As construction industry participants become more comfortable with the use of Construction Act adjudications as a means to resolve disputes during the lifespan of a project, questions as to the methods of enforcing of determinations have become common.
I. Filing a determination
Section 13.20 of the Act provides that a party to an adjudication may, within two years of the later of the communication of the determination or the completion of any application for judicial review thereof, file a certified copy of the determination with the court. The determination may be filed electronically, and, upon filing, is enforceable as if it were an order of the court.
The filing party will be required to provide the court with a copy of the certified determination, requesting that it be “issued and entered” as if it were an order of the court, pursuant to section 13.20 of the Act and in accordance with Rules 59.04 and 59.05. When filing, it is helpful to assist the court, especially in jurisdictions outside Toronto, by providing an accompanying memo supporting your submission request which should include a reference to the relevant adjudication provisions of the Act, a description of the determination received, and an explanation of the intent for the filing. Where there is no action, the memo should request that the court assign a file number (i.e., similar to court file numbers assigned to vacating motion materials filed before the subject lien is perfected). Where there is a contemporaneous action between the parties that encompasses the matter that is the subject of the determination, the determination may be filed under that court file number.
If the determination is successfully filed, the court will return the certified determination with a court seal and file number. The filing party will need to ensure the determination is also entered with the court in accordance with Rule 59.05. While some jurisdictions will issue and enter the determination at the same time, others may require the filing party to submit the determination again for entering.
Once the determination is successfully filed, subsection 13.20(3) of the Act requires the filing party to give notice of the filing to the other party within 10 days.
II. Methods of enforcement
The process for enforcing adjudication determinations is similar to enforcing a judgment in a regular civil action. Once the filing party receives the filed determination from the Court and has given notice to the other party, the filing party may then proceed with the methods of enforcement of an order for the payment of money available under Rule 60 of the Rules of Civil Procedure, including:
- a writ of seizure and sale (Rule 60.07);
- garnishment (Rule 60.08);
- a writ of sequestration (Rule 60.09 – leave is required);
- a writ of possession (Rule 60.10); and
- the appointment of a receiver.
In enforcement proceedings, the following clerical matters should be considered and included in the parties’ materials:
- The parties are to be referred to as creditor and debtor, and not lien claimant/applicant and respondent on court documents. Although the Adjudicator, in their certified determination, will still refer to the parties as claimant and respondent, it is important to make this distinction in enforcement court documents; otherwise, the Court may reject filing. It is also important to refer to the Construction Act in the style of proceedings as you would in a lien action. You can also refer to an adjudication with Ontario Dispute Adjudication for Construction Contracts (ODACC) for further clarification.
- The determination is to be referred to as an order of the court. For example, the parties’ materials could refer to the determination as follows: “Under an Order of this Court, in the form of an issued and entered Determination of ODACC, bearing ODACC File No.: ________, made on ________, certified on ________, and filed with the Court on ________, in favour of the creditor”.
- The ODACC case file number should be included and appear under the court file number.
III. Things to Consider
Parties seeking to enforce an adjudication determination, should also consider the following:
- Lien Deadlines
If the adjudication determination relates to an issue of non-payment for which a lien arose under the Act, the party with such lien should take note of the lien preservation and perfection deadlines specified under sections 34, 36 and 37 of the Act. Even if the determination has been filed with the court and is being enforced as an order, the filing party must ensure that it complies with the lien deadlines specified under the Act if the party intends to enforce its lien.
- Enforcement Costs
The party seeking enforcement of an adjudication determination will be required to pay the fees of the court and sheriff for enforcement of the adjudication determination, as these fees are not exempt. It is also important to consider that, once a writ has been directed to the sheriff to enforce the sale of a property, the typical deposit requested by the sheriff ranges from $5,000 to $7,500 and could be more in some instances. The sheriff will also request copies of the following documents, without limitation, for which the enforcing party will bear the costs of obtaining and providing:
a. a full legal description of the property,
b. a copy of a recent property abstract where the land is situated along with copies of all documents supporting any charges, mortgages or liens on the property,
c. up-to-date statements showing the balance outstanding on all encumbrances currently registered on the property,
d. municipal tax statements, and
e. a certified appraisal of the property obtained within the last two months or a certified letter of opinion from qualified appraiser.
Subsection 13.19(1) of the Act provides that interest begins to accrue on determination amounts not paid when due at the greater of the prejudgment interest rate determined under subsection 127(2) of the Courts of Justice Act and the interest rate specified in the contract or subcontract, if any. Unless the interest amount has been calculated by the adjudicator, the enforcing party should include the prejudgment calculation in its materials in the enforcement proceeding.