Millions raised in N.L. church lottery could be used in Mt. Cashel abuse settlement

ST. JOHN’S, N.L. – The Catholic Church is asking a Newfoundland and Labrador court to decide whether millions of dollars raised through a local parish fundraiser could be used to pay survivors of physical and sexual abuse at a former St. John’s orphanage.

The money at stake – more than $5.7 million – was raised through a Chase the Ace lottery that saw tens of thousands of people regularly flood the Goulds neighborhood of St. John’s during the summer of 2017 for a chance to win the jackpot.

The game was launched by the small parish of St. Kevin’s in hopes of raising enough money to fix the front steps of the church, said Kyle Rees, the parish’s attorney. They never imagined they would raise millions, attract national attention and end up embroiled in what Rees said is one of the most unusual cases he has worked on.

“As far as we know, this is a unique case in this country,” Rees said in an interview. The situation, he said, has resulted in some “strange legal issues” having to be raised.

Last January, a Supreme Court of Canada ruling found the Roman Catholic Episcopal Corporation of St. John’s responsible for physical and sexual abuse committed at the Mount Cashel Orphanage in St. John’s, Canada.

The four lead plaintiffs have sought a payout of nearly $2.4 million, and court documents show that the church expects at least 100 more victims to come forward with claims totaling more than $50 million. This forecast is contained in an affidavit filed with the court on January 11.

The archdiocese, which oversees 34 parishes in the St. John’s region, is now trying to figure out how it will pay those claims. It filed for creditor protection on Dec. 21, 2021, asking for time to come up with a plan. A trustee’s report filed with the provincial Supreme Court that same day shows the church is considering selling off a swath of its properties, including 19 churches in St. John’s and St. John’s, to pay off the claims.

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 gray stone spires of the ornate cathedral overlook one of the best views of St. John’s harbor.

The trustee’s report says that before the archdiocese can formalize its plan, it needs a court ruling on whether it has any ownership of 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 opinion that the funds are an asset of the company and, as such, are available for distribution to creditors,” the report said.

St. Kevin Parish disagrees.

“It would look bad, I think, to anyone who bought a ticket for that Chase the Ace to support St. Kevin’s if the Catholic Church was using that money to restructure so it wouldn’t have to sell the basilica,” Rees said. “It’s not acceptable to the people on the St. Kevin’s finance committee, it’s not acceptable to the Gould community.”

Archbishop Peter Hundt declined an interview request, and attorneys for St. John’s Roman Catholic Episcopal Corporation did not respond to e-mails or phone calls.

An independent arbitrator ruled on the issue last November and determined that the money belongs to St. Kevin’s, thanks to the woman who filled out the application to hold the lottery in the first place.

The non-binding decision by former provincial Supreme Court Justice David Orsborn is included in the Jan. 11 affidavit. It says that, according to his reading of the laws, the money should be used for the purpose set out in the original lottery application submitted by parish clerk Patsy Hynes: maintenance of the parish and its cemetery, as well as maintenance of its food bank.

If Hynes had left that field blank on the application, the funds would go to the archdiocese, Rees said. As was specific, Rees said St. Kevin’s officials risk breaking the law if they turn over the money.

St. John’s is asking the Supreme Court to give a binding decision on the matter as part of ongoing bankruptcy proceedings, and Rees said it is scheduled to be considered Feb. 28.

“This is a completely novel legal question,” Rees said. “It requires consideration of a very narrow legal question that no one has really had to consider before.”

This report from The Canadian Press was first published on January 29, 2022.