A British Columbia appeal court has set a date for a hearing into whether it should lift an asset freeze ordered by the B.C. Securities Commission (BCSC).
The B.C. Court of Appeal has set an appeal of a BCSC order for April 18. Last spring, the BCSC issued a temporary freeze order against Yan Zhu (aka Rachel Zhu), Guan Qiang Zhang, and their company, Bossteam E-Commerce Inc., as it investigated complaints that they may be operating a Ponzi scheme. That allegation has not been proven, and the BCSC has since set hearing various dates starting March 21, through April 19, to consider the case.
Last September, Zhu, Zhang, and Bossteam appealed the freeze order to the BCSC, which declined to lift the order. They then appealed that decision to the BC appeal court. In December, they were granted leave to appeal “on the basis that the commission’s order was an exercise of sweeping administrative power that merited review by this court.”
The decision notes that, while the appellants want the court hearing to proceed expeditiously, the BCSC has had “internal difficulties preparing for the hearing of the appeal”. In particular, the lawyer handling the case left the commission and it had to be be reassigned.
“The appellants put before me evidence of prejudice caused by the continuing freezing order. Balanced against that is the interest of the respondents in having the appeal argued by counsel of their choice,” the decision says.
Ultimately, the court concludes that completing the BCSC hearing won’t make the appeal moot. It says the issue of whether the freeze order should have been made “appears to be legally significant and it cannot be predicted when the commission proceedings will end.”
“If the freezing order should not have been made, it should be set aside,” it says. And, while it finds that “… the appellants are entitled to have their day in court as soon as it is practical,” it says, “In my view, they are not prejudiced unduly by an adjournment to April 18, 2013.”