At Singleton Reynolds, our people are what makes us great. We come together every day with the common goal of providing exceptional legal services and ensuring we go above and beyond for each and every client.
The range of backgrounds of the partners, counsel, associates and staff of Singleton Reynolds enables us to offer a broad range of services.
Singleton Reynolds’ lawyers spend a significant amount of time researching and thinking about how industry or legislative changes could affect your business.
Singleton Urquhart Reynolds Vogel LLP is recognized as a leader in construction and infrastructure, insurance, commercial litigation, real estate and business law.
Singleton Reynolds has offices to serve you in Vancouver and Toronto.
Singleton Reynolds believes in community. Our team members are teaching at Canadian universities and abroad, lecturing the next generation of lawyers.
How was Singleton Reynolds first established? Find out more here.
Recognizing the leadership that contributes to the company successes.
Singleton Reynolds prides itself in being a leader in corporate social responsibility. We encourage diversity, charity, mentorship, civic dedication and neighbourhood support.
Singleton Reynolds strives to understand the balance between your career and your personal goals and encourages our legal and operations staff in the pursuit of their interests outside of the firm.
Our goal is to develop strong lawyers from student right through to partner. Mentoring and training start when you are a student and continue throughout your practice.
We are always on the lookout for talented professionals to contribute to our team. Singleton Reynolds offers a professional and challenging work environment, with a competitive compensation and benefits package.
The framers of Ontario’s Construction Act intended to provide a reasonable basis for the court to support the determinations of adjudicators, while at the same time allowing for the court to play an effective supervisory role where an adjudicator has seriously transgressed. The fact that adjudicator’s determinations are issued on an interim binding basis, as per ss. 13.1 and 13.15(1) of the Act, and are subject to the final and binding decisions of the courts or arbitral tribunals, provides a principled basis for providing such legislative protection to the determinations of adjudicators.
From a public policy perspective, if it is probable that the court would not intervene, then parties are more likely to honour the adjudicator’s determination and the policy objectives of the Act are more likely to be achieved.
The High Bar
Accordingly, while judicial review has been made available, its availability is significantly constrained.
First, permission (“leave”) is required before a party may apply for judicial review. Under s. 13.18(1) of the Act, an application for judicial review of a determination of an adjudicator may only be made with leave of the Divisional Court, and under subs. (2) a motion for leave must be filed no later than 30 days after the determination is communicated to the parties. Pursuant to subs. (3), a motion for leave may be dismissed without reasons.
Second, under s. 13.18(4), no appeal lies from an order on a motion for leave to bring an application for judicial review.
Third, an adjudicator’s determination can only be set aside for specified reasons.
Specifically, s. 13.18(5) provides that the determination of an adjudicator may only be set aside if the applicant establishes one or more of the following grounds:
Conspicuous by its absence is any reference to errors of fact or law. In other words, provided that none of the seven grounds is applicable, the adjudicator — as in the U.K. — has “the right to be wrong”.
Fourth, s. 13.18(7) provides that an application for judicial review does not operate as a stay of the operation of the determination unless the Divisional Court orders otherwise.
At the same time, however, subs. (6) provides that if the Divisional Court does set aside the determination, the court may require that any or all amounts paid in compliance with the determination be returned.
The philosophical approach taken by s. 13.18(5) is consciously analogous to that contained in Chapter VII of the UNCITRAL Model Law on International Commercial Arbitration (1985), with amendments as adopted in 2006. By way of comparison, article 34(2) of the Model Law provides:
(2) An arbitral award may be set aside by the court specified in article 6 only if:
(a) the party making the application furnishes proof that:
(i) a party to the arbitration agreement referred to in article 7 was under some incapacity; or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of this State; or
(ii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iii) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside; or
(iv) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Law from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Law; or
(b) the court finds that:
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of this State; or
(ii) the award is in conflict with the public policy of this State.
A review of the two provisions indicates that grounds 1 and 2 of s. 13.18(5) are analogous to article 34(2)(a)(i) of the Model Law, while ground 3 aligns with both article 34(2)(a)(iii) and article 34(2)(b)(i), and grounds 4 and 5 are similar to articles 34(2)(a)(ii) and (iv).
Although bias and fraud, the final two grounds referred to in s. 13.18(5) have no parallel in s. 34 of the Model Law, they are consistent with the grounds that are available to challenge an arbitrator as set out in article 12 of the Model Law, as follows:
Article 12. Grounds for challenge
(1) When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose any circumstances likely to give rise to justifiable doubts as to his impartiality or independence. An arbitrator, from the time of his appointment and throughout the arbitral proceedings, shall without delay disclose any such circumstances to the parties unless they have already been informed of them by him. An arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his impartiality or independence, or if he does not possess qualifications agreed to by the parties. A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made.
(2) Of the seven grounds set out in s. 13.18(5), ground 3 (the determination was of a matter that may not be the subject of adjudication or of a matter entirely unrelated to the subject of the adjudication) and ground 5 (the procedures followed in the adjudication did not accord with the procedures to which the adjudication was subject, and the failure to comply prejudiced the applicant’s right to a fair adjudication) are likely to be the most frequently invoked. Simply put, ground 3 raises the jurisdictional issue of the adjudicator who “answers the wrong question”, while ground 5 raises the issue of natural justice.
Ground 3: Jurisdiction
From a jurisdictional perspective, the matters that may be the subject of adjudication are set out in s. 13.5(1) as follows:
If a party initiates an adjudication in respect of a matter not listed, then a challenge under ground 3 should succeed.
Similarly, under s. 13.5(3) an adjudication may not be commenced if the notice of adjudication is given after the date the contract or subcontract is completed, unless the parties to the adjudication agree otherwise. Accordingly, if a determination results from an adjudication initiated after completion, and there is no express or implied agreement to adjudicate in the circumstances, a challenge based upon ground 3 would likely succeed.
As well, under s. 13.5(4) an adjudication may only address a single matter, unless the parties to the adjudication and the adjudicator agree otherwise. Thus, a determination dealing with multiple matters, absent an express or implied agreement to adjudicate multiple issues, would be subject to a challenge based upon ground 3.
In other words, in exercising their powers, adjudicators must make sure that the matter(s) included within the adjudication are either within the ambit of the jurisdiction created by the Act, or that there is an express agreement to adjudicate between the parties.
Ground 5: Natural Justice
The applicability of the principles of natural justice is also constrained, or focused, by a number of factors:
First, the adjudicator is intended to function as an inquisitor.
Pursuant to s. 13.12 (1), and subject to the obligation to conduct the adjudication in an impartial manner, in conducting an adjudication an adjudicator may issue directions respecting the conduct of the adjudication; take the initiative in ascertaining the relevant facts and law; and draw inferences based on the conduct of the parties to adjudication; conduct an on-site inspection (subject to certain limitations); obtain the assistance of a merchant, accountant, actuary, building contractor, architect, engineer or other person in such a way as the adjudicator considers fit, as is reasonably necessary to enable him or her to determine better any matter of fact in question; make a determination in the adjudication; and exercise any other power that may be prescribed in the Regulations; and, subject to the express requirements of the section, the adjudicator may conduct the adjudication in the manner he or she determines appropriate in the circumstances.
Second, so long as the adjudicator complies with the minimum procedural requirements of the Act and the Regulation, the determination will not be exposed to a serious risk of a successful challenge. This is because s. 13.6(1) provides that an adjudication shall be conducted in accordance with the adjudication procedures set out in this Part, the regulations, and, subject to subs. (2), any additional adjudication procedures that may be set out in the contract or subcontract. Subsection (2) provides that adjudication procedures set out in a contract or subcontract apply only to the extent that they do not conflict with this Part and the regulations, and their application is subject to the exercise of the adjudicator’s powers under s. 13.12.
Third, the adjudicator, in conducting the adjudication, is obligated to respect the principle of proportionality, which means that challenges under ground 5, which attempt to raise traditional administrative law complaints, will not succeed. For example, in the event that the adjudicator, reasonably respecting the principle of proportionality, issues a procedural direction, then it is unlikely that the court would intervene. In fact, it is anticipated that many adjudications involving small dollar amounts or discrete issues will be conducted on a documents-only basis — as is the case in other jurisdictions.
The reason for this is that under s. 4(b) of O. Reg. 306/18, adjudicators are required to “comply with the code of conduct”. The code of conduct is described at s. 7(1) of the Regulation as follows:
7.(1) The Authority shall, subject to the approval of the Minister, establish and maintain a code of conduct for adjudicators, and shall make the code of conduct publicly available on its website.
(2) The code of conduct shall address, at a minimum, the following matters:
As is evident from the Act and the Regulations, it is intended that the adjudicator, as an inquisitor, is empowered to take the initiative to craft a procedure that is appropriate, and proportional to the dispute, and procedural fairness will be considered by the court through this over-arching lens.
It is clear that the Act and the Regulations are written so as to support the institution of adjudication, and limit the court’s need to intervene to a limited number of extreme circumstances. Of particular importance, of course, is the implicit recognition that the public policy objectives of interim binding dispute resolution are of sufficient importance to support the proposition that, although adjudicators are not empowered to answer “the wrong question”, they do have the “right to be wrong” and still withstand judicial review.
From a public policy perspective, if it is unlikely that the court will intervene, then parties are more likely to honour determinations and the policy objectives of the Act are more likely to be achieved.
This article was originally published in the January/February 2020 issue of the Construction Law Letter.
For more information, please contact:
We are a preeminent Canadian construction and infrastructure law firm. Our peers and clients recognize our lawyers as the best in the construction industry.
News + Insights | Nov 29, 2023
News + Insights | Nov 24, 2023
News + Insights | Nov 16, 2023
Or call toll-free at 1-877-682-4404
This field is required