Date: June 2024
Does failing to give notice of the filing of an Adjudicator’s determination result in a party being able to enforce the Adjudicator’s determination?
This week the Divisional Court released its decision with respect to the appeal of a motion decision in MGW Homes Design Inc. v. Pasqualino, 2023 ONSC 411. It was a pleasure working on the materials for this appeal while at my previous firm.
The central issue on the appeal was with respect to the motion judge’s decision to void enforcement steps taken pursuant to an Adjudicator’s determination (filed with the court) and any future enforcement steps following the plaintiff/appellant’s failure to give notice of the filing of the Adjudicator’s determination to the other party in accordance with section 13.20(3) of the Construction Act.
Rightfully so, the Divisional Court agreed with the plaintiff/appellant, that the motion judge’s order precluding enforcement of the Adjudicator’s determination was disproportionate to MGW’s non-compliance. The appeal was allowed in its entirety.
In its decision the Divisional Court made a number of important findings, relevant to the adjudication and prompt payment scheme in Ontario. These include the following:
– Paragraph 13 – The failure to give the requisite notice is a breach of a statutory requirement, but no particular consequence is prescribed for this non-compliance. When the notice requirement is read in the context of the scheme of the Construction Act in general, and the adjudication provisions in particular, remedies for non-compliance are in the court’s discretion, to be exercised judicially in the circumstances of each particular case.
– Paragraph 15 – The procedures in place to enforce an Adjudicator’s determination are not an “extraordinary power” but instead a necessary feature of the Construction Act.
– Paragraph 16 – The Divisional Court reiterated the importance of paying an Adjudicator’s determination promptly.
– Paragraph 24 – The notice requirement is more properly seen as a statutorily required courtesy than a strict condition that must be met before enforcement.
– Paragraph 28 – In the absence of a statutory provision which stipulates the consequence for non-compliance with the notice provision, it falls to the court to exercise its discretion as to an appropriate sanction, given all the circumstances.
For proponents of adjudication and prompt payment like myself, this is certainly an important decision providing additional teeth to this system in Ontario. Adjudication determination’s must be paid.
Click here for a link to the decision.