When Dispute Resolution is Disputed: Court of Appeal for Ontario Clarifies Dispute Resolution Timelines in Architectural and Construction Contracts

The Ontario Court of Appeal recently provided clarity on the interpretation of dispute resolution clauses in construction contracts in J.P. Thomson Architects Ltd. v. Greater Essex County District School Board, 2025 ONCA 378. This decision offers guidance for parties navigating standard form agreements, particularly concerning mediation and arbitration timelines.

Background

J.P. Thomson Architects Ltd. (Thomson) had a long-standing relationship providing architectural services for the Greater Essex County District School Board (the Board) for nearly 50 years. In 2016, Thomson secured two contracts with the Board, both of which included General Condition (GC) 18, a dispute resolution clause from the Ontario Association of Architects standard form contract that was current at the time.

In October 2021, Thomson invoked mediation under GC 18, citing a breakdown in the parties' working relationship. The Board, however, refused to appoint a mediator. The Board’s position was that there was no dispute to refer to mediation because any alleged disputes had arisen more than 30 days before Thomson's request and the opportunity for had elapsed. Thomson then served a notice to arbitrate and applied to the court for an order appointing an arbitrator). The judge agreed with the Board, concluding that GC 18 imposed a strict 30-day deadline for seeking mediation, which Thomson had failed to meet.

Thomson then appealed the judge’s decision to the Court of Appeal.

Court of Appeal's Decision and Reasoning

The central question before the Court of Appeal was whether GC 18 mandated a party to seek mediation within 30 days of a dispute arising as a condition precedent to arbitration.

The Court of Appeal determined that the application judge made a legal error by interpreting GC 18 as imposing a strict 30-day deadline for requesting mediation. The Court clarified that the phrase "within thirty (30) days" in GC18 sets a minimum period for parties to attempt to resolve a dispute informally before they can formally request mediation, rather than establishing a deadline for making such a request.

While other steps in GC 18's dispute resolution process have strict deadlines, there is no such deadline specified for serving a notice to arbitrate or for the initial request for mediation. This interpretation, the Court explained, aligns with sound commercial principles, particularly in the context of long-standing and complex relationships, by encouraging informal negotiation before escalating to more formal dispute resolution.

The Court concluded that a party does not forfeit its right to engage in dispute resolution by failing to serve a mediation request within 30 days of a dispute arising. This interpretation would be inconsistent with the language of GC 18, the overall dispute resolution scheme, other contractual terms, and good business sense.

Practical Implications

The Court of Appeal allowed the appeal, granting Thomson’s application. The Court ordered that mediation proceed within 60 days of the order, with Thomson retaining the right to seek arbitration under GC 18 if the dispute remained unresolved after mediation.

This decision shows that standard dispute resolution clauses, including those in standard form agreements, should be interpreted in a commercially reasonable manner that facilitates dispute resolution rather than creating unstated procedural barriers.

Parties should review their dispute resolution clauses carefully, understanding that a "within thirty days" stipulation may refer to a minimum waiting period rather than a strict deadline for initiating a process.

If you have questions about the dispute resolution clauses in your contracts, our team at Construct Legal can help.

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