Court Upholds Diocese’s Control of Property

June 2012 | Kate Lazier

The Ontario Superior Court of Justice recently decided a case involving two groups that each claimed to be the proper trustees of the property of a congregation of the Serbian Orthodox Diocese of Canada (the “Diocese”).

The congregation was not incorporated and, therefore, it was subject to the Religious Organizations Land Act in Ontario which provides that trustees can hold land on behalf of a congregation.  The members of the Serbian Orthodox Church–School Congregation of St. Nicolas in Unity (the “Congregation”) had, according to its by-law, elected an executive board to administer and manage property of the Congregation as trustees.

Several issues arose between the Congregation and the Diocese.  In one incident, the members of the Congregation walked out of a service in protest when the Bishop introduced a new priest to take over the Congregation. The next week the Bishop removed the Congregation’s elected executive board and replaced it with temporary trustees. Thus, for the past six years the Congregation has not had the ability to manage its property.

The Congregation’s by-laws were enacted in 1979 and had been approved by the Bishop, as required by the Church.

The Diocese enacted a Statute in 1996.  The Statute provided that a congregation could have its own by-law, provided that it was consistent with the Statute and approved by the Bishop.   The Statute also allowed the Diocese to appoint temporary trustees where a congregation was not serving according to the precepts of the Church.  The Diocese required all congregations to update their by-law in 1996.   The Congregation did not do so.   In 2006, the temporary trustees prepared a new by-law for the Congregation, but it was not adopted by the Congregation.  In 2007, the Diocese held that all by-laws not brought into compliance with the Statute would be superseded by the Statute.

The Court noted that the Church had a hierarchical structure in which the Diocese and Bishop are superior to the Congregation. The Court held that the Congregation’s 1979 by-laws were no longer in effect because the Diocese had superseded it. The Court found that the actions of the Diocese in removing and replacing the trustees were within its administrative authority.  Thus, the Court dismissed the action of the Congregation to regain control of its property.

While the courts are generally reluctant to address issues of religion, this case is an example of how the courts will intervene where the dispute involves property.  In this case, the Court upheld the Church’s hierarchical structure and its ability to override the by-laws of individual congregations.

Churches should consider their structure before a dispute arises.  The lawyers at Miller Thomson’s Charity and Not-For-Profit Group can assist groups to structure their corporations to achieve either centralized control or diffuse ownership.

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