On November 5, 2024, Ontario’s Divisional Court released its decision in Gay Company Limited and Sayers Foods Limited, 2024 ONSC 6123.
The matter involved an application for judicial review by Sayers of a determination of an adjudicator made pursuant to the Construction Act, R.S.O. 1990, c. C.30, as amended (“Construction Act”).
After concluding that it had jurisdiction to hear the application, for which leave was granted on June 28, 2024, the Divisional Court determined that the Attorney General was required to be on notice of the application. The Court clarified that, while it is not necessary for a moving party to put the Attorney General on notice of a motion for leave to bring an application for judicial review under section 13.18 of the Construction Act, if leave is granted, the applicant is required to serve the notice of application on the Attorney General. Here, the Court ordered Sayers to put the Attorney General on notice of the application by serving a copy of the Notice of Application, plus a series of other documents, including the Court’s endorsement, the underlying decision of the adjudicator, and the parties’ facta.
Unexpectedly, the Court went on to consider, and it ultimately determined, that the issues raised on the application were matters touching upon the jurisdiction and process of adjudication proceedings, and the finality of adjudication determinations, all of which may be of interest to the Ontario Dispute Adjudication for Construction Contracts (ODACC), the entity that administers and oversees the adjudication of construction disputes in Ontario. Accordingly, the Court ordered Sayers to put ODACC on notice of the application, and to serve it with a series of documents, including the Notice of Application, the Court’s endorsement, and the adjudicator’s decision
Thus, notice to the Attorney General of the Notice of Application is mandatory in applications for judicial review of prompt payment determinations under the Construction Act. Thereafter, at the return of the application, the court may inquire into and decide whether ODACC is entitled to notice and/or is entitled to be heard on such applications.
Moreover, since the Court was requiring notice to ODACC in this case, it determined that it may also consider concerns raised in prior decisions of the Divisional Court that adjudication decisions are not receiving neutral citations, and are not being released to reporting services such as CANLII, and the Court may inquire into and decide whether ODACC should be required to devise and implement a policy for public release of adjudication decisions in the future.
The Court appears to be expressing concerns about the reliability of Construction Act adjudication decisions that are coming before it on various applications for judicial review. Certainly, practitioners in the construction space in Ontario are experiencing a full range of issues and outcomes, including the risk of incorrect decisions, in whole or in part. Additionally, when rendering decisions, adjudicators are operating “blindly” in the sense that they don’t have the benefit of drawing upon previous adjudication decisions when considering their reasons for decision. It is fair to conclude that there is a serious risk, and certainly anecdotal evidence seems to suggest, that adjudication decisions are inconsistent at best, and potentially unsupportable at worst.
There have been suggestions that the Attorney General is considering the possibility of an adjudication regime for commercial disputes, in part to alleviate the backlog on the court system. If so, the Construction Act adjudication regime will provide valuable intelligence from which insight can be drawn on how to develop, implement, and run, a system of adjudication.
Coincidentally, the Divisional Court’s decision was released one day prior to Royal Assent of Bill 216, Building Ontario For You Act, which in part amends several key provisions of the Construction Act. The amendments broaden the availability of adjudication, including allowing adjudication after completion of a contract or subcontract, and no longer restricting the matters which can be referred to adjudication only to matters of non-payment. Instead, the Construction Act will permit adjudication of “any prescribed matter or any matter, agreed to by the parties to the adjudication”. The amendments will also permit parties to retain a private adjudicator, rather than requiring the parties to select an adjudicator from the list of appointed adjudicators as set out in ODACC’s registry. The Bill 216 amendments are not yet in full force and effect but highlight the importance of the issues raised by the Divisional Court in Sayers.
As of the date of this blog post, no date for Sayers’ application has been fixed. Pallett Valo will report again following the release of the Divisional Court’s decision on the application.