Sayers Foods v. Gay Company: The Limits of Judicial Review in Construction Adjudication

In Sayers Foods Ltd. v. Gay Company Ltd., 2026 ONSC 918, the Ontario Divisional Court upheld an adjudicator's determination that ordered an owner to pay $685,574.91 to its general contractor and dismissed every ground of judicial review raised under section 13.18(5) of the Construction Act. The decision is the clearest statement yet that complexity does not push a payment dispute out of adjudication, and that a judicial review of an adjudicator’s determination can succeed only where the applicant establishes one of the grounds enumerated in section 13.18(5).

The dispute

Sayers Foods' grocery store in Apsley, Ontario, was destroyed by fire in December 2020. In 2022, Sayers engaged Gay Company Ltd. to rebuild the store under a CCDC 2 stipulated-price contract. Beginning in October 2023, Sayers stopped making payments and delivered notices of non-payment to Gay Co. Gay Co. commenced two statutory adjudications on its November and December 2023 invoices, which were consolidated on consent.

The adjudicator ordered Sayers to pay $685,574.91 plus interest. Sayers' main defence (an intent to make a delay claim) was rejected because the Contract contained no binding schedule obligation and because Sayers had not followed the contractual process for claiming a credit.

Sayers sought judicial review of the determination under four of the seven grounds set out in s. 13.18(5), arguing that the adjudicator lacked jurisdiction, that the process was procedurally unfair, that the determination was procured by fraud, and that there was a reasonable apprehension of bias on the part of the adjudicator.

The Divisional Court dismissed Sayers’ application in its entirety. None of the four s. 13.18(5) grounds was made out: the Court found no jurisdictional defect, no breach of procedural fairness, no fraud, and no reasonable apprehension of bias. Along the way, the Court also addressed two procedural points (service on ODACC and the use of pay-into-court orders) that have application beyond this case.

The Court's jurisdiction is circumscribed by s. 13.18(5)

The Court reaffirmed that its jurisdiction on judicial review is "circumscribed by 13.18(5)" (para. 7). Findings of fact are reviewed on a reasonableness standard. Procedural fairness is reviewed for correctness, but the applicant must show both a breach of the procedures prescribed under Part II.1 of the Act and prejudice to the right to a fair adjudication (para. 9).

That framing ran through the entire decision. Every argument Sayers raised was tested against the s. 13.18(5) list. As the court confirmed, “on judicial review, the starting place in this court is the finding of fact and analysis of the Adjudicator: judicial review is not a re-hearing de novo before this court on the record below, but rather, a review of the decision in light of the record below.” (para 33)

Complexity does not oust an adjudicator's jurisdiction

Sayers argued that its multi-faceted delay defence made the dispute unsuitable for adjudication under s. 13.5(4). The Court disagreed. Gay Co.'s two payment claims were the "matters" before the adjudicator; Sayers' various defences were "disputes" within those matters (para. 76).

Allowing complexity to oust jurisdiction, the Court warned, "would defeat the prompt payment provisions" (para. 77). Complexity "does not oust an Adjudicator's jurisdiction to decide that dispute if it is necessary to do so to rule on a 'matter' properly the subject of an adjudication" (para. 80). The practical effect is that a responding party cannot usually force a dispute out of adjudication by describing its defence as too large or too technical.

Notice holdback requires formal written notice

Sayers argued that its awareness of registered liens, discovered through title searches, triggered a notice holdback obligation under s. 24(2) of the Act. The Court held that the statute in effect at the relevant time required "a written notice of a lien in the prescribed form, given by a person having a lien," and that this "precludes mere 'actual notice' obtained by an owner doing a title search and discovering that a lien has been registered" (paras. 54–55).

That distinction is deliberate. The Court treated it as consistent with the Legislature's intention that lien registration not be used to obstruct the adjudication regime. Note, however, that the definition of a written notice of a lien was expanded in the recent changes to the Construction Act, such that the Court’s findings on this point may be of limited assistance in the future. See the Court’s clarifying comments in 2026 ONSC 1589.

An adjudication is not an interlocutory injunction

Sayers invited the Court to import the interlocutory injunction tests (irreparable harm and balance of convenience) into the adjudicator's analysis when determining whether a payment should be ordered. The Court refused. A prompt-payment determination, it held, is "a comprehensive scheme for prompt adjudication of construction payment disputes, with the goal of seeing that funds flow to, and through, the construction pyramid promptly" (para. 109).

The Court held that imposing such a standard would be contrary to this intent and would largely defeat the processes established by the Legislature.

Fraud under s. 13.18(5) requires more than a contested position

The Court held that there is nothing “fraudulent” in a contractor taking the position that it did not delay a project under its contract with an owner, while also arguing that a subcontractor did delay the project under the terms of its subcontract.(para. 66). And Gay Co. was "not required to concede a contractual obligation to complete by a specific date; neither was it dishonest in taking a contrary position" (para. 67) – particularly where the adjudicator ultimately found that position correct on the contract (para. 68).

Advancing alternative legal theories in good faith is not fraudulent misrepresentation. The "fraud" ground in s. 13.18(5)(7) is not a route for re-litigating a contract interpretation that the unsuccessful party disagrees with.

Procedural fairness requires breach and prejudice

Sayers could not identify any statutory procedure that had been breached (para. 12). The order of submissions had been agreed. The absence of cross-examinations reflected the adjudicator's discretion and was not a statutory requirement. The refusal to release a Zoom recording of oral argument was not a breach either: an adjudicator is not required to record oral argument, to keep any recording that is made, or to release one (para. 123).

The Court cited Vavilov for the principle that judicial review is not "a treasure hunt for error" (para. 73). A complaint that the adjudication was not run like a trial is not, without more, a reviewable ground.

Two procedural signals with broader application

First, a party bringing a judicial review application must serve ODACC as well as the Attorney General. ODACC is a "proper" party and "cannot exercise its rights if it is unaware that an application has been brought" (para. 139). The Court invited ODACC to set up a means for service of such notices. ODACC appears to have done this by adding a disclaimer to the Determination page in ODACC cases advising that the application and all supporting materials shall be provided to authrotiy@odacc.ca.

Second, the court advised that its case-management order that Sayers pay $700,000 into court pending the review "should not be seen as a guiding precedent" (para. 129). The Court described the pay-into-court approach as "ill-advised" because it delayed payment that should have flowed promptly through the construction pyramid and produced paralysis in the related lien proceedings.

Key takeaways

• Complexity does not push a payment dispute out of adjudication. A well-documented defence can succeed; a large, undocumented one will not on scope alone.
• Adjudication is not an interlocutory injunction and the associated test of irreparable harm and balance of convenience do not factor into an adjudicator’s decision making process.
• Honest advocacy is not fraud under s. 13.18(5)(7). Alternative legal theories advanced in good faith are not misrepresentations.
• Procedural fairness requires both a breach of a statutory procedure and actual prejudice as a result of the breach. An adjudicator has discretion to control process within the bounds set by the legislation.
• Parties brining a judicial review of a determination must serve ODACC and the Attorney General.
• Payment into court, rather than payment in accordance with the determination, is not a default procedure. The intent of prompt payment is to allow funds to flow down the construction pyramid.

If you have questions about the impact of this decision on future adjudications, adjudication strategy, or judicial review under the Construction Act, our team at Construct Legal can help.

This article is not legal advice and is provided for informational purposes only.