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Remedies - Specific Performance

Di Millo v. 2099232 Ontario Inc. (Ont CA, 2018)

In this case to Court of Appeal sets out the criteria for specific performance, with a specific comment on when tender may be avoided.

First the issue of tender:
[45] For a party to be entitled to specific performance, the party must show he or she is ready, willing and able to close: Time Development Group Inc. (In trust) v. Bitton, 2018 ONSC 4384 (CanLII), at para. 53; see also Norfolk v. Aikens (1989), 1989 CanLII 245 (BC CA), 41 B.C.L.R. (2d) 145 (C.A.). While tender is the best evidence that a party is ready, willing and able to close, tender is not required from an innocent party enforcing his or her contractual rights when the other party has clearly repudiated the agreement or has made it clear that they have no intention of closing the deal: McCallum v. Zivojinovic (1977), 1977 CanLII 1151 (ON CA), 16 O.R. (2d) 721 at p. 723 (C.A.); see also Dacon Const. Ltd. v. Karkoulis, 1964 CanLII 252 (ON SC), [1964] 2 O.R. 139 (Ont. H.C.).

[46] In McCallum, at p. 723, this court explained that the renunciation of a contract may be express or implied:
The renunciation of a contract may be express or implied. A party to a contract may state before the time for performance that he will not, or cannot, perform his obligations. This is tantamount to an express renunciation. On the other hand a renunciation will be implied if the conduct of a party is such as to lead a reasonable person to the conclusion that he will not perform, or will not be able to perform, when the time for performance arises.

...

[48] The principles around the requirement to tender are summarized succinctly by Perell J. in Time Development Group, at paras. 56-57:
Tender … is not a prerequisite to the innocent party enforcing his or her contractual rights. Tender is not required from an innocent party when the other party has clearly repudiated the agreement. Numerous cases have held that the law does not require what would be a meaningless or futile gesture. Moreover, when there is an anticipatory breach, the innocent party need not wait to the date for performance before commencing proceedings for damages or in the alternative for specific performance of the agreement. [Citations omitted.]
[49] Thus, when a party by words or conduct communicates a decision not to proceed to closing, the other party is released from any obligation to tender in order to prove he was ready, willing and able to close: see Kirby v. Cameron, 1961 CanLII 203 (ON CA), [1961] O.R. 757 (C.A.); Kloepfer Wholesale Hardware v. Roy, 1952 CanLII 8 (SCC), [1952] 2 S.C.R. 465.
Then the larger issue of the test for specific performance:
Issue #4: Is the appellant entitled to specific performance ?

[64] I have concluded that the appellant’s failure to tender does not preclude him from obtaining a remedy of specific performance. I have also concluded that he has demonstrated that he was ready, willing and able to close, which is a prerequisite to obtaining the remedy of specific performance. I turn to one final issue – whether specific performance is an appropriate remedy on the facts of this case.

[65] In Semelhago v. Paramadevan, 1996 CanLII 209 (SCC), [1996] 2 S.C.R. 415, at para. 21, the Supreme Court of Canada stated that “[i]t cannot be assumed that damages for breach of contract for the purchase and sale of real estate will be an inadequate remedy in all cases.” Specific performance should not be granted absent evidence that the property is “unique” or, in other words, that “its substitute would not be readily available”: para. 22.

[66] In Erie Sand and Gravel Ltd. v. Seres’ Farms Ltd., 2009 ONCA 709 (CanLII), 97 O.R. (3d) 241, at para. 110, this court agreed that “specific performance is not to be ordered for breach of contract unless damages are inadequate”. Gillese J.A. cited John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd. (2003), 2003 CanLII 52131 (ON CA), 63 O.R. (3d) 304 (C.A.), explaining what is meant by unique:
[116] … Weiler J.A., writing for the court, referred to para. 23 in 1252668 Ontario Inc. v. Wyndham Street Investments Inc., [1999] O.J. No. 3188, 27 R.P.R. (3d) 58 (S.C.J.) and stated, at para. 39:
I agree that in order to establish that a property is unique the person seeking the remedy of specific performance must show that the property in question has a quality that cannot be readily duplicated elsewhere. This quality should relate to the proposed use of the property and be a quality that makes it particularly suitable for the purpose for which it was intended.
[67] Whether or not a substitute is readily available will depend on the facts of the particular case. Uniqueness is therefore a fact-specific inquiry.


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