Ermogenous v Greek Orthodox Community of SA Inc

What happened?

Archbishop Spyridon Ermogenous claimed unpaid annual leave and long service leave from the Greek Orthodox Community of SA Inc, saying it had employed him since 1970. An Industrial Magistrate awarded him $23,989.35 for annual leave and $10,672.80 for long service leave; a single judge and then the Full Court of the Industrial Relations Court both dismissed the Community's appeals. The Full Court of the Supreme Court of South Australia then allowed it, by majority, holding there had been no intention to create legal relations ([1]–[2]).

What did the Court decide?

The appeal was allowed. The intention challenge failed: the Full Court's inference that there was no intention to create legal relations "was not open on the facts that had been found at trial" ([45]), so the contract the Industrial Magistrate had found stood. What the Court did not decide was whether that contract was a contract of employment — the Community had run that as a separate ground below, the Full Court never reached it, and it was remitted for further argument ([46]–[47]).

On method, the joint judgment (Gaudron, McHugh, Hayne and Callinan JJ) held that because the inquiry may take account of the subject matter, the status of the parties, their relationship and other surrounding circumstances, there is "obvious difficulty in formulating rules intended to prescribe the kinds of cases in which an intention to create contractual relations should, or should not, be found to exist, [and] it would be wrong to do so" ([25]).

On presumptions their Honours were blunter: "we doubt the utility of using the language of presumptions in this context. At best, the use of that language does no more than invite attention to identifying the party who bears the onus of proof" — which here was the Archbishop, as the party asserting the contract ([26]). The danger was concrete rather than theoretical: the courts below had slid from one proposition, that an intention to create legal relations is not to be presumed, into a different one, that an arrangement about a minister's remuneration generally will not give rise to enforceable obligations ([27]). Kirby J agreed in the result in separate reasons.

Why does this case matter?

Count the hearings. The Archbishop won before the Magistrate, won before a single judge, won before the Full Court of the Industrial Relations Court, lost in the Full Court of the Supreme Court, and won in the High Court — and the litigation still was not over, because the Community had run a separate ground, that any enforceable contract was not a contract of employment, which the Supreme Court majority never reached and which went back with the case. He filed in September 1994 and the High Court gave judgment on 7 March 2002: seven and a half years, over roughly $34,700 in leave entitlements, to establish that the question of intention had been approached the wrong way.

Notice also how much the intention question carried. The Industrial Magistrate had found a contract of employment and awarded the leave, and that survived two appeals. In October 2000 the Supreme Court majority reversed it on intention — an issue already live before the Magistrate, not a new one — by treating the "church" as distinct from the Community contrary to the facts found at trial, and by reading the decided cases as supplying "a proposition more general or absolute than those decisions warrant" ([45]). That second move is the one to watch for, and it is not confined to religious office: it stands in front of volunteers, office-holders, family businesses and anyone whose working arrangement was never written down, which is why the case is cited well outside the setting that produced it.

Exam and application relevance

Start with who has to prove what. The party asserting the contract carries the onus, and in a problem where the arrangement is informal that is usually the person seeking to enforce it — say so before anything else. Then assemble the objective material: what was promised, what each side did, what was written down, how long it ran, what the parties' relationship and positions were. Do not open with "this is a domestic arrangement, so it is presumed not binding": the High Court's whole complaint about that move is that it converts a question about who must prove something into an answer about what is probably true. If a later authority is put to you as establishing a category rule, check whether it is doing the thing [27] warns against.

Check your understanding

The Archbishop won his appeal, and the contract found at trial survived it. So what was still undecided, and why did his leave entitlements turn on it?