The ruling last month could see church assets – including churches, halls, and rectories – sold to meet the substantial debt. 

Many have belonged to the diocese or its various organisations since the 1800s.

Anglican Bishop of Bathurst Ian Palmer said although Justice Hammerschlag had made his ruling, the diocese must now wait for the court to make orders regarding that judgement. These orders will be handed down in March. 

Bishop Palmer said that until that happens he is unable to comment on what this decision means for the future of the diocese. 

The matter began in February 2014, when the bank demanded the sale of diocesan assets to repay $14 million still owing. 

The diocese fought the bank’s claims in the NSW Supreme Court on numerous grounds during a trial lasting more than 30 days between April and June last year.

The Anglican Development Fund, a corporation under the auspices of the diocese, borrowed money from the Commonwealth Bank, which it on-lent to start the Macquarie Anglican Grammar School [MAGS] in Dubbo and Orange Anglican Grammar School [OAGS].

Both schools were sold in 2013 in a bid to clear mounting debts.

Justice Hammerschlag said the schools were overladen with debt, could not sustain themselves, and were incapable of repaying the borrowed money.

“The only security taken by the bank for the loan was a letter, known as a ‘letter of comfort’, signed by then Bishop Richard Hurford in 2008, undertaking responsibility, on behalf of the diocese, for the loan,” he said.

Justice Hammerschlag found that the diocese had undertaken legally binding obligations to the bank and the Anglican Development Fund.

He said there was church trust property available that could be used to pay off the debt.

The Bathurst diocese covers about a third of NSW and oversees 34 parishes from the Central West to the Queensland border.