Big case delivered yesterday in the NSW Court of Appeal (South Head & District Synagogue case). I have been waiting months for this one.
The case relates to whether the Voluntary Administrators could terminate the employment of the Chief Rabbi.
The Rabbi argued that Orthodox Jewish Law (Hazakah) should be incorporated into Australian Law, meaning that the Rabbi’s appointment was for life.
The Supreme Court sided with the Rabbi. This obviously causes a lot of problems for an insolvent company – who pays?
The Court of Appeal has yesterday overturned the Supreme Court, ruling that (on the facts):
1. there were no express terms, sufficiently described, in the employment contract incorporating Jewish Law;
2. Hazakah should not be implied into the contract from custom or usage, because there was no evidence in Australia of such a contract term (relying on Con-Stan v Norwich; Byrne v Aus Airlines); and
3. Hazakah cannot be implied to give the contract business efficacy – there is no such religious obligation.
BEWARE: Orthodox Jewish Law may still be incorporated into a contract; by an express term or custom/usage.
Creditors and insolvency practitioners can now breathe a little easier!
