Long Ago, Far Away Abuse May Close Canadian Schools

VANCOUVER, British Columbia — Just weeks ago, Monica Conlin joined in celebrations for the 80th anniversary of Vancouver College, a prestigious Catholic school in the city's upscale Shaughnessy neighborhood. Now the mother of two Vancouver College students is praying that this year's graduation class won't be the last.

The all-boys school is one of two Vancouver-area Catholic institutions in the cross hairs of liquidator Arthur Andersen Inc., which hopes to lock the doors and sell the schools by September to help pay damages arising from decades-old incidents of sexual abuse.

The irony is that neither of the West Coast schools had anything to do with the abuse that occurred at Mount Cashel Orphanage thousands of miles away in the Atlantic province of Newfoundland. However, because the schools are administered by the Christian Brothers of Ireland in Canada — the religious congregation that operated the orphanage — they might now pay the price.

But they're not giving up without a fight. For five years a courtroom drama worthy of a John Grisham novel has pitted liquidators against legal teams for Vancouver College, the co-ed St. Thomas More Collegiate in nearby Burnaby and the Archdiocese of Vancouver.

As the complex legal challenges have wound through a succession of courts in British Columbia and Ontario, as well as the Supreme Court of Canada, and back again, parents are left biting their nails over the future of two prominent Catholic institutions and where their children will be going to school in September.

A few parents have pulled their children from the schools. A larger number suggest the archdiocese or the parents try to buy the schools, valued at tens of millions of dollars, from the liquidator.

But Conlin appeared to speak for most parents when she said, “There comes a time in life when you have to stand up for what you believe in.”

Everybody agrees the abuse at the Newfoundland orphanage was “terrible,” Conlin said. “Everybody is very concerned about those victims,” she said, “but that doesn't mean that we now have to create 1,600 more victims.”

The public, on the other hand, seems to know little and care less about the schools, and reaction was generally negative at the latest development in the long-running saga — the entry of British Columbia Attorney General Geoff Plant into the ring. Plant is taking the schools' side, arguing that the charitable purpose trust that led to their creation needs defending if provincial trust law is to mean anything.

Plant has compared the schools to a bank safety deposit box: When wrongdoing is perpetrated by a bank's operators, investors don't lose the coin collections they've left for safekeeping.

The liquidator sees it differently. Arthur Andersen was called in by the courts after the Christian Brothers of Ireland in Canada, whose members had abused children at the Newfoundland orphanage, decided to voluntarily liquidate their assets to compensate victims.

In the middle of the winding-up process, the liquidator noticed that the Christian Brothers were shareholders in the two Vancouver-area schools. Sensing the real estate potential of the two campuses, the company added Vancouver College and St. Thomas More to the congregation's list of real estate assets to be sold off.

“The position of the two schools is that the brothers don't own the schools beneficially,” said John Nixon, chairman of Vancouver College. “They hold shares in the two companies that operate the schools, but they do so as trustees, not as beneficial owners.”

The courts have tended to side with the Catholic position, but not unfailingly. After the legal arguments were bounced from Ontario (home of the Christian Brothers' head office) to British Columbia, where the schools are located, the matter plodded through the British Columbia Supreme Court, the British Columbia Court of Appeals, and in May to the Supreme Court of Canada.

The most important victory for the schools was a decision that the shares are held by the Christian Brothers, subject to a special charitable purpose trust for the specific purposes of operating each school, and not for the brothers' general purposes. As Vancouver Archbishop Adam Exner put it: “The resources to build these schools were provided by local families, parishes and the Archdiocese of Vancouver,” rather than donations to the Christian Brothers.

Unfortunately for the schools, the courts have also ruled that the brothers hold the shares on behalf of the congregation, which is now in liquidation. It was a disappointing decision, Vancouver College's Nixon said, one that a number of academics and charitable purpose lawyers have criticized. The schools suffered another setback in May when the Supreme Court of Canada refused to hear an appeal.

The schools' next hope is a July appearance in the original Ontario court, which will hear a petition by the British Columbia attorney general that since the schools are located in British Columbia, that province's law of trusts should apply.

The government will also argue that the operation of the school does not depend on the Christian Brothers. “There's no reason why the schools have to be wound up simply because the congregation is winding itself up,” Nixon said. “They're completely separate and independent charities.”

If the attorney general's petition is successful, the court will be asked to appoint new trustees, “ones that are determined to protect the trust rather than to destroy it,” Nixon said. If the petition fails, the repercussions could be massive. Why, he asked, would anyone put money into a trust that might not be maintained?

David Wingfield, a Toronto lawyer acting for the liquidator, said the attorney general's petition is merely an attempt to raise “the same issues that have been resolved previously.” As far as he is concerned, “the matter has been finally resolved.”

Wingfield cited the Ontario Court of Appeals ruling that “expressly rejected the argument that the attorney general is making.”

He further cited a 1999 Supreme Court of Canada decision on a similar case. In that decision, known as Bazley v. Curry, the Supreme Court said, “The suggestion that the victim must remain remediless for the greater good smacks of crass and unsubstantiated utilitarianism.”

Under that ruling, Wingfield said, “the public, who benefit from these charitable organizations, must lose when their interests come in conflict with the interests of private creditors.”

As for the attorney general's safety deposit box analogy, Wingfield preferred a different comparison: “If you own shares in General Motors, General Motors' creditors can't take your shares away. But your creditors can take your shares,” he said.

Wingfield said there are potential purchasers interested in the properties if he is victorious in court. As far as he is concerned, the schools can reopen in September if they are sold to someone who wants to operate them as schools.

“If we have to sell the assets to a purchaser who doesn't want to operate them as a school, then we'll do so, and that means the schools won't open,” he said. ‘No Blame Whatsoever’

Another source of consternation for the schools is the fact that the largest single claimant in the liquidation is the government of Newfoundland. Liable for much of the abuse that took place, it has settled with claimants for more than $10 million and now wants to recover some of its money.

“Every kid in the place was a ward of the province,” Nixon said. “We have this terrible inequity in which Newfoundland, which shares in the liability, is actually trying to take down two schools here that have absolutely no blame whatsoever for the wrongdoing in Newfoundland.”

Meanwhile, parents like Monica Conlin remain confident despite the liquidator's threats that the schools will not reopen in September. Nixon's own son is registered and ready to return this fall. There is still a waiting list for admissions, and the spirit of Blessed Edmund Rice, founder of the Christian Brothers, inspires parents, staff and students.

It was his spirit, Conlin said, that led her to choose Vancouver College for her sons. She's also certain that when September arrives, the doors will reopen and it will be a “stronger, faith-filled” community that gathers to celebrate.

Paul Schratz writes from Vancouver, British Columbia.