Schmidt v. Jay Electric Limited, 2011 ONCA 388

CITATION: Schmidt v. Jay Electric Limited, 2011 ONCA 388

DATE: 20110518

DOCKET: C53058

COURT OF APPEAL FOR ONTARIO

MacPherson, Armstrong and Karakatsanis JJ.A.

BETWEEN

Lorenz Schmidt

Appellant / Respondent by Cross-Appeal

and

Jay Electric Limited and Bellwood Sheet Metal Limited

Respondents / Appellants by Cross-Appeal

and

Superintendent of Bankruptcy

Intervenor

Court File No.: 31-OR-455190-T

ONTARIO SUPERIOR COURT OF JUSTICE IN BANKRUPTCY AND INSOLVENCY

IN THE MATTER OF THE BANKRUPTCY OF LORENZ SCHMIDT, residing in the Town of Woodbridge in the Province of Ontario

Frank Bennett, for the appellant

Roy Wise, for the respondents

Liz Tinker, for the intervenor

Irving Burton, for the trustee in bankruptcy

Heard and released orally: May 16, 2011

On appeal and cross-appeal from the order of Justice Alexandra Hoy of the Superior Court of Justice, dated September 17, 2010.

ENDORSEMENT

[1] The 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.

[2] The 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.

[3] On 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.

[4] The 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.

[5] On 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.

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

[7] The 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.

“J.C. MacPherson J.A.”

“Robert P. Armstrong J.A.”

“Karakatsanis J.A.”