A freeze order is a type of interim order made by a regulator preventing a person from dealing with their financial assets until a concern can be resolved. In Party A v. British Columbia (Securities Commission), 2021 BCCA 358 (CanLII), https://canlii.ca/t/jjchh, the Court discussed the criteria for making a freeze order pending investigation of concerns under securities legislation in British Columbia. The court said:
… [the decision maker] is required to assess the evidence to determine if it is sufficient to raise a serious question that the investigation could show breaches of the [legislation] …. The evidence must be more than mere speculation or mere suspicion, but it can be less than evidence required to satisfy a balance of probabilities. In assessing the evidence, the Commission will bring to bear its experience, expertise and common sense, including in drawing reasonable inferences.
Perhaps most interesting for regulators generally is the Court’s description of the public interest factors that should be considered:
There can be any number of factors relevant to the public interest in a given case, depending on the circumstances. A non‑exhaustive list of factors that may be relevant in a given case includes: the seriousness and scope of the allegations; the stage of the investigation and any urgency; the scope and value of the assets to be frozen in relation to the potential claims or penalties; the potential consequences of the order on the asset owner or other parties; and the strength of the evidence in support of the asset freeze order. Other factors may also be relevant, including whether there is a link between the assets and the wrongful conduct, a risk of dissipation of assets, or other security for the potential claims or penalties. These are not mandatory criteria that must be analyzed in a checklist fashion, but simply examples of factors that may be relevant to the public interest analysis.
The Court also discussed a policy published by the regulator and concluded that it was inconsistent with the legislation and therefore should be disregarded.
The Court was hearing multiple appeals and, in applying the above criteria, upheld the freeze order in some of them and set them aside in others of them.