CITATION: Sayers Foods Ltd. v. Gay Company Ltd., 2026 ONSC 918
DIVISIONAL COURT FILE NO.: 238/24 JR
DATE: 20260304
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
D.L. Corbett, Ricchetti and Sutherland JJ.
B E T W E E N:
SAYERS FOODS LTD.
Kevin D. Sherkin, Richard MacGregor and
Jackson Moore, for the Applicant
Applicant
- and -
GAY COMPANY LTD.
Faren Bogach, James de Melo and Paul
Conrod, for the Respondent
Respondent
Mark Wiffen, for Attorney General of Ontario
Jack B. Siegel and Tyler Matthews, for Ontario
Dispute Adjudication for Construction
Contracts
Heard: June 4, 2025
the court:
REASONS FOR DECISION
[1] The applicant, Gay Co., applies for judicial review of the Determination dated April 12, 2024, and the corrected Determination dated April 12, 2024, of Adjudicator Hunault ordering the Applicant to pay $685,574.91, plus interest, to the Respondent, Sayers, pursuant to the prompt payment regime in the Construction Act, RSO 1990, c. C.30, as amended (the “Construction Act” or the “Act”).[^1] Leave to bring this application was granted on June 28, 2024 (2024 ONSC 3609).
Interim Terms
[2] In lieu of making payment to Gay Co. pending this application, this court ordered the Applicant to pay $700,000.00 into court, which was done (2024 ONSC 4832).
Issues
Grounds advanced for judicial review
[3] The Applicant seeks judicial review based on several of the grounds for judicial review prescribed in s. 13.18(5) of the Construction Act (Notice of Application, para. 5):
(a) The determination was of matters that may not be the subject of adjudication;
(b) The determination was made as a result of fraud by the Respondent;
(c) The procedures followed in the adjudication did not accord with the procedures to which the adjudication was subject, the result of which created unfairness to the Applicant affecting the outcome;
(d) There is a reasonable apprehension of bias on the part of the Adjudicator.
[4] During case management, the following issues were particularised as the grounds for the application (Case Management Direction dated July 18, 2024, (unreported)):
(a) Section 13.18(5)(3.) – The conflict of (notice/additional) holdback obligations and the interim payment order. This complaint naturally falls into the enumerated ground that the payment ordered was subject to holdback, which the Act expressly states at section 13.19 may not be the subject of a payment order under Adjudication. Thus it was a matter that could not be the subject of adjudication and the Adjudicator erred in failing to understand his jurisdictional limit in the circumstances. In connection with this issue, the Applicant also alleges that the Adjudicator mis-states the position of the Applicant before him and made an unreasonable finding of fact as a result.
(b) Section 13.18(5)(3.) – The multiple matters exclusion under section 13.5(4) of the Act, which relates to the position taken by Sayers in the Preliminary Objection and also focuses on matters that ought not be subject of an adjudication. Multiple matters are expressly excluded from being the subject of an adjudication, and thus the ultimate Determination dealing with all of the matters in dispute in the project was a collection of matters that may not be the subject of an adjudication.
(c) Section 13.18(5)(5.) – The procedural unfairness complaints related to alleged non-compliance with s.13(11) and the Adjudicator’s directions respecting the order of written submissions and the deadline for reply submissions.
(d) Section 13.18(5)(5.) - Clarity on what threshold of proof parties should be required to prove a set-off delay claim, particularly if it is a complex delay claim in a truncated adjudication. The experience of this Adjudication has shown how Adjudications naturally were not designed to address complex, multi-matter disputes at the end of a project. They are not designed, nor intended, to address long standing chronic disputes. If complex matters are going to be allowed to be adjudicated, with no monetary cap, then adjudicators and the profession must be given guidance on what the threshold of proving such a claim ought to be given [that] adjudications are interim in nature, and deal with an incomplete record. The concern of the underlying adjudication is [that] Sayers was put to the test of proving its set off claim on the same standard a party would be expected to do at a trial. Requiring such a standard on such a compressed timeline is unattainable and procedurally unfair. Adjudicators ought to be instructed to consider the prejudice of making orders with no monetary cap if the dispute is complex, the record is incomplete, and the determination may be highly (irreparably) prejudicial to a party if it turns out to be wrong.
(e) Section 13.18(5)(5.) - In addition to the above, if these payment awards are truly “interim”, then Adjudicators ought to be instructed to also consider the irreparable harm, and balance of convenience to the parties when making such an “interim” order. That consideration needs to be baked into the procedures adjudicators ought to follow with making payment orders. The goal should be to not allow a result where the “interim” payment, in effect becomes permanent. Adjudicators ought to be mindful of the surrounding circumstances and the concern if a payment is made. Owners have no recourse or security if an “interim” payment is made, and the contractor becomes insolvent. This is of particular concern in this case given Gay’s inability to pay subcontractors, and the 65 lawsuits it is currently involved in (as shown in the Leave Application).
(f) Section 13.18(5)(7.) - The procurement of the decision through fraud by Gay Company as set out in the leave application, relating to the undisclosed Lawson Gay Affidavit.
(g) Section 13.18(5)(6.) - The concerns of the appearance of bias by the Adjudicator.
[5] The leave panel directed the parties to “fix the questions for review” with the case management judge (D.L. Corbett J.). At the first case management conference (June 28, 2024), the case management judge directed Sayers to state the issues for review with particularity. This was done, and the issues particularised by Sayers were the issues the case management judge directed be the “questions for review”. In the case management direction of July 18, 2024, at para. 1, it was directed that “[t]he issues for judicial review shall be as set out at the end of this direction” (which are quoted verbatim, above). Neither party subsequently sought directions to vary the issues for the application. On this basis, we would not permit the parties to raise any issues that were not stated in the case management direction of July 18, 2024, as among the “issues for judicial review”.
Jurisdiction and Standard of Review
[6] This court has jurisdiction over this application pursuant to ss. 2(1) and 6(1) of the Judicial Review Procedure Act, RSO 1990, c. J.1 (the “JRPA”) and s. 13.18 of the Construction Act.
[7] Section 13.18(5) of the Construction Act provides:
The determination of an adjudicator may only be set aside on an application for judicial review if the applicant establishes one or more of the following grounds:
The applicant participated in the adjudication while under a legal incapacity.
The contract or subcontract is invalid or has ceased to exist.[^2]
The determination was of a matter that may not be the subject of adjudication under this Part, or of a matter entirely unrelated to the subject of the adjudication.
The adjudication was conducted by someone other than an adjudicator.
The procedures followed in the adjudication did not accord with the procedures to which the adjudication was subject under this Part, and the failure to accord prejudiced the applicant’s right to a fair adjudication.
There is a reasonable apprehension of bias on the part of the adjudicator.
The determination was made as a result of fraud.
No challenge is brought to the constitutionality of this provision, and we proceed on the basis that this court’s jurisdiction is circumscribed by 13.18(5).[^3]
[8] Grounds 1, 2 and 4 do not arise in this case. The questions over which this court has jurisdiction, therefore, are whether Gay Co. has established a basis for review under any of ss. 13.18(5)3, 5, 6 and/or 7.
[9] The standard of review of the Adjudicator’s Determination is reasonableness: Canada (Minister of Citizenship and Immigration v. Vavilov, 2019 SCC 65. Issues of procedural fairness are reviewed in this court on a standard of correctness: Abrametz v. Law Society of Saskatchewan, 2022 SCC 29. In the context of an application for judicial review pursuant to s. 13.18 of the Construction Act, issues of procedural fairness must be analysed through the lens of s. 13.18(5)5: (a) an applicant must show that the procedures followed did not accord with the procedures to which the adjudication was subject under Part II.1 of the Act; and (b) an applicant must show that the failure prejudiced the applicant’s right to a fair adjudication.
Summary and Disposition
[10] The application is dismissed.
[11] The Determination turned primarily on the Adjudicator’s findings in respect to Sayers’ delay claims. The Adjudicator found that construction schedules were not agreed in the Contract, and that Sayers had not pursued a claim for a credit in respect to its claims in accordance with the Contract. These findings were reasonable. Further, Sayers’ arguments respecting the reasonableness of these determinations do not raise grounds within this court’s jurisdiction to review in all the circumstances of this case.
[12] Sayers has not identified any “procedure to which the adjudication was subject” that was not followed that prejudiced its right to a fair adjudication, thus not raising any reviewable ground for procedural fairness issues. In any event, the process followed was procedurally fair in all the circumstances.
[13] Sayers raises several arguments that are inconsistent with the prompt payment provisions in the Construction Act: these arguments, collectively, challenge the Legislature’s wisdom in prioritizing prompt payment ahead of preserving common law contractual rights to leave issues (and payment) until after a complete litigation process. Those arguments do not avail Sayers. The prompt payment provisions require a payor to establish its set-off claims, pursuant to the applicable contract, through the prompt payment process, if it wishes to resist an interim prompt payment determination. Where a payor is unable to do so, prompt payment will be directed, and the payor may be left to pursue its claims after payment.
[14] Decision in this case is straightforward in light of the contract entered into between the parties: it is a comprehensive CCDC agreement, with an “entire agreement” clause, and payment certification and payment provisions. The Adjudicator reasonably construed these provisions and reasonably applied his reading of the contract to the record before him. It is apparent that the Adjudicator found the issues to be as straightforward as we do: Gay Co. was entitled to payment under the contract and should have been paid promptly in accordance with the payment certifier’s certification and the Adjudicator’s Determination. Sayers had the benefit of the work done by Gay Co. and its suppliers, and payment should have flowed through the construction pyramid in a timely way, as contemplated by the parties’ agreement and the Construction Act.
Background
[15] Sayers is a family-owned grocery store in the Town of Apsley, in the Township of North Kawartha, Ontario. In December 2020, the store was destroyed by fire.
[16] Sayers contracted with Gay Co., as general contractor, to build a replacement grocery store. The contract award was in September 2021, with a subsequent re-tender in February 2022. Sayers and Gay Co. entered into a CCDC 2 Stipulated Price Contract in March 2022 (the “Contract”) for the construction of the replacement store. The Contract price was $8,159,730, including HST.
[17] Sayers takes the position that there was an agreement to complete the construction by December 31, 2022, which was subsequently amended by construction schedules agreed between the parties. Sayers says that in April 2022, the parties agreed to a construction schedule “to provide an additional three months” to Gay Co., with the project to reach substantial completion by March 2023, and for the store to re-open in April 2023.
[18] Sayers takes the position that substantial performance of the contract was not reached until March 2024, when the store re-opened. Sayers claims damages for delay, which it alleges “are close to $900,000”.
Events Triggering the Adjudication
[19] Sayers ceased payments to Gay Co. and delivered Notices of Non-Payment under the Construction Act, starting in late November 2023. Gay Co. then commenced two statutory adjudication processes under the Act, on December 21, 2023, and on February 4, 2024, in respect to its November and December 2023 invoices ($585,226.67 and $266,576.66, respectively). On consent, the adjudications were consolidated and heard together before an adjudicator.
The Impugned Determination
[20] The Adjudicator made the following findings:
(a) Sayers is the “Owner” and Gay Co. is the “Contractor” pursuant to a “contract” entered into between them on March 22, 2022, for a stipulated price of $7,221,000, plus HST, for a total of $8,159,730, inclusive. (paras. 1-3)
(b) The “Consultant” within the meaning of the Contract, was Maclennan Jaunkains Miller Architects (“MJMA”). Under the Contract, the Consultant determines amounts owing to the Contractor under the Contract and issues Certificates for Payment pursuant to the Contract. “Any issues in respect to the performance of the [Contract] Work or the interpretation of Contract Documents ‘shall’ be referred in writing to MJMA by the party raising the issue for interpretation and findings (GC 2.2.7).” (para. 4)
(c) The two disputed payments were certified for payment by the Consultant, in Payment Certificates Nos. 18 (November 30, 2023) and 19 (December 31, 2023). (paras. 6 and 8)
(d) Sayers raised three reasons why it did not pay the disputed invoices:
(i) Sayers is required to hold back $877,747.00 as notice holdback under the Act in respect to unvacated subcontractor liens;
(ii) Sayers alleges that Gay Co. delivered false statutory declarations when it submitted requests for payment in respect to the disputed invoices, in breach of contract and contrary to the Criminal Code;
(iii) Sayers “intends to make a claim” against Gay Co. for a credit to the Contract price pursuant to GC 6.6.1 for delay, in the amount of $1.2 million, plus $100,000 to $150,000 [per month] until the Project is completed. (para. 10)
(e) Sayers does not dispute the value of the construction work done by Gay Co. (para. 11)
(f) Sayers claims a credit of $184,136.19 for amounts paid by it directly to subcontractors of Gay Co. (para. 12). Gay Co. agreed to this claimed deduction upon proof of payment by Sayers, which was provided. Thus, this credit against the claim was allowed. (para. 12)[^4]
(g) Accordingly, the net claim for adjudication was $667,667.14, plus interest (para. 14)
(h) The Consultant certified the disputed Invoices for payment. The Contract required Sayers to pay Gay Co. the amount certified for payment within 28 days, subject only to holdbacks under the Construction Act. (para. 28)
[21] The Adjudicator set out the following statements of principle (Determination, paras. 23-24):
… the Divisional Court has consistently upheld the principle that “prompt payment is integral to the scheme of the Construction Act”. The purpose of the adjudication provisions is to provide a quick, efficient and interim determination allowing funds to flow down the construction “pyramid”. More particularly, the prompt payment scheme allows for the prompt adjudication of invoice disputes so that construction does not get bogged down in disputes between the parties. As the Divisional Court stated in SOTA Dental
The whole point of these provisions is to require prompt payment to avoid the consequences of disruptions to construction projects of brinksmanship over disputes [that] arise.
The effect of this process has already resulted in a number of Claims for Lien. It is readily evident that the consequences are foreseeable and that a refusal to pay because a delay claim is complicated is inconsistent with prompt payment provisions.
Finally, I note that section 13.15 of the Construction Act confirms that adjudication determinations are interim, allowing the parties to continue litigating the issues including those that are subject to a final and binding determination. The risk to [Sayers] is that it will not be able to retain monies payable pursuant to the Contract as security for a judgment in the delay action. The idea that prompt payment and adjudication can be denied due to a complex issue is inconsistent with the scheme of the Construction Act. Otherwise, if this were the case, there is a strong incentive for a payor to claim that their matter is too complex for adjudication, and this would defeat the purpose of the changes to the Construction Act.
As should be evident from the rest of these reasons, we agree with these statements.
Impact of Registered Claims for Lien
[22] The Adjudicator found that an owner’s liability to subcontractors is in respect to the “basic” 10% holdback obligation under the Construction Act. An owner may also be liable for additional “notice” holdback obligations, but these additional obligations do not arise on the mere registration of a claim for lien: they arise upon an owner receiving written notice of lien pursuant to s. 24(2) of the Act. The Adjudicator stated at para. 35 of the Determination:
[Sayers] acknowledged that there was no evidence of a written notice of lien. Accordingly, [Sayers’] counsel agreed that there was no obligation to retain additional holdback pursuant to s. 24(2).
[23] Before us, Sayers argued that it did not agree “that there was no obligation to retain additional holdback pursuant to s. 24(2).” Rather, it submitted that it had “actual” notice that satisfied the “written notice” requirement in the Act and so did have an obligation to retain additional holdback pursuant to s. 24(2) of the Act.
Alleged False Statutory Declarations
[24] Sayers’ argument on this point is that Gay Co. falsely stated in its applications for payment that its subcontractors had been paid. Its evidence that the subcontractors had not been paid were claims for lien subsequently registered by subcontractors.
[25] The Adjudicator found (at Determination, para. 48) that:
(a) There is no need to deliver a fresh Statutory Declaration provided that the most recently submitted declaration remains true;
(b) The Statutory Declaration was true as to the last payment received;
(c) Sayers did not deliver any evidence that subcontractors remained unpaid in accordance with the arbitration schedule or by the time of the oral hearing;
(d) In the absence of cross-examination, the Adjudicator was “reluctant to make any such finding of fraud or untrue statement or any other finding in respect to the credibility of either [side].
[26] Sayers argues that the absence of cross-examinations was a consequence of procedural directions from the Adjudicator, and that it was unfair to decide this issue on this basis, given the evidence that it did provide that subcontractors had not been paid by Gay Co.
Intended Delay Claim
[27] The Adjudicator characterized this as the “primary reason for non-payment (para. 50). The Adjudicator summarized this as follows (paras. 50-51):
… [Sayers] has vigorously advanced an argument that the Contract provided for a completion date in March 2023 and that as a result, the Respondent is entitled to a credit for $1.2 million or greater and can-set off this amount against amounts due and payable pursuant to Payment Certificates Nos. 18 and 19.
[Gay Co.] … disputes that [Sayers] has a contractual right to unilaterally set off amounts due and owing based upon a delay claim. In any event, [Gay Co.] denies that [Sayers] is entitled to a credit for delay. [Gay Co.] raises the following defences to [Sayers’] claim:
(a) The Contract did not provide for a scheduled completion date;
(b) [Sayers] has not discharged its burden to claim a credit;
(c) [Sayers’] claim for damages is for indirect or consequential damages which are exclusions in the Contract pursuant to GC 13.1.2.
[28] The Adjudicator found that there was no contractually binding schedule and gave detailed reasons for this conclusion (para. 68, following analysis of this issue at paras. 52-67).
[29] The Adjudicator also found that Sayers did not follow the process stipulated in the Contract for claiming a credit for delay claims against the Contract price (para. 81, following the analysis of this issue at paras. 70-81).
[30] The Adjudicator did not find it necessary to decide the third basis of Gay Co’s defence of Sayers’ claim based on delay (the Contract precluded claims for consequential loss or indirect damages) and so did not do so. (para. 82)
[31] In the result, the Adjudicator found that Gay Co.’s applications for payment had been certified and were payable, subject only to deduction for the amounts paid by Sayers directly to Gay Co. subcontractors and found the balance of $667,667.14, plus interest, was payable by Sayers to Gay Co.
Arguments Before this Court
General
[32] Sayers’ principal argument is that it has a meritorious delay claim and the Adjudicator erred in rejecting it and erred in ordering prompt payment in the face of that claim. This principal argument is packaged in multiple ways, as we shall explain, but this is the nub of the case.
[33] In our view, Sayers’ argument was considered by the Adjudicator and rejected on the merits, for detailed reasons responsive to Sayers’ arguments. On judicial review, the starting place in this court is the findings of fact and analysis of the Adjudicator: judicial review is not a re-hearing de novo before this court on the record below, but rather a review of the decision in light of the record below.
[34] In its factum, Sayers provides a summary of the facts cited to the record below, and not to the Adjudicator’s decision (Factum, paras. 5-55). As this court has stated, repeatedly, this is not the correct approach to the facts on appeal or on judicial review. The correct approach is to set out the facts, as found below. Where an appellant or applicant disputes a factual finding, the finding below should be set out (cited to the decision) and then the basis on which the applicant says the finding is unreasonable or is a result of a palpable and overriding error (cited to the record). To fail to approach the findings below in this way is to mistake the role of this court, which is not to determine the facts at first instance on the basis of the record below, but to review the decision below. See Feng v. Ontario Securities Commission, 2025 ONSC 2268, para. 12 (Div. Ct.); H.H. v. Canada (Attorney General), 2005 SCC 25, para. 4.
[35] Sayers’ approach to the facts in its factum reflects its approach to the principal issue: it seeks to reargue the points it raised below rather than to address the findings made below and to explain why they were not reasonably available on the record. This approach is not salvaged by inviting the court to review the entire record and come to its own view on the facts and then arguing that the decision below is unreasonable because it does not accord to the view the court should take on a de novo review of the record.
[36] The Adjudicator’s decision rests on his careful review of the Contract. He found that the Contract contains an “entire agreement clause” (it does: Article 2 [Determination, para. 62]). It sets out a process for payment certification (it does: Article 5, and GC 5.3 [Determination, para. 25-28]). It contains provisions for Sayers to claim credits, which Sayers did not follow (it does: Article 6.6)). It does not contain a contractual commitment to meet a schedule or any remedies for failing to do so (there are no such provisions in the Contract). The Adjudicator found that there were obligations to provide and update schedules in the Contract, but that these did not amount to a contractual obligation to meet these schedules, or an obligation to pay consequential damages for failure to meet that obligation (paras. 52-64).
[37] In this case, the parties entered into a comprehensive written contract. Sayers has not persuaded us that the Adjudicator was unreasonable in his findings in respect to the terms of that agreement. Nor are we persuaded that the Adjudicator committed any error in principle in his approach to contractual interpretation: the Adjudicator cited and applied the applicable jurisprudence[^5] and Sayers has not pointed to any aspect of the Adjudicator’s analysis that was not faithful to that jurisprudence. The Adjudicator distinguished the two authorities relied upon by Sayers on the basis that the contracts in both of those cases were substantially or wholly oral, a proper basis to distinguish these cases from this case, where a formal written contract containing “entire agreement” and formal amendment clauses.[^6]
[38] Further, Sayers does not engage with the core of the Adjudicator’s analysis in its written or oral submissions. It does not address the entire agreement clause. It does not address the effect of the payment certification process in the contract or its contractual obligation to pay in accordance with a payment certificate. It does engage in the issue of the contract’s provisions for Sayers’ to claim a credit, but it mischaracterizes the Adjudicator’s findings on this issue (without addressing the findings the Adjudicator actually made on this issue).
Preliminary Issues: Motions to Adduce Fresh Evidence
(a) Fresh Evidence Admitted on Consent
[39] Both sides seek to adduce fresh evidence. Sayers brought its motion first. In response, Gay Co. consented to much of the proposed fresh evidence provided it could adduce its own fresh evidence in response to the fresh evidence supplied by Sayers. Sayers did not object to Gay Co.’s proposed fresh evidence provided it was in response to Sayers fresh evidence.
[40] On the basis of these positions, the court advised at the hearing that it would admit the fresh evidence tendered by Sayers to which Gay Co. consented (being all the tendered fresh evidence except that set out in Schedule “A” to Gay Co.’s Factum on the fresh evidence motion), and it would admit the fresh evidence tendered by Gay Co.
(b) Contested Fresh Evidence
[41] In general, the record on judicial review should be the same record that was before the original decision-maker when the underlying decision was made: Sierra Club Canada v. Ontario (Ministry of Natural Resources and Ministry of Transportation), 2011 ONSC 4086, paras. 10-15. Evidence that was not in the record below is generally inadmissible on judicial review unless it falls within recognized exceptions (Windrift Adventures Inc. v. Chief Animal Welfare Inspector, 2023 ONSC 4501, paras. 33-39):
I. Where the evidence provides background information to place a decision in context.
II. Where the evidence demonstrates a complete absence of evidence before the tribunal on a material point, to support an argument that a key finding is unreasonable because it rests on a factual finding unsupported by any evidence.
III. Where the evidence is in respect to natural justice, fairness, improper purpose, or fraud, and the evidence could not have been put before the original decisionmaker.
See also: Canadian National Railway Company v. Teamsters Canada Rail Conference, 2019 ONSC 3644, para. 12; Kadri v. College of Physicians and Surgeons of Ontario, 2020 ONSC 5882, paras. 12-18.
[42] Sayers argues that a more permissive standard for fresh evidence ought to be applied in judicial review of prompt payment determinations under the Construction Act (Sayers’ Factum on the Fresh Evidence Motion, paras. 9-15). We see no good basis for this argument, and the provisions of the Construction Act strongly militate against such an approach.
[43] Sayer cites no authority for its proposed approach to this issue. Rather, it argues that the short timelines for exchange of adjudication materials caused it unfairness, and materials it now seeks to adduce would have been adduced in the adjudication if it had had time to locate them.
[44] In our view, such materials are potentially admissible under one of the recognized exceptions, but only for the limited purpose of that exception: it is relevant to the argument of procedural unfairness. No relaxation in the Sierra Club principles are required to reach this conclusion. Fresh evidence may be used to establish prejudice arising from alleged unfairness. They may not be used for anything more, and in particular, they may not be used for an assessment of the underlying merits of the impugned determination. If the court found that there was procedural unfairness, and that this unfairness had deprived a party of a reasonable opportunity to adduce material evidence, and that this failure could have affected the result of the adjudication, then the remedy usually would be to allow the application and remit the matter for adjudication on a complete record.
[45] In this case, however, we are satisfied that the proposed fresh evidence – while it may have been admissible before the Adjudicator had it been tendered in the adjudication process – would not have affected the result. We are also satisfied that Sayers had a contractual obligation to mount its claim for a Contract credit in a timely manner if it wished to use that claim as a basis to stop paying for construction work as it was being done on its project. It had nine months to be gathering its evidence for its delay claim prior to the adjudication – not the mere days it says it had once the adjudication process was commenced.
[46] Further, as we explain below, we find no procedural unfairness that could ground a basis for this court to interfere with the impugned determination. Thus, even if these materials were admitted as fresh evidence, since there was no procedural unfairness, there is no need or the court to determine whether prejudice arose therefrom.
[47] Finally, we accept Gay Co.’s argument that the contested fresh evidence is replete with impermissible material. It contains factual argument, legal argument, inadmissible opinion evidence, hearsay on contentious issues, and de novo argument on the merits. None of this is properly admissible in any event: Gutierrez v. The Watchtower Bible and Tract Society of Canada, 2019 ONSC 3069, paras. 50-51; Lovell v. Ontario (Minister of Natural Resources and Forestry), 2022 ONSC 423, para. 8; Mensour v. The Corporation of the Town of Leamington, 2012 ONSC 3525, paras. 18-25; Rules 4.06(2) and 39.01(5) of the Rules of Civil Procedure; Belsito v. 2220742 Ontario Ltd., 2017 ONSC 7207, para. 17.
[48] For all of these reasons, the disputed fresh evidence tendered by Sayers (set out at Schedule “A” to the Factum of Gay Co. on the fresh evidence motion) is not admitted into evidence on this application.
Arguments on the Merits of the Application
(a) Notice Holdback
[49] Gay Co’s applications for payment did take account of Sayers’ obligation to maintain a “basic” holdback of 10% of the value of services and materials provided to the improvement. Sayers argues that, in addition to the “basic” 10% holdback, it was required to maintain a “notice” holdback in respect to the amount of any claims for lien registered against the project.
[50] Sayers is correct that “[a] requirement to pay an amount in accordance with this section [the prompt payment adjudication regime] is subject to any requirement to retain a holdback in accordance with Part IV [of the Act]” (Construction Act, s. 13.19). “Any” requirement to maintain a holdback includes the requirement to retain the “basic” holdback and “notice” holdback (Construction Act, ss. 22 and 24)).
[51] As noted above, the Adjudicator found that “notice” holdback obligations do not arise for an owner unless “written notice” of the lien is given to the owner by the claimant.
[52] Gay Co. argues that this finding is wrong in principle and unreasonable because it “[disregards] the legal constraints in the Act with respect to how additional holdback works when a party has “actual notice” of a registered construction lien” (Factum, para. 67). Gay Co. cites authority from the Superior Court and from this court in support of this position: Urbacon Building Groups Corp. v. Guelph (City), 2009 72065 (SCJ); Basic Drywall Inc. v. 1539304 Ontario Inc., 2012 ONSC 6391 (Div. Ct.).
[53] This analysis is problematic for two reasons. First, it overstates the authorities upon which it is based. Urbacon was a decision focused on finding the “undisputed basic holdback” and then ordering payments to subcontractors from this amount – against which a set-off claim could not be asserted by the owner. “Notice” holdbacks were not included in the calculation, and no findings were made respecting what kind of “notice” to an owner was required to give rise to a notice holdback obligation. In Basic Drywall, the court did find that “any notice [of a construction lien] before actual payment” would be sufficient to give rise to notice holdback obligations (at para. 24). However:
(a) The court, in Basic Drywall, was not concerned with the form of notice given, but rather with the timing of that notice; and
(b) The Construction Act and its regulations were amended when the prompt payment provisions were added, including amendments related to the form of notice to be given to an owner of registration of a construction lien [SO 2017, c. 24, s. 2].[^7]
[54] The applicable definition of “written notice of lien” in s. 1(1) of the Act means “a written notice of a lien in the prescribed form, given by a person having a lien.”[^8] This definition precludes mere “actual notice” obtained by an owner doing a title search and discovering that a lien has been registered. In this way, the Legislature has permitted a lien claimant to register a claim for lien without triggering notice holdback obligations, so that the claimant may protect its right to pursue a lien and may also cooperate with the efforts of its contractor to pursue the same funds, faster, through a prompt payment adjudication. The notice must be given “to” the owner “by” the person having a lien, in the “prescribed form”.[^9] If these conditions have not been met, then notice has not been given and notice holdback obligations do not arise. See Ziebarth Electrical Contactors Ltd. v. 2461476 Ontario Inc., 2021 ONSC 3360, paras. 45-51, per Master Kauffman (as he then was). Ziebarth states the law correctly on this point. Further, prior to Ziebarth, mere registration of the claim for lien was held not to be sufficient to constitute the requisite notice to give rise to notice holdback: Belmar Sheet Metal Co. v. 849539 Ontario Inc. (1995) 24 CLR (2d) 28 (Ont. SCJ Master); Hal Mann Tiles Inc. v. Palmer (1995), 1995 7093 (ON SC), 24 OR (3d) 93 (Master).
[55] The applicable definition provides that a subcontractor may register a construction lien so as to preserve its rights within the time periods stipulated by the Act but may also choose not to give “written notice” of the claim for lien so as to trigger notice holdback obligations and thereby frustrate an application for prompt payment. In this way, a subcontractor lien claimant may maintain its lien rights while also delaying asserting those rights against the notice holdback, in the hopes that an order for prompt payment will result in faster payment than would litigation of lien claims before the courts. These provisions are in accordance with the recommendations in Striking the Balance, the Report that led to the prompt payment amendments to the Act: “there is a need not only to preserve rights under the current Act, but also to attempt to ensure that the preservation of those rights does not defuse the potential usefulness of the adjudication regime.”[^10]
[56] In its factum, Sayers argues as follows:
The Adjudicator… simply interpreted section 24(2) as only being triggered if an actual “written notice” is provided, notwithstanding an Owner already has actual notice of registered construction liens. He misunderstood notice holdback in this scenario, and then stepped beyond his statutory authority limited by s. 13.19, as well as ss. 21 and 24(2) of the Act, and ordered payment in breach of holdback obligations. The logic is arbitrary, as it suggests that a subcontractor would attain greater rights by simply serving a letter indicating it was going to register a lien, but obtain lesser rights by actually registering that lien and the owner receives notice of it. (Factum, para. 74)
[57] With respect, the Adjudicator did not “step beyond his statutory authority”. The Adjudicator has jurisdiction to determine “basic” and “notice” holdback obligations and to apply those findings in the course of the adjudication. And that is what the Adjudicator did in this case. There is no evidence in the record establishing that Sayers received written notices from subcontractors giving rise to notice holdback obligations: Sayers’ argument that its discovery of liens registered on title constituted such notice is wrong in law, and the Adjudicator made no error in rejecting that argument on the merits.
[58] As noted above, the Adjudicator found that Sayers had conceded this point during argument. Before us, Sayers denies that this point was conceded. There is no transcript or recording of the hearing before the Adjudicator filed in this application, and so we have no way to assess whether the point was actually conceded. However, we would not rest our decision on the Adjudicator’s finding that the point was conceded. The record discloses no basis for finding that written notice was given by subcontractors to Sayers, and thus the Adjudicator was correct, in law, in finding that notice holdback obligations did not arise. Inquiry into the “concession issue” would not change the bottom-line conclusion on this issue.
[59] The court appreciates that payment of a prompt payment determination – and resulting payments by a contractor to subcontractors and suppliers – may have an impact on the quantum of subsisting liens and security required for those liens. Those are matters to be addressed in the lien proceedings, after the determination has been paid – adjudication and prompt payment are not to be delayed while those issues are sorted out. See: Okkin Construction v. Apostopoulos, 2022 ONSC 6367 (SCJ), per S.E. Fraser J.; Pasqualino v. MGW Homes Design Ltd., 2022 ONSC 5632 (Div. Ct.), per Ricchetti RSJ.
(b) Alleged Fraudulent Misrepresentation
Taking a “Dishonest Position”
[60] Sayers argues that Gay Co. took a “dishonest position” in the Adjudication when it argued that it has no contractual liability for Sayers’ delay claims. It argues that this position caught Sayers by surprise and that it did not have a fair opportunity to respond to it.
[61] We do not accept this argument. It would be unusual (to say the least) for there not to be a construction schedule for a project of this scale. It would be unusual (to say the least) for an owner not to have an interest in seeing the project completed as soon as possible. However, it is only a portion of projects for which the contractor contractually obliges itself to meet a construction schedule and to be liable to the owner for delays beyond that schedule. Where the parties have entered into a comprehensive written agreement, and where the contractor has agreed to be liable for delays to an agreed schedule, there are usually penalty clauses that prescribe (and limit) the contractor’s obligations upon default. As the Adjudicator noted in the Determination, there is no term of the Contract obliging the Contractor to meet an agreed schedule, there is no provision prescribing the contractor’s obligations upon default in meeting the schedule. Instead, there is an “entire agreement” provision, and a provision precluding liability for indirect or consequential losses, and no term obliging the Contractor to meet a particular schedule.
[62] It is not surprising that the record discloses that construction scheduling was discussed between Sayers and Gay Co. It is not surprising that schedules were established and amended from time to time. These events are not inconsistent with Gay Co.’s position that it was not contractually obligated to meet an agreed schedule, and it is not liable for damages for failure to meet that obligation.
[63] Sayers points to litigation between Gay Co. and its steel contractor, and an affidavit delivered on behalf of Gay Co. in those proceedings, to argue that Gay Co. knew there was an agreed construction schedule and is relying on that schedule in its dispute with its steel contractor. It argues that it was dishonest of Gay Co. to take diametrically opposed positions, in sworn evidence, in two different proceedings.
[64] We do not see this evidence in this way. First, the contractual terms between Gay Co. and its subcontractors do not have to mirror the terms of the Contract it has with Sayers. A subcontractor could be contractually bound to a construction schedule where the contractor does not have a comparable obligation to the owner.
[65] Second, losses to the contractor from subcontractor delay may be direct damages, rather than indirect damages, and may be distinct from any liability the contractor could have to the owner for delay. In the instant case, if Gay Co. had planned on a schedule to complete construction within nine months and was delayed in the project because the steel subcontractor did not meet its date for delivery of the steel, Gay Co. could face increased and unrecoverable costs as a result, in the context of its having a fixed price contract with Sayers. Delay in a project typically causes price escalations in many layers of the construction pyramid, and it is not incoherent, let alone dishonest, for Gay Co. to take the position that it has incurred losses for delays caused by one of its subcontractors, but that it is not liable under the Contract to Sayers for delays.
[66] Third, there is nothing “fraudulent” about a contractor taking the position with owner that it has no liability for delay and taking the position with a subcontractor that the subcontractor has delayed the project. The project could have been delayed by a subcontractor, even if contractor turns out not to have liability to owner for that delay. Indeed, where owner is asserting a delay claim against contractor, it is quite routine for the contractor to deny that claim, but to claim over against subcontractors in the event owner prevails against it on the delay claim.
[67] Fourth, “completion date” in the context of the Adjudication referred to a contractually binding obligation, and not construction schedules that did not have contractual force. Sayers equates the two in its central argument. Gay Co. was not required to concede a contractual obligation to complete by a specific date; neither was it dishonest in taking a contrary position.
[68] Fifth, nothing Gay Co. said or did after Sayers initiated its claim for a credit pursuant to Article 6.6 of the Contract could reasonably have led Sayers to believe that Gay Co. had acknowledged contractual liability for delay claims. Work continued. Monthly payment requests were made for the work done. Those requests were certified and paid. No further steps were taken by Sayers to demonstrate its claim for a credit to MJMA. The Adjudicator accepted Gay Co.’s position that there was no contractual liability for delay claims – in his view, Gay Co’s position was correct – and Gay Co. can hardly have acted “fraudulently” in advancing a correct argument respecting the Contract.
[69] Finally, parties are entitled to advance alternative theories in litigation. This does not entitle parties to swear false affidavits, of course, but advancing alternative legal characterizations is not dishonest, let alone fraudulent.
[70] We agree with Gay Co. that Sayers’ argument on this point is also an attempt to re-argue the underlying merits. Gay Co. did not make a “fraudulent misrepresentation” by advancing its position on the effect of the Contract. We would not give effect to this argument.
False Statutory Declarations
[71] Sayers submitted to the Adjudicator that Gay Co. relied upon false declarations in support of its payment claims. The Adjudicator did not accept this argument and gave rather brief reasons for this conclusion. One of the findings the Adjudicator did make was that the Statutory Declarations were true at the time they were made (even if they may have ceased to be true by the time one or both of the two claims for payment were made).
[72] I see no basis on which these allegations could justify an allegation of fraud. It was clear the parties and the Adjudicator that, by the time of the adjudication, subcontractors had not been paid. The Adjudicator saw this as a consequence of Sayers’ failure to pay Gay Co. in accordance with the Payment Certificates and as had been required by the Contact. The Adjudicator was also aware that Sayers had paid some of Gay Co.’s suppliers directly, so that those suppliers would continue to provide services and materials to the project, so that it could be completed, and the Adjudicator allowed a credit against the claimed payments for these direct payments (a credit to which Gay Co. consented). The Adjudicator noted that this disruption in the orderly flow of funds was a consequence of Sayers’ failure to make timely payments in accordance with the Contract and further noted that registration of claims for lien from subcontractors was the result. To the extent that the state of Gay Co.’s accounts with its subcontractors was not updated to reflect non-payment arising because of Sayers’ payment default to Gay Co., no one was misled, and the Determination was not a result of any misapprehension as to the true state of affairs. We would not give effect to this argument.
[73] Sayers also argues this point as a question of procedural fairness. The Adjudicator precluded cross examinations and then relied on the absence of cross examinations as a reason to decline making a finding that reliance on the impugned Statutory Declarations was dishonest. We accept that the Adjudicator’s reasons on this point are less than satisfactory. However, judicial review is not a “treasure hunt for error” (Vavilov, para. 102; Taccone v. Registrar, Funeral, Burial, and Cremation Services Act, 2002, 2025 ONSC 6879, para. 67). This was a subsidiary point in a case that should have been focused on Sayers’ primary objection: its delay claim. In our view, it is clear on the record that everyone was aware that subcontractors were not all being paid after Sayers stopped paying Gay Co., and that the Adjudicator reasonably did not see this as an arguable basis for Sayers to defend the claims for payment. Thus, even if it was thought that it was procedurally unfair to decide this point on the basis of an absence of cross examinations that had not been permitted, we would conclude that the unfairness did not affect the result.
(a) Procedural Unfairness: Adjudicating “Multiple and Complex Matters”
[74] Section 13.5(4) provides that an adjudication “may only address a single matter, unless the parties and the adjudicator agree otherwise.” Sayers argues that the adjudication was inconsistent with this provision.
[75] There were two “single matters” in dispute: Gay Co.’s claims to payment of Invoices 18 and 19. These two matters were consolidated by agreement between the parties and with the agreement of the adjudicator. Sayers properly does not object to the consolidation of the hearings into Invoices 18 and 19, since it consented to that consolidation. Rather, it argues that its multiple and complex defences to the claims to payment, including set-off claims, should have taken these disputes outside the adjudication regime pursuant to s. 13.5(4) of the Act.
[76] The Adjudicator ruled that Gay Co.’s two claims for payment were the two “matters” before him, consolidated on consent. The Adjudicator noted that s. 13.5(1)3 permits a party to adjudicate “disputes that are the subject of a notice of non-payment under Part I.1”. “Disputes” here is plural. The Adjudicator found that Sayers had raised multiple “disputes” in respect to the “matter” of Gay Co.’s two claims to payment. This finding is reasonable and accords with the scheme and provisions of the Act.
[77] Turning to Sayer’s position that Gay Co.’s claims should not be subject to adjudication because of complexity, it would defeat the prompt payment provisions if an owner could deprive an adjudicator of jurisdiction by raising, as a matter of defence to a “single matter” dispute, a defence that raises “multiple and complex” issues of fact and/or law. The subject-matter of the arbitration does not change because of a defence raised to it by an owner, although the focus of the arbitration may turn out to be on the defence, if the affirmative claim is otherwise uncontested.
[78] The primary basis for not paying these invoices was Sayers’ set-off claim for delay.
[79] If the Contract had obligated Gay Co. to follow an agreed schedule, and to be liable for prescribed damages for failure to do so, then the results below might have been different. We agree with Sayers that it may be challenging for an owner to pursue a set-off defence in circumstances where there are no clear contractual provisions permitting the set-off. But this is a consequence of the agreement entered into between the parties. Owners who wish to be able to pursue a set-off claim for delay, in the context of a prompt payment adjudication, will bear the burden, in the adjudication, of establishing the contractual basis of their entitlement.
[80] Complexity of a dispute does not oust an Adjudicator’s jurisdiction to decide that dispute if it is necessary to do so to rule on a “matter” properly the subject of an adjudication. Sayers argues, to the contrary, that the reason for limiting adjudications to a “single matter” was “to limit down what can be adjudicated and the complexity of same, [to] acknowledge only so much can be done in mere weeks without discoveries and examinations”. These arguments were considered and rejected by the authors of Striking the Balance in the report that grounded the prompt payment amendments to the Act.[^11] They expressly recommended that an adjudication respecting a claim for payment could include “set offs and deductions (i.e. for deficiencies) against amounts due under a proper invoice as set out in the notice to withhold or otherwise” and “delay issues as they relate to claims for payment.”[^12]
[81] If this court were to conclude otherwise, a clear path to undermining the prompt payment regime would arise – and ironically, this path would be more effective the less clear it was that the parties had agreed to contractual provisions placing the risk of delay on the contractor. Alternatively, if this court ruled that only the claim for payment could be adjudicated – and the multiple affirmative defences asserted by Sayers could not be included in the adjudication, then owners would not be able to pursue their affirmative defences in adjudication – a situation more draconian than permitting an owner to assert and establish – within the process of an adjudication – the defences they assert to an otherwise meritorious claim for payment.
[82] We accept that completing the project promptly was important to Sayers, and that it so told Gay Co. No explanation is provided, in the materials, as to why Sayers did not require terms in the Contract making the schedule a contractual obligation for Gay Co., and prescribing consequences for breach of that term.
[83] This does not put Sayers “out of court” in respect to its delay claim. The Determination does not preclude Sayers’ claims, whether founded in contract or in tort. All it means is that, in the meantime, funds to cover the costs actually incurred for the construction will be paid out to Gay Co., and thence to its subcontractors and suppliers pursuant to the Act. Or, put another way, what Sayers loses as a result of the Determination is some security for its claim against Gay Co. Where the parties have not included terms addressing liability for delay in their contract, this may be the consequence.
(b) Procedural Unfairness: Reversing the Order of Submissions
[84] Sayers argued that the Adjudicator reversed the order of submissions, requiring it to make its submissions first rather than in response to Gay Co.’s submissions. It says this procedural choice put it at a disadvantage and was procedurally unfair.
[85] We do not accept this submission. Aside from details over subcontractors paid directly by Sayers, Gay Co.’s claim was unchallenged in respect to the value of services and materials provided to the improvement. The only substantive issue was Sayers’ defence based on its set-off claim and its argument respecting notice holdbacks, defences for which it bore the burden of proof and argument. Where the substantial issues in dispute are an owner’s affirmative defences, we see no unfairness in requiring the owner to “go first” to establish its affirmative defences. In this regard, we note that Sayers was permitted to deliver reply submissions, which it did (38 pages in length), and it did not seek an extension in its deadline to deliver those reply submissions. It was permitted to deliver further reply submissions – in respect to the Contract addenda – thereafter.
[86] Further, it appears that the order for exchange of submissions was agreed by the parties as part of their agreement on the schedule for delivery of materials. Implementing the parties’ agreed schedule can hardly be procedurally unfair.
[87] Finally, s. 13.18(5) of the Construction Act limits procedural fairness issues on an application for judicial review as follows:
- The procedures followed in the adjudication did not accord with the procedures to which the adjudication was subject under this Part, and the failure to accord prejudiced the applicant’s right to a fair adjudication.
[88] Sayers has not identified “the procedures to which the adjudication was subject under this Part” which, it says, were breached by the order in which submissions were delivered. In an adjudication, as in other formal hearing processes, the party bearing the burden of proof is usually required to go first – usually the claimant. Where, however, the only significant live issues are questions of an affirmative defence, it may be most convenient to require the party with the burden of proof – the party advancing the affirmative defence – to go first. Deciding how best to proceed, in the circumstances of a particular case, is within an adjudicator’s discretion. We would not give effect to this argument.
(c) Procedural Fairness: Alleged Non-compliance with s. 13.11 of the Act
[89] Section 13.11 of the Act provides that the party who gives notice of adjudication shall provide a copy of the contract to the adjudicator and the other party.
[90] On January 9, 2024, Gay Co. uploaded “a version”[^13] of the Contract to the ODACC portal. Sayers delivered its primary submissions on February 12, 2024. Sayers did not object to the version of the contract uploaded to the portal, either before delivery of, or in its primary submissions.
[91] After Gay Co. delivered its responding submissions, Sayers raised its disagreement with the contract documents for the first time and delivered supplementary submissions on this issue on March 1, 2024.
[92] We fail to see the basis for a claim of procedural unfairness in respect to this issue. The party seeking adjudication is required to provide a copy of the contract. If the other side takes the position that the “version” provided is inaccurate or incomplete, the remedy is in the discretion of the adjudicator – and would usually involve some opportunity for the parties to submit further materials and make arguments after which the adjudicator would determine what constitutes the “contract”. That is, in essence, what happened here.
[93] Sayers argues that Gay Co’s “failure” to upload a complete and correct version of the contract, at the outset, caused it prejudice. We do not see how. Sayers had an opportunity to address the issue before the Adjudicator, and if the alleged shortcomings in the “version” uploaded by Gay Co. at the outset were material to Gay Co.’s delay claim, that should have been apparent to Gay Co. from the outset.
(d) Procedural Unfairness: Reliance on Sayers’ Failure “to Complete” its Claim for Credit under s. 6.6 of the Contract
[94] This issue, argued in Sayers’ Factum, was not listed as an issue for this application for judicial review. If Sayers wished to expand the grounds of the application, it should have sought case management directions permitting it to add a ground.[^14]
[95] In any event, this is not a question of procedural fairness. It is not inconsistent with “procedures to which the adjudication was subject” under the Act, nor does Sayers argue to the contrary and identify such a prescribed procedure that was not followed. Rather, this is an argument that the Determination was unreasonable by precluding Sayers’ set-off claim because Sayers had not “completed” the process prescribed in the Contract for claiming a credit.
[96] This ground of appeal fails because it is not accurately characterized as an issue within this court’s prescribed jurisdiction for judicial review. Further, in our view, the Adjudicator’s findings in respect to this point were subsidiary findings related to his interpretation of the Contract and add support to his conclusions respecting the Contract.
[97] First, in respect to this argument, Sayers mis-states the Adjudicator’s findings. It argues that the Adjudicator held that Sayers was disentitled to a credit because it had not “completed” the process for final determination of its claim to a credit against the Contract price pursuant to the Contract. That is not what the Adjudicator found. The Adjudicator found that Sayers invoked s. 6.6.1 of the Contract on June 29, 2023, and then did nothing at all to advance its claim to a credit. Nine months after having sent its notice under s. 6.6.1 of the Contract, without following any of the steps prescribed in ss. 6.6.2 – 6.6.4 of the Contract, Sayers asserted a set-off claim it had not advanced beyond mere assertion of the claim, and which had not resulted in a finding by the contract administrator under s. 6.6.5 that Sayers was entitled to a credit against the Contract price.
[98] If Sayers had taken reasonable steps to advance its claim under s. 6.6 of the Contract, then the Adjudicator would have been required to consider whether that claim – at whatever stage it had reached – should be a basis for withholding payments otherwise due to Gay Co. under the Contract. But that is not what happened. Gay Co.’s position seems to be that, because it had asserted a claim – without taking any steps to demonstrate it – its payment obligations under the Contract should have been suspended. The contract administrator did not see it that way when they authorized payment of Invoices 18 and 19, and the Adjudicator did not see it that way in his findings.
[99] Mischaracterizing the Adjudicator’s findings is not a strong basis on which to found Sayers’ argument on this point. It also ties into the observation we made at the outset of these reasons: the facts are those found by the Adjudicator, and not some oblique characterization of the facts in the record: this court is not assessing the record de novo, and arguing for a characterization of the facts not found by the Adjudicator as a basis for rejecting that characterization, does not assist Sayers.
[100] An overarching theme in Sayers’ submissions is that the adjudication process is short and informal and does not afford a party time to assemble a complicated claim. If Sayers had taken steps to document its delay claim – including the legal basis of that claim – in the nine months prior to the adjudication, it could have been in a stronger position to demonstrate its claim to the Adjudicator. Its argument that it was disadvantaged by the summary process of adjudications informs its approach to the issue. It was taking the position that there were firm, contractually binding, scheduling dates and that Gay Co. was liable to it for consequential losses flowing from failure to meet those scheduling dates. It did, apparently, nothing at all to establish these claims as a basis not to pay for ongoing construction work prior to the Adjudication.
[101] We accept Sayers’ argument that it should not be expected to obtain a final report on damages until after all the damages had been suffered. But that is not a basis on which it could reasonably do nothing to establish its claim, beyond asserting it, in the nine months between giving notice and the adjudication process. The Adjudicator did not find that Sayers’ claim failed because it did not “complete” its claim pursuant to s. 6.6.1 of the Contract, but because it did not “advance” that claim.
[102] Finally, the Adjudicator’s findings on this issue are supplementary to his core finding – that Sayers was not entitled to set-off under the contract for the delay claim it asserted in the adjudication. Even if it were thought that no weight should be placed on an incomplete contractual process for a credit, the Adjudicator’s core finding would remain unscathed.
(e) Adjudicator erred in applying too high a standard of proof for the set-off claim
[103] Sayers argues that interim adjudications are akin to injunctions or certificates of pending litigation, and that as a result, an evidentiary standard of “serious issue to be tried” should apply to both claims and defences.
[104] We would not accept this argument for two reasons. First, the merits standard for an interlocutory injunction applies to the merits of the claimant’s position, not the defence to that position. That is, after taking account of the evidence on the motion – both for the claim and for its defence, if the court is satisfied that there is a “serious issue to be tried”, the first hurdle of the injunction test is satisfied. It would be a serious error in principle to reject an injunction only because there was a “serious issue to be tried” about an affirmative defence to the claim. The analogy to injunction motions is not of assistance to Sayers.
[105] Sayers gives the following argument in defence of this position (without reference to the test for interlocutory injunctions):
The remedy is that Adjudicators need not assess matters as it a fulsome trial is being argued, nor should parties be held to the evidentiary standard of a trial. If delay claims are to be permitted in adjudications a party ought not be demanded to prove all of the elements of a delay claim as if they are at trial. Unless the threshold is lowered to a reasonably attainable standard, parties who have a meritorious set off or delay claims will simply have not fair opportunity to present them in a clear way in the confines of an adjudication. If there is a sizeable amount of money at stake, and there is a reasonable set off claim advanced which will need more time to be crystallized and proven with expert reports, the Adjudicator ought to make a determination that the dispute is too complex and multifaceted for adjudication, and be referred to court or arbitration if the contract between the parties requires same. Without some sort of gatekeeping, this system can quickly be abused and great miscarriage of justice will be permitted.
[106] This crie de coeur fails to take account of the basis of the Adjudicator’s Determination. He found that the Contract did not provide for the remedy Sayers pursued as a defence. To the extent to which Sayers was entitled to a “credit”, Sayers had not pursued the contractual provisions to establish that credit and was not entitled to resist paying for the value of services and materials provided to its property as a result. The consequence of this decision is that money would be paid immediately to Gay Co., which was required, by the Act, to use that money as trust monies to pay its subcontractors and suppliers. The answer to Sayers’ submission is that owners may protect themselves by bargaining for contractual rights and remedies respecting the construction schedule and then following those terms in the contract. There is no miscarriage of justice in Sayers being required to live by the terms of the Contract and losing some security over claims that are not provided for in the Contract.
(f) Adjudicator Failed to Consider Irreparable Harm and Balance of Convenience
[107] Sayers argues that an adjudicator’s determination is akin to an interlocutory injunction and should only be made after considering questions of irreparable harm and balance of convenience (the second and third branches of the injunction test).
[108] With respect, there is no merit to this submission. It would have been an error in principle for the Adjudicator to have applied these tests in a prompt payment adjudication.
[109] First, a prompt payment determination is not an interlocutory injunction. It is a comprehensive scheme for prompt adjudication of construction payment disputes, with the goal of seeing that funds flow to, and through, the construction pyramid promptly, to reduce cascading losses and delays on construction projects. The evidentiary burden is on a balance of probabilities, and the determination is without prejudice to the position of the parties in subsequent litigation. If one were to analogize to other systems of interim payments, it is more akin to an award for interim support in the family law context than it is to an interlocutory injunction: in both the family law context and the construction law context, the Legislature has concluded that payment cannot await “a fulsome trial”. Money must continue to flow on the construction project, and accounts among the parties can be adjusted, and awards made, after a “fulsome trial” in the fullness of time. It would largely defeat this scheme to hold that prompt payment adjudication is not available whenever an owner advances a “complex, multi-faceted” delay claim.
[110] Second, if an analogy was taken to interlocutory injunctions, the analysis of irreparable harm applies to the claimant – in this case Gay Co. – and not to the respondent – Sayers. The “balance of convenience” applies to both sides and (important in the construction law context) other affected parties. To the extent that an assessment of prejudice and convenience should apply to the prompt payment regime, that assessment has been done by the Legislature. It is not part of the test to be applied by adjudicators.
[111] Third, owners can protect themselves from risks associated with making prompt payment while there are subsisting disputes. They may bargain for contracts contain clear contractual provisions – including processes for determination and remedies – in which event they can expect adjudicators to apply them. They can require performance bonds from contractors. And of course, when putting their minds to whether to seek these terms, owners will no doubt take account of the fact that contract prices are likely to rise where the supply is reduced of contractors willing to agree to such terms, and where agreeing to such terms requires contractors to shoulder more risk and incur costs to obtain performance bonds.
[112] Fourth, the Legislature has addressed the application of funds received by a claimant as a result of a Determination, both within the prompt payment regime, and in respect to the trust provisions of the Construction Act. These provisions are part of the overall “balance” that has been “struck” by the Legislature when establishing the prompt payment regime. This balance would be thrown askew if an owner, at the end of the contract, after the work has been performed, can defeat an otherwise valid claim for payment by advancing a set-off claim that is not justified under the terms of the Contract.
Reasonable Apprehension of Bias
[113] Sayers argues that there is a reasonable apprehension of bias arising from the following points:
(A) Refusal to provide a copy of the ZOOM recording of the oral submissions of the parties (which Sayers says should raise an adverse inference that there “was bias at play”);
(B) Consistently ignoring Sayers’ procedural objections and concerns;
(C) Refusing to consider evidence that was not filed by a filing deadline;
(D) The reasons read like a decision-maker searching for a pre-decided result, rather than a neutral arbiter seeking the truth;
[114] We will address only one of these concerns in detail – the question of production of the ZOOM recording or a transcript.
[115] Different tribunals take different approaches to transcript/recording issues. Some, like many labour arbitrators, do not record evidence, let alone argument. Others, such as the Landlord Tenant Board, record their hearings, including argument. And in many contexts, courts and tribunals record some proceedings solely to protect the decisionmaker from wanton allegations of misconduct (a primary reason, for example, that some judges record family case conferences).
[116] There is no obligation on an adjudicator to record argument. If the adjudicator does record argument, it is in the adjudicator’s discretion whether to keep the recording. If the recording is kept, it is in the adjudicator’s discretion whether to release it to the parties. No inference of bias is available from an adjudicator’s exercise of discretion not to release the recording of argument.
[117] This said, adjudicators might bear in mind the position in which this court will find itself if there is no record for us to check. This case illustrates one such instance.
[118] The Adjudicator states, in his reasons, that Sayers’ counsel acknowledged that no written notice of lien was given by subcontractor lien claimants to Sayers, and that consequently, Sayers had no “notice holdback” obligations under the Act. Before us, Sayers acknowledges that it did not receive written notice from lien subcontractors, but it denies that its counsel ever conceded its argument based on “actual notice.” We have no way to check what Sayers said to the Adjudicator on this point because we do not have the recording or a transcript from it.
[119] One way an Adjudicator may address this situation during a hearing is to release a mid-hearing ruling memorializing a concession that has been made, or to request that the party making the concession file it in writing during the hearing. Not everything that is said during oral argument can be addressed in this way, of course, but for an important point that effectively concedes one of the major issues before an adjudicator, it would be very helpful for this court to have something, on the record of the hearing, confirming the concession.
[120] At para. 111 of its Factum, Gay Co. submits that counsel on both sides consented to the Adjudicator’s request to record the proceedings “for his personal use only” and that the Adjudicator advised “that he would delete the recording shortly after the conclusion of the hearing, likely before the parties received the Determination.” Sayers did not address this point in its Factum (which was delivered before Gay Co.’s Factum) and we do not recall that Sayers addressed this point in oral argument. Taking the most favourable argument available to Sayers on this issue (if Gay Co.’s submission on this point is so), Sayers would argue that, notwithstanding what the Adjudicator may have said, once Sayers advised that it was seeking the recording, the Adjudicator should have preserved it and provided it.
[121] From the perspective of a court responsible for hearing appeals and reviews, a record is helpful when an issue is raised in respect to which a transcript could assist. When a request is made for release of a recording or transcript, a clear response, with any reasons an adjudicator wishes to provide for that response, would be helpful to this court’s consideration about what to do when an issue arises that can only be resolved by knowing what was said at the hearing. However, to be clear, there is no obligation to keep a record of argument, and there is no obligation on an adjudicator to release a recording that may have been made. Of course, if a recording has been made, and may still exist, it would be open to this court to direct that it be provided to the court.
[122] In the circumstances of this case, we would not make an order for production of the recording. We would accept Sayers’ argument that it conceded that no written notice of lien was given by lien claimants to Sayers, but that it did not concede its argument based on actual notice of registered liens. The Adjudicator’s Determination and reasons adequately addressed this position, and as we have explained above, the Adjudicator did not error in his reasoning or conclusion on this point.
[123] There being no requirement for an Adjudicator to record oral argument, to keep any recording that is made of oral argument, or to release any recording that has been retained, it follows that no inference arises of “bias at play” when an adjudicator does not release a recording of oral argument when asked by a party to do so.
[124] In respect to the arguments based on procedural rulings, this court has not found that any of the material grounds of alleged procedural unfairness have been made out. Where there has been no demonstrated prejudicial unfairness, there can hardly be a procedural basis for a finding of reasonable apprehension of bias. Further, it would take a lot more than the procedural issues argued by Sayers to overcome the strong presumption of neutrality.
[125] In respect to the reasons themselves, we see no basis for the argument that they reflect bias. They are well-crafted and address the issues raised by the parties. Reasons are not supposed to set out the intellectual journey of the decision-maker. They are not a chronicle of the hearing. They are a decision, supported by reasons. They should read as if the decision-maker had “made their mind up” by the time they set out to write the decision. Good decision-writing follows a point-first model, setting out the conclusion, and then supporting that conclusion. In structure and logic, a well written decision generally follows the model of an academic thesis and not a bedtime story.
[126] With respect, this is not a close call on the issue of bias. The Adjudicator’s findings are reasonable, there was no prejudicial procedural unfairness, and the Adjudicator’s reasons fully explain how he reached his conclusions. We would not give effect to this ground of review.
Ongoing Lien Proceedings
[127] Questions were raised during case management and during oral argument about the relationship between these proceedings and ongoing construction lien proceedings. We have concluded that it is not appropriate for this court to engage in questions related to the impact of the payment of funds to Gay Co. as a result of the Adjudicator’s Determination and this court’s decision to uphold it. If the net value of lien claims is reduced as a result of the flow of funds following payment to Gay Co., the parties may seek variations in lien security within the lien proceedings, and those issues can be adjudicated there.
[128] This application was case managed on the basis that this court might have a role in sorting out concerns about over-security of claims resulting from claims asserted in both the prompt payment adjudication process and the lien claim process. This approach proved to be ill-advised. It served to delay payment that should have been prompt and seems to have led to some paralysis in the lien proceedings themselves.
[129] To be clear, the process followed in this case should not be seen as a guiding precedent for ordering payment into court, rather than payment in accordance with a Determination, pending an application for judicial review.
Other Issues
(a) Notice to the Attorney General
[130] We would re-emphasize here a practice point that delayed the hearing of this application (2024 ONSC 6123). Subsection 9(4) of the JRPA provides that a notice for judicial review shall be served upon the Attorney General of Ontario, who is entitled as of right to be heard on the application. This is a mandatory statutory provision reflecting the Ministry of the Attorney General’s role in overseeing tribunals and cannot be waived by the court. See Sutcliffe v. Ontario (Minister of the Environment) (2004), 2004 66285 (ON CA), 69 OR (3d) 257.
[131] It is not necessary to serve the Attorney General with the notice of the motion to seek leave to bring an application for judicial review pursuant to Construction Act, s. 13.18. If leave is granted, then notice must be given to the Attorney General of the application itself. Parties should bear in mind that, if the Attorney General decides to exercise their right to be heard on the application, the Attorney General’s participation should be factored into the schedule of exchange of materials. Early notice to the Attorney General is advisable to avoid unnecessary delays in scheduling the hearing of the application.
[132] The Attorney General did participate in this application, but only to address the question whether the court should require that prompt payment Determinations be reported to public legal databases. That issue is addressed later in these reasons.
(b) Ontario Dispute Adjudication for Construction Contracts (“ODACC”)
[133] This court directed (at 2024 ONSC 6123) that notice be given in this case to ODACC to consider:
(a) whether ODACC is entitled to notice and/or to be heard on applications for judicial review of prompt payment determinations under the Act; and
(b) whether ODACC should be required to devise and implement a policy for public release of adjudication decisions in the future.
(i) Notice to ODACC
[134] ODACC submits that it is not a statutory tribunal operating under the purview of the provincial government, but rather a “private corporation designated by the [Ontario Ministry of the Attorney General] through a contractual relationship as the Authorized Nominating Authority” pursuant to the Act. ODACC describes itself as having “unique status in the justice system.” Based on this analysis, ODACC argues that it should not be viewed as under the auspices of the Attorney General, but as an “arm’s length party” entitled to notice of court proceedings involving decisions of adjudicators made under its auspices. It argues that natural justice requires that a party with a sufficient interest in a matter has a right to be given notice and to be heard: Telecommunications Workers Union v. Canada (Radio-television and Telecommunications Commission), 1995 102 (SCC), [1995] 2 SCR 781. It asks that the court find that it is entitled to notice of motions for leave to seek judicial review from an adjudicator’s determination and, where leave is granted, notice of any application for judicial review of an adjudicator’s determination under the Act.
[135] Subsection 9(2) of the JRPA provides that a person who exercises or refuses to exercise a statutory power of decision may be a made a party to an application for judicial review. In Children’s Lawyer for Ontario v. Goodis (2005), 2005 11786 (ON CA), 75 OR (3d) 309, the Court of Appeal interpreted this provision to entitle a tribunal to be added as a party:
The ordinary meaning of this provision gives the administrative tribunal the right to be a party to the proceeding if it chooses to do so. It leaves to the tribunal, rather than the court the decision of whether to become a party to the application for judicial review.[^15]
[136] There is no statutory provision requiring that ODACC be given notice of leave motions or applications for judicial review brought under the Construction Act. ODACC requires parties to adjudications to enter into agreements respecting the adjudication. It would be open to ODACC to include a provision in the adjudication agreements requiring parties to give notice to ODACC of motions for leave to appeal or applications for judicial review. There is no evidence before this court that such a provision is included in ODACC’s adjudication agreements.
[137] On the law, ODACC is a “proper” party, but may not be a “necessary” party to an application for judicial review: r. 5.03 of the Rules of Civil Procedure. ODACC argues that it has a heightened interest in receiving notice, relative to statutory tribunals, since the Attorney General is at “arm’s length” from it and should not be taken to address its interests and concerns.
[138] ODACC’s status as a “private corporation” that is “under contract” with the Ministry of the Attorney General, raises interesting questions, but we do not find it necessary to address them for the purpose of deciding the notice issue. There is no law to support the argument that ODACC should be entitled to notice of a motion for leave to apply for judicial review, and we do not see how ODACC’s interests would be prejudiced if it was not able to participate at the leave stage. If we are wrong about that, it would be a simple matter for a notice requirement to be included in the Construction Act’s regulations.
[139] There is law to support the argument that ODACC should get notice of any applications for judicial review brought from decisions of adjudicators acting under its auspices. ODACC is a “proper” party to those applications and cannot exercise its rights if it is unaware that an application has been brought. We accept that notice on the Attorney General would not constitute notice on ODACC. We conclude that a party bringing an application for judicial review should serve that notice on ODACC so that ODACC may exercise its rights to be added as a party.
[140] For this notice requirement to be effective and efficient, ODACC should make parties to adjudications aware that they should serve notices of application on ODACC and should establish a means by which parties may do so efficiently (such as, for example, a service portal). Failure to take these steps could affect the exercise of the court’s discretion in a case where a party fails to serve ODACC.
(ii) Publication of ODACC Determinations
[141] This court has expressed concerns that ODACC prompt payment decisions have not been released to legal databases.
[142] On November 6, 2024, “Bill 216” received Royal Assent. Section 88(1)(j.1) of that Bill provides:
The Lieutenant Governor in Council may make regulations respecting any matter necessary or advisable to carry out effectively the intent and purpose of this Act, including regulations,
(j.1) requiring that the Authorized Nominating Authority make adjudication determinations publicly available, subject to the removal of identifying information, and governing the making of determinations publicly available and the removal of identifying information for that purpose;
[143] As of the hearing in this application (June 4, 2025), Bill 216 had not yet been proclaimed in force and no regulation had been promulgated pursuant to s. 88(1)(j.1). ODACC argued at the hearing that this court should not intervene in respect to this issue in light of this new legislation.
[144] This provision was proclaimed in force effective January 1, 2026, and the following provision was enacted as part of O. Reg. 264/25, s. 16:
(1) The Authority shall publish a copy of every adjudication determination on its website.
(2) Before publishing a copy of an adjudication determination, the Authority shall ask each party to the adjudication whether, in the party’s view, the determination should be anonymized, and if any party answers in the affirmative, the Authority shall,
(a) request that each party indicate, in the time and manner specified by the Authority, any portions of the determination that, in the party’s view, may identify either of the parties; and
(b) ensure that every portion indicated by a party in response to the request does not appear in the published version of the determination.
(3) This section applies with respect to an adjudication determination if the notice of adjudication is given on or after the first anniversary of the day this Regulation comes into force.
[145] In light of these enactments coming into force, it would not be appropriate for the court to address this issue in this case.[^16]
Conclusion and Order
[146] The application for judicial review is dismissed. Sayers shall pay costs of the application (including the costs of the motion for leave to bring the application and costs for the fresh evidence motion) to Gay Co. in the amount of $46,000, inclusive, within 30 days.
[147] In future, where leave to bring an application for judicial review has been granted, the applicant must serve a copy of the Notice of Application on the Ontario Attorney General in accordance with the JRPA and should serve a copy of the Notice of Application on the ODACC.
[148] We order as follows:
(a) The application for judicial review is dismissed;
(b) Sayers shall pay costs of the application (including costs of the motion for leave, and costs of the motions for fresh evidence) to Gay Co. of $46,000, inclusive, within 30 days;
(c) There shall be no costs for or against the Attorney General or ODACC;
(d) The funds held in court to the credit of this application (including any accrued interest) shall be forthwith paid out to Gay Co. and shall be credited to the amount owing by Sayers to Gay Co, pursuant to the Determination;
(e) Any shortfall or overpayment in the amount to be paid in accordance with the Determination shall be calculated and paid within seven days. Any disagreement in such amount shall be determined in writing by this panel of this court.[^17]
[149] We note that this order, and the impugned Determination, are not stayed pending any further proceedings that may be taken in the Court of Appeal, without prejudice, of course, to any order that court might make.
“D.L. Corbett J.”
“Ricchetti J.”
“Sutherland J.”
Released: March 4, 2026
CITATION: Sayers Foods Ltd. v. Gay Company Ltd., 2026 ONSC 918
DIVISIONAL COURT FILE NO.: 238/24 JR
DATE: 20260304
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
D.L. Corbett, Ricchetti and Sutherland JJ.
BETWEEN:
Sayers Foods Ltd.
Applicant
- and –
Gay Company Ltd.
Respondent
REASONS FOR DECISION
Released: March 4, 2026
[^1]: I refer to the corrected Determination as the “Determination” in these reasons: it is the final disposition of the matter by the Adjudicator, superseding the prior Determination. The only correction in the Determination was to change the name “Sayers Food Limited” to “Sayers Foods Limited”.
[^2]: Note that s. 13.18(5) 2 was repealed by SO 2024, c.20, Sched. 4, s. 22(2).
[^3]: It may be arguable that Ontario may not abrogate or limit the right of judicial review: Yatar v. TD Insurance Meloche Monnex, 2024 SCC 8. This issue was not raised in this application, and no notice of constitutional question was delivered: Courts of Justice Act, RSO 1990, c. C.34, s. 109 and Rules of Civil Procedure, r. 4.11.
[^4]: There was an outstanding issue over $8,014.80, which the parties agreed to resolve between themselves (para. 13).
[^5]: Sattva Capital Corp. v. Creston Mily Corp., [2014] SCC 53, [2014] SCR 633; Resolute FP Canada Inc. v. Ontario (Attorney General), 2019 SCC 60; Ottawa (City) v. ClubLink Corporation ULC, 2021 ONCA 847; Weyerhauser Company Limited v. Ontario (Attorney General), 2017 ONCA 1007 (rev’d on other grounds: 2019 SCC 60); Ventas Inc. v. Sunrise Senior Living Real Estate Investment Trust, 2007 ONCA 205; Dumbrell v. Regional Group of Cos., 2007 ONCA 59
[^6]: S & J Gareri Trucking Ltd. v. Onyx Corp., 2016 ONCA 505; Saint John Tub Boat Co. v. Irving Refinery Ltd., 1964 88 (SCC), [1964] SCR 614.
[^7]: Subsequent amendment of this definition (SO 2024, c. 20, Sched. 2) was not in effect and does not apply to this case.
[^8]: The prescribed form of the written notice of lien is provided by O. Reg. 303/18, s. 2(1).
[^9]: To be clear, I do not make any finding here about the extent to which any small deviation from the prescribed form would obviate a notice.
[^10]: Reynolds, Bruce and Vogel, Sharon, Striking the Balance: Expert Review of Ontario’s Construction Lien Act (Report to Ministry of Attorney General of Ontario, April 2016) (“Striking the Balance”), ch. 9, sec. 5.6.
[^11]: Striking the Balance, ch. 9, Part IV.
[^12]: Striking the Balance, ch. 9, sec. 5.3.
[^13]: Gay Co. Factum, para. 93.
[^14]: The court’s order grating leave to appeal required the parties to fix the questions for review before the case management judge, which was done, as described above. The resulting direction limits the issues on the application, and a party may not raise a fresh issue without the court’s permission.
[^15]: If a tribunal is added as a party to an application for judicial review, the court has discretion to determine the scope of participation to be accorded to the tribunal during the hearing, balancing the need for fully informed adjudication against the importance of maintaining tribunal impartiality, both in fact and in appearance: Ontario (Energy Board), v. Ontario Power Generation Inc., 2015 SCC 44, [2015] 3 SCR 147; Jaffer v. Ontario (Health Professions Appeal and Review Board), 2019 ONSC 6770 (Div. Ct.).
[^16]: On consent of all counsel, counsel for the Attorney General advised the court of these developments by letter dated February 4, 2026.
[^17]: Gay Co. had proposed a different approach. To be clear, the result of this application is that the Determination is in full force and effect. The finds paid into court stand as security for what is owed under the Determination, but do not affect calculation of what is owed. Calculation of what is owed shall be made based on the Determination, and funds held in court to the credit of this application shall be applied to the balance owed.