Tang v. Rong, 2021 ONSC 8058
Background
In Tang v. Rong (2021 ONSC 8058), the Ontario Superior Court considered what happens when a real estate deal doesn’t close on time, even by a matter of hours.
The purchasers, Yan Tang and Fang Cheng Bao, agreed to buy a home at 4670 Riverside Drive East, Windsor, from the vendors, Rong Rong and Jin Meng, for $1,090,000. The Agreement of Purchase and Sale was signed on February 12, 2021, with closing scheduled for March 31, 2021.
The Agreement stated that time was of the essence and stated that the closing had to occur by 6:00 p.m. on the closing date.
What Went Wrong
The purchasers had financing in place through RBC, including both a mortgage and bridge loan. On the day of closing, the mortgage funds were ready, but the bridge loan was delayed due to bank transfer timing during the COVID-19 pandemic.
By 5:30 p.m., all funds were finally in the hands of the purchasers’ lawyer. However, it was after 6:00 p.m. by the time tender could be completed.
The sellers’ lawyer refused to extend the deadline without compensation and treated the deal as terminated.
The next morning, the purchasers delivered full funds and asked to close. The sellers refused unless the buyers agreed to pay an additional $50,000 to revive the agreement. The buyers countered with $10,000, then $25,000. No deal was reached.
The Lawsuit
The purchasers sued for specific performance, asking the Court to compel the sale to go through.
They argued:
- The sellers acted in bad faith by refusing to close once the funds were available the next morning.
- The sellers should be estopped and prevented from relying on the “time of the essence” clause because of their conduct on March 31.
The sellers moved for summary judgment, seeking dismissal of the claim.
The Court’s Decision
Justice Hebner granted summary judgment in favour of the sellers.
1. Time of the Essence
When time is of the essence, any delay is fatal, even a short one.
The purchasers failed to deliver funds by the 6:00 p.m. deadline, so the agreement automatically terminated at that moment.
2. No Bad Faith
The sellers were ready, willing, and able to close on time.
Insisting on strict compliance with the contract is not bad faith. The Court cited Deangelis v. Weldan Properties (Haig) Inc. (2017 ONSC) for this principle.
3. No Estoppel
The sellers’ statement that “no extension will be granted without compensation” was not a promise that the deal could close later.
There was no representation, reliance, or detriment, so estoppel did not apply.
4. No New Agreement
When the sellers later offered to revive the deal for $50,000, the buyers’ counteroffers of $10,000 and $25,000 legally killed the original offer.
No binding agreement was formed.
Result
- The purchasers’ claim dismissed.
- The agreement was validly terminated at 6:00 p.m. on March 31, 2021.
- No sale, and the sellers were entitled to keep their property.
Considerations
- Time Really Is of the Essence: Once the clock strikes the closing deadline, the deal can die.
- No Obligation to Extend: A vendor who is ready to close has every right to insist on strict compliance.
- Good Faith Has Limits: Acting in good faith doesn’t mean surrendering clear contractual rights.
- Counter-offers Cancel Offers: When you make a counteroffer, the original offer is gone.
Comment
This case reinforces a fundamental rule in Ontario real estate law: deadlines matter. Even if funds arrive a few minutes late, the vendor has no obligation to wait — or to reopen the deal later.
As Justice Hebner made clear, certainty in real estate transactions depends on strict adherence to agreed timelines.
Brian Madigan LL.B., Broker
www.OntarioRealEstateSource.com