Re Chalmers and Board of Governors of the Toronto Stock
Exchange *

Indexed as: Chalmers v. Toronto Stock Exchange
(C.A.)

70 O.R. (2d) 532
[1989] O.J. No. 1839
Action No. 438/89

ONTARIO
Court of Appeal
Grange, Finlayson and Krever JJ.A.

November 6, 1989.

   * An application for leave to appeal from this decision was dismissed with costs by the Supreme Court of Canada (Wilson, La Forest and Cory JJ.) on February 22, 1990.  S.C.C. File No. 21710.  S.C.C. Bulletin, 1990, p. 407.

   Administrative law — Boards and tribunals — Authority — Applicant registered representative of member firm of respondent stock exchange — Resigning from brokerage business — Respondent laying charges based on conduct during his employment — Stock Exchange is domestic tribunal — Authority restricted to its own members and their employees — No statutory authority over former members — By-law taking jurisdiction over former members ultra vires.

   Criminal law — Securities offences — Applicant registered representative of member firm of respondent stock exchange — Applicant resigning from brokerage business — Respondent laying charges based on conduct during his employment — Stock exchange is domestic tribunal — Authority restricted to its own members and their employees — No statutory authority over former members — By-law taking jurisdiction over former members ultra vires.

   The applicant was a registered representative of a member firm of the respondent stock exchange. Almost a year after resigning from the brokerage business he was charged based on conduct while so employed. He applied for an injunction enjoining the respondent from holding a hearing into the allegations on the basis it was without jurisdiction. His application was dismissed.

   On appeal, held, the appeal should be allowed.

   The respondent stock exchange is a domestic tribunal. It is a voluntary society formed by its members for regulation of the trading of securities on the Toronto Stock Exchange. Its incorporation under legislation assists it in carrying out its objectives but it remains the independent self-governing body of those engaged in security trading. As such its authority is restricted to its own members and those employed by them.

   As the Toronto Stock Exchange Act, 1982, S.O. 1982, c. 27, does not authorize regulation of persons who are former members, s. 15.9(1) of the by-law which purports to give the Exchange jurisdiction over former members is ultra vires.

   Posluns v. Toronto Stock Exchange, [1964] 2 O.R. 547, 46 D.L.R. (2d) 210; affd [1966] 1 O.R. 285, 53 D.L.R. (2d) 193; affd 67 D.L.R. (2d) 165, [1968] S.C.R. 330; Ex parte Goodwin (1961), 27 D.L.R. (2d) 667; Bass v. Pharmaceutical Ass'n of B.C. (1965), 55 D.L.R. (2d) 476, 54 W.W.R. 437; Ritholz v. Manitoba Optometric Society (1959), 21 D.L.R. (2d) 542, 30 W.W.R. 204; Paratte v. College des Optometristes et Opticiens de la Province de Quebec (1966), 61 D.L.R. (2d) 335, [1967] Que. Q.B. 645 [leave to appeal to S.C.C. refused January 24, 1967]; Matheson v. Kelly (1913), 15 D.L.R. 359, 5 W.W.R. 950, 26 W.L.R. 475; Shaw v. Real Estate Board of Greater Vancouver (1974), 48 D.L.R. (3d) 404, 17 C.P.R. (2d) 45, [1974] 5 W.W.R. 193 [affd 67 D.L.R. (3d) 364, 26 C.P.R. (2d) 149, [1976] 2 W.W.R. 346; Re Medora (1982), 38 N.B.R. (2d) 564; affd 40 N.B.R. (2d) 243; Re Cambrian Realty Corp. Ltd. and Registrar, Real Estate and Business Brokers, [1973] 3 O.R. 593, 37 D.L.R. (3d) 516; Maurice v. Priel (1989), 58 D.L.R. (4th) 736, [1989] 1 S.C.R. 1023, [1989] 3 W.W.R. 673, 36 Admin. L.R. 169, 96 N.R. 178, consd

Other cases referred to

   A.-G. v. Great Eastern R. Co. (1880), 5 App. Cas. 473; Amalgamated Society of Railway Servants v. Osborne, [1910] A.C. 87

Statutes referred to

Act to incorporate the Toronto Stock Exchange, S.O. 1878, c. 65

Health Disciplines Act, R.S.O. 1980, c. 196, ss. 22(2), 47(2), 70(2) 91(2), 116(2)

Law Society Act, R.S.O. 1980, c. 233, s. 30(1)

Securities Act, R.S.O. 1980, c. 466

Statutory Powers Procedure Act, R.S.O. 1980, c. 484

Toronto Stock Exchange Act, 1982, S.O. 1982, c. 27, ss. 4(1), (3), 10(1)

   APPEAL from a dismissal by the Divisional Court, 68 O.R. (2d) 340, 32, O.A.C. 243, of an application for an injunction against the Stock Exchange.

   Peter C. Wardle, for appellant.

   Frederic L. Maefs, for respondent.


   The judgment of the court was delivered by

   FINLAYSON J.A.:— The appellant Chalmers appeals from the dismissal by the Divisional Court of his application for an injunction enjoining the respondent Board of Governors from holding a hearing into allegations made by the Toronto Stock Exchange ("Exchange") as to his conduct while formerly employed as a registered representative of a member firm of the Exchange. Success in the application was predicated upon obtaining a declaration that s. 17.19 of the General By-law ("By-law") of the Exchange is ultra vires the powers given to the respondent Board of Governors. He also sought a declaration that s. 17.14(2)(b) and (h) of the By-law are ultra vires. These sections deal with special remedies in the event of a finding of misconduct. In view of my proposed disposition, it is not necessary for me to consider them.

   It is conceded that the appellant resigned from a member firm, Davidson Partners Limited, on March 31, 1987, and is no longer involved in the brokerage business. Almost one year later, on March 25, 1988, he was served with a notice of hearing and particulars alleging certain misconduct while earlier employed at another member firm, Prudential-Bache Securities Canada Limited. The notice detailed seven charges spanning the period January 1, 1976 to October, 1985.

   The issue becomes, is the appellant still subject to discipline with respect to conduct during his employment by a member firm notwithstanding his resignation and withdrawal from the brokerage business before the institution of discipline proceedings?

   The case for the Exchange rests on the validity of s. 17.19(1) of the By-law, which reads as follows:

   17.19 Retention of Jurisdiction

   (1) The Exchange continues to retain jurisdiction under this Part over any person that has ceased to be under the jurisdiction of the Exchange and the Exchange may investigate the person, whether or not on the basis of a complaint or other communication in the nature of a complaint, and, subject to subsection (2), may commence discipline proceedings against the person.

   (2) The Exchange may not commence discipline proceedings pursuant to subsection (1) against a person unless the Exchange has served on the person a Notice of Hearing and Particulars pursuant to section 17.09 within twelve months from the date upon which the person ceased to be under the jurisdiction of the Exchange.

   It will be noted that the notice of hearing was within the time provided.

   The appellant submits that the section of the By-law in question exceeds the powers of the Exchange which are set out in the Toronto Stock Exchange Act, 1982, S.O. 1982, c. 27 ("Act") and in particular s. 10(1). Section 10(1) reads as follows:

   10(1) For the purposes of the object of the Corporation, the board of directors has the power to govern and regulate,


. . . . .

 (c)  the business conduct of members and other persons authorized to trade on the exchange and of their employees and agents and other persons associated with them in the conduct of business,

and, in the exercise of such powers and in addition to their power to pass by-laws under Part III of the Corporations Act, the board of directors may pass such by-laws and make such rules and regulations and issue such orders and directions pursuant to such by-laws as it considers necessary for the purpose, including the imposition of penalties and forfeitures for the breach of any such by-law, rule, regulation, direction or order.

   The "object of the Corporation" is defined in s. 4(1) as follows:

   4(1) The object of the Corporation is to operate an exchange in Ontario for trading in securities by the members of the Corporation and other persons authorized under subsection (2).

   On a straight reading of s. 10(1) of the Act, it appears that the appellant must succeed. The statute gives the Exchange jurisdiction over members and employees, not former members and employees. The impugned subsection of the By-law baldly states that the Exchange "continues to retain jurisdiction over any person that has ceased to be under [its] jurisdiction ...". This regulatory reach is not compatible with the Exchange's enabling statute and it appears on the face of it that the By-law is ultra vires and of no force and effect.

   The argument of the respondent is that the Act empowers the Board of Governors to govern and regulate the Exchange, the partnership and corporate arrangements of the members and other persons authorized to trade on the Exchange, and their business conduct. In the exercise of those powers, the Board of Governors may pass such by-laws "as it considers necessary" to carry out this broad mandate. The members of the Board of Governors are the specialists, and their determination, as a board, as to what is "necessary" is a subjective test that the courts will not question unless bad faith is established. There is no question of bad faith in this case, and appellant's counsel concedes that the extension of the Exchange's powers to former members and employees is "appropriate". He submits, however, that the means adopted are ineffective.

   There is material before us as to the nature and duties of the Exchange. It was originally formed by its members in 1852 and incorporated by a special Act of the Ontario Legislature in 1878 [Act to incorporate the Toronto Stock Exchange, S.O. 1878, c. 65]. It currently operates pursuant to the statutory authority of the Toronto Stock Exchange Act, 1982, as a self-governing, non-profit organization incorporated without share capital.

   The Exchange is owned and operated by its member firms, of which there are currently 73. A firm which owns a membership, called an Exchange seat, is entitled to privileges of membership, including use of the facilities of the Exchange to buy and sell securities. To qualify for membership, a candidate must be the owner of a seat, have a minimum level of capital, and have an acceptable level of experience in the securities industry. A firm must be approved by the Exchange and comply with its rules and regulations.

   The Exchange is governed by a board of directors, also known as the Board of Governors. The board is largely composed of representatives of its member firms and the Exchange president. In recognition of the Exchange's responsibilities to the investing public, two members of the public also sit on the Board of Governors.

   According to the Securities Act, R.S.O. 1980, c. 466, the Ontario Securities Commission is responsible for the over-all regulation of the securities industry in the province. Under s. 4(3) of its Act, the Exchange must ensure that the requirements established by the commission are complied with and that it operates the exchange "in a manner that does not contravene the requirements of the Securities Act, the regulations made thereunder ...".

   In my opinion, the approach of the respondent to the exercise of its powers is misguided. Counsel, in relying upon the authorities he submitted, assumes that the Exchange is a subordinate legislative body, whereas, in my opinion it is a domestic tribunal. Contemporary commentators prefer to describe the Exchange as a "self-regulatory organization", but whatever its label, the distinction between the Exchange and executive or administrative bodies is important for the purposes of this appeal. There is considerable curial deference shown to regulations passed by the latter which is not available to by-laws of domestic tribunals.

   Domestic tribunals are not subordinate legislative bodies. This is clear from their description by E.A. Driedger, Q.C., in his article, ''Subordinate Legislation" (1960), 38 Can. Bar Rev. 1, at p. 3:

   Subordinate legislation may roughly be divided into two classes. First, there are laws made by the executive or by some body or person that is subject to some degree of control by the executive. Into this category would fall regulations made by the Governor in Council, by-laws of the National Harbours Board, regulations of the National Capital Commission. Secondly, there are enactments by independent or quasi-independent local governments. They derive their powers from the legislature but are not directly responsible to the executive. As we shall see later, these two classes of legislation have to some extent received different treatment by the courts. Both classes constitute law, and are usually enforced by sanctions.

(Emphasis added.)

   Gale J. had occasion to look into the nature of the Exchange in Posluns v. Toronto Stock Exchange, [1964] 2 O.R. 547, 46 D.L.R. (2d) 210 (H.C.J.); affirmed [1966] 1 O.R. 285, 53 D.L.R. (2d) 193 (C.A.); affirmed 67 D.L.R. (2d) 165, [1968] S.C.R. 330 (S.C.C.). His examination was to determine whether or not the Exchange was subject to the rules of natural justice. He held that it was because it was a domestic tribunal. His reasoning is instructive. He stated at p. 627:

   The problem of determining whether any particular tribunal (in our case the governors of the Exchange) is subject to the rules of natural justice can be simplified to some extent by differentiating between domestic tribunals and administrative tribunals. For our purposes, a tribunal may be defined as administrative if it is established and constituted by legislation, and is in effect an arm or branch of the Government. The latter qualification that the Legislature-Established tribunal is virtually an arm of the Government, excludes from the term "administrative tribunals" such tribunals as the Discipline Committee of the Law Society, and the various other bodies that regulate the conduct of members of their respective professions, such as the General Medical Council which was the subject of litigation in the Leeson and Allinson cases. These professional tribunals, although established by statute, may be classified domestic. Maugham, J., in Maclean v. Workers' Union, [1929] 1 Ch. 602 at p. 620, defined domestic tribunals as,

 "a phrase which may conveniently be used to include the committees or the councils or the members of trade unions, of members' clubs, and of professional bodies established by statute or Royal Charter while acting in quasi-judicial capacity."

   With reference to the term "domestic tribunal", Lord Justice Morris, in his article in 69 L.Q. Rev. 318 (1953), entitled "The Courts and Domestic Tribunals", states at p. 321:

 "I have in mind primarily the bodies or committees in whom authority is vested in professional or trade or sporting organisations, in various social groups or clubs or in various guilds or trade unions."

   It is to be observed that an administrative tribunal would include not merely a number of individuals comprising a board, but also a department of government, or even a minister.

   I am aware that there have been changes in the Act governing the Exchange since it was considered by Gale J., and I recognize that its discipline proceedings must now comply with the Statutory Powers Procedure Act, R.S.O. 1980, c. 484. In my view, these changes do not alter the essential character of the Exchange. Despite the fact that it is carrying out an important public function, it is still a voluntary society formed by its members for the regulation of the trading of securities on the Toronto Stock Exchange. Its incorporation by the legislature may assist it in carrying out its objectives, and those objectives may have been altered over the years to lay greater stress on consumer protection, but it still remains the independent self-governing body of those engaged in the trading of securities. As such its authority is restricted to its own members and those employed by them.

   That the Exchange was originally a distinctly private entity is emphasized by Professor David Ratner in his article "Self-Regulatory Organizations" (1981), 19 Osgoode Hall L.J. 368, at p. 369:

To make this [the securities] market efficient, there must be a central facility in which the securities can be quoted and traded, and that facility must have rules to govern the conduct of the individuals or firms entitled to use it. Stock exchanges began providing those facilities, and imposing those rules, almost two hundred years ago in the United States, and almost a hundred and fifty years ago in Canada, long before government regulatory commissions came into existence.

(Emphasis added.)

   Despite the private nature of its origin, the Exchange gradually took on a recognized public function. This evolution by the Exchange is carefully detailed in Peter Dey and Stanley Makuch's paper, "Government Supervision of Self-Regulatory Organizations in the Canadian Securities Industry" in Proposals for a Securities Market Law for Canada, Consumer and Corporate Affairs Canada (1979), vol. 3. Dey and Makuch define "self-regulatory organizations" in this way (at p. 1410):

It is possible for any group of persons or companies with a role in the securities industry -- for example, securities salesmen or financial analysts -- to establish an association which could have a number of purposes. The association may simply provide a forum for the exchange of information by members. Or, the association may assume the more conventional trade association role, and keep members informed of, and lobby for, changes in the laws affecting the members. The association may apply standards for membership and regulate the conduct for members, using cancellation of membership in the association as the ultimate sanction. If the association is carrying out regulatory functions which are the responsibility of government and government is prepared to recognize this form of regulation, and, indeed, to delegate governmental authority to the association to carry out the regulatory functions, then the association is ... a self-regulatory organization -- an "SRO".

(Emphasis added.)

   I am satisfied that our courts will intervene where it appears that a domestic tribunal or self-regulatory body has purported to confer on itself, through a by-law, jurisdiction not provided for in the statute which created or incorporated it.

   For example, in Ex parte Goodwin (1961), 27 D.L.R. (2d) 667 (N.B.C.A.), a by-law of the Institute of Accredited Public Accountants of New Brunswick was challenged as being ultra vires because it purported to change the requirements of membership to the institute which were contained in the statute which incorporated the institute, the New Brunswick Accredited Public Accountants Act, 1947, S.N.B. 1947, c. 166. On the one hand, its Act gave the institute broad powers to determine requirements of membership; on the other hand, that Act also set some limitations in this respect. Ritchie J.A., said at p. 669:

   The power given the council by s. 9 of the Act to adopt by-laws providing for the terms and conditions of membership in the Institute cannot be taken to embrace authority to effect changes in the qualifications for certified membership prescribed by s. 13, something which the Legislature alone can do. The by-law ... is clearly ultra vires.

   Bass v. Pharmaceutical Association of B.C. (1965), 55 D.L.R. (2d) 476, 54 W.W.R. 437 (B.C.C.A.), addresses the question of when courts should intervene when a by-law is passed pursuant to a broad statutory clause giving the entity powers to pass by-laws "necessary" or "requisite" for the carrying out of the objects of the statute (such a clause as exists in s. 10(1) of the Act under appeal). In Bass, the Pharmacy Act, R.S.B.C. 1960, c. 282, conferred on the council of the Pharmaceutical Association power to make by-laws on "any ... matter requisite for carrying out the objects of this Act". Under this section, the council passed a by-law banning advertising by members of the association. In considering whether this by-law was ultra vires, McFarlane J.A. considered Lord Selborne's words from A.G. v. Great Eastern Railway Co. (1880), 5 App. Cas. 473, at p. 478:

... whatever may fairly be regarded as incidental to, or consequential upon, those things which the Legislature has authorized, ought not (unless expressly prohibited) to be held, by judicial construction, to be ultra vires.

   In declaring the advertising by-law ultra vires, McFarlane J.A. distinguished the case from the non-interventionist stance which Lord Selborne suggested that courts take. He stated at p. 479:

This is not a case ... in which the object of the Legislature was to create a body corporate for the purpose of carrying out some work or undertaking and from which it may be inferred the intention was to confer generally powers incidental to and consequential upon the accomplishment of that purpose. ... [rather] the intention of the Legislature under the Act here considered is that the functions of the appellant Association are themselves merely a means of achieving the objects of the statute.

   Other cases also address the issue of regulatory bodies operating under by-laws passed pursuant to broad statutory clauses like that in Bass. For example, in Ritholz v. Manitoba Optometric Society (1959), 21 D.L.R. (2d) 542, 30 W.W.R. 204 (Man. C.A.), a by-law made by the society purporting to prevent members from working for incorporated entities was held to be ultra vires. The by-law was passed under a clause in the statute which gave the society the power to create by-laws for "all such purposes as may be necessary for the operation and management of the affairs of the Society". The court simply held that the prohibition in the impugned by-law was unreasonable and went beyond the concern of the society's affairs.

   On the other hand, in Paratte v. College des Optometristes et Opticiens de la Province de Quebec (1966), 61 D.L.R. (2d) 335, [1967] Que. Q.B. 645 (Que. Q.B.), the college was given broad powers to make "such by-laws as it may deem proper" to ensure professional dignity. In upholding a by-law prohibiting members from carrying on business with non-members, Pratte J. for the Quebec Court of Appeal said at p. 338:

... the College may enact such by-laws "as it may deem proper". In other words, it is to the College that the Legislature has delegated the task of deciding what must be added to the requirements of the Act "to ensure the maintenance of professional honour and dignity". Accordingly, the Courts must not interfere with the decisions reached by the College unless the latter has clearly misused its discretionary powers.

(Emphasis added.)

   The case of Matheson v. Kelly (1913), 15 D.L.R. 359, 5 W.W.R. 950, 26 W.L.R. 475 (Man. K.B.), illustrates when a court will step in and declare a by-law ultra vires despite such a broad conferral of discretion. The constitution of the Winnipeg Grain Exchange gave the association the power to "make all proper needful by-laws". Nevertheless, the court declared as ultra vires a by-law which prohibited members from being employed with companies not conforming to the rules of the Exchange on commission rates. The court said at p. 370: "Whether or not a by-law is proper and needful depends upon whether the object sought is within the purposes for which the association was organized ...".

   "Misuse of discretionary power" and "exceeding the purposes of the act" are two ways of phrasing tests which allow courts to scrutinize by-laws. Another way of phrasing the issue is found in Amalgamated Society of Railway Servants v. Osborne, [1910] A.C. 87 (H.L.), quoted in Shaw v. Real Estate Board of Greater Vancouver (1974), 48 D.L.R. (3d) 404, 17 C.P.R. (2d) 45, [1974] 5 W.W.R. 193 (B.C.S.C.), where Lord Macnaghten said, at p. 97:

"... if a controversy arises as to whether a particular rule is ultra vires, the question must be, 'Does the rule merely provide a method of conducting business, or is it a rule making the society a thing different from that which is specified in the Act and meant by the Act?' "

This is perhaps just another way of saying that courts will not inquire into the reasonableness of by-laws made within the jurisdiction of the society or association. While the concept of what is meant by "jurisdiction" is sometimes nebulous, there are some cases where excesses of jurisdiction are obvious. For example, in Re Medora (1982), 38 N.B.R. (2d) 564 (N.B.Q.B.); affirmed 40 N.B.R. (2d) 243 (N.B.C.A.), the New Brunswick Dental Society, acting under statutory powers to create discipline rules, passed a by-law providing for an appeal from the discipline committee to the New Brunswick Queen's Bench. In declaring this by-law ultra vires, the court said, at pp. 568-9:

The Society and its Board cannot ... confer a right of appeal to the court. ... An appeal does not lie unless expressly given by the statute. A statutory body such as the Dental Society can no more impose on the court a jurisdiction not given it by statute than can a private person.

In like manner, one would suppose a society could not confer upon itself jurisdiction not provided for in the governing statute, something which the Exchange appears to have done in the case on appeal.

   To summarize then, these cases illustrate that, while by-laws of domestic tribunals or self-regulatory organizations may be declared ultra vires, before courts will do so, the by-law must be in some way in conflict with the governing statute or with the purposes underlying that statute.

   That there are restrictions on the power of tribunals, such as the Exchange, to enhance their regulatory authority, must be ever present in our examination of by-laws that they have enacted. Unlike subordinate legislative bodies, such as administrative tribunals and municipal corporations, domestic tribunals cannot make laws of general application. What is significant is not what they regulate, but whom they regulate. Their authority is restricted to those who have voluntarily submitted to that authority. It follows from this that the ultimate sanction of the tribunal against one of its members is expulsion. In reality, it is not just the ultimate sanction, it is the only sanction. The tribunal can fine or suspend a member if he or she has agreed to be subject to such penalties, but if he or she ignores their imposition, the only unilateral recourse of the tribunal is expulsion.

   It is significant in the case under appeal that the legislature has authorized the Exchange to impose penalties and forfeitures for the breach of its by-laws, but there is no machinery in the Act for their enforcement. The material before us discloses that fines of $184,000 and $135,000 were imposed by the Exchange in 1986 and 1987, respectively. If they were collected it could only be on the threat of expulsion, either explicit or implied. Absent a civil suit for recovery, how else could they be enforced?

   This very practical problem is illustrated by Re Cambrian Realty Corp. Ltd. and Registrar, Real Estate and Business Brokers, [1973] 3 O.R. 593, 37 D.L.R. (3d) 516 (Div. Ct.). Here the registrants, faced with a proceeding that could result in revocation of their licences, voluntarily tendered their licences for revocation. The tribunal proposed to continue, notwithstanding this capitulation [p. 596], in order "to take such action as the Tribunal considers the Registrar ought to take ...". The Divisional Court restrained the tribunal, saying that the above-mentioned "action" would have to be limited to cases in which the maximum penalty of cancellation had not been imposed.

   The theme of the respondent's submissions was that unless it could retain jurisdiction over former employees of member firms, any such employee could frustrate disciplinary proceedings by the simple act of resigning. That may well be, but keeping in mind what has been said above, all that an employee achieves by voluntarily removing himself from the business he is engaged in is the maximum penalty that his misconduct could produce, save for the stigma of a finding of misconduct. This is not an insignificant benefit by any means. Many governing statutes have anticipated this situation by requiring permission to resign: see for example Law Society Act, R.S.O. 1980, c. 233, s. 30(1). Other organizations have sought and obtained legislative assistance to expand their powers to maintain jurisdiction over members who have resigned in respect of any disciplinary action arising out of their professional conduct while members: see for example Health Disciplines Act, R.S.O. 1980, c. 196, s. 22(2) (dentists), s. 47(2) (physicians), s. 70(2) (nurses), s. 91(2) (optometrists) and s. 116(2) (pharmacists).

   A number of cases were referred to us by the appellant in support of the proposition that the Exchange's jurisdiction does not extend to former employees. I refer to one which appears to me to be conclusive on the issue. It is Maurice v. Priel, a judgment of the Supreme Court of Canada, released April 27, 1989 [since reported 58 D.L.R. (4th) 736, [1989] 1 S.C.R. 1023, [1989] 3 W.W.R. 673]. In that case, the Law Society of Saskatchewan had attempted to conduct a hearing into the conduct of a former member. The member had become a judge. In upholding the Saskatchewan Court of Appeal's order prohibiting the Law Society from proceeding with the hearing, Cory J., in the principal reasons delivered by the court, stated at pp. 10-12 [pp. 743-4 D.L.R.]:

   The appellant argued that if it should be found that a judge, while occupying a judicial position, was not a member of the Law Society then, in the alternative, provisions of the Legal Profession Act set out above indicated that once a person became a member of the Law Society that person's membership continued in effect forever. Tallis J.A. gave effect to an essentially similar submission. He determined that even if a person was no longer a member of the Law Society, the fact that he or she was a member at the time of the alleged misconduct is sufficient to give jurisdiction to the discipline committee to proceed with the hearing. That argument cannot be accepted. If it were, it would mean that discipline proceedings could be instituted against deceased members or those who had been retired for many years. It was contended that if the court did not agree with the submission "once a member always a member" it could lead to abuses as members could resign from the Law Society just before discipline hearings were commenced. In light of the determination that a judge is not a member of the Law Society of Saskatchewan, it is not necessary to deal with this somewhat in terrorem argument. In any event, it should be noted that the Act has now been amended to provide that a member cannot resign from the Law Society without the approval of the benchers.


. . . . .

   At the outset the appellant argued that as a matter of public policy the Law Society should retain disciplinary jurisdiction over members of the judiciary for breaches of professional conduct committed by them as lawyers before their appointment to the bench. It was contended that if the Society were denied such jurisdiction the public would perceive judges to be immune from the consequences of their misconduct. That submission cannot be correct. Judicial robes do not act as a cloak of immunity. A judge may, subject to the effect of any statutory time limitations, be sued in a civil action for doing those things he ought not to have done or for failing to have done those things he ought to have done as a lawyer. For example, a judge may be subject to suits for negligent acts committed while practising as a lawyer or for breach of trust or breach of contract. Similarly a judge may remain answerable in court for criminal acts committed before appointment to judicial office. This argument based on the difficult and slippery ground of public policy must, as well, be rejected.

   It follows from what I have said that since the Act does not authorize regulation of persons who are former members or employers of same, s. 17.19(1) of the By-law is ultra vires and of no force and effect. I would accordingly allow the appeal, set aside the order of the Divisional Court [68 O.R. (2d) 340, 32 O.A.C. 243] and substitute in its place an order:

(a) enjoining the respondent and its hearing committee from holding a hearing into allegations made by the Exchange against the appellant in a notice of hearing and particulars dated March 25, 1988;

(b) declaring that s. 17.19(1) of the General By-law of the Exchange is ultra vires the powers given to the respondent by the Toronto Stock Exchange Act, 1982 and accordingly is of no force and effect.

   The appellant should receive his costs here (including the motion for leave to appeal) and before the Divisional Court.

Appeal allowed.