Procedural Fairness in Construction Act Adjudications

The standard of procedural fairness in the context of adjudications initiated under the Construction Act is still nascent. Since the introduction of the adjudication process in 2019, very few matters have been brought to judicial review—the prescribed appeal mechanism—on the basis of procedural fairness. Adding to the significance of this question is the greater availability of adjudication since Bill 216: Building Ontario For You Act (Budget Measures) came into force in 2024 and permitted “a party to a contract [to] refer a dispute with the other party to the contract respecting any prescribed matter or any matter agreed to by the parties to adjudication.”

Despite a lack of established law, parties to an adjudication may still wish to evaluate judicial review of an adjudicator’s decision. This article discusses the available resources that counsel can consider in order to provide guidance on whether procedural fairness is a live issue arising out of an adjudicatory decision.

Nature of Adjudication in Ontario

Procedural fairness refers to the obligation that decision-makers owe affected parties to ensure that administrative decisions are made using a fair and open procedure. In Baker v. Canada (Minister of Citizenship and Immigration) (“Baker”), the Supreme Court of Canada pointed out that the “duty of fairness is flexible and variable, and depends on an appreciation of the context of the particular statute and the rights affected…”.[1] Therefore, the degree of procedural fairness is highly contextual. A process sufficient for one kind of statutory decision may be insufficient for another.

Against this backdrop, it is worth noting two fundamental characteristics of the adjudication regime.

First, the Construction Act creates an adjudicatory process that is designed to provide quick determinations. Speaking in the legislature when Bill 142 was introduced,[2] Ontario’s then Attorney General stated that adjudication “is the key to speeding up the dispute resolution process.”[3] This objective is clear from the short timelines under which determinations must be issued—adjudicators must provide their determination within 30 days unless the parties consent to a longer timeline.[4]

Second, beyond speed, the adjudication regime generates only interim determinations. Explaining the reasoning behind this decision, Ontario’s Attorney General noted that adjudicators’ decisions are “binding on the parties on an interim basis to keep the project moving. That means that either party would still have the option of taking the dispute to court or arbitration for a final determination.”[5] By its nature, an adjudication decision may not be the final word on a dispute, a factor that influences the extent to which the parties are afforded procedural fairness protections.

As noted in Baker, the “closeness of the administrative process to the judicial process should indicate how much of those governing principles should be imported into the realm of administrative decision making.”[6] Decisions for which no statutory appeal procedure is available, or where the decision is determinative of the issue, attract greater procedural protections. Conversely, an interim decision which is not dispositive of the underlying dispute points towards lighter obligations of procedural fairness.[7]

Appeal under the Construction Act

While the factors discussed above suggest a lower standard for procedural fairness in adjudications, it is important to consider the text of the Construction Act. In particular, the way in which procedural fairness is discussed throughout the process.

Section 13.18(5) of the Act contemplates the narrow grounds for an appeal for judicial review from an adjudicatory decision:

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:

1. The applicant participated in the adjudication while under a legal incapacity.

2. Repealed: 2024, c. 20, Sched. 4, s. 22(2).

3. 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.

4. The adjudication was conducted by someone other than an adjudicator.

5. 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.

6. There is a reasonable apprehension of bias on the part of the adjudicator.

7. The determination was made as a result of fraud.[8]

Procedural fairness is therefore explicitly described as grounds for judicial review of an adjudicator’s decision. In Ledore Investments v. Dixin Construction, 2024 ONSC 598 (“Ledore”), the Divisional Court noted that “judicial review is available for breaches of procedural fairness” on the basis of subsection 13.18(5)5.[9] The court affirmed the statutory presence of procedural fairness by observing that section 13.6 of the Act requires adjudications to be conducted in accordance with the procedures, at that time set out in Regulation 306/18, and since that regulation’s revocation on January 1, 2026, in Regulation 264/25 (the “Regulation”). The Regulation in turn creates a “floor” by setting out:

7. (1) The Authority[10] shall 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:

1. Conflicts of interest and related procedural matters.

2. Principles of proportionality in the conduct of an adjudication, and the need to avoid excess expense.

3. Principles of civility, procedural fairness, competence and integrity in the conduct of an adjudication.

4. The confidentiality of information disclosed in relation to an adjudication.

5. Procedures for ensuring the accuracy and completeness of information in the adjudicator registry.[11]

In turn, ODACC has published an Adjudicators’ Code of Conduct, with the latest version thereof being effective July 7, 2025. Therein, ODACC provides that Adjudicators shall ensure the parties are informed of the procedural aspects of the adjudication process, listen and read carefully the views and submissions of the parties, and make determinations on the merits of the case.

Content of Procedural Fairness in Adjudications

Ledore, addressed above, is the first case that contains a substantive discussion of the content of procedural fairness in the context of Construction Act adjudications. In that case, a dispute arose over unpaid subcontract invoices where the non-payor and respondent, Dixin Construction (“Dixin”), had not issued notices of non-payment. The adjudication proceeded on an expedited, documentary basis with no opportunity for oral submissions. The adjudicator ultimately dismissed Ross Steel Fabricators & Contractors’ (“Ross Steel”) claim on the basis that Dixin had not issued a “proper invoice” to the owner and therefore the relevant prompt payment provisions were not engaged. The adjudicator reached this conclusion despite that issue not having been raised in either party’s submissions.

On judicial review, the court made several comments regarding the applicable content of procedural fairness in Construction Act adjudications. Predictably, the court found that Ross Steel was “not entitled to the full range of procedural protections that would apply, for example, in a final arbitration or court hearing.”[12] However, “the right to be heard on the determinative issue is a central component of even more limited procedural protections.”[13] On that basis, the court sided with Ross Steel and remitted the matter to the adjudicator for re-determination.

Post-Ledore, the court considered adjudicatory procedural fairness in Feldt Electric Ltd. v. Gorbern Mechanical Contractors Limited, 2025 ONSC 4150 (“Feldt”). Feldt was not a case of judicial review, but rather a motion by Gorbern Mechanical Contractors Limited (“Gorbern”) seeking a stay of Feldt's lien action and returning the lien security on the grounds that Feldt had failed to pay the determination of an adjudicator arising out of the same matter. Though not a case of judicial review or a matter in which a decision of an adjudicator was overturned, the discussion by the Court in Feldt in refusing the stay is helpful in understanding the developing content of adjudicatory procedural fairness.

Feldt raised several concerns with the adjudication process:

 (a)  the adjudicator found that he had jurisdiction to deal with the dispute despite Feldt  specifically objecting to the adjudicator’s jurisdiction on the basis that the proposed adjudication was not merely a matter of payment, but rather a contractual dispute that required determination of the parties contractual rights and scope of work under the subcontract before any determination could be made on amounts to be paid;

(b) the adjudication dealt with issues beyond the scope of those permitted by s. 13.5(1) without Feldt’s consent;

(c) the adjudicator proceeded with the adjudication in the absence of evidence from or participation by Feldt; and

(d) the adjudicator ignored Feldt’s opinion report… on Feldt’s scope of work.[14]

While the Court focused on the first of Feldt’s concerns, it noted that all four claims at least had merit.[15] In light of Feldt’s fourth concern, it is worth noting that failure by an adjudicator to consider a relevant piece of evidence may give rise to procedural unfairness claims. The Court also noted that Feldt had objected to the scope of the adjudication consistently and from the outset.[16] In fact, the adjudicator acknowledged Feldt’s objection in his decision, however made no attempt to address the issue substantively.[17]

The comments in Feldt further emphasize that, despite the legislative objectives set out above, courts are carefully attuned to procedural fairness concerns and failure of an adjudicator to take them into consideration can compromise further steps in the dispute. As the court pointed out, “[r]egardless of whether judicial review was pursued, both the adjudicator’s finding on jurisdiction and ultimate determination are in question. In the circumstances of this case, it would only exacerbate procedural unfairness to Feldt if [the Court] were to turn a blind eye to those concerns when deciding the appropriateness of staying Feldt’s lien action for non-payment of the adjudicator’s determination.”[18]

Practical Guidance

Thus far, the content of procedural justice in adjudications has focused on the right to be heard. In Ledore, the applicant benefitted (at judicial review) from the fact that it could not make submissions on what ended up being the dispositive issue for the adjudicator. Even at a lower standard of content for procedural fairness, this is a clear indication that a decision is reviewable. Since Ledore, amendments to the Construction Act provide that parties must raise an objection if a matter is not subject to adjudication when the party first makes submissions, or if the objection pertains to the adjudicator exceeding their jurisdiction, as soon as the matter is raised.[19] Feldt additionally offers some indication that less blatant instances in which a party is deprived of the right to be heard—by, for example, the adjudicator’s lack of consideration of relevant documents—may give rise to relief under the procedural fairness ground of review.

Overall, the content of procedural fairness in adjudications remains on the lower end of the scale. The decision in Feldt indicates that the right to be heard may go beyond bare inability to respond, and include situations where a party is not able to raise materials relevant to their case, or where jurisdiction is explicitly challenged. Adjudicators should be aware that an expedited process is not one without procedural fairness obligations.

In practical terms, counsel should focus on the statute, the record, and any tangible prejudice in considering whether to appeal an adjudicator’s decision on the grounds of procedural fairness. Objections to scope should be made early and consistently to establish a documentary record of a party’s objection. If the objection is as to jurisdiction, by statute such objection must be raised when the party first makes submissions. And in the case of an adjudicator exceeding their jurisdiction, such objection must be made under statute at the time it arises. It is worth noting that even though Feldt was clearly in violation of the adjudicator’s determination and came to the proceeding with less than clean hands, the violation of procedural fairness in the adjudication significantly softened the impact of that violation. Feldt certainly does not provide carte blanche for parties to simply not pay adjudicatory awards if they feel the process was unfair. However, the courts take procedural fairness in adjudications seriously and a lower standard should not be reason to avoid judicial review in cases where a party has been significantly prejudiced.