Important amendments to Ontario’s Construction Act (OCA) received Royal Assent on Nov. 6 under the Building Ontario For You Act (Bill216).
These come as a result of an independent review undertaken by Duncan Glaholt, founder of construction law firm Glaholt Bowles LLP, who was retained by the Ministry of the Attorney General.
They reflect the experience gained by the construction industry, legal profession and courts since the OCA was initially introduced in 2018. Several of these new amendments have specific transition rules attached or are subject to regulations yet to be put in place.
Putting the amendments in context, one is reminded that the principles behind the OCA are to ensure a steady flow of funds down the construction pyramid to contractors and subtrades, and to reduce the number of disputes going to court.
A recent Gowling WLG bulletin summarizes the three key themes contained in Glaholt’s report.
1. Encourage greater take-up of fast-track dispute resolution through adjudication by enhancing access to statutory adjudication.
2. Mandate the release of holdback on an annual basis and otherwise simplify the holdback regime to ensure cash flow down the construction pyramid to contractors, subcontractors, trades.
3. Provide greater clarity and certainty to the construction industry through various technical and housekeeping amendments.
In conversation with the Daily Commercial News, Sahil Shoor, partner with Gowling WLG, drew particular attention to certain noteworthy elements contained in Bill 216.
“The range of issues which can be referred to an interim adjudication be extended, and that this expansion will also include cross contract disputes within the same project,” Shoor said. “Any party involved in a related dispute can also request an adjudicator, or order the consolidation of adjudications. The current provision only permits a contractor to request consolidation if the parties do not agree. That’s going to be a big change.”
Shoor also spoke of new sections allowing parties to object to adjudicator jurisdiction or to argue that an adjudicator had exceeded their jurisdiction. This is very relevant given the instances of jurisdictional concerns raised in several recent cases, many of which have been discussed previously in this column.
Another amendment Shoor feels is important is the ability to request corrections to decisions in order to correct adjudication errors.
“What occurs right now is that when the adjudicator renders a decision, there’s no going back to the adjudicator. You have to go back to court.”
Furthermore, an adjudicator will now have jurisdiction to amend the determination in order to correct an injustice caused by an oversight of their adjudicator’s charge.
“These revisions avoid having to go to court to appeal the adjudicator’s decision. So once the decision is released, and if the parties have questions or if they want to get a clarification, they can go back to that adjudicator.”
There are also times when the adjudicator may not be qualified to address certain points of law. The amendments allow parties to use private adjudicators as long as the private adjudicator is qualified by the authority.
These changes expand the latitude of adjudication and represent good news for those wanting to have a quick, efficient and cost-effective resolution of disputes brought to conclusion.
Shoor sees Bill 216 going hand-in-hand with changes to the “proper invoice” obligations.
Notably, the burden for identifying any deficiencies in the invoice submitted by subcontractors and trades will fall to the party receiving it, not the issuing party. The receiving party will have seven days to give notification of any invoice deficiencies and what corrections are required. This leaves a small window to rule an invoice “not proper,” and will require vigilance on the part of owners.
Shoor regards Bill 216 not as an overhaul but instead a “tweaking or fine-tuning” to address certain pain points within the act, now that key provisions of the act have a couple of years under their belt. All are consistent with the overall objective of ensuring the flow of funds through the project.
John Bleasby is a freelance writer. Send comments and Legal Notes column ideas to editor@dailycommercialnews.com.
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