S.C.A. No. 02430 IN THE SUPREME COURT OF NOVA SCOTIA APPEAL DIVISION Freeman, Hart, JJ.A., and Nunn J. BETWEEN: DONALD FRANK RIPLEY and PAUL POMMIER, GEORGE DUNN and RENE JARRY and THE INVESTMENT DEALERS ASSOCIATION OF CANADA respondents W. Dale Dunlop and W. Ray Wortman for appellant A. David MacAdam, Q.C., Robert L. Barnes, M.M. Fox and Alan J. Stern, Q.C., for respondents Appeal Heard: September 26, 1991 Judgment Delivered: November 18, 1991 THE COURT: Appeal dismissed from judgment of Madam Justice Roscoe refusing certiorari or other relief on review of decision of disciplinary tribunal of Investment Dealers Association per reasons for judgment of Freeman, J.A.; concurred in by Hart, J.A., and Nunn, J. FREEMAN, J.A.: This is an appeal from refusal of certiorari and other relief by Madam Justice E.A. Roscoe following findings by a disciplinary panel that the appellant had broken rules by which the investment dealers\' profession regulates itself. The appellant is Donald F. Ripley, who at material times was the regional manager, vice‑president and director of McLeod Young Weir, investment dealers. He was found guilty of four of six charges at lengthy discipline hearing conducted by panel of the Eastern Business Conduct Committee of the Investment Dealers Association of Canada. He was suspended for two years, fined $50,000 and ordered to pay costs of $65,000. The charges involved disclosure of information about the blind trust of federal cabinet minister; taking part and permitting employees to take part in "side deals"‑‑trades in securities not approved by his head office; failing to ensure proper records were kept of the side deals; and failing to properly supervise an employee who was involved in side deals. Two other charges, numbered (i) and (iii), were dismissed on grounds that they fell within the responsibilities of the branch manager. He was found guilty on the following charges: That the respondent, at the City of Halifax in the Province of Nova Scotia, being Director and Officer of member of the Investment Dealers Association of Canada: (ii) from time to time during the period from June 12 to June 22, 1987, inclusive, disclosed and participated in the disclosure by others of information relating to the accounts of former client of the Member in manner unbecoming director and officer and did thereby commit an offence contrary to By‑Law 7.5©) (iv) during the period from October 1981 to July 1986, inclusive, from time to time participated in, and permitted certain officers, registered representatives and non‑trading employees in the office for which he was responsible to participate in, for remuneration, trading in securities issued by: Crockett McConnell Inc., IAS (1983) Limited Partnership, IAS (1984) Limited Partnership, KB Electronics Limited, Nova Scotia Hospitality (1986) Limited Partnership, Nova Scotia Hospitality (1985) Limited Partnership, One Oak Street Limited Partnership, Scotia Liquicoal Limited Research and Development, Tenwolde Brothers Company Limited, M.U.R.B. Skyline Apartments and Waterfront Place Limited Partnership, ostensibly on behalf of and in the name of the Member in manner unbecoming director and officer of the Member, and did thereby commit an offence contrary to By‑law 7.5©); (v) during the period from October, 1981 to July 1986, inclusive, the Respondent permitted certain officers, registered representatives and non‑training employees in the office for which he was responsible, to effect trades from time to time in the securities referred to in paragraph (iv) hereof without recording such transactions on the books of the member or sending to the purchasers confirmations in respect of, or monthly statements disclosing, such trades in accordance with Regulation 200, and did thereby commit an offence contrary to By‑Law 7.5(c); [and] (vi) during the period from October, 1981 to July 1986 inclusive, the respondent failed to ensure that Mr. Eric C. Hicks, registered representative of the member, was not engaged in gainful occupation other than his employment with the member without: (a) being specifically permitted to do so by the authorities administering the securities legislation of the Province of Nova Scotia; (b) the Member acknowledging its responsibility in writing to the Association for supervision of Mr. Hicks; and (c) the annual approval of the Atlantic District Council of the Association with respect to such occupation, contrary to By‑Law 18.4, and did thereby commit an offence contrary to By‑Law 7.5(c). He was found not guilty of the following: (i) during the period from the 25th day of November, 1985, to February 17, 1987, inclusive, failed to ensure that an account for client, being trust in favour of the Honourable Stewart McInnes, was opened and supervised in accordance with Regulation 1300.2, and did thereby commit an offence contrary to By‑Law 7.5 (c); [and] (iii) during the period from the 25th day of November, 1985, to February 17, 1987, inclusive, permitted trades to be effected by registered representative in the branch office for which the Respondent was responsible in discretionary account for the Honourable Stewart McInnes, without the authorization of the client being accepted by the member or approved in accordance with Regulation 1300.15 (in effect prior to September, 1986 or Regulation 1300.4 in effect thereafter) and did thereby commit an offence contrary to By‑law 7.5 (c). In his vigorous counter attack Mr. Ripley has denied the involvement alleged in the first charge and asserted that he is not the officer who should be held responsible on the remaining three. Much of his argument has been directed at the process by which he was found guilty. Respecting charge (ii), the panel made the following findings of credibility: We accept the evidence of Heather MacDonnell, Susan Kilbride and Lee Harwood, where such evidence is in conflict with Donald Ripley's evidence concerning Mr. Ripley's direct role in releasing information on the account of Stewart Maclnnes in May and June of 1987. We further accept the evidence of Frank and Kathy Nichols and Cynthia Hallett where their testimony conflicts with that of Mr. Ripley. That finding is well within the duty and jurisdiction of disciplinary board. It is devastating to Mr. Ripley's defence to charge (ii). Ms. MacDonnell, Ms. Kilbride and Mr. Harwood told of preparing and sending documents relating to the McInnes account to Sheila Copps, Liberal Member of Parliament, under Mr. Ripley's direction and with his active involvement. Mr. Harwood described numerous telephone conversations he had had with Ms. Copps at Mr. Ripley's request, reporting on their contents to Mr. Ripley. He passed documents to the press on Mr. Ripley's instructions. When the McInnes account became the centre of storm in the media, it was Mr. Harwood who informed the MacLeod Young Weir head office of what had been going on. Mr. Nichols was the MacLeod Young weir manager at Kentville, Nova Scotia. He and Mrs. Nichols and Cynthia Hallett testified to conversations with Mr. Ripley in which he predicted the media coverage of the McInnes account. In addition, Mr. and Mrs. Nichols told of Mr. Ripley leaving back‑dated letter with Mr. Nichols for him to produce as evidence in Mr. Ripley's favour. Back‑dated memoranda casting favorable light on Mr. Ripley's activities featured prominently in the hearings; they had not been received by their addressees but turned up in files, sometimes files which had been previously searched. Many of the memoranda authored by Mr. Ripley were harshly critical of Ross Montgomery, former employee of MacLeod Young Weir and the investment executive in charge of the McInnes account. The McInnes account was transferred from McLeod Young Weir to Mr. Montgomery's new firm when he left. Much testimony, as well, suggested that Mr. Ripley's obsessive hostility to Mr. Montgomery motivated him to disclose information which he hoped would be damaging to Mr. Montgomery. Once the panel made its finding as to credibility, virtually precluding any further defence on the merits, the only substantial defence option left to Mr. Ripley on charge (ii) was to impugn the disciplinary process. His basic defence on the three remaining charges involving side deals was not outright denial but attempts to downplay and justify them and spread the responsibility. The securities issues central to the charges were marketed principally by the Halifax office of MacLeod Young Weir with some involvement by other offices in the region under Mr. Ripley's supervision. They had passed statutory requirements, but Mr. Ripley was not authorized to approve them as securities to be offered to the public by McLeod Young Weir. That approval required head office scrutiny in which whey were subjected to "due diligence" procedure and otherwise examined to ensure they represented investments which could be offered to the public backed by the name of reputable brokerage house. They were nevertheless advertised by the Halifax office in the MacLeod Young Weir name, and some of the Halifax investment executives actively sold them. In describing the seriousness of this kind of activity the panel stated: ". Once firm decides to endorse specific investment the dealer is essentially putting his reputation on the line. An investment dealer has the followng objectives in mind when it analyzes proposed financing: (i) to evaluate the financial and business risks of the investment; (ii) to ensure that the proposed pricing is fair and compensates for the degree of risk involved; (iii) to determine the suitable type of investor for the proposed financing: and (iv) finally, to undertake "due diligence" process, which essentially is an investigation to ensure that the offering documents provide "full, true and plain" disclosure of all the pertinent facts necessary to the potential investor to make proper evaluation of the merits and suitability of the proposed investment. Via his involvement in these dealings and via his awareness of the involvement of many other employees of McLeod Young Weir Limited in similar dealings, which he often encouraged, Mr. Ripley was effectively conducting business within business for his personal profit. Consequently, he was defrauding his employer. Mr. Ripley may have been providing grave disservice to clients of McLeod Young Weir Limited by promoting securities that had not been properly vetted by personnel of McLeod Young Weir Limited who were trained and experienced The clients believed that the securities had been examined and approved by McLeod Young Weir Limited, based on their financial and business merit and their suitability as investments." The appellant has objected to the last sentence on grounds that investors were not called and there was no evidence of what they believed. Obviously, the panel was stating what investors were entitled to believe rather than making literal finding as to what they actually believed. The panel made the findings of fact, for which there was ample evidence, necessary to support its finding that Mr. Ripley was guilty on charge (iv) of conduct unbecoming senior officer of an investment house. In finding Mr. Ripley guilty on charge (v), failing to keep proper records of the transactions in question, the panel stated: "It is the panel's opinion that all financial transactions executed for client must be recorded on the books of the Member. Regulation 200 is very clear in this respect. It appears, however, that these security transactions were not recorded on McLeod Young Weir Limited books or client statements in order to deliberately conceal the transactions from head office. Therefore, it was consistent not to have any telltale signs of these wrongdoings recorded in the firm's books or the client accounts." On charge (vi) the panel noted that supervising salesmen was primarily the function of the branch manager, but in view of the fact that Donald Ripley was the undisputed "Boss" of the Atlantic region, that he had strong personality and that he had hands-on style of management, it is inconceiveable to us that he could not have corrected decisively and quickly situations of non-compliance, such as Eric Hicks' involvemment with outside deals, had he intended to do so. The Investment Dealers Association (IDA), as explained at some length in the appellant's factum, is an unincorporated association which oversees the investment and brokerage business in Canada, serving as the professional organization of, and regulating, member brokerage houses and their employees. It is not specifically empowered under any statute, although its existence is recognized in some securities legislation. It has its own constitution, by-laws and regulations to which its members bind themselves by contract to comply. The IDA establishes requirements for capitalization, procedures for purchase, sale and registration of securities for clients, audit procedures and other matters that govern the internal and external operations of national and local investment firms. The IDA also sets standards of qualifications for, and for the discipline of, persons engaged in the industry. Its authority does not extend to regulating the actual issuance of securities: that is vested in provincial securities commissions and the various stock exchanges sold. The sale of securities is regulated by statute in all Provinces. It is the persons and the firms who sell the securities that are regulated by the IDA. The nature of associations such as the IDA was considered by the Supreme Court of Canada in the case of Orchard v. Tunney (1957), 1957 CanLII 57 (SCC), D.L.R. (2d) 273: "In the absence of incorporation or other form of legal recognition of group of persons as having legal capacity in varying degrees to act as separate entity and in the corporate or other name to acquire rights, incur liabilities, to sue and be sued, the group is classified as volunteer association. There are many varieties of this class ranging from business partnerships, labour unions, professional, fraternal and religious societies to social clubs. ." (page 278) Principles governing the relationship among the various members of voluntary organizations such as the IDA were considered in Stephen v. Stewart, [1944] D.L.R. (305) where MacDonald, C.J.B.C. said in the British Columbia Court of Appeal: "A volunteer organization, having no legal entity, has its most familiar form as members club. Decisions on such clubs show that the relation of members to each other is purely contractual, the contract being found in the constitutional rules which they adopt." (page 311) It was acknowledged that the appellant had agreed to bind himself to the by‑laws, rules and regulations of the IDA and made himself responsible for knowing their contents. IDA approval is required at various career stages beginning with securities salesman, or registered representative, and Mr. Ripley had in fact signed similar undertakings several times occasioned by his promotions. After he was found guilty of violations Mr. Ripley sought relief in the nature of certiorari, attacking the constitution and jurisdiction of the board and claiming it had failed to observe the rules of natural justice. In addition to an order quashing the panel's decision he sought an order in the nature of prohibition restraining further proceedings against him, declaration that the panel had no jurisdiction over him, declaration that the panel's decision was void for patent unreasonableness, denial of natural justice, excessive jurisdiction and reviewable error in law and further, declaration that the IDA proceeded against the appellant in bad faith. When his application was dismissed by Madam Justice Roscoe he alleged nine errors of law in his notice of appeal. Apparently these were incorporated into the following points in issue, which were the issues set out in the appellant's factum: 19. Were there any jurisdictional errors made that would deprive the Investment Dealers Association of the right to hold hearing with respect to Donald Frank Ripley? (i) Constitution of the Eastern Business Conduct Comittee Panel; (ii) Inapplicability of some of the charges; 20. Was there legal bias in the proceedings conducted against the appellant? 21. Were the rules of natural justice adhered to with respect to the appellant in the following areas: (i) The investigative process; (ii) Pre‑hearing disclosure and fairness; (iii) Rulings and decisions made during the course of the hearing; (iv) The decision; (v) Matters applicable to the penalty; 22. What remedies does the appellant have available to him?(i) Declaratory relief; (ii) The Charter of Rights Before considering appellant's complaints against the IDA and the panel, it may be useful to consider the available remedies to which they are directed. The appellant dealt with declaratory relief in his factum as follows: "Before Madam Justice Roscoe an argument was put forward that she had the power to issue prerogative writ including certiorari. The appellant now concedes that relief of this nature is not available. However, at the very minimum this honourable court possesses the power to provide declaratory relief. This power is not only inherent, but contained expressly in the civil procedure rules. The appellant is asking for the reasons of excess of jurisdiction, bias and breach of the rules of natural justice that the decision of the panel be declared null and void." This is essentially correct statement of the law. Madam Justice Roscoe found that certiorari for error of law on the face of the record was not available because the Business Conduct Committee panel was non-statutory tribunal, but that it was open to her to review the panel's proceedings for want of jurisdiction or breach of natural justice. She relied on Chyz v. Appraisal Institute of Canada (1985), 44 Sask R.165 in which the Saskatehewan Court of Appeal was considering the finding of the trial judge that "certiorari and prohibition, generally speaking, will not lie against private body which derives its jurisdiction from the consent of its members banded together in voluntary organization." After comprehensive review of the case law Tallis, J.A. found that "domestic tribunals (are) subject to the principles of natural justice and procedural fairness." Remedies included declaratory or injunctive relief. As quoted in Administrative Law and Practice, Second Edition, Reid David, at 367, Laskin, J. stated in Association of Radio and T.V. Employees v. C.B.C., 1973 CanLII 182 (SCC), [1975] S.C.R. 118 at p. 137 that "The effect of what was said [in the influential case of Port Arthur Shipbuilding Co. v. Arthurs, [1969] S.C.R. 85] is to deny homage to technicallty, and to make it clear that where the proceedings to review decision of board of arbitration are by way of motion to quash or to set aside the award, dispensing with the issue of writ of certiorari, it matters not whether the board is or is not statutory tribunal in any strict sense." In R. v. Board of Arbitration, Ex parte Cumberland Railway Co. (1968), 67 D.L.R. (2d) McKinnon J.A., then of this court found an arbitration board to be private board set up by the parties themselves. It was not statutory body, and certiorari did not lie. He nevertheless found there had been legal misconduct on the part of the chairman and set aside the award. While prerogative writs do not lie against the panel as domestic tribunal, its proceedings are reviewable for want of jurisdiction or breaches of natural justice, which would include bias, as Madam Justice Roscoe found. The remedy, as in Saskatchewan, would be declaratory or injunctive relief. In asserting a right to relief under the Charter the appellant did not contend that sections 7 and 11 of the Charter create any new rights not already available as rules of natural justice, but rather seeks the remedies available under s. 24(1) of the Charter. He reviewed Retail, Wholesale and Department Store Union, Local 580 v. Dolphin Delivery Limited, 1986 CanLII (SCC), [1986] S.C.R. 573, which established that the Charter regulates the relations between government and private persons, but does not regulate the relations between private persons and private persons. The appellant argues that the IDA is involved in public activity and engaged in government action pursuant to the Securities Act, in which the IDA is recognized, and cannot therefore be considered private person. Madam Justice Roscoe considered the appellant's right to Charter relief and concluded: "The respondent submits that recognition of the IDA in the Securities Act does not transform it into government actor to which the Charter applies, and relies on Harrison v. The University British Columbia,1988 CanLII 183 (BC CA), [1988] W.W.R. 688 (B.C.C.A.) and McKinney v. University of Guelph (1987), 1987 CanLII 179 (ON CA), 63 O.R. (2d) (O.C.A.) where the 'government control' and 'government function' tests were developed. Neither of those tests would, in my view, extend the operation of the Charter to the activities of the I.D.A. The respondent also refers to several cases where the applicability of the Charter to self‑governing bodies was discussed, including the Chyz and Peg‑Win cases, supra. agree with the respondent's submission that the courts have consistently applied the Charter to statutorily mandated professional associations, but not to voluntary private associations even when they are statutorily recognized. As indicated, when dealing with the question as to whether certiorari would lie, find there is no government control or government function being exercised by the IDA, and since its powers are derived from contract, the Charter is not applicable to its actions." On the appeal the appellant relied heavily on Roger R. Wigglesworth v. Her Majesty the Queen (1988), 1987 CanLII 41 (SCC), 45 D.L.R. (4th) 235 (S.C.C.), in which Madame Justice Wilson developed the "true penal consequences" test which would make Charter relief available when "a fine by its magnitude would appear to be imposed for the purpose of redressing the wrong done to society at large rather than to the maintenance of internal discipline within the limited sphere of activity." The IDA by‑laws give it the power to impose fines up to $100,000. While that amount is substantial, it must be borne in mind that the IDA's purpose is to regulate profession in which breaches of rules relating to the sale of securities can result in gains of great magnitude. Without that power to fine the IDA would be hampered in imposing discipline upon its members. It may be inferred that members of the securities industry contract to regulate themselves because it is to their advantage to do so. An obvious benefit is the avoidance of the need for government regulation in field where the need for protection of the public might otherwise attract it. party to such contract cannot have it both ways; if he enjoys benefits from contract which excludes government intervention from his profession, he cannot claim Charter protection when he is accused of breaching the conditions of his contract. There was no error of law on Madam Justice Roscoe\'s part in finding that the Charter has no application in the present case. Therefore the appellant will succeed on this appeal if, and only if, the record shows Madam Justice Roscoe committed reversible error in failing to determine that the disciplinary panel exceeded its jurisdiction or breached the rules of natural justice, which include bias. The appellants points will be considered in sequence. CONSTITUTION OF THE PANEL By-law 11.23 of the IDA requires that panel of the Eastern Business Conduct Committee have at least three members at least one of whom resides outside the district. Members residing in the district were ,canvassed and for variety of reasons none could serve. All of the members of the panel hearing the charges against Mr. Ripley came from Quebec or Ontario. The appellant now submits that "the lack of Atlantic District representation on the panel made the composition of that panel ultra vires and thus it lacked jurisdiction to hear the charge against him." He asserts that "the reason why local representation is important, other than being judged by one's peers, is to ensure that local standards and practices are understood by the panel." By‑law 11.23 contemplates but does not require representation from within the district of the person charged. Whatever may be the meri‑t of the appellant's argument, it is not sufficient to deprive the panel of jurisdiction. Nor can support be found for his contention that the IDA acted in bad faith in determining the membership of the panel. It was established consistently with its by‑laws, by which Mr. Ripley had agreed to be bound. Many representatives from this district who declined to serve did so to avoid the appearance of interest or bias‑‑which is the contrary of bad faith. Madam Justice Roscoe found it had been open to Mr. Ripley to call evidence‑‑and would agree with her that the burden was on him‑‑of local standards and procedures. No such evidence was called. would dismiss the appellant's first point relating to the constitution of the panel. INAPPLICABILITY OF SOME OF THE CHARGES do not agree with the appellant's allegations that the IDA acted unreasonably and in bad faith in charging him with infractions in charges (i) and (iii) that were "clearly not his responsibility." It was open to the IDA to lay the charges, and Mr. Ripley can hardly complain when the panel found him not guilty. The appellant contends that charges (iv), (v) and (vi) did not disclose specific wrongdoing. These charged him with three specific breaches of by‑law (c) which establishes disciplinary jurisdiction for engaging in any business conduct or practice 'which is unbecoming to partner, director or officer or which is detrimental to the public interest. As senior official of MacLeod Young Weir with many years of experience in the securities business the appellant was as aware as any member of the panel of what would constitute unbecoming conduct. The evidence, including the memoranda Mr. Ripley authored, makes it clear he fully appreciated the concept. If he did not, he had bound himself contractually to find out. In Morton v. Registered Nurses Association (1989), 92 N.S.R. (2d) 154 Nathanson, J. reviewed the case law and stated: "Implicit in the concept of profession is the existence of standards which are benchmarks for the practice of the professional. The standards may be written or unwritten." In dismissing the appellant's arguments on this point would agree with Madam Justice Roscoe: "Even if the Board's findings were wrong, since this is not an appeal, and since the interpretation and application of the regulation and the by‑law was within their jurisdiction, the court should not interfere with their decision. Certainly their interpretation could not be considered to be patently unreasonable, under the circumstances." LEGAL BIAS The appellant's submission is that ". the ability of the IDA to act and be seen to act impartially in investigating, prosecuting and adjudicating the complaints against the Appellant was coloured by the statements and representations of IDA officials and their close association with McLeod." He relies on "the Marshall Crowe case", Committee for Justice and Liberty v. National Energy Board (1976), 1976 CanLII (SCC), N.R. 115 (S.C.C.) in which Mr. Justice de Grandpré said: "The apprehension of bias must be reasonable one held by reasonable and right minded persons, applying themselves to the question and obtaining thereon the required information. In the words of the Court of Appeal that test is what would an informed person viewing this matter realistically and practically and having thought the matter through, conclude? The appellant raises number of matters which he alleges give rise to reasonable apprehension of bias: (a) statements made by officials who investigated on behalf of IDA suggesting they considered Mr. Ripley guilty before the hearing, coupled with the fact that they did not interview Sheila Copps who did not believe Mr. Ripley was the source of her information. (b) an uncompleted settlement agreement between IDA and Mr. Ripley in which he accepted responsibility for failure of supervision resulting in the McInnes trust leak, but no direct knowledge of leaked information; it was withdrawn by both sides before receiving required approval by two members of the disciplinary committee after further information became available following an internal investigation by McLeod Young Weir. (c) an alleged "close association" between McLeod and the IDA; McLeod was offered, and declined, the right to cross‑examine during the hearing, which the appellant argued would have faced him with two prosecutors, one able to cross examine. He contends: "the IDA appeared to act as an advocate of McLeod and, as such, its prosecution is tainted with the appearance of impartiality." The appellant relied primarily on Re McGavin Toastmaster Ltd. and Powlowski (1973), 1973 CanLII 1330 (MB CA), 37 DLR (3d) 100 and McBain v. Canada Human Rights Commission (1985), 1985 CanLII 3160 (FCA), 62 N.R. 117 (F.C.A.). In McGavin The Manitoba Human Rights Commission investigated company accused of discrimination against two employees. It wrote the employer stating that after "a full review of these cases" the Commission had resolved that certain undertakings by the company, including reinstatement and payment of back wages, be given in settlement. When the company objected, the commission held board of inquiry, which confirmed the previous conclusions, and reported to the Attorney General, who issued an order demanding the same compliance the Commission had. The appeal court upheld certiorari order because the applicant company "was exposed to an inquiry which fell below the standards of objective impartiality and adherence to natural justice which the law demands and to which they are entitled. justice demanded consummate care on their part in the procedures to be followed in disposing of the complaints." In McBain complaint of sexual harrassment in the workplace was investigated by an investigator appointed by the Human Rights Commission who reported back that the complaint was "substantiated." The Commission appointed human rights tribunal and acted as prosecutor of the complaint before the tribunal. The tribunal also found the complaint "substantiated." The Commmission ordered McBain to pay compensation. He appealed. The Federal Court of appeal found there was reasonable apprehension of bias in the commission appointing the tribunal to judge cause in which the commission was prosecutor. "Substantiated" meant the same in both the section of the statute providing for the investigator and the section and related to the Tribunal. The court applied the "consummate care" test from McGavin and found it had not been met. Neither had the Crowe test been met. McBain must be considered closely, because of obvious similarities to the present case: the IDA played role equivalent to that of Human Rights Commission in McBain, causing an investigation, appointing the tribunal and providing the prosecutor. Any professional organization which conducts its own disciplinary hearings must follow similar pattern. The distinguishing feature in the ratio of McBain is that under the relevant statute the tribunal was hearing evidence on question already determined by the investigator: that the complaint was "substantiated." In arriving at the same finding the tribunal could not avoid the appearance of rubber‑stamping the conclusion of the investigator, giving rise to an apprehension of bias. In the circumstances of that case the Federal Court of Appeal did add, in obiter, that "It is my opinion that even if the statute only required the Commission to decide whether there was sufficient evidence to warrant the appointment of tribunal, reasonable evidence of bias would still exist." However in distinguishing Re Caccamo and Minister of Manpower and Immigration (1977), 1977 CanLII 1724 (FCA), 16 N.R. 405; 75 DLR (3d) 720 the court stated: "In Caccamo there was no suggestion that the Department had taken the firm position in advance of the inquiry that the allegations against the appellant had been substantiated. The press release simply stated the position that the Department was going to take at the special inquiry. That is quite different situation from the one at bar where the commission, after deciding that the complaint has been substantiated, chooses the part‑time judges who will hear the complaint, and at that hearing takes the position that its earlier decision was correct. Such scheme represents after‑the‑fact justification for decision already made by it and before judges of its own choosing." The appellant argues that the so‑called settlement agreement fixed the IDA with belief in his guilt. Even if that argument is accepted, that belief was limited to the infraction described in the agreement. The subject matter of the agreement was that of the first charge, of which Mr. Ripley was found not guilty by the panel. That argument is without merit. The investigators were officials of the IDA employed to police the profession. Their conclusion was that hearing was warranted on the charges, not that Mr. Ripley was guilty of them. The persons they interviewed and the conclusions they reached privately bear only remotely on the ability of the panel authorized by the IDA to conduct an impartial hearing. There is little in the evidence to suggest complicity between IDA and McLeod. The appellant says the prospect of bias was inherent in the panel's invitation to McLeod to appear, present evidence and cross‑examine witnesses. The respondent points out that the panel was obliged to do so under IDA by‑laws 7.6 and 18.6. McLeod declined to take an active part in the proceedings. The appellant's activities necessarily involved McLeod as the IDA member who employed him, and McLeod was itself charged by the IDA in connection with the same matters. Madam Justice Roscoe considered the McGavin and McBain cases and appeared to accept the respondent's argument that they are distinguishable from the present case because the adjudicators are "clearly distinct and independent from the investigators." She stated: "It should be noted that, by virtue of the I.D.A. by‑laws, the panel that acted as adjudicators was comprised of members of the Eastern Business Conduct Committee, standing committee of the Association. The actual members of that committee, who formed the panel, were chosen by the chairman of the committee. Neither Mr. Clarke, as the investigating officer, nor Mr. Kniewasser, as President (of the IDA), were members of the Eastern Business Conduct Commitee, nor did they have any input into the selection of the Committee, nor were they involved in any of its deliberations. The arguments being made by the applicant, if accepted would, at the most, establish bias on behalf of the investigators, and in the absence of any evidence relating to the three members of the disciplinary panel, who were the decision makers, the fact that all concerned were connected with the IDA, is not sufficient to raise reasonable apprehension of bias." The panel had its own counsel, independent from the counsel engaged by the IDA to prosecute the charges. am satisfied that the process, from inquiry through to the determination of the panel, was handled by the IDA with "consummate care" to preserve "standards of objective impartiality and adherence to natural justice which the law demands and to which (the appellant was) entitled." (See McGavin) am satisfied, as well, that the Crowe test was met: "an informed person‑‑viewing this matter realistically and practically and having thought the matter through"‑‑would conclude there was no reason for apprehending bias. POINT THREE‑‑INVESTIGATIVE PROCESS The appellant has placed much emphasis on the inclusion of charges (i) and (iii), of which the appellant was found not guilty. "For example," he argues, "the decision to lay charges which were totally inapplicable to the appellant can lead not only to loss of jurisdiction, but can also be categorized as an example of bad faith." It is difficult to conclude that the first charge was "totally inapplicable" when the appellant had already admitted his culpability in the settlement agreement. POINT THREE‑‑PRE—HEARING DISCLOSURE AND FAIRNESS The appellant has complained consistently that certain notes and documents he left at McLeod Young Weir were not made available to him, and he has brought separate legal action against McLeod respecting them. Madam Justice Roscoe found that "there is no evidence in this case which indicates that the tribunal or its counsel or counsel for the IDA had any information that was not provided to Mr. Ripley. Given that the IDA did everything in its power to obtain information for Mr. Ripley and given that there was no other evidence that, in fact, any other notes even existed, am unable to find that there has been denial of natural justice or an excess of jurisdiction in relation to this complaint." She made no error of law in so finding. POINT THREE‑‑RULINGS AND DECISIONS Ross Montgomery The IDA refused to call Ross Montgomery, alleged target of Mr. Ripley's hostility, on grounds that he was unreliable and lacking in credibility. The respondent argues that his evidence in any event was only relevant to the dismissed charges, (i) and (iii). The panel had him called as its own witness, making him subject to cross‑examination by both sides. That strikes me as fair solution. Madam Justice Roscoe found it was within the jurisdiction of the panel to do so; there was no evidence of bad faith. The July 21 Meeting The appellant, representatives of McLeod and their counsel met on July 21, 1988, and agreed discussions should remain confidential. reference was made to the Supreme Court of Ontario to determine if disclosure was required. The IDA took the position that both McLeod and the appellant were bound by their undertakings to make full disclosure to the association. McLeod agreed; the appellant did not. The panel ruled that witnesses must answer questions put to them respecting the meeting. Mr. Ripley continued to object to details of the meeting being disclosed. Lacking the power to compel testimony, the panel considered its options in the words of its chairman, Paul Pommier: "The panel maintains its position that it wants to hear the witnesses of the July 21st meeting particularly Mr. Grasmuck and Mr. Taylor who have already testified. Now should Mr. Ripley, through his counsel, maintain his position the panel to date has looked at different alternatives, will continue to look at different alternatives. Presently they would appear to be the following: we could suspend the present hearings and await for the outcome of the decision by the Supreme Court of Ontario, which may settle the matter for us. Now if that decision ‑‑if we did suspend and that decision did not settle the matter for us, we would look at few other alternatives. One would be to continue the present hearings and view very harshly the refusal to waive confidentiality. Or, decide to conclude the meeting and consider immediate suspension and make recommendations to the IDA as to possible other suspensions. We will now go on with the present hearings." It is submitted by the appellant that the chairman's remarks are threats amounting to bad faith by the panel. "Its decision to require disclosure of the substance of the meeting was patently unreasonable and denial of natural justice." The panel was under duty to consider relevant evidence and it had the right to consider its alternatives if evidence it considered potentially relevant was denied to it. Rulings as to the duty of witnesses to answer questions were entirely within the panel's jurisdiction; weighing alternatives in those circumstances was not bad faith. Interference with Cross‑Examination Witnesses who requested that they have their own counsel at the hearing were permitted to do so. The appellant complains, particularly with respect to Lee Harwood, that his testimony or cross‑examination was "repeatedly interrupted by objections from his counsel. The inability to develop line of cross‑examination without fear of objection resulted in severe restriction on the right to cross‑examination." The respondent counted eight objections by Mr. Harwood's counsel, many to ensure he had been shown documents on which he was being questioned, or that he be permitted to complete his answers. There were no questions he was held exempt from answering. This complaint is included among those Madam Justice Roscoe described as having "little or no merit." Cancellation of the Penalty Hearing After the appellant was found guilty on four charges date was set for hearing as to penalty. The appellant did not attend and his counsel produced medical excuses. Counsel for the IDA objected to an adjournment. The panel cancelled the hearing and set date for written submissions. am aware of nothing in the by‑laws, nor in the rules of natural justice, to require oral submissions on penalty rather than written ones. The appellant declined to make written submission. That was his choice; it did not invalidate the process. DECISION‑‑No Evidence The appellant's basis for arguing that the panel lost jurisdiction by deciding matter without evidence is based on the panel's observation that "the clients believed that the securities had been examined and approved by McLeod Young Weir ". have dealt with this above. It is without merit. Failure to Consider Relevant Matters This point relates to evidence as to how the McLeod head office responded to certain payments sent from the Halifax office related to side deals. Head office knowledge of the side deals had little relevance to Mr. Ripley's guilt or innocence. Whether some officials in Toronto knew what was going on or not, Mr. Ripley was found to have countenanced dealings in securities knowing they had not gone through the approval process. Unreasonable and Contradictory Findings The examples offered of unreasonable and contradictory findings are unconvincing and lack substance; most relate to credibility. Even giving the argument its full weight, in the absence of any evidence of bias or bad faith the panel's findings were within its jurisdiction and within the bounds of the rules of natural justice. PENALTY The penalty of $50,000 fine and $65,000 costs coupled with two-year suspension is obviously an onerous one for Mr. Ripley, who is 56 years old and claims to have exhausted his personal financial resources on his defence. It is however well within the jurisidiction provided by the IDA by-laws, to the observance of which Mr. Ripley had bound himself. Considering the responsibilities of the position which he abused, and the opportunity for personal gain flowing from the dealings in unauthorized securities, the penalty is not unreasonable nor contrary to the dictates of natural justice. CONCLUSION In denying the application for certiorari and prohibition Madam Justice Roscoe held "I find that the Investment Dealers Association of Canada had jurisdiction over Mr. Ripley to conduct disciplinary hearings. I find that the panel was properly consitituted in accordance with the by‑laws of the IDA, that it acted within its jurisdiction, that there is no evidence of bad faith on the part of the panel members and that it complied with the rules of natural justice. The appellant has not shown she erred in law. would dismiss the appeal. Freeman, J.A. Concurred in: Hart, J.A. Nunn, J. 1990 S.H. No. 72667 IN THE SUPREME COURT OF NOVA SCOTIA TRIAL DIVISION BETWEEN: DONALD FRANK RIPLEY, and PAUL POMMIER, GEORGE DUNN and RENE JARRY and THE INVESTMENT DEALERS ASSOCIATION OF CANADA, Respondents HEARD: At Halifax, Nova Scotia, before the Honourable Madam Justice Elizabeth Roscoe, Supreme Court of Nova Scotia, Trial Division, in Complex Chambers, on September 5, 6, and 7, 1990. DECISION: November 1, 1990 COUNSEL: George MacDonald and Alexander Cameron Solicitors for the Applicant Robert Barnes and A. David MacAdam, Solicitors for the Respondent, Investment Dealers Association Alan Stern, Solicitor for the Respondents, Paul Pommier, George Dunn and Rene Jarry. S.C.A. No. 02430 IN THE SUPREME COURT OF NOVA SCOTIA APPEAL DIVISION BETWEEN: DONALD FRANK RIPLEY and PAUL POMMIER, GEORGE DUNN and RENE JARRY and THE INVESTMENT DEALERS ASSOCIATION OF CANADA REASONS FOR JUDGMENT BY: FREEMAN, J.A.
This was an appeal from a judgment refusing to gram certiorari and other relief following findings by the respondent disciplinary panel that the appellant was guilty of professional misconduct. The appellant sought declaratory relief or relief under s. 24(1) of the Charter. Dismissing the appeal that (1) the Charter has no application to this self-regulating body; (2) the panel was properly constituted in accordance with the respondent's by-laws; (3) the panel acted within its jurisdiction; (4) there was no evidence of bad faith on the part of the panel members; (5) the panel complied with the rules of natural justice, and (6) the trial judge, in refusing to grant certiorari, made no errors in so concluding.