It is a well-settled principle of law that the property of a religious institution must be held and applied to the original purposes for which that institution was founded, that is, for the original "trust". Such property cannot be redirected to other purposes by a mere majority of members, and where a majority decides upon a diversion, the property remains in trust for the dissenting minority (even one person) who adheres to the original trust for which the property was given. (5)There are a number of qualifications that need to be applied to this statement of law, most importantly that it is only the upholding of those doctrines that can be classified as fundamental that form the original trust, but that the rule of law existed has never been in dispute.
In Bentley v. New Westminster, (available free at http://www.canlii.org/en/bc/bcsc/doc/2009/2009bcsc1608/2009bcsc1608.html) (6) Mr Justice Stephen Kelleher, deciding ownership of the property of 4 orthodox Anglican congregations who had left the diocese, came to the surprising conclusion that this rule of law no longer existed. Or at least that he was able to decide a question of ownership where departure from fundamental doctrines was alleged while ignoring the rule, which amounts to the same thing. We have some detailed eyewitness accounts of the trial and can reconstruct how the justice was led to this novel conclusion, and they testify to the value of audacity in litigation strategy; the defendant diocese simply denied that any such doctrine existed.
Reading Kelleher J.’s legal analysis (beginning at para. 247), we can see that he has gotten off track, very early in his analysis, when he summarizes the defendant diocese’s position:
the defendants contend that the issues in dispute can be resolved by reference to statutes and canon law, and that it is unnecessary to turn to trust principles....What the defendants advance is akin to the "neutral principles of law" approach that American courts routinely apply in resolving church property disputes....Kelleher J. goes on to explain this so-called neutral principles of law approach, citing a recent California case:
The court should consider sources such as the deeds to the property in dispute, the local church’s articles of incorporation, the general church’s constitution, canons, and rules, and relevant statutes, including statutes specifically concerning religious property, such as [charitable corporations legislation].The reader’s first reaction will be to wonder what a principle of law developed by American courts in order to bring American church property law into compliance with the First Amendment to the American constitution by avoiding excessive entanglement of church and state has to do with the application of the well-established church property law of British Columbia. Kelleher J. "acknowledges that the neutral principles of law approach is a consequence of the First Amendment’s separation of church and state" in para. 249. But upon further consideration, this first reaction, that we are faced here with a pure doctrinal innovation based upon an arbitrary transplanting of American law, is misplaced. The neutral principles of law approach is not a new American approach. Properly understood, it is not an alternative to the Anglo-Canadian fundamental-purposes trust approach. The approaches are complementary, and have heretofore coexisted. Anglo-Canadian law, although having no need of the name, has always applied the "neutral principles of law" approach to answer the first question in any property dispute: who owns the property? And further, where necessary, do the holders of legal title hold the property on trust, express or implied, for some other entity within the denomination? And then, once these questions have been decided, once the "neutral principles of law" approach has been exhausted, where there has been a division within a church, there remains the question of whether one side of the division has abandoned the fundamental doctrines upon which the church has been based. For, to quote Prof. Ogilvie again,
"...regardless of denomination or polity, where a congregation or denomination decides to change its fundamental doctrinal standards from those for which the property was given, the property is to be held on trust for those members who adhere to the original standard." (7)11 Canadian cases are cited for this proposition, and more could be found, without even counting cases from Great Britain where the doctrine was formed and evolved.
First the neutral principles of property law are applied, then, if it is alleged that the title holders at law have abandoned the original fundamental principles for the furtherance of which the property is held, the special original-principles trust test is applied. That’s the law of Canada.
(1) Free Church Of Scotland v. General Assembly Of The Free Church Of Scotland  ScotCS CSOH_46
(2) Varsani v Jesani  EWCA Civ 630 (3 April 1998); http://www.bailii.org/ew/cases/EWCA/Civ/1998/630.html
(3) Hofer v. Hofer,  S.C.R. 958, 1970 CanLII 161 (S.C.C.), 73 W.W.R. (N.S.) 644
(4) Chong v. Lee, 1981 CanLII 732 (BC S.C.), 29 B.C.L.R. 13
(5) M. H. Ogilvie, Religious Institutions and the Law in Canada (Toronto: Irwin Law, 2nd ed., 2003, at 293-94
(6) 2009 BCSC 1608 (CanLII), http://www.canlii.org/en/bc/bcsc/doc/2009/2009bcsc1608/2009bcsc1608.html
(7) Ogilvie, (1st ed., 1996,) at 211.
TO BE CONTINUED