Anonymised, illustrative composite. An Ontario interior fit-out subcontractor faced a $47,000 back-charge on a retail build-out that it valued at no more than $9,000, and resolved it in 34 days instead of a lien action.
At a glance
The GC self-performed a set of deficiency fixes on the fit-out sub’s scope and back-charged $47,000 against the sub’s final billing, without warning and without giving the sub a chance to inspect or price the fix itself. The sub disputed almost all of it.
Rather than litigate, the sub used a right the Construction Act gives every party to a construction contract directly. As ODACC states, “a Party to a construction contract can commence an adjudication without the other Party’s consent”, with a Determination due “within thirty days from the day the Claimant submits its documents.”
The Notice of Adjudication claimed $47,000, placing the dispute in ODACC’s $35,000–$49,999 fee tier: a $3,700 adjudication fee, split $1,850 each under s.13.10(3)’s equal-split default — neither side’s conduct met the s.13.17 bad-faith threshold that would have shifted it.
Working within the 30-day Determination window and the broad discretion s.13.12(4) gives an adjudicator to run the process as they see fit, the adjudicator found $19,000 of the back-charge tied to documented deficiencies with clear evidence, and disallowed the remaining $28,000 for lacking any inspection record or notice to the sub before the GC self-performed the fix. Net: the GC kept 40 cents on the dollar of what it had withheld; the sub recovered the other $28,000, each side also covering its own $1,850 fee share.
The dividing line inside the determination was documentation, not who was ultimately right about the underlying deficiencies: the $19,000 upheld had a paper trail behind it, and the $28,000 disallowed did not. ODACC’s own framework — each party bearing its own costs under s.13.16 regardless of outcome, with the fee itself split evenly — meant the dispute turned entirely on the adjudicator’s read of the evidence inside the 30-day window, not on who could outlast the other in a longer process.
The dispute resolved in 34 days total from notice to certified Determination, against a multi-month lien action the sub had been bracing for. The GC and sub now log every back-charge with photographs and written notice to the affected sub before any self-performed fix — the exact gap the adjudicator flagged. See change order management that avoids disputes. A related delay-cost dispute decided partly on documentation is in how an excavator’s billed delay split on documentation, and a related capped chargeback dispute is in how a condo chargeback policy ended repeat damage costs.
Had the sub pursued a lien action instead of adjudication, the same $47,000 dispute would likely have taken months rather than 34 days to resolve, at legal cost far exceeding the $1,850 adjudication fee each side actually paid — with no guarantee of a different outcome on the merits, since the documentation gap that decided $28,000 of the claim would have decided it in litigation too. Adjudication did not change which $19,000 was owed; it changed how quickly and cheaply that answer arrived.
Any back-charge issued without prior written notice to the affected sub, or without photographs and an inspection record behind it, is vulnerable regardless of how legitimate the underlying deficiency actually is — the $28,000 disallowed here was not disallowed because the work wasn't deficient, it was disallowed because nothing beyond the GC's word said so at the time.
Adjudication under the Construction Act runs on a fixed clock regardless of how complicated the underlying dispute is — documents due five days after the adjudicator is appointed, a Determination due thirty days after that — which is what compressed a $47,000 dispute into 34 days from notice to certified Determination. The GC and sub now log every back-charge with photographs and written notice before any self-performed fix specifically because that is the exact gap the adjudicator identified: not whether the underlying deficiencies were real, but whether either side had built a record contemporaneous enough to prove it.
The GC did not simply lose the dispute: $19,000 of its original $47,000 back-charge held up under the same documentation standard that sank the rest, meaning the adjudicator's process protected a real, evidenced portion of the GC's position rather than dismissing the back-charge outright for being self-performed. That balance is part of why both sides accepted the result without pursuing further action — a process that had sided entirely with either party on a mixed set of facts would have looked far more like a coin flip than a documentation-based Determination.
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