Each case needs to be considered on its facts.
The starting point is to determine whether the contract has a condition stating that time is of the essence. Most contracts in Victoria include a condition which makes time of the essence – i.e. it is an essential term of the contract that conditions as to time be strictly complied with.
For example, see general condition 16.1 from the Estate Agents (Contracts) Regulations 2008 (Vic). Note that the regulations sunset on 11 August 2018. See our FAQ about the sunset of the regulations.
Portbury Development Co. Pty Ltd v Ottedin Investments Pty Ltd  VSC 57 is an example of a case where time remained of the essence where there was an agreement to extend the settlement date combined with a condition in a contract stating that time is of the essence and the vendor had not waived that condition.
Qin v Smith (No. 2)  VSC 476 is an example of a case in which it was held that time had ceased to be of the essence – a vendor’s notice of default was held to be ineffective in that case because the vendor had not been ready willing or able to settle on the specified contract date. The vendor had to first make time of the essence again before serving a notice of rescission on the purchaser.
Where time is no longer of the essence, an offended party must make time of the essence by giving notice of a reasonable period within which to complete so that the other party can, at that time, be said to be in default and so the innocent party can rescind. Usually the contract requires service of a notice of rescission specifying the contractual period within which the default must be remedied after which the contract is at an end.