The first application for judicial review of an adjudicator’s decision under Ontario’s Construction Act has been dismissed. In SOTA Dental Studio Inc. v. Andrid Group Ltd., 2022 ONSC 2254 (“SOTA”), a three-judge panel of the Divisional Court unanimously rejected the owner’s application for judicial review of an adjudicator’s order requiring payment of outstanding invoices. The application was not dismissed on the merits—it was rejected because the applicant had neither paid the order under review, nor moved for a stay.
The court’s message is clear: applications for judicial review may fail when adjudicators’ orders remain unpaid. What follows is a review of the decision, the relevant provisions of the Construction Act (the “Act”), and the lessons learned.
Background
The applicant owner, SOTA Dental Studio Inc., owns a property on Highway 7 in Vaughan, Ontario. The owner retained the respondent contractor, Andrid Group Ltd. (“Andrid”), to build a dental clinic on the property. The contractor performed work and delivered invoices to the owner.
Under the Act, the owner was required to pay all invoices meeting the requirements for a “proper invoice” in 28 days (or less). If the owner intended to dispute the invoices, it was required to deliver a “notice of non-payment” pursuant to section 6.4.
The owner did not dispute Andrid’s invoices, so they became due and payable.
The owner refused to pay, so Andrid referred the payment dispute to adjudication under section 13.5 of the Act. Mr. Chad Kopach was selected as adjudicator.
On May 21, 2021, Adjudicator Kopach ordered the owner to pay Andrid $38,454.55.
Adjudicators’ orders are considered “interim enforceable”: they can be enforced just like a court order, but may be subject to re-determination by litigation or arbitration. In Ontario, court orders may be enforced in a number of ways, including by garnishment or filing a writ of execution against real property.
In this case, Andrid garnished $6,711.04 from the owner’s bank account by enforcing the adjudication award through a notice of garnishment served on the owner’s bank. An outstanding balance of $31,743.51 remained.
The owner subsequently brought an application for leave for judicial review of Adjudicator Kopach’s May 21, 2021 decision.
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