Court of Appeal Reverses Securities Commission Freeze Order


Ascendion Law successfully reversed the BC Securities Commission's order to freeze assets. The Commission froze our client’s bank accounts using new powers under the Securities Act. However, relying on powers it believed it had under the new provisions, the Commission froze the bank account, introducing no evidence that could establish whether the allegations against our client were true. Instead, the Commission believed the Securities Act section entitled it to freeze assets merely by alleging wrongdoing. We asked the Commission to revoke the order. The Commission refused. The Court of Appeal agreed with us. Justice Wilcock held in the Court’s decision:

… to assess the public interest, the Commission is required to consider whether there is some evidence before it that raises a serious question that the breaches of the Act alleged in the notice of hearing may lead to financial consequences against the asset owner by way of monetary claims or penalties under the Act.,,, It is not onerous to require that the Executive Director persuade the Commission that there is some evidence to support the allegation of a breach. The standard is not met by simply establishing that a notice has been issued.

Based on the precedent set by our appeal, the Commission cannot arbitrarily freeze assets and other bank accounts with preservation orders just because suspects wrongdoing. Instead, the Commission must advance evidence of wrongdoing.

We are careful not to overstate the impact of this decision. The Commission need not prove that their allegations are true to justify issuing a freeze order. The Commission’s burden of proof remains low. The Commission need not meet the high standard required to freeze assets in a civil proceeding (a “prima facie case”). Moreover, the Commission need not advance evidence to prove allegations on a civil standard (the “balance of probabilities”) or to raise a “triable issue”. However, this decision vindicates the rule of law and affirms that administrative bodies and governments cannot act arbitrarily.

Here at Ascendion Law, we are very proud to defend our client in this matter of public importance.