Guardian Insurance has secured a significant legal victory in a case involving the Roman Catholic Archdiocese of St. John’s, Newfoundland, with a court ruling that the insurer is not obligated to cover settlements for historical sexual abuse claims.
According to a report from the International Comparative Legal Guides (ICLG), the Newfoundland and Labrador Supreme Court declared a policy issued in the 1980s void due to the archdiocese’s failure to disclose known incidents of sexual abuse by clergy, which was deemed “fraudulent misrepresentation.”
The decision, issued by Justice Peter Browne in late December 2024, adds further financial strain to the archdiocese, which has been under bankruptcy protection since 2021. The church has been liquidating assets to meet $104 million in settlement obligations, managing to raise just $44 million to date.
Central to the court’s findings was evidence that the Roman Catholic Episcopal Corporation of St. John’s (RCEC) deliberately withheld critical information about clergy abuse when applying for and renewing insurance policies with Guardian. Notably, the archdiocese failed to disclose allegations against Father James Hickey, a priest later convicted on 20 counts of sexual violence against minors.
The court reviewed a 2011 affidavit from Father Ronald MacIntyre, which detailed a 1974 report of Hickey’s misconduct to church leadership. Despite assurances from Monsignor David Morrissey, then-vicar-general, that the issue would be addressed, no action was taken to prevent further abuse, the report noted. The court heard that at least six senior clergy members, including Archbishop Alphonsus Penney, were aware of Hickey’s behaviour before the issuance of the policy.
Guardian Insurance argued that the RCEC’s non-disclosure invalidated the policy, a claim bolstered by expert testimony. Frank Szirt, a retired underwriter, explained that while allegations of sexual abuse were not routinely considered material for religious institutions in the 1980s, insurers nonetheless relied on full disclosure of known risks when assessing policies. Szirt testified that the policy would not have been issued if the abuse had been disclosed.
Justice Browne agreed, stating that even though societal awareness of institutional abuse was less developed at the time, the church had a legal and ethical duty to disclose its knowledge of abuse. He concluded that the RCEC “intentionally and recklessly withheld knowledge” of abuse and that Guardian would not have insured the archdiocese if the truth had been revealed.
The ruling allows Guardian to avoid liability for the multimillion-dollar claims and retain all premiums paid by the archdiocese. The court’s decision underscores the importance of disclosure in the insurance industry, particularly for institutions managing sensitive or high-risk operations.
Guardian Insurance was represented by Philip Buckingham KC of Goodland Buckingham, while the archdiocese’s defence was led by Chris Blom of Miller Thomson.
This landmark case highlights the financial and ethical consequences of non-disclosure, reinforcing the critical role of transparency in insurance agreements.
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