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Contracts - Specific Performance. Giannopoulos v 1781994 Ontario Inc.
In Giannopoulos v 1781994 Ontario Inc. (Div Court, 2023) the Divisional Court considered an appeal of an an interlocutory order that, in a business dispute, ordered that the parties jointly-retain an accountant, and production of related records. The court analogized the orders to ones of contractual 'specific performance' and allowed the appeal:[5] On or about December 1, 2020 the parties retained the services of an accountant on a voluntary and non-determinative basis. The parties agreed that the accountant’s findings would be non-binding. ...
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[10] The parties argue this appeal on the basis that the motions judge effectively granted an injunction. While this is potentially one way of viewing the motion, the effect of the order is that the motions judge ordered specific performance of the retainer agreement. Specific performance of the contract is generally a secondary remedy imposed by the courts: see Co-operative Insurance Society Ltd. v. Argyll Stores (Holdings) Ltd., [1998] A.C. 1 (H.L.(E.)). In The Law of Contracts, (seventh edition) S.M. Waddams quoted Flint v. Brandon (1803), 8 Ves. Jun. 159, 32 E.R. 314 and stated that:“[t]he general principle was that specific performance was available whenever the legal remedy was insufficient to satisfy the needs of justice” (p.477). [11] In the case before the court a number of items stand out:1. the accountant’s retainer is not subject to any mandatory provision contained within the Rules of Civil Procedure;
2. the retainer agreement does not contain any mandatory language requiring the parties to continue with the retainer until the accountant completes the task;
3. the retainer agreement does not contain any provisions for the termination of the retainer;
4. the accountant communicated with the respondents without copying the appellants; and
5. the appellants have lost faith in the accountant’s independence and impartiality. ....
[13] The motions judgment enforced specific performance of a professional relationship where the client has lost confidence in the professional providing services. As noted above, specific performance is an unusual remedy and generally requires that monetary damages are incapable of remedying a breach of contract. That is certainly not the case in this instance in so far as there is nothing unique about the provision of services that would require specific performance. Requiring specific performance on a voluntary accountant-client relationship does not meet the legal threshold necessary for ordering specific performance.
[14] Put another way the motions judge did not have a basis in law to order that the joint retainer continue until the accountant completes the task assigned.
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