The first letter is dated March 31, 1970.
Father Leonard Joseph Kelly was told to leave his parish in a hurry. The bishop could see no other option.
“It seems that you have been committing these acts over a long period,” reads the letter from John Michael O’Neill, then the bishop of Grand Falls. “You should make immediate preparations to leave Baie Verte permanently. To avoid scandal, you can say that you have not been feeling well and need medical care.”
The wording is ambiguous. The bishop never spells out exactly what the priest has done. He refers to it only as a “problem” far more “deep-seated” than was previously known.
O’Neill asks Kelly for frankness and honesty — and underscores his desire for secrecy.
“I thought of calling a meeting of the consultors but decided against it for fear that something might [get] out,” O’Neill wrote.
Rather than alert authorities, newly unearthed letters show the bishop referred the priest to the Southdown Institute — a controversial therapy centre near Toronto, where priests have been treated for a range of issues from alcoholism and depression to pedophilia for decades.
These letters, discovered in Kelly’s personnel file at the Roman Catholic Episcopal Corporation of Grand Falls, are now at the centre of an uncommon legal action in central Newfoundland.
The church’s own insurance provider is seeking a Norwich order — an exceptional move compelling a third party to hand over vital documents that could lead to a lawsuit against another entity.
In this case, Guardian Insurance is asking a judge to compel the Southdown Institute to turn over its files on Kelly to find out exactly why he was admitted there in 1970.
Guardian believes the records could show the church knew Kelly was a risk to children before entering into an insurance policy in the 1980s. Those records could lead to another court action, in which Guardian would seek to avoid covering the Roman Catholic Episcopal Corporation of Grand Falls for Kelly’s abuses during its policy period due to material non-disclosure or misrepresentation.
The church is currently facing a lawsuit, filed in 2022, accusing Kelly of sexual abuse in Gander.
The plaintiff alleged he was “subjected to regular and frequent forced oral sex and occasionally other invasive sexual touching by Kelly” between 1977 and 1983, when he was between the ages of six and 12.
Kelly was also convicted of sexually assaulting a pair of 12-year-old boys in the mid-1980s. A provincial court judge sentenced him to two years of probation, contingent on him returning to the Southdown Institute for treatment.
The province’s court of appeal found that to be inappropriate, and instead sent Kelly to jail on a four-month sentence in 1988.
The Roman Catholic Episcopal Corporation of Grand Falls is the church’s corporate body overseeing larger centres such as Grand Falls-Windsor and Gander, while also serving dozens of smaller churches dotting rural outports throughout the island.
Father Kelly — who hailed from Windsor — was ordained in 1955. He was welcomed to the priesthood by Bishop O’Neill at a ceremony in his hometown in front of 500 people “eager to honour the young cleric,” according to an article published by the Advertiser on June 9, 1955.
It’s not clear when he moved to Baie Verte.
Three months after being told to leave the parish, Bishop O’Neill began exchanging letters with the Southdown Institute about Kelly’s progress. The first letter quotes from a psychiatric evaluation conducted after his admission, referring to his actions as “rather pathetic homosexual adventures” fuelled by alcoholism.
“I do not feel the sexual episodes will cause any future difficulties if this priest is successful in his attempt to separate himself from alcohol,” it reads.
The person evaluating Kelly recommended he return to the priesthood in the Diocese of Grand Falls.
“It is felt that when returned to the ministry, Father Kelly should not be removed from the diocese since sexual problems play only a small role in his total inability to adjust. Rather than being removed from the home diocese, he should be given considerable support in his attempt to attack his central alcoholic difficulties.”
Bishop O’Neill responded two weeks later, pushing back on the idea.
“It must be obvious to him, as it is to me, that he was lucky to get out of Baie Verte with his name unsullied,” O’Neill wrote. “There could well have been a court case with all its ugly implications. Even he should realize that it is not merely a case of taking up where he left off.”
The bishop suggested Kelly should be moved to Halifax on a temporary basis.
“While my sympathy goes out to Father Kelly, as it would to any poor priest in trouble, I cannot be expected to condone the seriousness of his betrayal of confidence and the terrible scandal which, but for the discretion of the family involved, could have blighted the whole life of the church in this small province.”
The response — authored by Southdown’s executive director, John Kelly — came close to spelling out the nature of the complaint against the priest, without explicitly stating it.
“I am keenly aware that his conduct could have created wide-spread scandal and I am grateful that this was avoided,” the director wrote. “The more we see of Father Kelly, the more we become convinced that he can make a good recovery. His motivation is good and it becomes increasingly apparent that prolonged drinking had removed, as it frequently does, the restraints which normally he would have exercised in his relationships with the boys in question.”
He goes on to suggest they find Father Kelly an assignment close to the Southdown Institute in Ontario, so they can keep an eye on him before returning to Newfoundland.
O’Neill obliged, and conveyed the message to Father Kelly on July 30, 1970. They’d start him in Ontario, he said, before moving him to Halifax with the goal of working his way back to Newfoundland.
“It is apparent you were a very sick and mixed up priest,” O’Neill wrote. “As it is, we are all fortunate that the situation did not become public with irreparable damage to the Church and the priesthood. Now, fortunately, all that is past and I am happy to forget the whole thing and look forward to your future work in the holy Priesthood.”
Kelly’s personnel file shows he took up a pastoral assignment in Gander in 1977, before moving home to Grand Falls-Windsor in 1983.
O’Neill died in 1974. He didn’t live to see the consequences of his decision to “forget the whole thing.”
Kelly was part of the first wave of Catholic clergy and Christian Brothers to face criminal charges in the late 1980s. What began as a trickle turned into a flood of allegations, prompting the Archbishop of St. John’s, Alphonsus Penney, to call for a commission of inquiry.
“It’s a great mystery to me how such a thing could go on for so long without somebody blowing the whistle,” Penney told CBC News in 1989.
The Winter Commission report was released in 1990, and found allegations of sexual misconduct spanned back as far as at least 1975 — when Penney himself sent a priest from the Diocese of Grand Falls to the Southdown Institute over allegations of pedophilia. Penney did not report the priest to authorities, and the Winter Commission did not uncover the priest’s name.
Guardian Insurance is now asking the court to compel Southdown to turn over its records on the unnamed priest, as well as Father Leonard Joseph Kelly.
“Guardian has a reasonable basis to believe that the offending priest was Kelly, or alternatively another Grand Falls priest whose attendance at Southdown was precipitated by inappropriate interactions with a child, thus the priests’ identification in the Southdown records would be material to Guardian’s coverage investigation,” the company’s application reads.
The Winter Commission found church officials in Newfoundland and Labrador relied on Southdown for a range of reasons, starting with the unnamed priest in 1975.
The letters unearthed by Guardian Insurance show that reliance existed at least five years earlier than previously known.
In total, the Winter Commission report referenced five Newfoundland priests who were sent to Southdown, including four who were accused of inappropriate relationships with minors.
“The Southdown facility seems to have been seen as a quick fix for nearly any kind of behavioural problem,” the report reads.
The Southdown Institute still operates today, offering psychotherapy, counselling and spiritual direction to clergy, lay pastoral ministers and “all adults who consider faith and spirituality to be integral to their lives.”
Lawyers for Guardian Insurance, Southdown and the Roman Catholic Episcopal Corporation of Grand Falls were in court earlier this month for a brief appearance. A hearing on the application will be held on Jan. 26, 2027.
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