CITATION: Reichwein v. Reichwein, 2016 ONSC 831

COURT FILE NO.: FC-14-1325-00

DATE: 20160202

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: SHARON ANN REICHWEIN, Applicant

AND:

KEVIN KARL REICHWEIN and ELIZABETH REICHWEIN, Respondents

BEFORE: THE HON. MR. JUSTICE J.P.L. McDERMOT

COUNSEL: Alison Pengelley, for the Applicant

Trevor Owen, for the Respondents

HEARD: January 21, 2016

ENDORSEMENT

Introduction

[1] In this age of increasingly costly litigation, the concept of proportionality has become increasingly crucial. The rule of proportionality is set out in Rule 2 of the Family Law Rules[^1] which states, inter alia, that the court should devote its resources according to the importance of the particular case at bar.

[2] Although the rule speaks to the discretion of the court, counsel and parties are also have a duty of proportionality. Counsel and parties have to understand that without properly apportioning priority and resources to particular cases, legal fees escalate to a point where the costs of proceeding with a case simply do not make the litigation worthwhile. Numerous commentators have complained about the fact that legal fees appear to be out of hand, and much of the blame for this lies on the increasing complexity and cost of family law litigation. However the reason for litigation expense also often lies with the failure of counsel to limit the resources devoted to a case where unwarranted.

[3] Mr. Owen stated on behalf of the Respondents and Kevin and Elizabeth Reichwein that this is exactly what has occurred in this case. I have before me five volumes of continuing record documents, most of which had to be read for this motion. Numerous affidavits have been filed by both parties and many of those affidavits are more than 100 pages long including the exhibits. Private investigators have been hired. The motion argued before me took an entire day to argue. At issue is a sole proprietorship involving ATV rentals to tourists along with the income from that business and the ability of the Respondent Husband Kevin Reichwein to pay spousal support. Extensive disclosure has been requested and questioning was ordered. It is extremely concerning that the amount of material filed and the length of the argument was not in any way warranted by the amounts in issue in this case.

[4] This is not to say that the moving party, the Applicant wife Sharon Palmer, was not justified in feeling that her husband was attempting to deceive her and the court. Mr. Reichwein along with his mother involved himself in transactions which largely resulted in this matter getting out of hand. In a rather inept transfer of property, Mr. Reichwein purported to transfer the major assets of the business, a number of ATVs, to his mother for no consideration. He then claimed that he had little or no income from the business. This is consistent with his past behaviour where he declared almost nothing by way of income for tax purposes notwithstanding receipt of a substantial income. There were ample grounds for suspicion on the part of the Applicant wife. That being said, cooler heads have not prevailed and it is obvious that enormous amounts of legal costs are being incurred on an unjustified basis.

[5] For the reasons set out below, I have ordered the following:

a. The motion to join Karl Reichwein as a Respondent and to amend the Application is dismissed;

b. The motion for spousal support is dismissed without prejudice;

c. Kevin and Elizabeth Reichwein to produce disclosure as set out below;

d. The motion for questioning is dismissed;

e. The motion regarding storage charges and household contents is dismissed;

f. Costs to be spoken to.

Background Facts

[6] This was lengthy marriage. The parties married on December 29, 1985 and separated in March 2014. There are two children, both of whom are independent.

[7] Although the parties separated in March 10, 2014, they remained together for some time under the same roof in the matrimonial home. In May 2014 they signed what purported to be a “separation agreement”. In fact it did not meet the requirements of s. 55 of the Family Law Act;[^2] neither signature was witnessed and although Mr. Reichwein typed out the provisions of the agreement most of which dealt with property issues and division of household contents and the matrimonial home, Ms. Reichwein made a number of handwritten changes to the agreement prior to signing it. As earlier pointed out by Olah J. in a case conference, “the probability of invalidity of the [separation agreement] is very high”.

[8] For eight or so years prior to separation, Mr. Reichwein had operated an ATV rental business. The business involved ATV trail rides and rentals and was called “Adventure Tours”. Mr. Reichwein ran the business from the matrimonial home and used an adjoining piece of land owned by a neighbour for the trail rides. Although it was unclear as to the arrangements made with the neighbour for the use of that land, which becomes crucial as set out below, the neighbour appears to have expressed some concern about the arrangement. He wrote a letter which was filed as an exhibit to an affidavit which indicated that he felt that he had been taken advantage of and he told Mr. Reichwein that when he was given an inch “you will take a mile”.[^3] It was apparent that Mr. Reichwein was going to be tossed off his neighbour’s property after July 31, 2015.

[9] Prior to establishing Adventure Tours Mr. Reichwein had operated another business installing vehicle audio systems. He said that he wound this business up in 2008 (Ms. Palmer deposed that he actually wrapped this business up about a year prior to separation).

[10] Most of the ATVs for Adventure Tours were purchased when the business began in 2007 or 2008. In 2011 the parties increased their mortgage by $135,000. Ms. Pengelley submitted on behalf of the Applicant that all of this money went into the business; however Ms. Palmer acknowledged in the agreement the sum of $43,000 went to pay off a debt of hers which she says was used for family purposes.

[11] Ms. Palmer had second thoughts about the “separation agreement”. Once she retained counsel she resiled from the agreement. She says that she then was forced out of the home; however it appears that there was an altercation between Ms. Palmer and Mr. Reichwein’s mother Elizabeth Reichwein. Ms. Palmer was charged with assault. That issue was resolved by a peace bond.

[12] The net result was that during the summer of 2014 Ms. Palmer had to leave the matrimonial home. At her request the matrimonial home was sold. There remains some $83,000 in trust being the net proceeds from the matrimonial home after payment of encumbrances and costs.

[13] Once the matrimonial home was sold, Mr. Reichwein obviously could no longer operate the business from that location. He made arrangements with his mother, his co-Respondent Elizabeth Reichwein, that she and her husband Karl Reichwein would purchase a 200-acre parcel of land near Blue Mountain for use in the ATV adventure business. Mr. Reichwein transferred all of the vehicles belonging to the business to his mother at a nominal consideration in September 2014. Because of these transfers, Elizabeth Reichwein was named a Respondent in these proceedings.

[14] The business is presently operated from the 200 acre parcel purchased by Mr. Reichwein’s parents, along with adjoining snowmobile trails across public property. Although the business was originally called Adventure Tours, once the vehicles were transferred to Elizabeth Reichwein, the business then became known as ATV Adventure Tours.

[15] Although Mr. Reichwein deposed that his mother is now running the business and he receives a salary, it appears that he continues to run the business and invest funds in the business. He deposed that he cashed in RRSPs in order to pay for improvements to the business including a Quonset hut in which the ATVs are stored and to cut trails on the 200-acre parcel of land. He has continued to deposit business receipts into his own bank account. He said in his own financial statement that he receives about $1,500 per month in business income. Mr. Reichwein appears to continue to operate the business notwithstanding his professions to the contrary. He has also not provided any clarity whatsoever as to his income from that business.

[16] Ms. Palmer made very little income in the last years of the marriage. After separation she received a $27,000 settlement of a long-term disability claim which was made many years before; after legal fees she netted $20,000. She is now working as personal support worker and earns approximately $33,100 per annum. She rents in room in Barrie although Mr. Reichwein claims that she lives with her boyfriend.

[17] Mr. Reichwein lives with his mother and father in their home in Barrie. He commutes to Blue Mountain to operate the business.

[18] At a case conference held on June 16, 2015 Olah, J. endorsed that “much production and disclosure is required”. Ms. Pengelley on behalf of the Applicant has taken that to heart. Pursuant to the endorsement of Olah, J. she has served on the Respondent comprehensive notices to produce requesting extensive disclosure including a business valuation of ATV Adventure Tours. She now wishes to amend her client’s pleadings and join as a Respondent Mr. Reichwein’s father Karl Heinz Reichwein; the basis of this appears to be the fact that he is a joint owner of the land on which the business operates. She requests extensive disclosure in her Notice of Motion and as well requests spousal support.

Analysis

[19] There are a number of issues raised in the motion filed and served by Ms. Pengelley. They are as follows:

1. Should Kevin Reichwein’s father, Karl Reichwein, be joined as a respondent to this litigation as set out in the amended application attached to the Notice of Motion;

2. Should spousal support be ordered on a temporary basis;

3. The Applicant has raised a number of disclosure issues including the alleged failure of the Respondents to adequately provide disclosure pursuant to the notices to produce attached to the Notice of Motion as well as questioning.

[20] I shall deal with these issues in turn.

Joinder of Karl Heinz Reichwein as a Respondent in these Proceedings

[21] The original application in this matter joined only the Respondent’s mother as a co-Respondent in this proceeding. This was based upon the transfer of the ATVs to Elizabeth Reichwein for nominal consideration. In the original application this was characterized as a fraudulent conveyance pursuant to the Fraudulent Conveyances Act[^4] in order to defeat the claims of creditors including the claims of the Applicant. As well but no less importantly the Applicant claims that this is also an attempt to remove income from the hands of Mr. Reichwein and place it with his mother. In effect Ms. Palmer says that this is all part of a plan to evade Mr. Reichwein’s spousal support obligations.

[22] Ms. Pengelley frankly acknowledged that there was no evidence connecting the Respondent Husband’s father with this plan. Indeed he may not be capable of participating in the business or in any transaction whereby the business might have been transferred to him. Mr. Reichwein’s father is in his eighties and is seven years older than Elizabeth Reichwein. He suffers from dementia. That was confirmed in a medical letter from Karl Reichwein’s doctor.[^5] Although Karl Reichwein was sufficiently lucid to sign a power of attorney on September 22, 2015, Elizabeth Reichwein deposes that he is not capable of managing his affairs and that it would work a hardship on him to be joined as a party or to be involved in this litigation.

[23] Ms. Pengelley expressed little or no sympathy for Mr. Reichwein. She pointed out that Elizabeth Reichwein deposed that eventually both she and her husband hope to transfer the 200-acre parcel in the Blue Mountains to their son to operate that business. She says that this is a sufficiently clear connection to permit the court to join Karl Heinz Reichwein as a party to this litigation.

[24] The rule which governs who shall be named as a party to litigation is rule 7(3)(b) which reads as follows:

(3) A person starting a case shall name,

(a) as an Applicant, every person who makes a claim;

(b) as a Respondent,

(i) every person against whom a claim is made, and

(ii) every other person who should be a party to enable the court to decide all the issues in the case.

[25] A party may be added by court order under rule 7(5):

(5) The court may order that any person who should be a party shall be added as a party, and may give directions for service on that person.

[26] It appears to me that if I am to join a party to litigation the two criteria set out in rule 7(3)(b) would apply which are as follows:

i. There must be a claim against the proposed Respondent, or

ii. A party should be placed before the court to enable the court to decide all of the issues in the case.

[27] Regarding the latter provision, if Mr. Reichwein is suffering from Alzheimer’s disease or dementia, is it unclear as to how his participation in this case would assist the court in deciding the issues being placed before it. In fact joining Mr. Reichwein may involve serious issues which may overly complicate the case and may cause this matter to become even more expensive and time consuming for the parties. There is obviously potential for Mr. Reichwein to be determined to be a special party requiring a litigation representative under Rule 4(2) of the Family Law Rules, or alternatively as a litigation guardian under Rule 7.03(5) of the Rules of Civil Procedure.[^6] As such, this may involve a mental health assessment resulting in increased costs; in fact the Applicant suggests this be done in one of her affidavits.[^7] As well the sympathies of the court are with Mr. Reichwein’s father as he appears to be suffering from numerous health related problems including dementia and diabetes.

[28] The costs which may be involved in joining Karl Reichwein as a party must be balanced against the potential benefits to joining him as a party to this proceeding. If Mr. Reichwein is suffering from dementia he would have little information or evidence to contribute to this case. Ms. Palmer has not demonstrated that his addition to the case would assist the court in deciding the issues in this case.

[29] Ms. Palmer however points out that she wishes to make a claim under Fraudulent Conveyances Act in respect of the transfer of the business against Mr. Reichwein’s father. As such she says that he would be a proper party under rule 7(3)(b)(i).

[30] For an order to be made joining a party in a proceeding involves an examination of the prima facie validity of the claim. If the court did not do this the next step may very well be a motion for summary judgment to dismiss the claim based upon a lack of evidence or because the application does not disclose a reasonable cause of action against that Respondent.

[31] Ms. Palmer has produced absolutely no evidence connecting Mr. Reichwein’s father to the impugned transactions whereby the business was transferred out of Mr. Reichwein’s hands. He is not the recipient of the assets said to be the subject matter of the fraudulent conveyance. The transfers of the ATVs were to Elizabeth Reichwein only and the registration of the sole proprietorship named ATV Adventure Tours was in the name of Elizabeth Reichwein only. The only connection that Karl Heinz Reichwein has to this proceeding is the purchase of the land on which the business is operated which occurred well after the transfer of assets. That land is not an asset of ATV Adventure Tours; nor is it an asset of the Applicant or the Respondent Husband. It is not an asset which could in any way be equalized. There is only a potential for the land to eventually be transferred to Mr. Reichwein and the evidence is uncontradicted that all of the funds that went to purchase the 200-acre parcel in Blue Mountain came from the sale of Mr. Reichwein’s parents’ cottage. Indeed, I suspect that their joint ownership of that cottage is the reason why the 200-acre parcel was place in both of their names rather than the name of Elizabeth Reichwein only.

[32] As such the Applicant has not demonstrated any sort of prima facie case against Karl Reichwein sufficient to allow him to be joined as a party under rule 7(5) of the Family Law Rules. There must be some evidence connecting the proposed Respondent to the claims being made by the Respondent other than her own desire to make that claim.

[33] Finally, there is also evidence that joining Mr. Reichwein’s father would work a hardship on this gentleman who suffers from health issues. If he suffers from dementia, and cannot attend court as stated by Dr. D’Souza, and if the Applicant intends upon questioning Mr. Reichwein once he is made a party as suggested by counsel, how can the Applicant suggest that this will not work a hardship on him? The adding of a party to family law litigation is a discretionary process, and as part of the exercise of this discretion, the court must consider the hardship such an order may cause.

[34] The motion to join Karl Heinz Reichwein as a party and to amend the application as attached to the Notice of Motion is therefore dismissed.

Spousal Support

[35] The Applicant requests an order for temporary spousal support. The Applicant’s material includes a Spousal Support Advisory Guideline (SSAG) calculation of support based upon the Respondent’s income being set at $93,673 per annum. With the Applicant’s income being set at $33,117, the range of spousal support is between $1,892 at the lower end and $2,459 per month at the upper end. Mid-range support under the SSAGs at that income is $2,208 per month. Ms. Pengelley requests support at the upper end of the Spousal Support Advisory Guidelines retroactive to commencement of the application in February, 2015. The Applicant requests the upper range of support based upon the Respondent Kevin Reichwein living with his parents which has lowered his costs as well as his failure to declare his proper taxable income on previous tax returns.

[36] The jurisdiction for an interim order for spousal support can be found at s. 15.2(2) of the Divorce Act which reads as follows:

(2) Where an application is made under subsection (1), the court may, on application by either or both spouses, make an interim order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse, pending the determination of the application under subsection (1).

[37] The four objectives of an interim spousal support order are set out in s. 15.2(6) which reads as follows:

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should

(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;

(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and

(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[38] The first issue is the Applicant’s entitlement to temporary spousal support. The threshold for entitlement on an interim motion for spousal support is not high. Several cases confirm that a claimant for interim support need only prove on the balance of probabilities a prima facie case for spousal support in order to establish entitlement. See Gibson v. Gibson, [2009] O.J. No. 4172 (S.C.J.) at para. 13 and B.D.C v. M.C.C.M., 2014 ONSC 6064, [2014] O.J. No. 4940 (S.C.J.) at para. 16. If the moving party satisfies the court as to the relevance of any one of the statutory objectives noted above, then entitlement at least for the purposes of an interim order is established: see Gerlach v. Gerlach, 2003 CanLII 2125 (ON SC), [2003] O.J. No. 2623 (S.C.J.) at para. 16 and Haney v. Haney, [2005] O.J. No. 2329 (S.C.J.) at para. 49.

[39] The evidence in this matter establishes that the Applicant was largely unemployed and earned very little income leading up to the date of separation. The Applicant also deposes that the Respondent was abusive but more importantly also says that she assumed primary responsibility for the care and upbringing of the children, allowing the Respondent Husband to build up and operate the various businesses that he embarked on during the marriage. At the moment, the Applicant has also satisfied me that she has suffered severe economic disadvantage resulting from the breakdown of the relationship. She presently rents a room in a house and works as a personal support worker notwithstanding her fibromyalgia. The Applicant has satisfied me that she is entitled to interim spousal support.

[40] The second and more troubling issue is the quantum if any of spousal support payable. The Applicant has provided clear evidence that the Respondent earned a significant income from his ATV business in the years leading up to the date of separation. She has reviewed the bank statements provided by the Respondent Husband and has confirmed that the Respondent Husband transferred or deposited into his bank account the sum of $98,000 in 2013. This amount reduced to $88,000 in 2014 and, as pointed out by Mr. Reichwein a portion of this may have been RRSPs that he cashed in during the latter part of 2014.[^8] That being said significant deposits were made into the Respondent Husband’s bank accounts in 2013 and 2014 and I find that the source of the deposits was largely the ATV business that Mr. Reichwein purportedly transferred to his mother.

[41] Moreover, it also appears that the Respondent Husband during the marriage transferred amounts into that bank account which were not declared as business income with the Canada Revenue Agency when he prepared his tax returns. In 2013 Mr. Reichwein confirmed in his Statement of Business or Professional Activities that he had gross sales from Adventure Tours of $48,966 when in fact the evidence confirms that his gross receipts were in the range of $98,000. In 2013 Mr. Reichwein acknowledged with CRA gross business income of $36,152 when he transferred $88,000 into his bank account; the only RSP income shown on that tax return is $6,470.69, a portion of which would have been withheld for taxes. This means that well over $80,000 was transferred into his bank account in respect of the ATV business whereas only $36,152 was acknowledged as gross income from that business.

[42] As such Mr. Reichwein is not a credible witness. His assertions regarding present income must be viewed with suspicion. If he was willing to misrepresent his state of affairs to the great an extent to the Canada Revenue Agency he may very well be willing to do the same with this court.

[43] This is important because it is Mr. Reichwein’s onus to prove his reduction in income: see MacKenzie v. Flynn, 2010 ONCJ 184, [2010] O.J. No. 2145 (C.J.) at para. 15. That is because it is the paying spouse who has the information as to his income especially where he is self-employed. Accordingly the onus lies upon Mr. Reichwein to prove his reduction in income.

[44] I acknowledge that Ms. Pengelley is entirely correct when she says that there is a lack of clarity as to the Respondent’s income. The financial statements of the business have not been provided; neither have the journals for income and expenses of the business. Documents which might have shown the clients of the business, the waivers of liability taken from each customer, have been destroyed. There is no way to assess the actual funds received by the Respondent Husband other than the RRSP income that he has received.

[45] We know that there were deposits into the husband’s accounts of some $20,000 in 2015 and that the husband acknowledged some $10,000 in his “Square” receipts between May and August of 2015.[^9] He says in his financial statement that he earns $1,500 per month ($18,000 per annum) in business income from the business. However, other than that, the husband has provided little or no evidence of his receipts from the business since it moved to Grey County. As well, Elizabeth Reichwein, who says she is now doing the books of the business, has not disclosed any income or expense journals for the business and no financial statements have been provided.

[46] As well, the evidence is ambiguous as to the husband’s place in ATV Adventure Tours. Elizabeth Reichwein has said both that Kevin Reichwein is an employee of the business; she has also stated that he is operating the business. Mr. Reichwein is certainly involved in the business and admitted that he has invested his own money in the business. However, he also says that he is no longer the owner of the business and that it is owned by Elizabeth Reichwein. Elizabeth Reichwein has confirmed that she owns and operates the business and says that she will be administering the books of the business. However, she also says that the ATVs were transferred to her by way of security for her own expenditure of funds on the business. All of this is combined by the facts that Kevin Reichwein has confirmed that he keeps no records of the various customers of the business other than by way of liability forms which he promptly destroys once a safe trail ride is completed.

[47] As such, it is impossible for me to come to any estimate of Mr. Reichwein’s present income. That being said, in this case I find that Mr. Reichwein has proven a substantial reduction in income since separation. He had operated this business from the matrimonial home and the abortive “separation agreement” that the parties entered into in 2014 confirms that Mr. Reichwein expected to remain in the home and continue operating the business from that locale. It was uncontradicted that Ms. Reichwein forced the sale of the home resulting in the business having to be relocated. Kevin Reichwein would have had to move the business in any event, based upon the correspondence of the neighbour upon whose property the trail rides took place. This was largely the reason Mr. Reichwein consented to the sale of the home and also for the transfer of the ATVs to Elizabeth Reichwein and the purchase of the 200-acre parcel of land in Collingwood.

[48] Because of this, Mr. Reichwein has had to restart his business. He has had to obtain and cut new trails and although he had intended to use snowmobile trails it appears that he is unable to do so during the winter snowmobile season. He has provided permits which he needed to obtain in order to cut trails on the 200-acre parcel of land. He deposes that he has lost a source of referrals because of the change in location. Although he deposited significant business income into his bank account in 2013 and 2014, a similar review of his bank deposits from 2015 disclose only $20,000 having been transferred into his bank account from his business in the last year. As well Mr. Reichwein has cashed in some $37,000 in RRSPs; although Ms. Pengelley suggested that this was done with the intent of deceiving the court, I do not have evidence of this other than Ms. Pengelley’s suspicions. It is, however, in my view unlikely any party would go to the lengths of cashing in RRSPs to avoid spousal support especially when the motion for spousal support was only served after January 8, 2016 and was not requested until quite recently.

[49] It is obvious that the change in the business’ location would result in a reduction in the Respondent Husband’s income. It was not denied that the sale of the matrimonial home was at the instigation of the Applicant and the Applicant therefore bears some responsibility for the reduction in income. It appears to me that although there was substantial income in 2013 and 2014, that income has decreased sharply as a result of the business moving from the matrimonial home to its present location. The reports from the private investigators confirm that the business is in operation, but little else. There would obviously be a capital cost involved in the re-establishment of the trail and the physical plant out of which the business operates; evidence was offered of the Quonset hut that Mr. Reichwein had to pay to construct. This would also result in a reduction in income.

[50] I therefore cannot help but conclude, however, that the move from the matrimonial home to the new location would negatively affect the business and Mr. Reichwein’s income. I therefore find on the balance of probabilities that the Respondent’s present income may very well be equal to that of the Applicant and would not support any sort of award of spousal support as requested by the Applicant.

[51] The court should not permit a party to escape his or her obligations to pay support. However it is as harmful to order spousal support where there is little or no income with which to pay that support; that would result in an inevitable default in payment of support, motions to strike pleadings and for other relief as a result of the failure to pay support. It may result in enforcement proceedings by the Family Responsibility Office which may result of the loss of privileges such as the Respondent’s driver’s licence. I therefore do not find the Respondent Husband has a present ability to pay spousal support.

[52] The Applicant states however that income should be imputed to the Respondent. She states that Respondent Husband is “intentionally” under-employed or employed within the meaning of s. 19(1)(a) of the Child Support Guidelines.^10 Although spousal support is an issue, there is authority for the fact that the basis for imputation of income under the Child Support Guidelines can used in imputation of income for spousal support purposes: see Rilli v. Rilli, 2006 CanLII 34451 (ON SC), [2006] O.J. No. 4142 (F.C.J.) at para. 28.

[53] To find a payor to be “intentionally” under-employed does not require a finding of bad faith; all that must be shown is that the actions of paying spouse was a “voluntary act”: see Drygali v. Pauli, 2002 CanLII 41868 (ON CA), [2002] O.J. No. 3731 (C.A.) at para. 28. As pointed out by Ms. Pengelley, the test is reasonableness: is the Respondent Husband making what he can “reasonably expect to earn”: Rilli v. Rilli, supra at para. 22. Reasonableness is based upon the “age, health and employment prospects of the parties”.

[54] The real issue being raised by the Applicant is whether the Respondent Husband being employed in the re-establishment of his business is reasonable under the circumstances. If unreasonable, this is voluntary act of under-employment and therefore subject to imputation of income. If reasonable there is no intentional under-employment and income should not be imputed.

[55] The Respondent Husband deposes that he is re-establishing his business. Although he was not necessarily honest in the operation of his business (as shown by the private investigator’s reports), I have already found that there is reduction in income consistent with the re-establishment of his business. As such, the question is whether the Respondent Husband’s attempts to restart his business is unreasonable and therefore voluntary under-employment sufficient to impute income.

[56] The Applicant submits that the Respondent has had more than a year to re-establish the business and has not done so and this shows unreasonableness. I do not believe this to be the case. It is unquestioned that the location of the business had to be moved as a result of the sale of the home and this has therefore resulted in a reduction in income and a necessity to obtain permits, cut trails and re-establish goodwill for the business. I do not think that it is unreasonable to take a year to two years for the husband to re-establish his income to former levels. It may eventually be found that this is not a reasonable pursuit in which case the Respondent Husband may yet have to seek alternate employment. I do not believe that he has reached that stage yet.

[57] The Respondent’s parents have spent a significant amount of money in providing a base for the business and I believe it is too soon to expect the business to turn the profits it did before. I also believe it to be reasonable for the Respondent Husband to pursue the re-establishment of the business as this is all he has done for the past eight years. Re-establishing any career in your early to mid-50s is difficult at best and there is no evidence that the Respondent could earn a large income in any other pursuit. Certainly I cannot make a finding that the Respondent had employment opportunities which would pay him the income that he previously earned which Ms. Palmer says was in the range of $100,000 per annum.

[58] Ms. Pengelley alleges that the Respondent Husband has been under-promoting his ATV business. She offers no evidence to back up that assertion. Certainly, the evidence from the private investigators shows that ATV Adventure Tours is open for business and they, at least, were not turned away. There was no other evidence provided which would permit me to make a finding that Mr. Reichwein was not promoting the business and, in fact, much of what the Applicant was attempting to convince me of was that the business continued to be a going concern.

[59] As such I do not find that the Respondent should be imputed with income for spousal support purposes.

[60] This is not to say that spousal support should never be paid or that income should never be imputed. By a certain point in time, perhaps by the time of trial, the business should be earning a fair profit or alternatively the Respondent Husband should be seeking out other opportunities. As such, there is no question that this issue should be reviewed at the end of this calendar year. Accordingly the motion for spousal support is dismissed without prejudice to this issue being reviewed in a year.

Disclosure

[61] There is little question that disclosure is at the heart of most if not all family law cases. Without full disclosure, the other party is at a disadvantage as her or she is not in possession of essential facts with which to make his or her case. As well, every party has a right to know the case they have to meet at trial.

[62] The importance of financial disclosure is reflected the amendments to Rule 13 requiring certain mandatory disclosure prior to a case conference. However this does not diminish the need for proportionality as reflected in rule 2(3) which confirms that the court must deal “with the case in ways that are appropriate to its importance and complexity”. This confirms that, so long as the disclosure requirements under Rule 13 are complied with, the court must deal with the case in a manner proportionate to the importance of the issues before the court.

[63] Olah, J. confirmed at the case conference on June 16, 2015 that “much production and disclosure is required”. She ordered all parties to exchange notices to produce within 30 days. The Applicant complied with this direction. Neither of the Respondents complied the direction and the Respondent Husband only served his Notice to Produce several days prior to the motion.

[64] The Notice to Produce addressed to both Respondents in this case was attached to the Applicant’s Notice of Motion. Extensive disclosure has been provided by both Respondents. The Applicant takes the position that this disclosure is inadequate and that the Respondents should sanctioned for failure to adequately disclose in this case. She has requested extensive disclosure from both Respondents. Although she abandoned certain claims such as a full business valuation of ATV Adventure Tours, there are still issues of disclosure before the court.

Disclosure from the Respondent Husband

[65] Although he suggested the contrary, Mr. Reichwein continues to operate ATV Adventure Tours. This was confirmed by the private investigators. It is also confirmed by the fact that Mr. Reichwein confirms that he has invested his own funds in the cutting of trails for the business and in the relocation of the business. It was also confirmed in his affidavit and through the bank records that he continues to receive income from the business in his bank account and continues to pay the expenses of the business. To suggest otherwise and in particular to suggest that his mother Elizabeth Reichwein operates the business, paying him a salary would seem to be disingenuous based upon the evidence that was placed before me.

[66] As such, in determining equalization and income, the disclosure to be provided by Mr. Reichwein is important and crucial to this case.

[67] I have already commented on the failure of Mr. Reichwein to provide sufficient information from which I can discern what, exactly, his income is. Apart from what he has been asked to provide, the onus remains on him to prove his income, as well as the income from ATV Adventure Tours. That income should be easily proven, by disclosure of the books of the business including the receipts and expense ledgers which Elizabeth Reichwein says she will be maintaining. Although I have determined that his income for the purpose of the motion is insufficient to pay child support, trial is a whole new day, and if Mr. Reichwein comes to trial without some clarity as to his income, a court will be hard pressed to come to the same conclusion that I have today.

[68] A number of heads of disclosure are set out in the Applicant’s affidavit sworn January 18, 2016. The disclosure that the Applicant now requests is based upon her Notice to Produce as well as the disclosure already provided by Mr. Reichwein.

[69] All disclosure set out below should be provided within 60 days of this order unless stated otherwise.

[70] The issues of disclosure concerning Mr. Reichwein are as follows:

(a) Financial Statements of ATV Adventure Tours and Adventure Tours

[71] Ms. Palmer at the motion and the interests of proportionality abandoned her claim for a full business valuation. However she states that she has not received the financial statements of the business as she is entitled to under paragraph 5 of rule 13(3.3) of the Family Law Rules. That rule states that if a party had an interest in a sole proprietorship on the valuation date he or she is to provide the “financial statements of the party’s business or professional practice”.

[72] Mr. Reichwein acknowledges that he has not provided the financial statements of the business. He says that the financial statements are in an 80-foot long storage locker and were moved there after the closing of the sale of the matrimonial home. He says that he simply cannot be expected to dig that through that documentation to find those financial statements.

[73] As noted above, the financial statements for a business for the last three years preceding the valuation date are necessary items of disclosure in matrimonial proceedings under rule 13(3.3). As well, Mr. Reichwein knew that this matter was in court around the time that the sale of the matrimonial home occurred and around the time he was storing items from the matrimonial home pursuant to the order of Graham, J. made October 16, 2014. He should have known that the financial documents related to the business may very well be an issue as he had already arranged for a transfer of the ATVs in September 2014 prior to the closing of the sale of the home. Certainly Mr. Reichwein bears some responsibility for the loss of those documents and as well bears a responsibility to locate and disclose those documents to Ms. Palmer. Who else, after all, is in a better position to obtain the financial statements of this sole proprietorship other than the owner of that business?

[74] Accordingly, there shall be an order that Mr. Reichwein disclose the financial statements of the business for the three years prior to the valuation date as well as for the 2014 and 2015 fiscal years of both Adventure Tours and ATV Adventure Tours. He shall also disclose any and all income and expense journals in his possession concerning both businesses for the time periods noted above as well as any and all HST returns. If he does not have these documents, he is to explain how these essential business records were kept and provide those business records.

(b) Further and Better Financial Statement

[75] Ms. Palmer requests that Mr. Reichwein provide a further and better financial statement for the business. She states that Mr. Reichwein’s financial statement is deficient for a number of reasons. She submits that the financial statement does not contain a value for household goods and furniture notwithstanding the fact that Mr. Reichwein admitted in his affidavit that he would agree Ms. Palmer’s valuation of the matrimonial home contents of $50,000.

[76] Ms. Palmer also valued the inventory from Mr. Reichwein’s previous business involving the installation of car stereos at $60,000. Mr. Reichwein says that he gave that inventory away as it had no value. Ms. Palmer complains that this inventory is also not adequately disclosed in the financial statement. However, Ms. Palmer appears to have detailed knowledge of the inventory as set out in her materials.[^11] It is obvious that, as with the contents of the matrimonial home, the parties are far apart on this issue.

[77] As well Ms. Palmer has asked for certain items to be removed from the financial statement including a $25,000 debt to Mr. Reichwein’s parents and Mr. Reichwein’s date of marriage assets as the Respondent is unable to provide supporting documentation.

[78] A financial statement is both for the purposes of disclosure and as well to set out a party’s position regarding income and matrimonial assets. Deficiencies in a financial statement do not give rise to a claim for a further financial statement; they give rise to the other party being able to cross-examine and point out flaws in that financial statement. The contents of a party’s financial statement may very well affect his or her credibility. There is, however, as far as I know no remedy to force a party to file a new financial statement to deal with inconsistencies in a former financial statement.

[79] Specifically regarding household contents, if Mr. Reichwein has not put in a value for household contents which are jointly owned and which have been valued by Ms. Palmer of $50,000, he may be cross-examined on that issue at the questioning which was ordered by Olah, J. at the case conference. As well, if Mr. Reichwein cannot support with documentation certain items in the financial statement, he may be cross-examined on that and a judge may make a finding as to his assertions at trial. The fact that no supporting documentation is available for an item in a financial statement, especially in regard to an item owned on the date of marriage some more than 20 years ago, does not mean that Mr. Reichwein can prove those items by oral or viva voce evidence. As such, again Ms. Palmer cannot insist upon any financial statement because documentation may not be available to support the items in the financial statement. She also cannot insist on a further financial statement in order to force Mr. Reichwein to admit certain facts that she wishes him to admit.

[80] Ms. Palmer’s request for a further and better financial statement, subject to the updating requirements contained in the rules, is dismissed.

(c) Valuations of ATVs

[81] Mr. Reichwein has produced a valuation of the ATVs by an individual named “Chris” who says that the seven ATVs that he looked at and valued were worth some $13,700.

[82] It is clear that a party has a duty to value assets which belong to him. A full business valuation was not worthwhile in this case due to the nature of the business and the obviously limited value of the business. However the hard assets of the business being the ATVs owned by Mr. Reichwein on the date of separation were his assets and it was his responsibility to provide a valuation of those assets.

[83] Ms. Palmer states that the valuation of the ATVs on its face deficient. Certain vehicles were left out of the valuation as set out in the transfers of the vehicles to Elizabeth Reichwein. As well, the name of the expert was not provided; nor were his qualifications. Ms. Palmer also complains that the business that valued the ATVs has an ongoing business relationship with Mr. Reichwein and as such is no an unbiased valuator of the vehicles.

[84] Rule 20.1(10) of the Family Law Rules points out the content of an expert’s report. Chris’s report purports to be a valuation of certain vehicles and as such must comply with rule 20(10). Under Rule 20.1, the expert’s name, address and area of expertise must be inserted in the report as should be the expert’s qualifications. The expert must acknowledge his duty to be impartial which would address the issue of bias raised by Ms. Palmer.

[85] As such Mr. Reichwein has not provided a value of the vehicles and business assets set out in his financial statement as of the date of separation which is admissible at trial. He must do so. There shall be an order to go that Mr. Reichwein provide a value of the ATVs and vehicles belonging to the business Adventure Tours within 60 days of the date of this order. That report must comply with rule 20.1 of the Family Law Rules and must include all of the vehicles transferred by Mr. Reichwein to his mother Elizabeth Reichwein.

(d) Employment Contract

[86] Ms. Palmer has requested copies of any and all employment contracts related to ATV Adventure Tours and its employees.

[87] Mr. Reichwein has answered this request with advice that there are no employees or employment contracts respecting ATV Adventure Tours. The only possible employee is Mr. Reichwein and as noted above, his role within the business remains ambiguous. That motion is dismissed.

(e) Copies of All Applications for Loans, Lines of Credit, Credit Cards and Mortgages since January 1, 2010

[88] None of these have been provided by Mr. Reichwein.[^12] Mr. Reichwein advises that none of the lines of credit or credit cards have been taken out since 2010; they all pre-dated January 1, 2010. Considering that Mr. Reichwein only began Adventure Tours in 2009 or so, credit applications prior to that date are irrelevant to Mr. Reichwein’s present income. Therefore, unless Ms. Palmer can demonstrate that any of these loans were taken out since that date, this request for disclosure has been answered in full.

(f) ScotiaBank Personal Savings Account Ending in No. 9889

[89] Ms. Palmer’s solicitor, Ms. Pengelley, advises that she and her client have not received the statements for account number 9889 which is noted on the Applicant’s financial statement as being close to zero on the date of separation.

[90] The bank statement for the date of separation has been provided. It is apparent from the statements that this is account into which Mr. Reichwein’s WSIB payments are deposited. Otherwise there does not seem to be much in the way of activity in this account and the account is not useful for the purposes of determining income other than Mr. Reichwein’s WSIB monthly payments. The amount in the account of the date of separation has been provided. No further statements need be provided by Mr. Reichwein.

(g) Request for CIBC Bank Account Statements

[91] There is no evidence that Mr. Reichwein had a personal CIBC account in either his financial statement or elsewhere. Without some evidentiary foundation that Mr. Reichwein has a personal CIBC bank account no statements for this account need be provided.

[92] I am going to order however that Mr. Reichwein provide correspondence from the CIBC confirming what accounts he had with CIBC on the date of separation. If that letter discloses a bank account, disclosure must be provided of details of that bank account and statements from that bank account from the date of separation to the present.

(h) RRSP on Date of Marriage

[93] Mr. Reichwein alleges that he had savings at the date of marriage of $26,000. Ms. Palmer has requested documentary proof of this account.

[94] Disclosure is not only for the purposes of providing necessary information for a party to make their case; it is also necessary to disclose the case that a party must meet at trial. Mr. Reichwein must prove his date of marriage deductions under the Family Law Act (see s. 4(3) of the Family Law Act). As such Mr. Reichwein must prove his date of marriage deductions either through documentary evidence or viva voce testimony. If Mr. Reichwein advises that he does not have his date of marriage account documentation then he obviously must prove those deductions through viva voce testimony. If he is unable to do so on the balance of probabilities I presume that the deduction will be disallowed by the trial judge.

[95] Accordingly, if Mr. Reichwein states that he has no documentation regarding his date of marriage accounts, I am content to take him at his word. He will obviously not be permitted to file documentation at trial later showing the date of marriage deductions without prior and reasonable disclosure to the Applicant.

(i) $20,000 Cost to Repair Roof

[96] Mr. Reichwein claims that he spent $20,000 to repair the roof of the matrimonial home prior to its sale. He claims reimbursement for the Applicant’s share of that repair (presumably one half based upon her interest in the home). He says that although he knows who the money was paid to he cannot locate an invoice or proof of payment of this amount.

[97] If Mr. Reichwein claims a credit respecting the repairs to the roof he must prove that he expended those monies on that capital repair. If he is unable to do so on the balance of probabilities then again that credit will be disallowed at trial.

[98] Mr. Reichwein is to provide the name, address and telephone number of the person that he says that he paid for the roof repair. If there are other parties that Mr. Reichwein paid for repairs to the home similarly he must provide name, addresses and telephone numbers of those persons.

(j) Allegation of Damage to ATV and Tractor

[99] Mr. Owen claims on behalf of Mr. Reichwein that Ms. Palmer caused damage to the Kubota Tractor which cost $12,000 to repair. The cost of these repairs is set out in an email from Ken Day which purported to value the Kubota tractor.

[100] Mr. Reichwein shall provide particulars of the alleged damage to the Kubota tractor and as to how that damage occurred. He is to provide particulars of the damage and as to how the $12,000 repairs were calculated. If there is any documentary evidence such as estimates for repair to the damage, police reports or otherwise he is to provide that to Ms. Palmer’s solicitor within 60 days of this order.

(k) Car Stereo Equipment

[101] Ms. Palmer has estimated the car stereo equipment to be worth approximately $60,000. Mr. Reichwein says the car stereo equipment, inventory left over from a now defunct business, was worthless and that he gave it away.

[102] Mr. Reichwein is to provide the name, address and telephone number of the individual who received the car stereo equipment.

(l) Monthly Invoices for Storage

[103] Mr. Reichwein’s mother provided a somewhat astonishing bill of $33,000 for storage of household contents and other items.

[104] If Mr. Reichwein is claiming costs of storage pursuant to the order of Graham, J. dated October 16, 2014, he is to provide all storage invoices for which he has making a claim. If these storage invoices are on credit card statements provided to Ms. Palmer, particulars of those charges and where they appear on credit card statements are to be provided to Ms. Palmer. It is unfair if Mr. Reichwein is making a claim for these costs to make Ms. Palmer comb through all of the credit card statements to determine where storage charges can be found.

[105] It is up to Mr. Reichwein to provide clarity as to any claim for storage that he wishes to make and to particularize that claim for both the Applicant and for the trial judge.

(m) Family Debt and Inheritances

[106] Mr. Reichwein claimed a $12,000 family debt as a deduction. He also claimed that he borrowed this money from his parents on the date of marriage.

[107] In submissions there was some confusion. I was advised that the $12,000 debt had been repaid and was no longer an issue. The affidavits confirmed that the $12,000 was paid from the sale of a vehicle some time ago, but that interest remained outstanding. In any event I understand that it is Mr. Reichwein’s position that he cannot locate any documentation concerning this debt.

[108] Again the same would apply as noted above; if Mr. Reichwein needs to prove this debt, he may attempt to do so through viva voce evidence. He will not be permitted to ambush the Applicant by presenting documentary evidence at trial respecting this debt if it is not produced well prior to trial. I note that, without documentary proof, it will be difficult for either Respondent to make out a claim for interest or prove the unpaid portion of the debt.

[109] Mr. Reichwein to provide all documents in respect of this debt which may be in his possession.

[110] I have ordered that the Respondent, Elizabeth Reichwein provide disclosure as to this debt including a calculation of the amount owing. She is the creditor and should be made to provide particulars of a debt that she apparently still maintains is partly unpaid.

[111] There is a claim as to details of Mr. Reichwein’s $53,000 inheritance. I do not understand Mr. Reichwein to be claiming this as a deduction as there are no assets into which this inheritance can be traced. The money is gone. The disclosure of the particulars of Mr. Reichwein’s inheritance is therefore irrelevant to the issues before the court.

Disclosure by Elizabeth Reichwein

[112] Elizabeth Reichwein purports to be the transferee of the business now known as ATV Adventure Tours. She accepted a transfer of the ATVs used in that business as “security” to insure that she and her husband are protected in respect of the purchase of 200 acres of land in Blue Mountains.

[113] I have already commented on the ambiguity and lack of clarity respecting this transfer. Notwithstanding Elizabeth Reichwein’s transfer of the business, her son continues to operate the business. She says that her son is an employee; yet she has not provided T4 slips to show that he is an employee or to show that statutory deductions are being made in respect of her son. Mr. Reichwein has answered his undertaking to provide employment contracts by stating there are no employment contracts. The business income continues to be deposited into Mr. Reichwein’s account and Mr. Reichwein says that he is cashed in RRSPs to pay business expenses.

[114] The lack of clarity in this transfer and the lack of consideration for the ATVs has made Elizabeth Reichwein liable to provide disclosure and has involved her in this litigation. In hindsight, there appears to be a certain amount of ineptness in this transfer of assets and the transfer of assets appears to the Applicant to be an attempt to cover up and avoid liability for the Respondent Husband to pay support in these matrimonial proceedings. Ms. Pengelley has asked for extensive disclosure by way of a Notice to Produce attached as Schedule B to the Notice of Motion and earlier served on Elizabeth Reichwein. Again in the interest of proportionality the request for a full business valuation of ATV Adventure Tours was abandoned. A number of other items of disclosure were also abandoned, including wished a list of items contained in the matrimonial home and agreements concerning the business. However the disclosure that continues to be requested from Elizabeth Reichwein is a follows:

(a) A value of 24 Cloughley Drive Property in Barrie, Ontario (the property in which Elizabeth Reichwein and her husband live in) and the ATVs and Vehicles

[115] I cannot see the relevance of the value of the property in which Elizabeth Reichwein and her husband reside. This property is not used for business purposes. It was estimated in the credit application as being worth $450,000 and that will have to do. The request for disclosure of an opinion value of that property is dismissed.

[116] I have already made an order as to the value of the ATV vehicles as of the date of separation. Again that is only relevant value in this proceeding to the Applicant.

(b) Income Tax Documentation

[117] As requested the Respondent Elizabeth Reichwein shall provide her 2015 income tax return when it is prepared along with her Notice of Assessment when issued.

[118] She has also stated that the Respondent Husband is her employee only. This appears to be inconsistent with the evidence as Mr. Reichwein appears to be operating the business and also appears to be in receipt of the business income. He has invested his own money in the business and does not seem to be receiving a salary. That being said if Mr. Reichwein is an employee of his mother, she is obligated to withhold tax from his salary and provide a T4 slip in respect of Kevin Karl Reichwein.

[119] There is a serious lack of clarity as to Mr. Reichwein’s income, and I fear this may be purposeful. Based upon Elizabeth Reichwein’s assertions that she operates the business and that Kevin Reichwein is her business’ sole employee, she is obliged at law to provide a T4 slip to Mr. Reichwein. An order for disclosure of the T4 slip in respect of Kevin Karl Reichwein shall go.

(c) $12,000 debt owing to Elizabeth and Karl Reichwein

[120] Again there appears to be some ambiguity respecting this debt. During argument the Respondent said that this debt was no longer an issue. However, according to the Respondent Husband’s affidavit sworn on October 5, 2015 it remains so and he claims about $50,000 is now owing on this debt.[^13]

[121] It is up to the Respondents to prove this debt and the amount owing under it. If there is a claim for interest, there must be some document under which interest can be claimed other than assertions in an affidavit. As with Kevin Reichwein’s income, Ms. Palmer is entitled to clarity as to the amount being claimed under this debt. Elizabeth Reichwein may confirm that she and her husband are abandoning any claim for payment of this debt. Alternatively, the Respondent Elizabeth Reichwein is to produce any evidence she has of this debt including the amount advanced, any documentary evidence of the debt in her possession (including proof of advance, a promissory note or otherwise) and payment history and calculation of the amount owing to her and her husband for this debt.

(d) Business Documentation

[122] From argument, it appeared that the Applicant had abandoned several claims for business disclosure from Elizabeth Reichwein. She no longer wished disclosure of agreements concerning the business based upon the assertion that there were none.

[123] However the Applicant points out that certain documents are being destroyed which are waivers of liability signed by customers of ATV Adventure Tours. I agree with the Applicant when she says that this is only hard evidence of the present clientele of ATV Adventure Tours in light of the apparent failure of both Elizabeth and Kevin Reichwein to produce income and expense journals of ATV Adventure Tours. It is mystifying as to why the Respondents would think to destroy those waivers of liability when this litigation is ongoing and when that documentation is relevant.

[124] There will be an order to go that all future client documentation including waivers of liability shall be retained by the Respondents and produced on an ongoing basis to trial.

[125] Finally, Elizabeth Reichwein shall produce the financial statements of ATV Adventure Tours as well as all business ledgers respecting this business, including HST returns and income and expense journals respecting this business as they are prepared up to the date of trial. If they do not exist, she is to provide an explanation as to why these records are not being kept and as to how the income and expenses of this business are being recorded and calculated.

(e) Personal and Business Credit Card Statements

[126] The Applicant has alleged certain business and credit card statements are missing from the disclosure.

[127] I do not find Elizabeth Reichwein’s credit card statements prior to the transfer of the business assets to her in September 2014 to be relevant. Once the business was transferred her credit card statements become relevant both as to whether she is operating the business and as to income from the business. Accordingly there shall be an order to go that the Respondent Elizabeth Reichwein provide all BMO MasterCard statements (account number ending in 3662) from September 1, 2014 to the present. The same would apply to AMEX credit card statements (account number ending in 91007) from September 1, 2014 on to the present. The same would finally apply to the Wells Fargo business credit line (account number ending in 7024) from September 1, 2014 on to the present.

[128] Finally, the Respondent is to produce any and all statements in respect of Wells Fargo business line of credit (account number ending in 9830) from September 1, 2014 to the present.

(f) Purchase of Blue Mountains Property

[129] Ms. Reichwein and her husband purchased the 200-acre property at Blue Mountains for $315,000 in respect of ATV Adventure Tours.

[130] Information respecting this purchase is relevant as to the intended use of the property upon which the Respondent’s case is grounded. The Respondent Elizabeth Reichwein to produce the Agreement of Purchase and Sale in respect of the purchase of that property as well as the reporting letter from her solicitor in respect of the purchase of the property and enclosures.

Questioning

[131] The Applicant requests an order for questioning within 60 days of production of the documents noted above. She also requests an order for questioning notwithstanding the failure of the Respondent Husband to provide his Notice to Produce and an order that Mr. Reichwein not be permitted to issue a Notice to Produce.

[132] Mr. Reichwein has now served his Notice to Produce on the Applicant. This is no longer an issue.

[133] The parties already have an order for questioning. There is no evidence either of the Respondents was avoiding the scheduling of questioning. There is no necessity for setting a time limit for questioning and this issue may be left to counsel to schedule the questioning. That motion is dismissed.

Household Contents

[134] The Applicant requests an order that the household contents be transferred to another storage facility or that they be transferred to the Applicant with a value of $1,000.

[135] It is ironic that the Applicant is requesting this relief when she has herself valued the household contents as being worth approximately $50,000. This would presumably mean that the Applicant’s one half share of the household contents is worth $25,000, one half of the Applicant’s value of those assets, which Kevin Reichwein apparently agreed to.

[136] Storage fees and household contents were before this court on return of the Applicant’s ex parte motion on October 16, 2014, and the Applicant had then requested that she be able to attend at the matrimonial home to obtain the household contents or her portion of the household contents because she could not afford to pay half of the storage fees. At that time, Graham J. ordered that Kevin Reichwein store the contents of the home and otherwise dismissed the Applicant’s motion. This court has spent enough time on household contents which are likely not worth anything like the amount estimated by the parties, and I am not revisiting that issue. I have ordered disclosure of the storage invoices and I am not otherwise willing to make a determination that the storage fees paid by Mr. Reichwein for the storage facility are unreasonable based upon the evidence available to me.

[137] That motion is dismissed.

Costs

[138] Ms. Palmer requests an order for $3,000 in costs in sanction for failure to produce documentation. She requests this costs sanction from both Respondents. She further requests and $1,100 costs award in relation to the June 16, 2015 case conference.

[139] The issue of costs is to be determined once Costs Submissions are made, Bills of Costs produced and Offers to Settle produced. Accordingly the Applicant and then the Respondents shall provide Costs Submissions on a ten day turnaround. Costs Submissions including submissions regarding costs of the case conference to be no longer than five pages in length not including Offers to Settle and Bills of Costs.

Order

[140] There shall therefore be a temporary order as follows:

a. The motion to join Karl Reichwein as a Respondent and to amend the Application is dismissed;

b. The motion for spousal support is dismissed without prejudice;

c. Kevin Reichwein to provide the following disclosure within 60 days of the date of this order:

i. Kevin Reichwein shall disclose the financial statements of the business for the three years prior to the valuation date as well as for the 2014 and 2015 fiscal years of both Adventure Tours and ATV Adventure Tours. He shall also disclose any and all income and expense journals in his possession concerning both businesses as well as HST returns for the time periods noted above. If he does not have these documents, he is to explain how these essential business records were kept and provide those business records.

ii. The motion for a further and better financial statement from Kevin Reichwein is dismissed;

iii. Kevin Reichwein shall provide a value of the ATVs and vehicles belonging to the business Adventure Tours as of the valuation date. That report must comply with rule 20.1 of the Family Law Rules and must include all of the vehicles transferred by Mr. Reichwein to his mother Elizabeth Reichwein.

iv. The request for disclosure of all applications for loans and credit cards is dismissed as being answered in full.

v. The request for further statements from Scotiabank account number ending with 9889 is dismissed;

vi. Kevin Reichwein shall provide correspondence from the CIBC confirming what accounts he had with CIBC on the date of separation. If that letter discloses a bank account, disclosure must be provided of details of that bank account and statements from that bank account from the date of separation to the present.

vii. The request for disclosure of documentary proof of Kevin Reichwein’s RRSP on the date of marriage is dismissed as Kevin Reichwein has advised that this documentation is not available.

viii. Kevin Reichwein is to provide the name, address and telephone number of the person that he says that he paid for the roof repair. If there are other parties that Mr. Reichwein paid for repairs to the home similarly he must provide name, addresses and telephone numbers of those persons.

ix. Kevin Reichwein shall provide particulars of the alleged damage to the Kubota tractor and as to how that damage occurred. He is to provide particulars of the damage and as to how the $12,000 repairs were calculated. If there is any documentary evidence such as estimates for repair to the damage, police reports or otherwise he is also to provide that to the Applicant’s solicitor.

x. Kevin Reichwein is to provide the name, address and telephone number of the individual who received the car stereo equipment.

xi. If Mr. Reichwein is claiming costs of storage pursuant to the order of Graham, J. dated October 16, 2014, he is to provide all storage invoices for which he has making a claim. If these storage invoices are on credit card statements provided to Ms. Palmer, particulars of those charges and where they appear on credit card statements are to be provided to the Applicant.

xii. Kevin Reichwein to provide all documents in respect of the $12,000 debt to his parents which may be in his possession. The motion as to particulars of his inheritance is dismissed.

d. The Respondent, Elizabeth Reichwein to provide the following disclosure within 60 days of the date of this order:

i. The motion for a valuation of 24 Cloughley Drive, Barrie, Ontario as well as the ATVs and vehicles is dismissed;

ii. Elizabeth Reichwein shall provide her 2015 income tax return when it is prepared along with her Notice of Assessment when issued. As well, she shall provide the T4 issued to Kevin Reichwein when issued;

iii. Elizabeth Reichwein may confirm that she and her husband are abandoning any claim for payment of the $12,000 debt. Alternatively, the Respondent Elizabeth Reichwein is to produce any evidence she has in her possession of this debt including the amount advanced, any documentary evidence of the debt in her possession (including proof of advance, a promissory note or otherwise) and payment history and calculation of the amount owing to her and her husband for this debt.

iv. All future client documentation respecting ATV Adventure Tours including customer waivers of liability shall be retained by the Respondents and produced on an ongoing basis to the commencement of trial.

v. Elizabeth Reichwein shall produce the financial statements of ATV Adventure Tours as well as all business ledgers respecting this business, including HST returns and income and expense journals respecting this business as they are prepared up to the date of trial. If they do not exist, she is to provide an explanation as to why these records are not being kept and as to how the income and expenses of this business are being recorded and calculated.

vi. The Respondent Elizabeth Reichwein to produce the Agreement of Purchase and Sale in respect of the purchase of the Blue Mountain property as well as the reporting letter from her solicitor in respect of the purchase of the property and enclosures.

e. The motion for questioning is dismissed.

f. The motion regarding storage charges and household contents is dismissed;

g. Costs to be spoken to.

McDERMOT J.

Date: February 2, 2016

[^1]: O. Reg. 114/99

[^2]: R.S.O. 1990, c. F.3

[^3]: See correspondence from Terry Wilms dated June 2, 2014 attached as Ex. 24 to the Affidavit of Kevin Reichwein sworn October 5, 2015.

[^4]: R.S.O. 1990, c. F.29

[^5]: See correspondence from Dr. D’Souza dated January 18, 2016 at Tab 39 of V. 4 of the Continuing Record. The letter does not appear to have been attached as an exhibit to an affidavit. However see also the correspondence from Dr. Laura Chan dated June 30, 2015 attached as Ex. A to Elizabeth Reichwein’s affidavit sworn August 6, 2015, which also confirms Karl Reichwein’s dementia in the same terms as Dr. D’Souza.

[^6]: R.R.O. 1990, Reg. 194

[^7]: See the affidavit of Sharon Reichwein sworn October 5, 2015 at Tab 29 of Volume III of the Continuing Record, para. 6.

[^8]: The income tax returns of Mr. Reichwein confirm that he only cashed in $6,740.69 from his RRSPs meaning gross business income of more than $80,000. See below.

[^9]: See Kevin Reichwein’s affidavit sworn October 5, 2015, Ex. 37.

[^11]: See Ex. L to the affidavit of Sharon Reichwein (now Palmer) sworn September 16, 2005.

[^12]: Elizabeth Reichwein provided her credit application for a line of credit loan with Meridian Credit Union.

[^13]: Paragraph 79 of Kevin Reichwein’s affidavit sworn October 5, 2015.