The relatively new adjudication provisions in Part II.1 of the Construction Act offer an efficient process to resolve disputes. However, the Act leaves certain procedural questions unanswered, which our Courts have now started to address.
Most recently, the Court of Appeal for Ontario in MGW-Homes Inc. v. Pasqualino, 2024 ONCA 422 considered whether an order vacating a writ of enforcement of an adjudicator's determination is a "judgment" under the Construction Act. If so, it was required to be appealed to the Divisional Court. The court confirmed that such orders are judgments in the meaning of Section 71 of the Act and confirmed that the proper route of appeal was to Ontario's Divisional Court.
Background
MGW-Homes Design Inc. ("MGW") was contracted to supply materials for Mr. Pasqualino's home renovation. Following a dispute between the parties, MGW registered a lien, issued a statement of claim and sought an interim adjudication.
The adjudicator made a determination that Mr. Pasqualino had to pay a fixed sum to MGW. Mr. Pasqualino refused and subsequently sought, and was denied, leave to judicial review. MGW filed the adjudicator's determination with the court and obtained a writ of enforcement. However, MGW failed to provide the required notice to Mr. Pasqualino pursuant to s.13.20(3) of the Construction Act.
Mr. Pasqualino brought a motion to vacate the writ on the basis that MGW failed to provide the required notice. The motion was successful as the motion judge ordered the writ be vacated and barred MGW from re-filing any writs of execution or taking any other enforcement steps in connection with the adjudicator's order.1 MGW appealed the motion judge's orders to both the Court of Appeal and Divisional Court as the proper appeal route was uncertain.
Decision
The Court of Appeal found that an order arising from an adjudicator determination constitutes a "judgment" and therefore appeals lie to the Divisional Court under s.71 of the Construction Act. The broad interpretation of the term "judgment" aligns with the Construction Act's underlying goal of efficiency and is consistent with case law interpreting similar appeal provisions in the Construction Lien Act and Mechanics' Lien Act.2
In rendering its decision, the Court of Appeal cited Bird Construction Co. v. C.S. Yachts Ltd. and Villa Verde L.M. Masonry Ltd. v. Pier One Masonry Inc.. Both cases affirmed s.71(1) of the Construction Act takes precedence over the appeal provisions in Courts of Justice Act and supported a broad interpretation of the term "judgment".3
In Villa Verde, the court held that "judgment" should be interpreted broadly to include not only lien claims but also judgments arising out of trust claims. In Bird Construction, the court held that an order dismissing an action after the plaintiff's claim for a lien expired constituted a "judgment" for the purposes of the appeal provision.4
More recently, in TRS Components Ltd. V. Devlan Construction Ltd., the court provided an unrestrictive definition of "judgement" stating that it includes those granted in an action commenced and continued under Part VII of the Act, inclusive of any counterclaim, crossclaim or third party claim, unless otherwise directed to proceed under the Rules of Civil Procedure.5
Key takeaways
The Court of Appeal concluded that an appeal from the motion judge's order on the enforceability of the adjudicator's determination is a "judgment" under the Act. Therefore the appeal exception provision of the Construction Act applies and the proper route of appeal is to the Divisional Court. Failure to follow the correct route of appeal risks delay, costs and potential extinguishment of appeal rights while following the wrong procedure. This decision helpfully clarifies that procedural point and aligns with the case law's consistently broad interpretation of the term "judgment" in appeal provisions.
Footnotes
1 MGW-Homes Inc. v. Pasqualino, 2024 ONCA 422 at para 12 [MGW].
2 MGW at para 24.
3 MGW at para 25; Bird Construction Co. v. C.S. Yachts Ltd. (1990), 38 O.A.C. 147 (C.A.); Villa Verde L.M. Masonry Ltd. v. Pier One Masonry Inc. (2001), 2001 CanLII 7060 (ON CA), 54 O.R. (3d) 76 (C.A.) at para 9.
4 MGW at para 25.
5 TRS Components Ltd. v. Devlan Construction Ltd., 2015 ONCA 294, 125 O.R. (3d) 161; MGW at para 31.
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