18 March 2024

Dispute Over Real Estate Transaction Deadline: Ontario Court Of Appeal Affirms Vendor's Termination Of Contract

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In a recent appeal before the Ontario Court of Appeal, the Court showcased once again the significance of the "time is of the essence" clause. In, 3 Gill Homes Inc. v. 5009796 Ontario Inc.
Canada Litigation, Mediation & Arbitration
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In a recent appeal before the Ontario Court of Appeal, the Court showcased once again the significance of the "time is of the essence" clause. In, 3 Gill Homes Inc. v. 5009796 Ontario Inc. (Kassar Homes), 2024 ONCA 6, the parties entered into an Agreement of Purchase and Sale (APS) with 3:00 pm being the closing time specified on the completion date. The purchasing party missed the closing time by a mere 35 minutes and despite having delivered the purchase price, the Vendor terminated the contract. The appellant, 3 Gill Homes Inc., contested the application judge's ruling in favour of the respondent vendor, 5009796 Ontario Inc., trading as Kassar Homes ("Kassar Homes"). In rendering its decision the Ontario Court of Appeal had to balance well-established rules of contractual interpretation and strict reading of the contract negotiated and entered into by the parties.

Key Issues

  1. Did the application judge err in finding that:
    1. the payment closing time was 3:00 pm;
    2. time was of the essence in relation to the payment closing time;
    3. the 3:00 pm closing time was not unconscionable;
    4. damages could not be fairly determined on a written record; and
  2. Are the application judge's reasons sufficient for appellate review?

Court's Decision

The Court of Appeal dismissed the appeal, upholding the application judge's ruling. Here's the breakdown of the court's reasoning:

  1. Payment Deadline: The court affirmed the application judge's determination that the payment deadline of 3:00 p.m. was clearly stipulated in the APS. This timeframe was essential, and failure to adhere to it justified the vendor's termination of the contract.
  2. "Time is of the Essence" Clause: The court agreed with the application judge's interpretation of the "time is of the essence" clause. This clause made it clear that adhering to the closing date and time was crucial, empowering the innocent party to terminate the contract upon breach.
  3. Unconscionability: The court found no basis to interfere with the application judge's conclusion regarding the absence of unconscionability. The parties' familiarity with real estate transactions and the terms of the APS weighed against the appellant's claim of unfairness.
  4. Sufficiency of Reasons: The court determined that the application judge's reasons were adequate for appellate review. The judge's analysis of relevant case law, the APS terms, and factual circumstances provided a clear rationale for the decision.
  5. Damages Determination: Since the court upheld the application judge's ruling on the merits, it deemed the issue of damages determination unnecessary for consideration.


Many commentators would describe the Ontario Court of Appeal's decision as harsh, given the fact that the Purchaser missed the closing payment deadline by a mere 35 minutes.

This case underscores the significance of honouring contractual agreements in real estate transactions. The court's decision not to interfere with the contractual deadline reflects a commitment to upholding the parties' bargained-for terms. In essence, if parties agree that funds must be provided by a specific time, irrespective of other deadlines, the court will honour that agreement.

In this instance, the vendor was within their rights to terminate the contract when the funds were not deposited into their lawyer's trust account by 3:00 p.m., as specified in the APS. It is a common practice for such clauses to be included in pre-construction agreements. Upon entering into an APS, purchasers would do well to insert a solicitor review condition to ensure they are advised of all contractual timelines. While the transfer deed, the document in which ownership is transferred from vendor to purchaser, can occur on or prior to 5:00 pm, the parties could insert additional timelines for certain deliveries in the APS.


The Ontario Court of Appeal's decision in 3 Gill Homes Inc. v. 5009796 Ontario Inc. (Kassar Homes), 2024 ONCA 6 reaffirms the importance of respecting contractual obligations in real estate transactions. By upholding the parties' bargained-for terms, the court ensures clarity and fairness in contractual dealings. This case serves as a reminder for parties to carefully review and negotiate their agreements to avoid disputes over contractual deadlines in the future.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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