Insurer denied it had to indemnify religious entity due to nondisclosure before policy renewal
The Newfoundland and Labrador Court of Appeal has allowed an intervention application alleging that a decision failed to adequately address leading appellate authorities on insurance law principles or tackle the public policy implications of voiding coverage for sexual assault claims.
In Roman Catholic Episcopal Corporation of St. John’s v Guardian Insurance Company of Canada, 2025 NLCA 29, the claimants alleged that clergy or members of lay religious orders – under the responsibility of the Roman Catholic Episcopal Corporation of St. John’s (RCECSJ) – abused them.
In 1980, Guardian Insurance Company of Canada issued RCECSJ a general liability insurance policy, renewed annually until 1985. The policy potentially covered abuse claims that allegedly occurred within those five years.
Guardian challenged its obligation to indemnify RCECSJ against abuse claims within the policy period. The insurer argued that RCECSJ’s admitted non-disclosure of its clerics’ alleged acts of sexual abuse 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 consider that policy void ab initio because RCECSJ 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 considering a reasonable insurer in the issuance and renewal of a general liability policy from 1980–85.
The intended intervenors, the representative plaintiffs of claimants allegedly abused within the policy period, applied to intervene in the appeal. They offered a draft factum supporting their application.
They alleged that they wanted to address the perspective of sexual assault survivors, the impact of voiding an insurance policy on recovering compensation from judgment-proof defendants and survivors’ willingness to report claims, and Canadian insurance law’s guiding principles, which required a consideration of those perspectives.
The intended intervenors acknowledged that their arguments could overlap with RCECSJ’s. However, they stressed that the abuser should not speak for the abused’s interests.
Intervention granted
The Court of Appeal of Newfoundland and Labrador allowed the application to intervene and restricted the scope of intervention.
The appeal court accepted that the intended intervenors did not participate in the trial. However, it ruled that the intended intervenors, as the claimants’ representative plaintiffs, had a direct interest in the appeal.
According to the appeal court, if Guardian could deem the policy void ab initio, the claimants abused within the policy period could not prove that a valid insurance policy existed and thus could not succeed in claiming direct recovery under s. 13 of NL’s Insurance Contracts Act, 1990.
The appeal court held that the intended intervenors’ arguments did not expand the appeal’s scope because they appeared to relate to the first three appeal grounds.
The appeal court said the intended intervenors’ draft factum tackled general insurance law issues and the particular public policy implications of voiding an occurrence-based policy many years after the occurrences. The appeal court added that RCECSJ’s factum also addressed general insurance law principles but did not include arguments the intended intervenors made.
The appeal court noted that it would later decide whether the intended intervenors’ legal arguments were material to assessing the appeal’s issues.
