Account Restrictions & Frozen Funds

How bank accounts become restricted in Canada

A bank account may be restricted by a court order — for example a Mareva injunction or preservation order in civil litigation, or a restraint order in a criminal investigation — by law enforcement action, or by the financial institution itself under its compliance and anti-money-laundering obligations.

A restriction does not, by itself, establish guilt. It is a holding measure while questions are examined.

Impact on personal and business funds

Frozen accounts can affect rent, salaries, supplier payments and day-to-day living costs. Understanding the scope of the order, and which accounts it covers, is the first priority.

Bank statements and transaction records

Complete statements covering the relevant period, supported by explanations of significant or unusual transactions, help build a clear and consistent picture.

Source of funds and legitimate business activity

Invoices, contracts, payroll records, Canada Revenue Agency filings and management accounts can help demonstrate where money came from and why it moved as it did.

Ownership and third-party interests

Where funds belong partly to others — a business partner, a client, a family member — evidence of that interest should be identified and organised early.

Dates and deadlines

Orders typically specify a duration and may be extended. Note every date in the order and any accompanying notice and share them with your legal adviser promptly.

Possible legal routes

Depending on the circumstances and the province or territory, applications to vary an order (for example, to allow essential expenses) or to set it aside may be available. Whether any route is appropriate is for a lawyer licensed in the relevant jurisdiction to determine. Our role is to prepare documentation that supports that review.