





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 appellants 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 appellants application for a discharge from bankruptcy.

J.C. MacPherson J.A.

Robert P. Armstrong J.A.

Karakatsanis J.A.


