Court to decide if nearly $6 million raised in Church of Newfoundland and Labrador lottery can be used in Mount Cashel abuse settlement
The Catholic Church is asking a court in Newfoundland and Labrador to decide whether millions of dollars raised through a local parish fundraiser could be used to pay survivors of physical and sexual abuse in a former orphanage in St. John’s.
The money at stake – more than $5.7 million – was raised through a Chase the Ace lottery that saw tens of thousands of people pouring into the Goulds neighborhood of St. John’s regularly over the summer 2017 for a chance to win the jackpot.
The game was started by the small parish of St. Kevin’s in hopes of raising enough money to fix the church steps, said Kyle Rees, the parish attorney. They never imagined they would rake in millions, gain national attention and then find themselves embroiled in what Rees says is one of the most unusual cases he has ever worked on.
“To our knowledge, this is a unique case in this country,” Rees said in an interview. The situation, he said, resulted in “strange legal questions to be asked”.
Last January, a Supreme Court of Canada decision found the Roman Catholic Episcopal Corporation of St. John’s liable for physical and sexual abuse at St. John’s Mount Cashel Orphanage in the 1940s and 1950s.
The four main plaintiffs have filed for nearly $2.4 million, and court documents show the church expects at least 100 other victims to bring claims totaling more than $50 million. The expectation is set out in an affidavit filed with the court on January 11.
The archdiocese, which oversees 34 parishes in the St. John’s area, is now trying to figure out how it will pay those claims. He filed for creditor protection on Dec. 21, 2021, asking for time to develop a plan. A trustee’s report submitted to the Provincial Supreme Court the same day shows that the church is considering selling some of its properties, including 19 churches in St. John’s.
Among them is the Basilica of St. John the Baptist, one of the most recognizable buildings in the provincial capital. Built in the 1840s, the ornate gray stone spiers of the cathedral tower over one of the best views of St. John’s Harbor and the ocean beyond.
The trustee’s report says that before the archdiocese can formalize its plan, it needs a court ruling on whether it has any ownership over the Chase the Ace funds, and therefore whether the money can be used to pay its creditors or as part of a corporate restructuring.
“The trustee is currently of the view that the (funds) are an asset of the company and as such can be distributed among creditors,” the report said.
St. Kevin Parish disagrees.
“It would look wrong, I think, to anyone who bought a ticket to this Chase the Ace to support St. Kevin if the Catholic Church used that money to restructure so they wouldn’t have to sell the basilica,” Rees said. . “It’s not acceptable to the members of the St. Kevin’s finance committee, it’s not acceptable to the Goulds community.”
Archbishop Peter Hundt declined an interview request, and attorneys for the Roman Catholic Episcopal Corporation of St. John’s did not respond to emails or phone calls.
An independent arbitrator ruled on the matter last November and found the money belonged to St. Kevin’s, thanks to the woman who filled out the application to run the lottery in the first place.
The non-binding ruling by former provincial Supreme Court Justice David Orsborn is included in the Jan. 11 affidavit. He says that according to his reading of the laws, the money must be used for the purposes stated on the original lottery application submitted by parish secretary Patsy Hynes: the upkeep of the parish and its cemetery, as well as the maintenance of his food bank.
If Hynes had left that field blank in the application, the funds would go to the archdiocese, Rees said. Because she was specific, Rees said St. Kevin officials risked breaking the law if they turned over the money.
The Roman Catholic Episcopal Corporation of St. John’s is asking the Supreme Court for a binding decision on the matter in the ongoing bankruptcy proceedings, and Rees said it is expected to be heard Feb. 28.
“This is a completely new legal issue,” Rees said. “It requires consideration of a very narrow legal question that no one has really had to consider before.”