Churches - Church property - Congregations leaving United Church of Canada as result of disagreement over church policy - Lands used by congregations being held by and for United Church and not congregations - United Church of Canada Act, S. 0. 1925, c. 125.

Charter of rights - Application - Not applicable to private activity - Church, although created by statute, remaining a private body.

Three United Church congregations voted to break with the United Church over the issue of homosexuality in the church. They asked the United Church to sell or transfer their church property to them for a nominal consideration. The United Church refused and applied to determine the ownership of the lands.

Held, a declaration should issue that title in the lands was held by and for the United Church.

Section 3 of the Ontario United Church of Canada Act provides that property belonging to the three churches which came together to form the United Church (the negotiating churches) was to vest in the United Church. Under s. 4 of the Act, all property held by or in trust for any congregation of any negotiating church was held for the benefit of the same congregation as part of the United Church, but this did not include (a) any property held "in trust for any special use of any congregation" of the United Church or (b) under s. 6 of the Act, any property held in trust for the use of any congregation "solely for its own benefit". The lands in question either vested in the United Church under s. 3 of the Act or were held for the use of the United Church under s. 4; the exceptions in s. 4 and s. 6 did not apply.

The respondents' argument that the statutes in this case offended the Canadian Charter of Rights and Freedoms in that they denied or interfered with freedom of religion could not stand as the Charter does not apply to private activity, and churches are private bodies.

Cases referred to

Aird v. Johnson, [1929] 4 D.L.R. 664, 64 O.L.R. 223 (C.A.); Ferguson v. MacLean, [1930] S.C.R. 630, [1931] 1 D.L.R. 61; McLean v. Ballantyne, [1928] 4 D.L.R. 37,62 O.L.R. 443 (S.C.); McKinney v. University of Guelph (1990), 91 C.L.L.C. ¶l7,004, 76 D.L.R. (4th) 545, 2 O.R. (3d) 319 (note) (S.C.C.)

Statutes referred to

Act incorporating the Board of Trustees for the Presbyterian Church in Canada, S.O. 1900, c. 135, s. 5
Act respecting the union of certain Presbyterian Churches therein named, S.O. 1874 (4th Sess.), c. 75, s. 1
Canadian Charter of Rights and Freedoms
Methodist Church Act, 1884, S.O. 1884 (1st Sess.), c. 88, ss. 2, 3
United Church of Canada Act, S.C. 1924, c. 100
United Church of Canada Act, S.O. 1925, c. 125, ss. 3, 4, 6, Schedule A, clause 9

APPLICATION to determine ownership of church property.

Jeff G. Cowan and P. John O'Sullivan, for applicant.
Thomas P. Mitchell, for respondents.

GAUTREAU J.:-

This case involves the United Church of Canada, three departed congregations and their church properties. My task is to decide what happens to church property when a congregation leaves. Does it stay with the United Church or does it go with the departing congregation?

The three congregations, Dover Centre, Oldfield and Baldoon (Grace), are located in small rural communities in Kent County, near Chatham, Ontario. They go back for generations. In 1988 they decided that they could not accept the position of the General Council of the United Church on the issue of homosexuality in the church and they withdrew to form their own independent churches.

It is not difficult to imagine that the case is of significance to all the parties; it involves the very structure of the church and the very hearts of the congregations.

The three congregations make up the Dover Centre Pastoral Charge which in turn is part of the Kent Presbytery. (A pastoral charge is a basic organizational unit in the United Church.)

On September 13, 1988 the official board of the Dover Centre Pastoral Charge resolved that it was unable to accept the position of the church on the sexuality issue and called meetings of the members of the three congregations. These meetings were held on October 2, 1988 and as a result the congregations declared "that they could no longer remain as members of the United Church and, wanting to continue together as a rural Christian community, took the necessary actions to wind down the affairs of their respective United Church congregations to allow the formation of an independent congregation in each community". The combined vote was 172 to 1 in favour of leaving; and all left. The dissentient congregations do not purport to be congregations of the United Church and conceded this in argument. I gather there are no United Church congregations in the communities now.

The joint board of the reformed churches issued a statement on October 2, 1988 as follows:

At separate meetings earlier today, the newly formed congregations of Dover Centre Church, Oldfield Church and Grace Church, Baldoon formally declared that they will accept responsibility for the continuance of Christian work and worship in the Reformed tradition in their respective communities. They affirmed that their Doctrine will be that commonly held Christian faith entrusted by the founding congregations to The United Church of Canada in the 20 articles of faith that were known as The Doctrine of The Basis of Union adopted by The United Church of Canada in 1925.
They authorized their separate Congregational Boards to join together to become this Joint Board charged with the responsibility for the common work, and as our first action we have extended a call to the Rev. Kenneth G. Lowe of Dover Centre to be the Minister of the Chatham/Dover reformed churches. Mr. Lowe has accepted the call.

At the same time, the trustees of the three congregations requested the United Church to sell or transfer their church property to them for a nominal consideration. The Kent Presbytery refused the requests and on November 20, 1990 declared that the Dover Centre Pastoral Charge had ceased to exist and appointed three trustees of the properties which made up the Dover Centre Pastoral Charge.

The United Church has brought this application to determine the ownership of the lands used by the congregations. The respondents are the elected trustees of the congregations.

In order to decide this matter it is necessary to look at the formation of the United Church of Canada. In 1925 the Methodist Church, the Presbyterian Church and the Congregational Churches in Canada (the negotiating churches) united to form the United Church of Canada. This was done by means of federal legislation: see the United Church of Canada Act, S.C. 1924, c. 100. In addition, provincial legislation was enacted to deal with matters falling under provincial jurisdiction such as property rights. In Ontario the United Church of Canada Act was passed and it is to be found in S.O. 1925, c. 125.

The gist of the property provisions is that the property of the denominations and congregations forming or joining the United Church (with a few exceptions) becomes the property of the United Church. This appears to have been a common policy in church unions; when the Methodist Church of Canada was formed in 1884, the governing statute had similar provisions and the property of the denominations and congregations were vested in the Methodist Church; this also occurred when the Presbyterian Church of Canada was formed in 1874. (See the Methodist Church Act, 1884, S.O. 1884 (1st Sess.), c. 88; Act respecting the union of certain Presbyterian Churches therein named, S.O. 1874 (4th Sess.), c. 75.)

(1) Church or denominational property

The Ontario United Church of Canada Act provides by s. 3 that property belonging to the negotiating churches (as distinct from the property of congregations) which formed the United Church is to vest in the church. Section 3 of the statute reads:

3. Save as hereinafter provided, all property, real and personal, within this Province, belonging to or held in trust for or to the use of The Presbyterian Church in Canada, The Methodist Church, and The Congregational Churches, or belonging to or held in trust for or to the use of any corporation, board, committee or other body, whether incorporated or unincorporated, created by or under the government or control of, or in connection with, any of the said churches, shall upon the coming into force of this Act be vested in The United Church, to be held, used and administered, subject to the provisions of this Act, in accordance with the terms and provisions of the Basis of Union.

(2) Congregation property

Under s. 4 all property held by or in trust for any congregation of any negotiating church is held for benefit of the same congregation as part of the United Church on the trusts set out in Schedule A of the statute, but this does not include (a) any property held "in trust for any special use of any congregation" of the United Church, or, (b) under s. 6, any property held in trust for the use of any congregation "solely for its own benefit".

Section 4 reads as follows:

4. Subject to the provisions of section 6 hereof, all property, real and personal, within this Province, belonging to or held by or in trust for or to the use of any congregation of any of the negotiating churches, shall from and after the coming into force of this Act be held, used and administered for the benefit of the same congregation as a part of The United Church in the manner and upon the trusts and subject to the terms and provisions set forth in Schedule "A" to this Act and all property, real and personal, within this Province, thereafter acquired for or belonging to or held by or in trust for or to the use of any congregation of The United Church shall be held, used and administered for the benefit of the said congregation as a part of The United Church upon the said trusts and subject to the said terms and provisions. Provided that any property, real or personal, held at the time of the coming into force of this Act or thereafter acquired by devise, bequest, transfer or gift, in trust for any special use of any congregation, shall be held, used and administered in accordance with the special trusts so declared in respect thereof, not being contrary to law or to any by-law, rule or regulation of The United Church, and that in the event of failure or partial failure of any of the said trusts, the said property, in the absence of any express provision for such event, may be held, used, administered or disposed of as may be provided by any by-law, rule or regulation made from time to time by The United Church.

Section 6 exempts a congregation's property from the United Church trusts if the property is held solely for the benefit of the congregation. It is as follows:

6. Any real or personal property belonging to or held by or in trust for or to the use of any congregation, whether a congregation of the negotiating churches or a congregation received into The United Church after the coming into force of this Act, solely for its own benefit, and in which the denomination to which such congregation belongs has no right or interest, reversionary or otherwise, shall not be subject to the provisions of section 4 hereof or to the control of The United Church, unless and until any such congregation at a meeting thereof regularly called for the purpose shall consent that such provisions shall apply to any such property or a specified part thereof.

(3) After-acquired property

It will be noted that after-acquired property is treated the same as existing property under s. 4 and it is not mentioned in s. 6.

I shall refer to the properties involved here by the names of the congregations, namely, the Oldfield property, the Baldoon (Grace) property and the Dover Centre property.

(a) Oldfield and Baldoon (Grace)

The Oldfield property was conveyed to trustees of the Methodist Episcopal Church by deed dated June 3, 1875 and registered January 2, 1879. The trust required that the property be used "for the site of a church, meeting house and burying ground, for the use of the members of the Methodist Episcopal Church in Canada".

The Baldoon (Grace) property was conveyed to trustees of the Primitive Methodist Church in Canada under deed dated March 9, 1880 and registered April 19, 1880. The grant was "upon trust for the site of a Primitive Methodist Church (chapel), parsonage or burying ground".

In 1884 the Methodist Episcopal Church and the Primitive Methodist Church united with other Methodist Churches to form the Methodist Church. By virtue of s. 2 and s. 3 of the Methodist Church Act, 1884, supra, all property in Ontario held in trust for the use of the Methodist Episcopal Church and the Primitive Methodist Church and all property held in trust for any congregation of those denominations was vested in the Methodist Church.

2. As soon as the said Act of incorporation shall come into force, all the property, real and personal, within the Province of Ontario, now belonging to or held in trust for or to the use of the said denominations or any of them, or belonging to or held in trust for or to the use of any corporation under the government, or control of any of the said four denominations, shall henceforth be vested in and held, used, and administered for the benefit of the said Methodist Church, upon the trusts and for the ends and purposes declared in said Act of incorporation.
3. As soon as the said Act of incorporation shall come into force, all the property, real or personal, within the Province now belonging to or held in trust for or to the use of any congregation in connection or communion with any of the said denominations, shall henceforth be held, used and administered for the benefit of the said Methodist Church upon the trusts set out in the said schedule to this Act, and the trustees acting on said trusts for any of said Congregations at the date of the coming into force of this Act shall, notwithstanding any irregularity in their appointment, and notwithstanding their number shall not correspond with the number named in the deed of conveyance of said property, be deemed to be, and shall be, the trustees of the said property named in said deed; provided, however, that if said number be less than five, the same shall be increased to at least five, so soon as conveniently may be after the said date of coming into force of this Act.

The Ontario United Church of Canada Act provides by s. 3, above, that property belonging to the negotiating churches (as distinct from the properties of congregations) forming the United Church shall vest in the United Church. It will be recalled that the negotiating churches included the Methodist Church. It therefore follows that the Oldfield and Baldoon (Grace) properties are now vested in the United Church. Sections 4 and 6 of the Ontario Act have no application.

(b) Dover Centre property

The Dover Centre property consists of ten different parcels of land conveyed by a number of separate grants. The grants involve lands held in trust for the congregation as opposed to a church or denomination.

Parcels 1 and 2 were granted to trustees of the congregation of the Canada Presbyterian denomination in the Township of Dover East for the site of a Canada Presbyterian church, chapel, parsonage or burying ground. The grant provides that these parcels will revert to the grantor if not used for the purpose of the Canada Presbyterian Church. The deed was dated January 21, 1871 and registered September 30, 1871.

Parcels 3 and 4 were granted to the trustees of the Dover Presbyterian Church as a site for a manse to be used in connection with the Presbyterian Church in Dover. This grant also provides that the parcels will revert to the grantor upon determination of the trust. The deed was dated May 7, 1887 and registered on December 12, 1887.

The Presbyterian Church was one of the negotiating churches which formed the United Church. When the Presbyterian Church of Canada was founded in 1875, the legislation bringing this into effect provided that all property in Ontario held in trust for any congregation of the uniting churches (and not dissenting from union) was thenceforth to be held in trust for the benefit of the same congregation in connection and communion with the Presbyterian Church in Canada. Section 1 of the Act respecting the union of certain Presbyterian churches therein named, supra, reads as follows:

1. As soon as the union takes place, all property, real or personal, within the Province of Ontario, now belonging to or held in trust for or to the use of any congregation in connexion or communion with any of the said Churches, shall thenceforth be held, used and administered for the benefit of the same congregation in connexion or communion with the united body, under the name of "The Presbyterian Church in Canada."

Because of s. 4 of the Ontario United Church of Canada Act, these parcels, after union, are held for the benefit of the same congregations as part of the United Church subject to the exceptions that I have mentioned.

Section 4 says that all property held by or in trust for any congregation of any negotiating church shall be held and used for the benefit of the same congregation as a part of the United Church upon the trusts set out in Schedule A but this will not include: (a) any property held "in trust for any special use of any congregation"; or (b) any property held in trust for the use of any congregation "solely for its own benefit" under s. 6. Do either of these exceptions apply?

"Special use"

The Dover Centre lands were given to the congregation for general church use, i.e., as a site for a church, chapel, burying ground, manse, etc. In the context of a church statute I cannot imagine how common general church use of church property can be considered a special use. Surely a special use must be beyond this. I am of the view that "special use" was intended to apply to the situations beyond ordinary church purposes; I can imagine such might be the case where property is given to a congregation to provide bursaries for students of parishioners, etc. In the present case, the most that can be said is that the land is held in trust for a "special" congregation -- not for a "special use" of the congregation.

"Solely for its own benefit"

Although s. 4 says the land held in trust for a congregation will continue to be held in trust for the congregation as part of the United Church, it is subject to s. 6 which says that if property is held in trust for a congregation "solely for its own benefit" it shall not be subject to s. 4 or the control of the United Church (or, by implication, to the terms of the model trust) unless and until the congregation votes consent. What does "solely for its own benefit" mean?

The words "solely for its own benefit" must, of necessity, exclude the possibility of any other beneficiary. This is the view taken by Duff J. in referring to comparable United Church and Presbyterian Church legislation in New Brunswick: "I think that condition excludes any other beneficiary, contingent or not" (Ferguson v. MacLean, [1930] S.C.R. 630, [1931] 1 D.L.R. 61, at p. 651 S.C.R.).

Parcels 1, 2, 3, and 4 of the Dover Centre lands were granted to the use of the congregation as a Presbyterian congregation. Section 5 of the Act incorporating the Board of Trustees for the Presbyterian Church in Canada, S.O. 1900, c. 135, says that if a Presbyterian congregation ceases to exist its property will vest in the trustees of the Presbyterian Church in Canada. Thus, at the time of union, the properties were held for purposes or uses beyond those of the congregation. Section 5 reads:

5. All lands and premises which have been or shall hereafter at any time be held by any trustee or trustees for any congregation which shall have ceased to exist or has become disorganized shall vest in the said Board of Trustees on trust to sell the same and pay over the proceeds of the said sale to the Treasurer of the said Church for the benefit of the Home Mission scheme thereof or as may be otherwise determined by the General Assembly of the said Church.

In addition to this, the possibility of the lands being held for the sole benefit of the congregation is denied by the express words which follow in the section [s. 6 of the Ontario United Church of Canada Act]. This is the portion which says: "and in which the denomination to which such congregation belongs has no right or interest, reversionary or otherwise" in the property. Because of s. 5 of the Presbyterian Act it is abundantly clear that the Presbyterian Church also had an interest in these lands at the time of union, even though it might only be contingent.

There is a third reason. The grants all state that if the trustees cease to use the lands for church purposes the lands are to revert to the grantor's estate. This reversionary interest denies that the grant is "solely for the benefit" of the congregation.

Accordingly, I conclude that these lands do not fall under the s. 6 exception and do not escape the provisions of s. 4.

After-acquired lands

Parcels 5, 6, 7, 8, 9 and 10 of the Dover Centre property were granted to the trustees of the Dover Centre United Church after the formation of the United Church as follows, and I quote from the applicant's factum:

Parcel 5 on the plan of the Dover Centre property was conveyed to trustees of the Dover Centre United Church. The grant provided that if the property ceased to be used for "church purposes", it would revert to the grantor. That deed, dated November 16th, 1926, was registered on title on February 7th, 1927.
Parcel 6 on the plan of the Dover Centre property was granted to trustees of the Dover Centre United Church. That deed, dated November 3rd, 1967, was registered on title on January 3rd, 1968.
Parcel 7 on the plan of the Dover Centre property was conveyed to trustees of the Dover Centre United Church. That deed, dated July 15th, 1971, was registered on title on October 4th, 1971.
By deeds registered February 26th, 1986 there was an exchange of lands: parcels 8, 9 and 10 on the plan of the Dover Centre Property were conveyed to trustees of the Dover Centre congregation of the United Church, and parcels 2 and 4 were conveyed to the grantor of parcels 8, 9 and 10.

These lands also fall under the general provisions of s. 4 and are held in trust for the benefit of the congregation as part of the United Church in accordance with the terms of the model trust in Schedule A of the statute.

The exceptions do not apply. There is no special use under s. 4; the conveyances are straight grants without any special use or purpose mentioned or indicated. Section 6 does not have any application. It deals only with property held by congregations at the time of joining and not after-acquired property. But even if it did, there is a reversionary interest held by the grantor in relation to Parcel 5, and the other grants, to the trustees of the Dover Centre United Church are at most grants for the benefit of the congregations as part of the United Church. I do not see how it can be said that they are held to the use of a congregation "solely for its own benefit, and in which the denomination to which such congregation belongs has no right or interest".

Before leaving this I cannot help but wonder why s. 6 was inserted. It is quite narrow in scope; its purpose is not clear and it seems at odds with the general scheme of the property provisions, almost an afterthought. I assume it was intended to mollify particular congregations who held suspicions that union might not work out for them.

The respondent trustees raised the argument that the statutes that are involved in this case offend the Canadian Charter of Rights and Freedoms and cannot stand because they deny or interfere with freedom of religion.

I do not think that freedom of religion is being denied or interfered with in this case; the members who left the congregations of the Dover Centre Pastoral Charge exercised their religious freedom by saying that they did not want to be part of the United Church any more. Their departure is governed by the terms agreed upon by the parties -- nothing more and nothing less. Even if it were accepted that freedom of religion is impaired by the legislation, the Charter is not available to strike it down.

The Charter is intended as an instrument to check the powers of government over citizens and is confined to government action, the legislative, the executive and the administrative. It is not intended to apply to private activity; if it did it could strangle individual freedom (McKinney v. University of Guelph, S.C.C., Dickson C.J.C., Wilson, La Forest, L'Heureux-Dube, Sopinka, Gonthier and Cory JJ., December 6, 1990 [now reported 90 C.L.L.C. ¶l7,004, 76 D.L.R. (4th) 545, 2 O.R. (3d) 319 (note)], per La Forest J. at p. 634 D.L.R.):

The exclusion of private activity from the Charter was not a result of happenstance. It was a deliberate choice which must be respected.

To open up all private and public action to judicial review could strangle the operation of society and, as put by counsel for the universities, "diminish the area of freedom within which individuals can act".

Although churches may be created by statute, nonetheless they are in law private bodies like universities and trade unions. The government legislation which creates them only facilitates their legal existence -- they remain private bodies (McKinney, per La Forest J. at p. 637 D.L.R.):

But the mere fact that an entity is a creature of statute and has been given the legal attributes of a natural person is in no way sufficient to make its action subject to the Charter. Such an entity may be established to facilitate the performance of tasks that those seeking incorporation wish to undertake and to control, not to facilitate the performance of tasks assigned to government.

As already stated, the Oldfield and Baldoon (Grace) properties are vested in the United Church.

All the Dover Centre property is held for the use of the United Church of Canada under s. 4 of the Ontario United Church of Canada Act, upon the trusts set out in Schedule A of the statute. Clause 9 of the Schedule provides that where a congregation ceases to exist, the property of that congregation shall thenceforth be subject to the trusts determined by conference. The applicable part of clause 9 reads as follows:

And it is further declared that if at any time there shall cease to be an organized congregation entitled to the use, benefit and enjoyment of the said lands, it shall be lawful at any time or times for the said Presbytery to fill any vacancy in the number of Trustees, and the said lands shall thenceforth be held subject to such trusts and for such purposes for the benefit of the United Church of Canada as the Conference within the bounds of which the said lands are situate may determine under the by-laws, rules and regulations of the General Council.

I have stated my conclusions, but the human dimensions of the case require further comment; the case gives rise to empathy for both sides.

The people in these communities built, paid for and maintained their churches expecting and understanding that they would be forever there for their use. Now they find that they do not own them and cannot use them, unless with the goodwill of the United Church. Whether they were right or wrong, these people acted in honest belief and good conscience. Their decision was unanimous but, unfortunately for them, there is no provision in the United Church statutes whereby a congregation may leave; although they enter with their property, they cannot leave with it. At first impression this is unfair, but there is another aspect to consider.

The United Church was set up to unite and serve different churches and congregations. It was seen as a desirable thing. The principles and terms of union were obviously negotiated, debated, affirmed and enshrined; this included what would happen to the property of a congregation when it joined and when it left. Who can say that it is unfair? One must assume that the founders, the negotiating churches and congregations, felt that the rules were proper and necessary for the life and well-being of their new church. Yesterday's members of these congregations decided that union was a good thing; the terms were clear and their decisions were undoubtedly willing and conscious. Today's members must now live by those terms and decisions.

Some may view this as still unfair. In reply I can only say that the decision in this case cannot be founded on an emotional plea of deprivation. A legal question is involved and it must be decided according to the law that applies, which is to say, the legislation.

Battles similar to this have been fought in the past, and although there are no cases directly on point there are pointed judicial statements. In 1928 Orde J. said (McLean v. Ballantyne, [1928] 4 D.L.R. 37, 62 O.L.R. 443 (S.C.), at p. 44 D.L.R.):

... the entry into the United Church of any Presbyterian congregation carried with it the congregational property and in the eyes of the law did no violence to the trusts upon which the property was held ...

In another case, also heard over 60 years ago, members of a congregation felt that their church property had been taken from them without compensation. Middleton J.A. said that the members "must realize that the contest was lost when the legislature passed the Act in question and that the Courts cannot now aid them": Aird v. Johnson, [1929] 4 D.L.R. 664, 64 O.L.R. 223 (C.A.), at p. 670 D.L.R.

It makes no difference that all members of the congregation left. If a part of a congregation were to leave not many would argue that they should be entitled to take their share of the congregation's property with them. The property belongs to the institutional congregation, not the individual members. It does not help the respondents that all the members leave. The same principle applies because the legislation states that upon union congregational property will then be held for the benefit of the congregation as part of the United Church.

A declaration shall issue that title to the lands and premises described in Appendix D of the applicant's factum is held by and for the United Church of Canada in accordance with the terms of the Ontario United Church of Canada Act.

The parties shall bear their own costs.

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© Queen's Printer for Ontario, 1991. This is an unofficial version of Government of Ontario legal materials.