Pre-construction 2012 – 2016
Deangelis v. Weldan Properties (Haig) Inc.
Background
In Deangelis v. Weldan Properties (Haig) Inc. (2017 ONSC), the purchasers, Christopher and Pasquale Deangelis, agreed to buy a newly built townhouse at 115 Haig Boulevard, Unit 3, Mississauga from Weldan Properties for $359,900.
The Agreement of Purchase and Sale was signed in November 2012 and expressly stated that time was of the essence. Closing was scheduled for August 23, 2016, following interim occupancy that began in July.
On the day of closing, the Deangelis’ lawyer advised that they did not yet have the mortgage funds and asked the builder for a three-day extension. Weldan refused, treated this as an anticipatory breach, and terminated the Agreement, keeping the $20,000 deposit.
The Dispute
The purchasers argued that Weldan acted in bad faith by refusing to extend the closing, especially when the delay was caused by an alleged banking error and the closing would have been completed within days.
They sought specific performance of the contract, effectively, a court order forcing the sale to proceed.
Weldan countered that it had every right to enforce the time of the essence clause and terminate the contract once the buyers admitted they couldn’t close.
The Court’s Decision
Justice Ricchetti of the Ontario Superior Court of Justice sided with the builder.
- The Court found no evidence of bad faith on Weldan’s part. The builder was ready, willing, and able to close, and had provided a proper Statement of Adjustments.
- The Deangelis purchasers were not in a position to close because their mortgage funds were unavailable and there was no proof that this was due to any error by the bank.
- The doctrine of good faith, as articulated in Bhasin v. Hrynew (SCC, 2014), does not require a party to rewrite or ignore clear contractual terms. Enforcing the contract as written is not bad faith.
- When an agreement makes time of the essence, strict compliance is required. Failure to close on time entitles the vendor to terminate.
Result
- The Agreement was validly terminated.
- The $20,000 deposit was forfeited to the builder.
- The Certificate of Pending Litigation was vacated, and the purchasers were ordered to vacate the property.
- Any remaining adjustments (such as interim occupancy fees) would be dealt with later.
Considerations
- “Time of the Essence” Means Exactly That: Deadlines matter. Missing the closing date, even by a few days, can end the deal.
- Good Faith Has Limits: It does not override clear, mutually agreed terms.
- Vendors May Enforce Their Rights: A ready and willing seller can terminate when a buyer is unprepared to close.
- Bank Errors Are Not a Defence: A purchaser’s financing issues remain their own responsibility.
Comment
The Court recognized that fairness might tempt one to excuse a short delay after years of waiting for completion, but it refused to undermine the certainty that real estate transactions depend on.
As Justice Ricchetti observed, enforcing the “time of the essence” clause ensures predictability and avoids endless litigation over “how late is too late.”
This was a pre-construction project which took 4 years to complete. Over that time period 2012 to 2016 the market value would have risen substantially. Strangely, this wasn’t a factor in this case.
Brian Madigan LL.B., Broker
www.OntarioRealEstateSource.com