Court File and Parties

CITATION: Borden (Re), 2010 ONCA 875

DATE: 2010-12-20

DOCKET: C52320

COURT OF APPEAL FOR ONTARIO

Rosenberg, Cronk and Epstein JJ.A.

BETWEEN

IN THE MATTER OF THE BANKRUPTCY OF JOHN PERRY BORDEN Also known as Perry Borden, Of the City of Toronto, in the Province of Ontario, Self-employed Lawyer

Counsel: Jacqueline A. Horvat, for the appellant, Sutts, Strosberg LLP J. Perry Borden, in person

Heard and released orally: December 13, 2010

On appeal from the order of Justice Alexandra Hoy of the Superior Court of Justice, dated June 16, 2010.

ENDORSEMENT

[1] The appellant law firm appeals from the order of Hoy J. dated June 16, 2010 dismissing the appellant’s appeal from the order of the Registrar in Bankruptcy dated December 3, 2009. The latter order dismissed the appellant’s motion to set aside the respondent’s automatic discharge from bankruptcy, granted pursuant to the summary administration of his bankrupt estate.

[2] The appeal judge expressed doubt that, in the circumstances of this case, the appellant would discover “anything new and material” about the respondent’s affairs through the bankruptcy process. She also held that there was no evidence to support the conclusion that a discharge hearing, if one had been held, would have led to a discharge on terms that had “any practical or meaningful significance to [the appellant] in terms of its recovery”. On this record, we agree.

[3] The appellant is one of several of the respondent’s creditors. The debt owed to the appellant by the respondent represents approximately one-third only of the respondent’s total liabilities. The Canada Revenue Agency, which did not oppose the respondent’s automatic discharge, is owed an amount by the respondent having a value greater than what the appellant claims is the respondent’s largest known asset (a sizeable receivable allegedly owed to the respondent by his principal client).

[4] In addition, all the issues raised by the appellant regarding the affairs of the respondent were considered by the appeal judge. The appeal judge was alive to the applicable test for setting aside an automatic discharge from bankruptcy and correctly applied that test to the facts of this case. In so doing, she noted that the appellant was not without recourse against the respondent as the Trustee in Bankruptcy has agreed to consent to an order in the appellant’s favour under s. 38 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, should the appellant elect to apply for such an order, in respect of the client receivable allegedly owed to the respondent.

[5] In these circumstances, we agree with the appeal judge that the test for setting aside the respondent’s automatic discharge was not met. That said, we should not be taken as approving the actions of the Trustee in Bankruptcy in this case. The Trustee failed to call a first meeting of creditors on a timely basis, as it was obliged to do. Further, in its report regarding the respondent’s estate, as filed in court, the Trustee appears to have misstated the facts regarding opposition to the respondent’s discharge. We share the appeal judge’s view that these are matters of concern.

[6] The appeal is therefore dismissed. This is not an appropriate case for an award of the costs of the appeal.

“M. Rosenberg J.A.”

“E.A. Cronk J.A.”

“G.J. Epstein J.A.”