Adjudicating Adjudications: A Review of Case Law on Construction Act Adjudications from 2022, Lessons Learned, and Unanswered Questions

  • 10 janvier 2023
  • Paul Conrod, Faren Bogach, and James De Melo of Construct Legal

The adjudication and prompt payment provisions of Ontario’s Construction Act came into effect on October 1, 2019 but did not receive substantive judicial treatment until 2022. This article discusses three recent cases from the Ontario courts addressing the availability of adjudication and the extent to which the court may intervene in adjudicators’ determinations, as well as some unanswered questions and lessons learned from the case law and our experiences with adjudications so far.

Background: What is Construction Act Adjudication?

Adjudication is a statutory alternative dispute resolution procedure in Ontario’s Construction Act. Parties to construction contracts and subcontracts may refer certain types of payment disputes to a third-party adjudicator for determination, such as disputes relating to valuation of services or materials, payment of change orders, holdbacks, and set-off claims.[1] Each adjudication may only address a single matter unless the parties and adjudicator agree otherwise.[2]

Adjudications are administered by Ontario Dispute Adjudication for Construction Contracts (“ODACC”), which is the Authorized Nominating Authority under the Construction Act. Adjudications proceed on an expedited timeline and, in our experience so far, are typically based on written submissions and supporting documents without an oral hearing. There are strict page limits for each party’s written submissions and supporting documents.[3] The parties can select an adjudicator from ODACC’s roster by agreement or, if the parties cannot agree, the adjudicator will be chosen by ODACC.[4]

An adjudicator’s determination is binding on the parties until decided otherwise by a court or arbitrator (as the case may be), or if the parties agree otherwise.[5] An adjudicator’s determination may be set aside on an application to the Divisional Court for judicial review, but only on limited grounds listed in the Construction Act which primarily relate to issues of jurisdiction and procedural fairness.[6]