NL Court of Appeal Allows Intervention in Insurance Case Over Clergy Abuse Claims

The Newfoundland and Labrador Court of Appeal has allowed an intervention application in an insurance appeal arising from clergy abuse claims. The case is Roman Catholic Episcopal Corporation of St. John’s v Guardian Insurance Company of Canada, 2025 NLCA 29. The intended intervenors argued that a 2024 decision failed to adequately address leading appellate authorities on insurance law principles, and failed to address the public policy implications of voiding coverage for sexual assault claims.

The underlying claimants allege that clergy or members of lay religious orders, under the responsibility of the Roman Catholic Episcopal Corporation of St. John’s (RCECSJ), abused them. These are allegations, and the insurance dispute does not decide whether the abuse occurred.

In 1980, Guardian Insurance Company of Canada issued RCECSJ a general liability insurance policy, which was renewed annually until 1985. The policy potentially covered abuse claims that allegedly occurred within those five years. Guardian challenged its obligation to indemnify RCECSJ for those claims. The insurer argued that RCECSJ’s admitted non-disclosure of its clerics’ alleged acts of sexual abuse, made when applying for or renewing the policy, vitiated its obligation.

In 2024, a judge of the Supreme Court of Newfoundland and Labrador determined that Guardian could treat the policy as void ab initio because RCECSJ had failed to disclose its knowledge of abuse claims when it applied for and renewed the policy. On appeal, RCECSJ alleged that the trial judge erred in treating the fact of the abuse’s occurrence as material to how a reasonable insurer would have considered issuing and renewing a general liability policy from 1980 to 1985.

The intended intervenors are the representative plaintiffs of claimants who allegedly were abused within the policy period. They applied to intervene and submitted a draft factum. They said they wished to address the perspective of sexual assault survivors, the effect of voiding an insurance policy on recovering compensation from judgment-proof defendants, and survivors’ willingness to report claims, which they argued Canadian insurance law principles required the court to consider. They acknowledged that their arguments could overlap with RCECSJ’s, but stressed that the abuser should not speak for the interests of the abused, a principle that reflects the duty to protect the vulnerable (Proverbs 31:8-9).

The Court of Appeal allowed the application to intervene but restricted the scope of the intervention. The court accepted that the intended intervenors did not take part in the trial, but ruled that they had a direct interest in the appeal as representative plaintiffs. According to the court, if Guardian could deem the policy void ab initio, claimants allegedly abused within the policy period could not prove that a valid policy existed and therefore could not succeed in a direct recovery claim under s. 13 of Newfoundland and Labrador’s Insurance Contracts Act, 1990.

The court held that the intended intervenors’ arguments did not expand the scope of the appeal, because they appeared to relate to the first three grounds of appeal. The court said the draft factum addressed general insurance law issues and the particular public policy implications of voiding an occurrence-based policy many years after the occurrences. It added that RCECSJ’s factum also addressed general insurance law principles but did not include the arguments the intended intervenors made. The court noted that it would later decide whether those legal arguments were material to assessing the issues on appeal.

Source: Read the original report