing to settle a scheme. That issue was ultimately not pressed. Moreover, the scheme includes provisions regarding the use of the cemetery that were included as a result of issues raised by Mr Nesic which the plaintiffs initially resisted. 13. In making no order as to costs I do not intend to interfere with the first defendant's right to indemnity out of the trust assets in respect of costs and expenses properly incurred in its administration of the trust, including the costs and expenses incurred by it in these proceedings. 14. There is no reason to deprive the first defendant of its entitlement to be indemnified in respect of costs and expenses properly incurred in administering the trust. The proceedings were commenced in August 2011. On 6 February 2012 Ball J advised the trustee that it was justified in obtaining legal advice as to its prospects of successfully defending the proceedings. On 22 May 2012 Rein J advised it that it would be justified in doing all things necessary or reasonably incidental to the conduct of its defence of the proceedings on such bases as it might be advised from time to time until further order. His Honour also ordered that that order was subject to and might be revoked by an order of the trial judge, or by subsequent order in the proceedings for judicial advice. Costs of the application for judicial advice were reserved. 15. I see no reason to revoke the order that the first defendant was justified in doing all things necessary or reasonably incidental to the conduct of its defence of the proceedings. There was nothing in its conduct of the defence of the proceedings that warranted criticism. To the contrary, its case was conducted with considerable diligence and ability. The fact that I found that the first defendant had acted in breach of trust is not a sufficient reason to deprive it of its indemnity. For the reasons I gave, that finding did not affect the resolution of the real issues in dispute. 16. The plaintiffs did not submit that the first defendant had not made full disclosure of all material facts on its application for judicial advice. As Gummow A-CJ, Kirby, Hayne and Heydon JJ said in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66 at [71] and [73]: "71 In short, provision is made for a trustee to obtain judicial advice about the prosecution or defence of litigation in recognition of both the fact that the office of trustee is ordinarily a gratuitous office and the fact that a trustee is entitled to an indemnity for all costs and expenses properly incurred in performance of the trustee's duties. Obtaining judicial advice resolves doubt about whether it is proper for a trustee to incur the costs and expenses of prosecuting or defending litigation. No less importantly, however, resolving those doubts means that the interests of the trust will be protected; the interests of the trust will not be subordinated to the trustee's fear of personal liability for costs. … 73 The fact that one of the purposes of proceedings for judicial advice is to protect the interests of the trust has particular importance where, as in this case, the trust concerned is a charitable purpose trust. In litigation brought by private persons having a particular view about the terms of a trust, the trustee will ordinarily be joined as a necessary and proper party to the proceedings. Unless some other party will act as contradictor, the burden of defending the suit will fall upon the trustee. If, as will often be the case with a charitable purpose trust, there is no other party that will act as contradictor, the claims made about the terms of the trust will go unanswered unless the trustee can properly resort to the trust funds to meet the costs of defending the litigation. And even if there is another party that will act as contradictor, it is almost always desirable, even necessary, for the trustee to take an active part in the proceedings so that issues are properly ventilated and argued." 1. In my view having taken the necessary step of obtaining judicial advice that it was justified in defending the proceedings, having acted properly in conducting its defence, and having regard to the inconsequential nature of my finding that the first defendant acted in breach of trust, there is no reason to deprive the first defendant of its indemnity. 2. The plaintiffs pointed to the fact that Rein J had not given approval to the first defendant to charge the monastery in order to secure funding for its defence of the proceedings. But that is a quite different thing from depriving the first defendant of its right of indemnity. 3. If this means that in practical terms the SOC-ANZ Metropolitanate has to raise funds to pay the first defendant's costs so as to avoid a sale of the monastery, or if it means that the monastery has to be sold in order to pay those costs, then that is to be regretted. But it would be a consequence of the intransigence exhibited by both sides in this dispute. 4. The orders will include a declaration that the first defendant is entitled to be indemnified out of the trust property in respect of the costs and expenses properly incurred by it in its defence of the proceedings, including its application for judicial advice. 5. Prima facie it does not appear to me that any additional costs would have been incurred by the second to fifth defendants that would not have been incurred by the first defendant had it been the only party sued. The joinder of the second to fifth defendants should not reduce the first defendant's indemnity. But if any issue arises as to how much of the first to fifth defendants' costs are within the first defendant's indemnity, that issue will have to be determined in separate proceedings. Stay 1. The first to fifth defendants have given notice of their intention to appeal from the orders that I foreshadowed and have sought a stay of those orders pending the determination of the appeal. 2. In Kalifair Pty Ltd v Digi-Tech (Australia) Limited [2002] NSWCA 383; (2002) 55 NSWLR 737 the Court of Appeal said (at [17] and [18]): "[17] In Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) [(1985) 2 NSWLR 685], this Court (Kirby P, Hope JA, McHugh JA) restated the principles to be applied in exercising this Court's jurisdiction to grant a stay pending an appeal. The Court said (at 694 and 695): '… In our opinion it is not necessary for the grant of a stay that special or exceptional circumstances should be made out. It is sufficient that the applicant … demonstrates a reason or appropriate case to warrant the exercise of discretion in his favour … The Court has a discretion whether or not to grant the stay and, if so, as to the terms that would be fair. In the exercise of its discretion, the Court will weigh considerations such as the balance of convenience and the competing rights of the parties … Two further principles may be mentioned. The first is that where there is a risk that the appeal will prove abortive if the appellant succeeds and a stay is not granted, courts will normally exercise their discretion in favour of granting a stay … where it is apparent that unless a stay is granted an appeal will be rendered nugatory, this will be a substantial factor in favour of the grant of a stay.' [18] Thus the relevant principles are analogous to those which govern the grant of interlocutory relief before trial to protect the status quo. The appellant must show that the appeal raises serious issues for the determination of the appellate court, and that there is a real risk that he will suffer prejudice or damage, if a stay is not granted, which will not be redressed by a successful appeal. This requirement will be satisfied if the appeal will be rendered abortive or nugatory unless a stay is granted. If these pre-conditions are established the Court will then consider the balance of convenience." 1. The stay sought is until the determination of the first to fifth defendants' foreshadowed appeal. The plaintiffs accepted that in a case like the present, I, as the trial judge, am in a better position to evaluate whether a stay should be granted than a Judge of Appeal, although the first to fifth defendants could seek a stay from the Court of Appeal if I refuse a stay and no doubt the plaintiffs could apply to the Court of Appeal to discharge a stay that I might order. But the parties properly made full submissions and adduced evidence on matters relevant to a stay as I am seized of the matter. 2. I accept that the foreshadowed appeal raises serious issues for the determination of the Court of Appeal. As Mr Blake SC submitted, the question of the proper approach to s 9 of the Charitable Trusts Act has not yet been considered by the Court of Appeal. Mr Blake submitted that this is the first case where orders have been made under s 9 of the Charitable Trusts Act in New South Wales to apply the property of an existing and continuing religious body to benefit a different religious body. Previous applications under s 9 were not truly inter partes hostile litigation. 3. A draft notice of appeal annexed to an affidavit of the first to fifth defendants' solicitor was not particularly illuminating. It identified numerous findings and contended that I was in error in making those findings and contended that I was in error in not making other findings. But I accept that the first to fifth defendants have arguable grounds of appeal. 4. The first to fifth defendants submitted that the balance of convenience or what they called the "discretionary case for a stay" was strong. I accept that that is so. The Free ANZ Diocese has had control of the monastery since its inception. Following the establishment of the Metropolitanate and the loss of the majority of the church-school congregations to the Free ANZ Diocese, the Metropolitanate has substantially greater resources. It has existing headquarters at Alexandria. It has three monasteries, one each in Victoria, South Australia and New South Wales. Mr Nesic deposed that if the orders are not stayed pending determination of an appeal, the Free ANZ Diocese would need to seek an alternative administrative centre which he expected would be costly. But if the appeal were successful it would be the intention of the Property Trust to return to the monastery as the administrative and spiritual centre of the Free ANZ Diocese. He said that the books and records of the Free ANZ Diocese would need to be relocated pending the determination of the appeal. There would be issues concerning the storage of moveable property of the Free ANZ Diocese which is currently at the monastery. A handyman has been caretaker of the monastery for the Property Trust since November 1995. He and his wife live on the monastery. They are responsible for its day-to-day care. The Property Trust undertook to continue to engage them as caretakers at its expense pending the outcome of the appeal. (The plaintiffs undertook not to terminate their services or require their departure if the orders were not stayed.) Two clergy of the Free ANZ Diocese, Fr Hristifor Nedjic and Fr Simeon Miscevic live at the monastery. Mr Nesic deposed that the Free ANZ Diocese had no alternative accommodation for them. The first to fifth defendants submitted that if the appeal were successful the refusal of a stay pending determination of the appeal would be likely to result in the complete destruction of monastic life of the Free ANZ Diocese in the meantime. 5. Bishop Irinej gave evidence to the effect that the asserted hardship to the Free ANZ Diocese was overstated. He pointed out that the Free ANZ Diocese currently has control of the churches in Forrest, ACT, in South Brisbane, Queensland and in Carrum Downs, Victoria. Each of those properties possesses a church, a hall for meetings, and a priest's residence. He said that on his arrival in 2006 he observed that the books and records of the NGM Diocese at the monastery were incomplete. In 2009 the books and records of the NGM Diocese were relocated when the seat of the Diocese was removed to Alexandria. He said the records fitted in the boot and back seat of a car. He said the library at the monastery comprised two medium sized bookshelves in a relatively small room. He observed that "Mr Nedjic" was the administrator of the St Nicholas Church and that the two individuals identified by Mr Nesic as monastics could reside at one of the properties presently under the control of the Free ANZ Diocese. 6. I accept that there would be significantly greater hardship to members of the Free ANZ Diocese if a stay of the orders were not granted pending an appeal, but their appeal was successful, than there would be to the Metropolitanate if a stay were granted and the appeal was dismissed. 7. The plaintiffs submitted that this is too simplistic an approach. First they submitted that it was necessary for the first to fifth defendants to show that the Free ANZ Diocese would suffer prejudice or damage if a stay were not granted which would not be redressed by a successful appeal. But the prejudice or damage presently under consideration is that which would be caused during the period up to the determination of the appeal. That harm would not be remedied by a successful appeal. 8. The plaintiffs submitted that irremediable harm would result from the grant of a stay in the event that the appeal is dismissed. They submitted that the administration of charitable trusts involves a matter of public interest. I will declare that the trust purpose on which the Property Trust holds the monastery has ceased to provide a suitable and effective method of using the trust property having regard to the spirit of the trust. The plaintiffs submitted that the orders which will be made consequent on that declaration will protect the public interest, and that this consideration is entitled to determinative weight. They submit that this case, involving as it does matters of public interest, is not to be approached as if it were a case of private rights and liabilities. Any harm to the interests of individuals associated with the Free ANZ Diocese is not to the point because a charitable trust is a trust for purposes, not for persons. The plaintiffs submitted that as I have found that the purposes of the Free ANZ Diocese no longer provide a suitable and effective method of using the trust property having regard to the spirit of the trust, it would be contrary to the public interest not to give effect to that declaration. If my conclusions are upheld on appeal then nothing that could be ordered by the Court of Appeal would undo the fact that until the determination of the appeal the trust property had been applied for impermissible purposes. 9. The difficulty with the plaintiffs' argument is that it assumes the correctness of my reasons and the declarations and orders that I will make. If the orders are not stayed, but I am found to have been wrong, then there would be a similar harm to the public interest as there would be if the orders are not stayed and the appeal succeeds. 10. A stay application, at least when made to the trial judge, is not the occasion for weighing the prospects of a successful appeal. I accept that an appeal by the first to fifth defendants is arguable. 11. Moreover, as Mr Blake SC submitted, ultimately all-purpose trusts are for the benefit of individuals. 12. I accept the first to fifth defendants' submissions that the "discretionary case" in favour of a stay is strong. A stay would maintain the status quo as it has been since at least 4 September 2010. 13. The first to fifth defendants undertook to maintain existing insurances on the monastery property. They also undertook to retain the existing caretakers at the first defendants' expense. The plaintiffs did not submit that any undertaking as to damages should be required. It does not appear that any damage susceptible to monetary qualification would be suffered if the orders are stayed pending appeal. 14. For these reasons I will order that the orders to be made should be stayed. I share the doubt of Carr J in Bunnings Forest Products Pty Ltd v Bullen (1994) 54 FCR 342 at 347 and of the Full Court of the Supreme Court of South Australia in Roosters Club Inc v Northern Tavern Pty Ltd (No 2) [2003] SASC 143 as to whether a declaration of existing rights can be stayed. However, there is no doubt that consequential orders to give effect to such declarations can be stayed. 15. For these reasons I will make declarations and orders in accordance with the paragraphs numbered 1, 2, 3, 4, 5, 6 and 8 in paragraph [522] of my reasons for judgment of 29 May 2015. I will make an order as foreshadowed at para [523] of those reasons and further orders in accordance with these reasons. Declarations and orders 1. I make the following declarations and orders: 1. Declare that the land at 453 Wallaroo Road, Wallaroo, NSW, being the land described in Folio Identifier 1/248210 and the buildings thereon ("the monastery") is held by the first defendant upon a charitable trust for the purpose of conducting a monastery, a monastery church and related facilities for the purposes of the unincorporated association known as the Free Serbian Orthodox Church – Diocese of Australia and New Zealand ("the Free ANZ Diocese"). 2. Declare that the trust purpose on which the first defendant holds the monastery has ceased to provide a suitable and effective method of using the trust property having regard to the spirit of the trust. 3. Order that the first defendant be removed as trustee of the trust and that the second plaintiff be appointed as trustee in its place. 4. Order that the monastery vest in the second plaintiff. 5. Order that the first to fifth defendants forthwith do all that is required on their part to transfer title to the monastery to the second plaintiff. 6. Order pursuant to s 9 of the Charitable Trusts Act 1993 that the terms of the trust on which the monastery is held by the first defendant, and is to be held by the second plaintiff, be altered to provide that the trustee hold and use the monastery for charitable purposes of the Metropolitanate of Australia and New Zealand of the Serbian Orthodox Church provided that: a) to the extent that to do so is not inconsistent with the said purpose; and b) to the extent that to do so is practicable having regard to the need to avoid conflict, the monastery be available for use not only for the purposes of the Metropolitanate of Australia and New Zealand of the Serbian Orthodox Church, but also be available for use by those individuals and organisations that comprise or form part of the Free ANZ Diocese. 7. Order that a scheme be established for the administration of the said trust as set out in annexure "A" to these orders. 8. Order that within seven days the second defendant withdraw caveat no. U58320C. 1. 9. Order that the first to fifth defendants be appointed to represent the individuals comprising the Free ANZ Diocese for the purposes of these proceedings. 2. 10. Order that there be no order as to costs of these proceedings to the intent that the parties bear their own costs. 3. 11. Declare that the first defendant is entitled to be indemnified out of the trust property in respect of the costs and expenses properly incurred by it in its defence of these proceedings and in its obtaining judicial advice in relation to the conduct of its defence of these proceedings. 4. 12. Upon the first to fifth defendants by their counsel undertaking to the Court: 5. a) to maintain insurances with respect to the monastery as set out in paragraph 8 of the affidavit of Ratomir Nesic dated 6 August 2015; 6. b) to continue to engage the services of Moncilo Graovac and Zorica Graovac as caretakers of the monastery at the first defendant's expense pending the determination of the first to fifth defendants' proposed appeal from these declarations and orders; and 7. c) to commence and pursue such appeal expeditiously, 8. order that orders numbered 3 to 10 be stayed pending the determination of the proposed appeal from these declarations and orders, or earlier further order. 13. The court book and exhibits are to be dealt with in accordance with paragraphs 26 and 28 of Practice Note SC Gen 18. ANNEXURE A to Orders of 24 December 2015 Bishop Irinej Dobrijevic & Anor v Free Serbian Orthodox Church – Diocese for Australia and New Zealand Property Trust & Ors (2011/247393) Scheme for Administration of the Monastery of St Sava New Kalenic Trust Definitions 1. In this scheme: (a) the Metropolitan is the head of the Metropolitanate elected and appointed by the Holy Assembly of Bishops of the Serbian Orthodox Church; (b) the Metropolitanate is the Serbian Orthodox Metropolitanate of Australia and New Zealand governed by a written constitution adopted on 3-4 September 2010 and approved by the Holy Assembly of Bishops of the Serbian Orthodox Church on 23 May 2011 (the Metropolitanate Constitution); (c) the Free ANZ Diocese is the Free Serbian Orthodox Church Diocese for Australia and New Zealand governed by a written constitution adopted on 31 October 1964, amended on 30 December 1976 and 28 December 1988 (limited to a reworded Article 1 and the deletion of the first sentence of Article 4 of the 1976 constitution); (d) the Trustee is Serbian Orthodox Church in Australia and New Zealand Properties Limited (ACN 129 465 194), and the Former Trustee is the Free Serbian Orthodox Church-Diocese for Australia and New Zealand Property Trust (ACN 000 623 645); (e) The Trust Property is the land at 453 Wallaroo Road, Wallaroo, New South Wales, described in Folio Identifier 1/248210, and the buildings thereon, depicted in the attached survey plan, known as the Monastery of St Sava, New Kalenic; (f) the Trust Purpose is the purpose referred to in clause 3; (g) the following definitions designate parts of the Trust Property referred to further in this scheme: (1) St Sava church is the church building marked on the attached survey plan; (2) the cemetery is that part of the land marked on the plan and includes the adjacent fenced area marked on the plan with lines; and (3) the Bishop's residence is the one storey building and garage marked so on the plan. The Monastery Trust 2. The Monastery of St Sava New Kalenic Trust is the charitable trust upon which the Trust Property is held being the subject of the declarations and orders made on 24 December 2015 in proceedings no. 2011/247393 in the Supreme Court of New South Wales (the Monastery Trust). 3. The purpose of the Monastery Trust is for the Trustee to hold and use the Trust Property for charitable purposes of the Metropolitanate provided that: (a) to the extent that to do so is not inconsistent with the said purpose; and (b) to the extent that to do so is practicable having regard to the need to avoid conflict; the Trust Property is to be available for use not only for the purposes of the Metropolitanate, but also be available for use by those individuals and organisations that comprise or form part of the Free ANZ Diocese. 4. Pursuant to clause 3, an individual who belongs to the Free ANZ Diocese may: (a) attend the St Sava church and cemetery for private prayer and to visit peaceably any grave or vault; (b) attend the St Sava church and cemetery for religious services conducted by the Metropolitanate; (c) attend public functions conducted on the Trust Property by the Metropolitanate on the same terms as members of the Metropolitanate, without giving any prior notice to the Trustee and without the need to obtain the consent of the Trustee, but within such reasonable hours as the Trustee may set. 5. Pursuant to clause 3, with respect to buildings and facilities at the Trust Property other than the St Sava church, the Bishop's residence and any other building used as a residence for clergy or members of the Metropolitanate, individuals and organisations that comprise or form part of the Free ANZ Diocese may use those other buildings and facilities for the purposes of the Free ANZ Diocese on the same terms as members of the Metropolitanate provided that: (a) they apply in writing seeking the consent of the Trustee to do so at least 14 days prior to the proposed use and the Trustee consents to the use, and such consent must not be unreasonably withheld; and (b) they abide by any reasonable rules made and published by the Trustee governing the use of those buildings and facilities (with such rules not to be altered without reasonable notice being given to the Free ANZ Diocese). 6. The cemetery shall be subject to the following rules: (a) Individuals who have purchased cemetery lots or vaults for themselves or other persons shall be entitled to have funerals or burials conducted at the cemetery: (i) in accordance with the rites and customs of, and by clergy of or recognised by, the Serbian Orthodox Church; or (ii) in accordance with the rites and customs of, and by clergy of or recognised by, the Free ANZ Diocese, at their election, or the election of their legal personal representative. (b) So long as the cemetery remains open, if a person seeks to purchase a cemetery lot or vault in the cemetery, the Trustee shall not refuse to sell such cemetery lot or vault to that person on the ground that that person is a member of the Free ANZ Diocese or on the ground that that person's funeral or interment service is to be conducted in accordance with the rites and customs of, and by clergy of or recognised by, the Free ANZ Diocese. (c) Memorial services may be conducted at the burial sites of persons buried in the cemetery: (i) in accordance with the rites and customs of, and by clergy of or recognised by, the Serbian Orthodox Church; or (ii) in accordance with the rites and customs of, and by clergy of or recognised by, the Free ANZ Diocese. 7. The Trustee shall not, without a direction or order of the Court: (a) prohibit a use of the Trust Property only on the ground that it is a secular use; or (b) prohibit the conduct of an event for secular purposes that involves prayers or blessings said, or other participation, by clergy of, or recognised by, the Free ANZ Diocese only on the ground that the use constitutes a desecration of the Trust Property contrary to the religious doctrines and precepts of the Serbian Orthodox Church. 8. To be clear, subject to clauses 6 and 7, nothing in clauses 3 to 6 permits the Trust Property to be used for religious services conducted by priests or clergy who are not in communion with the Serbian Orthodox Church and who are not recognised by the Metropolitanate, or in a manner that is contrary to the religious doctrines and precepts of the Serbian Orthodox Church. 9. The Trustee holds the Trust Property subject to the Metropolitanate Constitution, but in the event of an inconsistency between: (a) the Trust Purpose and this Scheme; and (b) the Metropolitanate Constitution; the Trust Purpose and this Scheme prevail to the extent of any inconsistency. Scheme Committee 10. (a) There shall be a Scheme Committee consisting of five persons. (b) Members of the Scheme Committee are to be appointed as follows: (i) the Metropolitan nominates two lay members and an alternate for each member. (ii) the Free ANZ Diocese (by such person or body as is authorised in accordance with the constitution of the Free ANZ Diocese so to do) nominates two lay members and an alternate for each member. (iii) The four members so nominated appoint the fifth, as an independent member, who will chair meetings of the Committee. Failing agreement about appointment of the fifth member, the Metropolitan must request the President of the Law Society of New South Wales to appoint as the fifth member a solicitor who has at least 10 years' standing and who is experienced in the administration of trusts (provided that person is not a member of either the Metropolitanate or the Free ANZ Diocese). (c) An alternate for a member may participate and vote in meetings of the Scheme Committee if the member for which he or she is an alternate is unable to do so. 11. Tenure and remuneration of the Scheme Committee shall be as follows: (a) Subject to (e), members of the Scheme Committee hold their positions for two years (but are eligible for a single reappointment at the end of the two year period). (b) A vacancy occurs earlier if a member dies, becomes incapacitated, bankrupt or resigns, or is removed by order of the Court. (c) If a vacancy occurs, it is to be filled in the same manner as the member whose position has become vacant was appointed. (d) Subject to (e), reappointments of a member after the initial two-year period are to be made in the same manner as an initial appointment. (e) Members are eligible for reappointment for an additional period of two years or for further periods, each of two years, if: (i) in the case of the independent member, a majority of the other four members agrees; or (ii) in the case of any other member, both the Metropolitan and the Free ANZ Diocese (by such person or body as is authorised in accordance with the constitution of the Free ANZ Diocese so to do) agree. (f) Other than for the fifth independent member, the office is honorary and is conducted without payment. The independent member may be paid reasonable remuneration as agreed with the Trustee, or if not agreed, fixed by the Court on application. The remuneration of that member is paid by the Trustee as an expense in administration of the Monastery Trust. 12. (a) The quorum of the Scheme Committee shall be three members (of whom at least one must be a nominee of the Metropolitanate, one must be a nominee of the Free ANZ Diocese and one must be the independent member). (b) Questions arising shall be decided by a simple majority. The chair has a casting vote. (c) A meeting can be held by telephone or by use of other technology. (d) A resolution may be passed without a meeting being held if all members entitled to vote sign a document setting out the resolution. 13. At its first meeting, the Scheme Committee shall make other rules for procedures of the Scheme Committee (with such rules thereafter able to be varied by a majority of all members of the Scheme Committee). 14. The function of the Scheme Committee is to consider any request or dispute about use of the Trust Property by individuals or organisations that comprise or form part of the Free ANZ Diocese under clauses 3-6 that is submitted to the Scheme Committee, and to make recommendations to the Trustee about the request or dispute so submitted. 15. Individuals or organisations that comprise or form part of the: (a) the Free ANZ Diocese; or (b) the Metropolitanate (including the Trustee); may submit a request or dispute referred to in clause 14 to the Scheme Committee. 16. Where a recommendation is made by the Scheme Committee, the Trustee may follow and act on that recommendation without being liable for anything done or omitted by it by reason of it following that recommendation. 17. Where the Trustee is of opinion that any recommendation of the Scheme Committee conflicts with the Trust Purpose or any rule of law, or exposes it to any liability, or is otherwise objectionable, it may apply to the Court for directions in the matter, but nothing in this clause makes it necessary for the Trustee to apply to the Court for any such directions. 18. Where a recommendation of the Scheme Committee is not unanimous, the Trustee may apply to the Court for directions in like manner and with like effect as provided by clause 15. Dealings in the Trust Property 19. The Trustee may not sell, mortgage or encumber the Trust Property, or lease any part of the Trust Property for a term exceeding two years, without an order or direction of the Court. Appendix A Bishop Irinej Dobrijevic & Anor v Free Serbian Orthodox Church – Diocese for Australia and New Zealand Property Trust & Ors (2011/247393) Draft Scheme for Administration of the Monastery of St Sava New Kalenic Trust [Proposed by the plaintiffs] Definitions 1. In this scheme: (a) the Metropolitan is the head of the Metropolitanate elected and appointed by the Holy Assembly of Bishops of the Serbian Orthodox Church; (b) the Metropolitanate is the Serbian Orthodox Metropolitanate of Australia and New Zealand governed by a written constitution adopted on 3-4 September 2010 and approved by the Holy Assembly of Bishops of the Serbian Orthodox Church on 23 May 2011 (the Metropolitanate Constitution); (c) the Free ANZ Diocese is the Free Serbian Orthodox Church Diocese for Australia and New Zealand governed by a written constitution adopted on 31 October 1964, amended on 30 December 1976 and 28 December 1988 (limited to a reworded Article 1 and the deletion of the first sentence of Article 4 of the 1976 constitution); (d) the Trustee is Serbian Orthodox Church in Australia and New Zealand Properties Limited (ACN 129 465 194), and the Former Trustee is the Free Serbian Orthodox Church-Diocese for Australia and New Zealand Property Trust (ACN 000 623 645); (e) the Trust Property is the land at 453 Wallaroo Road, Wallaroo, New South Wales, described in Folio Identifier 1/248210, and the buildings thereon, depicted in the attached survey plan, known as the Monastery of St Sava, New Kalenic; (f) the Trust Purpose is the purpose referred to in clause 3; (g) the following definitions designate parts of the Trust Property referred to further in this scheme: (1) St Sava church is the church building marked on the attached survey plan and includes the area around the building shaded on the plan; (2) the cemetery is that part of the land marked on the plan and includes the adjacent fenced area marked on the plan with lines; and (3) the Bishop's residence is the one storey building and garage marked so on the plan. The Monastery Trust 2. The Monastery of St Sava New Kalenic Trust is the charitable trust upon which the Trust Property is held being the subject of the declarations and orders made on [ ] September 2015 in proceedings no. 2011/247393 in the Supreme Court of New South Wales (the Monastery Trust). 3. The purpose of the Monastery Trust is for the Trustee to hold and use the Trust Property for charitable purposes of the Metropolitanate provided that: (a) to the extent that to do so is not inconsistent with the said purpose; and (b) to the extent that to do so is practicable having regard to the need to avoid conflict; the Trust Property is to be available for use not only for the purposes of the Metropolitanate, but also be available for use by those individuals and organisations that comprise or form part of the Free ANZ Diocese. 4. Pursuant to clause 3, an individual who belongs to the Free ANZ Diocese may: (a) attend the St Sava church and cemetery for private prayer; (b) attend the St Sava church and cemetery for religious services conducted by the Metropolitanate; (c) attend public functions conducted on the Trust Property by the Metropolitanate on the same terms as members of the Metropolitanate, without giving any prior notice to the Trustee and without the need to obtain the consent of the Trustee, but within such reasonable hours as the Trustee may set. 5. Pursuant to clause 3, with respect to buildings and facilities at the Trust Property other than the St Sava church, the Bishop's residence and any other building used as a residence for clergy or members of the Metropolitanate, individuals and organisations that comprise or form part of the Free ANZ Diocese may use those other buildings and facilities for the purposes of the Free ANZ Diocese on the same terms as members of the Metropolitanate provided that: (a) they apply in writing seeking the consent of the Trustee to do so at least 14 days prior to the proposed use and the Trustee consents to the use, and such consent must not be unreasonably withheld; and (b) they abide by any reasonable rules made and published by the Trustee governing the use of those buildings and facilities (with such rules not to be altered without reasonable notice being given to the Free ANZ Diocese). 5A. The cemetery shall be subject to the following rules: Individuals who have purchased cemetery lots or vaults for themselves or other persons shall be entitled to have funerals or burials conducted at the cemetery: (i) in accordance with the rites and customs of, and by clergy of or recognised by, the Serbian Orthodox Church; or (ii) in accordance with the rites and customs of, and by clergy of or recognised by, the Free ANZ Diocese, at their election, or the election of their legal personal representative. So long as the cemetery remains open, if a person seeks to purchase a cemetery lot or vault in the cemetery, the Trustee shall not refuse to sell such cemetery lot or vault to that person on the ground that that person is a member of the Free ANZ Diocese or on the ground that that person's funeral or interment service is to be conducted in accordance with the rites and customs of, and by clergy of or recognised by, the Free ANZ Diocese. Memorial services may be conducted at the burial sites of persons buried in the cemetery: (i) in accordance with the rites and customs of, and by clergy of or recognised by, the Serbian Orthodox Church; or (ii) in accordance with the rites and customs of, and by clergy of or recognised by, the Free ANZ Diocese. 5B. The Trustee shall not, without a direction or order of the Court: (a) cause or permit the Trust Property to be used only as a women's monastery; (b) prohibit a use of the Trust Property only on the ground that it is a secular use; or 1. prohibit the conduct of an event for secular purposes that involves prayers or blessings said, or other participation, by clergy of, or recognised by, the Free ANZ Diocese only on the ground that the use constitutes a desecration of the Trust Property contrary to the religious doctrines and precepts of the Serbian Orthodox Church. 6. To be clear, subject to clauses 5A and 5B, nothing in clauses 3 to 5A permits the Trust Property to be used for religious services conducted by priests or clergy who are not in communion with the Serbian Orthodox Church and who are not recognised by the Metropolitanate, or in a manner that is contrary to the religious doctrines and precepts of the Serbian Orthodox Church. 7. The Trustee holds the Trust Property subject to the Metropolitanate Constitution, but in the event of an inconsistency between: the Trust Purpose and this Scheme; and the Metropolitanate Constitution; the Trust Purpose and this Scheme prevail to the extent of any inconsistency. Scheme Committee 8. (a) There shall be a Scheme Committee consisting of five persons. (b) Members of the Scheme Committee are to be appointed as follows: (i) The Metropolitan nominates two lay members. (ii) The Free ANZ Diocese (by such person or body as is authorised in accordance with the constitution of the Free ANZ Diocese so to do) nominates two lay members, but directors or officers of the Former Trustee (past or present) are not eligible for nomination. (iii) The four members so nominated appoint the fifth, as an independent member, who will chair meetings of the Committee. Failing agreement about appointment of the fifth member, the Metropolitan must request the President of the Law Society of New South Wales to appoint as the fifth member a solicitor who has at least 10 years' standing and who is experienced in the administration of trusts (provided that person is not a member of either the Metropolitanate or the Free ANZ Diocese). 9. Tenure and remuneration of the Scheme Committee shall be as follows: (a) Members of the Scheme Committee hold their positions for two years (but are eligible for a single reappointment at the end of the two year period). (b) A vacancy occurs earlier if a member dies, becomes incapacitated, bankrupt or resigns, or is removed by order of the Court. (c) Other than for the fifth independent member, the office is honorary and is conducted without payment. The independent member may be paid reasonable remuneration as agreed with the Trustee, or if not agreed, fixed by the Court on application. The remuneration of that member is paid by the Trustee as an expense in administration of the Monastery Trust. 10. (a) The quorum of the Scheme Committee shall be three members (of whom at least one must be a nominee of the Metropolitanate, one must be a nominee of the Free ANZ Diocese and one must be the independent member). (b) Questions arising shall be decided by a simple majority. The chair has a casting vote. (c) A meeting can be held by telephone or by use of other technology. (d) A resolution may be passed without a meeting being held if all members entitled to vote sign a document setting out the resolution. 11. At its first meeting, the Scheme Committee shall make other rules for procedures of the Scheme Committee (with such rules thereafter able to be varied by a majority of all members of the Scheme Committee). 12. The function of the Scheme Committee is to consider any request or dispute about use of the Trust Property by individuals or organisations that comprise or form part of the Free ANZ Diocese under clauses 3–5A that is submitted to the Scheme Committee, and to make recommendations to the Trustee about the request or dispute so submitted. 13. Individuals or organisations that comprise or form part of the: (a) the Free ANZ Diocese; or (b) the Metropolitanate (including the Trustee); may submit a request or dispute referred to in clause 12 to the Scheme Committee. 14. Where a recommendation is made by the Scheme Committee, the Trustee may follow and act on that recommendation without being liable for anything done or omitted by it by reason of it following that recommendation. 15. Where the Trustee is of opinion that any recommendation of the Scheme Committee conflicts with the Trust Purpose or any rule of law, or exposes it to any liability, or is otherwise objectionable, it may apply to the Court for directions in the matter, but nothing in this clause makes it necessary for the Trustee to apply to the Court for any such directions. 16. Where a recommendation of the Scheme Committee is not unanimous, the Trustee may apply to the Court for directions in like manner and with like effect as provided by clause 15. Dealings in the Trust Property 17. The Trustee may not sell, mortgage or encumber the Trust Property, or lease any part of the Trust Property for a term exceeding two years, without an order or direction of the Court. 3 December 2015 1. Appendix B Bishop Irinej Dobrijevic & Anor v Free Serbian Orthodox Church – Diocese for Australia and New Zealand Property Trust & Ors (2011/247393) Draft Scheme for Administration of the Monastery of St Sava New Kalenic Trust prepared on behalf of the First to the Fifth defendants incorporating agreed changes made by the Plaintiff Definitions 1. In this scheme: (a) the Metropolitan is the head of the Metropolitanate elected and appointed by the Holy Assembly of Bishops of the Serbian Orthodox Church; (b) the Metropolitanate is the Serbian Orthodox Metropolitanate of Australia and New Zealand governed by a written constitution adopted on 3-4 September 2010 and approved by the Holy Assembly of Bishops of the Serbian Orthodox Church on 23 May 2011 (the Metropolitanate Constitution); (c) the Free ANZ Diocese is the Free Serbian Orthodox Church Diocese for Australia and New Zealand governed by a written constitution adopted on 31 October 1964, amended on 30 December 1976 and 28 December 1988 (limited to a reworded Article 1 and the deletion of the first sentence of Article 4 of the 1976 constitution); (d) the Trustee is Serbian Orthodox Church in Australia and New Zealand Properties Limited (ACN 129 465 194), and the Former Trustee is the Free Serbian Orthodox Church-Diocese for Australia and New Zealand Property Trust (ACN 000 623 645); (e) the Trust Property is the land at 453 Wallaroo Road, Wallaroo, New South Wales, described in Folio Identifier 1/248210, and the buildings thereon, depicted in the attached survey plan, known as the Monastery of St Sava, New Kalenic; (f) the Trust Purpose is the purpose referred to in clause 3; (g) the Administrator is the person appointed by the Trustee to administer the cemetery; (h) the following definitions designate parts of the Trust Property referred to further in this scheme: (1) St Sava church is the church building marked on the attached survey plan and includes the area around the building shaded on the plan; (2) the cemetery is that part of the land marked on the plan and includes the adjacent fenced area marked on the plan with lines; and (3) the Bishop's residence is the one storey building and garage marked so on the plan. (4) the Dragoljub Draza Mihailovic shrine is the white building erected between the Great Hall and Dining Hall and is surrounded by water having access via a foot bridge. (5) the Great Hall is the large hall having the capacity of seating approximately 500 persons and is located at the Southern corner of the Property. (6) the Great Hall conference room is the conference room located adjacent to the Great Hall. (7) the Dining Hall is the small hall having capacity of seating approximately 150 persons and is located at the Western boundary of the Property and being adjacent the Dragoljub Draza Mihailovic shrine (8) the Great Hall residential units are the residential units located adjacent the Great Hall The Monastery Trust 2. The Monastery of St Sava New Kalenic Trust is the charitable trust upon which the Trust Property is held being the subject of the declarations and orders made on [ ] September 2015 in proceedings no. 2011/247393 in the Supreme Court of New South Wales (the Monastery Trust). 3. The purpose of the Monastery Trust is for the Trustee to hold and use the Trust Property for charitable purposes of the Metropolitanate provided that: (a) to the extent that to do so is not inconsistent with the said purpose; and (b) to the extent that to do so is practicable having regard to the need to avoid conflict; the Trust Property is to be available for use not only for the purposes of the Metropolitanate, but also be available for use by those individuals and organisations that comprise or form part of the Free ANZ Diocese. 4. Pursuant to clause 3, an individual who belongs to the Free ANZ Diocese may: (a) attend the St Sava church and cemetery for private prayer; (b) attend the St Sava church and cemetery for religious services conducted by the Metropolitanate; (c) attend public functions conducted on the Trust Property by the Metropolitanate on the same terms as members of the Metropolitanate; (d) attend religious services conducted on the Trust Property by the Free ANZ Diocese in accordance with clause 6(a); (e) attend meetings on the Trust Property by the Free ANZ Diocese in accordance with clause 6(b); (f) occupy or visit the areas designated in clause 6(c); (g) occupy or visit the areas designated in clause 6(d); (h) attend or visit the cemetery in accordance with clause 7, without giving any prior notice to the Trustee and without the need to obtain the consent of the Trustee, but within such reasonable hours as the Trustee may set. 5. Pursuant to clause 3, with respect to buildings and facilities at the Trust Property other than the St Sava church, the Bishop's residence and any other building used as a residence for clergy or members of the Metropolitanate, individuals and organisations that comprise or form part of the Free ANZ Diocese may use those other buildings and facilities for the purposes of the Free ANZ Diocese on the same terms as members of the Metropolitanate provided that: (a) they apply in writing seeking the consent of the Trustee to do so at least 14 days prior to the proposed use and the Trustee consents to the use, and such consent must not be: (i) unreasonably withheld; (ii) withheld on the ground that the Metropolitanate is using the building or facility on that date or at that time if it is not impossible for both the Metropolitanate and the Free ANZ Diocese to use separate and discrete parts of the building or facility on that date or at that time (and in that event the Trustee must offer an alternative building or facility for the use of the Free ANZ Diocese if that is reasonably possible); and (b) they abide by any reasonable rules made and published by the Trustee governing the use of those buildings and facilities (with such rules not to be altered without reasonable notice being given to the Free ANZ Diocese). 6. (a) The Free ANZ Diocese shall be permitted to conduct religious services according to the rites of the Free ANZ Diocese on the Trust Property at the Dragoljub Draza Mihailovic shrine at such reasonable times as are designated by the Free ANZ Diocese. (b) The Free ANZ Diocese shall be permitted to hold meetings of any of its legislative and administrative organs at the Trust Property in the Great Hall conference room, or such area as is designated by the Court at such reasonable times as are designated by the Free ANZ Diocese; (c) The Free ANZ Diocese shall be permitted to occupy an office adjacent to the Great Hall conference room, or such area as is designated by the Court for the purpose of storage of records and other archival material of the Free ANZ Diocese, the library of the Free ANZ Diocese library, and the publication and printing of the Diocesan magazine and other Diocesan communications; (d) The Free ANZ Diocese shall be permitted to occupy three of the Great Hall Residential Units for the purpose of accommodating monastics of the Free ANZ Diocese and/or such others as the Free ANZ Diocese deems fit; 7. The cemetery shall be subject to the following rules: Individuals who have purchased cemetery lots or vaults for themselves and other persons shall be entitled to have funerals or burials conducted at the cemetery: (i) in accordance with the rites and customs of, and by clergy of or recognised by, the Serbian Orthodox Church; or (ii) in accordance with the rites and customs of, and by clergy of or recognised by, the Free ANZ Diocese, at their election, or the election of their legal personal representative. So long as the cemetery remains open, if a person seeks to purchase a cemetery lot or vault in the cemetery, the Trustee shall not refuse to sell such cemetery lot or vault to that person on the ground that that person is a member of the Free ANZ Diocese or on the ground that that person's funeral or burial service is to be conducted in accordance with the rites and customs of, and by clergy of or recognised by, the Free ANZ Diocese. Memorial services may be conducted at the burial sites of persons buried in the cemetery: (i) in accordance with the rites and customs of, and by clergy of or recognised by, the Serbian Orthodox Church; or (ii) in accordance with the rites and customs of, and by clergy of or recognised by, the Free ANZ Diocese. Any funeral or burial service or memorial service shall be permitted to be undertaken after two (2) working days' notice has been given to the Administrator unless there would be a clash of services being undertaken in which case the priority shall be given to the first person seeking to undertake the burial service or memorial service and the Administrator shall nominate a time to the second person as soon as practicable after the first service has been completed. 8. The Trustee shall not, without a direction or order of the Court: (a) cause or permit the Trust Property to be used only as a monastery; or (b) prohibit a use of the Trust Property only on the ground that it is a secular use. (c) prohibit the following uses of the Trust Property at a location other than the St Sava Church, the Bishop's residence and any other building used as a residence for clergy or members of the Metropolitanate: (i) the conduct of religious services by clergy of, or recognised by, the Free ANZ Diocese; (ii) the conduct of an event for secular purposes that involves prayers or blessings said, or other participation, clergy of, or recognised by, the Free ANZ Diocese; (iii) the presence of clergy of, or recognised by, the Free ANZ Diocese in connection with a use in paragraph (i) or (ii) above; on one or more of the following grounds: (iv) the use constitutes a desecration of the Trust Property contrary to the religious doctrines and precepts of the Serbian Orthodox Church; (v) the belief based solely on events which occurred prior to the making of this Scheme that the use would cause conflict; (vi) the use would cause confusion among the Metropolitanate faithful; (vii) the use would not assist in promoting reconciliation among the faithful of the Free ANZ Diocese. The Trustee holds the Trust Property subject to the Metropolitanate Constitution, but in the event of an inconsistency between: the Trust Purpose and this Scheme; and the Metropolitanate Constitution; the Trust Purpose and this Scheme prevail to the extent of any inconsistency. Scheme Committee 10. (a) There shall be a Scheme Committee consisting of five persons. (b) Members of the Scheme Committee are to be appointed as follows: (i) The Metropolitan nominates two members. (ii) The Free ANZ Diocese (by such person or body as is authorised in accordance with the constitution of the Free ANZ Diocese so to do) nominates two members. (iii) The four members so nominated appoint the fifth, as an independent member, who will chair meetings of the Committee. Failing agreement about appointment of the fifth member, the Metropolitan or the Diocesan Council of the Free ANZ Diocese may request the President of the Law Society of New South Wales to appoint as the fifth member a solicitor who has at least 10 years standing and who is experienced in the administration of trusts (provided that person is not a member of either the Metropolitanate or the Free ANZ Diocese). 11. Tenure and remuneration of the Scheme Committee shall be as follows: (a) Members of the Scheme Committee hold their positions for two years (but are eligible for reappointment at the end of the two year period). (b) A vacancy occurs earlier if a member dies, becomes incapacitated, bankrupt or resigns, or is removed by order of the Court. (c) Other than for the fifth independent member, the office is honorary and is conducted without payment. The independent member may be paid reasonable remuneration as agreed with the Trustee, or if not agreed, fixed by the Court on application. The remuneration of that member is paid by the Trustee as an expense in administration of the Monastery Trust. 12. (a) The quorum of the Scheme Committee shall be three members (of whom at least one must be a nominee of the Metropolitanate, one must be a nominee of the Free ANZ Diocese and one must be the independent member). (b) Questions arising shall be decided by a simple majority. The chair has a casting vote. (c) A meeting can be held by telephone or by use of other technology. (d) A resolution may be passed without a meeting being held if all members entitled to vote sign a document setting out the resolution. 13. At its first meeting, the Scheme Committee shall make other rules for procedures of the Scheme Committee (with such rules thereafter able to be varied by a majority of all members of the Scheme Committee) provided that the majority includes one representative of the Metropolitanate and the Free ANZ Diocese. 14. The function of the Scheme Committee is to consider any request or dispute about use of the Trust Property by individuals or organisations that comprise or form part of the Free ANZ Diocese under clauses 3–7 that is submitted to the Scheme Committee, and to make recommendations to the Trustee about the request or dispute so submitted provided that a decision of the Scheme Committee shall be made by a majority which includes one representative of the Metropolitanate and the Free ANZ Diocese. 15. Individuals or organisations that comprise or form part of the: (a) the Free ANZ Diocese; or (b) the Metropolitanate (including the Trustee); may submit a request or dispute referred to in clause 14 to the Scheme Committee. 16. Where a recommendation is made by the Scheme Committee, the Trustee may follow and act on that recommendation without being liable for anything done or omitted by it by reason of it following that recommendation. 17. Where the Trustee is of opinion that any recommendation of the Scheme Committee conflicts with the Trust Purpose or any rule of law, or exposes it to any liability, or is otherwise objectionable, it may apply to the Court for directions in the matter, but nothing in this clause makes it necessary for the Trustee to apply to the Court for any such directions. 18. Where a recommendation of the Scheme Committee is not unanimous or cannot be achieved by the requisite majority set out in clause 14, the Trustee may apply to the Court for directions in like manner and with like effect as provided by clause 17. Dealings in the Trust Property 19. The Trustee may not sell, mortgage or encumber the Trust Property, or lease any of the Trust Property for a term exceeding two years, without an order or direction of the Court. Review of Scheme The Free ANZ Diocese or the Metropolitanate may seek a review of the scheme by the Court at the end of each five year period where in the reasonable opinion of either party the Scheme is not effective or could be improved by variation or amendment to the Scheme. 15 December 2015 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: 29 December 2015