Reasons for Decision

Court File No.: CV-24-00718817-00CL
Date: 2025-03-24
Ontario Superior Court of Justice – Commercial List

Between:
ABR PI Investments, Ltd. et al. v. Coco et al.

Heard: February 18, 2025

Counsel:
Erin Pleet and Scott McGrath, for the Plaintiffs Bridging Finance Inc. et al.
Geoff Hunnisett, Rohan Shah and Ankita Gupta, for the Plaintiffs, ABR PI Investments Ltd.
Kayla Theeuwen, Lia Boritz and Hashim Sohail, for First Trust Management AG in its capacity as Trustee of The Salus Rete Trust

Judge: Osborne

Introduction

1. First Trust Management AG in its capacity as Trustee (the “Trustee”) of The Salus Rete Trust (the “Trust”) is a Defendant in each of these two related actions. It has brought an almost identical companion motion in each action seeking an order staying or dismissing the action on the basis that Ontario lacks jurisdiction. In the alternative, it seeks an order staying the action on the basis that Ontario is not a convenient forum.

2. As the Trust seeks the same relief in both actions, these motions were argued together with the consent of all parties. These Reasons apply in both actions.

3. Defined terms in these Reasons have the meaning given to them in the motion materials unless otherwise stated.

4. The first action is brought by the Receiver (CV-23-00698633-00CL). The second action is brought by ABR PI Investments, Ltd., et al (collectively, “BlackRock”) (CV-24-00718817-00CL).

5. In both actions, the Plaintiffs seek damages and other relief against the Defendants for fraud. David and Natasha Sharpe, the former principals of Bridging Finance, are two such Defendants. The essence of the allegations relevant to these motions is that the Sharpes used funds misappropriated from certain Bridging entities to fund the Trust in Liechtenstein.

6. Originally, the Sharpes were beneficiaries of the Trust, together with their minor son, Alexander. A Receiver of Bridging Finance was appointed on an application by the Ontario Securities Commission (by orders dated April 30, 2021 and May 3, 2021). Shortly following that appointment, on August 3, 2021, the Sharpes renounced their interests as beneficiaries, with the result that Alexander is now its sole beneficiary.

7. I pause to observe that the Office of the Children’s Lawyer is on notice of these motions (given that Alexander Sharpe is a minor) and takes no position.

8. In the first action, the Receiver alleges that between January 5, 2021 and February 3, 2021, funds in the amount of CDN $5,887,377 and USD $265,002 were transferred from the Canadian trust account of Denton’s, then Ontario counsel to the Sharpes, to the Trustee to settle the Trust at the Sharpes’ request. In its Claim, the Receiver alleges that the Sharpes received these funds primarily as kickbacks/bribes and in breach of their fiduciary duties owed to Bridging.

9. The Receiver alleges that these transfers were for the purpose of attempting to shield those funds from recovery by Bridging Fund unitholders and other stakeholders for whose benefit the Receiver brings the action. It alleges that the Trustee holds these funds as a constructive trustee for certain of the Plaintiffs, and knew, ought to have known, was reckless, or was willfully blind, as to the source of the Sharpes’ wealth and/or the source of the funds utilized to settle the Trust.

10. In the second action, BlackRock seeks damages sustained by the BlackRock Funds resulting from alleged fraud, deceit, conspiracy and other claims. BlackRock alleges that two contracts were breached by certain of the Defendants (the “Loan Contracts”). Pursuant to the AcquireCo Loan Agreement, BlackRock agreed to loan $17,750,000 to 405 Ontario. Under the OpCo Loan Agreement, BlackRock agreed to loan $52,500,000 to Bridging Finance Inc. Those two Agreements together comprise the Loan Contracts.

11. BlackRock alleges that the Sharpes funneled or otherwise directed funds and/or assets that can be traced to amounts advanced by BlackRock under the Loan Contracts to various entities, including the Trust. Those funds were used to settle the Trust.

The Trustee’s Position

12. The Trustee takes the position that Ontario lacks jurisdiction over the subject matter of both actions against the Trustee for the following reasons:

a. it does not carry on business in Ontario;
b. it is domiciled in and incorporated pursuant to the laws of Liechtenstein;
c. the Trust Deed for the Trust is governed by the laws of Liechtenstein;
d. any Trust funds were received, and all assets of the Trust are located, in Liechtenstein;
e. the courts of Liechtenstein are the forum for the administration of the Trust; and
f. the torts or wrongdoing allegedly committed by the Trustee did not occur in Ontario.

13. In the alternative, the Trustee submits that if Ontario does have jurisdiction, any alleged misconduct by the Trustee will be governed by the laws of Liechtenstein and there is no existing treaty that permits enforcement of an Ontario judgment in Liechtenstein. As such, it submits that any attempt to enforce an Ontario judgment in that jurisdiction will lead to a multiplicity of legal proceedings in any event, and all witnesses for the Trustee are located in Liechtenstein.

14. As a result, and even if this Court finds that it does have jurisdiction simpliciter over the subject matter of the actions as against the Trustee, it should stay the action as against the Trustee on the basis that Ontario is not the convenient forum.

15. In its factum and at the return of these motions, the Trustee also argued as a preliminary matter that the Claim in each action is so deficient that each should be dismissed before the jurisdictional analysis is even engaged.

Issues

16. For the reasons that follow, the motions are dismissed.

17. I will address these three issues in turn:

a. preliminary matter: sufficiency of pleadings;
b. jurisdiction simpliciter; and
c. forum non conveniens.

Sufficiency of Pleadings

18. In the Receiver’s action, the Trustee submits that the “claims against the … Trustee are so inadequately pleaded that there is no cause of action grounded against the Trustee that engages this Court to conduct a jurisdictional analysis” (Trustee’s Factum, para. 1). The Trustee makes the same submission in its factum in BlackRock’s action, to the effect that BlackRock’s action “against the Trustee is devoid of any particulars such that it does not specify what relief is being specifically claimed against the Trustee or ground a justiciable cause of action against the Trustee, let alone attract this Court’s jurisdiction” (para. 1).

19. In oral argument, the Trustee submitted that this has the practical effect of placing the initial burden on the Plaintiff in each action before the jurisdictional analysis is undertaken.

20. I reject this argument.

21. First, Rule 37.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides that a motion shall be made by notice of motion, unless the nature of the motion or the circumstances make a notice of motion unnecessary, or these rules provide otherwise. None of those exceptions applies here.

22. Neither Notice of Motion makes any reference to an alleged insufficiency of pleadings, nor is any relief sought in respect thereof (i.e., such as an order striking the pleading or requiring particulars). The purpose of the notice of motion is to give notice to the other side of what the issues will be so they will know the case they have to meet: 2183164 Ontario Inc. v. Gillani, 2013 ONSC 1456, para 23.

23. Second, even if considered in substance, the argument has no merit. As observed by the Court of Appeal in 2249659 Ontario Ltd. v. Sparkasse Siegen, 2013 ONCA 354, paras 27-28 (“Sparkasse”):

Where a defendant seeks an order dismissing a claim for want of jurisdiction, the adequacy of the pleadings must be assessed in the context of that challenge. A jurisdictional motion is not the time or place to consider the adequacy of the pleadings for the purpose of a trial. That is the function of a rule 21.01(1)(b) motion.

It is open to a party bringing a jurisdictional challenge to argue that the pleadings are so inadequate as to preclude an accurate characterization of the nature of the claims advanced in the pleading. A pleading that falls into that category would provide considerable support for the submission that the pleadings do not show an adequate connection between Ontario and the claim to warrant a finding of jurisdiction. However, whatever may be said about any deficiencies in the negligent misrepresentation pleadings in this case, they do not prevent a proper assessment of the connection of that claim to Ontario. Any further inquiry into the adequacy of the pleadings had no relevance on the motion challenging the jurisdiction of the Ontario court.

24. In my view, both Statements of Claim at issue on this motion comfortably surpass the threshold of being “so inadequate as to preclude an accurate characterization of the nature of the claims advanced”.

25. Put differently, is this Court unable to conduct the jurisdictional analysis required on these motions as a result of the insufficiency of the pleadings? The answer to that question is no.

26. At their core, the claims are readily understood. Monies beneficially belonging to the Bridging Funds, their unitholders or BlackRock were inappropriately taken by the Sharpes and used to settle the Trust. The Trustee knew or ought to have known the source of those funds, but accepted them anyway. The Plaintiffs want those monies back.

27. The characterization of the nature of the claims advanced in the pleading in each action is clear both in the pleadings themselves and also in the factum of the Trustee in each action, where the Trustee summarizes the nature of the claims, thereby also demonstrating that the Trustee itself also understands what those allegations are (Trustee’s factum on Receiver’s motion at paras. 7 and 8; and Trustee’s factum on BlackRock’s motion at para. 10).

28. The merits of the claims are for another day. But for the purposes of these motions, the characterization of the nature of the claims advanced is clear.

Jurisdiction Simpliciter

29. The fundamental question is whether the Court has jurisdiction simpliciter based on a “real and substantial connection” between the subject matter of the litigation and the jurisdiction—in this case, Ontario.

30. This question is answered in two stages. First, I must determine whether a recognized presumptive connecting factor exists such that the court is prima facie entitled to assume jurisdiction. If the answer to the first question is yes, I must then determine whether the presumption is rebutted on the facts of this case: Haaretz.com v. Goldhar, 2018 SCC 28, para 34.

31. In Club Resorts Ltd. v. Van Breda, 2012 SCC 17, para 90 (“Van Breda”), the Supreme Court of Canada set out the presumptive connecting factors that, prima facie, entitle a court to assume jurisdiction over a dispute:

a. the defendant is domiciled or resident in the province;
b. the defendant carries on business in the province;
c. the tort was committed in the province; and
d. the contract connected with the dispute was made in the province.

32. Jurisdiction simpliciter may be grounded on any one or more of these presumptive factors. The party arguing that the court should assume jurisdiction has the burden of identifying the connecting factor between the litigation and the proposed forum (Van Breda, para 80).

33. The Supreme Court further observed that the list of presumptive connecting factors is not closed, and over time courts may identify new factors which also presumptively entitle the court to assume jurisdiction. In identifying such factors, a court should look to connections that give rise to a relationship with the forum that is similar in nature to the ones which result from the listed factors (Van Breda, para 91).

34. In Thind v. Polycon Industries, 2022 ONSC 2322, paras 28-30, this Court observed the following when considering the Van Breda factors:

[28] By focusing on the context of a case, the forum non conveniens analysis strikes an important balance between order and fairness: Van Breda at para 105. A plaintiff’s mere presence in Ontario is not, on its own, a connecting factor that allows a court to have jurisdiction: Van Breda at para 86. Similarly, the fact that damages were sustained in the jurisdiction is not a presumptive connecting factor: Van Breda at para 89. Moreover, the courts have not given presumptive effect to the concept of a necessary and proper party: Van Breda at para 55; Misyura v. Walton, 2012 ONSC 5397, paras 31, 38; Khan v. Layden, 2014 ONSC 6868, para 14. Jurisdiction may not be assumed based on the combined effect of a number of non-presumptive connecting factors: Van Breda at para 93.

[29] Jurisdiction simpliciter may be grounded on a relatively low threshold: Van Breda at para 109; Goldhar at para 32. To successfully establish jurisdiction simpliciter, the plaintiff need only show a “good arguable case” that a connecting factor applies for the court to assume jurisdiction: Ontario v. Rothmans Inc., 2013 ONCA 353, paras 53-54, 106; leave to appeal denied [2013] SCCA No. 327; Vahle v. Global Work & Travel Co. Inc., 2020 ONCA 224, paras 12-13. This is not a high threshold and only requires the plaintiff to show “a serious question to be tried,” or a “genuine issue,” or that the case has “some chance of success”: Tucows.Com Co. v. Lojas Renner S.A., 2011 ONCA 548, para 36; leave to appeal denied [2011] SCCA No 450; Vahle at para 13. To show a “good arguable case” that a connecting factor applies, the plaintiff may rely upon the facts pleaded in the statement of claim without additional evidence unless the allegation is challenged or seems devoid of merit or lacks an air of reality: Rothmans at paras 110-113.

[30] A presumption of jurisdiction based on a recognized connecting factor may be rebutted: Van Breda at para 95; Goldhar at para 40. The burden of rebutting the presumption of jurisdiction is on the party challenging the assumption of jurisdiction who must adduce facts to show that the presumptive connecting factor does not point to any real relationship between the subject matter of the litigation and the forum, or points only to a weak relationship: Van Breda at paras 81, 95; Goldhar at para 42. The circumstances must show that the relationship between the forum and the subject matter of the litigation make it unreasonable to expect the defendant to be called to answer proceedings in the jurisdiction: Van Breda at para 97; Goldhar at para 43.

Presumptive Connecting Factors

35. The Receiver submits that three presumptive connecting factors apply here:

a. a contract connected to the dispute was made in Ontario;
b. a tort was committed in Ontario; and
c. the other defendants domiciled in Ontario give this Court jurisdiction simpliciter over the Trustee, or alternatively, a new presumptive connecting factor (the so-called “proceeds of fraud” factor) should apply when a bad actor knowingly transfers funds from Ontario to a foreign jurisdiction and the recipient of those funds knew they originated in Ontario.

36. BlackRock similarly submits that a contract connected to the dispute was made in Ontario. It also submits that the Trust is domiciled in Ontario, and finally, it submits (together with the Receiver), that a new presumptive connecting factor for proceeds of fraud should be recognized, if necessary.

A Contract Connected to the Dispute

37. With respect to a contract connected to the dispute, this factor promotes flexibility and commercial efficiency. All that is required is a connection between the claim and a contract that was made in Ontario.

38. A “connection” does not require that an alleged tortfeasor be a party to the contract, and to narrow this presumptive factor would unduly narrow the scope of Van Breda, and undermine the flexibility required in private international law: Lapointe Rosenstein Marchand Melancon LLP v. Cassels Brock & Blackwell LLP, 2016 SCC 30, para 32.

39. Where this presumptive connecting factor is engaged, it is necessary to identify the dispute and then determine whether the dispute is connected to a contract made in the province where jurisdiction is proposed to be assumed: Cassels Brock, para 36, quoting Van Breda, para 90.

40. As noted above, the “dispute” here is the alleged misappropriation of Bridging monies by the Sharpes, who wired (through their counsel) those funds to the Trustee to settle the Trust. That is the essence of the alleged wrongdoing that is in dispute here: sending the misappropriated money to Liechtenstein for the Trust.

41. The Receiver submits, and I accept, that in the particular circumstances of this case, that the interpretation of what the relevant contract or contracts are, should be generous.

42. The Receiver submits that all of the documents which together constitute the contract that was necessary for the allegedly improper transfer of funds to be effected were signed by the Sharpes in Toronto. Those documents include the application and various forms the Trustee sent to the Sharpes and which the Trustee required to be executed to settle the Trust, the Trust Deed, and the Deed of Gift. Those were the documents essential to the settlement of the Trust.

43. Where the contracting parties are located in different jurisdictions, the contract will be formed in the jurisdiction where the last essential act of contract formation, such as acceptance, took place: Cassels Brock & Blackwell LLP, paras 40-41.

44. In that case, the acceptance of the offer and therefore the last act essential to contract formation occurred at the offices of one party (General Motors) in Ontario. Here, the last act essential to contract formation was the acceptance of the terms of the trust set out in the documents prepared by the Trustee and signed by the Sharpes in Ontario. There is no evidence in the record of the Sharpes ever having travelled to Liechtenstein to sign documents (or, for that matter, to deliver funds).

45. I also reject the submission of the Trustee that there is no contract connected to the dispute because there is no contract between Bridging and the Trustee (the parties to the Trust Deed and other trust documents are, of course, the Trustee and the Sharpes). This is the principal submission of the Trustee made in its factum in each action (Trustee’s factum in the Receiver’s action, para. 44; Trustee’s factum in BlackRock’s action, para. 42).

46. As noted above, the presumptive connecting factor of a contract related to the dispute does not require that the defendant be a party to that contract. Such a fact may make the determination that it is “related” to the dispute more straightforward, but it is not essential: Cassels Brock, para 32.

47. Similarly, the Trustee argues in each action that it is relevant to the analysis of this presumptive connecting factor that the relevant contract (or at least a relevant contract)—the Trust Deed—contains a proper law and forum clause, both of which favour Liechtenstein. As further discussed below, in my view, these clauses are not determinative of the issue. To decide otherwise would be to render the entire Van Breda analysis moot: a defendant could avoid jurisdiction simply by electing, just as the Trustee has done here, to insert in the contract governing law and forum provisions that reference another jurisdiction.

48. I am satisfied that a contract connected with the dispute was made in Ontario.

49. I also note for completeness that the Receiver submits that additional contracts would also be sufficient themselves to ground this presumptive connecting factor. Some of the funds used to settle the Trust apparently originated from the sale of real property in Ontario and the Trustee knew or understood this to be so. Indeed, the Trustee received copies of those agreements of purchase and sale. Since completion of those agreements generated the funds used to settle the Trust, the Receiver submits that they are connected to the dispute so as to give this Court jurisdiction simpliciter separate and apart from the Trust Deed and related documents.

50. There is no question that those agreements of purchase and sale were contracts made in Ontario and that they relate to real property located in Ontario. However, and while I do not need to find that these agreements constitute a contract connected with the dispute given my findings above with respect to the Trust documents, it seems to me that these agreements of purchase and sale alone would not be sufficient to satisfy this presumptive factor in the circumstances of this case.

51. As noted above, the dispute is the alleged wrongful taking of the funds from Bridging by the Sharpes to settle the Trust. Those funds came from Bridging accounts. Whether the cash on hand came from the sale of land, or operating income or any other source, it would in my view be a strained connection to conclude that the ordinary course commercial agreement pursuant to which those funds were paid to Bridging was itself sufficient to create a rebuttable presumption of jurisdiction over the dispute.

52. The Court of Appeal has been critical of attempts by plaintiffs to “bootstrap” the contract between the plaintiff and a third party to create the real and substantial connection for the defendants. See: Sinclair v. Amex Canada Inc., 2023 ONCA 142, paras 19, 24, leave to appeal to SCC granted, [2023] SCCA No. 154.

53. I note that the facts in that case were quite different (that case arose out of the plaintiff’s injury suffered on a water taxi in Venice, Italy), and that the decision of the Supreme Court of Canada in Sinclair remains under reserve at this time. However, in my view the same principle applies here particularly given that the application of the presumptive connecting factors is to be viewed from the perspective of the defendant who is disputing jurisdiction.

54. Notwithstanding that the Plaintiff in each action is not a party to the Trust Deed and other contractual documents, I am satisfied that the contracts are directly connected to the dispute.

55. BlackRock also submits that contracts connected with the dispute in its action against the Trustee were made in Ontario: the Loan Contracts referred to above, and the Trust Deed. Pursuant to both Loan Contracts, BlackRock agreed to lend funds: $17,750,000 to 405 Ontario pursuant to the AcquireCo Loan Agreement and $52,500,000 to Bridging Finance under the OpCo Loan Agreement.

56. Both Loan Contracts were made in Ontario. BlackRock’s allegation is that the Sharpes misappropriated funds directly traceable to amounts advanced under the Loan Contracts to, among other entities, the Trust.

57. As noted above, the Trustee knew or believed all of the following:

a. the Sharpes (as well as their minor son, Alexander) were ordinarily resident in Ontario;
b. the Sharpes were citizens of Canada;
c. the Sharpes were tax residents of Canada (and no other jurisdiction), at the time they settled the Trust;
d. the funds applied to settle the Trust included funds from the sale of two Canadian properties and from “the holding company that owns the shares of the operating company” (i.e., BFI); and
e. the beneficiaries of the Trust included only the Sharpes and their minor son.

58. BlackRock agrees with and adopts the submissions of the Receiver with respect to this Van Breda factor. The Plaintiff need only establish that “the events that give rise to the claim flow from the relationship created by the Ontario contract, and that the Defendants conduct brings them within the scope of the contractual relationship (without requiring them to be a party thereto): Cassels Brock, para 44.

59. As observed by Harvison-Young, J.A. in her concurring reasons in Sinclair, the analysis to be applied is not changed even where the dispute involves a multiplicity of contracts or multiple parties. The phrase “connected to” has a “very broad meaning” and it is sufficient if there is some relationship between two things or activities; that is, they have something to do with each other (paras. 56-59).

60. As further observed by Nordheimer, J.A. in Sinclair, the Supreme Court was clear in Van Breda that even if the presumptive connecting factor of a contract made in the province is established, it can be rebutted by showing that the contract has little or nothing to do with the subject matter of the litigation (Sinclair, para 34, quoting with approval from Van Breda, para 96).

61. In Sinclair, Nordheimer J.A. concluded that the fact that the contract that was made in Ontario had little relevance to the subject matter of the litigation, a conclusion that was supported by the fact of the contract was not pleaded with any particularity, and no breach of the contract was pleaded.

62. That is distinguishable from the facts in this case where the relevant contracts made in Ontario are pleaded. The Deed of Trust and related contractual documents establishing the Trust are directly relevant to the claim against the Trustee. In my view, so too are the Loan Contracts on which BlackRock relies. Those Loan Contracts, and the breach thereof, are pleaded and are relevant. It is pursuant to those Loan Contracts that BlackRock advanced the funds to Bridging in the first place, and it is in breach of those contracts that the Sharpes are alleged to have misappropriated the BlackRock funds to settle (in part) the Trust.

63. Finally, I reject the submission of the Trustee that the choice of law and forum clause in the Trust Deed (both are Liechtenstein) assist it on this motion. The Court of Appeal has been clear that a forum selection clause applicable to the relevant litigation identifying a forum other than Ontario as the forum of choice cannot deprive Ontario of jurisdiction simpliciter. Such a clause may be relevant to whether Ontario should exercise its jurisdiction, but not to the question whether Ontario has jurisdiction: Sparkasse, para 25.

64. Accordingly, in my view, the contracts relied upon by the Plaintiffs in both actions are connected to the dispute and this presumptive connecting factor is established.

A Tort Committed in Ontario

65. I am also satisfied, for the purposes of this motion, that there is another presumptive connecting factor of a tort committed in Ontario, at least with respect to the Receiver’s action. That tort was the misappropriation of the funds and the breach of fiduciary, statutory and other duties by the Sharpes.

66. Canadian courts have found, in several cases involving a misappropriation of funds in Ontario and the subsequent transfer to another jurisdiction, that the province from which the funds were transferred had jurisdiction simpliciter over foreign defendants who received the funds in those other jurisdictions. See, for example: Richter Inc. v. Wing, 2023 ONSC 3325 (“Richter”) (transfers at undervalue or preferences by a bankrupt in Ontario to a spouse located in the United States); Mitsubishi HC Capital America Inc. v. eCapital Trust Corp., 2022 ONSC 4161 (fraudulent conveyances in Ontario, resulting in knowing receipt by defendants in other jurisdictions); Trustee in Bankruptcy of Mannix Resources Inc. Re: Focus Energy Ltd., 2006 BCSC 175 (action by a bankruptcy trustee for constructive trust over funds that had been transferred to a foreign jurisdiction); and Laxton v. Jurem Anstalt, 2010 BCSC 1002, aff’d 2011 BCCA 212, para 35 (unjust enrichment action for a constructive trust over funds sent to a defendant (ironically) in Liechtenstein).

67. The Receiver and BlackRock submit that these misappropriation cases are distinguishable from so-called “vacation” cases like Sinclair where the tort occurred entirely in the foreign jurisdiction (i.e., a water taxi accident in Venice, Italy).

68. All of these misappropriation cases are consistent with the rationale endorsed by the Supreme Court of Canada in Van Breda and by the Court of Appeal in Sinclair. In my view, it cannot be, in misappropriation cases where the tort was committed in Ontario, (even considering the presumptive connecting factors from the perspective of the defendant who is disputing jurisdiction), that there is no jurisdiction over one defendant simply because that defendant is located elsewhere, as the Trustee submits here. That is the whole point of the analysis in the first place. As is clear from the statements of LeBel, J. in Van Breda itself, at para. 99:

The purpose of the conflicts rules is to establish whether a real and substantial connection exists between the forum, the subject matter of the litigation and the defendant. If such a connection exists in respect of a factual and legal situation, the court must assume jurisdiction over all aspects of the case. The plaintiff should not be obligated to litigate a tort claim in Manitoba and a related claim for restitution in Nova Scotia. That would be incompatible with any notion of fairness and efficiency.

69. As further observed by the British Columbia Supreme Court in Laxton at para. 35:

The tort of conversion is complete with the act of taking property or interfering with the property rights of the owner. The point at which conversion or other wrongful taking of property or money occurs as at the place at which the money is taken, not the place to which it is taken. It was taken in the case at bar from this province, and accordingly, this court clearly has the territorial competence over this claim because it took place in British Columbia.

70. In my view, this presumptive factor is established here. To conclude otherwise would have the practical effect, in these types of misappropriation cases (i.e., a fraud or unlawful taking of funds in the jurisdiction followed by the transfer of those funds elsewhere), of forcing a plaintiff whose funds had been wrongfully taken in Ontario to commence multiple separate proceedings in as many foreign jurisdictions as to which the defendant had transferred the funds it wrongfully took (likely in part to bring about this very hardship on the plaintiff). That result is inconsistent with the fundamental efficiency and fairness objectives described in Van Breda.

A Defendant Domiciled in Ontario

71. The Receiver also relies on a third presumptive connecting factor: a defendant domiciled in Ontario. It submits that Thind (together with subsequent decisions consistent with its rationale) stands for the proposition that where there are multiple defendants, some of which are located in Ontario, and the defendants are joint tortfeasors, the court may assume jurisdiction simpliciter. Here, the Sharpes are domiciled in Ontario, the Trustee is not.

72. The Trustee submits that the Court of Appeal in Sinclair overruled Thind where, at para. 18, it observed that: “[j]ust because there is a presumptive connecting factor with respect to one defendant who may not be disputing jurisdiction, does not mean that the court can avoid looking at the jurisdiction issue from the perspective of the defendant disputing jurisdiction,” and that there must be a presumptive connecting factor that attaches to each individual defendant.

73. The Receiver submits that Sinclair is readily distinguishable from a case such as this (assuming that the Court of Appeal decision is upheld by the Supreme Court—the decision is under reserve), since there, the tort took place completely in the foreign jurisdiction (the water taxi accident in Italy).

74. By contrast, here the foreign defendant received funds directly from an Ontario financial institution on behalf of a defendant located in Ontario. Moreover, the presumptive connecting factor at issue in Sinclair was whether the fourth presumptive connecting factor identified in Van Breda (a contract connected to the dispute was made in Ontario), not whether the defendant was domiciled in the province.

75. The Receiver submits that in the alternative, and particularly if Sinclair is found to have overruled Thind, this Court should find that a new presumptive connecting factor exists where the foreign defendant received allegedly misappropriated funds from an Ontario financial institution.

76. I need not decide this issue given my findings above that other presumptive connecting factors exist here. However, I do concur with the submission of the Receiver in respect of the proposed presumptive connecting factor that it seems inconsistent with fairness and judicial efficiency, as well as the rationale of the Supreme Court in Van Breda, to require a plaintiff to bring an action in Ontario against the tortfeasor who misappropriated the funds, and then be required to bring another action or actions in whatever jurisdiction or jurisdictions that bad actor electronically sent the funds (See the observations of LeBel, J. excerpted above).

Have the Presumed Connecting Factors been Rebutted?

77. As I have found that there are presumptive connecting factors giving this Court jurisdiction simpliciter, I must proceed to the second stage of the analysis and determine whether the Trustee has rebutted the presumption.

78. In my view, the Trustee has failed to do so here. It has not adduced facts to show that any of the applicable presumptive connecting factors do not in fact point to a real relationship between the subject matter of the litigation and the forum. It has also failed to adduce sufficient facts pointing to a weak relationship. The circumstances here do not show that the relationship between the forum and the subject matter of the litigation make it unreasonable to expect the defendant to be called to answer proceedings in the jurisdiction: Van Breda, para 95.

79. For the above reasons, the opposite is true here. The connecting factors point directly to a real and strong relationship between the subject matter of the litigation and Ontario. It is appropriate for an Ontario court to take jurisdiction over the litigation in which the remedy of an order compelling the return of the funds is sought, where the misappropriation occurred in Ontario, the funds originated from Ontario, the improper transfer was done by individuals located in Ontario, and all of this is to the knowledge of the foreign-based recipient. It is not unreasonable to require the Trustee to defend, or that the Trustee ought to have expected to have to defend, an action squarely about the propriety of the transfer of those funds here in Ontario.

80. The Court of Appeal was clear in Sinclair, relying on Van Breda, that “the fundamental issue involved in deciding whether a court should assume jurisdiction is whether there was a ‘real and substantial’ connection between the dispute and the court assuming jurisdiction.” (para. 31).

81. With respect to the presumptive connecting factor of a contract relevant to the litigation, the presumptive factor has not been rebutted since the Trustee has not shown that the contracts have little or nothing to do with the subject matter of the litigation, as is required.

82. The arguments advanced by the Trustee in both actions are the same: that the Trust Deed (which, again, the Trustee, at least implicitly acknowledges is the contract at issue) does not constitute a presumptive factor because there is no privity (the Receiver or the Bridging Funds for whose benefit the Receiver brings the action, and BlackRock are not parties to the Trust Deed), there is nothing in the document that contemplates or requires their involvement and the transfer of property from the Sharpes as settlor of the Trust was done only for the beneficiaries of the Trust, and the obligations of the Trustee were performed in Liechtenstein.

83. In my view, none of these arguments rebut the presumption. The Trust Deed is clearly (indeed, centrally) relevant to the claims in both actions. It is the contractual vehicle by which the very funds at issue are conveyed into the Trust, and that is at the core of the central allegations in both actions.

84. The Trust Deed is also heavily relied upon by the Trustee itself to support its arguments that the governing law and forum provisions favour Liechtenstein, and that all of the “contractual” obligations of the Trustee carried out pursuant to the document were performed in that jurisdiction.

85. In short, the contracts are directly related to the subject matter of the litigation, from the perspective of the Defendant as well as the Plaintiff in each action. All of the relevant documents (to which the Trustee is a party) were signed by the Sharpes in Ontario and then the executed versions were transmitted electronically to Liechtenstein.

86. With respect to the presumptive connecting factor of a tort committed in Ontario, the Trustee submits that the presumption is rebutted because the Trustee did not do anything in Ontario, and if torts were committed in Ontario, the Trustee was not involved. Boiled down, the argument of the Trustee is that (with respect to the claims of knowing receipt, for example), it received the funds in Liechtenstein and did not do anything in Ontario.

87. In my view, the Trustee has also failed to rebut this presumptive factor. Again, the Trustee cannot overcome, among other things, the facts noted above at paragraph 57. The Trustee had all of this knowledge: it knew precisely from where and from whom the funds to settle the Trust were coming. Moreover, the wrong alleged was (in part) the improper removal of the funds from Ontario and the transfer out of the jurisdiction for an improper purpose to Liechtenstein.

88. The tort is committed where the transfer occurred. A tort occurs in the jurisdiction substantially affected by the defendant’s activities or its consequences or where the important elements of the tort occurred: Beijing Hehe Fengye Investment Co. Limited v. Fasken Martineau Dumoulin LLP, 2020 ONSC 934, para 59; see also Central Sun Mining Inc. v. Vector Engineering Inc., 2013 ONCA 601, paras 32-35; Gulevich v. Miller, 2015 ABCA 411, paras 27-28.

89. I am satisfied that the presumptive connecting factors have not been rebutted here.

Forum Non Conveniens

90. Even if jurisdiction is established, the court may decline jurisdiction based on the doctrine of forum non conveniens in favour of another “clearly more appropriate” forum.

91. There are many authorities addressing the doctrine, but the essence of the analysis is that the defendant challenging jurisdiction has the burden of demonstrating, on a high standard, that fairness and efficiency favour another jurisdiction: Van Breda, para 109. As the Supreme Court noted in that case:

The burden is on a party who seeks to depart from this normal state of affairs to show that, in light of the characteristics of the alternate forum, it would be fairer and more efficient to do so, and that the plaintiff should be denied the benefits of his or her decision to select a forum that is appropriate under the conflicts rules. The court should not exercise its discretion in favour of the stay solely because it finds, once all relevant concerns and factors are weighed, that comparable forums exist in other provinces or states. It is not a matter of flipping a coin. A court hearing an application for a stay of proceedings must find that a forum exists that is in a better position to dispose fairly and efficiently of the litigation.

92. There is no exhaustive list of factors. The doctrine focuses on the context of each individual case and its purpose is to ensure that both parties are treated fairly and that the process for resolving their litigation is efficient: Van Breda, para 105. Factors that courts have considered (often in the context of statutory provisions referencing such factors) include:

a. the comparative convenience and expense for the parties to the proceeding and for their witnesses, in litigating in the court or in any alternative forum;
b. the law to be applied to issues in the proceeding;
c. the desirability of avoiding multiplicity of legal proceedings;
d. the desirability of avoiding conflicting decisions and different courts;
e. the enforcement of an eventual judgment; and
f. the fair and efficient working of the Canadian legal system as a whole.

See: Van Breda, para 105.

93. The standard to displace the plaintiff’s chosen jurisdiction is high. Before Ontario motion judges decline jurisdiction, the existence of a more appropriate forum must be clearly established to displace the forum selected by the plaintiff: Young v. Tyco International of Canada Ltd., 2008 ONCA 709, para 28.

94. A consideration of these factors weighs in favour of this Court taking jurisdiction. I am not persuaded that Liechtenstein is the “clearly more appropriate” forum.

95. Each of BlackRock and the Trustee filed an expert opinion with respect to the jurisdiction issue. In my view, I do not need to rely on either opinion to reach the necessary conclusions. I accept the submission of BlackRock (which applies equally to the Receiver’s action) that none of the alleged fraudulent misconduct of some of the Defendants (i.e., the Sharpes) occurred in Liechtenstein.

96. I also accept the submission of the Trustee as is clear on the record that the Trust Deed is governed by Liechtenstein law and the attornment clause favours the courts of that jurisdiction. However, as submitted by BlackRock, that is not the point: BlackRock is not asserting breach of trust, unjust enrichment or damages against the Trustee. It (and the Receiver) seek equitable remedies of tracing, accounting and the imposition of a constructive trust, flowing from the wrongs alleged to have been committed by the Defendants who are domiciled in Ontario. It follows that there simply are not any claims to which Liechtenstein law would attach.

97. In addition, and while, as noted above, the parties filed expert opinions that are inconsistent in many respects, the experts agree that Liechtenstein, as a civil law jurisdiction, does not recognize the principle of equitable interest in property against third parties. While the Trustee submits that similar remedies, such as an implied trust, can be available in Liechtenstein, in my view, such a fact (even if accurate) falls well short of clearly establishing that Liechtenstein is a more appropriate forum.

98. In short, could the entire action (in either case) be brought and litigated in Liechtenstein, according to Liechtenstein law? The answer to that question is no.

99. Moreover, this action by the Receiver is but one of many brought by the Receiver arising out of the mismanagement and alleged misappropriation of funds at Bridging Finance all currently pending in this Court. In fact, all of those actions are proceeding on the Commercial List, and all are being case managed together to maximize efficiency, and minimize costs and inconsistent results. The Receiver brings all of these actions—including this action—for the benefit of (the same universe of) creditors of Bridging.

100. This Court has already determined and directed that the BlackRock action should be case managed together with the actions of the Receiver given the significant overlap in the relevant underlying facts and in the relief sought.

101. In addition to the numerous actions by the Receiver, and the BlackRock action, the receivership proceeding itself is proceeding on the Commercial List.

102. In my view, it is overwhelmingly preferable and fair to both Plaintiffs in these two actions and the Defendants in these actions that both continue to be managed together with the other actions being prosecuted by the Receiver for the benefit of creditors before the Commercial List in this Court.

103. It follows from the above that many and indeed most of the relevant parties and witnesses in this action alone are located in Ontario. I acknowledge that the Trustee is not located in this jurisdiction. There are expected to be trials in Ontario relating to these matters. The allegations against the Trustee will be, as submitted by the Receiver on this motion, a logical and necessary part of a determination of all of these issues in these actions. In my view, this case represents a classic example of a matter where this Court taking jurisdiction would promote the fair and efficient working of the Canadian legal system as a whole.

104. To the extent that there are relevant witnesses located in Liechtenstein (i.e., the Trustee), any evidence to be required from those witnesses can be called efficiently, and where appropriate (in the discretion of the judge hearing the matter on the merits), remotely. The Trustee adduced substantial evidence on this motion without any difficulty. It has already retained Ontario counsel.

105. Leaving aside the other related actions referred to above, even within these two actions, the claims against some of the Defendants (i.e., the Sharpes) will be litigated in this Court in Ontario. It will inescapably create a multiplicity of legal proceedings and the possibility of conflicting decisions if only part of these actions (the claims against the Trustee) are litigated in Liechtenstein.

106. I recognize that even if this motion is dismissed, there is the real possibility of a multiplicity of legal proceedings (i.e., at least two: the first for judgment in Ontario and the second to enforce any judgment against the Trustee in Liechtenstein if the Plaintiff is successful), but if this Court declines jurisdiction in favour of Liechtenstein, a multiplicity of legal proceedings is guaranteed.

107. For all of these reasons, I am satisfied that Ontario is the most appropriate and convenient jurisdiction for these actions.

Result and Disposition

108. The Trustee’s motions are dismissed. The Claims are adequately pleaded, the Ontario courts have jurisdiction simpliciter, and Ontario is the convenient forum for the determination of these actions.

109. Orders to go in accordance with these reasons.

110. I urge the parties to agree on costs. If they cannot agree, the Receiver and BlackRock may make submissions in writing, not to exceed three pages in length in addition to their respective bills of costs, to me through the Commercial List office within 10 days, and the Trustee may file responding submissions of the same length within 10 days thereafter.

Osborne