Page 1
Christian Brothers of Ireland in Canada, Re
In the Matter of the Winding-up and Restructuring Act, R.S.C. 1985, C. W-11, as
amended
In the Matter of the Winding-up of the Christian Brothers of Ireland in Canada
The Christian Brothers of Ireland in Canada, Applicant
Ontario Superior Court of Justice [Commercial List]
Blair J.
Heard: November 10, 12, 13, 17-21, 2003
Judgment: February 4, 2004
Docket: 98-CL-002670
Counsel: David Wingfield, Kim Mullin for Provisional Liquidator of the Christian Brothers of
Ireland in Canada
Douglas Garbig -- Representative Counsel
Clifton Prophet, Geoffrey Budden, Robert Buckingham, Patrick Eichenberg for Claimants 4, 30,
13, 15, 15, 29, 37, 43, 44, 48, 52, 60, 61, 65, 69, 72, 74, 75
David Day, Q.C. for Claimants 7, 8, 11, 16, 30, 32, 40, 51
David Bright, Q.C. for Claimant 42
Barry Stagg for Claimant 46
Nicola Savin, Craig Colraine for Claimants 62, 68, 70, 73, 81
Claimant 28, Wayne Pittmann (Claimant 35) for themselves
Claimants 45, 55, 63 for themselves
Ian Stauffer for Additional Claimant
Kevin Kemp for Additional Claimant
Page 2
Cases considered by Blair J.:
Alberta Government Telephones v. Selk (1974), [1974] 4 W.W.R. 205, 1974
CarswellAlta 56 (Alta. Dist. Ct.) -- referred to
Athey v. Leonati (1996), [1997] 1 W.W.R. 97, 140 D.L.R. (4th) 235, 81B.C.A.C. 243,
132 W.A.C. 243, 31 C.C.L.T. (2d) 113, 203 N.R. 36, [1996] 3 S.C.R. 458, 1996
CarswellBC 2295, 1996 CarswellBC 2296 (S.C.C.) -- considered
Bulut v. Brampton (City) (2000), 2000 CarswellOnt 1063, 185 D.L.R. (4th) 278, 48 O.R.
(3d) 108, 15 P.P.S.A.C. (2d) 213, (sub nom. Bulut v. Sun Life Assurance Co. of Canada)
131 O.A.C. 52, 16 C.B.R. (4th) 41 (Ont. C.A.) -- referred to
C.C. Petroleum Ltd. v. Allen (2002), 2002 CarswellOnt 2375, 35 C.B.R. (4th) 22, 26
B.L.R. (3d) 47 (Ont. S.C.J. [Commercial List]) -- referred to
Canada Deposit Insurance Corp. v. Canadian Commercial Bank (1992), 5 Alta. L.R. (3d)
193, [1992] 3 S.C.R. 558, 16 C.B.R. (3d) 154, 7 B.L.R. (2d) 113, (sub nom. Canada
Deposit Insurance Corp. v. Canadian Commercial Bank (No. 3)) 131 A.R. 321, (sub nom.
Canada Deposit Insurance Corp. v. Canadian Commercial Bank (No. 3)) 25 W.A.C. 321,
97 D.L.R. (4th) 385, (sub nom. Canada Deposit Insurance Corp. v. Canadian Commercial
Bank (No. 3)) 143 N.R. 321, 1992 CarswellAlta 298, 1992 CarswellAlta 790 (S.C.C.) -referred to
Crown Trust Co. v. Rosenberg (1986), 60 O.R. (2d) 87, 22 C.P.C. (2d) 131, 39 D.L.R.
(4th) 526, 67 C.B.R. (N.S.) 320 (note), 1986 CarswellOnt 235 (Ont. H.C.) -- followed
Crowther v. Canada (Attorney General) (1959), 42 M.P.R. 269, [1959] I.L.R. 1-326, 17
D.L.R. (2d) 437, 1959 CarswellNS 7 (N.S. C.A.) -- referred to
Dvorak, Re (1980), 119 D.L.R. (3d) 173, 1980 CarswellMan 197 (Man. C.A.) -considered
Food Controller v. Cork (1923), [1923] A.C. 647, [1923] B. & C.R. 114 (U.K. H.L.) -considered
Household Realty Corp. v. Canada (Attorney General) (1979), [1980] 1 S.C.R. 423, 105
D.L.R. (3d) 266, 34 N.S.R. (2d) 583, 9 R.P.R. 145, 59 A.P.R. 583, 29 N.R. 174, 1979
CarswellNS 108, 1979 CarswellNS 97 (S.C.C.) -- referred to
Laronge Realty Ltd. v. Golconda Investments Ltd. (1986), 7 B.C.L.R. (2d) 90, 63 C.B.R.
(N.S.) 76, 1986 CarswellBC 496 (B.C. C.A.) -- referred to
Matter of Mobile Steel Co. (1977), 563 F.2d 692 (U.S. C.A. 5th Cir.) -- considered
Page 3
Merrell v. A. Sung Holdings Ltd. (1995), (sub nom. Leavere v. Port Colborne (City)) 25
M.P.L.R. (2d) 122, (sub nom. Leavere v. Port Colborne (City)) 22 O.R. (3d) 44, (sub
nom. Leavere v. Port Colborne (City)) 122 D.L.R. (4th) 200, (sub nom. Leavere v. Port
Colborne (City)) 9 P.P.S.A.C. (2d) 78, (sub nom. Leavere v. Port Colborne (City)) 79
O.A.C. 16, 1995 CarswellOnt 157 (Ont. C.A.) -- referred to
R. v. Alberta (Workmen's Compensation Board) (1962), (sub nom. Regina (Provincial
Treasurer) v. Alberta (Workmen's Compensation Board)) 39 W.W.R. 291, 36 D.L.R. (2d)
166, 1962 CarswellAlta 38 (Alta. Dist. Ct.) -- referred to
R. v. Alberta (Workmen's Compensation Board) (1963), 42 W.W.R. 226, 40 D.L.R. (2d)
243, 1963 CarswellAlta 23 (Alta. C.A.) -- referred to
R. v. Bank of Nova Scotia (1885), 11 S.C.R. 1, 4 Cart. B.N.A. 391, 1885 CarswellPEI 1
(S.C.C.) -- referred to
Royal Bank v. Soundair Corp. (1991), 7 C.B.R. (3d) 1, 83 D.L.R. (4th) 76, 46 O.A.C.
321, 4 O.R. (3d) 1, 1991 CarswellOnt 205 (Ont. C.A.) -- followed
Statutes considered:
Bankruptcy Act, R.S.C. 1970, c. B-3
Generally -- referred to
Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3
Generally -- referred to
Constitution Act, 1867, (U.K.), 30 & 31 Vict., c. 3, reprinted R.S.C. 1985, App. II, No. 5
s. 91 ¶ 21 -- referred to
Personal Property Security Act, R.S.O. 1990, c. P.10
Generally -- referred to
Winding-up and Restructuring Act, R.S.C. 1985, c. W-11
Generally -- referred to
s. 71(2) -- referred to
Page 4
ss. 71-75 -- referred to
s. 75(1) -- referred to
ss. 87-92 -- referred to
s. 89 -- referred to
s. 111 -- referred to
MOTION BY liquidator of religious order for approval of methodology for proving and valuing
claims by victims of abuse, for approval of recommendations for distribution of funds to victims
and for approval of agreement entered into with government of Newfoundland with respect to
certain claims.
Blair J.:
PART I
BEGINNING
Introduction
1
Underlying these proceedings is a story of aching proportions.
2 Between December 1962 and the late 1980's a succession of teachers - all cloaked in the
trust-evoking aura of religious orders - committed unspeakable acts of physical, sexual and
emotional abuse on a group of boys who were under their protection and care at the Mount
Cashel Orphanage in Newfoundland and elsewhere. These cruel and sadistic men were all
members of the Christian Brothers of Ireland in Canada, a corporate entity that is being wound
up in these proceedings[FN1] .
3 The heartbreak of this tragedy was exacerbated when revelations of the abuse, made by
some of these vulnerable boys in 1975, were suppressed and covered up, and the boys sent back
to the "care" of their abusers. The cover-up involved not only leaders of the Christian Brothers
themselves, but people in very high places in the police and the Government of Newfoundland
and Labrador. The impact and reverberations of the Christian Brothers' treatment of their
victims, and the torment it has caused them, continues to this day.
4 This is an old story in Canada, but it is an unfinished story. Hopefully, the outcome of this
winding-up proceeding and the Order made as a result of the present Hearing will provide a
concluding chapter to the story and some closure to the anguish the victims have endured.
Background
Page 5
5 The present Hearing involves a motion by the Provisional Liquidator [FN2] of the Christian
Brothers for approval of the Recommendations contained in the Eleventh Report of the
Liquidator dated April 10, 2003.
6 On October 28, 1996, the Christian Brothers applied to the Ontario Superior Court of Justice
to be wound up under the provisions of the Winding-up and Restructuring Act R.S.C. 1985, c.
W-11, as amended ("the Act"). The Corporation was insolvent because of numerous claims made
against it by those who had been abused by members of the Christian Brothers ("the Claimants"
or "the Abuse Victims"). The winding-up was stated to be for the purpose of ensuring that "the
maximum amount of the corporation's assets ... were employed [to compensate] all of the
Claimants in a fair and expedited manner".
7 While I am sure the Claimants would not view the process to have been an "expedited" one,
the assets of the Corporation have now been realized and the Liquidator is in a position to
distribute the proceeds amongst the Claimants. On this motion it is asking the Court to approve:
the methodology which the Liquidator has developed for proving and valuing the claims against
the Estate; the Recommendations arising out of the implementation of that methodology and
leading to the distribution of funds to the Claimants in the individual amounts indicated in the
Report; and, as well, an Agreement it has entered into with the Government of Newfoundland
and Labrador.
8 Although the majority of the (now) 83 Claimants support the Recommendations, certain of
the Claimants oppose the approval of the Report on various grounds ("the Objecting Claimants").
Some of the Objecting Claimants ask the Court to reject the Liquidator's methodology; others
request that it reject an agreement that has been entered into between the Liquidator and the
Government of Newfoundland and Labrador and which the Liquidator asserts is central to its
ability to distribute the assets to the Claimants at this time and in the amounts indicated; and,
finally, certain Objecting Claimants ask the Court to award them different amounts of
compensation than what the Liquidator has recommended. A number of the Objecting Claimants
are in more than one of these camps.
9 Various Notices of Objection have been filed, and there are several cross-motions seeking
changes in the amounts recommended respecting four Claimants and requesting that the claims
of the Government be subordinated to those of the Claimants in the liquidation.
10 To preserve the confidentiality of the identities of the Claimants I shall refer to them by the
Master Identification Number attributed to them by the Liquidator for those purposes, rather than
by their names, throughout these Reasons. There is one exception. Claimant #35, Mr. Wayne
Pittman, appeared and participated in person at the Hearing. He has advised that he wishes to be
referred to by his name rather than by his I.D. number, and I have accommodated that request.
11 Some further background is necessary in order to appreciate the context of the Liquidator's
Recommendations.
Page 6
12 The original winding-up Order was made on October 28, 1996. On December 10, 1996, the
Court ordered that anyone who wished to make a claim against the Christian Brothers must file a
proof of claim with the Liquidator by February 14, 1997 (this date was subsequently extended to
December 10, 1997). As of February 28, 2003, a total of 111 people had filed proofs of claim.
13 By Order dated July 28, 1998, the Court appointed Representative Counsel to represent the
interests of the Abuse Victims. Representative Counsel was asked, amongst other things, to assist
Claimants in understanding the compensation process and to report to the Winding-up Court
with respect to the compensation process. Mr. Garbig has performed that role admirably. The
Court is grateful for his assistance to it and to the Claimants throughout.
Motion for Advice and Directions
14 In December 1997, the Liquidator sought advice and direction from the Court on a number
of questions, including that of whether the Liquidator should be ordered to admit liability on
behalf of the Christian Brothers to those people whose claims related to abuse they had suffered
while in the care of members of the organization and, if so, for which claims. On February 27,
1998, the Court ordered the Liquidator to admit such liability where it was proved that after
December 20, 1962, a Brother of the Congregation physically, emotionally or sexually assaulted
or abused a person in attendance at an institution managed or operated by the corporation.
15 At the same time, the Court ordered the Liquidator to propose a method to determine the
veracity of the allegations of abuse made by Claimants and the damages that ought to be paid by
the Christian Brothers to each such Claimant.
The Liquidator's Sixth Report
16 The Liquidator filed its Sixth Report with the Court on July 9, 1998, setting out its
proposed method for determining the veracity of the abuse allegations. By Order dated July 28,
1998, the Court approved the implementation of those terms. The particulars of this Order are of
some significance to the motions presently being considered. I will therefore summarize a
number of its provisions in more detail. The Order:
a) required the Liquidator to send to each Claimant in a prescribed form a Statutory
Declaration which the Claimant was to fill in and return;
b) required the Liquidator not to consider any claim made by an individual for which no
Statutory Declaration had been received by the Liquidator on or before October 31, 1998
except by further Order of the Winding-up Court, and provided that any such claim
should be valued at nil in the winding-up of CBIC (by Order dated October 28, 1998, this
deadline was extended to December 11, 1998);
c) directed the Liquidator to determine, by any method that it in its "sole discretion"
Page 7
thinks fair and reasonable, which Claimants it believes should be entitled to
compensation and the value of compensation each Claimant should receive (this
determination was defined in the Order as "the Recommendations");
d) directed the Liquidator to notify each Claimant in writing of its decision about the
Recommendations as they pertained to his or her claim;
e) directed the Liquidator to bring a motion to the Winding-up Court seeking approval of
the Recommendations and to notify each Claimant of the motion and an opportunity to
appear at the motion at his or her own expense;
f) directed that any Claimant who intended to appear at the motion to make submissions
was required to notify the Liquidator of that intention in writing within 14 days after the
Liquidator had notified him or her of the Recommendations;
g) permitted the Liquidator to hire any third parties to assist it in determining who should
be entitled to compensation and the value of compensation each Claimant should receive;
and,
h) continued the appointment of Representative Counsel on behalf of persons having
claims in the liquidation and winding-up of the Christian Brothers as a result of physical,
sexual or emotional assault or abuse suffered by them after December 20, 1962.
17 The Liquidator followed this process. It sent out statutory declaration forms to each person
who had submitted a Proof of Claim. By mid-1999, however, it had concluded that in many
cases the statutory declarations submitted to it had not been prepared with sufficient care and
detail. Many contained what the Liquidator described as "boilerplate information which on their
faces did not permit the Liquidator to admit those Claimants signing the declarations as creditors
of the Estate"[FN3] . The Liquidator therefore submitted its Eighth Report to the Court, setting
out a revised methodology for making its Recommendations, having regard to this situation.
The Liquidator's Eighth Report
18 The Eighth Report proposed[FN4] , firstly, that the Claimants who had filed statutory
declarations within the prescribed time be placed into one of three categories based on the
information contained in their statutory declarations, namely:
(i) Category I, consisting of claims accepted by the Liquidator based on the information
contained in the statutory declaration;
(ii) Category II, consisting of claims accepted by the Liquidator provisionally, subject to
further investigations; and
(iii) Category III, consisting of claims rejected by the Liquidator on the basis of deficient
Page 8
information or inability to corroborate the claims, subject to review if requested by a
claimant.
19 Secondly, the Liquidator proposed retaining Dr. David Wolfe as an expert to perform
certain psychological evaluations and to provide an opinion for each Claimant as to:
(i) whether the Claimant was abused as claimed (for Category II and III); and,
(ii) whether the abuse which the Liquidator or Dr. Wolfe accepted a Claimant had
experienced materially contributed to the psychological harm suffered by the Claimant.
20 Thirdly, the Liquidator proposed that in valuing the Claimants' damages it would use a
methodology that hewed as closely as possible to the methodology used by a court in assessing
liability and damages for tortious wrongdoing, including general, aggravated and special
damages. Only those Claimants whose damages were caused by the abuse were to receive
special damages, however. In that regard, since the Liquidator did not wish to invoke a standard
of proof of causation that would be impossible or even very difficult for a Claimant to meet, it
proposed that Dr.Wolfe would review each of the statutory declarations and conduct personal
interviews and psychological assessments of all Claimants in order to provide the Liquidator
with the following opinions:
a) Whether the Claimant exhibited psychological symptoms or conditions which were
consistent with the abuse the Liquidator accepted as having been suffered;
b) Whether these symptoms or conditions were caused in whole or in part by such abuse;
c) Whether the damage the Claimant alleges to have suffered by the abuse was consistent
with those psychological symptoms or conditions; and,
d) Whether Dr.Wolfe believed the Claimant's damages were caused entirely by factors
other than the abuse that was accepted by the Liquidator as having been suffered by the
victim.
21 Finally, the Liquidator also requested in the Eighth Report that an expert be retained to
provide economic opinions and advice to determine the special damages a Claimant would be
entitled to receive and, in particular, damages for lost income.[FN5]
22 The Court approved the revised methodology proposed by the Liquidator in its Eighth
Report, by Order dated July 27, 1999. Based on his qualifications and expertise, Dr. Wolfe's
retainer was accepted in that Order as well.
The Claims
23
From its review of the statutory declarations and other information available to it, the
Page 9
Liquidator admitted 32 Claimants under Category I. It sought more evidence for 37 Claimants
under Category II. It rejected 13 Claimants under Category III and concluded that 3 Claimants
did not meet the liability threshold even if the information contained in their claims were
accepted. Following the receipt of Dr. Wolfe's reports, the Liquidator accepted liability for 81 of
the 85 Claimants who had filed statutory declarations. No one whose claim was rejected is
opposing the Liquidator's Recommendations. At the commencement of the hearing of this
motion, I granted leave to 2 additional Claimants to file statutory declarations, bringing the total
of Claimants presently before the Court to 83.
24 Amongst the 81 pre-Hearing Claimants are 28 individuals who had formerly sued the
Government of Newfoundland and Labrador (the "Government") and the Christian Brothers in
the Supreme Court of Newfoundland and Labrador, and who settled those claims in 1996 for
their individual portions of a total of $11.2 million paid by the Government. I shall refer to these
28 Claimants, as a group, from time to time as the "1996 Claimants", and to the settlement as the
"1996 Settlement". Each of the 1996 Claimants gave a release to the Government and, as well,
assigned their claims against the Christian Brothers to it (the "Assigned Claims"). The
Government has filed a Proof of Claim in the liquidation with respect to the Assigned Claims
and with respect to its claim for contribution and indemnity from the Christian Brothers arising
out of the actions leading up to the 1996 Settlement (the "Contribution Claim").
25 Also amongst the 81 Claimants are 38 individuals who, since 1996, have commenced new
proceedings in the Supreme Court of Newfoundland and Labrador against the Government (the
"post-1996 Litigants"). The Government has taken third party proceedings against the Christian
Brothers in those actions, and also asserts a claim in the Estate for contribution and indemnity
with respect to those proceedings (the "Third Party Claims").
26 In addition, there are 12 Claimants in the Estate who are not 1996 Claimants or post-1996
Litigants, but who have claims against both the Estate and the Government. Finally, there are 3
Claimants who were abused by the Christian Brothers in institutions in British Columbia (the
"B.C. Claimants") and who, therefore, have no claim against the Government with regard to their
abuse.
The Hearing
27 The Hearing extended over eight days. It took the format of a Motion, with supporting and
opposing materials, supplemented by viva voce testimony. Three Claimants participated by
video-conferencing from various parts of the country.
28 The Liquidator filed its Eleventh Report and Supplementary Eleventh Report, together with
the individual assessments prepared by Dr. Wolfe respecting the Objecting Claimants, and other
materials to assist the Court. Notices of Objection to the approval of the Liquidator's
Recommendations were filed by, or on behalf of, 26 Claimants. Various of the Notices of
Objections were accompanied by affidavits and other documentation.
Page 10
29 Dr. Wolfe testified. He was examined in chief respecting his assessments and reports by
Mr. Wingfield, and cross-examined by a number of counsel, by two of the Claimants who
attended personally at the Hearing (Claimant #28 and Mr. Pittman) and by the three Claimants
who participated by video-conferencing (Claimants #45, #55 and #63). The two Claimants who
attended personally to participate in the Hearing also testified and made submissions (one of
them, Claimant #28 had previously filed an affidavit and written materials). In addition, three
other Claimants (#33, #20 and #70) attended to give evidence (two in opposition to the
Recommendations, one in support of them). All three Claimants who participated by videoconferencing during the Hearing had filed written affidavits and materials, and two of them made
a further statement and submissions by video.
30
Counsel also participated in the Hearing on behalf of various Claimants.
Part II
The Test
31
What is the legal standard for approval of the Liquidator's Recommendations?
32 This is an unusual winding-up proceeding. Normally the assets of an insolvent company
are liquidated and the proceeds distributed amongst creditors whose claims are essentially of a
commercial nature. That is not the case here. The essence of this winding-up is that the
Company's assets have been liquidated specifically to provide a pool of funds for distribution to
tort victims of institutional abuse for which the Corporation is liable. The nub of what is before
the Court on these motions is the Liquidator's request for approval of its Recommendations
concerning the scheme for distribution of the liquidated assets to those tort victims based upon
what is loosely parallel to an assessment of damages for that institutional abuse.
33 The Liquidator was asked to do a great deal in this case. The process and the methodology
leading up to the preparation of these Recommendations has been described above. It has been
approved by earlier Orders of this Court that have not been contested or appealed. The procedure
is founded upon the claims procedure set out in sections 71-5 of the Act, upon the Court's
authority under section 111 to confer and delegate any of its powers under the Act to an officer
of the court - in this case, the Liquidator - and upon the general equitable jurisdiction of the
Winding-up Court, coupled with its general supervisory power over the proceedings and the
Liquidator.
34 The Court has given the Liquidator a mandate to assess and value the claims of the
Claimants, subject to court approval, and a considerable discretion in doing so. On February 27,
1998, the Liquidator was directed and authorized to propose a method for determining the
veracity of the claims and to value the claims; by Order dated July 28, 1998, it was directed and
authorized to determine, by any method which it determined to be fair and reasonable, which
Claimants should be entitled to compensation and in what amounts; and on July 27, 1999, this
Court approved the methodology proposed by the Liquidator to effect this result, together with
Page 11
the appointment of Dr. Wolfe to assist in the process.
35 On behalf of the Liquidator Mr. Wingfield submits that the Court has placed a great deal of
trust and confidence in its officer by assigning the Liquidator the foregoing tasks, and that the
Court should therefore show considerable deference to the Liquidator's Recommendations. The
Court should only decline to approve the Recommendations - in the exercise of its supervisory
mandate - if it is satisfied that its officer has acted unfairly, imprudently or arbitrarily in making
them. On the other hand, Mr. Prophet argues, on behalf of the Claimants he represents, that there
should be no deference to the Liquidator's Recommendations and that where an individual
Claimant objects to the recommendation pertaining to him the Court has an obligation to
consider that claim as if it were adjudicating it separately and in accordance with normal tort
damage principles. He contends that the previous Orders do not ask the Liquidator to adjudicate
the claims of the Claimants, but rather to provide the Court with assistance in adjudicating the
claims.
36 I agree that it is ultimately for the Court to "adjudicate" the claims, in the sense that the
Court must be satisfied that the Recommendations in question should or should not be approved.
However, I accept that the Court should afford a certain deference to the Recommendations
made by the Liquidator.
37 In Royal Bank v. Soundair Corp. (1991), 4 O.R. (3d) 1 (Ont. C.A.) and in Crown Trust Co.
v. Rosenberg (1986), 60 O.R. (2d) 87 (Ont. H.C.), the courts have enunciated certain criteria for
consideration when they are dealing with a receiver's recommendations concerning the sale of an
asset. They speak to deference in such circumstances. While I agree that the nature of the
recommendations before the courts in those cases was more strictly commercial than ones
dealing with an assessment and valuation of tort claims based on institutional abuse, I do not
agree with the submission that the principles stated in Soundair Corp. and Crown Trust Co. are
of no assistance in these circumstances. In my view they are of assistance.
38 Mr. Prophet reasonably raises the distinction between this winding-up proceeding and
Soundair Corp. and Crown Trust Co., where the Court lacked the commercial expertise of its
receiver. Here, it is not a matter of lack of expertise on the Court's part in adjudicating and
assessing damages in tort cases. Obviously, courts perform this function regularly. However, the
claims in question are for institutional abuse, a relatively new category of tort claim. They are
difficult to prove. The damages are uncertain. Significantly, the pool of funds available to
respond to the claims is finite, and limited. Once their claim has been assessed, what each
Claimant has is a proportionate entitlement to those funds.
39 In those circumstances - given the complexities of this winding-up, the nature of the claims
being asserted, the need for a fair overall process that would treat all Claimants with similar
claims reasonably and equally, and the limited resources available for the resolution of individual
claims disputes - it made sense to direct and authorize the Liquidator, as an officer of the court,
to engage in the process described, to develop the methodology utilized, and to make
recommendations accordingly. The Liquidator and its advisors not only have some competence
Page 12
in the area, they have time and ability beyond that of the Court to engage in the exercise. To
paraphrase Justice Galligan in Soundair Corp., supra (at. 5), when a court appoints a liquidator
to use its expertise, time and abilities to administer the Estate and develop such a process and
methodology, "it is inescapable that it intends to rely upon" what the liquidator does in that
regard.
40 I therefore accept Mr. Wingfield's submission that the test the Court should adopt in the
circumstances of this winding-up is a modified version of the criteria set out in Soundair Corp.
and Crown Trust Co.. The Court must review the Recommendations in light of the specific
mandate given to the Liquidator, and, in determining whether to approve them or not, should
consider:
a) whether by its Recommendations the Liquidator has made a sufficient effort to
compensate the Claimants fairly and reasonably;
b) whether the Recommendations serve the interests of all parties, including the
Claimants, the Government, and the Estate;
c) whether the process adopted by the Liquidator and leading to the Recommendations
was reasonable and conducted with integrity; and,
d) whether the process or the results as contained in the Recommendations are unfair to
any of the parties.
41 I have concluded that these criteria have been met, in the circumstances, and that the
Recommendations should be approved notwithstanding the arguments of the Objecting
Claimants. My reasons for arriving at this conclusion follow.
Part III
The Assessments, The Methodology, and The Recommendations
Dr. Wolfe's Assessments and Reports
42 Dr. Wolfe's reports form a part of the record. He testified at the Hearing. I was impressed
not only by his expertise and experience, but also by the clarity and fairness of his testimony and
the sensitivity with which it was given - particularly in the face of questioning by deeply troubled
Claimants in circumstances where imperfect video-conferencing technology made the
communication of his evidence difficult.
43 Dr. Wolfe is a distinguished clinician, teacher, researcher, and author in the field of clinical
psychology, mental disorders, and psychopathology. His field of expertise includes, in particular,
the areas of abnormal development of children, the effects of abuse on children, and the longterm effects of abuse into adulthood. Although his work in this case constituted his first
Page 13
involvement with male adult victims of institutional sexual abuse - as opposed to domestic abuse
situations - I do not regard this as significant given his overwhelming expertise and experience in
the field of child abuse and its developmental effects through adult life. He does have experience
in dealing with female victims of sexual abuse by priests or teachers in school institutions. Dr.
Wolfe was also questioned about the tests he chose to administer - in contrast to others that
might have been selected - and about the manner in which the tests were administered and,
generally, about the way in which he conducted his interviews and prepared his diagnoses. I do
not see any criticism of merit in respect of these issues.
44
No expert evidence was tendered in opposition to that of Dr. Wolfe. I accept his evidence.
45 Dr. Wolfe prepared a general Report for the Liquidator, dated February 10, 2003, in which
he described the methodology he used in evaluating each Claimant and explained his
conclusions. He also provided the Liquidator with individual reports on each Claimant he met
and assessed. Of the 85 Claimants who filed statutory declarations, Dr. Wolfe individually
interviewed 79 (three claims were rejected outright by the Liquidator; three Claimants had died).
46 These assessments confirmed that the Claimants had encountered the same types of wideranging harm generally experienced by victims of child sexual abuse, and described in the
following passages from the February 10th Report: [FN6]
As noted in my original opinion ... the impact of child abuse changes over the life course.
A child's initial attempts to cope with abuse may change to chronic patterns of anger,
sexual acting-out, alcohol abuse, and similar self-destructive behaviours, among both
males and females. It is common for such patterns to worsen during young adulthood
when individuals begin to form the recognition that someone they trusted and perhaps
looked up to betrayed them.
The breach of trust forms the basis for a further erosion of their current self-esteem, a fear
of intimacy and closeness, and ill-conceived attempts to avoid unpleasant reminders of
the abuse. ...
Suicidal thoughts and behaviours, lowered self-esteem, and increased relationship
difficulties are commonly reported among abused men, as well as post-traumatic stress
disorder (PTSD) symptoms, such as hypervigilance and arousal, fear and avoidance of
events, places or persons that remind them of the abuse, and experiencing intrusive
reminders of the abuse. Ineffective coping strategies are also common, such as drug or
alcohol abuse, eating disorders, and sexual promiscuity, which often have a major impact
on lifestyle, employment history, and marital relations.
In brief, men and women with histories of child sexual abuse are more likely than their
non-abused counterparts to suffer damages and consequences stemming from the abuse
throughout the course of their lifetime. These consequences may include (but are not
limited to) an inability to seek and maintain meaningful and gainful employment;
Page 14
inability to provide adequate support for themselves and their families; inability to trust;
difficulties in male-female relationships; difficulties in childrearing; low self-esteem;
difficulties in anger management; self-destructive behaviour; abuse of alcohol and drugs;
intrusive flashbacks; mood swings; panic attacks; insomnia; and depression.
47 The Claimants abused by the Christian Brothers' experienced similar impacts, to varying
degrees: See the February 10th Report, p. 14 (Eleventh Report, p. 332).
48 Dr. Wolfe was not the investigator of the abuse claims, however. He used as his
informational base the data set out in the statutory declarations and whatever other records the
Liquidator or others were able to provide concerning pertinent life experiences and background,
clinical notes and records of family physicians and medical specialists and hospitals where
available. All of this material was reviewed before the assessment. Each assessment began with a
semi-structured clinical interview which was followed (in most cases) by the administration of
two psychological tests - the Trauma Symptom Inventory ("TSI") and the Personality
Assessment Inventory ("PAI") - and, finally, a diagnostic interview. The sessions varied in
length but on average lasted three to four hours.
49 The following opinions were provided for each Claimant.[FN7] For the claims already
accepted by the Liquidator (Category I), Dr. Wolfe determined the extent to which that Claimant
suffered psychological harm as a result of the abuse. For claims needing additional information
(Category II) or provisionally rejected by the Liquidator (Category III) he determined - as
requested, and in accordance with the July 27, 1999 Order - whether the Claimant showed
symptoms consistent with abuse of the nature, degree and frequency that the Claimant alleged
had been suffered, and then he determined the extent to which the Claimant suffered
psychological harm as a result of the abuse.
50 As part of the process, Dr. Wolfe gave an opinion as to the nature and severity of abuse
suffered by a Claimant compared to the other Claimants he had assessed. In this respect,
Claimants were placed in one of three relative categories, namely, whether the abuse suffered by
them was (a) similar to, (b) significantly more extreme than, or (c) significantly less extreme than
that suffered by others.
51 The manner in which this comparative analysis was conducted was the subject of some
controversy during the Hearing. If the Liquidator had previously accepted the claim (Category I),
Dr. Wolfe did not ask the Claimant to describe the abuse again during his interviews; instead, the
Claimant was reminded the claim had been accepted and told that there was no need to discuss
the upsetting events further unless the Claimant wanted to elaborate further. In those instances,
the nature and severity of the abuse was simply summarized from the statutory declaration and
other sources of information provided. On the other hand, if the Liquidator had not already
accepted the claim (Categories II and III), Dr. Wolfe asked the Claimant to describe and
elaborate upon the incidents of abuse alleged in the statutory declaration. This approach was
criticized by a number of the Claimants - Claimants #28, #35 (Wayne Pittman), #45, #55 and
#63, in particular - on the basis that their statutory declarations and other records (or, in the case
Page 15
of Mr. Pittman, a lack of records) did not accurately reflect the nature or severity of the acts of
abuse to which they were subjected. It was argued that Dr. Wolfe should have probed further.
52 As I have indicated, however, it was not Dr. Wolfe's role in this process to conduct a
further investigation of the acts of abuse in question. I am satisfied the restrictions on time and
resources that are inherent in this liquidation, together with the generally painful and possibly
detrimental impact on the Claimants of discussing the particulars of the abuse they sustained in
detail with the assessor, justified the approach taken by Dr. Wolfe and the Liquidator in this
regard. While there may have been instances where the full nature of the abuse was not
articulated in the statutory declaration or apparent from other records, I am not persuaded on the
evidence there would have been any significant overall difference in the categorization of
Claimants on this basis.
53 In addition to his opinions on the foregoing matters, Dr. Wolfe also provided a
psychological measurement of the harm to Claimants in terms of their current and past
functioning. This was done through what is known as a Global Assessment of Functioning
("GAF") and a Social and Occupational Functioning Assessment ("SOFA"). The GAF is a
standard scale used for rating an individual's overall psychological, social, and occupational
functioning. Recognizing that a person's global functioning may have changed since the
childhood abuse, a GAF score was provided for each Claimant on the basis of his current
functioning and on the basis of his worst level of functioning after 21 years of age. The SOFA
considers social and occupational functioning (not psychological), but includes impairments due
to both physical and mental limitations. Each Claimant's report sets out the GAF and SOFA
scores and the average of those scores.
54
Dr. Wolfe described these two assessments as follows:[FN8]
The GAF is a hypothetical continuum of mental health/mental illness, whereby 100
equals superior functioning in all areas, and 10 and below equals persistent danger of
severely hurting himself or others or inability to maintain minimal personal hygiene or
serious suicidal acts. Lower GAF scores indicate greater impairment in social functioning
or personal care (such as suicidal ideation or avoiding others), whereas higher scores
reflect milder or more transient symptoms (61-80) or the absence of significant symptoms
(>81). Someone obtaining a GAF score above 70 would generally be considered to be
functioning in the normal range, with few if any mental health problems.
.....
In addition to the GAF score, a social and occupational functioning assessment (SOFA)
score was provided ... This scale considers social and occupational functioning on a
continuum from excellent functioning (100) to grossly impaired functioning (0-10).
Included in this rating are impairments due to physical limitations as well as those due to
mental impairments.
Page 16
55 Finally, Dr. Wolfe provided the Liquidator with a psychological opinion whether the abuse
suffered by a Claimant materially contributed to his impairment - i.e., whether it had more than a
de minimus impact - or was the result of other factors in the individual's life. In doing so he was
required to have a high degree of confidence that the abuse suffered did not contribute in more
than an inconsequential way to the Claimant's overall level of functioning and that it was caused
by other identifiable factors. There were 12 Claimants for whom Dr. Wolfe felt the abuse
suffered did not materially contribute to their psychological impairment.
Methodology and the Liquidator's Recommendations
56 Following receipt of Dr. Wolfe's reports the Liquidator prepared its Recommendations for
the Court. They are contained in its Eleventh Report and the Supplementary Eleventh Report.
The first part of the Recommendations deals with how the pool of distributable assets available
in the liquidation (the "Distributable Amount") is to be allocated proportionately to each of the
Claimants. The second part deals with an agreement that has been entered into between the
Liquidator and the Government of Newfoundland and Labrador (the "Government Agreement"),
and which the Liquidator says is essential to the proper liquidation of the Estate.
57 The Distributable Amount is finite and limited. It is approximately $15.5 million. Given the
number of Claimants, the nature of the abuse inflicted upon them by the Christian Brothers, and
the damages that might well be awarded to most Claimants were they to litigate their individual
claims against the Corporation, it is obvious that $15.5 million cannot come remotely close to
compensating the Claimants in any full way for the harm they have endured. This reality cannot
be ignored when considering the process and methodology followed by the Liquidator in arriving
at its Recommendations. It must be borne in mind as well, in terms of the nature of an approval
motion under the Winding-up and Restructuring Act, that limited distributable amounts and a
proportionate-reimbursement approach to the allocation of those funds makes it cumbersome and
ineffective to conduct the Hearing as if it were 81 separate personal injury actions.
58 The Liquidator recommends that the allocation of the Distributable Amount be
accomplished under three separate headings. It argues these headings together encompass
general, aggravated, and special damages. The proposal is as follows:
A. Liability Compensation
A lump sum payment of $20,000 is to be made to each Claimant in recognition of the fact
that they have been abused and that the Christian Brothers are liable to them, even though
they may already have been compensated through the 1996 Settlement with the
Government. This amount represents 8% of the Distributable Amount.
B. Severity of Abuse Compensation
Secondly, a payment is to be made for the nature and severity of the abuse suffered. This
amount is designed to reflect the horrible nature of the events that occurred and the fact
Page 17
that damages should distinguish between the nature and severity of abuse suffered by
various people. It represents 22% of the Distributable Amount and is to be apportioned
on the following basis:
a) $25,000 for those Claimants who suffered abuse which was significantly less
severe than that suffered by others;
b) $50,000 for those Claimants who suffered abuse similar in severity to other
Claimants; and,
c) $100,000 for those Claimants who suffered abuse which was significantly more
severe than that suffered by others.
C. Impaired Functioning Compensation
The largest category is intended to compensate those whose ability to function normally
and to work have been impaired. It represents 70% of the Distributable Amount. The
Liquidator believes that the most significant aspect of damages for such individuals
would consist of lost income, since a person whose ability to function has been
significantly impaired has likely been harmed in his or her income-earning potential. The
Liquidator therefore recommends that most of the Distributable Amount be allocated to
compensate for that type of loss. The Liquidator reports the statutory declarations
indicate that most of the Claimants are unemployed or employed in jobs that provide only
marginal income.
In developing this category of compensation the Liquidator also drew upon Dr. Wolfe's
GAF and SOFA scores respecting a Claimant's ability to function. Given that a score of
over 70 represented "normal functioning", the Liquidator proposes that no Impaired
Functioning Compensation be awarded to those with scores over that amount. To ensure
that Claimants receive compensation for both their worst and current impaired
functioning (and therefore will receive compensation even if presently functioning in the
normal range), the Liquidator has allocated equal compensation to the three functioning
scores (Worst GAF, Current GAF, and SOFA). It developed a formula to make sure 70%
of the Distributable Amount was apportioned in this fashion. The formula the Liquidator
used was 71 minus the score times $3,565 for each of the Claimant's GAF and SOFA
scores.
Finally, Impaired Functioning Compensation is only recommended for those Claimants
whose impairment was identified by Dr. Wolfe as having been caused by the abuse the
Claimant suffered.
59 A helpful overview of the methodology used by the Liquidator in arriving at its
Recommendations, and of the proposed manner of allocating the Distributable Amount, is found
in the "Flow Chart for Liability and Damage Assessments" attached as Schedule "A" to these
Page 18
Reasons. A summary of the individual payments proposed, by Claimant Number, is included as
Schedule "B" to the Reasons. The latter indicates in columnar form the amounts suggested for
each category of compensation, the severity of abuse and amount of severity payment, the GAF
and SOFA scores and quantum of impaired functioning payment, and the total amount of
compensation proposed for each Claimant. Where a Claimant was involved in the 1996
Settlement, the sum received from that Settlement is deducted from the liability, severity and
impaired functioning payments to arrive at the total distribution. Everyone receives at least
$20,000, however.
60 The amounts recommended to be paid cannot be allocated, however, without a
consideration of the position of the Government, and of the Government Agreement and the
issues surrounding it. I turn to those subjects next, prefaced by a brief discursion into a topic that
underlies and colours everything flowing from the Mount Cashel abuse.
Part IV
The 1975-76 Cover-Up
61 The topic I refer to is what I shall describe in general terms as "the 1975-76 Cover-up". The
fallout from this cover-up is at the core of the opposition of some Claimants to the Government
Agreement and its approval; but it lies beneath the objections of certain Claimants to their
categorization in terms of severity of abuse and impaired functioning, as well.
62 The 1975-76 Cover-up was examined, and confirmed beyond peradventure, by the Royal
Commission of Inquiry into the Response of the Newfoundland Criminal Justice System to
Complaints, conducted by the Honourable S.H.S. Hughes Q.C. in 1989-90 ("the Hughes
Inquiry")[FN9] . A police investigation regarding physical and sexual abuse by five Brothers at
Mount Cashel was interfered with and ultimately terminated and suppressed by the then Chief of
the Royal Newfoundland Constabulary and (and at the instance of) the then Deputy Minister of
Justice. The investigation, which was launched as a result of complaints regarding one Mount
Cashel boy, was soon buttressed in the Fall of 1975 by particulars of widespread physical and
sexual mistreatment obtained in interviews with some 26 boys, many of whom gave
statements.[FN10] It was also supported by admissions from two of the Brothers. The
investigating officer prepared two reports, dated December 18, 1975 and March 3, 1976, but he
was ordered by his Chief to alter an earlier version of his first report to remove all references to
sexual abuse, an edict he only partially obeyed. His first report was accompanied by the written
statements of boys who had been interviewed, however. These reports were closely guarded by
the Deputy Minister and were never shown to the Minister of Justice, as found by Commissioner
Hughes.[FN11]
63 Shortly after the March 3rd report, it seems, a meeting took place between senior officials
of the Christian Brothers and the Deputy Minister of Justice, at which time a tacit agreement was
made whereby the implicated Brothers would be removed from Newfoundland and would
undergo treatment, in exchange for which the laying of any criminal charges would be
Page 19
suspended. By letter dated January 26, 1977, the Deputy Minister returned the two reports to the
Chief of police, together with copies of letters from Christian Brothers' officials attesting to
treatment undertaken by the offending Brothers, and stating:
In view of the action taken by the Christian Brothers, further police action is unwarranted
at this time.[FN12]
64
Commissioner Hughes described what happened in December 1975 in the following words:
In December 1975 there were ninety-one pupil residents of the Mount Cashel Boys'
Home and Training School of whom all but one were wards of the director of child
welfare. During the investigation conducted by Detective Robert Hillier, assisted by
Detective Ralph Pitcher, thirty-one people had been interviewed in one way or another:
there were five adults, including two Christian Brothers, and twenty-six boys ranging in
age from eight to seventeen with an average of eleven to thirteen years. I say
"interviewed in one way or another" because only boys ten years old and over were asked
to sign written statements, and when they were under that age and gave statements these
were written out by one or other of the investigating officers, but not signed. ... Of the
twenty-six pupil residents interviewed twenty-five gave statements and three of these
gave two each. Most of the boys, according to Hillier, were either frightened or in tears;
the condition of one was such that Hillier was not anxious to take a statement from him.
Indeed the arrangement whereby Brother Kenny[FN13] was to drive the boys to the
police station for the purpose of interview was enough to implant a fear in all the younger
boys, several of whom testified that he had told them not to tell the police about anything
he had done. I have already mentioned the tears of Andre Walsh when he displayed his
ravaged hands. The reason for selecting the twenty-six boys is not easy to analyze,
particularly as Mr. Hillier was not too sure himself. He felt that Shane and Billy Earle had
given him some leads. There is no evidence to suggest that the boys were either
volunteers or selected by the superintendent, an unlikely possibility under the
circumstances. Nevertheless there is no doubt the boys feared retaliation at Mount Cashel
and this must have had a stultifying effect on many of the statements; it is surprising that
so many deadly allegations were made.[FN14]
65 From the standpoint of the child victims, of course, the trauma was only heightened by the
fact that they were forced to return with Brother Kenny and to continue to reside at Mount
Cashel with their abusers. Many were further molested and beaten as a "reward" for their cooperation with the police.
66 One can readily understand the tormented memories that haunt those boys to this day.
Many of them are Claimants in the liquidation. Three - Claimants #28, #35 (Mr. Pittman) and
#63 - participated personally or by video-conferencing at this Hearing. They expressed in
differing ways, but equally eloquently, the impact the experience of the 1975-76 Cover-up had
on them and their reasons why it should preclude the Government from evading responsibility
for its actions (and inaction) through the mechanism of the Government Agreement, as well as
Page 20
their perspective of the experience in the context of the severity of their abuse and impaired
functioning.
67 Mr. Pittman was particularly vocal in his testimony regarding these issues. He has become
very focused on what he perceives to be an ongoing conspiracy to obstruct justice and to cover
up what actually happened on the part of the Government, beginning in 1975 and continuing
through the Hughes Inquiry (which he also challenges) to the present attempt by the Government
to avoid responsibility by forcing the Claimants to provide releases by means of the Government
Agreement. Apart from what is already in the public domain concerning the role of senior
government officials and police in the 1975-76 Cover-up through the Hughes Inquiry and
subsequent criminal proceedings involving certain Brothers, I am aware of no real basis for Mr.
Pittman's allegations.
68 To this mix of frustration and anger Mr. Pittman adds a dissatisfaction with Mr. Budden (in
relation to his services provided earlier concerning the liquidation) and Mr. Day (in relation to
certain things that happened at the Hughes Inquiry, where Mr. Day was co-counsel to the
Commission). The former arises out of the conviction that his historical records were not
provided to Dr. Wolfe when they should have been. The latter relates to a controversy over
whether there were written statements given by Mr. Pittman in November or December 1975
and, if so, whether they should have been tendered at the Hughes Inquiry. Again, I see nothing in
the Record before me that provides any objective basis for Mr. Pittman's grievances with respect
to these allegations.
69 In any event, both the accusations concerning particulars of the Cover-up and the Hughes
Inquiry and those concerning the solicitors are well beyond the scope of the liquidation and this
Hearing.
70 Having said that, however, I have no doubt Mr. Pittman subjectively believes that his
concerns are justified. While this is peripheral to the issues to be determined at this Hearing, it
has a great deal to do with his sense of justice being done and with his ability to achieve closure
respecting the Christian Brothers' affair.
71 Mr. Pittman says that he and his brother spoke to the police, and gave statements, in
November 1975, as well as in December of that year. In addition, he spoke to his father, to a
teacher he was put in contact with, and to the guidance counsellor at Brother Rice High School
where he attended. Nothing came of these efforts, as far as he can determine. The abuse
continued, particularly respecting his brother, and he has a sense of guilt about not having been
able to protect his brother.[FN15] In addition he is frustrated by the fact - as he sees it - that his
efforts to report and put an end to the ongoing abuse seem to have been ignored and the
statements he gave either ignored or (worse) their existence denied. Mr. Pittman did not attend or
testify at the Hughes Inquiry because he simply felt unable to do so. There is some controversy
over whether written statements from him exist, but I think that Mr. Pittman's concerns in this
regard are more subjective than real. On a review of Appendix G to the Hughes Inquiry
Report[FN16] it is apparent that Mr. Pittman spoke to the police at least on December 12, 1975,
Page 21
and that the Commissioner accepted this was so. Thus, I think Mr. Pittman can take some
measure of comfort that he and his brother's contacts with the police played a role - along with
the information provided by the other 26 boys - in unravelling the Mount Cashel disgraces.
72 I cannot leave this part of these Reasons, though, without commenting on the extraordinary
bravery of the young boys, including Claimants #28, #63 and Mr. Pittman, who were courageous
enough in 1975 to attempt to put a stop to the tragedy that was unfolding. To say that it is
difficult to restrain one's sense of disbelief and outright abhorrence at the egregious and
despicable acts of physical, sexual and emotional abuse visited upon the young boys who were
placed in the care of the Christian Brothers is an understatement. However, the sense of horror,
betrayal and breach of trust that must have been experienced by the Claimants who were
courageous and bold enough to risk revealing the abuse, only to have those acts of bravery
rewarded by more years of the same abuse by the same perpetrators, with the apparent
condonation of those in authority, cannot be imagined. I salute those valiant boys. I express my
revulsion, and, to the extent I can, that of the society this Court represents, at what happened to
them.
Part V
The Government Agreement
The Position of the Government of Newfoundland and Labrador and the Agreement
between it and the Liquidator
73 Most of the Mount Cashel victims assert a claim against the Government as well as against
the Christian Brothers. The claims against the Government rest on various foundations, including
the assertions that the victims were wards of the Province when placed in the care of the
Christian Brothers and therefore the Government was responsible for ensuring their protection; if
not wards, the Government was responsible, nonetheless, in its capacity as parens patriae. The
claims are framed in breach of fiduciary duty, breach of duty of care, and vicarious liability.
Claims are also put forward in relation to the 1975-76 Cover-up following the initial revelations
of abuse by a group of boys in the Fall of 1975 and the failure of the police and government
agencies to deal with those allegations at the time.
74 The validity or strength of the claims against the Government is of only tangential
significance for this Hearing. What is important is that the claims exist. That fact has two
important implications for this Hearing. First, for understandable emotional and psychological
reasons, the suggestion that Claimants should be expected to give up their claims against the
Government is a flashpoint for a generation of built-up anger and bitterness. Secondly - but on
the other side of the ledger - the existence of those claims has led to the separate reality of the
Government's claims against the Estate. The convergence of these two factors is the source of
much of the tension underlying the Objecting Claimants' opposition to the Government
Agreement.
Page 22
75 The Government settled with the 1996 Claimants by paying a substantial sum in total. It
holds the Assigned Claims of those plaintiffs against the Christian Brothers directly, as well as
the Contribution Claims and the Third Party Claims. The Government is by far the largest single
creditor in the liquidation, with demands that, if entitled to Crown Priority, would equal or
exceed the Distributable Amount. Its claims are the sword of Damocles hanging over the
Liquidator's ability to distribute the assets of the Estate to the Claimants. They have to be
resolved before the Estate can be liquidated.
76 So, too, does the question of how to treat the claims of the 1996 Claimants relative to the
claims of those who have never received any settlement payment or who are currently suing the
Government as well as claiming in the Estate.
77 These factors led the Liquidator to negotiate the Government Agreement. In that
Agreement the Government has agreed to subordinate its Contribution Claim to the individual
Claimants. It has agreed not to pursue its Assigned Claims, and it has agreed to dismiss the Third
Party Claims. The Government's agreement comes at a price, however. The Agreement is subject
to certain conditions, including the following:
a) Prior to receiving compensation from the Christian Brothers, each individual Claimant
is to execute a release in favour of the Government;
b) Prior to receiving such compensation, each individual Claimant who has commenced
legal proceedings against the Government is to file a discontinuance of that proceeding;
c) If any Claimant does not execute the release and file a discontinuance on or before the
date the assets are distributed, then the Government's Contribution Claim will rank in
priority to the entitlement of that Claimant to receive compensation;
d) The Liquidator is to provide the Government with all documents and other information
on each Claimant who does not execute a release or file a discontinuance on the same
basis it would have to do pursuant to its discovery obligations had it remained a party to
the Third Party claim; and,
e) The Winding-up Court must grant an order making the above conditions part of the
terms on which the assets of the Christian Brothers are to be distributed.
78 The Liquidator's rationale in support of the Government Agreement is that it generally
benefits the various groups of Claimants and enables the Liquidator to wind up the Estate and
distribute the assets in a timely fashion while at the same time disposing of the Government's
claims with finality.
79 From the Liquidator's perspective the benefit of the Agreement is that it permits the Estate
to be wound up in a fair and timely fashion. From the perspective of the 1996 Claimants, the
advantage is that they recover at least $20,000 from the Estate - and in some cases significantly
Page 23
more - even though they have already settled with, and received monies from, the Government;
in addition, they receive concrete recognition of the Christian Brothers' liability for their abuse.
From the perspective of the post-1996 Claimants, there is the option of recovering compensation
immediately from the Estate or of continuing or commencing their pursuit of "full
compensation" from the Government. In exchange for these benefits, the Claimants must provide
the Government with releases and, in the case of the post-1996 Claimants who have sued the
Government, discontinuances of their actions.
80 The Claimants, generally, benefit from the fact that the Distributable Amount has been
increased, for purposes of calculating payments to be made, by the value of the Government's
entitlement under the Assigned Claims ($6.9 million), which has effectively been added back
into the Estate for these purposes. The Claimants will then receive their proportionate share of
the Distributable Amount immediately, without having to wait for a determination of the existing
series of actions in the Supreme Court of Newfoundland and Labrador and the Third Party
Claims in those actions and - in the case of the 1996 Claimants - without having to pay anything
to the Government under the assignments they gave. The four Claimants from British Columbia,
who have no claim against the Government of Newfoundland and Labrador, will also benefit
from an immediate distribution without having to await the outcome of proceedings that are of
no concern to them.
81 The Liquidator points out, as well, that the compensation amounts proposed in the
Recommendations are, on average, consistent with the average amounts received by the 1996
Claimants. Moreover, the great majority (55, or 68%) of the 81 Claimants against the Estate
support the Recommendations and the Agreement.
82 The Liquidator submits that to be able to administer the Estate it requires two things. First,
it needs the Government's Third Party Claims to be dismissed. Secondly, it needs the
Government's remaining claims to be subordinated or abandoned. The Agreement gives the
Liquidator both of these things. The Liquidator does not believe that either can be accomplished
except with the consent of the Government.
83
Those opposing approval of the Agreement take a different view, however.
84 The opposition is based in some part on litigation strategy - the post-1996 Claimants should
be allowed to recover from the Estate and be able to continue to pursue the Government in the
courts, just as the 1996 Claimants had been able to do - but it is in large part rooted in a deeplyheld belief that it is wrong and unfair to permit the Government to escape its civil obligations to
the post-1996 Claimants by, in effect, forcing those Claimants to accept less than full
compensation out of the Estate. In developing his argument about what he called "the
Government's goal of thrifty litigation immunization", Mr. Stagg summarized the profound sense
of anger towards the Government in the colourful opening to his factum, submitted on behalf of
Claimant #46:
The Mount Cashel scandal has always been about the government of Newfoundland and
Page 24
how through its various political and legislative incarnations, both before and after
Confederation, the government permitted a Victorian relic of child protection, the Mount
Cashel Orphanage, to endure and metastasize into the den of child sexual abuse that the
Hughes Inquiry so thoroughly documented in 1989- 90.
85 The solution proposed by those objecting to the Government Agreement is that the Court
should rule either (a) that the doctrine of Crown priority does not apply in the circumstances of
this liquidation, and therefore that the Government's claims do not rank in priority to those of the
abuse victims but are subordinated to them, or (b) that the Government's claims are subordinated
to those of the Abuse Victims on the basis of the doctrine of "equitable subordination". I turn
briefly to these issues now, although I have concluded that they are not dispositive of this matter.
Crown Priority
86 Crown priority is a vestige of the prerogative powers of the Crown, which arise at common
law. In essence, it provides that "when the rights of the Crown come in conflict with the right of
a subject in respect to payment of debts of equal degree, the right of the Crown must prevail": R.
v. Bank of Nova Scotia (1885), 11 S.C.R. 1 (S.C.C.), at 10. The principle was reiterated in
Household Realty Corp. v. Canada (Attorney General) (1979), [1980] 1 S.C.R. 423 (S.C.C.). It is
argued that Crown priority can only be defeated either by statutory abolition or by demonstrating
that the nature of the debt held by the Crown is of a lesser degree than that of the other creditors.
87 Nothing in the Winding-up and Restructuring Act abolishes Crown priority. The debt of the
Christian Brothers to the Claimants and its debt to the Government for the Contribution Claims
and, potentially, for the Third Party Claims, are of equal degree since they are all unsecured
claims. Therefore, the Crown's argument goes, the principle of Crown priority applies in favour
of the Government. It is submitted for good measure that courts have declined to subordinate the
Crown's right on equitable grounds: see, for example, Crowther v. Canada (Attorney General)
(1959), 17 D.L.R. (2d) 437 (N.S. C.A.).
88 Mr. Prophet argued on behalf of a number of Objecting Claimants, however, as did Mr.
Stagg on behalf of his client, that Crown priority ought not to attach to the Government's claims
in this case. Mr. Prophet submitted that the priority applies to situations where the Crown is
acting in a capacity that is unique to the Crown - for example, the collection of taxes - and not
where the Crown is acting simply like any one of its subjects. He relies upon the reasoning of
Lord Shaw of Dunfermline in Food Controller v. Cork, [1923] A.C. 647 (U.K. H.L.), where, at
p. 666, Lord Shaw said:
My Lords, I venture to interpose much doubt as to the application or extension of the
expression used by Macdonald C.B. "that where the King's and the subject's title concur
the King's shall be preferred," and the modernization of it given by Lord Macnaghten, to
cases of ordinary commercial or industrial contracts entered into by a Government
department in the course of the business or enterprise which it carries on.
Page 25
89 In the Food Controller case the Crown was claiming on a debt owed to it by an insolvent
company that was acting as the Crown's agent for the sale and distribution of frozen rabbits
imported from Australia. The Crown priority was held to have been extinguished by statute in
that case, but Lord Shaw of Dunfermline felt obliged to consider the nature of the debt "in case
the treatment of this appeal should ever be attempted as a precedent for recognition on a wide
scale of what are Crown debts" (p. 665). He concluded, at 667-668:
How is this a Crown debt? It springs out of no power vested in the Crown by way of the
imposition of a duty or a tax. It is not in the ordinary enumeration of debts incurred for
the service of the country. It is an instance simply of a debt arising under ordinary
transactions of principal and agent. ... The debt arises purely in commercio.
It is unnecessary in this case to commit oneself to the proposition that when Departments
of Government enter into the commercial or industrial sphere they do so with such an
enormous leverage against all competitors or subjects of the Crown.
As at present advised, I can imagine nothing more damaging to the royal prerogative. As
time proceeds, the Government does no doubt increasingly enter into the commercial or
industrial sphere; but if the argument suggested be sound, it would further appear as a
consequence that as spheres of Government action widen, the prerogative of the Crown
grows larger and larger and the escape from obligations or the use of preference over
the rights of the ordinary citizens would in a greater and greater measure extend
[emphasis added].
90 The sentiments of Lord Shaw of Dunfermline have found favour in certain western
Canadian cases: see R. v. Alberta (Workmen's Compensation Board) (1962), 36 D.L.R. (2d) 166
(Alta. Dist. Ct.), affirmed in part on other grounds (1963), 40 D.L.R. (2d) 243 (Alta. C.A.), [sub
nom. Regina (Provincial Treasurer) v. Alberta (Workmen's Compensation Board)]; Alberta
Government Telephones v. Selk, [1974] 4 W.W.R. 205 (Alta. Dist. Ct.). In Dvorak, Re (1980),
119 D.L.R. (3d) 173 (Man. C.A.), however, the Manitoba Court of Appeal declined to accept
that view in the circumstances of a specific provision in the Bankruptcy Act which excluded the
application of a Part of the Act to debts owing to Her Majesty (of which Manitoba Hydro was
held to be an agent); nonetheless, Freedman C.J.M., with whom Matas J.A. concurred, expressed
the view that "there may be cases in which we will be called upon to consider whether the
principle set forth by Lord Shaw of Dunfermline in Food Controller et al. v Cork ... should be
applied" (pp. 173-174).
91 Here, the substance of the Government's claim in the Estate is by way of a claim for
contribution or indemnity in relation to a liability to which both the Christian Brothers and the
Crown are exposed as a result of abuse inflicted on young boys. It is even more removed than a
strictly commercial debt from the exercise of a power vested in the Crown "by way of the
imposition of a duty or a tax". What could be the policy rationale for preserving Crown priority
in relation to such a tainted claim, particularly when the contest is between the Crown and the
Page 26
very victims of the acts that give rise to the claims in the first place? I can see little rationale for
doing so.
92 I pause to digress and to note that the Government of Newfoundland and Labrador chose
not to attend and make submissions at this Hearing. It would have been more supportive of, and
beneficial to, the process if they had.
93 The Christian Brothers' winding-up has been underway since 1996. This Hearing
constitutes the first opportunity, for practical purposes, however, for the abuse victims to
participate themselves. It embraces the very core of what the winding-up procedure is about: the
distribution of monies from the liquidation of the Christian Brothers' assets to victims in
recompense for the horrific wrongs perpetrated upon those victims. In the nightmares of many of
those victims, of course, the Government of Newfoundland and Labrador is seen as coperpetrator of those wrongs. The Government has participated in many hearings over the course
of the proceedings, where its interests needed to be protected. For somewhat thin reasons,
expressed in a letter filed with the Court late in the Hearing,[FN17] however, it chose not to
participate on this occasion. It simply filed a slim, 5-page, written submission setting out its
position on the issue of Crown priority. This choice was puzzling, because the Government
Agreement is central to the Liquidator's Recommendations and its approval a key issue at the
Hearing. One is left with the impression that the Government is neutral, at best, about whether
the Agreement is approved, and willing to let the chips fall where they may and fight these
abused victims to the bitter end. The choice is as regrettable as it is puzzling. First, it leaves the
Court without the benefit of oral argument - directly responsive to questions arising during the
Hearing - on the part of the Government. Worse, however, the Government's absence at the
Hearing, perhaps unwittingly, fuelled and reinforced the sense of abandonment and betrayal that
underlies the very life-experience of these abuse victims. The Mount Cashel story is a source of
unremitting shame on the Christian Brothers, the Roman Catholic Church, and the Government
of Newfoundland and Labrador. The Government's presence at this Hearing would have been
helpful.
94 There is a certain attraction to the argument that Crown priority does not apply in the
circumstances of this liquidation, and I might be tempted to hold that Crown priority does not
attach to the Government's claims if it would help resolve the problems of the liquidation by
doing so; but it would not. The true issue here is not whether the Government's claims have
priority over those of the Claimants, but whether the Liquidator's Recommendations, including
the Government Agreement, should be approved. Even if the Government's claims do not have
priority they are sufficiently large that everyone agrees they would "eat up" the Estate, or at least
render the proposed distribution unworkable, if the Government were to share pari passu in the
distribution.
95 Mr. Prophet also submitted that the Government has admitted it either ranks in priority to
the Claimants or its claims are inferior to the others. This argument is founded upon the
following statement in the Government's written submission (at p. 5):
Page 27
It is important to remember that the Crown can never participate equally with other
creditors in a liquidation. Because of Crown priority, the Crown either ranks ahead of
claims of equal degree or its claim is deemed to be of a lesser degree in which case it
ranks behind other creditors. The Crown's claims are either superior or inferior but never
pari passu.
96 On its face the statement might appear to be such an admission. It would have been helpful
to have had counsel for the Government present to explain what was meant. I think it is apparent,
however, that the statement was made in the context of a situation where the principle of Crown
priority is applicable. If it were held that Crown priority did not apply to the debts in question,
not because of statutory abolition of the concept or because the debts were of lesser degree, but
because Crown priority simply does not attach to such debts on Food Controller principles and
therefore did not have to be "displaced", then the debt, being of equal degree, would have to be
treated pari passu with the others.
97 Finally, Mr. Prophet raised a technical argument. He contended that the Government had
not claimed a priority in the claims form filed with the Liquidator and therefore was out of time
to assert such a claim without leave from the Court to do so, which has not been sought. This
argument requires a formulistic interpretation of the forms in question but, in any event, does not
accord with the substance of the situation because the Liquidator has at all times been aware that
the Government is claiming Crown priority in the liquidation. Furthermore, the issue was not
raised in Mr. Prophet's factum and he candidly conceded that the Government did not have
notice of this specific contention. I would not strike the Government's claim to priority on this
basis.
98 In the end, I decline to rule on the issue of Crown priority because it is neither necessary
nor helpful in the circumstances to do so, and might well simply engender further litigation.
Even if the Government's claims do not have priority, but must rank pari passu with those of the
Claimants, the Government's claims would pose a considerable problem for the Liquidator.
Hence the need for the Liquidator to make a deal with the Government would continue.
Equitable Subordination
99 Regardless of Crown priority, the Objecting Claimants contend that the Government's
claims in the liquidation can and should be subordinated to those of the Claimants by reason of
the doctrine of "equitable subordination".
100 Equitable subordination is a concept that has been applied in insolvency matters in the
United States for many years. In Matter of Mobile Steel Co., 563 F.2d 692 (U.S. C.A. 5th Cir.
1977), the U.S. Court of Appeal for the Fifth Circuit described it in this fashion (per Clark J.):
Equality of distribution is the underlying theme of the Bankruptcy Act. But the rule of per
centum dispensation of assets is not inexorable. Although nothing in the Bankruptcy Act
expressly authorizes departures from the strict equality, bankruptcy courts have
Page 28
traditionally been regarded as courts of equity, and it is settled that they possess the
power to "prevent the consummation of a course of conduct by [a] Claimant which ...
would be fraudulent or otherwise inequitable" by subordinating his claims to the ethically
superior claims asserted by other creditors.
101
Matter of Mobile Steel Co. articulated three requirements for a successful claim of
equitable subordination: (a) the Claimant must have engaged in some type of inequitable
conduct; (b) the misconduct must have resulted in injury to the creditors of the bankrupt or
conferred an unfair advantage on the Claimant; and (c) equitable subordination of the claim must
not be inconsistent with the provisions of the bankruptcy statute. Although the Supreme Court of
Canada expressly declined to determine the question whether the equitable subordination
doctrine applied to Canadian insolvency law in Canada Deposit Insurance Corp. v. Canadian
Commercial Bank, [1992] 3 S.C.R. 558 (S.C.C.), per Iacobucci J. at 608-609, some courts in
Canada have applied it, expressly or by implication: see, for example, Bulut v. Brampton (City)
(2000), 48 O.R. (3d) 108 (Ont. C.A.); C.C. Petroleum Ltd. v. Allen (2002), 35 C.B.R. (4th) 22
(Ont. S.C.J. [Commercial List]); Laronge Realty Ltd. v. Golconda Investments Ltd. (1986), 7
B.C.L.R. (2d) 90 (B.C. C.A.);
102 The authority the Objecting Claimants rely on primarily in connection with the claim for
equitable subordination is the decision of the Ontario Court of Appeal in Bulut, supra. There, the
Court upheld a decision of MacKenzie J. who had allowed a lien holder to enforce its lien rights
for occupancy costs against a bankrupt company in priority to the claims of two secured
creditors. The securities of the two creditors had been registered prior to the court order that
preserved the lien holder's right to occupancy costs. However, the secured creditors had been
guilty of misconduct in delaying the payment of those costs. Speaking for the majority of the
Court, Macpherson J.A. said, at paras. 76-78:
A second line of exception to the "first in time" rule is provided by equity. In Spence on
Equitable Jurisdiction of the Court of Chancery, the author identified the "first in time"
rule as "the general rule" (vol. 2, at p. 727). However, he stated that the rule was qualified
by the notion of "the better equity" and that "the circumstance of priority of time alone
does not give a better equity" (vol. 2, at p. 737).
In Snell's Principles of Equity, 29th ed. by P.V. Baker and P. St. J. Langan (London:
Sweet & Maxwell, 1990) the authors explain (at p. 57) the circumstances in which the
holder of a prima facie priority can lose it:
A person with a prima facie claim to priority for his interest may lose it through his
own misconduct. The owner of a legal interest may be postponed to a subsequent
equitable interest owing to his fraud, or by estoppel, or through gross negligence; and
the owner of a prior equitable interest may be postponed if his conduct is inequitable.
The motions judge recognized the "first in time" rule. However, he determined that Sun
Life had a better equity. The mechanism he chose to give effect to this determination was
Page 29
reasoning by analogy from this court's decision in Leavere v. Port Colborne (City). He
said that what the statute did in Leavere he could do by "rule of law" - i.e., by judicial
application of common law and equitable principles - in this litigation. Since the priority
issue had to be determined outside the framework of the BIA and the PPSA, I can find no
fault in the motion judge's approach.[FN18]
103 The Objecting Claimants argue that this is precisely the situation here. In a contest
between the unsecured claims of the Abuse Victims and the unsecured claims of the
Government, the claims of the Abuse Victims have "the better equity". The three requisites of the
Matter of Mobile Steel Co. test have been met, they submit, since (a) the Government has
engaged in inequitable conduct, having breached its fiduciary duty and duty of care to the Abuse
Victims, (b) those breaches of duty have caused and/or contributed to the abuses suffered by the
Abuse Victims, who are the competing Claimants in the Estate, and have resulted in the
Government being vicariously liable for the damages of the abuse victims, and (c) equitable
subordination would not be inconsistent with the provisions of the Winding-up and Restructuring
Act because there is no provision in that Act which grants the Government priority. Therefore,
the claims of the Government for contribution in relation to the 1996 Settlement and the
contingent claims for contribution in relation to the presently pending Third Party Claims should
be subordinated to the claims of the Abuse Victims in the liquidation.
104 Like the argument in favour of holding there is no Crown priority in the circumstances of
this case, the equitable subordination argument is attractive, too. I find that on the facts the Court
could apply the doctrine to the Government's Contribution and Third Party Claims, and I have
little doubt - based on the equitable principles outlined above and the lack of any governing
statutory regime to the contrary - that the Winding-up Court has the jurisdiction to do so.
However, like the Crown priority argument as well, I am not satisfied that it is equitable or
appropriate to apply subordination principles in the circumstances and to refuse to approve the
Government Agreement on that basis. I come to this conclusion because I do not think the
application of equitable subordination will solve the problem. My analysis of this is as follows.
105 The doctrine might be used to subordinate the Government's Contribution Claims and
Third Party Claims. I do not accept there is a jurisdictional or constitutional impediment to
subordinating these claims in the liquidation. Although the Liquidator does not make the
argument for the (absent at the Hearing) Government, Mr. Wingfield is nonetheless concerned
about the contention that the Winding-up and Restructuring Act does not bind the Crown and that
this Court does not have the jurisdiction to determine the priorities of the Crown because only
the Supreme Court of Newfoundland and Labrador has the competence to do so. I agree that only
the latter Court has jurisdiction to deal with the actions that are presently pending against the
Government and in which the Christian Brothers have been third partied. It is for the Supreme
Court of Newfoundland and Labrador to determine the liability of the Province to the plaintiffs
in those proceedings, the liability of the Christian Brothers, the proportionate liability as between
the Government and the Christian Brothers, the plaintiffs damages and therefore the quantum of
the Government's claims.
Page 30
106 None of the issues to be determined by the Supreme Court of Newfoundland and
Labrador directly concern this Court in the liquidation, however. The concern of this Court is to
decide how the liquidated assets of the Estate are to be distributed amongst the creditors, in what
amounts, and in accordance with what priorities for purposes of the liquidation. Parliament has
legislated in this area pursuant to its jurisdiction to legislate in the field of bankruptcy and
insolvency under section 91(21) of the Constitution Act, 1867[FN19] , by enacting the Windingup and Restructuring Act. That Act provides this Court with the authority to determine claims
and rule as to distributions.
107 In relation specifically to claims subject to a contingency or for unliquidated damages or
which for any other reason do not bear a certain value, section 71(2) empowers the court to
"determine the value of the claim and the amount for which it shall rank". To the extent, then,
that the Contribution Claims and the Third Party Claims are claims for unliquidated damages, the
Winding-up Court has the power to determine the value for which they shall rank for distribution
in the liquidation. Further, sections 87 to 92 of the Act provide a mechanism for the contestation
of claims or of dividends proposed to be paid. The Court has the power to hold a hearing to
determine the contestation: s. 89. In such circumstances it would be open for an opposing
creditor, or the Liquidator, to contest - for instance - a Crown claim for priority in the liquidation
or to argue that the Crown's claim in the liquidation should be subordinated on equitable
grounds.
108 In my view, the Crown is not free to assert a claim in a winding-up proceeding and then
take the position that the Winding-up Court does not have jurisdiction or the constitutional
authority to deal with any objections contesting its claim. If the Crown seeks to participate in,
and benefit from, the winding-up proceedings, it exposes itself to the jurisdiction of the Court
under the Winding-up and Restructuring Act to determine any contestation relating to its claim,
for purposes of the liquidation.
109 Accordingly, while I recognize the Liquidator's concerns in this regard, I am satisfied that
there is no jurisdictional or constitutional impediment to this Court's ability to subordinate the
Contribution Claims and the Third Party Claims to those of the Claimants in the liquidation,
based on equitable grounds, should the Court feel it appropriate to do so.
110
As I have indicated, however, I do not think it is appropriate to do so.
111 The concept of subordination in relation to the Assigned Claims is problematic. The
Assigned Claims are not claims of the Government against the Christian Brothers; they are the
claims of the 1996 Claimants against the Christian Brothers. They are before the Court only
because the Liquidator treated the claim filed by the Government in this regard as a claim on
behalf of the 1996 Claimants, and sent them a statutory declaration to complete. A claim cannot
be subordinated to itself. To subordinate the Assigned Claims would be tantamount to setting
aside what appear to be valid contractual agreements between the Claimants and the
Government. Nothing before this Court would justify such a step.
Page 31
112 Consequently, even if the Government's claim to Crown priority were defeated and even
if the Government's Contribution Claims and Third Party Claims were subordinated, the
Liquidator would still have to deal with the Government's Assigned Claims. Only the agreement
of the Government will dispose of those claims. This is important because it is central to the
submissions of those who oppose the Government Agreement that its non-approval will have no
impact on the Liquidator's Recommendations for distribution of the assets. That is not the case,
however. The distribution cannot be effected as proposed unless the Government agrees to
forego its right to receive the proceeds designated for the 1996 Claimants.
Final Considerations Concerning the Government Agreement
113 The Liquidator was correct in accepting the Government's claims as valid claims in the
liquidation: the Assigned Claims are made under valid contracts between the Government and
the 1996 Claimants; the Contribution Claims arise from damages the Government has already
paid in respect of torts for which it and the Christian Brothers are each liable, and the Third Party
Claims arise in relation to pending actions in respect of similar torts, giving rise to similar
liabilities. These claims are of a size that will consume the entire Estate, if Crown priority
prevails, or at least dominate its distribution and defeat the proposed distribution, if treated pari
passu. The Liquidator had to deal with them, and it is not unexpected, or unreasonable, that for
its part the Government would seek to extract something in exchange for its agreement to
subordinate all of its claims. What it seeks to obtain are the releases and the discontinuances of
the Claimants.
114 The Government Agreement provides significant benefits to the various constituent
groups in the liquidation, as I have summarized above. Moreover, it maximizes recovery in the
Estate for the Abuse Victims, a legitimate public policy goal. Finally, it provides certainty,
avoids further court proceedings (an important consideration for many Claimants), and enables
the Christian Brothers' Estate to be wound up in a timely fashion, thus facilitating some closure
for the Abuse Victims by permitting them to proceed with their lives.
115 At the same time, those who feel strongly about continuing their pursuit of the
Government may elect to do so. They may ultimately recover more than they will receive from
the liquidation, if they do. However, the evidence suggests that the choice they are being asked
to make, in declining to give the release demanded by the Government Agreement, is not
between recovering substantial damages in a lawsuit compared with minimal recovery out of the
Estate. A comparison between the distributions proposed in the Liquidator's Recommendations
and the amounts received by the 1996 Claimants in the 1996 Settlement shows that on average
the amounts recovered are similar. Indeed, I note that Mr. Stagg's client, Claimant #46 - one of
the post-1996 Litigants - offered to settle his outstanding claim against the Government for less
than his proposed distribution in the liquidation. Thus, while I recognize the Government
Agreement interferes to some extent with the post-1996 Litigants' autonomy to proceed against
the Government and that it is an anathema to them for understandable emotional reasons, I am
not persuaded that requiring them to make the choice between being compensated now from the
Estate or later, through proceedings in the Supreme Court of Newfoundland and Labrador, is
Page 32
unjust in the context of this winding-up.
116 I conclude in the end, therefore, that the Government Agreement should be approved.
When the analysis is complete, it remains a fair and reasonable way for the Liquidator to
accomplish what needs to be accomplished, while balancing the interests of the various
competing Claimants in the Estate and avoiding the risks, costs, and delays that may result from
any future litigation respecting the above matters. I approve the Liquidator's actions in
negotiating and entering into the Government Agreement and I approve the Agreement itself for
the purposes of this liquidation.
Part VI
Individual Objections
The Assessments and Methodology: Summary of Objections
117 Objections to the approval of the Liquidator's Recommendations have been filed by or on
behalf of 26 of the Claimants. Fifty-five of the 81 Claimants are not appearing to object, and I
am advised by Representative Counsel that many of the 55 have delivered written notices
personally or by counsel indicating they support the Recommendations.
118 Most of the Objecting Claimants (over 20) have targeted the Government Agreement as
the focal point of their complaints. Several protest the assessment process and the methodology
adopted by Dr. Wolfe and the Liquidator, however, and, in some instances, the results in their
individual cases. The latter group of Objectors assert a variety of complaints including the
arguments that:
a) the GAF scale should not be used for purposes of arriving at individual assessments of
damages when its purpose is simply to assess psychological behaviour;
b) the methodology of using the GAF assessment for purposes of assessing damages
discriminates against those abuse victims who have managed to accomplish more in life;
c) the 1996 Claimants should be dealt with differently than in the manner proposed in the
Recommendations (some contend the 1996 Claimants should not have as much of their
1996 recovery deducted; others say the 1996 Claimants should not be able to recover out
of the Estate at all, since they have already given a release of their claims to the
Government);
d) the "severity scale" for distribution of $25,000, $50,000 and $100,000 (for those
sustaining less, similar or more severe abuse) is inappropriate, and the scheme would be
fairer and more equitable if the amounts distributed for severity abuse represented an
equal deviation from the mid-point of compensation;
Page 33
e) the categorization for severity abuse should be adjusted in certain individual cases;
f) the determination that the abuse sustained did not materially contribute to impaired
functioning, in certain other individual cases, should be set aside - on the evidence in
particular cases, and because the Liquidator applied the wrong test for causation - and
those Objecting Claimants should therefore be included amongst those entitled to
compensation for impaired functioning;
g) the interview process conducted by Dr. Wolfe was inadequate in terms of the time
devoted to certain individual interviews by him and in terms of the information that he
obtained (or did not obtain); and,
h) in the case of Mr. Pittman, that his assessment could not have been adequate because
of a lack of background documentation relating to his treatment and history.
119 Criticisms (a) through (d) are in the nature of a general attack on the assessment process
and the methodology adopted by Dr. Wolfe and the Liquidator. Criticisms (e) through (h) are
particular to individual cases. I shall deal with these two groups in order.
General Objections
The Assessment Process Generally
120 It should be noted that if the Claimants were to be required to prove their claims in the
ordinary fashion in a winding-up proceedings, "to the satisfaction of the court", pursuant to
section 75(1) of the Winding-up and Restructuring Act, the process would be much more formal,
expensive and cumbersome than that proposed by the Liquidator. Moreover, there would be a
heavier onus on the Claimants. Such a process is undesirable and would be unworkable in the
circumstances of this liquidation. Accordingly, as the Liquidator notes in paragraph 32 of the
Supplementary Eleventh Report, what it has attempted to do is,
to establish a process for determining claims which is more efficient than individualized
hearings for each Claimant but which still gives effect to each individual Claimant's
particular damages.
121 In arriving at its recommended process the Liquidator considered examples of other
processes that had been adopted for compensation in other institutional abuse cases, notably the
compensation packages offered to Claimants who were abused at the Jericho Hill School in
British Columbia, at the Grandview Training School for Girls in Cambridge, Ontario, and at the
Shelburne Youth Training Centre in Nova Scotia. For the most part these schemes focused on
severity of abuse, i.e., on the nature of the acts committed against the Claimant rather than the
ongoing harm suffered by the Claimant as a result of the acts. The Liquidator is of the view that
this approach fails to take into account the fact that the same act may have different impacts on
different persons. It therefore opted for an approach that was more akin to that generally taken by
Page 34
courts which "involves an assessment not only of the severity of the acts but also of the nature of
the injuries suffered by the victim, including any aggravation of pre-existing conditions or
propensities (i.e. application of the 'thin skull' doctrine)" (Supplementary Report, p. 20).
122 At paragraph 38 of the Supplementary Eleventh Report, the Liquidator explains its
selection of the proposed methodology:
The Liquidator believes that its process provides a more appropriate method for
determining compensation than other institutional abuse compensation processes or
individualized hearings before the Court. Like the other institutional abuse compensation
processes, the Liquidator's Recommendations take into consideration the nature of the
abuse suffered by each claimant and provides compensation based on the severity of the
abuse relative to the other claimants. The amount of compensation provided to claimants
for the severity of the abuse alone is generally higher than the total compensation paid to
claimants under the Jericho Hill, Grandview and Shelburne programmes. Moreover,
unlike those institutional programmes, the Liquidator's proposal provides claimants with
compensation for impairment to their ability to function which the Liquidator has
accepted will affect their ability to earn an income, much as a Court would do. This is
achieved through the allocation of 70% of the Distributable Amount to compensation for
impaired functioning.
[emphasis in original]
123
I accept this as a reasonable rationale for the proposed scheme.
The GAF Scale
124 Dr. Wolfe acknowledged that the GAF scale was not designed for the purpose of
assessing damages. Rather, its function is to provide a measurement of psychological, social and
occupational functioning on a scale of 1 to 100. He was not concerned that the Liquidator was
misusing the scores as a basis upon which to construct a recommended compensation scheme for
impaired functioning, however. In creating this category of compensation, the Liquidator was
attempting to replicate, in a way that made sense in the winding-up, the legal category of
damages known as "special damages". On the basis of what he understands about damages, Dr.
Wolfe is comfortable with what the Liquidator has done based upon the GAF/SOFA results.
125 I observe that special damages do not relate to harm "specially felt" by individuals, as
some of the Objecting Claimants seem to understand it to mean. Special damages are damages
resulting from the particular circumstances of the case and capable of more or less precise
calculation. Medical and hospital expenses are common examples. Loss of income to the date of
determination is a major element of such damages as well. In this case the Liquidator concluded
lost income was the element of damages that most needed to be recognized in terms of the
quantum of compensation to be distributed. The Liquidator's justification for this is explained at
pages 22-23 of the Eleventh Report as follows:
Page 35
Since the largest dollar value of damages for people who have suffered tortious
wrongdoing impairing their ability to work consists of damages for lost income, the
Liquidator is of the view that most of the Distribution Amount [should] be allocated to
compensation that will recognize a claimant's lost income-earning potential. A person
whose ability to function has been significantly impaired has likely been harmed in his or
her income-earning potential. Based on the Statutory Declarations the Liquidator
received it appears that most claimants are unemployed or employed in jobs that provide
only marginal income. It is for this reason that the Liquidator recommends allocating
approximately 70% of the Distribution Amount to Impaired Functioning Compensation.
[emphasis added]
126 There is no question this approach has had the result, in the case of at least a few of the
Claimants, of reducing their proposed compensation because those Claimants, in spite of their
abused backgrounds, have been able to do better in life than others in terms of jobs and stable
family lives. Indeed, Claimant #55 (one of the video-conferencing participants in the Hearing) is
in the anomalous position of being amongst the most severely abused while functioning
relatively well over a period of 20 years as a mental health care professional - as he put it,
"through my own grit and determination not to let these monsters define me". His objection, and
those of at least two others (#45 and #63, who were classified as having suffered "less severe"
abuse), is captured very well in the following passage from Claimant #55's written Notice of
Objection:
Studying the Liquidator's Report it would appear that some claimants who experienced a
less severe form of abuse, but who in the opinion of the Expert, was [sic] un/under
employed received a significant amount of compensation while, as in my case, being
anally raped at 8-9 years old (and admitted by the Liquidator as a more severe form of
abuse) and forced to battle the attendant demons for a lifetime, is arbitrarily valued at
zero because I have so far effectively kept the demons at bay. I may have fought them,
but it was and continues to be a frightening fight. To be arbitrarily dismissed and
removed from any valuation for "special damages" to compensate for the horrendous
abuse suffered, and it's [sic] effects, is unfair and unreasonable.
127 I recognize the impaired functioning scheme proposed by the Liquidator, based upon Dr.
Wolfe's GAF and SOFA assessments, may seem to these Objectors to be punishing them for
their truly exceptional struggles in successfully overcoming their "demons" to the extent of being
able to function better in the workforce and to have more stable family lives than many of the
other Claimants. In that respect the results must seem incongruous from their perspective.
Nonetheless, if these claims were to proceed to judgment in court, the likelihood is that these
Claimants would recover less in damages for loss of income than others.
128 I am satisfied that the Liquidator's Recommendations concerning the proposed
compensation for impaired functioning are not made arbitrarily, imprudently or unfairly, having
Page 36
regard to the interests of all the parties, the data the Liquidator has (showing that the great
majority of Claimants are unemployed or employed in jobs with marginal incomes), the overall
results of the Recommendations, and the overall integrity of the winding-up process. I accept and
approve the methodology used by the Liquidator in arriving at its proposed scheme of
compensation for impaired functioning.
The Treatment of the 1996 Claimants
129 I also accept that the Liquidator's proposed treatment of the 1996 Claimants is fair,
reasonable, prudent, and in the best overall interests of the Claimants. It is approved.
130 By bringing the 1996 Claimants into the distribution of the Estate, the Liquidator is able
to accomplish three things. First, the Recommendations recognize and acknowledge the liability
of the Christian Brothers to those victims for the abuse inflicted upon them. Secondly, the
Liquidator is able to increase the Distributable Amount by the value of those claims (and, in
conjunction with the Government Agreement, by the amount of the Assigned Claims). Thirdly,
the Recommendations are able to propose a fair and equitable distribution to all victims of
Christian Brothers' abuse on a principled basis, with the 1996 Claimants then accounting for
recovery already made. I would not favour a scheme of distribution that failed to acknowledge in
some way the Christian Brothers' abuse of, and liability towards, the 1996 Claimants, both
because of the financial and the symbolic significance of that recognition.
131 Nor do I think there is anything to be gained by tinkering with the way in which the
Liquidator has proposed to deal with the crediting of amounts received by the 1996 Claimants.
The Liquidator states that, contrary to the views of some Objecting Claimants, the proposed
distribution to the 1996 Claimants does not amount to a "top up" of the amounts they have
already received from the Government, thus giving them an advantage over the post-1996
Claimants who will not be able to "top up" their recovery out of the Estate with other amounts
from the Government. The Liquidator points out that it has tried to assess what compensation a
Claimant would receive from a Court, and made recommendations accordingly. Therefore, only
the 1996 Claimants who have been under compensated by the Government will receive
additional funds (beyond the basic liability compensation of $20,000). I think it is clear, given
the limited pool of funds available for distribution, that all Claimants are under compensated. In
that context, however, the Liquidator's point in this regard makes sense.
132 In the end, the amounts already received by the 1996 Claimants must be acknowledged in
some fashion. There may be different ways to do so, but in my view that proposed by the
Liquidator is fair and reasonable in the circumstances.
The Severity Abuse Scale and the Bell Curve
133 Two of the Objectors who participated by video-conferencing attacked the "severity
scale" for distribution of $25,000, $50,000 and $100,000 for those sustaining less, similar or
more severe abuse as inappropriate, arguing that the scheme would be fairer and more equitable
Page 37
if the amounts distributed for severity abuse represented an equal deviation from the mid-point of
compensation. This criticism was founded on the statistical notion of the bell curve, supported by
Dr. Wolfe's acceptance of the point that the number of victims who fell on either side of the
"similar" category was about equal. Therefore, why shouldn't the compensation for each category
be equal?
134 In my view, however, it does not necessarily follow that simply because the Liquidator
chose to adopt Dr. Wolfe's ratings of individual Claimants for severity of abuse purposes, the
Liquidator was required to apply a bell curve approach to quantum of compensation for that
abuse. There are valid reasons for providing those who have been severely abused, compared to
others, with a proportionately higher amount of compensation in recognition of the horrors of
that severe abuse.
135
This brings me to a consideration of certain individual objections.
Individual Objections
Severity of Abuse Categorization
136 Claimants #35 (Mr. Pittman), #37, #45, #48 and #63 specifically complain about not
having been placed in a higher category of severity of abuse.
137 For ease of reference, the description of the categories for nature and severity of abuse, as
defined in Dr. Wolfe's Report, is as follows [emphasis in original]:
a) Less extreme, relative to other claimants abused by The CBIC. Less extreme child
abuse does not imply that the abuse was insignificant or unharmful. Rather, this category
pertains to acts that are less extreme relative to other acts committed by The CBIC. Such
acts include sexual touching/fondling, masturbation, and grabbing, and physical acts such
as slapping, pushing, or hitting. To be considered less extreme, these acts typically would
have occurred infrequently. In determining that a claimant's abuse was less extreme, this
examiner considered whether the overall nature of the abuse was significantly less
extreme than what other claimants had experienced.
b) Similar to other claimants abused by The CBIC. This is the most commonly used
category, and pertains to the typical forms of abuse that were reported across all
claimants. Sexual acts included oral and anal sex, masturbation, and digital penetration;
physical abuse included beatings, being hit with an object, thrown against stationary
objects, etc. To be considered similar to other claimants, any of these acts would have
occurred on a frequent or repeated basis, and would not have met criteria for more
extreme (below).
c) More extreme, relative to other claimants abused by The CBIC. More extreme child
abuse consisted of experiences that were significantly more extreme than those of other
Page 38
claimants. These included prolonged/repeated episodes of anal or oral intercourse,
usually accompanied by violence, threats, or other life threatening circumstances. It also
included serious and repeated physical assaults, such as major blows with a fist or object,
attempted drowning, dragged down stairs in a laundry bag, etc. (i.e., life threatening acts;
acts leading to serious injury). More extreme also applied to those instances in which a
claimant was repeatedly abused over a long period of time, and at least one of those acts
was extreme (as described above).
138 In some respects the complaints about improper classification as to nature and severity of
abuse are based simply on an understandable unwillingness on the part of any victim of such
abuse to accept that the terrors they experienced could be "less" severe than those endured by
others. This was particularly so amongst those Claimants who, as boys, went to the authorities in
1975 and revealed the abuse, only to be returned to the continuing abusive care of the Christian
Brothers while their complaints were covered up by the authorities. In other cases, the complaint
is based upon the belief that Dr. Wolfe either did not spend sufficient time with them during the
interview process or did not ask adequate questions about their abuse to be able to perform a
valid assessment of their abuse and to understand it fully. In still other cases, the argument is that
Dr. Wolfe simply got it wrong when it came to the assessment, given the circumstances of the
individual.
139 I start with the observation that Dr. Wolfe is the only person who has seen and assessed
all of the Claimants.[FN20] He is therefore in the best position to opine as to the comparative
severity of abuse amongst those Claimants. I have already indicated that I accept and approve the
process and the methodology he employed.
140 Secondly, I note that it was the abuse sustained overall by these Claimants within the
Christian Brothers' institution - primarily at Mount Cashel, but also at Brother Rice High School
and St. Bonaventure School in Newfoundland, and in the B.C. School - that was being compared.
Abuse that is less severe, more severe, or similar in severity in one setting, may not fall into
those same categories in another. In the Christian Brothers' context, as repugnant and degrading
as it is, acts of physical and sexual abuse including severe beatings, fondling, fellatio,
masturbation and even anal intercourse, were not unusual. They were typical. To elevate such
acts of abuse to the comparatively severe category in this context, Dr. Wolfe testified that such
acts were "usually accompanied by violence, threats, or other life threatening circumstances". In
his opinion all of these Objecting Claimants were appropriately categorized in this context.
Claimant #48
141 Claimant #48 was categorized as having sustained abuse that was similar in nature to that
suffered by other victims. Mr. Budden submitted he should have been categorized in the "more
severe" group. Claimant #48 was the subject of all of the acts of abuse described in the preceding
paragraph, including one act of anal intercourse. Terrible as this abuse was, and although it was
probably frightening to the Claimant, there was no information that it was life threatening or
extreme in that sense. Dr. Wolfe maintained his opinion on cross-examination. Without in any
Page 39
way seeking to disparage the abuse suffered by Claimant #48, I accept his classification as
similarly abused for purposes of the distribution of the Christian Brothers' Estate.
Claimants #35 (Mr. Pittman), #45 and #63
142 Mr. Pittman and Claimants #45 and #63 also argued that they had been categorized
incorrectly in terms of nature and severity of abuse. Mr. Pittman was assessed as having suffered
"similar" abuse. Claimants #45 and #63 were placed in the "less severe" category. These
complaints are essentially based upon the view that:
a) Dr. Wolfe did not appreciate the acts of abuse suffered, either because his interviews
with them were too short, or because the Liquidator had not provided him with an
accurate description of the acts of abuse suffered, or because Dr. Wolfe himself had not
made sufficient inquiries to ascertain what those acts of abuse were; and, that
b) Dr. Wolfe did not give adequate consideration to the high level of breach of trust, and
the effect of that breach of trust, inherent in the circumstances surrounding the 1975-76
Cover-up.
143 These Claimants, and others, complained about Dr. Wolfe's interview process and about
the fact that he did not elicit more information from them concerning the acts of abuse. The
underpinning for this complaint lies in Dr. Wolfe's role as assessor. He was not to be the
investigator of the acts of abuse. He therefore was instructed to, and did, proceed with his
assessments on the basis primarily of the facts described in the statutory declarations that were
filed, together with whatever additional information was provided to him in advance of the
interviews by the Liquidator or others.
144 The problem was exacerbated by the fact that in Category I cases, where the Liquidator
had accepted the abuse, Dr. Wolfe specifically told the Claimants that it was not necessary for
them to describe the acts of abuse or provide other information in that regard, unless they wished
to do so. Only in Category II and III cases did he make enquiries about the acts of abuse, in order
to provide the Liquidator with an opinion about whether abuse, as alleged, had been sustained.
This different approach led to the perception that there were two different processes for
ascertaining the nature and severity of abuse and that those whose abuse had already been
accepted were placed at a disadvantage in terms of their classification for nature and severity of
abuse. These Objecting Claimants point out that victims are reluctant to talk to anyone about
their experiences, much less to a strange man - albeit a psychologist - in a short interview period.
They argue that there should have been a more thorough investigation of the facts relating to the
abuse suffered.
145 Claimants such as Mr. Pittman and Claimants #45 and #63 feel that Dr. Wolfe did not
have an accurate knowledge of the acts of abuse sustained by them because of the foregoing
factors. Dr. Wolfe was cross-examined by each of these Claimants about information and facts
he was said to be lacking, however. He did not change his opinions regarding their
Page 40
categorizations for nature and severity of abuse. He testified that the interview and assessment
process, although informal (and intended to be informal) was nonetheless "a very pre-planned
and purposeful assessment ... intended to get the information that was required for the Liquidator
in a reasonable period of time". During his cross-examination by Claimant #45, Dr. Wolfe
defended the approach to discussions about the acts of abuse during the interviews on the basis
that "it was very upsetting to review these incidents for most of the men who repeatedly said they
had already written it down". He continued:
The purpose of the statutory declaration is to write it down and swear to that. My job then
was to interview that person to see if their affect and their statements were consistent
with what they said happened to them, and then my role continued to look at the possible
harm this caused. I recognized that there could have -- additional details of abuse could
have come out in those, in that fashion, although -- although that was relatively rare that
the information I obtained added new types of abuse. What it did, it just confirmed and
described what was already known to the Liquidator.
So I have to say as dissatisfied as you appear to be [i.e., Claimant #45] in terms of my
role as investigator, I think there are many others that were satisfied that I did not play
that role ...
146 Dr. Wolfe and the Liquidator took the view - I think correctly - that, since many
Claimants did not want to delve into the details of what had happened to them, it would be an act
of revictimization in many cases - or "retraumatization", as one of the Claimants himself put it to engage in an extensive fact-finding exercise with those Claimants, and it was unnecessary to
do so where the Liquidator was already satisfied that the Claimant had been abused. In the end,
Dr. Wolfe was satisfied with the information he obtained for purposes both of his psychological
assessments and his comparative analysis regarding the nature and severity of abuse suffered. I
have read the statutory declarations of these Claimants, their Notices of Objection and objecting
materials, and I have listened to their statements and submissions to the Court.
Mr. Pittman
147 The physical and sexual abuses suffered by Mr. Pittman were outlined in an earlier 1998
clinical report. It was reviewed by Dr. Wolfe with the Claimant and its accuracy confirmed. It
consisted of fondling and beatings. He experienced emotional abuse as well. Dr. Wolfe
characterized his abuse as "similar" to that of others.
148 Mr. Pittman was concerned about what he believes to be the lack of an adequate
documentary basis for his assessment, since he is convinced there are many records pertaining to
him that could and should have been made available to the Liquidator and Dr. Wolfe. He
testified at length at the Hearing respecting this.
Claimant #45
Page 41
149 Claimant #45 described incidents of fondling, humiliation and emotional abuse. He
explained that he had been reluctant to expand upon what had happened to him in the criminal
trials and in the public eye of the Hughes Inquiry, as well as in his statutory declaration (which
he said contained "just the tip of the iceberg"). However, he did not articulate other significant
acts of abuse, and Dr. Wolfe testified that during the interview he was able to review in detail
with this Claimant the description of the physical and sexual abuse provided in the statutory
declaration and its addendum. There was additional information brought out during the interview
that Dr. Wolfe felt was consistent with the abuse alleged.
Claimant #63
150 Claimant #63 attended Mount Cashel from 1975 to 1977. Thereafter he attended Brother
Rice High School and St. Bonaventure School, where he says the abuse by the Brothers
continued. In his materials, Claimant #63 repeatedly described the acts of abuse to which he was
subjected as "extreme sexual and torturous mental, physical and emotional abuse". He stated that
the abuse "occurred frequently and lasted for differing periods (of time) ranging from several
minutes to up to an hour in duration". The incidents sometimes occurred a few times a day by
different Brothers. Dr. Wolfe categorized the nature and severity of these acts as "less extreme"
relative to the abuse suffered by other Claimants. Claimant #63 submits that the abuse incurred
and described by him concurs with Dr. Wolfe's "more extreme" category since the abuse was
frequent, repetitive, occurred over a long period of time, and more than one of the acts was
extreme. He therefore argues that he should have been placed in the "more extreme" category
and compensated accordingly.
151 Claimant #63 did not provide any specifics about the acts of abuse, however. He has never
been able to do that and, indeed, recognizes that he needs professional help to bring closure to
these matters because he has not yet, to date, "revealed to anyone all the specifics of the abuse
[he] endured". Dr. Wolfe testified that at the time of the interview the only additional
information he had was the Liquidator's indication that Claimant #63 had been subjected to
"genital fondling". In his affidavit filed with his Notice of Objection, however, and at the
Hearing, Claimant #63 stated that the abuse included "prolonged and repeated episodes of oral
intercourse ... accompanied by what [he] believed to be life threatening circumstances". He did
not elaborate on the latter, but said as well that he was on occasion "severely beaten and
punished" for wrongdoing, as, for example, when he and some other boys burnt a hole in the
chapel ceiling. Claimant #63 believes that if Dr. Wolfe had been more diligent in his questioning
at the interview with him, or if the investigation before and after the interview had been more
thorough, the acts of abuse revealed would have warranted placing him in the category of the
more extremely abused. Like other Claimants he is critical of the interview process in which
those whose claims of abuse had already been accepted by the Liquidator were not asked further
questions about the nature and severity of abuse. He also expressed concern that Dr. Wolfe may
have mistaken him for his brother, who was also interviewed on the same day and who was also
rated as "less extreme".
152
Claimant #63 is also one of the victims who, in 1975, went to the police to reveal the
Page 42
abuse. He was 9 years old at the time. A key point probed by him in cross-examination of Dr.
Wolfe and emphasized in his submissions was the argument that the breach of trust impact of the
1975-76 Cover-up should have been factored into the measurement of nature and severity of
abuse. Mr. Pittman made the same point. The desire for this point to be recognized - not just for
these Claimants but for others in this position, too - is well typified by the following exchange
between Claimant #63 and Dr. Wolfe:
Q. And as far as the breach of trust and the synergistic accumulative impact that
would take on a 9 year old, and hand him back to their abusers to continue abuse,
would that go towards the severity of abuse?
A. Subjectively it may. Objectively, from where I had to make these categorizations,
it did not.
Q. I'm a little confused then, sir. You mentioned that the severity of the abuse was
directly related to the affects of the abuse, and you said but paramount to that was the
breach of trust and I find - - I find it very difficult then to take a 9 year old boy who
has been abused, who was very scared at the time, admitted to that abuse, though very
vague because his abuser is sitting outside the door and drove him down there, and
then to be brought back to that same institution, to [be given] back to the same caregivers to continue that abuse, and a subsequent cover-up and a breach of trust not
only in the care-givers but the government that is to protect them, I find it very
difficult [to understand] that if the breach of trust is paramount, that you make such a
statement.
A. I understand what you are saying and my unsavoury duty here was to determine
relative to others. We are talking about 81 men almost all of whom had episodes
similar to yours or worse, and my job was to determine that relative to others - Q. And - A. Let me finish, please. I'm not meaning to take away anything from your
experience. We know that in trying to evaluate claims and impairment that we have to
somehow establish both of those things, what happened to the person and the degree
of impairment. There is no Bible for this, there is no gold standard, and I did the best
I could.
153 Dr. Wolfe confirmed in cross-examination that the breach of trust and other aspects of the
1975-76 Cover-up did not enter into the rating for nature and severity of the abuse. He explained
this on the basis of the distinction between "what happened to the persons" (the nature and
comparative severity of the abuse) and "the degree of impairment" (which pertains to the
impaired functioning class of compensation). The nature and severity of abuse categorizations
were based upon an objective assessment of the acts of abuse as provided to Dr. Wolfe rather
than on the adjectives used to describe them or the "horrible fallout" that inevitably accompanies
Page 43
such abuse. This is made clear in the following exchange between Dr. Wolfe and Claimant #63:
Q. ... I was nine years old when I first came into Mount Cashel, I was fresh blood, I
had no idea what sex was and I got a crash course that continues [sic - continued]
repeatedly. Now, I ask you how you can place me in this - - I want to know
comparatively how I compared to all these other complainants because I know for a
fact I was more severely abused than most of them.
A. And I think I have - Q. And that coupled with the fact that I was brought down to a police station in 1975
and you say that's paramount, there is - - breach of trust is paramount ... and my trust
in authority, it was shattered and it still is today.
A. What I'm describing in this report are unfortunately just the objective hard
evidence or information that was given to me. What you are describing are the
additional horrors that go along with being abused and that is reporting to the police
or being on television and other things, all of which I know contribute to impairment,
and that's probably why your impairment score is lower [FN21] ...
154 Hard as this may seem for Claimant #63 (and for other Claimants in similar situations,
such as Claimant #28 and Mr. Pittman), I accept this approach by Dr. Wolfe to the implications
of the 1975-76 Cover-up and his explanation for not incorporating the factors relating to it in his
assessment of the nature and severity of the abuse suffered by the Claimants. In spite of being
cross-examined on all of these matters, including the additional statements of abuse set out in
Claimant #63's affidavit filed at the Hearing, Dr. Wolfe testified he would "have to stick to his
opinion" regarding his categorization of this Claimant in terms of nature and severity of abuse. In
doing so he recognized that for any individual like Claimant #63 from their individual
perspective and known lived experience "this may not fit well with them", but based on the
actual acts of abuse as he understood them, his classification, relative to the other victims, was
fair. Again, hard as it may be, I accept this assessment.
155 Before leaving the issue of nature and severity of abuse I should note that a number of
Claimants filed brief written Objections in which they questioned their placement in this
category on general grounds of unfairness. Claimant #3 stated in his written Objection, for
instance, that it is "an insult to say that the abuse of one victim is less damaging than another".
156 Again, I recognize this Court's inability (or anyone else's) to stand in the shoes of the
Claimants and experience what they have experienced, and I recognize nothing can minimize for
them the abuse they have sustained or truly compensate them for that abuse in their eyes. I am
satisfied on the Record, however, that Dr. Wolfe's categorization of those Claimants who object
to their nature and severity of abuse classification, relative to all of the other Claimants he
assessed, should be, and it is, accepted.
Page 44
Impaired Functioning
157 Several of the Objecting Claimants criticized the impaired functioning approach to
compensation proposed by the Liquidator. I have already dealt with some of these general
critiques concerning the emphasis on loss of income. Claimants #28, #29, #37 and #75 launched
case-specific attacks, however. I shall deal with each of these separately.
Claimant #28
158 Claimant #28 objected to the overall GAF rating assigned to him by Dr. Wolfe. His
current GAF score was 70 (normal), his worst GAF score was 60 and his SOFA score was 60.
Dr. Wolfe placed his average level of functioning at 63. The Liquidator proposes that Claimant
#28 be awarded $130,657 for impaired functioning.
159 Claimant #28's objections were twofold, namely (a) that, given Dr. Wolfe's assessment of
him as having "elevated scales of depression, dissociation and impaired self-reference
concerning his mood and interpersonal relationships" and the chronic form of dissociative
depression that can go with that, his GAF scores should have been lower; and, (b) that the cut-off
age of 21+ for "worst GAF" scores was too late and unfair to him.
160 Dr. Wolfe was cross-examined at length by Claimant #28 at the Hearing about the GAF
and SOFA scores attributed to him, having regard to the symptoms and the indicia of functioning
he displayed. He was aided in this regard by the contents of a letter he had received from another
doctor who had treated him and which he used as the basis for some of his questioning.
161 Dr. Wolfe was aware that the abuse suffered by Claimant #28 would have long-term
effects and a significant impact on the Claimant's life. This is apparent from the following
exchange in cross-examination, which at the same time underscores and provides an
understanding of the Claimant's perspective:
Q. I just want to review one thing with you with regard too - - if a person is raised in a
Catholic home, their aunt is a nun, they have priests over for supper, you know, on
several occasions, nuns are always over to the house, their parents hold the Christian
Brothers in high regard as well as all the family members, and then they enter Mount
Cashel and on the first night is exposed to that type of abuse, the unsolicited abuse
where a child is punished for absolutely no reason and beaten seven, eight times to
the floor, and getting up and protesting that, you know, that the Brother has
misunderstood them and then finally conceding that, yes, the Brother was right and
getting knocked down on the floor again for thinking that way, and then four months
later going to the police, telling about his sexual and physical abuse that he received
while at Mount Cashel, and be turned around and brought back to Mount Cashel by
the police with no other word on the subject, what kind of an impact do you think that
would have on that person?
Page 45
A. I assume you don't want me to respond hypothetically here to that, but to your case
in particular. Much of what you are describing has to do with the pain and suffering
aspects, as I understand it, and the acts themselves and how awful they were.
Separately from that is the harm that it creates over your life span and there is no gold
standard for that, to determine that harm, and I recognize that the individual who
lived that experience would have a much different perception than I would more
objectively on it, but that's clearly an act, a severe act of abuse and would likely have
a significant impact with the person's life.
162 What GAF and SOFA measure, however, is the level of a person's functioning,
notwithstanding the abuse. In the end, Dr. Wolfe remained of the view that the average score of
63 was "bang on in terms of [Claimant #28's] overall functioning". It indicated the Claimant was
exhibiting "mild moderate symptoms" in terms of his ability to function in society.
163 Claimant #28 also argued that assessing his "worst GAF" score after the age of 21 was
unfair in his circumstances. He had spent the early years after Mount Cashel roaming aimlessly
around Ontario, sleeping on park benches in places in urban centers, often without food and
housing. This was his worst period. Dr. Wolfe acknowledged that age 21 was an arbitrary cutoff. Many of the victims had similar experiences between the ages of 18 and 21, however, and he
chose the age of 21 because he wanted to have enough of a period of time after everyone was out
of Mount Cashel that they would be getting on with their lives.
164 I am satisfied that Dr. Wolfe's assessment of Claimant #28, and the Liquidator's proposed
distribution to him based upon impaired functioning, are adequate and reasonable, given the
nature of this winding-up proceeding and the need for a general psychological assessment
process to be put in place in relation to 81 Claimants. I accept them.
Claimants #29, #37, and #75
165 I turn now to the three Claimants who contest the Recommendations that they receive no
compensation at all for impaired functioning. They are Claimants #29, #37 and #75. Counsel for
each of these Claimants argue (a) that Dr. Wolfe and the Liquidator applied an incorrect legal
test for causation in concluding that the Claimants' level of functioning was not "caused" by the
acts of abuse suffered by them, and (b) that Dr. Wolfe nonetheless erred on the facts as they
relate to these Claimants in concluding there was no causal connection.
Causation
166
I shall deal with the legal argument first, as it pertains to all three Claimants.
167 The Liquidator has indicated that the methodology employed in assessing the Claimants
and making recommendations respecting compensation was intended to adhere as closely as
possible to the methodology used by courts in assessing liability and damages for tortious
wrongdoing. These Objecting Claimants submit that is has failed to do so. Mr. Prophet
Page 46
summarized the argument in this way, at page 20 of his factum:
The Liquidator has created an "all or nothing" compensation model for functional
impairment. If Dr. Wolfe determined that the abuse suffered by the Claimant at Mount
Cashel was the sole cause or a material contribution to the Claimant's low level of
functioning, then compensation was awarded. If Dr. Wolfe determined that there were
causes other than the abuse which contributed to the Claimants impaired functioning,
then Dr. Wolfe had to determine if the abuse was a material contribution. If, in Dr.
Wolfe's opinion, the abuse was not a material contribution then no compensation was
awarded. This methodology is inconsistent with the standard employed by Canadian
courts for causation in tortuous [sic] wrongdoing. This standard is set out in the 1996
Supreme Court of Canada decision in Athey v. Leonati.[FN22]
168 I do not accept that Dr. Wolfe and the Liquidator have employed a methodology that is
inconsistent with the law respecting causation, as expressed in Athey v. Leonati. A defendant is
liable for any injuries caused or contributed to by his or her negligence. As long as the
defendant's conduct is found to be a cause of the injury, it is irrelevant that there may also have
been other non-tortious contributing causes. A contributing causal factor is material if it is
outside the de minimus range, i.e. it is not insignificant or trivial. See Athey v. Leonati [[1996] 3
S.C.R. 458 (S.C.C.)], supra, at 466-468 and 473-474.
169 In making its Recommendations concerning compensation for impaired functioning, the
Liquidator accepted that the abuse a Claimant suffered and for which the Christian Brothers was
liable caused that impaired functioning, unless:
a) Dr. Wolfe opined that the abuse did not materially contribute to the Claimant's
impaired functioning (i.e. did not have more than a de minimusaffect); and,
b) Dr. Wolfe also provided an alternative explanation for why the Claimant's functioning
was impaired.
170 In my view it is not necessary for the Liquidator to adhere precisely to the principles of
legal causation for purposes of the proposed distribution in a winding-up proceeding such as this.
At the same time, though, I am satisfied that the methodology employed by Dr. Wolfe - and
therefore underlying the compensation recommendations of the Liquidator - was substantially in
accord with the Athey v. Leonati principles. Dr. Wolfe testified that he was able to form an
opinion on causation with respect to each Claimant, and that when he used the words "material
contribution" he meant something that was more than "de minimus". He said:
In most cases [forming an opinion on causation] was relatively straightforward because
the abuse, the nature of the abuse that had been documented and accepted was of the
nature that I could easily conclude that could lead to these effects, at least a material
contribution despite other possible causes. In other cases that was more difficult and I had
to ponder carefully if I felt comfortable concluding that even though they were abused
Page 47
and even though that was wrong, the nature of that abuse was de minimus in terms of its
outcome and their functioning and impairment. That's not likely the explanation.
171
When asked how he was able to come to that opinion, he stated:
Based largely on my knowledge of what causes or what kind of outcomes follow abuse
which can be very many, or what other things can cause those outcomes because they are
- - the thing about psychology is that there is not one disease or microbe that causes the
outcome, there [are] many problems.
There are certain mental disorders that have a very identifiable life course. Depression is
one of them, conduct-related problems are another one, whereas posttraumatic stress does
not and many anxiety disorders. So, I was able to look at - - I have the textbook on
this,[FN23] I know the causes of all the different childhood disorders and their outcomes
as an adult, and based on that I was able to weigh whether I felt there was a better
explanation and that this type of act, the abuse as described was de minimus in terms of
impairment on that person.
.....
Well, the words that I used [were] it was not a "material contribution". As I understand
that terminology and as I use that terminology, it would mean that it did not have a
significant or even minimal relationship to the outcome, and I would state what I thought
was probably a better explanation, but I had no concrete proof of that, it was more a
statement that says that these two things, that abuse and that outcome are unlikely to be
connected.
[emphasis added]
172 Dr. Wolfe was cross-examined on this point by a number of Claimants and counsel. His
evidence remained consistent and I accept it.
173 Mr. Prophet articulated the position of the Objecting Claimants on this point during the
Hearing. He submitted that "unless you can conclude that abuse, at whatever level it has been
recorded, is only a de minimus cause of the current functional state of these Claimants, then you
have to attribute compensation for that abuse applying normal rules of legal causation that we are
familiar with in tort law and that the Supreme Court of Canada has recognized." I am satisfied on
the evidence and find that that is precisely the test and methodology employed by Dr. Wolfe in
conducting his psychological assessments, and adopted by the Liquidator in making its
Recommendations respecting compensation for Impaired Functioning.
174 The debate really boils down to whether on the facts, and as a matter of psychological
assessment, the impaired functioning of these Claimants was caused or contributed to in more
than a de minimus fashion by the abuse in question. I turn to that issue now.
Page 48
Claimant #37
175 Claimant #37 was placed in Mount Cashel at the age of 7 and resided there for six years,
from 1963 to 1969. He was subjected to physical and emotional abuse by the Christian Brothers.
This consisted of a 20-30 minute beating by one of the Brothers following an episode of
shoplifting, including kicks, punches and being thrown around, and a lot of name-calling and
put-downs by the Brothers generally.
176 After his interview and diagnosis, Dr. Wolfe found Claimant #37 to have a hostile
attitude, to be distrustful of others, to have shown problems with authority and to have had some
suicidal ideation in the past (although not considered a risk at this time). The Claimant had been
seeing a psychiatrist for anxiety, stress and depression. His average GAF and SOFA score was
50, which "reflects his moderate level of mental health symptoms and his serious impairments in
social and occupational functioning." With respect to causation, however, Dr. Wolfe concluded:
Relative to other contributing causes it is unlikely that the abuse by The CBIC
summarized herein was a significant material contribution to his past and current
psychological and social functioning. In determining the contribution to harm stemming
from these incidents of physical abuse by The CBIC, the assessor took into account other
major contributing factors as well as the significance of this abuse relative to that
experienced by other Claimants.
[Claimant #37's] psychological condition very likely stems primarily from other
contributing causes, most notably early onset depressive disorder and anxiety, with
significant biological origins. I am confident in this opinion, which is derived from a
match between the claimant's information, scientific consensus and clinical opinion.
177 The latter conclusion was challenged by Mr. Budden on the grounds that there was no
independent evidence that Claimant #37 suffered from early onset depressive disorder.
Nonetheless, in the affidavit supporting Claimant #37's motion for increased compensation it is
acknowledged that "he has had and presently has a depressive disorder"; the affidavit states that
the Claimant "believes that his functional and other impairments are a consequence of the
aforenoted abuse suffered by him while a child resident at Mount Cashel orphanage". In any
event, Dr. Wolfe's evidence - which I have accepted - is that it was not necessary for him to have
"concrete proof" of the better explanation for purposes of his impaired functioning analysis
because he was able to form his opinions on the basis of his knowledge of "the causes of all the
different childhood disorders and their outcomes as an adult" and "based on that [he] was able to
weigh whether [he] felt there was a better explanation and that ... the abuse as described was de
minimus in terms of its impairment on that person".
178 Mr. Budden cross-examined Dr. Wolfe at length with a view to showing that many of the
symptoms exhibited by Claimant #37 were consistent with various aspects of impaired
functioning as set out in Dr. Wolfe's report and with a view to demonstrating that Dr. Wolfe may
Page 49
not have appreciated the full extent of the Claimant's work history and the number of Brothers
who abused him. Dr. Wolfe did not alter his opinion with respect to causation or with respect to
the severity of abuse or level of impairment with respect to Claimant #37. I accept his
assessment, for purposes of the liquidation, and I am not prepared to impose a level of
compensation other than that proposed by the Liquidator.
Claimant #29
179 Claimant #29 was placed in Mount Cashel at the age of 6 and resided there for 10 years,
from 1977 through 1987.[FN24] He exhibited mild developmental delay before entering Mount
Cashel and has an estimated IQ of 57, which places him in the range of moderate mental
retardation. The acts of physical, emotional and sexual abuse relevant to him are described as
consisting of one incident of sexual fondling and four or five incidents of physical abuse when he
was hit with a fist. He was degraded, subjected to ongoing put-downs, and told that he was not
going to amount to much. Dr. Wolfe placed him in the "similar" category in terms of nature and
severity of abuse, but concluded that the abuse he incurred did not materially contribute to his
impaired functioning. He said:
[Claimant #29's] psychological condition very likely stems from other contributing
causes, most notably his intellectual limitations and his past family background. I am
confident in this opinion, which is derived from a match between the claimant's
information, scientific consensus, and clinical opinion.
180 In describing Claimant #29's personal and family background in his Report, Dr. Wolfe
commented that "it is very likely that his mental retardation is related to fetal alcohol effects, but
this has not been medically confirmed". He also noted his information that all three boys in the
family "are described as being developmentally delayed". These statements were the subject of
attack by Mr. Buckingham on behalf of the Claimant, on the basis (a) that Claimant #29 has
never been diagnosed with foetal alcohol syndrome and has stated his mother was basically a
non-drinker and (b) that one of the brothers was not, in fact, developmentally delayed. It was
also submitted that the Liquidator and Dr. Wolfe did not accurately assess the damage suffered
by the Claimant because of Dr. Wolfe's failure to perform an intelligence test and, more
particularly, his inability to perform the TSI and PAS tests that were given to all other Claimants,
in view of the Claimant's intellectual limitations.
181 Dr. Wolfe testified that it was unnecessary to perform an intelligence test on this
individual and, while he did not perform the TSI and PAS because of Claimant #29's intellectual
limitations, he was able to conduct a diagnostic interview which satisfied him that the Claimant
met the diagnostic criteria for alcohol abuse. Responding to the foregoing criticisms, that had
been articulated in Mr. Prophet's factum, Dr. Wolfe explained his difficult decision with respect
to Claimant #29's impaired functioning, in examination-in-chief, as follows:
Q. Again, Dr. Wolfe, can you tell me why you opined in the case of Master ID #29
that his functioning was not caused by the abuse experienced?
Page 50
A. Yes, this is a particularly difficult case because he was the only person not
considered to have compensation for harm from - if I'm saying that correctly - when
he was also considered typically abused, the others were less abused. I looked
carefully at, again, the relationship between his functioning and impairment and the
nature of what happened to him. He was clearly abused. The abuse clearly had an
impact on him. The question to me is did that change the inevitability of his
functioning. If I interpreted that question correctly, then no it did not. It can still have
an effect on someone. In the case of this man, he had considerable problems to begin
with related to mental retardation, but also I assumed it was perhaps related to what
was known as foetal alcohol because of the nature of his behaviour, but it did not
matter to me if that was the original cause of it, because of the aggressive behaviour,
that's why I stated that in the hopes that someone would follow-up with that. But,
given his intellectual functioning and lengthy history of institutional care, it was
inevitable that he would still have very poor social, occupational and psychological
functioning and, therefore, I did not feel that this was a material contribution. And,
again, I say it is a difficult thing to wrestle with, but given the question posed to me
that is how I answered it.
182 The evidence was that, in the absence of physical injury to the head, mental retardation is
not caused by the type of abuse at issue here. Dr. Wolfe had acknowledged in his Report that
there was no medical confirmation that Claimant #29's mental retardation was related to foetal
alcohol effects and he testified that even if, in fact, the Claimant's brother was not
developmentally delayed it would not change his view with respect to causation. I note there are
indications in the Record that this Claimant's mother was developmentally delayed.
183 Dr. Wolfe conceded that this particular case was the most difficult of all that he had to
consider. Having regard to Claimant #29's pre-existing mental retardation and his pre-existing
behaviour problems, however, he concluded it was inevitable the Claimant would still have the
limitations he has today. He did not mean by this that the abuse had not had an impact on
Claimant #29 in any way, but simply that "it was not discernible above and beyond his other
impairments". At the end of the day, Dr. Wolfe maintained his view that he "couldn't detect any
change from what [Claimant #29] was like before the orphanage and what he was after that
would convince [Dr. Wolfe] that it had a causal relation."
184 In the absence of expert evidence contradicting that of Dr. Wolfe, I see no basis for not
accepting his assessment in this regard, recognizing as I do - and as he did - that Claimant #29's
circumstances represent a particularly unfortunate and difficult situation.
Claimant #75
185 Claimant #75 was placed in Mount Cashel after his parents' divorce, at the age of 12. He
resided there from 1981 to 1983. The abuse described in his statutory declaration, and to Dr.
Wolfe, was physical and emotional. Physically, he was slapped in the face and locked in a room
Page 51
for two weeks after being caught stealing. He told Dr. Wolfe this was his worst memory.
Although he does not remember being beaten up by the Brothers, his face was slapped on several
occasions and both hands beaten with a long black leather strap until they were swollen and
bloodied. Emotionally, he was constantly belittled, put down and told that he would never
amount to anything. In a letter attached to his affidavit filed in support of his Notice of
Objection, Claimant #75 says his worst memory is instead about a night when he was possibly
drugged and subjected to masturbation by one of the Brothers.
186 Claimant #75's life since leaving Mount Cashel has been difficult, to say the least. He is of
average intellectual ability. Nonetheless, he has had a history of criminal acts since his teenage
years, including thefts, breaking and entering, drug abuse, mischief, armed robbery and
possession of narcotics. He has spent most of the last 13 years in prison, and was interviewed by
Dr. Wolfe in a penitentiary near Calgary. He has latterly been diagnosed as HIV-positive, as a
result of sharing needles and spoons with other drug users over the years while using cocaine and
heroin.
187 Claimant #75 was categorized amongst the "less severe" in terms of nature and severity of
abuse. He suffers from a major depressive disorder. Although his functioning assessment on the
GAF/SOFA scores was only 40, however, the Liquidator is not recommending that this Claimant
receive any compensation for impaired functioning because Dr. Wolfe found that relative to
other contributing factors, such as childhood onset conduct disorder, the abuse suffered by
Claimant #75 did not materially contribute to his past or current psychological and social
functioning.
188 This conclusion is attacked on the basis that Claimant #75 has never been diagnosed with
childhood onset conduct disorder and there is no independent evidence to support such a finding.
Indeed, even though he did exhibit a negative attitude towards learning and did have some
learning difficulties, there is a social worker's report from around 1983 that states "he gets along
well with the teacher and other students" - a characteristic that is inconsistent with childhood
onset conduct disorder. It is therefore argued that Dr. Wolfe was mistaken in the factual
underpinning of his opinion respecting causation, and that Claimant #75 should receive
compensation for impaired functioning based upon his GAF/SOFA score of 40.
189 Dr. Wolfe was cross-examined by Mr. Buckingham about whether Claimant #75 met the
criteria set out in the DSM-IV[FN25] for having suffered from childhood conduct disorder. The
criteria mentioned were: aggression to people and animals; destruction of property; deceitfulness
or theft; and, serious violation of rules. Dr. Wolfe testified that there were some indications of
those criteria, but that he had not made the determination whether the Claimant met the criteria
for a diagnosis of conduct disorder because he did not need to do so.
190 Next, Dr. Wolfe was cross-examined on the statements contained in the report of the
social worker referred to above. Dr. Wolfe did not have this report at the time of his diagnosis,
but he agreed there was nothing in that report that would indicate any conduct disorder. He
further agreed that he had to, and did, consider a possible alternative explanation for Claimant
Page 52
#75's level of functioning, namely that his post-Mount Cashel anti-social behaviour may have
been a matter of acting out in response to the trauma he experienced and observed at Mount
Cashel.
191 In spite of the foregoing, however, Dr. Wolfe maintained his opinion that the abuse
suffered by Claimant #75 at Mount Cashel did not materially contribute to his subsequent level
of functioning. This view is summarized in the following exchange with Mr. Buckingham:
Q. Where is it for you to conclude that there was a childhood onset conduct disorder?
A. First of all, I did not conclude childhood onset disorder. I was giving you a more
logical explanation for his functioning than the abuse at Mount Cashel. That was my - part of my opinion is to offer a possible explanation. It may or may not be correct,
but I will continue for a minute.
The life course persistence of his problems begin at age 12. He did indicate difficulty
attending school to me at the interview. Theft, drugs, breaking and entering before
age 14, that is after he left the orphanage. Thirteen years in prison, numerous charges,
armed robbery, possession narcotics. These things do not follow from being slapped
on the wrist from a Christian Brother or the other things as indicated. I had to look for
other explanations. This is a life persistent problem he has which was emerging in
adolescent. It is adolescent onset which is what I should have said instead of
childhood onset but, given the limited information that I had that now it has come
forward at the last minute, I would still not change my opinion any because it makes
more sense that this problem has been around since either childhood or early
adolescence.
Q. But we do know that [Claimant #75] in his statutory declaration states that his
problems started at Mount Cashel. He has told you his drug usage started at Mount
Cashel?
A. That is what he said, yes.
Q. We have a social worker's report which indicates none of the persistent behaviour
that existed prior to going into Mount Cashel.
A. A lot of that persistent behaviour emerged in adolescence after Mount Cashel and,
as I say, I had to form an opinion whether or not that could have been due to Mount
Cashel and I didn't think it was.
192 There is no expert evidence challenging Dr. Wolfe's professional opinion on this issue.
His explanation appears reasonable to me, and in the context of this winding-up I accept his
opinion respecting the lack of causation above a de minimus level between the abuse suffered by
Claimant #75 while at Mount Cashel and his past and current psychological and social
Page 53
functioning.
Part VII
Other Issues
Legal Costs and Legal Representation
193 Representative Counsel reported to the Court on several concerns he had arising out of
certain disputes between various Claimants and their solicitors about the solicitors' representation
and about their legal fees, particularly contingent fees. Mr. Garbig made it clear that it was not
his function, nor was it his intention, to intermeddle with solicitor-client disputes. Since there
had been a number of these instances, however, he felt they should be reported to the Court.
194 Like Representative Counsel, I do not think it is the role of this Court to interject itself
into disputes that may exist between Claimants and their solicitors as to the solicitors' retainers or
the quality of services provided. All counsel who attended at the Hearing before me conducted
themselves in the finest tradition of the Bar. Moreover, mechanisms exist in each Province to
deal with such disputes as between solicitors and their clients. I am satisfied that the particular
issue that was canvassed regarding Mr. Budden's representation of Claimant #4 has been cleared
up with the filing of Claimant #4's written confirmation that he instructed Mr. Budden to
challenge the requirement that he be required to give a release to the Government at the Hearing
but not to challenge the Liquidator's "causal connection" finding. That is what Mr. Budden did.
195 Representative Counsel expressed concern about the potential impact on Claimants of
contingency fee agreements that apparently provide for solicitors' fees in the range of 20% to
40% of recovery, particularly in the context of a winding-up proceeding where an action may or
may not have even been commenced. Of the 81 pre-Hearing Claimants, 58 are represented, or
were at one time represented, by solicitors. The solicitors are located in Newfoundland (six, who
represent 42 Claimants), Nova Scotia (two, who represent two), Ontario (four, who represent
nine), Alberta (two, who represent three) and British Columbia (three, who represent four). It
appears that all of those, except Ontario counsel, are acting on the basis of contingency fees.
196 To meet these concerns, and to protect the interests of the Claimants - most of whom are
vulnerable persons who have psychological and emotional problems - Representative Counsel
proposes that the Court should direct the Liquidator, in its Order, to make payment only on
account of solicitors' fees that are rendered for services in respect of this liquidation and which
are shown to have been reviewed and approved in accordance with the laws in effect in the place
of the solicitor's practice. Otherwise, payment of the amount to be distributed to a Claimant in
the liquidation should be paid directly to the Claimant by the Liquidator.
197 In this regard, Representative Counsel points out that all Provinces have in place a
mechanism whereby solicitors' accounts can be assessed and contingent fee arrangements
reviewed. He also raises the question whether a contingent fee arrangement can apply to a claim
Page 54
in a liquidation under the Winding-up and Restructuring Act, since in the provincial schemes the
triggering event for payment - the "contingency upon which the compensation is to be paid" - is
generally dependent upon something happening in the courts of the Province.
198
Various counsel oppose Representative Counsel's proposal.
199 While I share Representative Counsel's concern that it would be unfortunate if Claimants
were required to forego up to 40% of their recovery for solicitors' services that do not
appropriately warrant such a payment, I do not think it is the role of the Winding-up Court to
require the confidential fee arrangements with their solicitors to be interfered with, and reviewed,
unless the Claimants choose to pursue their remedies under the relevant provincial legislation.
Mechanisms exist whereby the courts may be asked to review the quantum of such arrangements
for fairness and appropriateness. In my view, it should be left to the Claimants, or their solicitors,
to resort to these mechanisms, in their individual cases, if called for.
Publication Ban and Sealing Order
200 There is no publication ban in place with respect to these Reasons. I have referred to the
Claimants by their Master I.D. numbers, with the exception of Mr. Pittman (who asked to be
named), in order to preserve their privacy and confidentiality. I note, however, that there is an
Order sealing the court record prohibiting access to the names of the Claimants and to details of
the acts of abuse. There is also an Order prohibiting the broadcast or publication of the name of
or the identity of any person who has filed a claim in this proceeding or who is otherwise
identified in the evidence given or the submissions made in this proceeding as having suffered
physical, sexual or emotional assaults or abuse by the Christian Brothers or any institution
managed or operated by the Christian Brothers.
Part VIII
Ending
Conclusion
201 For the foregoing reasons, then, the Liquidator's Recommendations are approved, as is the
Government Agreement.
202 I find that in putting forward its Recommendations the Liquidator has made a sincere and
sufficient effort to compensate the Claimants fairly and reasonably, and that the
Recommendations serve the interests of all parties, including the Claimants, the Government,
and the Estate. I include under the rubric of "Recommendations" for these purposes the
Government Agreement. I find, as well, that the process adopted by the Liquidator and leading
up to the Recommendations was conducted with integrity.
203
Finally, I find that neither the process nor the results as contained in the
Page 55
Recommendations are unfair to any of the parties, having regard to the nature of the proceedings,
the finite proceeds available for distribution, and the requirement for a compensation process that
was cost-effective while at the same time responsive to both the group and individual needs of
the Claimants and the constraints of a winding-up procedure set in motion to provide recompense
for institutional abuse claims. It would not be impossible to devise a different methodology and
proposal for distribution. However, any such scheme would be subject to the same types of
attack as put forward here - but by different Claimants who would be affected in different ways.
There will always be borderline cases in which - to the individuals in question - there will be a
perception of unfairness. Objectively, applying the above criteria, however, I am satisfied that
the Liquidator's Recommendations are based upon a series of assessments and a methodology
that are soundly based upon the expertise and knowledge of a credible expert - whose expert
opinions are not challenged by the opinions of any other experts - and that they are fair and
reasonable in the circumstances.
204 The liquidation of assets in a winding-up proceeding is inevitably an unfulfilling way of
responding to the needs of Claimants. This is particularly so when the Claimants - as they are
here - are the victims of horrific and repulsive institutional abuse and betrayal of trust. By
definition, in such circumstances, there will be insufficient assets to satisfy the claims advanced.
205 In this case, no amount of compensation can ever adequately make up for the terror, the
trauma, and the torment that the Abuse Victims have experienced. I am convinced, however, that
the Recommendations put forward by the Liquidator provide as reasonable and as effective a
means of approaching that goal as can be expected in the circumstances. I hope that their
approval will enable the Estate to be wound up, and the proceeds distributed, in a timely fashion.
Although it may not be possible in all cases, I hope as well that the resolution of these matters
will enable as many of the Claimants as possible to put an end to this heartrending story in their
lives - and that of a certain part of Canadian society - and move on.
Disposition
206
Accordingly, an order is granted,
a) approving the Liquidator's Recommendations, as defined and found in the Eleventh
Report of the Provisional Liquidator; and,
b) approving the Agreement dated March 31, 2003, made between the Liquidator and Her
Majesty the Queen in Right of the Province of Newfoundland and Labrador.
207 The motions brought individually by Claimants #29, #37, #46, #48, and #75 are
dismissed, as is the motion brought on behalf of Claimants #1, #4, #10, #13, #14, #15, #29, #37,
#39, #43, #44, #48, #52, #60, #61, #65, #69, #72, #74 and #75 as a group for relief respecting
Crown priority and equitable subordination.
208
I may be spoken to with respect to costs, if necessary.
Page 56
209 In closing I would like to thank all counsel and the individual Claimants who participated
by attendance at the Hearing or by video-conferencing for the very professional and helpful way
in which the Hearing was conducted. Without their able assistance the job of the Court would
have been even more difficult than it was.
Motion granted.
FN1. I shall refer to the Christian Brothers of Ireland in Canada throughout these Reasons as "the
Christian Brothers" or "the Corporation".
FN2. I shall refer to the Provisional Liquidator as "the Liquidator" throughout these Reasons.
FN3. Deloitte & Touche, The Eleventh Report of the Provisional Liquidator: April 30, 2003, at
8-9 ("Eleventh Report")
FN4. The information contained under this heading is taken from the Eleventh Report at pp. 810.
FN5. The Liquidator subsequently concluded that an economic model would not address any
individual Claimant's economic loss and would only provide generalizations and averages. As a
result, the Liquidator decided not to rely on an economic model to assess damages.
FN6. Eleventh Report, supra note 3 at 320-21.
FN7. See the Eleventh Report, supra note 3 at 19-21.
FN8. Eleventh Report, supra note 3 at 327-28.
FN9. Newfoundland & Labrador, Report of the Royal Commission of Inquiry into the Response
of the Newfoundland Justice System to Complaints, vols. 1&2 (St. John's: Queen's Printer,
1991).
FN10. See the Hughes Inquiry Report, supra, at 196 and Appendix F.
FN11. Ibid., at 209.
FN12. Ibid., at 152-153.
FN13. Brother Kenny was at the time the Superintendent of Mount Cashel. He was also one of
the Brothers accused by the boys of sexual abuse.
FN14. Ibid., at 196-197.
Page 57
FN15. Mr. Pittman can take some comfort from the fact that he was eventually able to help his
brother, in any event. It was at least in part because of what I heard during his testimony on the
first day of the Hearing that I was persuaded to make the order I did, granting an extension of
time and leave to the brother to participate as a Claimant in the liquidation.
FN16.Supra, note 9, vol. 2 at 76-89 and 86
FN17. The reasons were twofold: (1) The Government takes the position it is not bound by the
Winding-up and Restructuring Act; and (2) The Government indicates it is not objecting to the
Recommendations and takes the position that it is the role of the Liquidator to seek and obtain
approval of those Recommendations (including, apparently, the Government Agreement).
FN18. Sun Life was the lien holder with the claim for occupancy costs. Merrell v. A. Sung
Holdings Ltd. is reported at (1995), 22 O.R. (3d) 44 (Ont. C.A.). The BIA is the Bankruptcy and
Insolvency Act, R.S.C., 1985, c. B-3. The PPSA is the Personal Property Security Act, R.S.O.
1990, c. P.10.
FN19. (U.K.), 30 & 31 Vict., c.3, reprinted in R.S.C. 1985, App. II, No. 5.
FN20. Except for Claimant #36, who is deceased.
FN21. Claimant #63 was categorized as "less extreme" in terms of the nature and severity of
abuse (and is recommended to receive $25,000 in that regard) but scored low on the GAF and
SOFA assessments and is recommended to receive $316,065 as Total GAF and Severity
compensation based on impaired functioning.
FN22.[1996] 3 S.C.R. 458.
FN23. Dr. Wolfe meant by this that he has written the textbook on this.
FN24. Claimant #29's supporting affidavit says he was born on December 9, 1971, but that he
resided at Mount Cashel from 1967 to 1977. This must be an error. I have taken the dates 1977
through 1987 from Mr. Prophet's factum.
FN25.Diagnostic and Statistical Manual-IV, American Psychiatric Association (1994),
Washington, D.C.
END OF DOCUMENT