Ontario Court of Appeal asserts jurisdiction in international fraud case

Jurisdiction over one defendant sufficient when conspirators were interconnected

Ontario Court of Appeal asserts jurisdiction in international fraud case
Ontario has jurisdiction over a gift deed executed in Toronto

The Ontario Court of Appeal ruled that assessing jurisdiction factors against each defendant in a commercial fraud case is unnecessary when they were alleged to have conspired under a single controlling mind.

The facts depicted in Sakab Saudi Holding Company v. Jabri, 2022 ONCA 496 involve a massive international fraud with billions of dollars misappropriated from corporations in Saudi Arabia. Sakab Saudi Holding Company (Sakab) sued Saad Khalid Al Jabri, the alleged mastermind, along with his son and several other companies with whom he allegedly conspired.

The lower commercial courts appear to have cases involving similar parties. Read more: 4.4-billion-dollar case continues with Bennett Jones, Adair Goldblatt Bieber, Osler

Jabri sought to dismiss the action, claiming that the court had no jurisdiction over them as they had no presence in Ontario.

In dismissing the motion, the judge found a real and substantial connection between the subject matter of the action, the defendants, and Ontario. Club Resorts Ltd. v. Van Breda, 2012 SCC 17 identified four presumptive connecting factors, and only one needed to be established to ground jurisdiction, said the judge.

The motion judge found as central to the tort a gift executed by Jabri, passing all his assets substantially to his son. While Jabri argued that the gift was made in Turkey, the deed was memorialized in Toronto in 2018. The motion judge also found multiple contracts between the defendants that were characterized as part of the fraudulent scheme.

As argued by the respondents, several suspicious transactions suggested that the gift was a ruse, such as Jabri maintaining control over the supposedly transferred assets. Nevertheless, the validity of the gift is immaterial on whether it can ground jurisdiction, said the judge.

The fact that the gift deed was drafted and signed by Jabri in Toronto remained undisputed, said the judge.

Further, the motion judge found that several concerned assets were not only found but also controlled in Ontario, where Jabri resides.

On appeal, Jabri argued that the motion judge failed to distinguish among the various defendants and instead concluded that once Ontario had jurisdiction over Jabri, it had jurisdiction over all defendants.

The appellate court disagreed.

The individualized assessment argument was somewhat of a red herring, said Justice Bradley Miller, the author of the Court of Appeal’s decision. It was unnecessary to run through the Van Breda factors for each defendant since they were alleged to have acted in an “interconnected way under the direction of a single controlling mind,” he said.

Further, the court said the motion judge did not err in concluding that there was a real and substantial connection between the defendants, the subject matter of the litigation, and Ontario.

Contrary to Jabri’s assertion, it is sufficient that the elements of a tort are committed within the jurisdiction, even if the harm is suffered elsewhere, said the court. The fact that the gift was not a bilateral contract also did not prevent it from being a presumptive connecting factor, said the court.

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