Sayers Foods: Complexity Is No Defence To Prompt Payment Adjudication In Ontario Construction

In Sayers Foods Ltd. v. Gay Company Ltd. ("Sayers"),¹ the Ontario Divisional Court dismissed an application for judicial review of an adjudication determination under the Construction Act. For owners, contractors, and subcontractors, the takeaway is practical and immediate: a party generally cannot avoid prompt payment by reframing a payment dispute as a complex delay, set-off, fraud, or procedural fairness issue. The decision gives useful guidance on adjudicator jurisdiction, notice holdback requirements, the limits of judicial review, and the kinds of arguments that are unlikely to stop money from flowing on an Ontario construction project.

More broadly, Sayers strongly reaffirms Ontario's prompt payment and adjudication regime. It also addresses procedural points that matter in practice, including service on ODACC in judicial review proceedings and the court's resistance to workarounds that delay payment. Below, we highlight the parts of the decision most likely to affect day-to-day construction administration, payment strategy, and dispute planning.²

Background

Sayers Foods Ltd. was a family-owned grocery store in North Kawartha whose premises were destroyed by fire. Sayers retained Gay Company Ltd. as contractor to rebuild under a CCDC-2 contract. Sayers later took the position that the parties had agreed to a construction schedule requiring substantial completion by March 2023, and that actual substantial completion was not achieved until March 2024, giving rise to an alleged delay claim of close to $900,000.³

Starting in late November 2023, Sayers ceased payments to Gay and delivered Notices of Non-Payment under the Construction Act. Gay responded by initiating two statutory adjudications in respect of its November and December 2023 invoices, totalling approximately $851,000. The two adjudications were consolidated on consent.⁴

Sayers advanced three principal reasons for refusing to pay: (a) it said it was required to maintain a notice holdback under the Construction Act because of registered subcontractor liens; (b) it alleged Gay had delivered false statutory declarations in connection with its payment applications; and (c) it intended to assert a delay credit in excess of $1.2 million against Gay.⁵ Sayers did not dispute the value of the construction work performed by Gay.⁶

The Adjudicator rejected each of those grounds. He found that there was no contractually binding construction schedule in the parties' agreement and that the contract's entire agreement clause, payment certification provisions, and credit-claim process did not support Sayers' position. He also found that Sayers had not followed the contractual process for claiming a credit against Gay. The Court described the adjudication determination under review as requiring payment of $685,574.91, plus interest, after accounting for the deductions accepted in the adjudication.

Sayers then applied to court for judicial review of the determination. In lieu of immediate payment pending judicial review, the Court ordered Sayers to pay $700,000 into court.

What the Divisional Court Decided

The Divisional Court confirmed that, on an application for judicial review of an adjudication determination, its jurisdiction is tightly limited by section 13.18(5) of the Construction Act. It also confirmed that the standard of review for the Adjudicator's determination is reasonableness, while procedural fairness issues are reviewed for correctness.

The Court dismissed the application. At a practical level, the Court agreed with the Adjudicator that Sayers could not stop payment by relying on a delay set-off theory that was not grounded in clear contractual language and had not been advanced through the contractually required process. For Ontario owners, this is an important warning: if the contract does not clearly support a back-charge, credit, or set-off position, adjudication may force payment first and leave the claim to be sorted out later.

On the notice holdback issue, the Court confirmed that the obligation to retain a notice holdback under section 24(2) of the Construction Act arises only upon receipt of "written notice of lien" in the prescribed form, not merely because an owner discovers a registered lien through a title search. The Court treated that distinction as deliberate. The practical watch-out is that owners should not assume every registered lien automatically justifies withholding additional funds in response to a proper invoice or adjudication claim; the statutory trigger matters.

Sayers also argued that Gay took a "dishonest position" in the adjudication, which the Court treated as an allegation of fraudulent misrepresentation. The Court rejected that argument. It held that Gay's position on contractual liability for delay was not dishonest merely because Gay had advanced different claims in other project relationships, and it likewise declined to find fraud arising from the statutory declarations submitted in support of payment applications. For parties considering judicial review, this is another practical point: allegations of fraud will not succeed simply because the other side advances a contested contractual interpretation or a position that appears commercially inconsistent.

On the procedural unfairness grounds, the Court found that the consolidation of two payment claims did not violate the "single matter" limitation in section 13.5(4) of the Construction Act. It also confirmed that complexity in the defences raised does not deprive an adjudicator of jurisdiction. In other words, a responding party cannot usually force a dispute out of adjudication simply by saying the defence is too factually or legally complicated.

The Court also rejected Sayers' argument that adjudicators should apply an interlocutory injunction-type analysis, including irreparable harm and balance of convenience, before ordering payment. In the Court's view, adjudication is a self-contained statutory scheme intended to keep money moving down the construction pyramid. That matters in practice because parties resisting payment cannot expect an adjudicator to pause and weigh broader commercial prejudice the way a court might on an injunction motion.

Sayers also alleged a reasonable apprehension of bias on several grounds, but the Court found no merit in those complaints. Among other things, it confirmed that an adjudicator is not required to record oral argument, retain any recording that is made, or provide it to the parties. The practical implication is that parties should not assume a robust review record will exist unless they take steps during the adjudication to clarify key concessions, directions, and procedural agreements.

Finally, on two systemic questions, the Court held: (i) parties bringing a judicial review application should serve ODACC with notice of the application, in addition to serving the Attorney General, so that ODACC may exercise its right to seek participation; and (ii) because legislation now requires ODACC to publish adjudication determinations on its website, the Court did not need to decide broader issues about publication in this case.

Key Takeaways and Practical Risks

Sayers is an important Ontario construction decision because it shows how difficult it is to overturn an adjudication determination and how limited the available judicial review grounds really are. For project participants, the case is less about abstract doctrine and more about risk allocation, project administration, and preserving payment rights before a dispute arises. Several practical lessons stand out.

Notice Holdback

The Court's analysis of notice holdback provides welcome clarity on a point with real payment consequences. An owner's obligation to retain a notice holdback under section 24(2) of the Construction Act is triggered only by receipt of a "written notice of lien" in the prescribed form from the lien claimant, not by the owner's independent discovery of the lien.

That distinction matters for at least two reasons. First, it protects the prompt payment regime: if mere lien registration automatically triggered notice holdback obligations, an owner could seek to withhold large sums and sidestep adjudication. Second, it is a reminder to owners and contractors to administer lien notices carefully and not rely on assumptions. As a business practice, parties should track not just whether a lien has been preserved, but whether the statutory written notice requirements that trigger additional holdback obligations have actually been met.

Jurisdiction and the Complexity of Defences

Perhaps the most important practical lesson from Sayers is that complexity is usually no defence to adjudication. The Court confirmed that an adjudicator may decide all issues necessary to resolve the "single matter" before it, including complex delay and set-off arguments. That closes off a strategy some parties may have hoped to use: making the defence sound too large or too technical for the compressed adjudication process.

At the same time, the decision is a strong reminder that contract terms matter. The Court proceeded on the basis that, under this CCDC-2 contract, there was no binding contractual completion schedule and no clear contractual mechanism permitting Sayers to unilaterally assert a delay credit to stop payment. For owners, the business lesson is straightforward: if schedule commitments, liquidated damages, back-charges, or set-off rights are important, they should be drafted expressly and administered strictly. If they are left ambiguous, the likely result in adjudication may be pay now, argue later.

Best practice: before a payment dispute arises, owners, contractors, and consultants should confirm that the contract clearly addresses milestone dates, schedule update obligations, delay notice requirements, entitlement to credits or back-charges, and who decides those issues. If the parties intend schedule slippage to have payment consequences, those consequences should not be left to implication.

No Injunction Test for Adjudication Determinations

The Court's rejection of an injunction-type test resolves an argument that would have significantly changed the character of adjudication. The legislature designed adjudication to require prompt payment without finally determining the parties' underlying rights. In practical terms, that means a payor cannot expect to avoid payment by emphasizing insolvency risk, business disruption, or other forms of alleged irreparable harm that might matter on a court motion.

More broadly, the decision reinforces that adjudication is its own statutory process. Courts are unlikely to welcome attempts to import tests from injunction law, arbitration law, or other procedural regimes where doing so would undermine the speed and payment-forward purpose of the Construction Act.

Standard of Review

The Court's application of reasonableness review is consistent with the emerging Divisional Court approach to adjudication cases. The practical consequence is significant: once an adjudicator has made factual and contractual findings that are reasonably available on the record, it will be difficult to overturn them on judicial review.⁷

The same is true of procedural fairness. The Court confirmed that a party seeking review must identify a failure to follow the procedures required by the Construction Actand must also show resulting prejudice to the right to a fair adjudication. Complaints that amount to little more than "this was not run like a trial" are therefore unlikely to succeed. Parties should plan their adjudication strategy with the understanding that compressed procedure is a feature of the regime, not a defect.

Recordings, Transcripts, and the Record on Review

The Court's observations on recordings and the record on review are also useful. While it confirmed that adjudicators are not obliged to record, retain, or release recordings of oral argument, it recognized the practical difficulty that can arise on judicial review when there is no reliable record of what was argued or conceded. A short written direction or memorial of a significant concession may therefore be helpful in some cases.

For counsel and project participants, the watch-out is obvious: if a procedural agreement, concession, or mid-hearing ruling matters, try to have it confirmed in writing during the adjudication. Waiting until judicial review to dispute what happened in a fast-moving adjudication is risky and may leave the court with little basis to intervene.

That said, there is a countervailing risk. If every adjudication begins to resemble court litigation, the speed and accessibility of the process may be lost. Parties should therefore be careful not to over-judicialize routine adjudications unless the stakes genuinely justify it.

ODACC's Status and the Notice Requirement

The Court's direction that parties bringing judicial review applications ODACC is a practical point that counsel should immediately incorporate into their checklists. Although the Court noted interesting questions about ODACC's institutional status, it did not need to resolve them. What matters operationally is that ODACC is a proper party for notice purposes and should be served so it can decide whether to participate.

The takeaway is simple: when commencing a judicial review of an adjudication determination, add ODACC to the service plan from the outset, along with the Attorney General. Failing to do so may create unnecessary delay, added cost, or procedural complications.

The Prompt Payment Regime and Payment into Court

Finally, the Court offered a useful caution about the earlier order requiring payment into court rather than directly to Gay. The Court indicated that this approach, adopted as a case management solution, proved problematic because it delayed payment that should have moved promptly through the construction pyramid and appears to have contributed to paralysis in related lien proceedings.

The message for parties is that substitute arrangements that delay payment should not be viewed as routine or reliable solutions. Judicial review rights remain narrow, and commencing review does not itself suspend the statutory payment consequences of an adjudication determination. Parties considering a challenge should therefore assess early whether they are pursuing a realistic review ground or merely incurring additional cost while payment pressure continues to build.

Overall, Sayers is a strong pro-adjudication, pro-prompt-payment decision. For Ontario construction industry participants, the practical lessons are clear: draft delay and set-off rights expressly, administer notice and credit procedures carefully, preserve important procedural points in writing, and do not assume that complexity or commercial prejudice will prevent an adjudicator from ordering payment. In many cases, the real dispute can continue later, but the money will still have to move now.

Footnotes

1. Sayers Foods Ltd. v. Gay Company Ltd., 2026 ONSC 918.

2. Because Sayers touches on a panoply of different issues, this case comment does not attempt to address all of them.

3. Sayers at para 18.

4. Sayers at para 19.

5. Sayers at para 20(d).

6. Sayers at para 20(e).

7. See for example, as discussed in R Bruce Reynolds, Sharon Vogel, Nicholas Reynolds & Tanya Soni, "Jamrik v 2688126 Ontario Inc.: What is Adjudication?" (2025) (available here).