In a recent decision the Ontario Court of Appeal prevented a Seller from relying on the “time is of the essence” clause in the Agreement. The reason was simple, the Seller demonstrated a lack of good faith.
Fortress was a real estate developer. It was assembling land in downtown Toronto in order to construct a condominium. Ricki’s was the owner of some property which had 4 leases.
Fortress wanted to ensure that it would be able to terminate the leases, gain occupancy and, of course, subsequently, demolish the building.
Ricki’s delayed delivery of the appropriate estoppel certificate from the tenant until one hour before closing time. Then, it insisted that the closing take place immediately or Fortress would be in default, thereby allowing Ricki’s to keep the million dollar deposit.
The Motions Court Judge conclude that Ricki’s was acting in bad faith and that it waived the “time is of the essence” clause in the Agreement.
The Court of Appeal agreed and confirmed that an Order would issue obligating Ricki’s to specifically perform the agreement.
Refer to: Fortress Carlyle Peter St. Inc. v. Ricki’s Construction and Painting Inc., 25 October 2019.
Brian Madigan LL.B., Broker