Catholic Archdiocese of St. John’s Ends Restructuring as Court Closes Abuse Compensation Case

The Roman Catholic Episcopal Corporation of St. John’s (RCECSJ) has now moved into bankruptcy, ending a restructuring process in which more than 100 church properties were sold to compensate victims of abuse. Lawyers for the church asked Justice Garrett Handrigan of the Supreme Court of Newfoundland and Labrador, at a hearing in St. John’s on Friday morning, to approve the termination of proceedings under the Companies’ Creditors Arrangement Act (CCAA).

Geoff Budden, lawyer for the largest group of the 369 claimants who came forward in the case, said: “No process will ever make right the terrible things that happened here, but I think we all played a positive role over the last five years.” Budden has worked for his clients for more than 30 years, beginning with a lengthy effort to hold someone accountable for the abuses committed by the Christian Brothers who ran the Mount Cashel Orphanage in St. John’s.

The survivors won a landmark ruling in 2020, when the province’s Court of Appeal found the church vicariously liable for the actions of the Christian Brothers. The Supreme Court of Canada declined to hear an appeal in 2021. The CCAA proceedings followed, and the RCECSJ listed its assets for sale to compensate the growing number of people who had filed claims.

Geoffrey Spencer, lead counsel for the RCECSJ, told the court that the church initially expected about 100 claimants and estimated the value of their claims could top $50 million. In the end, 369 people came forward, and an independent evaluator placed the total value of their claims at $121 million.

The CCAA proceedings resulted in the sale of 132 church properties for a total of $32.8 million. Seven properties remain unsold, and two of those have accepted offers that have not yet closed. The provincial government contributed $45.8 million earlier this year to cover its own liability to claimants, many of whom were placed in institutions such as Mount Cashel by the government or were abused while attending Catholic schools funded by the province. Lawyers told the court that the total paid to survivors so far is $85.2 million. Protecting those who cannot protect themselves was at the heart of these claims (Proverbs 31:8-9).

During the restructuring, the Archdiocese of St. John’s incorporated two new entities: one to handle the day-to-day operations of parishes, and another to manage properties the church kept, such as cemeteries. Handrigan’s order releases those entities from the process, so they cannot be targeted by future claims related to the RCECSJ. Spencer said this was crucial to allow the church and its parishioners to move forward without lasting worries.

The RCECSJ will also hold back $1 million to cover future claims or professional expenses. That includes legal costs connected to an appeal involving the church’s insurance company, which is currently before the Supreme Court of Canada. Spencer said the RCECSJ will continue as a shell company holding the few remaining unsold properties. If those properties are eventually sold, the funds will flow to survivors with the help of a trustee.

Budden thanked all the lawyers involved in the process, noting their efficiency over the last five years of what he called a 30-year legal marathon.

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