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Judicial Interpretation of the Religious Organizations' Lands Act

In Pankerichan v. Djokic (decided in October 2014), Justice Lauwers of the Ontario Court of Appeal provides a scholarly and authoritative analysis of the Ontario Religious Organizations' Lands Act.

1. Facts

Pankerichan v. Djokic involved a dispute over title to church property. The Serbian Orthodox Church-School Congregation of St. Nicholas in Unity occupied several properties that it used for religious and ancillary purposes.

The Congregation was not incorporated. Its properties were held in trust for it under the Religious Organizations' Lands Act.

The deeds to the Congregation's properties conveyed them to, variously, certain named individuals as "Trustees" for the Congregation (although not precisely named) or, in one instance, to the trustees of the Congregation (again not precisely named) without naming the specific individual trustees.

In 2005, the Serbian Orthodox Diocese of Canada and the bishop of the Diocese removed the Congregation's elected executive board and replaced it with a temporary trusteeship.

The applicants applied for a declaration that the Congregation's elected trustees (and not the temporary trusteeship appointed by the Diocese) continued to have the authority to manage and deal with the Congregation's properties.

2. Rulings

(a) Court's Analysis of the Act

The Act was enacted in 1979 to implement the 1969 Ontario Law Reform Commission Report on Mortmain Charitable Uses and Religious Institutions. The Act replaced the predecessor, Religious Institutions Act, which had been in force, with few changes, since 1873.

The Commission supported a revision of the Act because it was of great utility, particularly for smaller denominations. According to the Commission, the main advantage of the Act was the benefit of perpetual succession for trustees. Without legislation, these organizations would be treated in law like any other unincorporated association and could hold land only through individual trustees whose appointment, tenure and power would be governed by the more onerous provisions of the Trustee Act.

The Act made two important changes to the law. First, the privilege of holding land by means of trustees with perpetual succession was extended to virtually all religious organizations. Second, the purposes for which land might be held under the legislation were broadened to ancillary uses other than worship.

Section 3(2) of the Act provides:

Unless the constitution or a resolution of the religious organization otherwise provides, a trustee holds office until he or she dies, resigns or ceases to be a member of the organization.

Section 3(2) specifically acknowledges that the religious organization's constitution or resolutions can supersede the default provisions of the Act. Justice Lauwers found that by-laws of the Congregation make the powers of the trustees under the Act with respect to the acquisition, disposition and mortgaging of land subject to the approval of the Diocese. Therefore, the trustees hold the properties under the direction of the temporary trusteeship.

(b) Court's Approach to Disputes with a Religious Organization

Justice Lauwers observed that, while the law relating to property disputes with a religious organization might seem arcane, he was of the view that most issues can be resolved using a mix of ordinary trust and contract law principles applied to voluntary associations and analogous relationships.

While disputes about religious doctrine are generally inappropriate for judicial determination, courts have intervened to review the actions of religious bodies when the dispute involves property, contracts or other civil rights. The reasons for judicial diffidence include:

● respect for freedom of religion, which is protected under the Canadian Charter of Rights and Freedoms; and

● a real risk that a court may misunderstand the relevant religious tradition and culture, resulting in an incorrect judicial decision which could saddle the organization with difficult, if not unworkable, consequences.

3. Key Observations

The reasoning of the court in Pankerichan is unassailable. The court deftly applied a mix of statutory, trust and contract tools to yield a result that put the Diocese, through its appointed temporary trusteeship, unequivocally in control of the congregation's property.

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