Administrative law – Decisions of administrative tribunals – Investment Regulatory Organization of Canada – Professions – Governance – Self-governing professions – Non-statutory organizations – Powers – Judicial review – Jurisdiction of court – Procedural requirements and fairness – Natural justice
Steinhoff v. Investment Regulatory Organization of Canada,  B.C.J. No. 1489, 2012 BCSC 1054, British Columbia Supreme Court, July 16, 2012, K.N. Affleck J.
The plaintiff is a member of the defendant Investment Regulatory Organization of Canada (“IROC”) which is a non-statutory organization regulating the conduct of its members in their role as investment advisors. IROC was incorporated in March 2008 to combine the operations of the Investment Dealer’s Association (“IDA”) and Market Regulation Services Inc. (“RS”). The IDA was formed as a voluntary contractual association to regulate standards of conduct within the securities industry. Its members agreed to submit to its jurisdiction in relation to disciplinary members. IROC inherited the investigative and enforcement jurisdiction previously undertaken by the IDA. Both IROC and the former IDA were recognized by the British Columbia Securities Commission pursuant to the Securities Act as a self-regulatory organization. The plaintiff was first registered as a member of IDA and next of IROC and, in doing so, agreed to be bound by the bylaws, rules and regulations of the IDA and IROC and to submit to their jurisdictions.
In April 2010, IROC delivered a Notice of Hearing to the plaintiff alleging seven counts of contravention of its member rules. A hearing panel subsequently found that five of the counts had been proven. Prior to the decision on penalty, the plaintiff filed a civil claim against IROC. In her Amended Notice of Civil Claim, she sought, inter alia, an injunction prohibiting IROC from making a decision and declarations concerning the lawfulness of the conduct of IROC hearing panel. IROC applied for dismissal of the plaintiff’s claim for want of jurisdiction, on the basis that IROC was a voluntary industry organization, not a government actor or a creature of statute, and thus its decisions were not subject to judicial review which was, in essence, the nature of the relief sought in the Amended Notice of Claim. The Court allowed IROC’s application and dismissed the plaintiff’s action. The Court found that IROC was entitled to conduct a hearing into the professional activities of its members and impose a penalty if a contravention of its bylaws or rules was proven. IROC obtained its authority as a result of the agreement of its members to be bound by its bylaws, regulations and rules. It is a voluntary organization. While IROC is recognized by the Commission, which is itself a statutory body, that does not alter IROC’s private character. It is not a government actor. Its decisions are not amenable to judicial review. The nature of relief sought by the Plaintiff in her Amended Notice of Claim was provided for in judicial review. The Court had no jurisdiction to hear her claim. The plaintiff’s only remedy was to apply to the Commission for a review under the Securities Act.
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