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Deposit – Time of the Essence Clause – No Waiver

Mikmada Development Group Inc. v. Conlon 2018 Ont SCJ

The purchaser wanted a declaration that an agreement of purchase and sale was still in effect. The agreement, modified by subsequent amendments, stated that a condition had to be waived by 5 PM on May 30, 2016 and a 2^nd deposit cheque of $130,000 be paid “upon” waiver. The purchaser waived the condition, but did not send the deposit cheque until June 1 to arrive on June 2. The seller had terminated the agreement on June 1. Further, the deposit cheque was uncertified – contrary to the terms of the agreement. Although the judge interpreted “upon” as meaning “as shortly afterwards as practical”, the sending of the cheque the next day by overnight delivery did not meet this criterion. The judge held that the seller had not waived the time of the essence clause by subsequent negotiation and gave 10 reasons for that decision. The most important reason was that, by the time of the subsequent negotiations, there was no agreement or clause to waive.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.