Oct 28, 2020
A recent article for Daily Commercial News looks at the amendments to Ontario’s Construction Act under Bill 142, which came into effect one year ago in October 2019, and the transformative impact of one of the key amendments that introduced a mandatory adjudication mechanism.
The article reports that the number of adjudications has steadily grown, and that according to the Ontario Dispute Adjudication for Construction Contracts (ODACC), the Authorized Nominating Authority under the Construction Act, 27 adjudications had commenced from October 2019 to June 30, 2020, with a total of 40 by the first week of October 2020.
According to author John Bleasby, “important lessons have been learned along the way, particularly by those who have been on the receiving end of an adjudication determination.” To gain insight into those lessons and on considerations that parties to an adjudication will want to keep top of mind if they have received a determination from an adjudicator under the Construction Act, he turned to a blog post written by Osler construction law experts Carly Fidler, Lia Bruschetta and Jagriti Singh.
They state that first there is the need to check for errors. Since an adjudicator’s determination is binding, the decisions should be carefully reviewed for any typographical errors that might have a bearing on meaning. These must be reported to the ODACC’s Custom System within seven days.
There are other critical timelines. “A party who is required to make a payment to comply with an adjudicator’s determination must do so within 10 calendar days after the determination has been communicated to the parties,” they state. That means internal processes required to approve and make payments must be in place. “Failure to make payment on time could result in significant consequences, including the possible suspension of further work by the successful contractor or subcontractor awaiting payment, until the amount required under the determination is paid, along with interest and reasonable costs resulting from suspension of work.”
However, the article reports that a successful party who has not received a payment award within the 10-day period could find themselves facing payment demands of their own from those lower down the construction pyramid whose payments had been deferred pending the adjudication outcome. To avoid the squeeze, the successful party can opt to have the determination enforced as if it were a court order.
“Once a determination has been reflected in a court order, the party seeking enforcement can engage more traditional remedies like performing a judgment-debtor examination and seeking a writ of seizure and sale or garnishment,” they state. “These remedies have their own strategic considerations including timing and cost.”
For more of Carly, Lia and Jagriti’s insight, read John Bleasby’s full article “Legal Notes: Mandatory adjudication in Ontario is a year old, what has been learned?” in Daily Commercial News.