Corporate Philanthropy and Social Responsibility in Latin America

Case Notes: Latin America

The International Journal
of Not-for-Profit Law

Volume 4, Issue 1, September 2001

The Bahamas

The Bahamas District of the Methodist Church in the Caribbean and the Americas v The Hon. Vernon J. Symonette MP and others. These proceedings derived from a schism in the Methodist Church in the Bahamas (“the Bahamas Church”). Prior to 1968 the Bahamas Church was constituted as a district of the parent Methodist Church established by an English Deed of Union in 1932. In 1968 the Bahamas district acceded to an Antiguan ordinance establishing the Methodist Church in the Caribbean and the Americas (“the Caribbean Church”) as an autonomous body, and became a district of the Caribbean Church. In 1982 the Bahamas Methodist Trust Corporation Act established a Bahamas corporation to hold the property of the Bahamas district, which was formerly vested in a UK company. Subsequently, an irreconcilable dispute arose within the Bahamas Church as to whether it should continue as a district of the Caribbean Church or be established as an independent body. In 1993, some of those favoring the establishment of an independent body promoted legislation to achieve their objective. The Methodist Church of the Bahamas Act 1993 established the Bahamas district as an autonomous body (“the new church”), whose members would be such persons as were specified in a Deed of Union to be prepared following a conference to be held by those congregations of the Bahamas district that agreed to participate (“the participating churches”). By sections 15 and 16, the 1993 Act also repealed the 1982 Act, and provided that all property held by or in trust for the Bahamas Methodist Trust Corporation was thereby transferred to the new church; such property included that of the non-participating churches, which was to be held for the use and benefit of the non-participating churches but only to the extent that it was used by those churches (i.e. other assets of the non-participating churches, which appear to have included land held for investment purposes and two denominational schools, were transferred to the new church exclusively for the use and benefit of the participating churches). In July 1993 the conference was held, and a Deed of Church Union was signed on behalf of 31 participating churches; 6 churches did not participate in the conference. Members of the non-participating churches challenged the constitutional validity of the 1993 Act on the grounds that:

  • there was a procedural irregularity in the passing of the Act, which breached Article 59 (1) of the Constitution;
  • the Act infringed their freedoms of religion, expression, assembly and association, and discriminated against the members of the non-participating churches contrary to Articles 22, 23, 24 and 26 of the Constitution;
  • charity property had been compulsorily acquired in breach of Article 27 of the Constitution (protection from deprivation of property).

The suit was rejected initially by the Chief Justice, and subsequently by the Court of Appeal, of the Bahamas. On appeal, the Privy Council held that:

  • the general common law principles that Parliament is sovereign and has exclusive control over the conduct of its own affairs are modified only to the extent that is necessary to give effect to the supremacy of the Constitution, and Article 59 (1) did not make compliance with the rules of procedure of the House of Assembly a constitutional requirement;
  • the Act did not infringe their freedom of religion, since members of the non-participating churches remained free to become members of the Caribbean Church and to worship in its churches, and the fact that minority members of the participating (non-participating) churches faced the inconvenience of having to go elsewhere to attend, respectively, a non-participating (participating) church was a problem arising from the schism that the division made by the Act was genuinely and reasonably intended to resolve;
  • for the same reasons, there was no infringement of the freedoms of expression, assembly and association;
  • having regard to Craigdallie v. Aikman (1813) 1 Dow. 1 and General Assembly of Free Church in Scotland v. Overtoun [1904] AC 515, it is settled law that in the absence of a provision in the governing instrument for a division of property on a schism the law of England will not enforce a trust for a religious society at the expense of a forfeiture of property held for the beneficiaries for adhering to the opinions and principles in which the congregation had originally united, provided that the court will not enforce the letter of the governing instrument if, in changed circumstances, to do so would defeat the underlying charitable purpose for which the trust was established;
  • the members of the Bahamas district had a legitimate interest in seeing that its property was properly applied for church purposes, subject to the power of the court to exercise its cy-pres jurisdiction in appropriate circumstances so as to give effect to the underlying charitable purpose (there being no comparable statutory provision in the Bahamas to section 13 of the English Charities Act 1993);
  • Article 27 should be construed purposively, and a fair and reasonable division of the property of a charitable body between two internal factions cannot be regarded as a mischief at which Article 27 is directed, where the essential purpose of the division is genuinely to promote the existing underlying charitable purposes in changed circumstances brought about by a schism, and if on the facts such a division can properly be regarded as for the overall benefit of all those who are interested under the existing trusts;
  • since the conditions in which compulsory acquisition of a person’s property is permitted by the Constitution are limited to those specified in Article 27 (1), sections 15 and 16 of the 1993 Act can be justified only if the Act represented a genuine and reasonable attempt by Parliament to further the Methodist Church in the Bahamas by dividing the property of the Bahamas district in a fair and reasonable manner.

However, as the evidence before the Privy Council was insufficiently factual (the parties being unable to agree on several basic facts regarding the dispute), the issue of whether the 1993 Act breached Article 27 was remitted to the Supreme Court of the Bahamas for further hearing.

(The Bahamas District of the Methodist Church in the Caribbean and the Americas v The Hon. Vernon J. Symonette MP and others, Privy Council, [2000] UKPC 31, 26 July 2000). PB