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Under Alberta’s Prompt Payment and Construction Lien Act

Part 5 of the Prompt Payment and Construction Lien Act (the “PPCLA”) sets out a statutory adjudication process for resolving disputes over construction contracts in Alberta. An adjudication under the PPCLA offers parties a cheaper, faster alternative to litigation or arbitration. This blog post provides a high level overview of the PPCLA adjudication process.

Initiating an adjudication

A party to a contract or subcontract may commence an adjudication where there is a dispute over any of the following matters:

1. Valuation of services or materials, including in relation to change orders,
2. Payment under the contract, including in relation to change orders,
3. Disputes over a Notice of Non-Payment under Part 3 of the PPCLA,
4. Payment of an amount retained as the major or minor lien fund,
5. Any other matter related to the contract that the parties agree to adjudicate.

Keep an eye on timelines. An adjudication cannot be commenced if it has been more than 30 days since the “final payment” under the contract.

The party referring the matter to an adjudication (the “Applicant”) must complete a notice of adjudication and submit the notice to the opposing party and ARCANA.

Selecting an adjudicator

The parties then have 4 calendar days to agree upon an adjudicator from ARCANA’s online roster, which include lawyers, engineers, consultants, and arbitrators. If the parties cannot agree on an adjudicator by the deadline, ARCANA will then appoint one within 7 calendar days.

Exchanging submissions

After the adjudicator is appointed, the Applicant has 5 days to submit the materials they intend to rely upon during the adjudication to the opposing party and the adjudicator. The Applicant is required to submit:

• The notice of adjudication,
• The contract or subcontract, and
• Any documents the Applicant intends to rely upon.

The Applicant may also include written argument and any legal authorities at this time.

The opposing party (the “Respondent”) then has 12 calendar days to respond, calculated from the date that the Applicant’s materials are received.

These timelines are tight – it is best practice to start preparing your materials well in advance of the applicable deadline. That being said, the adjudicator has the discretion to extend any deadline in the adjudication process to a maximum of 10 calendar days, one or more times throughout the adjudication.

Note that “calendar days” is a defined term: it excludes weekends and holidays.

The Decision

The adjudicator’s timeline for issuing a decision is 30 days from the date that the Applicant submitted their material, subject to any time extension.

The adjudicator’s order may then be registered with the clerk of the court, at which time it has the same effect as an order made by the court.

Judicial review

The adjudicator’s decision is binding on the parties unless it is referred to the court for judicial review (see Welcome Homes Construction Inc v Atlas Granite Inc, 2024 ABKB 301 at para 23). There are narrow grounds for judicial review set out in the PPCLA regulations:

• the applicant party participated in the adjudication while under a legal incapacity;
• the contract or subcontract is invalid or has ceased to exist;
• the determination was of a matter that may not be the subject of adjudication under section 19 or of a matter entirely unrelated to the subject of the adjudication;
• the adjudication was conducted by someone who did not, at the time, meet the requirements and qualifications under section 7(2);
• the procedures followed in the adjudication did not accord with the procedures to which the adjudication was subject and the failure to accord prejudiced the applicant party’s right to a fair adjudication;
• there is a reasonable apprehension of bias on the part of the adjudicator;
• the determination of the adjudication was made as a result of fraud.

Conclusion

Adjudication under the PPCLA provides a fast, cost-effective mechanism for resolving construction disputes and maintaining cash flow on projects in Alberta. Beware that the process is driven by strict timelines and limited review rights, making early preparation and procedural compliance essential to a successful outcome.

_{^{This post is meant to provide information only and is not intended to provide legal advice. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this post to be outdated.}}