Veskovic v Nielsen, 2022 SKCA 134

Court of Appeal for Saskatchewan Docket: CACV3887 Citation: Veskovic v Nielsen , 2022 SKCA 134 Date: 2022-11-23 Between: Boris Veskovic Appellant (Petitioner) And Jennifer Nielsen Respondent (Respondent) Before: Richards C.J.S., Jackson and Barrington-Foote JJ.A. Disposition: Appeal allowed in part Written reasons by: The Honourable Chief Justice Richards In concurrence: The Honourable Madam Justice Jackson The Honourable Mr.

Justice Barrington-Foote On appeal from: DIV 652 of 2018, Regina Appeal heard: April 6, 2022 Counsel: Paul Korpan, K.C. and Mustafa Ghori for the Appellant James Vogel, K.C. for the Respondent Richards C.J.S. I. INTRODUCTION [ 1 ] The appellant, Boris Veskovic, and the respondent, Jennifer Nielsen, are involved in proceedings that engage the Divorce Act , RSC 1985, c 3 (2d Supp), and The Family Property Act , SS 1997, c F-6.3 . [ 2 ] This case presents two main issues. The first is whether Mr. Veskovic must obtain leave to appeal in order to prosecute his appeal.

I find that, as explained below, it is not necessary to resolve this issue because, even if leave is required, it should be granted nunc pro tunc . [ 3 ] The second issue concerns the scope of Mr. Veskovic’s entitlement to obtain information about various trusts and corporations in which he says Ms. Nielsen has an interest. A Queen’s Bench Chambers judge denied Mr. Veskovic’s application to obtain that information and he now seeks to have that ruling overturned. I conclude that Mr.

Veskovic is not entitled to the full range of information that he originally sought but that he is nonetheless entitled to some additional disclosure. II. BACKGROUND A. The trusts and corporations [ 4 ] In order to come to grips with the arguments advanced by Mr. Veskovic, it is necessary to begin by explaining the somewhat complicated set of relationships between and among the various trusts and corporations that occupy the playing field in this case. These are Cinnabar Family Trust [Cinnabar Trust], J & V Nielsen Ltd. [J & V], V & J Properties Ltd. [V & J Properties], and Lobo Family Trust [Lobo Trust].

It is also necessary to say a word about a testamentary trust contemplated by the will of Ms. Nielsen’s father. 1. Cinnabar Trust [ 5 ] Cinnabar Trust was created by a trust agreement [Cinnabar Trust Agreement] dated May 4, 2009. The initial trustees were Ms. Nielsen’s parents, James and Viola Nielsen, and John Breakey. The trustees enjoy an absolute discretion with respect to the distribution of capital and income to the beneficiaries. [ 6 ] Ms. Nielsen is one of the capital and income beneficiaries under the Cinnabar Trust Agreement. The other beneficiaries, at this point, are Viola Nielsen and Ms.

Nielsen’s two siblings. [ 7 ] Prior to Mr. Veskovic issuing his petition for divorce, Cinnabar Trust made payments to Ms. Nielsen in 2012, 2013, 2014, 2015 and 2016. She received $12,000, $14,000, $20,000, $35,000 and $25,000 respectively in those years. [ 8 ] Ms. Nielsen’s father died on March 10, 2018. Later that year, Mr. Breakey ceased to be a trustee of Cinnabar Trust and Ms. Nielsen was appointed a trustee. All of this happened before Mr. Veskovic’s petition was issued. [ 9 ] Cinnabar Trust owns all of the common shares of J & V.

It is unclear whether it holds other assets as well. [ 10 ] Speaking in somewhat broad terms, the Cinnabar Trust Agreement provides that trust property remaining as of May 3, 2030, is to be divided equally among Ms. Nielsen and her two siblings. The Trust Agreement contemplates agreements to the contrary being made among Ms. Nielsen and her siblings but, in the absence of any such agreement, the trust property is to be divided equally.

2. J & V [ 11 ] J &V is incorporated under the laws of Manitoba. As noted, Cinnabar Trust owns all of its common shares. Viola Nielsen owns all of its preferred shares. [ 12 ] J & V is an income and capital beneficiary of Lobo Trust. [ 13 ] Mr. Veskovic believes that J & V owns assets including mines and minerals and farmland. [ 14 ] Ms. Nielsen has been a director and officer of J & V since August 1, 2005. She does not own any of J & V’s shares. 3. V & J Properties [ 15 ] V & J Properties is also incorporated under the laws of Manitoba.

The record is somewhat inconsistent with respect to the ownership of its shares. Viola Nielsen deposed that, in light of the death of her husband, she now owns all of the shares of the corporation. The shareholders’ register, on the other hand, indicates that James and Viola Nielsen own the preferred and common shares, with the exception of a small number of common shares owned by Lobo Trust. The Chambers judge indicated, at paragraph 14 of her decision, that Lobo Trust is “the sole shareholder” of V & J Properties.

However, she then appears to have based her ruling, as per paragraph 36 of her decision, on the fact that Viola Nielsen owns all of the preferred shares and controls the corporation. This latter view of the situation is not disputed and, accordingly, I will proceed on that basis. [ 16 ] Ms. Nielsen has been an officer and director of V & J Properties since March 10, 2018. Ms. Nielsen is not a shareholder of V & J Properties. 4. Lobo Trust [ 17 ] Lobo Trust was created by a trust agreement dated May 5, 2009 [Lobo Trust Agreement].

Like Cinnabar Trust, the original trustees of Lobo Trust were James Nielsen, Viola Nielsen and John Breakey. Since the death of James Nielsen, the trustees have been Viola Nielsen and Mr. Breakey. [ 18 ] The capital and income beneficiaries of Lobo Trust are J & V, James Nielsen and Viola Nielsen. [ 19 ] The Lobo Trust Agreement provides for a distribution of trust property on May 4, 2030. In the event that neither James Nielsen nor Viola Nielsen are the trustees at the division date, the trust property is to be distributed according to any deed made and signed by them.

In the absence of any such deed, it is to be divided equally among Ms. Nielsen and her siblings. 5. The testamentary trust [ 20 ] James Nielsen’s will provided for the establishment of a trust that was to hold, among other things, his preferred shares in J & V and in V & J Properties. The net income of the trust was to be paid to Viola Nielsen during her lifetime. The trustee was also given an absolute discretion to pay Viola Nielsen amounts out of the capital of the trust property. Upon Viola Nielsen’s death, the trust property remaining at that time was to be divided equally among Ms. Nielsen and her siblings.

James and Viola Nielsen’s accountant averred in an affidavit that, due to changes in the law regarding spousal trusts that were made prior to James Nielsen’s death, the trust was not “possible” and that all of the preferred shares in issue were owned by Viola Nielsen. There are live issues here, as argued by Mr. Veskovic, about the status of the trust and about whether Ms. Nielsen’s interest in the residue of the trust is family property. However, Mr. Veskovic advises that those are not matters that need to be resolved in the context of this appeal. B. Procedural history [ 21 ] Mr. Veskovic and Ms.

Nielsen were married in 1998 and had three children. They separated in early 2018. [ 22 ] Mr. Veskovic filed a petition for divorce in December of 2018. Ms. Nielsen has not filed an answer or counter-petition but she did file a property statement in March of 2019. That statement did not disclose an interest in any of the trusts or corporations that are the subject of this appeal. [ 23 ] Mr. Veskovic filed a notice to disclose in June of 2020. He sought, among other things, “copies of all monthly and other bank statements of any account held by any trust which [ sic ] you are a trustee and/or beneficiary”.

In her reply, filed in July of that year, Ms. Nielsen indicated that she is a discretionary beneficiary under a trust and that the information sought by Mr. Veskovic in relation to the trust was not available to her. [ 24 ] Mr. Veskovic then filed a notice of application returnable on July 29, 2020. It sought an order compelling a complete response to his notice to disclose, including information with respect to Cinnabar Trust. [ 25 ] Mr. Veskovic also filed a notice to file income information on September 8, 2020.

It asked for various kinds of information including “a copy of the [Cinnabar Trust] settlement agreement and copies of the trust’s 3 most recent Financial Statements”. [ 26 ] Mr. Veskovic went on to file a notice of application returnable on October 16, 2020, seeking orders regarding child and spousal support and compliance with the notice to file income information. [ 27 ] Mr. Veskovic conducted a questioning of Ms. Nielsen on May 11, 2021. [ 28 ] Mr.

Veskovic then filed a notice of application returnable on July 30, 2021, wherein he sought answers to a number of questions concerning J & V, Lobo Trust and another corporation that had been put to Ms. Nielsen during questioning. The application

indicated that it was to be heard with the outstanding application to require Ms. Nielsen to comply with Mr. Veskovic’s notice to disclose(originally returnable on July 29, 2020) and his notice to file income information application (originally returnable on October 16, 2020). III. THE CHAMBERS DECISION [29] Mr. Veskovic took the position in Chambers that, in order to value Ms. Nielsen’s interest in Cinnabar Trust, he requiredinformation about J & V because J & V’s shares are owned by Cinnabar Trust. He contended that he also required information aboutLobo Trust because J & V is a beneficiary of Lobo Trust.

He asked for information about V & J Properties because Lobo Trust owns allof the common shares of V & J Properties. [30] The Chambers judge held as follows: (

a) Ms. Nielsen has only a discretionary beneficial interest in Cinnabar Trust and no legal or equitable right to demand any of itsincome or assets. As a result, it is not clear that further disclosure relating to the Trust would be “even marginally material or logicallyrelevant to the division of the parties’ family property” or that ordering further disclosure would “accord with the principle ofproportionality” (at para 34). As a result, Mr. Veskovic’s application for further information about Cinnabar Trust must be dismissed. (

b) The common shares of J & V are owned by Cinnabar Trust and the preferred shares are owned by Viola Nielsen. Ms. Nielsenis not a shareholder of J & V and, therefore, Mr. Veskovic’s application is dismissed as it relates to that corporation. (

c) The preferred shares of V & J Properties are owned by Viola Nielsen and the corporation is controlled by her. Ms. Nielsen hasno authority over V & J Properties and therefore Mr. Veskovic’s application must be dismissed as it concerns V & J Properties. (

d) Ms. Nielsen is not a beneficiary of Lobo Trust, discretionary or otherwise. Accordingly, Mr. Veskovic’s application withrespect to Lobo Trust is dismissed. IV. ANALYSIS A. The leave to appeal issue [31] Mr. Veskovic initiated the proceedings in this Court by filing a notice of appeal. He did not seek leave to appeal. Ms. Nielsensubmits that leave was required and that the appeal should therefore be set aside. [32] The statutory provisions bearing on the leave to appeal question are as follows: The Divorce Act 21

(1) Subject to subsections (2) and (3), an appeal lies to the appellate court from any judgment or order, whether final or interim,rendered or made by a court under this Act. …

(6) Except as otherwise provided by this Act or the rules or regulations, an appeal under this

section shall be asserted, heard and decidedaccording to the ordinary procedure governing appeals to the appellate court from the court rendering the judgment or making the orderbeing appealed. The Family Property Act 55 An appeal lies to the Court of Appeal for Saskatchewan from any order or judgment made or given on or pursuant to an applicationpursuant to this Act. The Court of Appeal Act, 2000 7(2) Subject to subsection (3) and

section 8, an appeal lies to the court from a decision: (

a) of the Court of Queen’s Bench or a judge of that court; and (

b) of any other court or tribunal where a right of appeal to the court is conferred by an enactment.

(3) If an enactment provides that there is no appeal from a decision mentioned in subsection (2) or confers only a limited right of appeal,that enactment prevails. [33] The key authority relied on by Ms. Nielsen is Rimmer v Adshead, 2003 SKCA 19, 224 DLR (4th) 372 [Rimmer]. It concerned aQueen’s Bench Chambers decision that had dismissed an application to compel answers to questions about family property. The discoveryhad been conducted in the context of a divorce proceeding.

The root issue was framed as being whether the right of appeal in question wasgrounded in s. 8(1) of The Court of Appeal Act, 2000, SS 2000, c C-42.1, or whether it was grounded in The Family Property Act or theDivorce Act. [34] Justice Jackson, writing for the Court, concluded that the words “order or decision made pursuant to this Act” in the DivorceAct and The Family Property Act could bear the

interpretation given to them in the

Canada Business Corporations Act, RSC 1985, c C-44,in Kelvin Energy Ltd. v Lee, (SCC), [1992] 3 SCR 235, i.e., as granting an appeal, as of right, from orders and decisionsmade pursuant to a power expressly conferred by the Act in question. However, she held that a procedural order of the sort before the

Court did not come within the scope of those words: [8] …we conclude that the right of appeal in the Divorce Act and The Family Property Act is limited to those judgments or ordersarising from a power specifically conferred by those statutes, to the exclusion of the variety of interlocutory decisions which may be madeunder the Rules of Court. Accordingly, this appeal finds its authority in The Court of Appeal Act, 2000.

See also: Dutchak v Dutchak, 2009 SKCA 89, 337 Sask R 46. [35] The decision made by the Chambers judge that is in issue here could be argued to have been made, at least in some part,pursuant to a power conveyed by the Divorce Act. That is because Mr. Veskovic sought disclosure not only in relation to proceedingsunder The Family Property Act, as per what is reflected in the decision of the Chambers judge, but with respect to child support as well. Asa result, s. 22(1) of the Federal Child Support Guidelines, SOR/97-175 [Guidelines], was engaged.

It provides that, where a spouse fails tosupply mandated information, the other spouse may apply for an order compelling its production. As relevant here, such informationwould include, as per s. 21(1)(g), “a copy of the [Cinnabar Trust] trust settlement agreement and copies of the trust’s three most recentfinancial statements”. On this view of things, and given the Court’s decision in Rimmer, leave to appeal would arguably not be aprecondition of Mr.

Veskovic being able to move forward with his appeal to the extent it concerns disclosure of Cinnabar Trust’s financialstatements. [36] I note here, however, that the case law nationally is not entirely consistent on the question of whether s. 21(1) of the DivorceAct provides a right of appeal, unqualified by the need to obtain leave, in relation to decisions made pursuant to an authority granted bythat Act. Some courts have taken the position reflected in Rimmer, but the Courts of Appeal of Ontario and Quebec have gone the oppositedirection.

See, for example: Rimmer at para 3; Patel v Whiting, 2020 SKCA 49 at paras 19–21; De Fehr v De Fehr, 2002 BCCA 577 atpara 14; R.Z. v D.Z., 2012 PECA 5 at para 18, 321 Nfld & PEIR 331; Elgner v Elgner, 2011 ONCA 483 at para 15, 105 OR (3d) 721,leave to appeal to SCC dismissed, ; Droit de la famille — 123147, 2012 QCCA 1966 at para 3.

This divergence in thecase law was raised during oral argument and was addressed by counsel in supplementary briefs. [37] In the end, however, I find it unnecessary to engage in any reconsideration of the Court’s approach to the appeal of decisionsmade pursuant to a power conferred by the Divorce Act. This is because, to the extent leave might be required in this case, it should begranted nunc pro tunc. The right of appeal issue considered in Rimmer can be addressed, if or when necessary, in a case where it arisesmore directly and is necessary to the resolution of the appeal. [38] I appreciate that Mr.

Veskovic did not formally apply for leave nunc pro tunc in the event it is determined that leave wasrequired. However, the parties proceeded as if that alternative was open to the Court, and I am therefore prepared to go forward on thatbasis. [39] As is well known, a decision about granting leave involves consideration of both the merits of the proposed appeal and itsimportance. See: Rothmans, Benson & Hedges Inc. v Saskatchewan, 2002 SKCA 119 at para 6, 227 Sask R 121. [40] As just noted, if leave is required with respect to any aspect of this appeal, it should be granted.

The Chambers decision raises asignificant question about the extent, if any, to which information about trust property should be disclosed in the context of a family lawproceeding where one of the parties to the proceeding is a beneficiary under the trust. The answer to that question is of significance wellbeyond the four corners of this case. Further, as explained below, Mr. Veskovic’s position with respect to this issue has enough strength towarrant granting leave. B. The merits of the appeal [41] Mr. Veskovic contends that the documents he seeks are required for both child support and family property purposes.

Hesubmits that the Chambers judge failed to properly understand the Cinnabar Trust Agreement and erred in her assessment of the relevancyof the information in question. As explained below, his submissions have considerable merit. [42] By way of an aside, I observe here that Ms. Nielsen says Mr. Veskovic did not refer to support or the Guidelines, as justifyingfurther disclosure in his notices of application returnable July 29, 2020, and July 30, 2021. On my understanding of the submission, shetherefore suggests that support-based arguments for disclosure are not properly on the table.

I am not moved by this concern. Mr.Veskovic did refer to The Family Property Act in his notice of application returnable July 30, 2021. That, of course, was the third notice ofapplication before the Chambers judge. 1. Relevant legislation [43] Two features of the legislative regimes relevant to this appeal inform the analysis required to address Mr. Veskovic’ssubmissions. The first is found in the Guidelines.

Section 13 thereof requires a court making an order for child support to first determinethe incomes of the parties.

Section 21 prescribes the income information that each spouse is required to produce. In relevant part, it readsas follows: 21

(1) A spouse who is applying for a child support order and whose income information is necessary to determine the amount of theorder must include the following with the application: … (

g) where the spouse is a beneficiary under a trust, a copy of the trust settlement agreement and copies of the trust’s three most recentfinancial statements; …

(2) A spouse who is served with an application for a child support order and whose income information is necessary to determine the

amount of the order, must, within 30 days after the application is served if the spouse resides in Canada or the United States or within 60 days if the spouse resides elsewhere, or such other time limit as the court specifies, provide the court, as well as the other spouse or the order assignee, as the case may be, with the documents referred to in subsection (1). (Emphasis added) [ 44 ] The other relevant statutory provision is in The Family Property Act .

Section 2(1) of that Act defines “family property” as follows: 2(1) In this Act: … “family property” means any real or personal property, regardless of its source, kind or nature, that, at the time an application is made pursuant to this Act, is owned, or in which an interest is held, by one or both spouses, or by one or both spouses and a third person, and, without limiting the generality of the foregoing, includes the following : (

a) a security, share or other interest in a corporation or an interest in a trust , partnership, association, organization, society or other joint venture[.] (Emphasis added) 2. Cinnabar Trust [ 45 ] Ms. Nielsen has disclosed some information about Cinnabar Trust: the Cinnabar Trust Agreement; resolutions from 2012 to 2016 concerning payments to beneficiaries; and documents concerning her appointment as a trustee. Other documents indicate that Cinnabar Trust is a shareholder of J & V. Ms.

Nielsen has disclosed no documents that would reveal the extent or nature of the property held by Cinnabar Trust or the income generated by that property. [ 46 ] The Chambers judge declined to order further disclosure concerning Cinnabar Trust because of her determination that Ms.

Nielsen has “only a discretionary beneficial interest” in the Trust and that, as a result, it was not clear that “further disclosure relating to [Cinnabar Trust] would be even marginally material or logically relevant to the division of the parties’ family property or that ordering further disclosure would accord with the principle of proportionality” (at para 34). In my respectful view, two difficulties are embedded in that line of analysis. [ 47 ] The first is tied to the Chambers judge’s reading of the Cinnabar Trust Agreement.

It is correct, as the Chambers judge found, that, during the life of the Trust, the trustees have absolute discretion with respect to the distribution of the Trust’s income and capital to the beneficiaries, including to Ms. Nielsen: Administration of Trust Property 3.1 The Trustees shall hold the Trust Property in trust and administer it for the primary purpose of allowing dividends to be paid to a Corporate Beneficiary, if applicable, for asset protection purposes.

To the extent that the Trustees, in their absolute discretion, determine that no corporate beneficiary requires all or any portion of the income or all or any portion of the capital of the Trust for its respective purposes, the Trustees may choose to distribute any of such income or capital on the following basis: Distribution of net annual income among Primary Beneficiaries (

a) The Trustees may, in their absolute discretion, pay all or any amount or amounts of the net annual income derived from the Trust Property to or for the benefit of any one or more of the Primary Beneficiaries, in such proportion or proportions, and in such manner as the Trustees, in their absolute discretion, determine. … Discretionary power to encroach on capital (

b) The Trustees may, in their absolute discretion, encroach upon the capital of the Trust Property and pay or transfer any amount or amounts of the capital of the Trust Property to or for the benefit of any one or more of the Primary Beneficiaries, subject to paragraph (e), at such time or times, in such proportion or proportions, and in such manner as the Trustees, in their absolute discretion, determine. When encroaching upon the capital of the Trust Property, the Trustees shall be entitled to do so to such extent, including the complete depletion thereof, as they in their absolute discretion determine to be advisable. [ 48 ] However, the Chambers judge did not refer to

article 3.1(

c) of the Cinnabar Trust Agreement. It provides that trust property remaining as of the division date, May 3, 2030, is to be distributed equally among Ms. Nielsen and her siblings if the initial trustees are no longer the trustees. It is clear that they will not be, given that Ms. Nielsen’s father and Mr. Breakey are no longer on the scene. Agreements to the contrary can be made among Ms. Nielsen and her siblings but, in the absence of such an agreement, the division is to be equal. This means, in effect, that Ms.

Nielsen is in a position to ensure that, as of May 3, 2030, she will receive at least one-third of the trust property existing as of that date. Accordingly, while it is possible that some, or perhaps even all, of the capital and income of the trust might be distributed before the division date, Ms. Nielsen would appear to have a clear claim to any trust property in existence as of May 3,

Article 3.1(

c) reads as follows: Distribution of capital among Primary Beneficiaries

(

c) On the Division Date, the Trustees shall pay or transfer the whole of the Trust Property then remaining in their hands to or for the benefit of any one or more of the Primary Beneficiaries, in such proportion or proportions, and in such manner as the Trustees, in their absolute discretion, determine, there being no requirement on the Trustees to maintain an even hand among the Primary Beneficiaries and the Trustees shall have absolute discretion to exclude from any such distribution any of the Primary Beneficiaries and may in fact make distribution to only one such Primary Beneficiary.

If the initial Trustees are no longer the Trustees on the Division Date, the Trust Property then remaining shall be distributed as set forth in a Deed made by Jennifer Nielsen, Erica Nielsen and Christopher Nielsen and in the event that there be no such Deed, the Trust Property then remaining shall be divided amongst the said Jennifer Nielsen, Erica Nielsen and Christopher Nielsen in equal shares per stirpes. [ 49 ] The second, and more fundamental, problem with the Chambers judge’s analysis is that she concluded disclosure of additional Cinnabar Trust documents was not appropriate because Ms.

Nielsen has only a discretionary beneficial interest in the Trust. This reasoning does not take account of the fact that, as noted above, the Guidelines require the disclosure of “copies of the trust’s three most recent financial statements” when a spouse is a beneficiary under a trust.

Her approach also takes no account of the fact that The Family Property Act clearly defines “family property” to include “an interest in a trust”. [ 50 ] As this Court explained in Grosse v Grosse , 2015 SKCA 68 , 387 DLR (4th) 473, the reference to “an interest in a trust” in The Family Property Act comprehends both contingent and vested interests: [24] Subparagraph (

a) refers to, among other things, “an interest in a trust”. A spouse may have an interest in a trust as either a beneficiary or a trustee. Legal title to trust property rests with the trustee, while the objects of the trust ( i.e. , its beneficiaries) hold beneficial ownership of its property. Key to determining whether a spouse has an “interest” in a trust is the trust agreement.

That agreement should set out what constitutes the corpus of the trust, who the beneficiaries are, how the income and capital of the trust is to be distributed, who will administer the trust (the trustee(s)), what powers the trustee will have, how the trust can be dissolved, and what will happen should the trust fail. A spouse’s “interest in a trust”, may be contingent or vested.

Pursuant to subparagraph (a), it is the spouse’s “interest in a trust”, not the property, income or corpus of the trust, that constitutes family property and must be valued for division purposes. [ 51 ] It should be noted, of course, that the fact an interest in a trust is family property is something quite distinct from the question of the valuation of that interest for property division purposes. It is possible for an interest to have no value. See, for example: Gordon v Nielson , 2018 SKQB 207 at paras 153–157 . [ 52 ] In light of all of this, the real issue here is not whether Mr.

Veskovic is entitled to disclosure in relation to Cinnabar Trust. Rather, it concerns the extent of that disclosure. Ms. Nielsen contends that any additional demands in this regard would not respect the principle of proportionality expressed in Rule 5-2 of The Queen’s Bench Rules and suggests, in effect, that Mr. Veskovic is engaged in something of a fishing expedition when it comes to his request for additional documents. I am not persuaded by these arguments. Mr. Veskovic is entitled to attempt to put a value on Ms. Nielsen’s interest in Cinnabar Trust.

In order to do that, he must know the property held by the trust. Accordingly, I see nothing disproportionate in requiring Ms. Nielsen to produce the basic documents that speak to the value of the trust: its financial statements. I would therefore order that she disclose Cinnabar Trust’s annual financial statements for the three years prior to the date of petition, December 14, 2018, and its income tax returns for the taxation years 2016, 2017 and 2018.

That limited level of disclosure cannot be seen as being an offence to the notion of proportionality. [ 53 ] In coming to this conclusion, I appreciate that any disclosure of the financial affairs of Cinnabar Trust, J & V, V & J Properties and Lobo Trust is distasteful to Viola Nielsen. She sees these matters, understandably, as being very personal and confidential. However, the reality is that Ms. Nielsen is embroiled in divorce proceedings and, as is often the case in such circumstances, concerns about privacy must give way to the obligations of disclosure that come with such proceedings.

It might also be noted, on this front, that the disclosure of documents is not disclosure to the public at large. Any such documents may be used only for these proceedings and must be kept in confidence by Mr. Veskovic. See: Rule 15-6 of The Queen’s Bench Rules . 3. J & V [ 54 ] Ms. Nielsen has provided some disclosure with respect to J & V. This includes, most notably: shareholders’ and directors’ registers; and confirmation that J & V is owned by Cinnabar Trust and that J & V is a beneficiary of Lobo Trust. [ 55 ] The Chambers judge decided not to order additional disclosure with respect to J & V.

Her reasoning in that regard appeared to have two dimensions. On the one hand, she observed that J & V’s shares are held by Cinnabar Trust and that Ms. Nielsen’s beneficial interest in the Trust was “purely discretionary” (at para 35). On the other hand, after making this point, the Chambers judge went on to note that the preferred shares of J & V were held by Viola Nielsen and that Viola Nielsen controlled J & V. Observing that Viola Nielsen was not a party to these proceedings and that she refused to provide the disclosure sought by Mr.

Veskovic, the Chambers judge indicated that “[u]nder the circumstances” she would dismiss Mr. Veskovic’s application as it related to J & V (at para 35). In my view, this line of analysis is problematic. [ 56 ] With respect to the fact that Ms. Nielsen’s interest in Cinnabar Trust is only discretionary in nature, I see no basis for this being a reason to deny disclosure. As already explained, Ms. Nielsen’s interest in the trust is family property. In order to value that interest, it is necessary to understand the nature of the trust property. That property consists, at least in part, of J & V’s shares.

The value of those shares is self-evidently a reflection of the net assets owned by J & V. [ 57 ] I turn then to the idea that no order for disclosure is warranted or appropriate because J & V is controlled by Viola Nielsen and she refuses to provide disclosure. This line of thinking overlooks the fact that Ms. Nielsen is an officer and director of J & V. During oral argument, counsel for Ms. Nielsen acknowledged that, as such, Ms. Nielsen would thereby be able to obtain J & V’s financial statements and be in a position to disclose those documents. [ 58 ] In his notice of application returnable July 30, 2021, Mr.

Veskovic specified the disclosure he sought with respect to J & V. It was far reaching and included a request for information such as: “[f]ixed asset register or depreciation schedule, including the original

cost, net book value, and Fair Market Value for each asset or group of assets”; “[s]chedule of sales by product for each period for which an income statement is obtained”; and “[s]chedule of key-person life insurance”. However, in the course of oral argument in this Court, counsel for Mr. Veskovic took a less aggressive approach to this issue. [ 59 ] As explained above, Ms. Nielsen’s interest in Cinnabar Trust is family property. The shares of J & V appear to be a significant part of the assets held by Cinnabar Trust. As a result, Mr.

Veskovic has to understand how much those shares are worth in order to attempt to value Ms. Nielsen’s interest in the Trust. The most straightforward way of approaching that issue, at this stage of the litigation, is to give Mr. Veskovic access to J & V’s financial statements and income tax returns. Those documents are obviously relevant to the issues at stake in these proceedings and can no doubt be readily produced with minimal effort and at little or no cost. Ms. Nielsen raises concerns about the proportionality of ordering disclosure above and beyond what she has already provided.

However, disclosure that is limited to a few additional documents is not problematic on the proportionality front. [ 60 ] In the end, therefore, I would order Ms. Nielsen to disclose J & V’s financial statements for the three years prior to the date of petition, December 14, 2018, and the corporation’s income tax returns for the taxation years 2016, 2017 and 2018. 4. V & J Properties [ 61 ] Ms. Nielsen has provided Mr.

Veskovic with documents concerning V & J Properties that include, most importantly: directors’ registers indicating that she has been an officer of V & J Properties since March 10, 2018; shareholders’ registers; and a corporate profile report from the Companies Office of the Government of Manitoba. [ 62 ] Mr. Veskovic asked, by way of a draft judgment roll provided to this Court, that Ms. Nielsen be ordered to provide him with an extensive list of additional V & J Properties documents.

That list included such things as: “fixed asset register or depreciation schedule, including the original cost, net book value, and fair market value for each asset or group of assets”; “schedule of sales by product for each period for which an income statement is obtained”; “T4s for Company shareholders and employees related to company shareholders for the five years prior to the Date of Petition”; and “schedule of key-person life insurance”. That said, I take counsel for Mr.

Veskovic to have suggested in his oral submissions in this Court that a significantly reduced amount of disclosure might be appropriate. [ 63 ] The Chambers judge declined to order the additional disclosure sought by Mr. Veskovic. As explained above, she did this on the basis that V & J Properties is controlled by Viola Nielsen and that Viola Nielsen refuses to make the requested disclosure. This analysis takes no account of the fact that Ms. Nielsen is a director and officer of V & J Properties. As Ms. Nielsen’s counsel acknowledged in the context of the argument concerning J & V, that means Ms.

Nielsen has the ability to disclose at least some of the documents sought by Mr. Veskovic. [ 64 ] As noted above at paragraph 20, there is a controversy here about the status of the testamentary trust contemplated by James Nielsen’s will. This appears almost certain to be a live issue at trial that will engage questions about the value of V & J Properties’ shares. As a result, it seems appropriate that Ms.

Nielsen disclose V & J Properties’ annual financial statements for the three years prior to the date of petition, December 14, 2018, and V & J Properties’ income tax returns for the taxation years 2016, 2017 and 2018. 5. Lobo Trust [ 65 ] Ms. Nielsen’s disclosure with respect to Lobo Trust has been limited. She has provided Mr. Veskovic with the Lobo Trust Agreement, which lists J & V as a beneficiary, confirmation that Lobo Trust is a shareholder of V & J Properties, and confirmation that she is not a beneficiary of Lobo Trust. [ 66 ] In his July 30, 2021, notice of application, Mr.

Veskovic sought an order that would have required Ms.

Nielsen to disclose an extended list of additional documents from Lobo Trust, including: “[l]ist of subsidiaries, assets, or other businesses in which the Trust has an ownership interest, together with their financial statements”; “[w]ho makes the decisions regarding distributions from the Trust”; and “[d]etails of relationship between the Trustees and/or Beneficiaries”. [ 67 ] The Chambers judge declined to order further disclosure on the basis that her conclusion concerning that issue in relation to J & V was determinative of the situation concerning Lobo Trust, i.e., no further disclosure was warranted because Ms.

Nielsen has no control over Lobo Trust and, presumably, as well, because Ms. Nielsen’s interest in Cinnabar Trust – to which the income and assets of Lobo Trust might filter down through J & V – is only that of a “discretionary” beneficiary. [ 68 ] I see no bottom-line error in the Chambers judge’s conclusion with respect to Lobo Trust. Ms. Nielsen has no control over documents held by that Trust and no authority to acquire them. As a result, there is no proper basis on which to order her to provide disclosure of such documents.

As Rule 15-52(2) of The Queen’s Bench Rules recognizes, information requested in a notice to disclose must be limited to existing documents “in the control” of the opposite party. V. CONCLUSION [ 69 ] Mr. Veskovic’s appeal is allowed to the extent of requiring Ms. Nielsen to provide the following additional disclosure: (

a) With respect to Cinnabar Trust: (

i) Annual financial statements for the three years prior to December 14, 2018, the date of petition; and (ii) Income tax returns, and notices of assessment and reassessment, for the taxation years 2016, 2017 and 2018. (

b) With respect to J & V: (

i) Annual financial statements for the three years prior to December 14, 2018, the date of petition; and

(ii) Income tax returns, and notices of assessment and reassessment, for the taxation years 2016, 2017 and 2018. (

c) With respect to V & J Properties: (

i) Annual financial statements for the three years prior to December 14, 2018, the date of petition; and (ii) Income tax returns, and notices of assessment and reassessment, for the taxation years 2016, 2017 and 2018. [ 70 ] The limited scope of this order is intended to facilitate a measured approach to the disclosure exercise. It does not mean that Mr. Veskovic is precluded from seeking further disclosure at some later stage of these proceedings if he can make out a proper case for it.

This might include making a case in relation to documents sought, but not ordered to be disclosed, in this appeal. [ 71 ] In light of the fact that the disclosure being required of Ms. Nielsen is considerably narrower than what Mr. Veskovic was originally seeking, there will be no order with respect to costs. “Richards C.J.S.” Richards C.J.S. I concur. “Jackson J.A.” Jackson J.A. I concur. “Barrington-Foote J.A.” Barrington-Foote J.A.