By Elizabeth Shalders, Special Counsel

When the Presbyterian Church of Queensland went into receivership in May 2020, it was a shock. Now, case law is emerging which grapples with some difficult questions that commonly arise in religious contexts.

The latest decision in this sorry tale was handed down by the Supreme Court of Queensland on 3 October 2025 in Catalyst Townsville SPV No 1 Pty Ltd v The Presbyterian Church of Queensland (receivers and managers appointed) [2025] QSC 255 (PCQ decision).

Set out below is some background and a summary of some key learnings from this case.

Background

The Presbyterian Church of Queensland (PCQ) is a statutory religious incorporation established in 1876 under provisions of the Religious Educational and Charitable Institutions Act 1861 (Qld).

PCQ holds property on trust for the purpose of the Presbyterian Church of Queensland (Church), which is an unincorporated association.

There are three key officeholders within the Church, namely the Moderator, Clerk and Treasurer, who are also the officeholders of PCQ.

In around 1998, the Church established ‘PresCare’, a ministry division which carries out the social mission responsibilities of the Church, including aged care. Although not a separate legal entity, it has its own ABN, constitution and governing board. PresCare appears to have been operated as a separate business insofar as the books and records reflect loans between PCQ and PresCare, and it maintains its own financial reports and bank accounts. However, as PresCare was not incorporated, PCQ was the registered proprietor of the land upon which various aged care facilities operated by PresCare were established.

What caused the receivership?

PresCare needed to raise capital to construct residential aged care facilities on some of its vacant land; it also needed to refinance existing debt with the Commonwealth Bank of Australia (CBA). It did this by entering into some complicated agreements which included borrowing money from the Catalyst parties.[1]  Ultimately, it was unable to make the repayments required and went into receivership.

Implications of receivership

The receivership of PCQ did not just affect the aged care assets, or even PresCare assets. All of the assets of PCQ were placed with the receivers. This included:

• six residential aged care facilities (RACFs) operated by PresCare;
• over 180 other properties, including Churches;
• numerous trusts associated with bequests, donations and endowments;
• a capital fund where PCQ invested all the congregational money;
• a general Church charitable trust; and
• a school and a theological college.

Which assets of PCQ can be used to pay the debt?

That question has not yet been answered. It is anticipated that further litigation will be needed to resolve that.

What did we learn from the PCQ decision?

Lesson 1: aged care purposes are part of the Church’s general purposes

An argument was run by the Attorney General (Queensland) that certain parcels of land were held on trust by PCQ not for the Church’s general purposes, but for a different non-religious purpose, namely, an ‘aged care’ purpose. The Court rejected this argument. It held that care for the aged was within the charitable purposes of the Church.[2]

Lesson 2: when is land held for general Church purposes and not more specific purposes?

An argument was run by the Receivers for PCQ that certain assets were held for a narrower subset of purposes than just the Church’s general purposes, namely aged care purposes.

The Court rejected this argument. The Court could not identify a particular moment in time when a more specific or special trust was created. The Court considered a range of factors, which included the following:

• Transferring administration of the property to PresCare was not sufficient.
• PresCare adopting its own constitution was not sufficient.
• The way in which the General Assembly of the Church made decisions in relation to the relevant properties, which were then carried out by PCQ, suggested the relevant properties were held for the Church’s general purposes.
• Two of the three properties under consideration in this PCQ decision had been mortgaged.
• The officeholders did not declare a trust.
• Although the relevant land had been used for aged care purposes, it appeared that the General Assembly retained the power, if it had so chosen, to reallocate the property for another purpose at a future date if it wished. There was no evident intention to remove that ability or restrict the General Assembly in that way.

That is not to say that in every case a religious statutory corporation holds property for general Church purposes rather than a narrower, more confined set of purposes (such as aged care or education as part of its general purposes). However, in this case, the relevant circumstances were not present to create a narrower trust for a particular subset of purposes within the Church’s general purposes.

Other lessons

The Court also made some interesting observations about the way in which trusts should be understood and interpreted in the context of religious organisations. The Court stated that “the Court looks at the instrument as part and parcel of the whole machinery by which the Church is kept together and carried on” (paragraph 127). It appears that the Court endeavoured to interpret and understand decision-making within the Church in relation to property by reference to the structure and beliefs within the Church, and that this was also relevant to understanding the duties of officeholders within the Church (see paragraph 125—126).

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[1] This is a short-hand term to refer to various related entities which were plaintiffs in the PCQ decision, namely: Catalyst Townsville SPV No 1 Pty Ltd (As Trustee For The Catalyst Townsville SPV No 1 Trust) and Catalyst Corinda SPV No 2 Pty Ltd (As Trustee For The Catalyst Corinda SPV No 2 Trust).

[2] At paragraph s 182 – 189.