Nova Fish Farms Inc. v Cold Ocean Salmon Inc., 2025 NLCA 28 (CanLII)
Reading time: 3 minutes (approx.)
By: Hayley Gardner (Articled Clerk)
In February 2020, Nova Fish Farms Inc. and Cold Ocean Salmon Inc. entered into an Agreement of Purchase and Sale in which Cold Ocean agreed to sell several trout farms to Nova Fish.
The sale of the farms was conditional upon government approval. As such, the Agreement contained a clause which required both parties to use “commercially reasonable efforts” to obtain government approval “as promptly as practicable” following the signing. Further, it contained a clause which stated that “time shall be of the essence of this agreement”.
After signing the Agreement, neither party took any further steps until Nova Fish submitted transfer applications to the provincial government in June 2021. The government subsequently approved the applications in October 2021. In December 2021, Nova Fish informed Cold Ocean’s solicitor of said approval and communicated that it wished to close the transaction. Finally, in May 2022, Cold Ocean informed Nova Fish that it did not intend to proceed any further with the transaction.
Nova Fish then launched an action against Cold Ocean, seeking specific performance of the Agreement. Cold Ocean pleaded in defence that Nova Fish had breached the Agreement by not obtaining government approval sooner, and that this breach entitled Cold Ocean to terminate the Agreement.
In a summary trial, the judge had decided that Nova Fish had breached the Agreement with its delay, and that this delay entitled Cold Ocean to terminate the Agreement. As a result, Nova Fish was not entitled to specific performance.
The Justices of the Court of Appeal of Newfoundland & Labrador did not disturb the trial judge’s finding that Nova Fish had breached the sections of the Agreement which required that government approval be obtained as quickly as was practicable or commercially reasonable.
However, the Appeal Justices went on to find that, as a matter of law, “time is of the essence” clauses do not apply to indefinite time provisions. Thus, because the Agreement between the parties did not contain a more specific timeline for performance, Cold Ocean was not entitled to terminate the contract.
Ultimately, the appeal was allowed and Nova Fish’s application for specific performance was granted.
