Case information

Constitutional law — Constitutional applicability — Private international law — Extraterritoriality — Jurisdiction of Québec Court — Legislation — Interpretation —Administrative law — Boards and Tribunals — Jurisdiction — Did the Court of Appeal err in deciding that the provisions of the C.C.Q. setting out the International Jurisdiction of Québec Authorities (articles 3134 to 3145) do not apply to administrative proceedings before the Financial Markets Administrative Tribunal (FMAT) — Did the Court of Appeal err in deciding that the FMAT can assert adjudicative jurisdiction over out-of-province defendants based on legislative or territorial jurisdiction — Did the Court of Appeal err in affirming the FMAT’s jurisdiction over the application by the Autorité des Marchés Financiers (AMF) against Sharp — Are the provisions of the C.C.Q. governing the International Jurisdiction of Québec Authorities applicable to administrative proceedings before a Québec tribunal in the context of disputes relating to the implementation of provincial laws concerning property and civil rights — If the provisions of the C.C.Q. are not applicable, must the Court’s jurisdiction be founded on the presence of specific and predetermined presumptive connecting factors relating to the alleged violations or is it sufficient for the Court to find some form of connection deemed sufficient between Québec and the overall context within which the violations took place — Is the test met in the circumstances of this case — Can article 3148 C.C.Q. be applied by analogy to ground the jurisdiction of Québec courts and tribunals in proceedings of a different nature than a personal action of patrimonial nature — Can article 3136 C.C.Q. apply to the present action in the absence of a request to this effect before the FMAT and in the absence of any evidence as to the impossibility that the Appellants’ alleged conduct be adjudicated elsewhere.

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In 2017, the AMF brought an action before the FMAT alleging that the appellants participated in a transnational pump and dump scheme by improperly influencing or manipulating the price of a stock in contravention of the Quebec Securities Act, CQLR, c. V-1.1.

According to the AMF, the appellants, who are residents of B.C., made financial transactions through offshore companies incorporated in several countries with bank accounts in Europe. AMF alleged that they acted in concert to acquire the shares of a Nevada company (Solo), give it a legitimate face and promote its business for the purpose of fraudulently increasing the value of its shares and then selling them for a profit, for distribution among themselves. Solo’s shares are traded on an over-the-counter market in New York. The AMF alleged that at all material times, Solo was under the direction of a Québec resident and was a reporting issuer in Québec with a business address in Montreal. It also alleged that the misleading press releases and promotional materials, a portion of which originated in Montreal, were accessible to Québec residents and that approximately fifteen investors in Québec lost a total of $5,000 as a result of the activities. AMF’s action sought to have the FMAT order the appellants to cease any activity in respect of a transaction in securities; prohibit them from acting as directors or officers of an issuer, dealer, adviser or investment fund manager for five years; and impose administrative penalties on them, all pursuant to ss. 265, 273.3, 195.2, 199.1(1) and 273.1 of the Securities Act.

The appellants brought preliminary motions for declinatory exceptions arguing that the FMAT was without jurisdiction. The FMAT denied the appellants’ motions and confirmed its jurisdiction to hear the action. The Quebec Superior Court dismissed the application for judicial review, and the Quebec Court of Appeal dismissed the appeal.