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What does “Time is of the Essence” really mean?

Posted on April 5, 2019 | Posted in Five Liners, Real Estate

Di Millo v. 2099232 Ontario Inc. 2018 Ont CA

Purchaser bought a lot in the vendor’s subdivision. The agreement provided that the purchaser was to build a building within 30 months of closing failing which the vendor had the option to buy back the land at the original price less real estate commission. The application judge held that the notice to buy back the land was delivered too late because “time was of the essence”. The Court of Appeal reversed because the judge misconstrued the meaning of time of the essence. It does not apply to impose a time limit that has not been set in the agreement; rather, it dictates the consequences that flow from failing to comply with a time limit stipulated in an agreement. Since the agreement did not specify a time before which the option had to be triggered, then it was sufficient if the option were triggered within a reasonable time. In this case, the Court held that it had been. The Court also held that tender was not necessary because the purchaser made it clear that it was not going to close the purchase in accordance with the option to purchase. The Court granted specific performance because the land was unique; it was part of the vendor’s subdivision and all of the subdivision had to be completed before the vendor was able to regain its deposit under its agreement with the municipality.


Jonathan Speigel


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


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