This page focuses on dealings in land and funds held for the purposes of a parochial unit, but much of it applies also to land held for diocesan organisations.
Property is "church trust property" if it is subject to any trust for or for the use, benefit, or purposes of the Anglican Church in the Diocese of Sydney or any parochial unit (parish or provisional parish) or diocesan organisation in the Diocese.
All church trust property in this Diocese has been donated to trustees, or has been acquired with money placed in the hands of trustees, for the purposes of parochial units or diocesan organisations or for specific or general purposes within the Diocese. Church trusts are not private trusts for the benefit of individual beneficiaries but are charitable trusts under which the property concerned (subject to the power to vary those trusts) is devoted to designated purposes in perpetuity.
From time to time a parochial unit or a diocesan organisation may want to sell, lease, mortgage, grant an easement over, develop or otherwise deal with land which is held on trust for the purposes of that parochial unit or diocesan organisation.
Where the land is held for the purposes of a parochial unit, the proposal must be fully discussed at the local level: with the minister, the wardens and the parish council. Consideration must be given as to the application of any money (for example, sale proceeds) arising from the dealing in light of diocesan policies (refer to the paragraph on Preservation of Capital).
The archdeacon should be consulted early in the decision making process as he can offer advice on diocesan policy relevant to the proposal.
It may be necessary to consult professional advisers such as solicitors, surveyors, architects or engineers.
A professional adviser must not be permitted to act until he or she has been instructed in writing. The instructions must clearly specify to whom the professional adviser must look for any further instructions. The persons or body of persons giving instructions are responsible for the payment of any fees and the basis of those fees must be clearly evidenced in writing before any instructions are given.Documents of Title
The documents of title of the land to be dealt with should be located and, if necessary, put in order. (Sometimes old system title documents have to be brought under the provisions of the Real Property Act or property has to be vested in the Property Trust.) The Secretary of the Property Trust holds the documents of title to land vested in the Property Trust and enquiries should be directed to him about the process for releasing certficates of title. At the end of any action involving title documents, the documents must be returned to the Secretary of the Property Trust.Power of Trustee to implement the Plan
Consideration must be given as to whether the trustee has power to deal with the land in the manner proposed. Power may arise under one or more of the following -
If the Property Trust is the trustee, the Secretary of the Property Trust can advise if there are any written trusts and, if so, supply a copy of the relevant Act, ordinance or instrument in which the trusts appear.
The question of whether power exists for a dealing requires a legal interpretation of an Act, ordinance or trust instrument. If in doubt, a solicitor should be consulted.
If the dealing is permitted by an Act, ordinance or trust instrument then, subject to the specific terms of an Act, ordinance or trust instrument, no further authority is needed. The parochial unit or diocesan organisation must, if it has not already done so, consult with the trustees of the land particularly if contracts or other legal documents must be executed.The need for an Ordinance
Ordinarily there will not be any existing authority for a dealing (particularly a sale, mortgage or lease) and steps must be taken to obtain specific power to implement the proposed dealing.
The 1917 Act gives the Synod and, by delegation, the Standing Committee power to pass ordinances to authorise dealings with church trust property and to vary trusts. Without these powers it would be necessary to promote a bill for an Act of Parliament or apply to the Equity Court when it was desired to take some action which was not already authorised. An application for an ordinance is a preferred alternative to the other methods of obtaining further powers.Drafting of Ordinances
The procedure for promoting an ordinance is set out in the Ordinance Procedure Ordinance 1973. The first step is to draft an ordinance to give the trustee the relevant power.
A list of solicitors who are experienced in this type of work is available from the Secretary of the Property Trust. The promoters of an ordinance are not bound to instruct a solicitor to act for them, but it is usually in their better interests to do so.
There are many different situations which may be encountered in an ordinance, making it difficult to recommend standard clauses. Nevertheless in drafting ordinances, try and get a near precedent. Precedents may be obtained from the Legal Officer at our Sydney Office. In drafting, use contemporary language whenever possible, do not over-use capital letters and use the following numbering standard -
There are several formal matters which must be remembered when drafting ordinances. These include -
Statement of Evidence
A statement of evidence must be prepared to enable each recital of fact in the preamble of the ordinance to be proved. The information in the statement of evidence will depend upon the circumstances. However the matters which should be addressed include -
Posting of Notices regarding the Proposed Ordinance
If a proposed ordinance relates to property which is held partly or wholly for the benefit of one or more parochial units the Ordinance Procedure Ordinance 1973 requires that notice of the ordinance be posted. Specifically, clause 13 requires that notice be continuously posted in the main entrance of the principal church of each of the parochial units and of each other church which may be affected for 2 Sundays on which services are held in such church or churches. The attention of the congregation must be drawn to the notice at all such services. Notices do not have to be posted in the circumstances set out in clause 15 of the Ordinance.
The contents of the notice are prescribed by clause 13. Precedents can be obtained from the Manager, Legal Services at our Sydney Office.
The reason for the posting of notices is to ensure that parishioners are informed of the proposal and are given the opportunity to comment. In particular, clause 16 of the Ordinance Procedure Ordinance 1973 permits objections to be made.
If the proposed ordinance relates to property held for the sole benefit of a parochial unit, s.26 of the 1917 Act requires that the consent of the majority of the parish council (if any) for the time being of that parochial unit be obtained before the Archbishop can assent to the ordinance. If the consent is not obtained the Archbishop may only assent to the ordinance it if is passed by a special majority (2/3) of the members of the Synod present and voting on the ordinance.
Precedents can be obtained from the Manager, Legal Services at our Sydney Office.
If the church trust property was gratuitously granted or given within 20 years and the donor is still alive, s.26 of the 1917 Act requires that the consent of the donor be obtained before the Archbishop can assent to the ordinance.
If the proposed ordinance relates to property held for the purposes of a parochial unit, a copy of the proposed ordinance should be submitted to the regional archdeacon for his written comments. If the archdeacon has been consulted early in the decision-making process, difficulties may be avoided when he reviews the proposed ordinance.
If the proposal involves a "large receipt" (currently $500,000 for sales and $40,000 for leases) the archdeacon's comments should expressly deal with the application of the large receipts policy and, where appropriate, provide reasons why the policy should not be applied in the particular case.Applying for an Ordinance
An application for an ordinance can be made by lodging the following with the Diocesan Secretary -
* The financial summary is to be in the form approved by the Standing Committee. Click here to access the summary template (in Microsoft Excel) and instructions on its completion.
The schedule of ordinance fees is as follows -
The ordinance fee can change from time to time so, if in doubt, check with the Manager, Legal Services at our Sydney Office.
The application process for an ordinance relating to parish property is facilitated if the following further items are lodged with the Diocesan Secretary -
Review of the Proposed Ordinance
The papers lodged with the Diocesan Secretary will be reviewed on the Standing Committee's behalf by either an ordinance reviewer or a review committee.
The Standing Committee also requires that -
Review by an Ordinance Reviewer
An ordinance reviewer, who is a member of the Standing Committee, will review the papers lodged with the Diocesan Secretary unless it is appropriate that they be reviewed by an ordinance review panel.
The ordinance reviewer will -
If the report of the reviewer is adverse the promoters will be advised and given an opportunity to respond to the Standing Committee.
An ordinance review panel will consider the proposed ordinance if by reason of large receipts (currently $500,000 for sales and $40,000 for leases) or any other matter or thing (such as objections having been lodged) it is appropriate that the proposed ordinance be reviewed by a panel.
The large receipts threshold does not however apply where the proposed ordinance authorises the sale of a minister's residence, the sale proceeds are to be used solely for the acquisition of a replacement residence and an ordinance reviewer is prepared to review the proposed ordinance.
The review panel is usually the Regional Council or a sub-committee thereof for the region in which the property is located.
The review panel proceeds by way of hearing and usually the solicitor and 2 to 4 of the promoters (eg the minister and wardens) attend the hearing. The functions of the review panel are similar to those of the ordinance reviewer.
If the proposed ordinance relates to land held for the purposes of a parochial unit and the receipts from the ordinance are beyond the reasonable needs of the parochial unit, the review panel may recommend the allocation of part of the funds for other parochial units and/or diocesan mission and ministry objectives. There is ample scriptural and legal precedent for the sharing of large receipts.
If the report of the review panel is adverse the promoters will be advised and given an opportunity to respond to the Standing Committee.Making an Ordinance
The report and proposed ordinance and any response of the promoters, should the report be adverse, are placed on the agenda for the next Standing Committee meeting. The Standing Committee meets towards the end of each month but occasionally this is varied on account of Christmas or Easter or a Synod meeting.Assent of the Archbishop
An ordinance passed by the Standing Committee does not come into effect unless the Archbishop assents to it within 1 month.Following Assent
After the Standing Committee has passed the ordinance and the Archbishop has assented to it, advice is sent to the solicitor for the promoters or directly to the promoters if they are not represented by a solicitor.Evidence of Value
When contemplating the sale or purchase of land a written opinion of value should be obtained from an independent registered valuer. This is required if the transaction depends upon the promotion of an ordinance, for the question of value is a matter which will be taken into account by the ordinance reviewer or review committee.
The Property Trust requires written evidence of value before it will execute any legal document concerning the lease, purchase or sale etc of real estate, and it reserves the right to require a further opinion, at the expense of the parochial unit or the diocesan organisation, on the value of the real estate in any particular transaction.
The full name of the Property Trust is "Anglican Church Property Trust Diocese of Sydney" and this name should be used in all legal documents. The Property Trust should be contacted (9265 1555) before any documents are submitted for signing).
All legal documents forwarded to the Property Trust for execution must be certified by a solicitor as being "in order for execution by the Trust". This certification is intended to indicate that the solicitor has -
Solicitors should ensure that the words "pursuant to the provisions of the Anglican Church of Australia Trust Property Act 1917" appear in the relevant place in leases, grants of easements and transfers etc, as this can preclude the Registrar General from making requisitions under sections 29, 33 and 34 of the 1917 Act.
Contracts for the purchase of land in the name of the Property Trust, or for the improvement or maintenance of property vested in the Property Trust, must generally be executed by the Property Trust. However in view of the wardens power to repair and renovate church properties under clause 20(1)(p) of the Church Administration Ordinance 1990, the Property Trust has resolved that wardens can sign building contracts for works in the nature of repairs or renovations for $20,000 or less as principals.
The uses to which church trust property can be put are limited by the trusts of the property. For instance, a property held on trust for an Anglican church cannot be leased for use as a shop, or used by another denomination as a church without a variation of trusts. The Synod, by Ordinance No 38 of 1979, declared the purposes and objects of the Church in this Diocese to include the prevention of church trust property from being used for purposes prescribed from time to time by ordinance of the Synod or by ordinance or resolution of the Standing Committee.
The Standing Committee's policy concerning the use of the proceeds from the sale of property held upon trust for a parochial unit is -
It is desirable that the ordinance provide for a review in, say, 3 or 5 years time.
At present, the Standing Committee does not view favourably bills for ordinances for the sale of property, the proceeds of which are to be applied to recurring expenditure on wasting assets.
The Standing Committee has indicated that it is of the view that, in ordinary circumstances, it is inappropriate to sell a building which has been a licensed or consecrated church to an organisation of another faith or sect. Accordingly church buildings cannot be sold at auction.
As a matter of policy, the Property Trust requires that all contracts for the sale of church buildings and church halls contain a special condition which prohibits the use of the church name by the purchaser.Purchasing Property for Church Purposes
Where property is to be purchased as a site for a church, the approval of the Archbishop and the Property Trust must be obtained and the land must be transferred to the Property Trust.
Finance for the purchase of a property must be assured before the Property Trust will execute any contract or transfer. Any contract forwarded for execution prior to the finalisation of borrowing arrangements must contain a special condition making completion conditional upon finance being obtained. Contact the Secretary of the Property Trust for advice on other procedural matters relevant to the purchase of property for church purposes.
Finance may be available through the Sydney Church of England Finance and Loans Board.
The Property Trust may lease land held for the purposes of a parochial unit for a term not exceeding 10 years, or 50 years for a building lease, provided a majority of the parish council authorises the lease in writing and the leasing is compatible with the trusts upon which the land is held.
The trustee of church land must be guided by the powers in the trust document governing that land. If the trust does not contain a power to lease, the power can be obtained by promoting an ordinance under s.26 and possibly s.32 of the 1917 Act.
All proposed leasing and licensing of property should be discussed with the Property Trust.
Under the Church Trust Property (Declaration of Certain Purposes and Objects) Ordinance 1979, the Standing Committee declared that its policy on the letting of church trust property for or for the use, benefit, or purposes of the Anglican Church of Australia in the Diocese of Sydney was that church property must not be used -
From time to time ministers, wardens and parish councils have allowed people to occupy parish property for residential purposes under informal arrangements that include the payment of a "rent" or "fee" of some kind. This is highly undesirable and may involve the minister and church officers in personal liability.
First, the legal relationship between the occupant, the Property Trust and the parish authorities is obscure and can be exploited in court proceedings by an occupant who is unwilling to leave, causing delays and additional legal costs. Secondly, there is a risk that a lease will be deemed to exist under the Residential Tenancies Act 1987 or the Retail Leases Act 1994. Thirdly, it can render the property liable to rates, if it is not already rated.
The Property Trust has recommended that arrangements of this kind be documented by a lease or licence agreement.
Any parish officers proposing to allow a person to occupy church trust property for residential or other purposes on a regular or continuous basis, should contact the Secretary of the Property Trust before the arrangement is made and before the person is allowed into possession and seek advice on the documentation required and insurance aspects.
Problems have also arisen regarding the use of parish halls on a regular basis by outside organisations (refer to "Parish Buildings"). Usage by outside organisations, without being documented in accordance with the Property Trust's recommendation, is highly undesirable.
Government organisations do not usually resume church property without the consent of the trustee. They usually purchase at an agreed price and, wherever possible, the sale should be negotiated on the basis of the purchaser meeting all valuation and legal costs and ordinance fees. If a resumption takes place, the trustee should reach agreement with the resuming authority on the amount of compensation on the basis of written evidence of value.
An ordinance is required under s.26 of the 1917 Act before the trustee of church property can grant an easement or dedicate land for public purposes (including road widening), unless the power to so grant or dedicate is in the particular trust document. In negotiating the consideration, the person or organisation requiring the land should be asked to pay a fair price plus legal costs and ordinance fees.
The development of church property may be generally defined as -
Each of these situations is a highly specialised matter and it is recommended that expert advice be obtained.
Unless the power to mortgage already exists, those seeking to mortgage church property must promote an ordinance under s.26 of the 1917 Act. If there is no variation of trusts involved, the ordinance procedures (except for preparing a draft ordinance) should be followed up to and including the review stage (see appropriate paragraphs) and the ordinance reviewer or review committee will report to either the Standing Committee or the Sydney Church of England Finance and Loans Board, both of which are able to authorise the mortgaging of property by resolution under s.26A of the 1917 Act. However, neither body can act by resolution if a variation of trusts is involved and an ordinance is required.
All mortgages or charges must contain a clause limiting the liability of the trustee to particular church trust property. In the case of mortgages or charges submitted to the Property Trust for execution, a clause to the effect of the following should be included -
Declarations of Trust
The donor of property can determine the trusts upon which that property will be held and the proposed trustee can decline to accept the property on those trusts.
Land purchased from the general funds of a parochial unit will be held upon an implied trust for the purposes of the Anglican Church of Australia, Diocese of Sydney in that parochial unit.
Over the years the practice has developed of leaving any formal declaration of trust, or of varying trusts in the event of the creation or subdivision of a parochial unit, until the next occasion that an ordinance is promoted relating to the land concerned. In such circumstances the following form of declaration of trust is recommended -
Another more simplified form of trust is used frequently -
The legislation implementing A New Tax System has had a significant impact on how the Property Trust administers church trust property. Therefore with the Standing Committee's support, the Property Trust seeks to simplify the administration of church trust property by proposing that all property (including land) for each parochial unit be held on trusts created by a single standard form "trust ordinance".
The objects of the standard form trust ordinance are -
Further information about the standard form trust ordinance can be obtained from the Manager, Legal Services at our Sydney office.
Updated: 24 January 2006
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