Bank entitled to refreeze company accounts during directors’ dispute

Categories:

Bank accounts, Closing/Freezing accounts,

Summary:

In March 2025, Ronald and his co-director, Aiden, got into a dispute about their company, which had business accounts with the bank. Earlier court orders had frozen the accounts, but the orders were lifted. A few days after their lifting, Aiden told the bank he and Ronald were still in a dispute about the company, and the bank froze the accounts again. Ronald complained that the bank's actions contradicted the court’s decision, breached the account mandate, and caused financial and other harm. He also complained that the bank did not tell him it had refrozen the accounts. He sought compensation of $350,000.

Published:

July 2026

Our investigation

We found the bank's terms and conditions allowed it to freeze the accounts if it believed there was a dispute about ownership or control of the money. We found the bank was entitled to act once a director told it there was a dispute affecting the company’s accounts. We also found the bank’s decision did not contradict the earlier court decision. That decision lifted the court’s own interim injunction, but it did not prevent the bank from exercising its separate contractual rights.

As for whether the bank told Ronald it had refrozen the accounts, the bank’s terms said it would tell account holders as soon as possible why it had taken such an action and what needed to happen before access would be restored. The bank’s own policy also required notification as soon as possible. We found the bank did not notify Ronald that it had refrozen the accounts. This was contrary to its policy and process.

The bank had offered Ronald $1,000 for its failure to notify him, an offer we found fair and reasonable. Much of the harm Ronald described stemmed from the underlying dispute with Aiden, rather than from the lack of notification itself. We recommended he accept the bank's offer.