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SALE OF LAND - Vendor - Duties and obligations - Completion

Wednesday, April 01, 2020 @ 9:02 AM  

Lexis Advance® Quicklaw®
Appeal by the builder from a decision of an application judge finding that it breached the agreement of purchase and sale with the respondent by terminating it. The respondent purchased a new home from the appellant. The appellant could not provide an occupancy permit on the closing date and could thus not close. The respondent was also not able to close due to lack of financing. The lawyers for both parties then agreed to extend the closing date. The respondent was still not in funds on the revised closing date and was unable to close. The respondent then requested a further extension of the closing which the appellant refused. The application judge found that the parties did not have the contractual freedom to set a closing date outside of the confines of the Tarion Addendum in the Agreement of Purchase and Sale. She found that none of the permitted grounds for termination under the Tarion Addendum was available to the appellant.

HELD: Appeal allowed. The application judge erred in finding that the parties were not free to set a new advanced closing date before the Delayed Closing Date, outside of the confines of the Tarion Addendum. The Tarion Addendum did not render unenforceable non-compliant amendments. The failure to close on the initial closing date had the effect of leaving either party free to specify a new closing date on reasonable notice and restore the force of the time of the essence provision. Since the respondent was not in funds to close on the new agreed closing date, it was open to the appellant to terminate the agreement of purchase and sale. Doing so was not prohibited by the Tarion Addendum. As the respondent had not by then exercised his right to void the lawyers’ agreement, the appellants’ termination was valid under the Tarion Addendum.

Ingarra v. 301099 Ontario Ltd. (c.o.b. Previn Homes Ltd.), [2020] O.J. No. 579, Ontario Court of Appeal, J.M. Simmons, P.D. Lauwers and I.V.B. Nordheimer JJ.A., February 11, 2020. Digest No. TLD-March302020006