Simon looking earnest in Preveza, Greece
Simon Shields, Lawyer

Advising Self-Representing
Ontario Litigants
Since 2005

tenant / small claims / welfare (ontario works) / odsp / human rights / employment / consumer /
collection agencies / criminal injuries compensation / sppa (admin law)
/ line fences / animal cruelty / dogs & cats / wild animal law (all Canada) / war / conditions of guide use

home / about / client testimonials / areas of practice / about self-representation

Your
Self-Representation
Service Options

Simon Shields, LLB



























CONSUMER LAW

Consumer Protection (Ontario) Law
General CPA Law
(01 July 2013)

Chapter 8 - Administrative Enforcement

  1. Overview
    (a) Overview
    (b) Ministry Role
    (c) Director Role
  2. Complaint and Investigation
    (a) Overview
    (b) Complaints
    (c) Ministry May Initiate Inquiries
    (d) Investigators
  3. Warrant Search and Seizure
    (a) Issuance of Warrant
    (b) Terms of Warrant
    (c) Obstruction
    (d) Treatment of Things Seized
  4. Warrantless Search and Seizure
    (a) Criteria and Terms for Warrantless Search
    (b) Obstruction
    (c) Treatment of Things Seized
  5. Plain View Seizure
  6. Proposed Compliance Orders
    (a) Overview
    (b) Proposed Order
    (c) Notice and Right to Hearing
    (d) Tribunal Hearing and Orders
    . Overview
    . Hearing and Order
  7. Immediate Compliance Order
    (a) Overview
    (b) Order for Immediate Compliance and Notice
    (c) Original Order Expiry Pending Hearing
    (d) Hearing and Order
  8. False Advertising Stop Orders
    (a) Overview
    (b) Director May Issue Stop Orders
    (c) Hearing before the License Appeal Tribunal (LAT)
    . Right to Hearing
    . Conduct of Hearing
    . Tribunal Orders
    (d) Appeal to Court
  9. Court Appeal of Tribunal Decisions or Orders
    (a) Overview
    (b) Limitation Period
    (c) Stay Pending Appeal
  10. Undertakings of Voluntary Compliance
    (a) Overview
    (b) Terms of Undertakings
    (c) Finality of the Undertaking
    (d) Security for Undertaking
  11. Freeze Orders
    (a) Overview
    (b) Terms of Freeze Orders
    (c) Criteria for Issuance of a Freeze Order
    (d) Avoidance of Freeze Order by Posting of Security
    (e) Disposition of Frozen Assets
    (f) Registration of Freeze Order on Title of Real Estate
    (g) Tribunal Application By Parties to Alter or Discharge Title Registration
  12. Court Restraining Orders
  13. Service of Notices and Orders by Director and Tribunal
    (a) Service of Director Notices and Orders
    (b) Service of Tribunal Orders
------------------------------

1. Overview

(a) Overview

This chapter discusses the roles of the Ministry of Consumer Services and the Director of the Consumer Protection Branch in receiving consumer complaints, investigation, obtaining and executing search warrants and undertaking warrantless searches. Additionally, it discusses the wide range of Orders that the Director can issue, such as both Proposed and Immediate Compliance Orders, False Advertising Stop Orders and asset-directed Freeze Orders. Hearing and Court appeal processes related to these and other Or ders are also discussed.

(b) Ministry Role

While the Ministry of Consumer Services has a general mandate of enforcing both the CPA and other consumer-protecting legislation in Ontario [CPA 102(1)], it's practical role is limited as most enforcement duties are undertaken by the Director of the Consumer Protection Branch. The Ministry retains a more direct role in complaint intake and CPA regulatory prosecutions, which are discussed in Part C, Ch.9 ["CPA Prosecutions"].

However, the Minister can also [CPA 102(1)]:
  • produce and distribute information for the purpose of educating and advising consumers; and

  • provide information to consumers about the use of alternate dispute resolution techniques as a means of resolving disputes arising out of consumer transactions.
The Minister may delegate these powers and duties within the Ministry [CPA 102(2,3)], and may be enter into enforcement agreements in furtherance of their mandate (including those for the sharing and exchange of information respecting consumer-protection breaches) with other jurisdictions both within Canada and internationally [CPA 102(4)].

(c) Director Role

The Director of the COnsumer Protection Branch has a range of specific administrative enforcement roles including investigation and the issuance of administrative orders, which are discussed in more detail throughout this chapter [CPA 103(1)].

In addition, the Director shall maintain a Public Record of enforceement and complaint activities [see Part C, Ch.10: "Public Record"].


2. Complaint and Investigation

(a) Overview

This section discusses the Minister's authority to receive and investigate complaints, and the Director's authority to appoint investigators. Warrant and related search authority are discussed in ss.3 and 4 below.

Subject to rules of court, evidence obtained from the investigations discussed here can be used in support of regulatory prosecutions under the CPA, which are discussed in Part C, Ch.9 ["CPA Prosecutions"]. Use of such evidence in consumer-initiated civil actions is discussed in Part C, Ch.7, s.9(e) ["General Civil Remedies: Civil Court Remedies for General CPA Rights: Evidence"].

(b) Complaints

The Ministry has the main role in complaint intake regarding possible CPA (or other consumer protection legislation) violations [CPA s.105(a)]. The Ministry may, with respect to such complaints: make inquiries, gather information and attempt to mediate or resolve them.

Ministry of Consumer Services Complaint Intake

While the legislation does not expressly set out the requirements for a complaint, they may be inferred from the public record [see Part C, Ch.10] requirements for recording complaints. In order to be entered into the public record, consumer complaints must [CP Reg 90(1,2)]:
  • be in writing;

  • identify the complainant as a consumer;

  • assert that the consumer has given notice, or tried to give notice, of the complaint - with details - to the respondent (ie. the supplier or other party complained of)
Other useful information would include:
  • details of the complaint, written in chronological order giving dates and times of events;

  • the name of the respondent business and persons involved in the transaction; and

  • the address, phone, fax and email of the respondent business.
In addition the receiving complaints under the Consumer Protection Act, the Ministry may also receive complaints respecting [CP Reg 90(1), 91]:
  • the Athletics Control Act
  • the Bailiffs Act
  • the Cemeteries Act (Revised)
  • the Collection Agencies Act
  • the Consumer Reporting Act, and
  • the Payday Loans Act, 2008
(c) Ministry May Initiate Inquiries

Whether it has received a complaint or not, the Ministry may "make inquiries and gather information" regarding any matter that comes to its attention respecting potential CPA (or other consumer protection legislation) violations [CPA s.105(b)].

(d) Investigators

The Director may appoint an investigator [CPA 104.1, 106(1)], who shall be issued a signed "certificate of appointment" by the Director which they must produce on request while conducting an investigation, including while acting under the authority of a search warrant [106(2,3)].


3. Warrant Search and Seizure

(a) Issuance of Warrant

An investigator may apply before a justice of the peace (JP), without notice to the parties to be investigated, for the issuance of a search warrant. The warrant may be granted if, on the basis of the affidavit (or other sworn) evidence put before them, the JP finds that there are "reasonable grounds for believing that" [CPA 107(1)]:
  • there has been a past or present contravention of the CPA or its Regulations,

    AND

  • there is either:

    - anything relevant to such contravention in any building, dwelling receptacle or place,

    OR

    - information or evidence relevant to such contravention "that may be obtained through the use of an investigative technique or procedure or the doing of anything described in the warrant."
(b) Terms of Warrant

A warrant, subject to such conditions as the JP thinks are reasonable in the circumstances, authorizes an investigator to [CPA 107 (2,4,8,10), 107.1]:
  • enter or access the building, dwelling, receptacle or place specified in the warrant and examine and seize anything described in the warrant;

  • use any data storage, processing or retrieval device or system used in carrying on business in order to produce information or evidence described in the warrant, in any form;

  • in the course of executing a warrant, require a person to produce the evidence or information described in the warrant and to provide whatever assistance is reasonably necessary, including using any data storage, processing or retrieval device or system to produce, in any form, the evidence or information described in the warrant and the person shall produce the evidence or information or provide the assistance;

  • call upon police officers for assistance in executing the warrant and the investigator may use whatever force is reasonably necessary to execute the warrant; and

  • use any investigative technique or procedure or do anything described in the warrant; and

  • seize anything in plain view that the investigator believes on reasonable grounds will afford evidence relevant to the investigation.
Unless the warrant states otherwise, entry or access is limited to the hours between 6am and 9pm [CPA 107(6)].

Where the investigator seeks authority to enter a dwelling place, that fact must be stated to the JP, and authority to enter such dwelling place must be expressly stated in the warrant [CPA 107(3)].

The JP may also, in the warrant, authorize "persons who have special, expert or professional knowledge and other persons as necessary to accompany and assist the investigator in respect of the execution of the warrant" [CPA 107(5)].

Warrants must name a date of expiry that is no more than 30 days after issuance, subject to extension for another 30 days on application to the JP made without notice to the parties being investigated [CPA 107(7)].

(c) Obstruction

It is prohibited to obstruct an investigator acting under warrant authority. Obstruction for these purposes also includes withholding, concealing, altering or destroying anything relevant to the investigation [CPA 107(9), 116(1)]. Such obstruction may be a criminal offence.

(d) Treatment of Things Seized

The investigator shall return anything seized under warrant authority within a reasonable time, but may make and retain copies of it beforehand [CPA 107(11)]. Such copies, if certified as true by the investigator, are admissible in evidence as though they were originals [CPA 107(12)].


4. Warrantless Search and Seizure

(a) Criteria and Terms for Warrantless Search

Where the conditions for obtaining a warrant exist, but 'exigent circumstances' (eg. urgency) make it impractical to obtain the warrant, an investigator may [CPA 108(1,3,4), 107(2,5,9,11,12), 107.1]:
  • enter or access the building, dwelling, receptacle or place and examine and seize anything therein;

  • use any data storage, processing or retrieval device or system used in carrying on business in order to produce information or evidence, in any form;

  • require a person to produce the evidence or information described in the warrant and to provide whatever assistance is reasonably necessary, including using any data storage, processing or retrieval device or system to produce, in any form, the evidence or information described in the warrant and the person shall produce the evidence or information or provide the assistance;

  • call upon police officers for assistance and the investigator may use whatever force is reasonably;

  • call on the assistance of "persons who have special, expert or professional knowledge and other persons as necessary to accompany and assist the investigator";

  • to use any investigative technique or procedure or do anything described in the warrant; and

  • seize anything in plain view that the investigator believes on reasonable grounds will afford evidence relevant to the investigation.
Warrantless entry is not permitted into any part of a building used as a dwelling place [CPA 108(2)].

(b) Obstruction

It is prohibited to obstruct an investigator acting under warrant authority. Obstruction for these purposes also includes withholding, concealing, altering or destroying anything relevant to the investigation [CPA 107(9), 116(1)]. Such obstruction may be a criminal offence.

(c) Treatment of Things Seized

The investigator shall return anything seized under warrantless search authority within a reasonable time, but may make and retain copies of it beforehand [CPA 107(11)]. Such copies, if certified as true by the investigator, are admissible in evidence as though they were originals [CPA 107(12)].


5. Plain View Seizure

In addition to the warrant and warrantless search and seizure authorities set out above, an investigator may at any time that they are "lawfully present in a place" in the execution of their duties, seize anything in plain view that the investigator believes on reasonable grounds will afford evidence relevant to the investigation. [CPA 107.1].

In addition to existing during legal warrant or warrantless searches, this authority might exist where the investigator is either expressly invited into premises, or where there is in law an implied invitation to enter certain areas (eg. a place normally open to the public such as an open retail outlet) [CPA 107.1].


6. Proposed Compliance Orders

(a) Overview

The CPA proposed 'compliance order' system is an unusual one in administrative law. A typical administrative procedure would involve the issuance of an order to the subject, followed by a right of appeal (this is the process discussed in s.7 below for "Orders for Immediate Compliance"). However under this 'proposed Order' scheme the procedure is for the Director to first 'propose' the issuance of an order, which may then - IF the subject of the order so requests - be the subject of a hearing
before the Lice nse Appeal Tribunal. The Tribunal may then refuse, confirm or alter the Order.

Note that these compliance orders can be made with respect to both general contraventions of the CPA, and as well with respect to the more specialized area of CPA 'unfair practices', which are dealt with in Part C, Ch.6 ["Unfair Practices"].

(b) Proposed Order

If the Director "believes on reasonable grounds" that a subject has or is contravening the CPA, the Director may propose the making of an order directing them to comply [CPA 111(1)].

(c) Notice and Right to Hearing

The Director shall serve Notice of the Proposed Order, with reasons, on the subject [CPA 111(2)] (Director-issued notices may be served by any of the methods set out in s.13 below). The Notice shall advise the subject that they are entitled to a hearing if, within 15 days after service of the Notice, they mail or otherwise deliver a written Notice Requiring a Hearing to the Director and the Tribunal [CPA 111(3)].

*** add links to forms

If the subject does not request such a hearing within the 15 day period, the Director may proceed to make the Compliance Order [CPA 111(4)].

Note that the Tribunal has a general jurisdiction to order the extension of any "time fixed by or under any Act for the giving of any notice requiring a hearing by the Tribunal" if it believes that there are "reasonable grounds for applying for the extension and for granting relief". Such orders may be accompanied by an additional Tribunal Order giving "directions that it considers proper as a result of extending the time". Time extension orders made be made either before or after the time limit
has expired [LATA 7], which means that a party who has failed to request a hearing within the 15-day timeline may request it late as long as it is accompanied by a request to extend time (which may or may not be granted).

(d) Tribunal Hearing and Orders

. Overview

If the subject has properly requested a hearing, then it shall be held before the License Appeal Tribunal (LAT).

License Appeal Tribunal Website

. Hearing and Order

The parties to the hearing are the person (or corporation) who is the subject of the Proposed Order and the Director [CPA 111(7)].

The LAT has issued rules with respect to its procedures:

License Appeal Tribunal Rules of Practice

In addition, the LAT is generally governed by the Statutory Powers Procedures Act (SPPA), which is the topic of its own Isthatlegal.ca Legal Guide:

Administrative Law (Ontario)(SPPA)

After the Hearing is conducted the Tribunal may confirm or deny the Director's Proposed Order, or may issue its own Order [CPA 111(5)]. To any of these Orders, the Tribunal "may attach such conditions to its order as it considers proper" [CPA 111(6)].


7. Immediate Compliance Order

(a) Overview

Alternatively, the Director may make an Order for Immediate Compliance, if in their opinon "it is the public interest to do so"[CPA 112(1)].

Such an Order can be made with respect to both general contraventions of the CPA, as well as the more specialized area of CPA 'unfair practices', which are dealt with in Part C, Ch.6 ["CPA Unfair Practices"].

(b) Order for Immediate Compliance and Notice

Such an Order takes effect when the Director serves the subject with Notice of it (Director-issued Orders may be served by any of the methods set out in s.13 below), and the Notice shall include [CPA 112(2); LATA s.10]:
  • the Order,

  • written reasons the Order, and

  • a statement that the subject is entitled to a hearing if, within 15 days after service of the Notice, they mail or otherwise deliver a written Notice Requiring a Hearing to the Director and the Tribunal.
Note that the Tribunal has a general jurisdiction to order the extension of any "time fixed by or under any Act for the giving of any notice requiring a hearing by the Tribunal" if it believes that there are "reasonable grounds for applying for the extension and for granting relief". Such orders maybe accompanied by an additional Tribunal Order giving "directions that it considers proper as a result of extending the time". Time extension orders made be made either before or after the time limit has expired [LATA 7], which means that a party who has failed to request a hearing within the 15-day timeline may request it late as long as it is accompanied by a request to extend time (which may or may not be granted).

(c) Original Order Expiry Pending Hearing

The original Order for Immediate Compliance expires 15 days after the written request for hearing is received by the Tribunal, subject to a discretionary extension by the Tribunal as follows [CPA 112(4,5)]:
  • if the hearing is commenced within those 15 days, until the hearing ends;

  • and in any event "if it is satisfied that the conduct of the person named in the order has delayed the commencement of the hearing", to:

    - the commencement of the hearing; or

    - if the hearing has commenced, until it ends.
(d) Hearing and Order

If the subject has properly requested a hearing, then it shall be held before the License Appeal Tribunal (LAT).

License Appeal Tribunal Website

The LAT has issued rules with respect to its procedures:

License Appeal Tribunal Rules of Practice

In addition, the LAT is generally governed by the Statutory Powers Procedures Act (SPPA), which is the topic of its own Isthatlegal.ca Legal Guide:

Administrative Law (Ontario)(SPPA)

After the Hearing is conducted the Tribunal may confirm or set aside the Director's Order for Immediate Compliance, or may issue its own Order [CPA 111(5),112(3)]. To any of these Orders, the Tribunal "may attach such conditions to its order as it considers proper" [CPA 111(6), 112(3)].

The parties to the hearing are the person (or corporation) who is the subject of the Order for Immediate Compliance, the Director, and such other parties as the Tribunal may specify [CPA 112(6)].


8. False Advertising Stop Orders

(a) Overview

The CPA establishes separate procedures for "unfair practices", the largest element of which are "false. misleading or deceptive" representations (ie. false advertising) [see Part C, Ch.6, s.2]. Generally the CPA treats unfair practices as more serious than most general CPA non-compliance.

This section describes the authority of the Director of Consumer Protection Branch to issue 'stop orders' against such 'false, misleading or deceptive' representations ('false advertising').

Real estate purchase, sales and lease agreements, while generally exempt from the CPA [CPA 2(2)(f)], ARE however subject to the false advertising stop order provisions [CPA 109(2)].

(b) Director May Issue Stop Orders

If the Director believes on "reasonable grounds" that a party is making a false, misleading or deceptive representation respecting a consumer transaction "in an advertisement, circular, pamphlet or material published by any means" then the Director may issue a False Advertising Stop Order. Such Orders may order the party to cease the activity and as well to "retract the representation or publish a correction of equal prominence to the original publication" [CPA 109(1)].

False Advertising Stop Orders are effective when made [CPA 109(3)], and must be served on the respondent, with written reasons [CPA 109(4)]. This seems an odd combination of rules, for how can a party know of - and thus be bound by - the terms of the Stop Order unless it is first served on them?

(c) Hearing before the License Appeal Tribunal (LAT)

. Right to Hearing

A False Advertising Stop Order shall inform the party that they are entitled to a hearing if, within 15 days after service of the Order, they mail or otherwise deliver a written Notice Requiring a Hearing to the Director and the License Appeals Tribunal [CPA 109(5,6)]. Contrary to the situation with both proposed and immediate compliance orders, the Tribunal is NOT granted discretion to extend this 15 days timeline.

The Director, the person who requested the hearing, and any others added by the Tribunal are parties to the hearing [CPA 109(8)].

While this hearing is not called an appeal hearing, it has the same function as one and will be commonly referred to as an 'appeal' [although note the 'second' appeal to the court discussed in (d) below].

. Conduct of Hearing

The Tribunal may stay the Order pending the outcome of the hearing [CPA 109(7)].

The License Appeal Tribunal has issued rules with respect to its procedures:

License Appeal Tribunal Website

License Appeal Tribunal Rules of Practice

In addition, the LAT is generally governed by the Statutory Powers Procedures Act (SPPA), which is the topic of its own Isthatlegal.ca Legal Guide:

Administrative Law (Ontario)(SPPA)

. Tribunal Orders

The Tribunal, after hearing, may [CPA 109(9)]:
  • confirm the False Advertising Stop Order, with or without amendments; or

  • set aside the Order.
In any event, the Tribunal may substitute its own 'opinion' for the Director's earlier Order [CPA 109(10)]. This can only mean that it can express its own reasons for its decision.

(d) Appeal to Court

The License Appeals Tribunal Act allows for the appeal of a LAT Order to the Divisional Court [LATA s.11]. Such appeals are discussed in s.9 below ["Court Appeal of Tribunal Decisions or Orders"].

On such appeal to the Court there is no automatic stay of the Tribunal Order being appealed, which takes effect immediately. However the Tribunal may issue a stay until the appeal hearing is resolved [CPA 109(11)]. Logically such a stay would have to be initiated by motion before the LAT.

Additionally, the court has jurisdiction to order a stay on motion [RCP Rule 63.02(1)(b)].


9. Court Appeal of Tribunal Decisions or Orders

(a) Overview

Further appeal by a party from a decision or order of the License Appeal Tribunal (LAT), made under the authority of the Consumer Protection Act, lies to the Divisional Court [LATA s.11].

(b) Limitation Period

Appeals to court are subject to the standard 30-day administrative appeal limitation period set out in the Rules of Civil Procedure [RCP Rule 61.04]. Since this is a limitation period established under the rules of court it may, on motion, be extended by the court [RCP Rule 3.02(1)].

Additionally however, the License Appeal Tribunal (LAT) itself has the (unusual) jurisdiction to extend the court appeal limitation if it believes that there are "reasonable grounds for applying for the extension and for granting relief". Such orders may be accompanied by an additional Tribunal Order giving "directions that it considers proper as a result of extending the time". Time extension orders can be made be made either before or after the time limit has expired [LATA 7], and logically
would be reque sted by way of motion to the Tribunal.

(c) Stay Pending Appeal

The filing of a court appeal does not automatically stay the Tribunal Order being appealed, although the Tribunal may order that it be stayed until the court appeal is resolved [CPA 113].

Additionally, the court has jurisdiction to order a stay on motion [RCP Rule 63.02(1)(b)].


10. Undertakings of Voluntary Compliance

(a) Overview

At any time during the Proposed Compliance Order, Immediate Compliance Order - and related LAT Hearing or Court Appeal - processes [described above (in ss.6,7 and 9)] - and before the time that Court appeal procedures are exhausted or the time limit for an appeal has expired if it has not been taken (as applicable) - the party who is subject of the Order may enter into an "Undertaking for Voluntary Compliance" [CPA 114(1)].

(b) Terms of Undertakings

In the undertaking the subject may undertake [CPA 114(1)]:
  • to not engage in specified acts after the date of the undertaking;

  • to provide compensation to any consumer;

  • to publicize the undertaking or the actions being undertaken as a result of the undertaking;

  • to pay any cost incurred in investigating the subject's activities, any legal costs incurred in relation to the subject's activities and any cost associated with the undertakings;

    and/or

  • to take any other action that the Director considers appropriate in the circumstances.
(c) Finality of the Undertaking

If the Undertaking is accepted by the Director then it "has and shall be given for all purposes of this Act the force and effect of an order made by the Director" [CPA 114(2)].

This Undertaking procedure plainly offers itself as a means of settling current legal proceedings such as a Hearing or Court Appeal. For that purpose though I find CPA s.114(2) lacking in its absence of any provision terminating current hearings or appeals, and preventing further of the same - when an Undertaking for Voluntary Compliance is given and accepted by the Director.

The best I can speculate is that the legislation intends to have this finality effect, by relying on either:
  • the inclusion within the Undertaking a term withdrawing current Hearing and Court Appeal proceedings by the subject and an undertaking not to commence further similar proceedings respecting the resultant 'Order', or

  • the absence of statutory appeal-type hearing processes for a deemed 'Order' that emanates from an Undertaking. That is, there is a hearing process for Proposed Orders, and one for Immediate Orders, but none set out in the legislation for these deemed 'Undertaking Orders'. That being the case, neither can there be a court appeal of an 'Undertaking Order' because the authority for such appeals lies only from Orders of the TRIBUNAL (not the Director):

    License Appeals Tribunal Act s.11 A party to a proceeding before the Tribunal relating to a matter under any of the following Acts may appeal from its decision or order to the Divisional Court in accordance with the rules of court:

    .... the Consumer Protection Act, 2002.
As such it seems that anyone wishing to appeal an Order that emanates from an Undertaking (that they have given), has either promised not do so, or lacks the legal machinery to do so, or both. The legislation could have made this result a lot plainer with some simple wording.

(d) Security for Undertaking

Before accepting the Undertaking, the Director may additionally require that the subject provide - "in such manner and amount as the Director determines" - security as follows [CPA 114(3)]:
  • a personal bond accompanied by collateral security;

  • a bond of an insurer licensed under the Insurance Act to write surety and fidelity insurance; or

  • a bond of a guarantor accompanied by collateral security.

    Note that there is a provision for additional forms of security to be listed by Regulation, but that this has not yet been done.
The Director may not release such securities until satisfied that the Undertaking has been fulfilled [CPA 114(4)].


11. Freeze Orders

(a) Overview

Essentially, a "Freeze Order" operates to freeze assets of a supplier. It can be made at the discretion of the Director when there is enforcement activity underway against the supplier, and it must be made in writing [CPA 110(1-3)].

Note that Freeze Orders can be made with respect to both general contraventions of the CPA, as well as the more specialized area of CPA 'unfair practices', which are dealt with in Part C, Ch.6 [CPA 110(3)]. When unfair practices are the basis of a Freeze Order, it can be made not only against a supplier, but against anyone who has engaged in an unfair practice.

(b) Terms of Freeze Orders

A Freeze Order may [CPA 110(1)]:
  • order any person having on deposit or controlling any assets or trust funds of a supplier or former supplier to hold those funds or assets;

    Where a Freeze Order is made against assets held in a bank, a credit union, a loan corporation or a trust corporation, it only applies to the offices and branches specifically named in the Order [CPA 110(4)].

  • order a supplier or former supplier to refrain from withdrawing any asset or trust fund from a person having them on deposit or controlling them;

    and/or

  • order a supplier or former supplier to hold any asset or trust fund of a consumer or other person in trust for the person entitled to it.
(c) Criteria for Issuance of a Freeze Order

The Director may make a Freeze Order whenever they "believe that it is advisable for the protection of consumers"[CPA 110(2)] AND (not 'or') where ANY of the following are the case:
  • a CPA search warrant has been issued;

  • a Compliance Order has been made [this would include both CONFIRMED Proposed compliance Orders (as per s.6 above) and Immediate Compliance Orders (as per s.7 above)]; or

  • an Undertaking of Voluntary Compliance has been entered into.
There is no requirement in CPA s.110 that the enforcement activity must be against the supplier who is the subject of the Freeze Order, but it is safe to say that any court would read that requirement in.

Director-issued Orders (with Reasons if issued: LATA s.10) may be served by any of the methods set out in s.13 below.

(d) Avoidance of Freeze Order by Posting of Security

A supplier may avoid the issuance of a Freeze Order where they file with the Director - "in such manner and amount as the Director determines" - security as follows [CPA 110(6)]:
  • a personal bond accompanied by collateral security;

  • a bond of an insurer licensed under the Insurance Act to write surety and fidelity insurance; or

  • a bond of a guarantor accompanied by collateral security.

    Note that there is a provision for additional forms of security to be listed by Regulation, but that this has not yet been done.
(e) Disposition of Frozen Assets

Generally, the Director may at any time revoke a Freeze Order or, alternatively, consent to the release of "any particular asset or trust fund" from it [CPA 110(5)].

An application to the Superior Court for a "determination in respect of the disposition of an asset or trust fund" may be made by either [CPA 110(7)]:
  • a person who claims an interest in the assets or trust fund being frozen, or

  • the holder or trustee of the assets or trust fund, if they are "in doubt as to whether the order applies to the asset or trust fund".
As well, the Director may apply to the Superior Court, without notice to any other person (ie. 'ex parte'), for "directions or an order relating to the disposition of assets, trust funds or land affected by the order ..." [CPA 110(12,13)].

(f) Registration of Freeze Order on Title of Real Estate

The Director may register a notice of the Freeze Order 'on title' against real estate (ie. under the Registry or Land Titles system, as appropriate) held by the asset or trust fund holder who is subject of the order [CPA 110(8)].

The effect of such a registration is "the same effect as the registration of a certificate of pending litigation". Certificates of Pending Litigation, when filed on title, have the effect of notifying any parties interested in the real estate that the title of the property is subject to the outcome of litigation, so any sale or other dealing with the property until that is resolved is risky. In the case of a Freeze Order it necessarily notifies them of the terms of the freeze Order.

The Director may revoke or modify such a registered notice [CPA 110(8)] - or may apply to the Superior Court, without notice to any other person ('ex parte'), for "directions or an order relating to the disposition of assets, trust funds or land affected by the ... notice" [CPA 110(12,13)].

(g) Tribunal Application By Parties to Alter or Discharge Title Registration

As well, the holder of frozen assets or trust funds, or anyone having an interest in the real estate subject of the registration may apply to the License Appeal Tribunal "for cancellation in whole or in part of the order or for discharge in whole or in part of the registration" [CPA 110(9)].

The Tribunal shall hold a hearing into the application and the applicant, the Director and such other persons as the Tribunal may specify are parties to it [CPA 110(11)].

After the hearing, the Tribunal may "cancel the (Freeze) order or discharge the registration in whole or in part" if it finds either [CPA 110(10)]:
  • the order or registration is not required in whole or in part for the protection of consumers or of other persons having an interest in the land; or

  • that the interests of other persons are unduly prejudiced by the order or registration.

12. Court Restraining Orders

If it appears to the Director that a person is not complying with the CPA, its Regulations - or a CPA Order (either of the Director or the Tribunal), then the Director may apply to the Superior Court for an order (a "restraining order") compelling compliance [CPA 115(1)]. This application is in addition to the other enforcement powers that the Director has (eg. Compliance Orders, False Advertising Stop Orders, etc) - and is open to the Director regardless of whether those have first been
exercised [CPA 115( 2)].

While such court orders are labelled 'restraining orders' in the CPA, it is likely that a court facing such an application would have jurisdiction to not only prohibit certain behaviours, but to order positive acts to bring the respondent into CPA compliance.

Such court restraining orders may be appealed to the Divisional Court [CPA 115(3)].

The practical effect of such a 'restraining order is to add the court's contempt of court authority to the CPA sanctions which may otherwise be imposed on the party for continued non-compliance.


13. Service of Notices and Orders by Director and Tribunal

(a) Service of Director Notices and Orders

Where the Director must serve a Notice or an Order it may be served by any of the following methods [CPA s.121(1)]:
  • personal delivery;

  • registered mail;

    In the case of registered mail, service is deemed effective on the third day after mailing, "unless the person on whom service is being made establishes that the person did not, acting in good faith, through absence, accident, illness or other cause beyond the person?s control, receive the notice or order until a later date". [CPA s.121(2)].

  • any other method which generates proof of receipt; or

  • any other method ordered by the License Appeal Tribunal [CPA s.121(3)].
(b) Service of Tribunal Orders

The Director must serve any final decision or Order it has made, with reasons if any, on the parties (or their legal representatives) by any of the following methods [LATA s.10]:
  • regular mail;

  • fax; or

  • such other method that the Tribunal specifies in its rules.

Lawyer License #37308N / Website © Simon Shields 2005-2017