Party A v. British Columbia, 2021 BCCA 358
Ken McEwan, K.C. and Laésha Smith, on behalf of two of the appellants, were successful in arguing that asset freeze orders under the Securities Act, R.S.B.C. 1996, c. 418 are subject to threshold evidentiary standards.
This case concerned the proper exercise of the British Columbia Securities Commission’s discretion under s. 151(1)(a) of the Act to freeze assets during or in anticipation of an investigation. The appellants were subject to various asset freeze orders by the Commission. However, the Notice of Hearing and Temporary Order did not claim any contravention of the Act, nor any basis for a monetary award. The Commission rejected the appellants’ application to review the orders under s. 171 of the Act because the Commission could not be “certain” that there are no persons with common law or statutory claims to the frozen assets.
On appeal, Ken and Laésha successfully argued: (1) that there should be a minimum evidentiary threshold required before a s. 151(1)(a) asset freeze order could be issued; (2) that in a s. 171 review of an asset freeze order, where the freeze order was made without notice and without reasons being issued, the onus lies on the executive director; and (3) that the evidentiary threshold was not met in the circumstances of the two appellants.
The Court of Appeal concluded that before a s. 151(1)(a) asset freeze order is issued, there must be a preliminary assessment of the basis for the proposed investigation to determine whether there is a “serious question” that the investigation could show breach of the Act giving rise to financial consequences. On review of an order, the executive director must establish that the evidence continues to satisfy the serious question threshold. The full reasons of the Court of Appeal can be found here.