The recent decision of the NSW Court of Appeal in Ulman v Live Group Pty Ltd [2018] NSWCA 338 (20 December 2018) raises important issues about the interaction between internal disputes within a religious community, and the “secular” court system. In this case a majority held that the threat of purely religious sanctions, to be applied if a dispute was resolved in the ordinary courts rather than in a religious tribunal, amounted to contempt of court, and imposed financial penalties on members of the tribunal. Significant questions are raised as to whether religious groups are able to apply their own religious beliefs in disciplining members of their community, or whether these decisions will be over-ridden by the ordinary court system.

Background

The case arose due to a commercial dispute between two members of the Jewish community. Two companies were involved, Live Group Pty Ltd, whose main director was Mr Barukh, and SalesPort LLC, a US-registered company whose main director was Mr Kuzecki. Both Mr Barukh and Mr Kuzecki are observant Orthodox Jews. The contract between the two companies contained a dispute resolution clause:

“Conflict resolution In a case of dispute that can not be resolved by the parties or via a 3rd party which is acceptable to both sides we here by agree that the matter shall be brought to the Chief Dayan of Sydney AUS. Rabbi Gutnick who will hear both claims in person or video conference or by phone and his decision will be final and acceptable on both sides …”

Rabbi Gutnick is the presiding member of the Beth Din in Sydney, a tribunal set up under Jewish law to resolve disputes within the Jewish community. The other members of the Beth Din involved in decisions made in these proceedings were Rabbi Ulman, Rabbi Schlanger and Rabbi Chriqui.

When a dispute arose between the two companies, Mr Kuzecki approached Rabbi Gutnick, who agreed to convene the Beth Din to deal with the dispute in accordance with the “conflict resolution” clause. But Mr Barukh refused to accept that the Beth Din had jurisdiction over the matter. (The proceedings filed in the Beth Din made a claim for some $5 million in damages, so clearly there was a lot at stake financially.) His lawyers advised that he would not attend at the Din Torah (the hearing before the Beth Din), and invited Mr Kuzecki to make a claim in the civil courts if he alleged that he was owed money.

Rabbi Schlanger then responded that members of the Jewish faith were required to appear when summoned before the Beth Din:

“1.   All members of the Jewish Faith are obliged to have their disputes heard in accordance with Jewish Law at a Beth Din. They are not permitted to seek adjudication at a civil court without the express permission of a Beth Din when the other side has refused to abide by a Beth Din summons. In accordance with Jewish Law they are not permitted to refuse such summons”

Para [28].

A later letter of 28 December 2016 said:

Unless by 5pm January 26 2017 the Beth Din hears from you on behalf of your client that he has recanted and that he acquiesces to the Beth Din process in accordance with Jewish Law, (which is indeed compatible with secular law), the following halachic sanctions will apply and the Synagogue/s where he prays will be informed accordingly.

1.   He will not be counted to a minyan.

2.   He will not be able to receive an aliyah to the Torah.

3.   He will not be offered any honour in the Synagogue

There are further sanctions that will be applied should your client maintain his recalcitrance

Para [31]

A further letter of 31 Jan 2017 stated:

“3.   … A Jew is obliged by Jewish Law, in the first instance, to resolve his or her disputes via a Beth Din and not through the civil jurisdiction. The Beth Din has a duty, when asked to do so, to summons parties to attend a Din Torah. It is a duty that it can not refuse. As with any court the defendant has the option to file a motion to dismiss an action and if the Beth Din is satisfied after giving the plaintiff the opportunity to respond, the action can be dismissed. However a member of the Jewish Faith does not have the religious option to dismiss the Beth Din.” (emphasis added)

Para [34]

Mr Barukh then commenced the present action in the Supreme Court seeking an injunction to prevent the Beth Din imposing religious sanctions, and also seeking an order that, by seeking to prevent him having his matter heard before the Supreme Court rather than in the Beth Din, the rabbis were in contempt of the Supreme Court. There were also allegations that even if the Beth Din had authority to hear the matter, its members had showed bias against Mr Barukh, and hence he could not received a fair hearing.

The majority decision

The majority of the Court of Appeal (Bathurst CJ and Beazley P) upheld the decision of the trial Judge, Sackar J, that the members of the Beth Din were guilty of contempt, although they held that the amount of the fines imposed were excessive, and reduced those amounts. Sackar J had imposed penalties of $20,000 on Rabbi Gutnick, as the senior member of the Beth Din, and $10,000 on each of the other three members. The Court of Appeal reduced the penalties to $7500 for each of Rabbis Ulman, Gutnick and Chriqui (who were formally the members of the Beth Din), and $2500 for Rabbi Schlanger (whose role was more that of a Registrar than a formal decision-maker)- see paras [202]-[203].

The majority noted that the allegation of contempt of court was not made in relation to specific proceedings which were on foot- in fact there had been no civil claim lodged yet in relation to the dispute between the two companies. But it was a form of contempt where the behaviour of the Beth Din was alleged to have “a real and definite tendency to interfere with the administration of justice generally”, by threatening sanctions to be applied if a person resorted to a civil court- see para [58] quoting the trial Judge.

As the majority said at [72]: “there will be an interference with the course of justice where improper pressure is placed upon a litigant”. But the key question here was, what would constitute “improper” pressure? At one end of the spectrum, threatening to commit an unlawful battery on someone by beating them up if they went to court, would clearly be improper. At the other end, simply politely warning someone that if they commenced proceedings, those proceedings may be long and expensive, would obviously not.

(It should be noted that there was a dispute as to whether the religious sanctions were threatened simply on account of the failure to attend the Beth Din proceedings, or whether the threat also related to the possible resort to the civil courts. The majority concluded that the various statements made had the implied meaning that the Beth Din had exclusive jurisdiction, and that this meant that sanctions would be applied for resort to the courts. They concluded that there had been: “an unambiguous threat that sanctions would be imposed if Mr Barukh persisted in asserting that the alleged commercial dispute be resolved in a civil court”- para [159].)

Such a threat, the majority concluded, was relevantly “improper” pressure and amounted to contempt of court. They held that the “conflict resolution clause” in the contract, while it amounted to a binding arbitration agreement if it were invoked, only committed the parties to have their dispute resolved by Rabbi Gutnick personally, not the Beth Din, and in particular did not amount to an agreement to apply Jewish law to the dispute- see [161]. (This seems to have been important, because there was evidence that in a dispute between corporate entities, Jewish law would look beyond the “corporate veil” and hold individual company officials liable- and there would have been a danger that Mr Barukh may have found himself personally liable for his company’s obligations- see para [166].)

Other reasons offered by the majority for concluding that the pressure applied was “improper” included that the religious sanctions would not have remained private, but would have been made known to Mr Barukh’s local synagogue:

Had sanctions been imposed on Mr Barukh, this would have become publicly known. Worship in a synagogue, as it is in any religious or faith-based institution, is public and may be considered to be a public act. The threatened sanctions were a serious imposition on Mr Barukh’s practice of his faith. (emphasis added)

Para [162]

While the majority’s concern for Mr Barukh’s religious obligations is welcome, I have to say, with respect, that there seems to be little concern at this point for the religious obligations of the wider Jewish community of which he is a part. This issue is brought out, in my view, very helpfully in the dissenting judgement.

The dissent

McColl JA dissents on the question as to whether there has been shown to be “improper” pressure put on Mr Barukh such as to satisfy the requirements for a finding of contempt of court (which, as her Honour notes at [241], is a criminal offence and needs to be proven beyond reasonable doubt.)

Her Honour disagreed with the majority on the implications of the correspondence between the parties. She held that the Beth Din had asserted that Jewish persons ought not to disregard a summons to appear, but held that in the end they did not go so far as to threaten sanctions based on Mr Barukh resorting to a civil court- see her conclusion on this issue at para [276].

However, it seems that even if her Honour had concluded that there was a threat to impose religious sanctions in relation to court attendance, she would not have been inclined to find that this was improper pressure for contempt purposes.

There is an excellent passage in the judgment which affirms the importance of religious freedom. While lengthy, it is worth quoting in full:

[244] These issues fall for determination in the context, as the primary judge recognised, of “the judicially recognised right of unimpeded access to the courts” afforded to all citizens.^[1]

[245] However, they also fall for determination in circumstances where “the law recognizes a complete freedom of conscience in matters of religion”^[2]and it is acknowledged that “[f]reedom of religion, the paradigm freedom of conscience, is of the essence of a free society.”^[3]Accordingly, there is “an area within which a person subject to the law is free to believe and to act in accordance with his belief without legal restraint.”^[4]However, “[t]he freedom to act in accordance with one’s religious beliefs is not as inviolate as the freedom to believe, for general laws to preserve and protect society are not defeated by a plea of religious obligation to breach them”.^[5]

[246] As the primary judge recognised, “religious freedoms are vital and important in a democracy” but “must be balanced against every citizen’s right to approach a court or to insist upon a secular court resolving any alleged commercial dispute between citizens, or for that matter between a citizen and foreign national”.^[6]As will be apparent from the juxtaposition of the propositions in the preceding paragraph, the balancing exercise to which his Honour referred may often be a delicate one.

[247] As Gibbs J said in Grant,“[n]o one is compelled to adhere to, or to abjure, any particular religious opinions. Any member of a church is perfectly free to leave that church and join another which professes different beliefs and has a different mode of government”.^[7]

[248] Furthermore, it should be recognised as Murphy J explained in Grantthat, “[j]udicial determination of religious doctrine and practice is as much state interference in religious affairs as legislative and administrative measures are”.^[8]That does not mean that churches (using that expression broadly) are immune from judicial scrutiny, but, generally “only marginal inquiry into church government is permissible”.^[9]In particular, as recognised in a body of United States jurisprudence, “the decisions of the governing body of the church should be accepted on issues of practice and procedure of ecclesiastical government, as well as issues of doctrine” and “controversial questions of doctrine (or departure from doctrine) or practice or procedure in ecclesiastical government … however forceful … arguments [on these issues] appear to be … are outside the judicial sphere.^[10]As Kirby P recognised in Uniting Church in Australia Property Trust (NSW) v Vincent, judges’ “competence to determine disputed issues of religious belief is highly doubtful.”^[11]

Against the background of these principles, it must be asked whether the majority decision involves too great an interference in the communal life of the Jewish community, which it could be argued should be left to determine its own issues in accordance with its own religious beliefs and authorities.

For example, as McColl JA points out, there was an issue in the evidence presented as to whether the Beth Din could, or could not, deal under Jewish law with a commercial dispute between companies by penalising company officers. Evidence given by Mr Barukh was to the effect that it could not- see para [267]. But Mr Barukh was not an expert in Jewish law, and Rabbi Gutnick, who clearly was, gave contrary evidence that the Beth Din could deal with company officers directly and was not bound by the “corporate shield”- see paras [268]-[269]. In my view, it was not appropriate for the secular court to simply prefer one witness over another without good reasons. McColl JA noted that the US jurisprudence she had previously referred to would point to accepting the views of senior officials recognised by a religious body as having authority to resolve religious issues. But in the end, whether the views of the Beth Din were an accurate reflection of Jewish law or not, was not a matter that should have led to a finding of improper pressure. (See the discussion at paras [271]-[276].) As her Honour later said at [283]: “this court should not intrude upon the rabbinical view of the Halacha.”

As she pointed out, the sanctions that were threatened by the Beth Din were directed to encouraging Mr Barukh to comply with Jewish law, in a situation where both he and Mr Kuzecki were observant Orthodox Jewish believers. It was a sanction similar to what might have been called in a Christian context “excommunication”: “a form of religious censure common to many religious communities” (at [252]). This was also in a context where the contract giving rise to the dispute had a “conflict clause” which, on McColl JA’s view, seemed to amount to an agreement to accept the authority of the Beth Din- see [263]. Rabbi Gutnick in that clause was referred to explicitly as “Chief Dayan of Sydney”, a job description of someone in a Beth Din, and he was known to both parties to have carried out that role for many years.

In the circumstances, her Honour held that there had been no relevant “improper” pressure applied by the Beth Din directed to preventing recourse to the civil courts, and hence no contempt had been committed- see [277], [278].

Implications of the decision

This decision may have some serious implications for religious freedom, if it stands. (There is no indication yet as to whether an appeal to the High Court will be filed, though in my view such would be possible.) Of course there can be argument about some specific factual questions, on which the majority and minority differed: did the correspondence really amount to a threat to impose sanctions based on resort to the civil courts (as the majority said), or was it merely designed to encourage attendance at the Beth Din (per McColl JA)? Should the “conflict clause” in the contract have been interpreted as a submission to the jurisdiction of the Beth Din as commercial arbitrators (as McColl JA said), or not?

But even assuming the answers to these questions given by the majority, the question remains: should a civil court impose a penalty on a religious tribunal for simply imposing religious sanctions in accordance with its faith? These matters are not restricted to the Jewish community. One can imagine some examples in other religious traditions which would raise these issues. In the Christian tradition, the New Testament contains an injunction directed to Christians not to take actions in the civil courts against fellow congregation members- see 1 Corinthians 6:1-8. Should a Christian pastor who advised one member not to pursue litigation against another based on this passage, be found to be guilty of contempt of court? Or if church discipline were applied to a member who openly disobeyed such counsel, would that amount to contempt of court?

The sort of religious freedom principles spelled out by McColl JA in dissent here, point to the advisability of courts not becoming involved in intramural religious disputes in this way. Indeed, in the United States there is a well-developed body of jurisprudence around the First Amendment “free exercise” and “non-establishment” clauses which would, it is suggested, clearly have resolved the issues here in a different way.

For example, in a case with some similarities to this litigation, Abdelhak v. Jewish Press 985 A.2d 197 (N.J. Super. Ct. App. Div. 2009), the plaintiff was a Jewish husband who had refused to grant his Jewish wife a get (religious divorce). He had been ordered to do so by a Beth Din, but not formally found in “contempt” of the Beth Din yet. A Jewish newspaper wrongly reported him as being someone who had refused and was in contempt. He sued for defamation, and intentional emotional harm. His claim failed because the Superior Court held that the jury would need to delve into the details of Jewish faith to make a decision, and this would contravene the principles developed under the First Amendment banning “excessive entanglement” with religion- eg Lemon v. Kurtzman, 403 U.S. 602, 622–24, 91 S.Ct. 2105, 2115–16, 29 L.Ed.2d 745, 761–62 (1971); Serbian E. Orthodox Diocese v. Milivojevich, 426 U.S. 696, 698, 96 S.Ct. 2372, 2375, 49 L.Ed.2d 151, 156 (1976). (Thanks to my colleague Professor Chaim Saiman from Villanova University, Pennsylvania, for reference to this and other relevant US cases!)

A similar approach can be seen in cases involving the “shunning” of religious persons by their communities. In Grunwald v. Bornfreund, 696 F. Supp. 838 (E.D.N.Y. 1988) the plaintiff sought an injunction against the local Jewish community to prevent them excommunicating him, claiming that he had been threatened with this if he continued to litigate in the federal court. The court ruled that it had no jurisdiction: 

A long line of Supreme Court cases holds that, where a religious body adjudicates relations among its members, courts will not interfere with the decisions of those bodies made in accordance with those bodies’ rules. Gonzalez v. Archbishop, 280 U.S. 1, 50 S.Ct. 5, 74 L.Ed. 131 (1929); Bouldin v. Alexander, 82 U.S. (15 Wall) 131, 139–40, 21 L.Ed. 69 (1872); Watson v. Jones, 80 U.S. (13 Wall) 679, 20 L.Ed. 666 (1871). This line of cases is based on the Court’s observation that voluntary religious organizations are much like any other voluntary organization and are in the best position to interpret their own rules (Grunwald v. Bornfreund, 696 F. Supp. 838, 840 (E.D.N.Y. 1988))

While the Australian courts have not developed formal principles of this sort in detail, the general approach of the courts in not interfering in decisions within religious communities represents a similar practice. Part of recognising the religious freedom of groups involves leaving them free from interference with decisions which only have an impact in the religious sphere, as noted in the quote from Grant given above in the passage from the judgment of McColl JA, at para [248]. Another example of this “hands off” approach can be seen in the decision of the Full Court of the Federal Court in Iliafi v The Church of Jesus Christ of Latter-Day Saints Australia [2014] FCAFC 26 at [78]: ” …[I]n the case of dissent from Church rulings, an individual’s freedom of religion is protected by the right to leave the Church”.

That is not to say, of course, that decisions of religious bodies can never be reviewed by the courts. The present situation seems to be that where a dispute between members of a church or religious body involves contractual obligations, or the need to determine property rights, then the courts have a duty to exercise jurisdiction to protect those rights.

This issue arose incidentally in the Ulman proceedings. One claim made by Mr Barukh was that, even if he accepted the jurisdiction of the Beth Din, he would not receive a fair hearing as the tribunal would be biased. In the trial proceedings Sackar J ruled that previous authority meant that the courts were not able to intervene on the grounds of natural justice in the proceedings of a religious tribunal which did not involve contracts or property: see Live Group Pty Ltd v Rabbi Ulman [2017] NSWSC 1759 at [79]:

[79] As the law stands, a Court may only grant a private law remedy in relation to a challenged decision of a private body when enforcing or protecting an underlying contractual or other entitlement recognised at law or in equity; Agricultural Societies Council of NSW v Christie [2016] NSWCA 331(Christie) at [35] per Meagher JA. Where there is no “contractual or other entitlement,” the Court has no jurisdiction to intervene in the affairs of a private body…

Interestingly, the majority of the Court of Appeal, while seeming to agree with this as a matter of principle, said that if the Beth Din had jurisdiction here they would have been willing to entertain a claim about natural justice- see [218]. They seem to have accepted the arguments that this was not the sort of case where the court would automatically decline jurisdiction, as the Beth Din if involved would have asked Mr Barukh to have signed a formal arbitration agreement which would have had contractual (or statutory) force. McColl JA, however, dissented on this point- her Honour thought that since the matter had not even reached the Beth Din, the question of whether the court would supervise its process was “hypothetical” and should not have been the subject of any order- see [285]-[288].

Conclusion

To sum up, the decision of the majority here means that correspondence from a Jewish tribunal which simply threatened religious sanctions if the party did not adhere to Jewish law, was seen to amount to contempt of court. With respect, there seems no clear explanation of why these purely religious sanctions were an “improper” form of pressure. The dissent of McColl JA more correctly acknowledges the importance of the religious freedom of all the parties involved, and notes that in general it is better for the courts not to intervene in internal religious disputes of this sort. It will be interesting to see if this matter is taken on appeal to the High Court.

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^[1]   Live Group Pty Ltd and Anor v Rabbi Ulman and Ors [2017] NSWSC 1759 at [88].

^[2]   Attorney-General for the State of New South Wales (on the Relation of MacLeod) v Grant (1976) 135 CLR 587 at 600; [1976] HCA 38 (Grant) per Gibbs J (as his Honour then was).

^[3]   Church of the New Faith v Commissioner of Pay-roll Tax (Vic) (1983) 154 CLR 120 at 130; [1983] HCA 40 per Mason ACJ and Brennan J.

^[4]   Ibid.

^[5]   Ibid at 135 – 136.

^[6]   Live Group Pty Ltd & Anor v Rabbi Ulman and Ors [2017] NSWSC 1759 at [269].

^[7]   At 600.

^[8]   Ibid at 612 per Murphy J

^[9]   Ibid at 613.

^[10]   Ibid at 613, 614; the primary judge acknowledged in Sturt v Bishop of Newcastle [2012] NSWSC 400 at [46] “that courts have routinely not interfered in the internal workings of voluntary associations especially religious organisations”.

^[11]   (Unreported, Court of Appeal (NSW), Kirby P, Clarke JA and Sheller JA, 19 August 1994) at 10.