Models of church governance in Australia

1. www.etiennelaw.com

2. www.etiennelaw.com

3. 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?
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4. Unincorporated non-profit association
Incorporated non-profit association
Incorporated as a company
Trust
Trust established by statute
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5. 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
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6. 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
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7. 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
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8. 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
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9. OH& S Issues
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10. 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.
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11. 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
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12. 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.
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13. 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
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14. Gretley Case
10 defendants
2 corporations

Newcastle Wallsend Coal Company Pty Ltd (NWCC) and Oakbridge
Pty Ltd (OPL)
8 individuals







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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
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15. 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.
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16. 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.
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17. 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.
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18. 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.
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19. 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.
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20. 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?
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21. OH&S Issues
Management and Control
Ownership as trustee
Vicarious Liability as employer and owner
of land
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22. Trite yet true --Depends upon the legal nature of the
church organisation…
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