Church Goverance

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Information about Church Goverance

Published on July 21, 2009

Author: EtienneLawyers



Models of church governance in Australia

What are the “corporate” and individual governance responsibilities of members of church bodies? Gretley Mine Case: Has this affected the responsibilities of Board Members. Has it extended these responsibilities to Managers and others who have provided “guidance” in the making of decisions of a Not-For-Profit organisation. How does a Church discipline volunteers (for example Board Members) or remove them from office?

Unincorporated non-profit association Incorporated non-profit association Incorporated as a company Trust Trust established by statute

Unincorporated non-profit association MacQueen v Frackleton(1909) 8 CLR 673 per O’Connor J at 696 It has long been settled … that a religious body … is merely a voluntary association bound together by a consensual compact… (which) terms and conditions constitute a contract

Unincorporated non-profit association Rev Howard Knowles v The Anglican Property Trust, Diocese of Bathurst [1999] NSWIRComm 157 Scandrett v Dowling (1992) 27 NSWLR 483

Plaintiffs Defendants & A-G Trust was established For the trust to have a for religious purposes religious purpose the for Serbian Christians Serbian Church must in the Mona Vale area control it. The trust NOT subject to the was for a charitable rules of the Church. purpose. The trust was for a charitable institution

Classification of Church Trusts Hierarchical – Church has superior clergy Presbyterian – General Assembly may overturn decisions of local congregation Congregational – the local congregation makes or unmakes the rules. Young J AG v Holy Apostolic & Catholic Church of the East (1989) 37 NSWLR 293, 315; Radmanovich v Nedeljkovic [2001]; Hamilton J Metropolitan Petar v Mitreski [2003] NSWSC 262

OH& S Issues

Corporations and the Law Lord Reid in Tesco Supermarkets Ltd v Nattross [1972] 2 All ER 127 at 131: I must start by considering the nature of the personality which by a fiction the law attributes to a corporation. A living person has a mind which can have knowledge or intention to be negligent and he has hands to carry out his intentions. A corporation has none of these; it must act through living persons, though not always one or the same person. Then the person who acts is not speaking or acting for the company. He is acting as the company and his mind which directs his acts is the mind of the company.

Corporate vs Individual Liability Corporations act through people If the agents of corporations have no liability it is thought they will not take the necessary or required responsibility Consequently, the OHS Acts provide for individuals to be prosecuted in certain circumstances

s 26 Offences by corporations—liability of directors and managers OHSA (NSW)) (1) If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, each director of the corporation, and each person concerned in the management of the corporation, is taken to have contravened the same provision unless the director or person satisfies the court that: (a) he or she was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or (b) he or she, being in such a position, used all due diligence to prevent the contravention by the corporation.

Purpose of Individual Liability To encourage those concerned in management to take a proactive role in accepting and assuming responsibility for health and safety in the workplace

Gretley Case 10 defendants 2 corporations  Newcastle Wallsend Coal Company Pty Ltd (NWCC) and Oakbridge Pty Ltd (OPL) 8 individuals         Richard Myles Porteous Statutory & General Mine Manager at Gretley on 14 November 1996 Phillip John Pritchard statutory Under Managers at Gretley , Michael Francis Alston statutory Under Managers at Gretley , Mark Robinson statutory Mine Surveyor , Jonathan Erik Humphries Romcke Statutory & General Mine Manager at Gretley between June 1993 and 28 October 1994 , Michael John Coffey statutory Under Managers at Gretley , Christopher Wayne Nicholls statutory Under Managers at Gretley and Terence Shacklady statutory Under Managers at Gretley

Gretley case facts NWCC operated the Gretley Colliery. Adjacent to the mine were old mine operations (Young Wallsend Colliery). NWCC investigated the old mine operations to gauge the impact of the new work on the area. At about 5:30am on 14 November 1996, a crew of seven mine workers at the Gretley Colliery were working underground in developing a roadway in an area of the mine. Four of the men were using a continuous miner. Three members of the crew were in a crib room. Another mine worker who was not on the crew but had been working in the area was also in the crib room. Suddenly, with great force, water rushed through a hole in the coalface at the place where the continuous miner was cutting. The four men working at the face were engulfed, swept away and drowned. The four men in the crib room survived the inrush. The water came from the long abandoned old workings of the Young Wallsend Colliery. Those old workings were full of water and gases.

Unaware of the true position of the Young Wallsend Colliery old workings, mining activity resumed on or about 16 September 1996. The workings of the old mine depicted in RT 523 Sheets 2 and 3 as workings of the Young Wallsend Colliery in a Top and Bottom Seam were not only wrong but proved to have disastrous consequences. The south eastern boundary of the old workings of the Young Wallsend Colliery in the Young Wallsend Seam were always 100 metres or more closer to the proposed mining activity boundaries than the official mine plans for Gretley Colliery were depicting at all relevant times.

What the Court Said Staunton J (T)he proper approach to be taken in construing the phrase 'concerned in the management of the corporation' as stated in [s50(1)] of the Act should be: (i) the phrase should be construed in accordance with the normal rules of statutory interpretation which includes consideration of the context in which the expression appears together with the objects of the Act. (ii) as it is a provision that attracts a criminal sanction, it should not be given a construction which creates an unfairness. (iii) prior decisions as to like or similar provisions in diverse companies legislation as to the construction of the phrase 'concerned in the management of the corporation' are of assistance to me as guidance only, but that is all. (iv) reference must be had to the facts and circumstances of the matter before me in order to ultimately determine the issue. In doing so, there will be factors indicative of a defendant being concerned in the management of the corporation that, when taken together, will be conclusive as to that issue.

What the Court looks at What would appear to be a common and understandable factor in all the authorities to which I was taken was the person's decision making powers and/or authority going directly to the management of the corporation. That decision making role or authority on behalf of the corporation may involve advice given to management encompassing a participation in its decision making processes and the execution of those decisions going beyond the mere carrying out of directions as an employee. That decision making role or authority and the responsibilities inherent in them must be such as to affect the corporation as a whole or a substantial part of the corporation. In saying that, it does not mean that the person must be at the highest levels of management. The structure and size of the corporation is relevant as is the role of the person within the corporation relevant to his/her decision making powers on behalf of the corporation. Critically, …. the person's decision making powers must be such as to directly influence the corporation in relation to the act or omission that constituted the offence of the corporation…..In other words, the determination of a person concerned in the management of the corporation … must be a person who was in a position to influence, by advice or decision making, the conduct of the corporation in relation to its contravention or whose decision making powers within the corporation comprehends activities the consequences of which have a significant bearing on the conduct of the corporation relevant to its contravention.

Who of the Individual defendants were concerned in management As General Mine Managers at Gretley, Romcke and Porteous both participated in the General Mine Manager's meetings held on a quarterly basis under the Cyprus/OPL management structure. Those General Mine Manager's meetings set the direction and policy of the mines operating within the corporate matrix of Cyprus/OPL. I have set out those matters in some detail earlier in this judgment. Within that corporate matrix, the clear indication is that NWCC (as well as other corporate entities such as Coalex and Bulga JV) operated the mines within the Cyprus/OPL group in NSW, specifically and more directly, as the OPL Board Minutes would indicate, under the active control and direction of OPL. At the General Mine Manager's meetings, Romcke and Porteous presented As General Mine Managers Romcke and Porteous had responsibility for implementing and overseeing decisions taken at the corporate level back at the mine in relation to such matters, particularly safety, the conduct of safety audits and the review of such audits. As well, the OPL corporate safety meetings attended by the General Mine Managers, set detailed worksite safety policies at OPL mines, including Gretley. For all of the above reasons, I am satisfied that, in their respective positions as General Mine Manager at Gretley as well as the position of Statutory Mine Manager at Gretley, such positions held concurrently, Mr Romcke and Mr Porteous were persons concerned in the management of the corporations NWCC and OPL and were involved in decision making relevant to the contraventions of those corporations in the proceedings before me.

Checklist of being concerning in management What is my role and responsibilities in the company do they impact on financial matters? What is the size of the company? What is my position in the organisational structure of the company? What is my degree of involvement in making decisions relating to the business affairs of the company? How significant are the decisions I make to the company?

OH&S Issues Management and Control Ownership as trustee Vicarious Liability as employer and owner of land

Trite yet true --Depends upon the legal nature of the church organisation…

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