Adjudication under Ontario’s new Construction Act

Adjudication’ means construction dispute interim adjudication of any matter that falls within Part II.1, and if one party is not satisfied with the adjudicator’s decision, the party can proceed with a court action or an arbitration to reverse what the adjudicator has decided.

Adjudication procedures
The adjudication is subject to the adjudication procedures set out in the contract or subcontract, if they comply with Part II.1. However, if the contracts do not address adjudication procedures, or if the procedures set out do not comply with the requirements of Part II.1, then the adjudication is subject to the adjudication procedures set out in this Part and the regulations.

Notice of adjudication
A party who wishes to refer a dispute to adjudication gives the other party a written notice that includes:

  • names and addresses of the parties;
  • nature and a brief description of the dispute, including details respecting when and how it arose;
  • nature of the redress sought; and
  • name of a proposed adjudicator to conduct the adjudication.

Consecutive adjudications
If the same matter (or a related matter respecting improvements) is to be held in different adjudications, the parties may agree to adjudications consecutively by the same adjudicator.

The adjudicator
An adjudication may only be conducted by an adjudicator listed in the registry. The parties may agree on an adjudicator or may request the ANA to appoint an adjudicator. This cannot be done in a contract. If an adjudicator refuses to act within four days after the notice of adjudication, the party who gave the notice shall request the ANA to appoint an adjudicator.

The appointment of the adjudicator
The ANA shall appoint the adjudicator no later than seven days after receiving the request for the appointment. The adjudicator need not agree to conduct an adjudication or to accept an appointment by the ANA.

Adjudicator’s fee
The adjudicator shall be paid a fee (determined before the adjudication commences) for conducting the adjudication. The amount is the fee agreed upon by the parties and the adjudicator, failing which it is determined by the ANA.

Payment of the adjudicator’s fee is to be split equally between the parties. However, if an adjudicator determines a party to the adjudication has acted in a manner that is frivolous, vexatious, an abuse of process, or other than in good faith, the adjudicator may provide that the party pay some or all of the other party’s costs.

Documents for adjudication
No later than five days after an adjudicator is appointed to conduct the adjudication, the party who gave the notice shall give the adjudicator a copy of the notice, together with a copy of the contract or subcontract and any documents the party intends to rely on during the adjudication.

Conduct and powers of the adjudicator
An adjudicator may exercise the following powers and any other power of an adjudicator that may be specified in the contract or subcontract:

  1. Make directions respecting the conduct of the adjudication.
  2. Take the initiative in ascertaining the relevant facts and law.
  3. Draw inferences based on the conduct of the parties to adjudication.
  4. Conduct an onsite inspection.
  5. Obtain the assistance of a merchant accountant, actuary, building contractor, architect, engineer, or other person in such a way as the adjudicator considers fit to enable him or her to determine better any matter of fact in question. The adjudicator may fix the remuneration of the expert and who will pay it.
  6. Make a determination of the adjudication.
  7. Any other power that may be prescribed.

Conduct of adjudication
The adjudicator may conduct the adjudication in a manner he or she determines to be appropriate in the circumstances, and shall conduct the adjudication in an impartial manner.

The adjudicator shall make a determination of the matter no later than 30 days after receiving the documents required in the notice of arbitration. The time may be extended at the adjudicator’s request and with the written consent of the parties for a period of no more than 14 days, or upon written agreement of the parties, and subject to the adjudicator’s consent. Otherwise, if it is made after the determination date, it is of no force or effect.

The adjudicator’s determination shall be in writing, including reasons.

Termination of the adjudication
The parties may agree to terminate the adjudication on notice to the adjudicator and subject to the payment of the adjudicator’s fee.

Application to set aside the determination
The court may set aside the determination on application made no later than 30 days after the determination has been communicated to the parties, on the following grounds:

  • a party participated in the adjudication under a legal incapacity;
  • the contract or subcontract is invalid or has ceased to exist;
  • the determination is of a matter that may not be subject to adjudication;
  • the adjudication was conducted by someone other than an adjudicator;
  • the procedures did not comply with the procedures to which the adjudication was subject;
  • there is a reasonable apprehension of bias on the part of the adjudicator; or
  • the determination was made as a result of fraud.

The court may order that amounts paid be returned.

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