Background
David and Natasha Sharpe were the former principals of Bridging Finance Inc. (BFI), an Ontario-based investment and loan company. It is alleged that the Sharpes falsely operated BFI as a legitimate fund while diverting BFI’s assets to a private trust — the Salus Rete Trust — settled in Liechtenstein and administered by First Trust Management AG as trustee. The Sharpes and their minor son were beneficiaries of the Trust. The Trust Deed was dated January 1, 2021, and was signed by the Sharpes in Ontario, with their signatures witnessed in Etobicoke, Ontario.
Two sets of plaintiffs commenced actions against the Sharpes, related corporate defendants, and First Trust: PricewaterhouseCoopers Inc. as court-appointed Receiver of BFI and related funds, and ABR PI Investments/BlackRock entities that had extended loans totalling approximately $70 million to Bridging Finance entities. Both sets of plaintiffs allege fraud and seek recovery from First Trust on the basis that it knowingly assisted the Sharpes’ breach of fiduciary duty and/or knowingly received misappropriated funds.
First Trust brought motions to stay or dismiss both actions, arguing Ontario lacked jurisdiction over a Liechtenstein-based trustee, or alternatively that Liechtenstein was the more appropriate forum. Justice Osborne of the Superior Court of Justice dismissed those motions, finding jurisdiction simpliciter established and Ontario the convenient forum. First Trust appealed.
The Court’s Holding
The Court of Appeal, per Pomerance J.A. (Miller and Thorburn JJ.A. concurring), dismissed the appeal. Applying the two-stage Van Breda framework, the court confirmed that multiple presumptive connecting factors linked the dispute to Ontario. First, the Trust Deed — the very instrument used to shelter the alleged fraud proceeds — was a contract connected to the dispute that was made in Ontario, because the last essential act of formation (the Sharpes’ signatures) occurred in Ontario. The BlackRock loan contracts were likewise made in Ontario. Second, the underlying tort of misappropriation was committed in Ontario, because fraud is committed at the place from which funds are wrongfully taken, not the place to which they are transferred.
The court rejected First Trust’s argument that jurisdiction must be assessed exclusively from the perspective of the foreign trustee, finding that First Trust was itself a party to the Ontario-formed Trust Deed and was alleged to have participated in the tortious scheme by receiving the funds without adequate inquiry into their source. The court distinguished the Supreme Court’s recent decision in Sinclair v. Venezia Turismo, 2025 SCC 7, where the connecting contract was incidental to a tort that occurred entirely in Italy; here, the Trust Deed was the central instrument of the alleged fraud and First Trust had actual knowledge that the settlors, beneficiaries, and source funds were all Ontario-based.
On rebuttal, the court upheld the motion judge’s finding that First Trust failed to adduce facts sufficient to negate the presumptive connecting factors. Given that the Trustee knew the Sharpes were Ontario residents, Canadian citizens, Canadian tax residents, and that the trust funds purportedly derived from Canadian sources, it could not reasonably have expected Liechtenstein to be the proper forum for related litigation. The court also confirmed the pleadings were adequate for jurisdictional purposes, and noted that the issue had not even been properly raised in First Trust’s Notices of Motion below. First Trust did not contest the forum non conveniens ruling on appeal.
Key Takeaways
- In misappropriation cases, the tort is committed where the funds are wrongfully taken, not where they are ultimately received — meaning a plaintiff need not pursue separate proceedings in every foreign jurisdiction to which a tortfeasor has transferred stolen funds.
- A defendant need not be a party to the relevant contract in the traditional sense; it is sufficient that the defendant’s conduct brought it within the scope of a contractual relationship and that the dispute flows from that relationship, per Cassels Brock and Sinclair.
- When contracting parties are in different jurisdictions, the contract is formed where the last essential act of formation — such as the signing of a deed — took place; uncontroverted evidence that signatures were placed in Ontario was sufficient to ground jurisdiction even where the counterparty was in Liechtenstein.
- A jurisdictional motion is not the appropriate vehicle to challenge the adequacy of pleadings for trial purposes under r. 21.01(1)(b); the threshold is merely whether claims are so deficient as to preclude accurate characterization.
- A foreign trustee that knowingly receives funds from Ontario-based settlors, with knowledge of their Ontario residence and the Ontario source of funds, can reasonably be expected to defend fraud-related proceedings in Ontario.
Why It Matters
This decision reinforces Ontario’s willingness to assert jurisdiction over foreign entities that facilitate alleged cross-border fraud, even where those entities are located in secrecy-friendly offshore jurisdictions. By confirming that the situs of a misappropriation tort is where funds are wrongfully taken — not where they land — the court closes a potential loophole that could otherwise force defrauded parties to litigate in as many foreign jurisdictions as a fraudster chooses to scatter proceeds. The ruling also clarifies how Sinclair v. Venezia Turismo (2025 SCC 7) applies in multi-defendant fraud cases: courts must examine each defendant’s connection individually, but a foreign trustee that is party to the central instrument of an alleged fraud and has actual knowledge of the Ontario nexus will not easily escape Ontario jurisdiction.
For practitioners, the case underscores the importance of raising all jurisdictional grounds — including pleadings challenges — in the original Notice of Motion, and illustrates how the evidentiary burden on a defendant seeking to rebut presumptive connecting factors can be decisive. First Trust’s failure to lead affirmative evidence displacing the Ontario nexus was fatal to its appeal.