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 Chambers, on May 24, 1990. DECISION: May 29, 1990 COUNSEL: George MacDonald, Solicitor for the Applicant Robert Barnes and A. David MacAdam, Solicitors for the Respondents ROSCOE, J.: This is an application by Donald Frank Ripley for an interim injunction restraining the respondents from further proceedings against the applicant in respect of charges prosecuted against the applicant pursuant to the constitution, by‑laws and regulations of the Investment Dealers Association of Canada (I.D.A.). The application for the interim injunction is made pending the outcome of an application for certiorari quashing the decision of the disciplinary panel of the I.D.A. which application will be heard in the Supreme Court Trial Division on September 6, 1990. The application for certiorari is joined with an application for an order in the nature of prohibition restraining the I.D.A. from taking any further proceedings against Mr. Ripley. The history of the proceedings leading up to this application is lengthy and is contained in the affidavits of Douglas Caldwell and Mary Margaret Fox, which were filed on this application. Further details of the background to the proceedings are found in the decision of Nathanson, J. in Ripley v. Investment Dealers Association of Canada et al (1988), 86 N.S.R. (2d) 437, arising from similar application made in May, 1988. In January, 1988 the I.D.A. brought six charges of professional misconduct against Mr. Ripley, in his capacity as an investment dealer and member of the association. In accordance with its by‑laws, Business Conduct Panel was eventually appointed to hold hearings to determine the validity of the charges against Mr. Ripley. The application for an interim injunction heard by Nathanson, J. in May, 1988 was made by Mr. Ripley for the purposes of restraining the I.D.A. from proceeding with the disciplinary hearing on the basis of apprehension of bias on behalf of the I.D.A. and the disciplinary panel. The interim injunction was granted by Nathanson, J., who concluded his decision by saying at page 442: "Ought an injunction issue to restrain the occurrence of future event? The point is dealt with in Sharpe on Injunctions and Specific Performance (Canada Law Book, 1983), at para. 481 on p. 244 where the learned author expresses the opinion that plaintiff should be granted the protection of an injunction to enjoin litigants before an inferior tribunal where those proceedings are 'abusive or vexacious'. In McFetridge v. Nova Scotia Barristers' Society (1981), 45 N.S.R. (2d) 319; 86 A.P.R. 319, MacKeigan, C.J.N.S. at p. 322, stated that the court should not interfere by interim injunction except in 'very special circumstances, e.g. where it is necessary to obtain time for the court to adjudicate the issue and where the consequences of not staying the lower proceedings would be serious and irreversible'. am bound by Chief Justice MacKeigan's test. Although the hearing before the tribunal might result in the charges being either substantiated or rejected, find on balance of probabilities arising from the facts of this most unusual case that it is necessary to obtain time for the court to adjudicate the issues arising from the special circumstances of the case, and that the consequences of not staying the proceedings of the tribunal until after trial would be serious and irreversible. Although the court is reluctant to enjoin the I.D.A. from holding the hearing, that finding overcomes its natural reluctance to enjoin such future event. The court has not judged the merits of the principal action. But, the court is willing to exercise its discretion in favour of the application of the plaintiff being granted. An interim injunction will issue restraining the I.D.A. pending trial from holding disciplinary hearing with respect to the charges laid against the plaintiff." The decision of Nathanson, J. was reversed by the Appeal Division of the Supreme Court of Nova Scotia in decision reported at 86 N.S.R. (2d) 434. In his decision, Hart J.A. noted the similarities between the Ripley case and McFetridge v. Nova Scotia Barristers' Society and quoted the same portion of the decision as Nathanson, J. had. However, Hart, J. A. went on to say at p. 436: "We are unanimously of the opinion that Mr. Justice Nathanson erred as did Burchell, J. in the granting of the injunctive relief that he did. This court should be reluctant to interfere with the affairs of domestic tribunal such as the I.D.A. It should be permitted to carry on with the procedures adopted by its members. Should it fail to follow the course of natural justice, the respondent has his remedies to pursue. It would be premature to say at this stage that the respondent would not receive fair hearing under the Constitution of the Association of which he is member." (emphasis added) After the injunction was set aside by the Appeal Division, the I.D.A. appointed two substitute members to the disciplinary panel and proceeded with lengthy hearing on the charges against Mr. Ripley. Numerous witnesses were called on seventeen days spanning several months. The hearings ended in June, 1989 and on February 5, 1990 the decision of the panel was rendered, finding Mr. Ripley guilty of four of the charges against him. The by‑laws of the I.D.A. authorize the panel to impose various penalties for each of the offences including reprimand, fine of up to $100,000.00, suspension of approval as member and revocation of approval as member. After its decision, Alan Stern, counsel for the disciplinary panel, after correspondence with Mr. Ripley's counsel and counsel for the I.D.A., scheduled hearing with respect to the penalties to be imposed upon Mr. Ripley for May 4, 1990, that being date convenient to all counsel. By letter dated March 12, 1990 Mr. Stern wrote to each of the counsel confirming the date of the hearing and asking if any of them intended to call witnesses at the penalty hearing. By letter dated April 9, 1990 Douglas Caldwell, Mr. Ripley's counsel, advised Mr. Stern that he did not have any instructions to call witnesses at that point. Then on April 26, 1990, Mr. Caldwell wrote to Mr. Stern advising that Mr. Ripley "is medically unable to attend at the I.D.A. hearing on May 4th according to the opinion of his doctor" and requested that the hearing be adjourned until such time as Mr. Ripley was medically able to attend. In his letter Mr. Caldwell enclosed two medical opinions, one dated June 12, 1989 (which was prior to the conclusion of the first hearing) and which indicated that it would be detrimental to Mr. Ripley's mental and physical health if he were required to attend the I.D.A. hearings because of state of "anxiety and depression". The second letter, from the same doctor, was dated February 7, 1990 and was addressed to Mr. Ripley's new employer. That letter indicated that Mr. Ripley should take time off from his work for an indefinite period because of the stress and demands of his work. On April 30, 1990 Mr. Stern wrote to all counsel involved indicating "that the Panel wishes to proceed on May 4, 1990, if at all possible. If it is the wish of Messrs. Caldwell and MacDonald not to proceed with submissions at that time, the Panel would like to have the matter of penalty done by written submissions to be received by May 31, 1990 at the latest." Mr. Ripley's counsel then sent to Mr. Stern on May 2nd letter of the same date from another doctor of Mr. Ripley's, which indicated Mr. Ripley had been advised to "stay out of the investment business for an indefinite period of time until he has sufficiently recovered to cope with the daily stresses of the business. Under no circumstances should he be expected to attend hearings or be involved in the investment business until either Dr. Shane or myself have advised him to do so." The response of the disciplinary panel was to cancel the hearing scheduled for May 4th. Counsel were advised that the panel would consider written submissions to be filed by May 31, 1990. The letter from Mr. Stern indicated "the submissions may include any material related to appropriate penalties, including declarations or letters from individuals who may wish to make statements in support of Mr. Ripley." The by‑laws of the I.D.A. that deal with the imposition of penalties on one of its members are as follows: 7.6 District Council shall not refuse approval of an applicant for approval as partner, director or officer or impose any of the penalties provided for in By‑law 7.5 unless the partner, director or officer shall have been given the opportunity to be heard at meeting called and held in accordance with the provisions of By‑law 18.6 and the provisions of By‑laws 18.6 to 18.11, inclusive, shall apply mutatis mutandis with the substitution of partner, director or officer for applicant for approval as registered representative or registered representative, as the case may be, and the substitution in such By‑laws of references to the appropriate sections of By‑law for references to the sections of By‑law 18, as the context requires. 7.7 Business Conduct Committee having jurisdiction in District in which partner, director or officer is acting as such shall have the right to impose any of the penalties referred to in By‑law 7.5(c) at meeting of the Business conduct Committee (in lieu of the applicable District Council at meeting held pursuant to By‑law 7.5) and the provisions of By‑laws 18.6 to 18.8, inclusive, shall apply mutatis mutandis with the substitution of Business Conduct Committee for the applicable District Council, as the context requires. 18.6 District Council shall not refuse approval of an applicant for approval as registered representative or the transfer of registered representative, or impose any of the penalties provided for in By‑law 18.5 with respect to registered representative unless it shall have summoned the applicant for approval or the registered representative, as the case may be, before meetingof such Council, of which at least forty‑eight hours' notice shall be given to the applicant for approval or the registered representative, as the case may be, and to the Member concerned, which notice shall be in writing, state the time and place of the meeting, specify the purpose of the meeting, state the statutory authority, if any, pursuant to which the hearing is held and state that if the registered representative does not attend at the meeting the District Council may proceed in his absence and he will not be entitled to any further notice. The applicant for approval or registered representative, as the case may be, the Member and the Director of Compliance, his staff or other person designated by the Board of Directors shall be entitled to appear and be heard at the meeting and shall be entitled to be represented by counsel or an agent and to call, examine and cross‑examine witnesses. If the applicant for approval or registered representative, as the case maybe, fails to appear at such meeting when summoned, the applicable District Council may exercise any of its powers pursuant to By‑law 18.5 in his absence. The District Council may in any case in its discretion require that the applicant for approval or registered representative pay the whole or part of the costs of the proceedings before the Council and of any investigation relating thereto. (emphasis added) The argument of Mr. Ripley, in support of his application for an interim injunction, is that the disciplinary panel, if it is allowed to proceed in the manner they have chosen, will be acting in contravention of the I.D.A. by‑laws that provide that Mr. Ripley is entitled to be present, to be heard and to call and examine and cross‑examine witnesses. They argue that, because of Mr. Ripley's poor health, he is unable, at this time, to instruct his counsel and his counsel stated at the hearing of this application that if the injunction is not granted, no submissions will be made by Mr. Ripley to the disciplinary panel with respect to penalties. In his oral argument on the application, Mr. Ripley's counsel reviewed some of the documents and exhibits, that have been filed on the application for certiorari and prohibition to be heard in September, for the purpose of proving that there is serious issue to be tried at the September hearing. They will be arguing, in September, that the apprehension of bias that they claimed existed at the time of the hearing before Nathanson, J. has turned out to be actual bias. In addition, they will submit that the disciplinary panel acted without jurisdiction and that there was denial of natural justice illustrated by several examples of unfair procedures, both before and during the hearings. Mr. Ripley's counsel submits that this is one of the "very special circumstances" referred to in McFetridge v. Nova Scotia Barristers' Society because "the consequences of not staying the lower proceedings would be serious and irreversible". They further submit that the normal test in interim injunction cases established by American Cyanamid Company v. Ethicon Limited, [1975] A.C. 396 has been met in that the applicant has established that there is serious question to be tried, that Mr. Ripley will suffer irreparable harm if the injunction is not granted and that, on the balance of convenience test, the disciplinary panel would not suffer any damages if the interim injunction is granted. The argument presented by counsel for the I.D.A., in opposition to the application for an interim injunction is that the penalty hearing is not new hearing of the disciplinary panel but simply reconvening of the proceeding and that, therefore, the decision of the Appeal Division, in setting aside the interim injunction granted by Nathanson, J., that it is premature to interfere with the affairs of domestic tribunal is still applicable at this time. The I.D.A. argues that this is just one more attempt, by Mr. Ripley, to stall the proceedings. They refer to the Appeal Division's decision in McFetridge v. Nova Scotia Barristers' Society where it is said that the test in American Cyanamid does not apply to these fact situations. They further argue that it is against the public interest and the interest of other members of the I.D.A. to allow person, who has been convicted of serious charges, to indefinitely postpone the imposition of penalty. It is further submitted, on behalf of the I.D.A., that the medical evidence presented by Mr. Ripley to the disciplanary panel and to the court on this application is flimsy. They point out that the first medical opinion was in existence at the time Mr. Ripley's counsel presented their final argument to the disciplinary panel in June, 1989 and further that none of the medical opinions even mentions that Mr. Ripley is not able to instruct counsel. It is further submitted, on behalf of the I.D.A., that the by‑laws, quoted above, permit the hearing with respect to penalties to take place in the absence of the member, if the member elects not to appear at the hearing. Mr. Ripley was given the opportunity to present oral evidence and attend at the hearing, but he is electing not to do so. It is further submitted that it is "preposterous" that Mr. Ripley is unable to give instructions for the penalty hearing when he was presumably able on May 3, 1990 to give instructions to his counsel to file the application in this Court for certiorari and prohibition and on May 11th to give instructions to bring this application for an interim injunction. With respect to the argument that Mr. Ripley would suffer irreparable harm if the interim injunction is not granted, counsel for the I.D.A. argues that the possibility that Mr. Ripley's approval, to work as an investment dealer, would be suspended or revoked pending the September court hearing, will not harm Mr. Ripley because, according to his medical evidence, he is unable to work in any event. With respect to the publicity and harm to the reputation of Mr. Ripley, if the penalties are imposed, it is argued that it was Mr. Ripley who released the decision of the disciplinary panel to the public and the press. In determining the issues presented in this case, find first of all that if the American Cyanamid test were to be applied that the applicant would have satisfied the requirements for an interim injunction. would not have had any difficulty making the same findings that Nathanson, J. did in the application for an interim injunction before him, that is, that there is serious question to be tried, that the applicant has reasonable prospect of success, that the balance of convenience favors the applicant, that the applicant is likely to suffer irreparable harm not compensable in damages, and that there are very special circumstances involved in this case. However, am bound by the Appeal Division's decisions in McFetridge v. Nova Scotia Barristers' Society and Ripley v. Investment Dealers Association of Canada et al and am unable to distinguish those cases from this. In McFetridge v. Nova Scotia Barristers' Society, Burchell, J., the trial judge, imposed an injunction of the same type which is requested now, that is, restraining the Bar Society from ordering disciplinary action against Mr. McFetridge in the event that he was found guilty of professional misconduct. The Appeal Division found that the American Cyanamid test was not applicable and that the court should not interfere with the proceedings of a quasi judicial or other tribunal by interim injunction or stay except in very special circumstances. Again, in Ripley v. Investment Dealers Association of Canada et al the Appeal Division found that the circumstances that Mr. Ripley was found to be in did not meet that test. Since the hearing, which the Appeal Division found should continue, has not yet been completed, must find that it is still premature to enjoin the disciplinary process prior to its conclusion. For these reasons, the application for an interim injunction isdismissed, without costs. HALIFAX, NOVA SCOTIA J. May 1990 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
This was an application for an interim injunction restraining the respondents from further proceedings against the applicant, in particular restraining a sentencing hearing, in respect of charges of professional misconduct. The application was made pending the outcome of an application for certiorari quashing the decision of the disciplinary panel. The Appeal Court had refused to issue an interim injunction restraining the disciplinary hearing, holding that the courts should not interfere with the tribunal's proceedings until its completion except in very exceptional circumstances. In the case at hand, the applicant's counsel had requested an adjournment of the sentencing hearing on the ground that the applicant was medically unable to attend. The respondent's counsel then sought to settle the matter of penalty by written submission. The respondent's by-laws respecting penalty provided that the applicant shall be given the opportunity to appear and be heard. Dismissing the application for an interim injunction, that because the sentencing hearing was merely an extension of the disciplinary proceedings, rather than a new proceeding, the court was bound by the Appeal Court decision which held that the Court should not interfere with the proceedings of a quasi-judicial or other tribunal by interim injunction or stay except in very exceptional circumstances, which requirement, the Appeal Court had concluded, the applicant did not meet.