Schmidt v. Jay Electric Limited, 2011 ONCA 388

ENDORSEMENT

1The appellant appeals the decision of Hoy J. dated Sept 17, 2010 revoking his discharge from bankruptcy. The respondents cross-appeal on the question of costs.

2The appeal judge admitted fresh evidence and revoked the discharge. She directed the appellant to file a fresh statement of affairs and produce various documents and the official receiver to hold a s. 161 examination.

3On the appeal, the appellant submits that the appeal judge erred in admitting fresh evidence because the creditors had numerous opportunities to examine the appellant and the evidence could have been obtained with due diligence. We agree with the decision and the reasons of the appeal judge on fresh evidence. Even if the appellant’s non-disclosure was unintentional, the creditors were entitled to rely on his disclosure.

4The appellant further submits that the decision to revoke the discharge was unreasonable and punitive as a refusal to discharge is reserved for the most extreme cases and the worst misconduct. In our view, the failure to disclose significant assets was a serious omission which justified the appeal judge in revoking the discharge. The appeal judge found that the Registrar did not have a proper record for an informed decision. We agree.

5On the cross-appeal, the creditors ask that the payment of the costs order be made a condition of any application for discharge. The appeal judge exercised her discretion in reserving to the Registrar the issue of whether payment of costs should be a prior condition of discharge. She made no error in principle.

6Accordingly, the appeal and the cross-appeal are dismissed.

7The appellant shall pay costs fixed in the amount of $14,000, all inclusive, payable forthwith and in any event as a condition precedent to the appellant’s application for a discharge from bankruptcy.