Crown drops case against former IWK executive charged in expense scandal

A former Halifax children's hospital executive charged in an expense scandal involving the hospital's former CEO won't be going to trial, after the prosecution dropped its case against him Tuesday.

Stephen D'Arcy had been scheduled to stand trial beginning May 30 on charges of breach of trust, unauthorized use of a computer and mischief in relation to data. During a brief court hearing, Crown prosecutor Peter Dostal told provincial court Judge Marc Chisholm that the case was being discontinued because of a lack of evidence.

Outside court, Dostal said new evidence cast a reasonable doubt on the basis for the charges -- that D'Arcy, in 2016 or 2017, had allegedly intentionally deleted email records to obstruct a freedom of information request related to the expense scandal involving Tracy Kitch, the hospital's former CEO. Kitch was found guilty in February on one count of fraud over $5,000 and is awaiting sentencing.

"We've received additional information from multiple individuals who were directly related to the freedom of information process," Dostal told reporters. "That ultimately revealed critical inconsistencies and ambiguities in what was being relied upon for the purposes of this prosecution."

Dostal did not give specifics about the new information, saying only that several witnesses had come forward.

D'Arcy, the IWK Health Centre's former chief financial officer, resigned from his post in September 2017 after repaying $17,000 in expenses. He appeared in court via a phone link with his Toronto-based lawyer Christine Hunter, but he did not speak.

Dostal said in instances where doubt emerges on crucial parts of a case, the Crown is obligated to discontinue the prosecution with the benefit of the doubt going to the accused. "This decision was based entirely on the evidence that was available to us," he said. "In no way does Mr. D'Arcy's position as a senior executive play in favour of discontinuing."

The prosecutor said the development in D'Arcy's case would have no effect on the Aug. 10 sentencing scheduled for Kitch. She was found guilty after it was revealed she used her corporate credit card to pay for about $47,000 worth of personal expenses between August 2014 and June 2017. She eventually paid back more than $45,000.

In issuing his decision, Judge Paul Scovil said Kitch failed to adhere to the high ethical standard her position demanded as head of the IWK Health Centre.

Kitch resigned from her position in August 2017 following an independent audit.

This report by The Canadian Press was first published May 10, 2022.