Sharp v. United States (Securities and Exchange Commission)

2025 BCCA 213 Sharp v. United States (Securities and Exchange Commission)

COURT OF APPEAL FOR BRITISH COLUMBIA Citation: Sharp v. United States (Securities and Exchange Commission), 2025 BCCA 213 Date: 20250625 Docket: CA50003 Between: Frederick L. Sharp Appellant (Defendant) And United States Securities and Exchange Commission Respondent (Plaintiff) Before: The Honourable Madam Justice Fisher The Honourable Mr. Justice Abrioux The Honourable Justice Donegan On appeal from: An order of the Supreme Court of British Columbia, dated June 14, 2024 (United States Securities and Exchange Commission v. Sharp, 2024 BCSC 1688, Vancouver Docket S225495). Counsel for the Appellant: J. Narwal, K.C. Counsel for the Respondent: M.N. Ruby W.R. Chamberlain Place and Date of Hearing: Vancouver, British Columbia March 20, 2025 Place and Date of Judgment: Vancouver, British Columbia June 25, 2025 Written Reasons by: The Honourable Mr. Justice Abrioux Concurred in by: The Honourable Madam Justice Fisher The Honourable Justice Donegan Summary: The appellant appeals from an order granting summary judgment against him. The effect of that order was to recognize and enforce a default judgment against Mr. Sharp obtained by the respondent, the United States Securities and Exchange Commission, in a Massachusetts court that required him to repay the profits of an alleged securities fraud scheme. The chambers judge concluded that there were no triable issues, specifically

regarding whether: 1) the Massachusetts court had jurisdiction over the underlying claim; and 2) the appellant had been properly served in the Massachusetts action in accordance with the principles of natural justice. On appeal, the appellant challenges both of those holdings. Held: Appeal dismissed. The appellant has not established a reviewable error in the judge's conclusion that there were no triable issues regarding the jurisdiction of the Massachusetts court or whether he was served in accordance with the principles of natural justice. There was uncontroverted evidence establishing a real and substantial connection between the subject matter of the action and the jurisdiction of Massachusetts, and the appellant received service in a manner according with the minimum standards of fairness in Canadian law such that the appellant was aware of the case to meet and was given an opportunity to defend himself. Reasons for Judgment of the Honourable Mr. Justice Abrioux: [1] This appeal arises from a successful summary judgment application brought by the United States Securities and Exchange Commission ("SEC"): United States Securities and Exchange Commission v. Sharp, 2024 BCSC 1688. The defendant, Mr. Sharp, appeals an order made by Justice Sharma in the Supreme Court of British Columbia which recognized and enforced a US District Court (the Massachusetts Court) default judgment

made in Massachusetts (the "Judgment") requiring him to repay profits obtained from an alleged securities fraud scheme. The total amount of the Judgment, including interest is approximately USD $30 million. [2] Mr. Sharp challenges the order on the basis that: 1) the judge erred in misapplying the evidentiary burden of proof on the application by incorrectly placing that burden on him to establish a triable issue; and 2) in finding there were no triable issues regarding jurisdiction and the defence of natural justice. [3] For the reasons that follow I would dismiss the appeal. Background [4] The judge concisely summarized the facts: [7] This was a proceeding commenced by the Commission against Mr. Sharp. The Commission is a federal agency in the United States, which is responsible for, among other things, enforcing the federal securities law of the United States. Pursuant to its jurisdiction and authority, the Commission is authorized to make civil claims for violations of those laws. [8] On August 5, 2021, the Commission started a proceeding in Massachusetts against Mr. Sharp and several others. The Commission alleged that Mr. Sharp and others were involved in various violations of the United States security laws, and it sought, among other things, disgorgement (with pre-judgment interest) of all of Mr. Sharp's gains as well as civil monetary penalties pursuant to the United

States legislation. In that complaint, the Commission alleged that Mr. Sharp was the mastermind of an illegal enterprise in the business of facilitating his clients' illicit sale of public company shares. As set out in the Commission's complaint, it is alleged that Mr. Sharp maintained this enterprise between at least 2010 and 2019. [9] The United States District Court of Massachusetts (the "Massachusetts Court") granted judgment against the Mr. Sharp in relation to disgorgement, including pre-judgment interest (the "Judgment"). The Commission seeks enforcement of the Judgment, converted into Canadian funds in accordance with the Foreign Money Claims Act, R.S.B.C. 1996, c.

155. The amount sought is US$21,760,936 for disgorgement, and US$7,173,497 for pre-judgment interest. The Commission also seeks orders for post‑judgment interest at various times. [10] On August 6, 2021, Judge Gorton of the Massachusetts Court issued a temporary restraining order granting the injunctive relief sought by the Commission. Pursuant to that order, assets held by or for the benefit of the defendants and entities they controlled, whenever those assets were located, were ordered to be frozen among other things. Among the assets mentioned in that order are dozens of bank accounts based in Canada. [11] On August 10, 2021, a summons was issued to Mr. Sharp by the Massachusetts Court. The next day, a return of service was filed on Mr. Sharp. On November 10, 2021, a supplemental proof of service was filed. [12] Also, on November 10, 2021, the Commission moved before the Massachusetts Court for entry of default against Mr. Sharp for failure to answer or otherwise appear in response to its complaint. On November 15, 2021, the notice of default was entered against Mr. Sharp. [13] On May 12, 2022, the Massachusetts Court entered the final Judgment against Mr. Sharp by default. As noted, the Judgment, among other things, ordered Mr. Sharp to pay disgorgement in US$21,760,936 and pre-judgment interest thereon in the amount of US$7,173,497. As of the date when the application

before me was heard, Mr. Sharp had not paid anything to satisfy that order. [5] The SEC commenced the underlying proceeding in British Columbia by way of Notice of Civil Claim on July 7, 2022, seeking enforcement of the Judgment. It then applied for summary judgment pursuant to Rule 9-6 of the Supreme Court Civil Rules, B.C. Reg. 168/2009. The Chambers Decision [6] The judge began her analysis by setting out the test for summary judgment which requires the applicant to meet the high burden of showing that the claim or defence presents no genuine issue for trial and is bound to fail. She also canvassed the role of the responding party on such an application, who "must refute or counter the moving party's evidence or risk summary judgment": at para. 15, citing Canada (Attorney General) v. Lameman, 2008 SCC 14 at paras. 10-11. [7] Since Massachusetts is not a reciprocating jurisdiction under the Court Order Enforcement Act, R.S.B.C. 1996, c. 78, the judge applied the common law to determine if the judgment should be enforced, relying on Beals v. Saldanha, 2003 SCC 72. In the context of this case, the framework in Beals requires: (1) that there be a "real and substantial connection" between the cause of action and the foreign court; and (2) the foreign judgment was obtained in a manner that met the requirements of a fair process and natural justice: at paras. 20-23, citing Beals at

paras. 32, 61-65. [8] The judge found that both these criteria were met. [9] The appellant argued each of these criteria raised a real triable issue. First, he questioned whether there was a "real and substantial connection" between him and the jurisdiction of the Massachusetts Court. The appellant said he is a resident of West Vancouver, B.C., and has never resided or owned property in Massachusetts nor attorned to the jurisdiction of the US District Court. Second, he argued a triable issue was raised as to whether he benefited from a fair process in the Massachusetts Court proceedings. Specifically, he said the manner of service was unfair and not in accordance with the principles of natural justice. [10] The judge rejected both arguments. First, the Massachusetts Court "clearly" had jurisdiction over the subject matter of the Massachusetts proceeding. One of the companies involved in the appellant's alleged fraudulent scheme had a place of business in the state; the alleged fraud took place within the state; and some victims of the alleged fraud resided within the state. Further, the judge noted that allowing the appellant's argument to succeed "could possibly allow complex international fraud schemes to avoid accountability by spreading the scheme across multiple jurisdictions": at paras. 32, 35-36. [11] Second, the judge rejected the argument that the appellant had not

been served in accordance with the rules of natural justice. The Massachusetts judge had authorized service upon the appellant by fax, mail, email, delivery by commercial courier or personal service. The SEC attempted service through multiple means on many occasions. First, they sent an email to a particular email address. An individual responded identifying herself as the appellant's spouse but also expressing the email address was not that of the appellant. The SEC asked for her to share the appellant's proper address but she did not do so. The SEC then sent copies of the relevant documents via overnight courier to a property owned by the appellant in West Vancouver, which the SEC says is his home. They then took steps to serve him personally at that address. They later sent multiple courier packages containing copies of the pleadings, orders, documents relating to the steps taken for the default judgment in the US proceedings, and the entry of the default order and default judgment: at paras. 41-44. [12] The SEC argued--and put forward evidence to support--that the appellant was evading service and had actual knowledge of the Massachusetts proceeding at a time when he had the opportunity to apply in Massachusetts to set aside the default judgment. They also tendered an expert opinion which was to the effect there were no flaws in the manner the appellant was served. [13] The

appellant argued that none of the efforts undertaken by the SEC amounted to personal service and the court should not assume he had actual notice of the Massachusetts proceedings. He also submitted, based on expert evidence, that the terms of the Massachusetts court order providing for the terms of service and the procedures allowing for that kind of service under Massachusetts law generally were flawed and a violation of fundamental and natural justice: at paras. 46-47. [14] The judge held the appellant had received the necessary minimum standard of fairness required to enforce the Judgment. Citing Wei v. Li, 2019 BCCA 114, leave to appeal to SCC ref'd, 38679 (14 November 2019), the judge held that personal service was not required and the question was whether the appellant was made aware of the case to meet and was given an opportunity to meet it: at paras. 53-54, 60. The judge noted the appellant had not filed any affidavit evidence on this point. She ultimately held the evidence established "to an overwhelming degree" that the conditions of natural justice had been met; the appellant had received adequate service and had been given an opportunity to defend himself, in accordance with Canadian conceptions of fairness: at paras. 61, 62. Standard of Review [15] A chambers judge's decision to grant an application for summary judgment is a question of mixed fact and law. As such

it will only be overturned on appeal if the appellant can establish a palpable and overriding error, absent an extricable error of law: Anthem Crestpoint Tillicum Holdings Ltd. v. Hudson's Bay Company ULC Compagnie de la Baie D'Hudson SRI, 2022 BCCA 166 at para. 44; Balfour v. Tarasenko, 2016 BCCA 438 at paras. 39-40. [16] A failure to engage properly with the requisite test on a summary judgment application is an error in principle, subject to a standard of correctness: Rooney v. Galloway, 2024 BCCA 8 at para.

168. Issue #1: Did the Judge err in reversing the burden of proof? [17] The judge instructed herself on the high burden placed on a party applying for summary judgment. She cited the extensive discussion of the relevant law in Wang v. Lu, 2024 BCSC 126 at paras. 61-64, including the acknowledgement therein that the onus is on the applicant to establish "beyond a doubt" that there is no genuine issue for trial: at para. 14. [18] After reviewing the applicant's burden, the judge then discussed how a party responding to an application for summary judgment must refute or counter the moving party's evidence "or risk summary judgment": at para. 15, citing Lameman at paras. 10-11. Each party must "put its best foot forward". For the responding party, they must have a "bona fide foundation in fact in order to defeat a summary judgment": at para. 16, citing Balfour v. Tarasenko at paras. 48-54. In sum, the judge held that "the burden on an applicant to meet the test for summary judgment does not relieve a resisting party from putting its best foot forward": at para. 17. [19] Mr. Sharp argues that this summary of the parties' respective burdens failed to recognize that the applicant must satisfy its own burden prior to requiring the defending party to "put its best foot forward" regarding the existence of triable issues. He says the "best foot forward" rule is only engaged after the

applicant establishes, beyond a reasonable doubt, that no triable issue exists. Specifically, he says this led to the judge placing the onus on the appellant to establish a defence based on natural justice. [20] During the hearing of the appeal Mr. Sharp's counsel stated that he "would not press this point". He argued that triable issues existed in any event, which were not recognized by the judge. I will still address the issue. [21] The judge did not reverse the burden of proof. Her reasons demonstrate she was aware that the burden to establish there was no triable issue ultimately rested with the applicant, and only after that burden was met did the burden to establish a defence shift to Mr. Sharp. Her application of the law to the facts reflects this understanding. The judge began her analysis by reviewing the evidence and arguments of the SEC on the service and natural justice issue. Then the judge considered whether Mr. Sharp raised a sufficient defence. She ultimately held that the evidence established "to an overwhelming degree" that the conditions of natural justice were met and there was no triable issue on that point: at paras. 62-63. She did not place an unfair or reversed burden on Mr. Sharp. [22] The SEC led evidence detailing their efforts to serve Mr. Sharp and supporting the position that Mr. Sharp received actual notice of the Complaint and Default Documents

relating to the US Proceedings. Based on that evidence, the judge found: · the SEC "easily met" the requirements to establish the Massachusetts' Court properly exercised jurisdiction and there were no natural justice concerns in this case (at paras. 32, 53-54); · SEC had not only relied on what was required by the order granted by the Massachusetts judge to serve Mr. Sharp but also undertook additional steps and numerous deliveries (at para. 57); · The SEC's efforts would have complied with the B.C. rules of service (at para. 61); and · As a whole, the evidence "establishe[d] - to an overwhelming degree - that both conditions of natural justice have been met and, therefore, there is no triable issue on that point": at para. 62. [23] The judge was satisfied there was no triable issue based on the SEC's evidence and submissions. She explicitly stated that the SEC "bears the burden to demonstrate there is no triable issue" and that "Mr. Sharp has the burden to establish a defence, with reference to both policy and natural justice". While acknowledging that the burdens of proof in this case were "complicated", the judge held there was no genuine issue for trial "regardless of where the burden lies": at para. 63. [24] It was only after the judge made these findings and comments that she referred to Mr. Sharp's failure to put his best foot forward and adduce evidence to support his

defence: at paras. 64-65. The judge's reasons make it evident that the SEC bore the burden to establish there were no triable issues in the case before her, and that she was satisfied that the SEC had met this burden. [25] Accordingly, I would not accede to this ground of appeal. Issue #2: Did the Judge err in failing to recognize triable issues on jurisdiction and natural justice? [26] The appellant also argues that, irrespective of the issue of where the judge placed the burden, the judge failed to recognize that triable issues had been raised regarding: 1) whether there was a real and substantial connection between the matter and the jurisdiction of the Massachusetts court; and 2) whether the appellant had been served in accordance with the principles of natural justice. I will address each of these issues in turn. Jurisdiction [27] The judge summarized Mr. Sharp's position about the allegedly insufficient connection between him, the litigation, and the jurisdiction of the Massachusetts Court as follows. Mr. Sharp is a resident of West Vancouver and has never resided in or owned property in Massachusetts, nor has he attorned to the jurisdiction of the US District Court. While the SEC has alleged that the underlying schemes at issue in the litigation involved victims that resided within Massachusetts, the SEC had not provided details about these victims: at paras. 28-29. [28]

The judge rejected these arguments and held the question of jurisdiction did not raise a triable issue. The test for enforceability of a foreign judgment required the judge to determine whether: 1) the Massachusetts Court had jurisdiction to deal with the case before it; and 2) its decision was final: at para. 36, citing United States (Securities and Exchange Commission) v. Peever, 2013 BCSC 1090 at para. 26. [29] On the first question, the judge held the "question is not whether the Massachusetts Court had jurisdiction over the person of Mr. Sharp" but rather "whether there is a real and substantial connection between the foreign court and the cause of action, or subject matter, of the dispute": at para. 31, emphasis in original. In this case, although Mr. Sharp may not have a personal connection with the jurisdiction, the Massachusetts Court had jurisdiction over the subject matter of the proceeding, and the complaint alleged that Mr. Sharp was involved in violations of U.S. securities laws and was in fact "the mastermind" of an illegal enterprise. As the Supreme Court stated in Beals at para. 32, "a defendant can reasonably be brought within the embrace of a foreign jurisdiction where he or she has participated in something of significance in that foreign jurisdiction". [30] There was a sufficient connection between the jurisdiction of the Massachusetts Court and the subject

matter. The Massachusetts Court's jurisdiction was based on the facts that one of the companies involved in the alleged fraud had a place of business in Massachusetts and there were victims of that alleged fraud in Massachusetts. Additionally, the judge noted that "accepting the argument advanced by Mr. Sharp could possibly allow complex international fraud schemes to avoid accountability by spreading the scheme across multiple jurisdictions": at paras. 32, 35. [31] In support of this position, the judge referenced a Supreme Court of Canada case involving Mr. Sharp where the Court concluded that Québec's Financial Markets Administrative Tribunal had jurisdiction over Mr. Sharp because the scheme itself had links to Québec: Sharp v. Autorité des marchés financiers, 2023 SCC 29 [Sharp 2023]. She held that even if the connection in that case between Mr. Sharp and Québec was stronger than that between him and Massachusetts, the test for enforcing and recognizing the judgments of foreign courts was still met in the present matter: at paras. 33-34. Discussion [32] Mr. Sharp argues that the judge erred in failing to correctly apply the "real and substantial connection" test as articulated in Beals. Had she done so, he says she would have identified a triable issue regarding the jurisdiction of the Massachusetts Court. [33] He argues that the test in Beals has been "developed and

refined" in Club Resorts Ltd. v. Van Breda, 2012 SCC 17. Specifically, he states in his factum that the framework established in Van Breda provides for a two-step process in the substantial connection test. First, the party arguing for the assumption of jurisdiction must identify connecting factors. Second, the responding party may rebut the connection established in the first step. Crucially for this appeal, Mr. Sharp argues a successful rebuttal can be established on the basis that the factor or factors establishing a connection with the foreign jurisdiction are "proportionately minor" compared to other jurisdictions when "viewed in the full context of the alleged circumstances". [34] He says it follows from Van Breda that a proportionality analysis forms part of the analytical framework and raises a triable issue in the context of this case. Mr. Sharp says a triable issue was established because of the "lack of any indication of the scope of the alleged fraud in Massachusetts vis-à-vis the scope of the alleged wrongful conduct in its entirety". He argues that the judge committed a material error when she did not specifically consider in her reasons an argument he advanced before her being the proportion of the alleged wrong that took place in Massachusetts. [35] For its part, the SEC submits that Mr. Sharp's reliance on Van Breda is misplaced. They say that the holding in

Van Breda was narrowly confined and does not alter anything in the framework for the enforcement and recognition of foreign judgments and the associated "real and substantial connection" analysis in the context of this case. The cases relied on by Mr. Sharp were decided beyond the narrow scope of this case, and in this context--where only the enforcement and recognition of a foreign judgment is at issue--nothing in Van Breda alters the real and substantial connection test that should be applied. In support, they rely on the more recent and qualifying comments of the Court in Chevron Corp. v. Yaiguaje, 2015 SCC 42. [36] In my view, the chambers judge did not err in her application of the real and substantial connection test to the issue of jurisdiction. First, the appellant's reliance on Van Breda in the context of this case is misplaced. More recent Supreme Court jurisprudence has emphasized that the application of the real and substantial connection test is context dependent, explicitly circumscribing the scope and effect of the holdings in Van Breda. The Supreme Court has also emphasized the important policy considerations at play in the unique context of applying the test to cases involving financial regulatory schemes. It is that specific context that is engaged in this case. The judge's analysis reflects this context specific approach and does not contain reversible

error. [37] The Court's analysis in Van Breda was narrowly focused on the assumption of jurisdiction by Canadian provincial courts in the context of tort cases, and its holdings, in my view, should not be unduly extended beyond that context without proper justification. The Court acknowledged the diverse contexts in which different versions of the real and substantial connection are employed. When laying out a proposed list of presumptive factors supporting the assumption of jurisdiction, the Court circumscribed the scope of its holding in the following way: [85] The list of presumptive connecting factors proposed here relates to claims in tort and issues associated with such claims. It does not purport to be an inventory of connecting factors covering the conditions for the assumption of jurisdiction over all claims known to the law. [38] The Court made it clear that the scope of its holding and proposed approach was meant to be narrow. The Court reiterated that its proposed approach to the assumption of jurisdiction applied specifically to the context of tort cases multiple times: see paras. 68, 80, 90, 100. [39] The narrow scope of the holdings in Van Breda was subsequently confirmed by the Court in Chevron and Sharp 2023. In Chevron, the Court addressed the argument that the principles articulated in Van Breda should apply such that a party seeking to enforce a foreign

judgment in a domestic court must establish a connection between the enforcing forum and the dispute or the defendant. The Court held that Van Breda should be interpreted narrowly and not extended to the context of enforcing foreign judgments. The following comments make this abundantly clear: a) "[Van Breda's] intended scope should not be overstated. Nothing in Van Breda altered the jurisdictional inquiry in actions to recognize and enforce foreign judgments as established by this Court in Morguard [Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077], Beals and Pro Swing Inc. v. Elta Golf Inc., 2006 SCC 52" (citations added); b) "Nowhere [in Van Breda] did the Court analyze or modify the principles applicable to the recognition and enforcement of foreign judgments"; c) Lebel J., writing for the Court in Van Breda, "repeatedly confined the principles he developed in Van Breda to the assumption of jurisdiction in tort actions" (citing paras. 68, 80, 85); d) Finally, the Court unequivocally held: "the principles that animate recognition and enforcement indicate that Van Breda's pronouncements should not apply to recognition and enforcement cases". (At paras. 38-41. See also discussion at paras. 88-93.) [40] I reiterate that the Court in Chevron was not responding to the same argument raised by Mr. Sharp in this case. Rather, the comments above were made in the specific context

of rejecting the argument that the substantial connection test as described in Van Breda should apply so as to require the establishment of a connection between the enforcing forum and the dispute or defendant in that dispute. [41] Still, the Court's discussion of Van Breda is instructive insofar as it emphasizes the importance of applying the real and substantial connection test in a context dependent manner. There is no one version of the test and it must be applied in a manner that is commensurate with the facts and circumstances of the specific case before the court. For this reason, I do not accept the appellant's proposal that the Van Breda framework needs to be applied to this case. The real and substantial connection test must be applied in a manner that recognizes the unique considerations raised in the context of recognizing and enforcing foreign judgments, as well as the specific context of enforcing a financial regulatory scheme. The purpose of an action to recognize and enforce a foreign judgement is to "allow a pre-existing obligation to be fulfilled; that is, to ensure a debt already owed by the defendant is paid". It follows that the court being asked to enforce the foreign judgment should not evaluate the underlying claim giving rise to the dispute or the substantive and procedural law on which the judgment is based; "the court's role is not one of substance,

but instead of facilitation": Chevron at paras. 43-44. [42] This perspective and approach is supported by the Supreme Court's recent holding in Sharp 2023, a case arising from Mr. Sharp's involvement with another alleged fraudulent investment scheme. In Sharp 2023, the Court emphasized the diverse contexts in which the real and substantial connection test is applied, the different nature of the tests in those contexts, and--of particular relevance to this case--the distinct considerations required when applying the substantial connection test in the context of financial regulation enforcement cases. [43] The Court discussed the various contexts in which a form of the real and substantial connection test is applied and circumscribed the scope of Van Breda's holding to the application of the test in cases dealing with the assumption of jurisdiction of Canadian courts in tort cases. The Court described how the real and substantial connection test is properly conceptualized as "a family of tests" that "involves different considerations in each of the varying contexts in which the formula is employed". Van Breda developed a test within that family for the specific context of "deciding whether a court can assume jurisdiction over a tort claim brought by Canadian residents who were injured abroad": at paras. 118-120. [44] The Court rejected the invitation to apply the test developed

in Van Breda outside the tort context. Van Breda "set out the real and substantial connection test in the context of tort claims at common law" and that test consequently did not apply to the legal context of Québec or the specific securities regulatory scheme at play in the underlying litigation: at para. 123 (emphasis added). [45] Notably, the Court emphasized the unique considerations at play when applying the test in the context of financial regulatory schemes. Namely, the public interest in and importance of transnational enforcement in the context of securities regulation and market manipulation: [128] The "sufficient connection" analysis must recognize the transnational nature of modern securities regulation and the public interest in addressing international market manipulation. Securities regulation raises unique considerations that highlight the need for transnational enforcement To effectively regulate the securities market, "regulators must equally be able to respond, and surmount borders where legally possible": citing Global Securities Corp. v. British Columbia (Securities Commission), 2000 SCC 21 at para. 28. [46] Based on the Court's comments in Chevron and Sharp 2023, I do not accept the appellant's position that the chambers judge was obliged to follow the framework established in Van Breda. The judge's analysis was bound instead to follow Pro Swing and Beals,

and her analysis was entirely in line with those authorities. The judge found the SEC's evidence regarding the connection between the victims and companies involved in the underlying scheme and Massachusetts "[c]learly" established there is a sufficient connection with the subject matter of the litigation and the jurisdiction of the Massachusetts Court: at para. 32. [47] The judge was right to analogize the case before her to Sharp 2023 while acknowledging the distinct connections to Québec therein. The alleged scheme in that case had links to the jurisdiction of Québec in a manner at least somewhat analogous to the links between the alleged scheme in this case and the jurisdiction in Massachusetts. The scheme in Sharp 2023 was connected to the jurisdiction of Québec because, inter alia, one of the companies involved had a place of business in Québec and some of the victims of the scheme resided in Québec: at paras. 17-21, 33. [48] The judge was also correct to reiterate the importance of the policy considerations raised in Sharp 2023 engaged by the case before her. She rightly emphasized the risk--raised by the specific financial regulatory context of this case--that "accepting the argument advanced by Mr. Sharp could possibly allow complex international fraud schemes to avoid accountability by spreading the scheme across multiple jurisdictions": at para. 35. [49] In sum, the

judge took the proper approach to the question of jurisdiction given the specific context of this case, and she did not err by finding that the evidence before her did not give rise to a triable issue. [50] The appellant highlights submissions he made in the court below on the proportionality issue and argues they raised a triable issue regarding Mr. Sharp's potential to rebut the presumption of the Massachusetts Court's jurisdiction. Before the chambers judge, Mr. Sharp challenged the sufficiency of the facts alleged by the SEC to establish a connection between him, the subject matter of the litigation, and the jurisdiction of Massachusetts. One of the alleged connections between the litigation and the jurisdiction of Massachusetts was the fact that some of the alleged victims were in Massachusetts. Mr. Sharp argued the extent of this connection was out of proportion to the evidence establishing points of connection with other jurisdictions. Mr. Sharp points to his submission below that "[t]here has been no indication of the number or proportion of Massachusetts' victims in the overall scope of the alleged fraud". The appellant now argues that: 1) this point "clearly raised a triable issue"; and 2) the "Chambers judge's analysis failed to engage with this question". I disagree on both counts. [51] I do not accept that the judge erred by failing to engage with theses submissions. The judge was not obliged to give a detailed response to each argument advanced by Mr. Sharp: Key-West Asphalt Products Ltd. v. CMI Roadbuilding Inc., 2022 BCCA 444 at para.

50. Still, she did explicitly reference the appellant's submission on this issue: at para.

29. While she did not discuss it at length or characterize it as an issue of proportionality, she was clearly alive to and considered the issues raised by the appellant on this point. This degree of attention was proportionate to the appellant's submissions on the issue; this was not an issue the appellant made extensive submissions on in their materials below. The above quoted passage is the only argument on this issue in the appellant's materials below. The appellant did not actually argue that a proportionality analysis was required and did not refer the court to or cite Van Breda. [52] To conclude on this issue, the judge's findings regarding the Massachusetts Court having assumed jurisdiction were entirely open for her to make based on the evidence and the fact that Mr. Sharp chose not to put forward any evidence as contemplated by Rule 9-6(5). Her analytical approach was appropriate given the specific context of the case before her and her conclusion was supported by the evidence. Mr. Sharp has identified no reviewable error in the judge's conclusion that there was no triable issue regarding the existence of a real and substantial connection between the Massachusetts Court and the subject matter of the dispute which resulted in the foreign judgment. [53] I would not accede to this ground of appeal. Natural Justice The reasons for judgment [54] As noted above, the judge

held that the question of whether Mr. Sharp was served in accordance with the principles of natural justice did not raise a triable issue. The SEC put forward evidence detailing their multiple attempts through different means to serve Mr. Sharp at various stages of the litigation. They argued, and put forward evidence to support, that Mr. Sharp was evading service. For his part, Mr. Sharp made legal arguments about the insufficiency of service but did not tender any affidavit evidence about whether he actually received notice. [55] Mr. Sharp adduced expert evidence challenging the fairness of the service in the Massachusetts proceedings, taking issue with the specific order of the judge and "system of service as a whole" in Massachusetts: at para.

60. The expert report tendered by Mr. Sharp provided a legal opinion that what the Massachusetts judge ordered was not compliant with the Fifth Amendment of the US Constitution: at paras. 47, 58. [56] The judge held that "none of that expert evidence is relevant": at para.

48. The issue of whether the service complied with the US Constitution was not relevant to the judge's determination of whether the service was sufficient to meet the minimum standards of fairness as conceived in Canadian law. More specifically, that required the judge to determine whether Mr. Sharp had: 1) adequate notice; and 2) the opportunity to defend himself. [57] The judge answered yes to both questions, holding that Mr. Sharp was served in a manner that gave him adequate notice and an opportunity to defend himself. Indeed, Mr. Sharp was served in a manner that would have constituted valid service under the BC rules. Additionally, regardless of whether the service which occurred complied with the BC rules, the various methods of service provided for in the Massachusetts Court order accorded with Canadian conceptions of fairness: at para.

61. Indeed, the SEC's evidence established "to an overwhelming degree" that the service to Mr. Sharp accorded with the principles of natural justice, and there was no triable issue on this point: at para.

62. The Parties' Positions [58] Mr. Sharp's position is that the judge committed a material error in her natural justice analysis. He says a triable issue existed as to whether he was validly served with the originating process and the default judgments in accordance with Massachusetts law. [59] He points to expert evidence which was before the judge supporting the position that Mr. Sharp had a "strong case" that he was not validly served in accordance with Massachusetts law. [60] The SEC's position is that the expert evidence issue raised by Mr. Sharp is an "irrelevant sideshow". It says the enforcing court does not sit as a court of appeal of the foreign court. The Massachusetts Court had properly assumed jurisdiction, Mr. Sharp was notified of the US proceedings, was actually served, and yet he did nothing in response. It also argues that there was evidence before the judge that Mr. Sharp could have disputed service in the United States and sought to have the orders set aside but he did not do so. Discussion [61] The legal framework which applies to this ground of appeal originates in Beals and was summarized by Madam Justice Newbury in Wei v. Li, 2019 BCCA 114, where she addressed whether notice was adequate for purposes of the natural justice defence articulated in Beals: [26] The essential substantive question before the court below was whether "minimum standards of

fairness" had been accorded to the defendants by the Chinese court: Beals at para 60. The Supreme Court of Canada went on in that case to describe what was meant by a "fair process": Fair process is one that, in the system from which the judgment originates, reasonably guarantees basic procedural safeguards such as judicial independence and fair ethical rules governing the participants in the judicial system. This determination will need to be made for all foreign judgments. Obviously, it is simpler for domestic courts to assess the fairness afforded to a Canadian defendant in another province in Canada. In the case of judgments made by courts outside Canada, the review may be more difficult but is mandatory and the enforcing court must be satisfied that fair process was used in awarding the judgment. This assessment is easier when the foreign legal system is either similar to or familiar to Canadian courts. The defence of natural justice is restricted to the form of the foreign procedure, to due process, and does not relate to the merits of the case. The defence is limited to the procedure by which the foreign court arrived at its judgment. However, if that procedure, while valid, is not in accordance with Canada's concept of natural justice, the foreign judgment will be rejected. The defendant carries the burden of proof and, in this case, failed to raise any reasonable

apprehension of unfairness. [At paras 62, 64; emphasis added in Wei.] [27] The underlying principle, then, was that Ms. Li had to demonstrate at least a "reasonable apprehension of unfairness" by showing that she was not given "adequate notice" of the claim against her or did not have an opportunity to defend it. The question of whether she was personally served with notice of the mediation is not necessarily determinative of that question, given the foreign system of law may have rules for service that are different from those of countries with different traditions. (I note that Ms. Liang told us that in China, parties are served by court officials rather than by opposing parties. However, there was no expert evidence to this effect because, Ms. Liang contends, the matter was not raised.) As I read Beals, as long as the defendants were made aware of the case they had to meet and were given an opportunity to meet it, the requirements of natural justice will be met. [Emphasis added.] [62] In my view, it was entirely open to the judge to conclude that the "minimum standards of fairness" had been met in this case. This is because: (a) Service of the originating process and the default judgments were effected in accordance with the Massachusetts Court's orders (at paras. 9-11); (b) There was ample evidence before the judge that Mr. Sharp was in fact served with the Massachusetts

Court's Complaint and the default judgments. This included uncontested evidence that Mr. Sharp lived in West Vancouver, B.C., at the address where the documents were delivered (at paras. 28, 42-44); and (c) Mr. Sharp chose not to adduce any sworn evidence that he did not have notice or was not served with the Massachusetts Court's documents in question (at paras. 5, 55). [63] I will briefly address Mr. Sharp's argument that the expert evidence raised a triable issue in that the Hague Convention rules may not have been followed prior to the default judgment being granted. [64] First, Pro Swing confirms the principle that a Canadian court enforcing a foreign judgment does not review the substantive and procedural law underlying a foreign judgment: Pro Swing at paras. 12-13. In my view, the judge adhered to the well-established principle that the courts of British Columbia should not "sit on appeal" of a US Court's decision to order service by courier, and other means, on Mr. Sharp. [65] I would agree with the judge that the experts' evidence did not raise a triable issue in light of her conclusion, based on the evidentiary record that the SEC had in fact served Mr. Sharp, albeit not personally, with the Massachusetts complaint and default judgment at his home address in West Vancouver. The fact that personal service was not effected does not impugn her conclusion that minimum

standards of fairness had been met. The evidence supported the inference that Mr. Sharp was objectively served, had notice of the Massachusetts proceedings, and had an opportunity to defend himself. [66] In my view Mr. Sharp has failed to identify a reviewable error in the judge's conclusion that there were no triable issues in relation to his breach of natural justice defence. Disposition [67] I would dismiss the appeal. "The Honourable Mr. Justice Abrioux" I AGREE: "The Honourable Madam Justice Fisher" I AGREE: "The Honourable Justice Donegan"