5th Session, 42nd Legislature
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Bill 38
THE BUILDERS' LIENS AMENDMENT ACT (PROMPT PAYMENT)
| Bilingual version (PDF) | Explanatory Note |
(Assented to )
HIS MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:
1 The Builders' Liens Act is amended by this Act.
2 Subsection 1(1) is amended
(a) in the part before the first definition of the English version, by striking out "In this Act," and substituting "The following definitions apply in this Act.";
(b) in the definition "contract", by replacing the part before clause (a) with the following:
"contract" means a contract entered into with the owner or the owner's agent, as amended from time to time,
(c) in the definition "contract price", by striking out "or sub-contract" wherever it occurs;
(d) in the definition "prescribed", by adding ", except in sections 79 to 125" at the end;
(e) in the part before clause (a) of the definition "sub-contract", by adding ", as amended from time to time," after "another sub-contractor"; and
(f) by adding the following definition:
"sub-contract price" means the price to be paid under a sub-contract for performance of the sub-contract. (« prix de sous-traitance »)
3(1) Clause 2(1)(b) is amended by adding "or sub-contract price" after "contract price" wherever it occurs.
3(2) Subsection 2(2) is amended by adding "or sub-contract price" after "contract price".
4 Subsection 4(2) is amended, in the part before clause (a), by striking out "a contract price in the sub-contract," and substituting "the sub-contract price".
5 Subsections 6(2) and (3) are amended by striking out "under a contract or sub-contract" and substituting "or sub-contract price".
6 The section heading in section 9 is replaced with "Lien time limits do not affect trust rights".
7 Section 11 is amended
(a) in clause (a) of the English version, by striking out "him" and substituting "the person";
(b) in clause (b) of the English version, by striking out "his" and substituting "the person's"; and
(c) by replacing clause (c) with the following:
(c) that waives or purports to waive any of the following:
(i) a right of lien under this Act,
(ii) a right under a trust established by this Act,
(iii) a prompt payment requirement under this Act,
(iv) a right to seek adjudication of a matter that is the subject of a prompt payment requirement;
8 Subsections 24(1) and (2) are amended, in the part before clause (a),
(a) by striking out "him" and substituting "the person"; and
(b) by striking out "40 days" and substituting "60 days".
9(1) Subsection 25(1) is amended, in the part before clause (a), by striking out "40 days" and substituting "60 days".
9(2) Subsection 25(2) is amended
(a) in the part before clause (a), by striking out "40 days" and substituting "60 days"; and
(b) in clauses (d) and (e), by striking out "contract price for the sub-contract" and substituting "sub-contract price".
9(3) Subsection 25(3) is amended, in the part before clause (a), by striking out "40 days" and substituting "60 days".
9(4) Subsection 25(4) is amended
(a) in the part before clause (a), by striking out "40 days" and substituting "60 days"; and
(b) in clauses (c) and (d), by striking out "contract price for the sub-contract" and substituting "sub-contract price".
10 Subsections 27(3) and (4) and 34(1) are amended by striking out "40 days" and substituting "60 days".
11 Section 36 is amended
(a) by replacing the section heading with "Architects and engineers excluded";
(b) by striking out "Notwithstanding any other provision of this Act, an" and substituting "An"; and
(c) in the English version, by striking out "his professional fees and charges" wherever it occurs and substituting "the professional fees and charges of the architect or engineer".
12 The following provisions are amended by striking out "40 days" and substituting "60 days":
(a) subsection 43(1);
(b) clauses 43(2)(a) and (b);
(c) clauses 43(3)(a) and (b);
(d) clauses 43(4)(a) and (b);
(e) clauses 43(5)(a) and (b);
13 The following is added after section 78:
PROMPT PAYMENT
Overview
This Division requires the timely payment of amounts owing under contracts and sub-contracts. It includes
a requirement for a proper invoice,
deadlines for making payments,
a requirement for a notice of non-payment when an amount is in dispute in order to suspend a payment deadline,
rules for paying sub-contractors when a partial payment is made,
a requirement for interest on delayed payments,
a mandatory adjudication process for the determination of payment disputes.
The holdback and set-off provisions in this Act apply to the payments required by this Division.
The contractor must give the owner a proper invoice each month unless their contract provides for a different time period. The time for payment for all payors in the payment chain starts to run from the date the invoice is given.
The owner must pay the contractor within 28 days. But the owner can suspend this payment deadline if it gives a notice of non-payment to the contractor within 14 days.
The contractor must pay its sub-contractor within 7 days after receiving full or partial payment from the owner. But if the owner does not pay in full, the contractor must pay its sub-contractor the entire invoiced amount within 35 days. The contractor can suspend the payment deadline by giving its sub-contractor a notice of non-payment before the deadline.
The contractor may give its sub-contractor a notice of non-payment because
(a) the owner failed to pay the contractor; or
(b) the contractor disputes the sub-contractor's entitlement to be paid.
If applicable, the contractor's notice of non-payment by the owner must include an undertaking by the contractor to refer the dispute with the owner to adjudication within 21 days after giving notice to its sub-contractor.
The sub-contractor must pay its sub-contractors within 7 days after receiving full or partial payment from the contractor. But if the contractor does not pay in full, the sub-contractor must pay its sub-contractors the entire invoiced amount within 42 days. The sub-contractor can suspend the payment deadline by giving its sub-contractors a notice of non-payment before the deadline.
The sub-contractor may give a notice of non-payment because
(a) the owner failed to pay the contractor some or all of the invoiced amount;
(b) the contractor disputes the sub-contractor's entitlement to be paid; or
(c) the sub-contractor disputes its sub-contractor's entitlement to be paid.
If applicable, the sub-contractor's notice of non-payment must include an undertaking by the sub-contractor to refer the dispute with the contractor to adjudication within 21 days after giving notice to its sub-contractors.
The requirement to pay by the deadline and the ability to suspend payment by giving a notice of non-payment continue to apply to sub-contractors further down the payment chain.
Introductory provisions
79(1) The following definitions apply in this Division.
"adjudication" means an adjudication by an adjudicator under this Division. (« renvoi »)
"adjudication authority" means the government employee, person or entity designated by the minister under subsection 104(1). (« responsable des renvois »)
"adjudicator" means a person who meets the requirements for being an adjudicator referred to in clause 104(3)(b) and is listed on the registry of adjudicators referred to in clause 104(3)(c). (« intervenant expert »)
"applicable sub-contractor" means a sub-contractor who provides work, services or materials for which payment is requested in the proper invoice. (« sous-traitant concerné »)
"Division" means sections 79 to 125. (« section »)
"invoiced amount" means the amount requested to be paid under a proper invoice. (« somme facturée »)
"minister" means the minister appointed by the Lieutenant Governor in Council to administer this Division. (« ministre »)
"notice of adjudication" means a notice that meets the requirements in subsection 106(1). (« avis de renvoi »)
"prescribed" means prescribed by regulation under this Division. (« réglementaire »)
"proper invoice" means an invoice described in section 85. (« facture en règle »)
79(2) Reference aids in this Division with the heading "Overview", "Example", "Illustration" or "Information Note" are included for convenience of reference only and do not form part of it.
80(1) This Division applies to owners, contractors, sub-contractors and construction projects that are subject to the lien and trust remedies under this Act in respect of a contract or sub-contract entered into on or after the date this section comes into force.
Architects and engineers excluded
80(2) For certainty, this Division does not apply to an architect or engineer referred to in section 36.
80(3) A reference to an amount in relation to an applicable sub-contractor means the amount for which payment is requested for that particular sub-contractor in the proper invoice.
Contract and sub-contract deemed to conform
81 Every contract and sub-contract is deemed to be amended insofar as is necessary to conform with this Division.
82 Nothing in this Division affects or suspends any obligation or requirement under this Act for deducting, retaining, reducing or paying out a holdback in respect of an amount otherwise payable under a contract or sub-contract.
83 Subject to any circumstance referred to in subsection 27(6) (where holdback not to be applied), any amount otherwise payable under this Division may be reduced only by set-off claims made in good faith by an owner, contractor or applicable sub-contractor for debts, claims or damages relating to the performance of the contract or sub-contract.
84 Nothing in this Division in any way reduces, derogates from or alters the obligations of a contractor or sub-contractor to pay wages as provided for by statute, contract, sub-contract or collective agreement.
Proper invoice
85 For the purpose of this Division, "proper invoice" means a written bill or other request for payment for work, services or materials provided under a contract that meets the requirements specified in the contract (which is subject to section 87) and contains the following information:
(a) the contractor's name and address;
(b) the date of the invoice and the time period during which the work, services or materials were provided;
(c) information identifying the contract or other authority under which the work, services or materials were provided;
(d) a description of the work, services or materials that were provided by the contractor and its sub-contractors, including quantity if appropriate;
(e) the amount invoiced for the work, services or materials that were provided and the payment terms;
(f) the name, title, telephone number and mailing address of the person to whom payment is to be sent;
(g) the information required by the regulations.
Proper invoices to be given monthly
86 Subject to the regulations, proper invoices must be given by the contractor to the owner on a monthly basis unless the contract provides otherwise.
Contract must not require certification or approval before proper invoice given
87(1) A contract provision requiring certification of a payment certifier or the owner's approval before a proper invoice is given is of no force and effect.
Contract may require certification or approval after proper invoice given
87(2) For certainty, subsection (1) does not apply to a contract provision requiring the certification of a payment certifier or the owner's approval after a proper invoice is given.
Contract may require testing and commissioning before proper invoice given
87(3) Subsection (1) does not apply to a contract provision requiring testing and commissioning of the work, services or materials provided under the contract.
88 A proper invoice may be revised by the contractor after it has been given to the owner if
(a) the owner agrees in advance to the revision;
(b) the date of the invoice is not changed; and
(c) the invoice, as revised, continues to be a proper invoice.
89 Upon request, the contractor or the sub-contractor, as the case may be, must provide its applicable sub-contractors with the date on which the contractor gave the proper invoice to the owner.
Payment obligation — owner to contractor
Owner must pay contractor within 28 days
90(1) Subject to subsection (2) and the regulations, an owner must pay the invoiced amount within 28 days after the proper invoice is given to the owner by the contractor.
Owner may suspend payment by giving notice
90(2) An owner who disputes the proper invoice may refuse to pay all or any portion of the invoiced amount if the owner gives a notice of non-payment to the contractor within 14 days after the invoice is given to the owner.
Requirements for notice of non-payment by owner
90(3) The owner must give the notice of non-payment by the owner to the contractor in the form and manner set out in the regulations. The notice must
(a) specify the amount that is not being paid because the owner disputes the proper invoice; and
(b) detail every reason for the refusal to pay.
Undisputed amount must be paid within 28 days
90(4) Subsection (1) continues to apply to any invoiced amount that is not disputed by the owner in a notice of non-payment that meets the requirements of subsections (2) and (3).
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Example The contractor gives the owner a proper invoice on July 1 for a total amount of $10,000. The owner disputes the entitlement to $4,000 of the invoiced amount. The owner must pay $6,000 to the contractor by July 29. |
Contractor must advise sub-contractors about owner's notice of non-payment
91 A contractor who receives a notice of non-payment from the owner must, without delay and in accordance with the regulations, advise its applicable sub-contractors that the contractor has received the owner's notice.
Payment obligation — contractor to sub-contractor
Contractor must pay sub-contractors within 7 days
92(1) A contractor who receives payment of all or any portion of the invoiced amount must pay the amount received for each applicable sub-contractor within 7 days after receiving payment.
Contractor receives partial payment to pay several sub-contractors
92(2) The following rules apply only if the contractor receives a portion of the amount invoiced on behalf of its applicable sub-contractors:
1.If the owner's notice of non-payment specifies the amount withheld from one or more applicable sub-contractors implicated in the dispute, the contractor must pay out the portion received among all the applicable sub-contractors in accordance with the notice.
2.If the owner's notice of non-payment does not specify the amount withheld from the applicable sub-contractors implicated in the dispute, the contractor must pay the portion received among all the applicable sub-contractors on a proportionate basis.
3.In any other case, the contractor must pay the applicable sub-contractors on a proportionate basis.
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Illustration — meaning of "proportionate" The contractor includes $6,000 in the proper invoice for work, materials or services supplied by three of its sub-contractors. Sub-contractor A requests $1,000 for a proportionate entitlement of 1/6 of the total amount. Sub-contractor B requests $2,000 for a proportionate entitlement of 1/3 of the total amount. Sub-contractor C requests $3,000 for a proportionate entitlement of ½ of the total amount. The owner makes a $2000 partial payment to the contractor for the three sub-contractors without any explanation or details of the dispute. The owner's notice of non-payment does not specify the amount to be withheld from which sub-contractor. The proportionate basis for each partial payment is as follows: Sub-contractor A is entitled to 1/6 of $2,000, which is $333.33. Sub-contractor B is entitled to 1/3 of $2,000, which is $666.67. Sub-contractor C is entitled to 1/2 of $2,000, which is $1,000. |
Contractor must pay sub-contractors entire amount within 35 days
93(1) If an owner does not pay, in full, the invoiced amount to the contractor within the 28-day period in subsection 90(1), the contractor must pay the amount invoiced for each of its applicable sub-contractors, to the extent that it was not fully paid under section 92, within 35 days after giving the proper invoice to the owner.
Contractor may suspend payment by giving notice of owner's non-payment
93(2) The contractor is not required to make full payment to its applicable sub-contractors within the 35-day period in subsection (1) if the contractor gives each applicable sub-contractor a notice of non-payment
(a) within 7 days after receiving the notice of non-payment from the owner; or
(b) if no notice of non-payment was given by the owner, before the expiry of the 35-day period.
Requirements for contractor's notice of non-payment by owner
93(3) The contractor must give the notice of non-payment by the owner to each applicable sub-contractor in the form and manner set out in the regulations. The notice must
(a) state that some or all of the amount invoiced for each applicable sub-contractor was not paid by the owner within the 35-day period in subsection (1);
(b) specify the amount that was not paid to each applicable sub-contractor because the owner disputes the proper invoice;
(c) include an undertaking from the contractor to refer the matter between the contractor and the owner to adjudication within 21 days after the notice is given to the sub-contractor; and
(d) include a copy of the notice of non-payment, if any, received by the contractor.
Contractor must pay sub-contractors within 7 days
94 Once all or any portion of the invoiced amount previously disputed by an owner is paid by the owner, the contractor must pay each applicable sub-contractor within 7 days after receiving payment, and, for certainty, subsection 92(2) applies.
Contractor disputes sub-contractor's entitlement
95(1) A contractor who disputes the entitlement of one or more of its applicable sub-contractors to the amount invoiced may refuse to pay all or any portion of the amount within the required time period if the contractor gives a notice of non-payment to each applicable sub-contractor
(a) within 7 days after receiving either payment or a notice of non-payment, from the owner; or
(b) if no payment or notice of non-payment is given by the owner, before the expiry of the 35-day period.
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Information Note The deadline under clause 95(1)(a) is based on the owner's actions even though, in this case, it is the contractor who is disputing the sub-contractor's entitlement to payment under the proper invoice. |
Requirements for notice of non-payment by disputing contractor
95(2) The contractor must give the notice of non-payment by the contractor to each applicable sub-contractor in the form and manner set out in the regulations. The notice must
(a) specify the amount that is not being paid because the contractor disputes the sub-contractor's entitlement; and
(b) detail every reason for the contractor's refusal to pay.
Sub-contractor must advise its applicable sub-contractors about contractor's notice of non-payment
96 A sub-contractor who receives a notice of non-payment from the contractor must, without delay and in accordance with the regulations, advise its applicable sub-contractors that the sub-contractor has received the notice.
Payment obligation — sub-contractor to sub-contractor
Sub-contractor must pay its sub-contractors within 7 days
97(1) A sub-contractor who receives payment of all or any portion of the amount included in the proper invoice on behalf of its applicable sub-contractors must pay each of them within 7 days after receiving payment.
Sub-contractor receives partial payment to pay several of its sub-contractors
97(2) The following rules apply only if the sub-contractor receives a portion of the amount invoiced on behalf of its applicable sub-contractors:
1.If the contractor's notice of non-payment specifies the amount withheld from one or more applicable sub-contractors implicated in the dispute, the sub-contractor must pay the portion received among all the applicable sub-contractors in accordance with the notice.
2.If the contractor's notice of non-payment does not specify the amount withheld from the applicable sub-contractors implicated in the dispute, the sub-contractor must pay the portion received among all the applicable sub-contractors on a proportionate basis.
3.In any other case, the sub-contractor must pay the applicable sub-contractors on a proportionate basis.
Sub-contractor must pay its sub-contractors entire amount within 42 days
98(1) If a contractor does not pay, in full, the invoiced amount to the sub-contractor within the 35-day period, the sub-contractor must pay the amount invoiced for each of its applicable sub-contractors, to the extent that it was not fully paid under section 97, within 42 days after the proper invoice was given by the contractor to the owner.
Sub-contractor may suspend payment by giving notice of contractor's non-payment
98(2) The sub-contractor is not required to make full payment to its applicable sub-contractors within the 42-day period in subsection (1) if the sub-contractor gives each applicable sub-contractor a notice of non-payment
(a) within 7 days after receiving the notice of non-payment from the contractor; or
(b) if no notice of non-payment was given by the contractor, before the expiry of the 42-day period.
Requirements for sub-contractor's notice of non-payment
98(3) The sub-contractor must give the notice of non-payment by the contractor to each applicable sub-contractor in the form and manner set out in the regulations. The notice must
(a) state that some or all of the amount invoiced for each applicable sub-contractor was not paid by the contractor within the 42-day period in subsection (1);
(b) specify the amount that was not paid to each applicable sub-contractor as a result of the contractor's failure to pay;
(c) unless the contractor's failure to pay is the result of non-payment by the owner and in respect of which the contractor has undertaken to refer the matter to adjudication, include an undertaking from the sub-contractor to refer the matter between the contractor and the sub-contractor to adjudication within 21 days after the notice is given to each applicable sub-contractor; and
(d) include a copy of any notice of non-payment received by the sub-contractor.
Sub-contractor must pay its sub-contractors within 7 days
99 Once all or any portion of the invoiced amount previously disputed by a contractor is paid by the contractor, the sub-contractor must pay its applicable sub-contractors within 7 days after receiving payment, and, for certainty, subsection 97(2) applies.
Sub-contractor disputes its sub-contractor's entitlement
100(1) A sub-contractor who disputes the entitlement of one or more of its applicable sub-contractors to the amount invoiced may refuse to pay all or any portion of the amount within the required time period if the sub-contractor gives a notice of non-payment to each applicable sub-contractor
(a) within 7 days after receiving either payment or the notice of non-payment, from the contractor; or
(b) if no payment or notice of non-payment is given by the contractor, before the expiry of the 42-day period.
For certainty, the notice of non-payment referred to in clause (a) may relate to either the owner's non-payment or the contractor's non-payment.
Requirements for notice of non-payment by disputing sub-contractor
100(2) The sub-contractor must give the notice of non-payment by the sub-contractor to each applicable sub-contractor in the form and manner set out in the regulations. The notice must
(a) specify the amount that is not being paid because the sub-contractor disputes its sub-contractor's entitlement; and
(b) detail every reason for the sub-contractor's refusal to pay.
Requirement to advise re receipt of notice of non-payment
101(1) A sub-contractor of a sub-contractor's sub-contractor who receives a notice of non-payment must, without delay and in accordance with the regulations, advise its applicable sub-contractors that it has received the notice.
Application to subsequent sub-contractors
101(2) Sections 97 to 100 apply, with necessary changes, to each applicable sub-contractor of a sub-contractor's sub-contractor who is entitled to payment in accordance with those sections and to any amounts payable by that sub-contractor to its applicable sub-contractors.
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Illustration — payments to sub-contractors further down the payment chain Sub-contractor A1 sub-contracts with A2. Sub-contractor A2 sub-contracts with A3 and Sub-contractor A3 sub-contracts with A4. The contractor pays sub-contractor A1 within 35 days after the contractor gives the proper invoice to the owner. Sub-contractor A1 pays A2 within 42 days after the contractor gives the proper invoice to the owner. Sub-contractor A2 pays sub-contractor A3 within 49 days after the contractor gives the proper invoice to the owner. And sub-contractor A3 pays A4 within 56 days after the contractor gives the proper invoice to the owner. |
Interest on late payments
102 If an invoiced amount is not paid when it is due in accordance with this Division, interest is payable on the unpaid amount from the due date to the date of payment at the following applicable rate:
(a) the prejudgment interest rate determined under section 79 of The Court of King's Bench Act;
(b) if the contract or sub-contract specifies a different interest rate for the purpose, the greater of the prejudgment interest rate under clause (a) and the specified interest rate.
Adjudication
103(1) The following matters may be referred to adjudication under this Division by an owner, contractor or sub-contractor to whom this Division applies:
(a) a dispute that is the subject of a notice of non-payment given by the owner, contractor or sub-contractor, as the case may be, in accordance with this Division;
(b) a failure to submit a proper invoice;
(c) a failure to make a payment in accordance with this Division;
(d) a dispute in respect of the valuation of work, services or materials provided under a contract or sub-contract;
(e) a dispute in respect of a payment under a contract or sub-contract, including in respect of a change order, whether approved or not, or a proposed change order;
(f) a dispute in respect of a set-off provided for by section 83;
(g) a matter agreed to by the parties to the adjudication;
(h) any other matter set out in the regulations.
No adjudication after contract or sub-contract completed
103(2) The adjudication must not be commenced if the notice of adjudication is given after the date on which the contract or sub-contract is completed unless the parties to the adjudication agree otherwise.
103(3) Subject to section 107, the adjudication may address only a single matter unless the parties to the adjudication and the adjudicator agree otherwise.
Effect on court action or arbitration
103(4) The owner, contractor or sub-contractor may refer a matter to adjudication pursuant to this Division even if the matter is the subject of a court action or an arbitration under The Arbitration Act unless the action or arbitration has been finally determined.
Designation of adjudication authority
104(1) The minister must designate one of the following as the adjudication authority for the purpose of this Division:
(a) a government employee;
(b) a person or entity that meets the criteria set out in the regulations.
104(2) For the purpose of clause (1)(a), the minister may designate the government employee to act as the adjudication authority on an interim basis until a person or entity that meets the criteria is designated.
Duties and powers of adjudication authority
104(3) The adjudication authority must
(a) develop and oversee programs for the training of persons as adjudicators;
(b) assess qualifications of persons to determine whether they meet the requirements for registration as an adjudicator set out in the regulations;
(c) establish and maintain a publicly available registry of adjudicators;
(d) appoint adjudicators for the purpose of subsection 110(4);
(e) perform any other duties of the adjudication authority for the purposes of this Division; and
(f) perform any other duties set out in the regulations.
Government employee as interim adjudication authority
104(4) The government employee who is designated to act as the adjudication authority on an interim basis is not required to perform the adjudication authority's duty under clause (3)(a).
Adjudication procedures addressed in contract or sub-contract
105(1) Subject to subsection (2), an adjudication is subject to procedures set out in the contract or sub-contract if those procedures comply with the requirements under this Division.
Adjudication procedures not addressed in contract or sub-contract
105(2) If the contract or sub-contract does not set out adjudication procedures or the procedures set out in the contract or sub-contract do not comply with this Division, the adjudication is subject to the procedures set out under this Division.
106(1) To refer a matter to adjudication, a party to the contract or sub-contract must give to the other party a written notice of adjudication that
(a) must include
(i) the name and address of each party,
(ii) the nature and a brief description of the dispute, including details respecting how and when it arose, and
(iii) the nature of the redress sought; and
(b) may include the name of a proposed adjudicator to conduct the adjudication, subject to subsection 108(2).
If a form is prescribed for the notice of adjudication, then the prescribed form must be used.
106(2) The party who gives the notice of adjudication must also give a copy of the notice in the prescribed manner to the prescribed persons and entities.
106(3) Each party who receives the notice of adjudication may respond in writing in accordance with the regulations.
Parties may request consolidation
107(1) Separate adjudications on the same or related matters under the same contract or sub-contract may be consolidated at the request and agreement of the parties to the adjudication or the contractor in accordance with the regulations.
Contractor may require consolidation
107(2) Despite subsection (1), the contractor may require the consolidation of the separate adjudications even if the parties to the adjudication do not agree.
108(1) An adjudication may be conducted only by an adjudicator.
Adjudicator not required to accept appointment
108(2) Nothing in this Division is to be read as requiring an adjudicator to agree to conduct the adjudication or accept an appointment by the adjudication authority to conduct an adjudication.
Choosing adjudicator in advance prohibited
109 A provision in a contract or sub-contract that names a person to act as the adjudicator in the event of an adjudication is of no force or effect.
Parties may agree on adjudicator
110(1) The parties to the adjudication may agree on an adjudicator, in which case one of the parties must provide the proposed adjudicator with a notice of adjudication.
Proposed adjudicator does not consent within 4 days
110(2) If the proposed adjudicator does not consent within four days after the notice of adjudication is provided, the party who gave the notice must request that the adjudication authority appoint an adjudicator.
Parties fail to agree on adjudicator
110(3) If the parties do not agree on an adjudicator, the party who gave the notice of adjudication must promptly request that the adjudication authority appoint an adjudicator.
Adjudication authority must act within 7 days
110(4) Within seven days after being requested to appoint an adjudicator under subsection (2) or (3), the adjudication authority must appoint an adjudicator who consents to the appointment.
111(1) An adjudicator is entitled to a fee for conducting the adjudication, which is to be determined in accordance with subsection (2) and the regulations.
111(2) The fee payable to the adjudicator is
(a) the amount agreed to by the parties to the adjudication and the adjudicator; or
(b) if the parties to the adjudication and the adjudicator do not agree to an amount, the amount determined by the adjudication authority, on the adjudicator's request, in accordance with the regulations.
111(3) Subject to subsection 119(2) and the regulations, each party to the adjudication must pay an equal portion of the fee.
112(1) Within five days after an adjudicator agrees or is appointed to conduct the adjudication, the party who gave the notice of adjudication must give to the adjudicator and every other party a copy of the notice, together with
(a) a copy of the contract or sub-contract; and
(b) any documents the party intends to rely on in the adjudication.
Documents to be shared with other parties
112(2) At the same time that the party acts under subsection (1), the other party or parties to the adjudication must give every other party and the adjudicator a copy of any documents the party intends to rely on in the adjudication.
113(1) An adjudicator must conduct the adjudication in an impartial manner.
113(2) In conducting the adjudication, the adjudicator may do any or all of the following:
(a) issue directions respecting the conduct of the adjudication;
(b) take the initiative in ascertaining the relevant facts and law;
(c) draw inferences based on the conduct of the parties to the adjudication;
(d) subject to subsection (4), conduct an on-site inspection of the construction that is the subject of the contract or sub-contract;
(e) obtain the assistance of an accountant or actuary or an architect, building contractor, engineer, supplier or other person in any manner that the adjudicator considers appropriate to enable the adjudicator to determine any matter of fact in question;
(f) exercise any other power of an adjudicator that may be specified in the contract or sub-contract;
(g) exercise any other power set out in the regulations.
Procedures at adjudicator's discretion
113(3) Subject to this section and the regulations, the procedures for the adjudication are at the adjudicator's discretion.
113(4) The adjudicator may conduct an on-site inspection of the construction that is the subject of the contract or sub-contract only with the prior consent of
(a) the owner of the premises if
(i) the premises is a home in which the owner resides, or
(ii) the owner is not a party to the adjudication; and
(b) any other person who has the legal authority to exclude others from the premises.
113(5) If the adjudicator obtains the assistance of a person under clause (2)(e), the fee payable to that person is to be split equally among the parties to the adjudication. If the parties to the adjudication do not agree to split the fee equally, the adjudicator may direct payment of the fee by the parties as is reasonable and proportionate to the dispute.
114 At any time before the determination of an adjudication, the parties to the adjudication may agree to terminate the adjudication. The termination is not effective until
(a) the adjudicator has been notified in writing of the parties' agreement to terminate the adjudication; and
(b) the adjudicator's fee and any fee payable for assistance obtained under clause 113(2)(e) have been paid.
Determination to be made within 30 days
115(1) Subject to section 116 and the regulations, an adjudicator must make a determination of the matter and provide it to the parties to the adjudication within 30 days after receiving the documents required by section 112.
Written determination with reasons
115(2) The adjudicator's determination must be in writing and must include reasons for the determination.
116(1) The deadline for the determination may be extended at any time before the 30-day period expires as follows:
(a) for up to 14 days, on the adjudicator's request with the written consent of the parties to the adjudication;
(b) for the period specified in the contract or sub-contract, on the request and written agreement of the parties to the adjudication and with the consent of the adjudicator.
116(2) If the party who gave the notice of adjudication also gave a notice of non-payment in relation to the matter that is the subject of the adjudication, the party must notify each applicable sub-contractor about the extension period.
Determination cannot be made after deadline
117 Subject to the regulations, a determination made by an adjudicator after the applicable deadline determined under section 115 or 116 is of no force or effect.
118(1) Once provided to the parties to the adjudication, the determination of an adjudicator is binding on the parties until
(a) an order is made with respect to the matter by the court;
(b) a decision is made with respect to the matter as a result of an arbitration under The Arbitration Act;
(c) a written agreement is entered into between the parties with respect to the matter; or
(d) the determination is set aside pursuant to section 120.
Court or arbitrator decision not affected
118(2) Despite section 120, nothing in this Division restricts the authority of the court or an arbitrator to consider the merits of a matter determined by the adjudicator.
119(1) Subject to subsection (2), the parties to an adjudication must bear their own costs of the adjudication.
Actions — frivolous, vexatious, etc.
119(2) If the adjudicator determines that one or more parties has acted in a manner that is frivolous, vexatious, an abuse of process or other than in good faith, the adjudicator may, as part of their determination under section 115, require the party or parties to pay one or both of the following:
(a) some or all of the costs of the adjudication of the other party or parties;
(b) any part of the adjudicator's fee, and any fee payable for assistance obtained under clause 113(2)(e), that would otherwise be payable by the other party or parties.
120(1) Within 30 days after the determination is provided to the parties to the adjudication, a party may, by application to the court, seek to set aside the determination on any of the following grounds:
(a) a party participated in the adjudication while under a legal incapacity;
(b) the contract or sub-contract is invalid or has ceased to exist;
(c) the determination dealt, in whole or in part, with a matter that cannot be referred to adjudication under this Division, or with a matter entirely unrelated to the subject of the adjudication;
(d) the procedures followed in the adjudication did not comply with the procedures to which the adjudication is subject under this Division;
(e) there is a reasonable apprehension of bias on the part of the adjudicator;
(f) the determination was made as a result of fraud;
(g) the adjudication was conducted by a person other than an adjudicator;
(h) any other ground set out in the regulations.
120(2) The court must consider the following:
(a) the adjudicator's determination;
(b) the documents the adjudicator considered in making the determination;
(c) any other information the court considers relevant to the application.
120(3) The court may set aside the adjudicator's determination on any of the grounds mentioned in subsection (1).
120(4) In setting aside the determination, the court may require that any or all amounts paid in compliance with the determination be returned.
Application does not operate as stay
120(5) An application does not operate as a stay of the determination unless the court orders otherwise.
Parties must not initiate another adjudication
120(6) If the determination in respect of a matter is set aside on a ground mentioned in clause (1)(b) or (c), the parties to the adjudication must not initiate another adjudication in respect of that matter.
Payment deadline after determination
121(1) Subject to section 120, a party who is required under the determination of an adjudicator to pay an amount to another person must pay the amount within 10 days after the determination has been provided to the parties to the adjudication.
121(2) If the amount payable to a contractor or sub-contractor under the determination is not paid by the party when it is due under subsection (1), the contractor or sub-contractor may suspend further work under the contract or sub-contract until the party pays the following amounts:
(a) the amount required to be paid under the determination;
(b) any interest accrued on that amount;
(c) any reasonable costs incurred by the contractor or sub-contractor as a result of the suspension of work.
Contractor or sub-contractor entitled to resumption of work costs
121(3) After the party pays the amounts payable under subsection (2) and the contractor or sub-contractor resumes the work, the party must also pay the reasonable costs incurred by the contractor or sub-contractor due to the resumption of work.
122(1) A party to an adjudication may file the adjudicator's determination with the court to be enforced as an order of the court.
122(2) The filing of the determination must not be made after the later of
(a) two years after the date the determination was provided to the parties; or
(b) if applicable, two years after the date of the final determination of an application under section 120 that did not result in the setting aside of the adjudicator's determination.
122(3) The party filing the determination must notify the other party or parties within 10 days after filing it.
122(4) If a determination requiring that an amount be paid to a contractor or sub-contractor is filed, any related requirement of the contractor or sub-contractor to pay a sub-contractor is deferred pending the outcome of the enforcement.
123 An adjudicator must not be required to give evidence in any proceeding about information that comes to their knowledge in exercising powers or duties under this Division.
124 No action or proceeding may be brought against the minister, the adjudication authority or an adjudicator for anything done, or omitted to be done, in good faith, in the exercise or intended exercise of a power or duty under this Division.
Regulations
125(1) For the purpose of this Division, the Lieutenant Governor in Council may make regulations
(a) prescribing the information required to be included in a proper invoice;
(b) prescribing the frequency with which proper invoices must be given to an owner;
(c) prescribing the period within which an owner must pay the amount payable after receiving a proper invoice from a contractor;
(d) prescribing the form of a notice of non-payment and the manner in which that notice is to be given;
(e) respecting the duties of a contractor or sub-contractor on receipt of a notice of non-payment;
(f) respecting the records that persons who are subject to this Division are required to make and maintain, including the length of time for which and the location at which the records must be maintained;
(g) prescribing matters that may be referred to adjudication;
(h) prescribing criteria for the designation of a person or entity as the adjudication authority;
(i) establishing the procedures for the making of complaints against the adjudication authority;
(j) prescribing the requirements for registration as an adjudicator;
(k) prescribing the form of notice of adjudication;
(l) respecting the timing for, manner in which, and the persons or entities to whom, a copy of a notice of adjudication is to be given or sent;
(m) respecting the response of a party on receipt of a notice of adjudication;
(n) respecting the consolidation of adjudications, including governing the manner in which a contractor may require the adjudication of disputes to be consolidated;
(o) respecting the payment of the fee payable to an adjudicator, including the time period within which the payment must be made;
(p) governing the determination of an adjudicator's fee by the adjudication authority;
(q) respecting the conduct of an adjudication including prescribing additional powers for the adjudicator;
(r) prescribing the period after receiving documents within which an adjudicator must make a determination of the matter that is the subject of an adjudication;
(s) respecting the effect of a determination made by an adjudicator after the period set out in section 115 or 116;
(t) prescribing any other grounds on which the court may set aside the determination of an adjudicator;
(u) governing the procedures that apply if an adjudicator fails to complete an adjudication;
(v) respecting the manner in which any document may be given, served or provided under this Division;
(w) prescribing anything referred to in this Division as being prescribed;
(x) defining any word or phrase used but not defined in this Division;
(y) respecting any matter the Lieutenant Governor in Council considers necessary or advisable to carry out the purpose of this Division.
125(2) On recommendation of the minister after the minister's consultation with the adjudication authority, the Lieutenant Governor in Council may make regulations respecting fees, including
(a) prescribing an amount or maximum amount, or a method for determining the amount or maximum amount, payable as fees in respect of an adjudication, including
(i) the adjudicator's fees, and
(ii) fees for the assistance that may be obtained by an adjudicator under clause 113(2)(e);
(b) establishing fees or a method of determining fees that may be charged for the training and assessment of adjudicators and requiring their payment.
125(3) The Lieutenant Governor in Council may make regulations providing for transitional matters that the Lieutenant Governor in Council considers necessary or advisable for the purpose of implementing this Division.
14(1) Section 79 is amended by renumbering it as section 126 and adding the following as subsection 126(5):
126(5) This section does not apply to sections 79 to 125.
14(2) The centered heading "MISCELLANEOUS PROVISIONS" is added before section 126.
15 Section 80 is renumbered as section 127.
16 Sections 81 and 82 are repealed.
17 This Act comes into force on a day to be fixed by proclamation.