The Archdiocese of St. John’s has lost its legal effort to compel its insurance company to help cover some of its mammoth $105-million settlement with nearly 300 clergy sexual abuse survivors.

Justice Peter Brown of the Supreme Court of Newfoundland and Labrador ruled late last month that the Roman Catholic Episcopal Corporation of St. John’s (RCEC) did not divulge instances of sexual abuse when it applied for and renewed its policy with Guardian Insurance from 1980 to 1985. A failure to disclose invalidated the contract. 

Archbishop Peter Hundt informed The Catholic Register via email on Jan. 6 that the archdiocese is “presently reviewing the decision with our advisors.”

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Time will tell what actions this court loss will engender. It has now been over three years since the archdiocese filed for bankruptcy in December 2021. This action was taken in response to the Newfoundland and Labrador Court of Appeal — and later the Supreme Court of Canada — ruling the archdiocese was vicariously liable for the atrocities committed at the Mount Cashel Orphanage during the 1940s, ‘50s and ‘60s. The Christian Brothers of Ireland, the operators of the infamous establishment, did not have the fiduciary means to pay the damages as it filed for Chapter 11 bankruptcy in the U.S. in 2011.

To date, the RCEC has amassed $44 million of the $105 million to be paid to abuse survivors by liquidating over 110 property assets and transferring the title, right and interest for 38 schools to the province and the Newfoundland and Labrador English School District. 

According to Brown’s written decision, RCEC’s policy with Guardian Insurance — issued through broker Marsh & McLennan Limited — “was occurrence-based and contained provisions that provided comprehensive general liability coverage, including bodily injury liability. The policy limits were $5 million from Oct. 1, 1980, to Oct. 1, 1982, and $10 million from Oct. 1, 1982 to Oct. 1, 1985.”

The agreed statement of facts section outlines that “the RCEC admitted it did not disclose its knowledge that certain of its clerics were alleged to have committed acts of sexual abuse prior to obtaining the policy in October 1980.” And this remained the case “when it renewed the policy each year up to and including 1985.”

Particularly notable was the archdiocese’s failure to disclose the allegations against Fr. James Hickey, who in September 1988 pleaded guilty to 20 charges of sexual assault, gross indecency and indecent assault involving teenage boys while he was a parish priest serving in the Burin Peninsula and around St. John’s.

Hundt, appointed as head of the St. John’s bishopric on Dec. 12, 2018, provided testimony during these proceedings in his capacity as current office holder and successor to the archbishops who held the office during the relevant periods in the 1970s and 1980s 

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A 2011 affidavit from Fr. John MacIntyre indicated that in 1974 he was informed by a student, identified in documentation as “T.C.,” that Fr. Hickey sexually abused him. MacIntyre shared these allegations with Vicar General Msgr. David Morrissey. In 1975, Fr. Philip Lewis arranged a meeting between Morrissey and T.C. The pupil recounted details of the sexual abuse inflicted upon him by Hickey. Morrissey did not pass T.C.’s account along to civil authorities but did inform Hickey. The priest confronted T.C. 

“No action was taken by the Vicar General to prevent further abuses by Hickey. Hickey continued to abuse children over the following 14 years as he moved from parish to parish within the archdiocese.”

Later, in 1980, a seminarian named Randall Barnes informed Archbishop Alphonsus Penney that Hickey and another seminarian “were abusing boys at the parochial house, Parish of Rushoon.” Penney did not disclose this information with civil authorities, nor Guardian. 

Adding together all the aforementioned names, at least six priests working in the archdiocese were aware of Hickey’s predatory behaviour before the policy was issued in 1980. 

Brown found that “his information was intentionally concealed or misrepresented by the archdiocese and had it been disclosed it would, on a fair consideration of the evidence, have influenced a reasonable insurer to decline the risk.” Furthermore, he wrote that the evidence indicated to him that by the 1980s “the RCEC had adopted a practice that has been described in some parlance as ‘a cover-up.’ ”

Ultimately, Brown declared “Guardian has met its burden of establishing that RCEC and its legal representatives intentionally and recklessly withheld knowledge of past and ongoing sexual abuse by its clergy and is not required to return the premiums paid by RCEC during the time of the policy.”

Survivors of clergy abuse or by Mount Cashel orphanage operators received their first disbursement back in October. Over $20.9 million was approved as an interim distribution. 

Geoff Budden, the lead lawyer for the plaintiffs, has told The Register multiple times in recent months he and his legal colleagues could get closer to gaining the full $105 million by litigating against other entities. The provincial government and religious orders linked to the priests named by victims represent a couple of possible pathways for Budden’s team.

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All parties are also waiting to see if RCEC’s litigation against Northbridge General Insurance Corporation — the RCEC held a policy with its predecessor from 1985 to 1990 — will reach a similar conclusion or a win for the archdiocese.

Read Brown’s entire decision at https://www.canlii.org/en/nl/nlsc/doc/2024/2024nlsc182/2024nlsc182.html.