Canada: Adjudication Under The New Construction Act

The last article outlined the proposed Prompt Payment provisions that will be added to Ontario's Construction Lien Act, which should come into force in the spring of 2018.

This article sets out how disputes on construction projects can be determined on an interim basis using a new (to Ontario) concept called "Adjudication".

Compared to Litigation or even Arbitration, Adjudication will be a lightning fast way to get an interim decision when a dispute arises between parties to a contract. Adjudication will resemble a court or arbitration proceeding, with both sides given an opportunity to present their case to a neutral arbiter, who will then make a determination.

Sometimes referred to as "pay now, argue later", adjudication does not take away the jurisdiction of a court or an arbitrator (if the parties have agreed to submit matters to arbitration), but a determination under an adjudication is binding on the parties until a court or arbitrator makes a finding in the matter.

Many of the details about adjudicators and adjudication procedure will be set out in regulations under the new Act, and those regulations will not be drafted until later in the summer of 2017. The following information is based on the text of the proposed adjudication provisions in the Act, as well as the report to the Province recommending the introduction of adjudication in Ontario.

Who Are Adjudicators?

Adjudicators will not need to have a legal background, but likely will have to be members of a regulated profession (in addition to lawyers, this is expected to include engineers, architects and quantity surveyors). The thought is that the parties will agree (or, absent agreement, the Adjudicator Nomination Authority ("ANA") will appoint) adjudicators with training/background/experience that is tailored to the issue for adjudication.

Adjudicators will be screened and trained by the to-be-established ANA. The ANA will maintain a roster of pre-approved adjudicators, and only roster adjudicators will be permitted to conduct adjudications.

What Gets Adjudicated and Who Pays?

Adjudication will only apply to contracts entered into after the adjudication section comes into force, expected to be some time in early 2018.

The Act will allow adjudication of the valuation of services or materials provided under a contract, and payment under a contract, including under approved, unapproved, and proposed change orders. Disputes that are the subject of non-payment notices under the prompt payment provisions can be adjudicated (and, as set out in the last article, will have to be adjudicated in some circumstances). Non-payment of holdback and set-off claims can also be adjudicated. This is not a closed list, and other issues that can be adjudicated may be added by regulation.

Importantly, only one "issue" at a time can be referred to adjudication, unless the parties and the adjudicator agree otherwise. The issue can go to adjudication even if it is also the subject of a court action (including a lien action), or an arbitration, unless the court action or arbitration has already been finally determined.

Generally speaking, the parties to the adjudication will each be responsible for an equal share of the adjudicator's fees, and each party bears its own costs, regardless of the result. That said, the adjudicator has the discretion to punish one party with costs, but only if the adjudicator determines that the party acted in a manner that was "frivolous, vexatious, an abuse of process or other than in good faith".

Commencing the Adjudication

A party can only commence an adjudication against a party with whom it has a contract. As an example, an owner can adjudicate a dispute with a contractor, but not with a subcontractor; the contractor can adjudicate with owner and subcontractor, but not with a party below the subcontractor; the subcontractor can adjudicate with the contractor and with a party below it (sub-subcontractor, though the Act does not use that term), and so on. The adjudication provisions do not contemplate a "third party" proceeding, so "stacked" or "cascading" adjudications will likely result.

An adjudication has to be started before the date the contract between the parties is completed, unless the parties agree otherwise. It is started by a party giving a notice of adjudication setting out the names and addresses of the parties, the nature of the dispute and a brief description including how and when it arose, and what redress is being sought. The notice will also propose an adjudicator. The parties are prohibited from agreeing on the adjudicator in advance (precluding the use of a "project adjudicator").

Adjudication Timelines

There is no timeline in the Act for the responding party to deliver material, or even to agree to or dispute the proposed adjudicator. However, the Act states that there is a 4 day deadline for the adjudicator to agree to take on the adjudication, which implies that the parties have to agree on the adjudicator prior to that. If there is no agreement within 4 days, the person who started the adjudication must ask the ANA to appoint an adjudicator. The ANA then has 7 days to appoint an adjudicator.

Once an adjudicator has been agreed to or selected by the ANA, the party who started the adjudication must deliver to the adjudicator within 5 days the notice, a copy of the contract in question, and any documents the party intends to rely on. This is an important step, as once the adjudicator receives these documents, a determination, supported by written reasons for decision, must be released within 30 days. The adjudicator can request up to 14 additional days, but the adjudicator's request can be refused by either party. The parties can agree between themselves to extensions without limit, though subject to the adjudicator's consent.

These timelines mean that, absent an extension of time, the adjudication will be determined within 46 days of the adjudication being commenced. A determination that is made after the timelines in the Act will be of no force or effect.

Once the adjudicator has made a determination, a party required to pay must do so within 10 days. The Act will also allow for consecutive adjudications in certain circumstances, so that one adjudicator can deal with several issues that arise between parties.


The Act will allow the parties to agree to an adjudication procedure in their contract. If they fail to set out a procedure, or if the procedure in the contract does not comply with the Act (presumably referring to contractual provisions that purport to limit an adjudicator's powers or restrict the types of matters can be adjudicated), then the procedure in the Act governs.

There is little in the proposed Act mandating how the adjudication is to be conducted. Instead, the Act gives the adjudicator the discretion to "conduct the adjudication in the manner he or she determines appropriate in the circumstances". The adjudicator is given the power to issue directions respecting the conduct of the adjudication, and is specifically granted the power to take "the initiative in ascertaining the relevant facts and law" and draw "inferences based on the conduct of the parties".

At the adjudicator's request, he or she can conduct on-site inspections of the construction project, though this is subject to approval of the owner or other person with legal authority to exclude persons from the premises.

While it is the intention that the adjudicator will be selected for his or her expertise based on the issue to be determined, the adjudicator is also granted the power to obtain the assistance of experts to determine any matter of fact in question. The list of experts includes a "merchant, accountant, actuary, building contractor, architect, engineer", though this is not a closed list, and the adjudicator can retain any other person he or she considers fit to assist in the factual determination and direct one or both parties to pay the associated fees.


Once completed, either party to the adjudication can bring an application to the court for an order enforcing the adjudicator's determination. Once that court order is made, it can be enforced like any order of the court, including by way of writ of execution and by garnishment.

In the event of non-payment after the adjudicator has made a determination, then in addition to enforcement, the contractor or subcontractor who has not been paid can suspend their work. The party in default must then pay not only the amount required by the determination plus interest, but also the costs of suspension. Once paid, the non-defaulting party is also entitled to be paid the costs of resuming their work. This shifts the responsibility for costs of demobilization/remobilization of forces onto the defaulting party.

Standard of Review

Given the tight timelines at play, it is inevitable that an adjudicator will come to a "wrong" decision. There is no right of appeal per se, but in addition to being able to go to court or to an arbitration to seek a different result, any party to the adjudication can apply to have the decision set aside within 30 days under 7 grounds:

  1. At the time of the adjudication, one party was operating under a legal incapacity;
  2. The contract between the parties was invalid or ceased to exist;
  3. The determination dealt with a matter that could not be adjudicated, or was unrelated to the subject of the adjudication;
  4. The adjudication was conducted by someone not qualified to be an adjudicator;
  5. The procedures for the adjudication did not comply with the procedures set out in the Act;
  6. There was a reasonable apprehension of bias on the part of the adjudicator; or
  7. The adjudicator's determination was made as a result of fraud.

Practically speaking, this list is going to mean that "correctness" is not a condition for a proper (and enforceable) adjudicator's decision. To put it another way, an adjudicator's decision that is "wrong" must still be obeyed, as long as the adjudicator answered the questions he or she was asked to answer (and only those questions).

Extended Time to Lien

An adjudication and a lien claim can be advanced at the same time. In an apparent effort to ensure that a claimant is not obligated to run parallel proceedings, the Act includes a new subsection that extends the expiry of a lien.

For example, currently, in most cases a subcontractor's lien expires if not preserved within 45 days from the date of last supply. This deadline will be extended to 60 days pursuant to changes to section 31 of the Act. However, the Act will also include a new subsection that applies to issues that are subject to both a lien claim and an adjudication. The new subsection deems the lien to expire on the later of the date under section 31, or 45 days from when the adjudicator receives the documents from the party who commenced the adjudication. There will also be a provision that states that where there are consecutive adjudications, the lien expires 45 days from when the adjudicator receives the documents relating to the last adjudication.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
27 Jan 2018, Seminar, Toronto, Canada

Andrea's panel, 'An Action Plan for Canadian Music', will discuss the impact of digital media like Spotify and YouTube on Canadian music, and how that affects the revenue model and discoverability of recorded music.

26 Feb 2018, Seminar, Toronto, Canada

On February 26th, 2018, John Polyzogopoulos and Lea Nebel will be co-chairing the OBA Civil Litigation Program's Top Appeals of 2017 from the Ontario Court of Appeal.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions