Year in Review: Top 5 Construction Law Cases from 2025
2025 has been a pivotal year for construction litigants in Ontario. This year, courts have issued decisions with meaningful consequences on how parties invoke and comply with dispute resolution mechanisms, the enforcement and discharge of lien rights, and the interaction between construction claims and bankruptcy stays.
In this article, we highlight five of the most significant construction cases in 2025 and consider what they mean from a practice-focused perspective.
J.P Thompson Architects Ltd. v Greater Essex County District School Board
In J.P. Thomson Architects Ltd. v. Greater Essex County District School Board, the Ontario Court of Appeal considered the proper interpretation of GC 18, the dispute resolution clause in the then‑standard form Ontario Association of Architects contract. The dispute arose after the architectural firm, J.P. Thomson Architects Ltd. (“Thomson”), and the Greater Essex County District School Board (the “Board”) experienced a deterioration in their working relationship.
GC 18 provides that any dispute arising out of the agreement that cannot be resolved within 30 days shall, at the request of either party, be referred to mediation. The clause further requires the parties to engage in mediation for at least 30 days before serving a notice to arbitrate.
By letter dated October 12, 2021, Thomson invoked its right to mediation under GC 18, explaining that it was responding to a series of letters sent by the Board over the previous 15 months that reflected an ongoing breakdown in the relationship. The Board refused to appoint a mediator, taking the position that no dispute existed within the meaning of GC 18 because the issues raised had arisen more than 30 days before Thomson requested mediation. The Board maintained this position when Thomson subsequently served a notice to arbitrate. Thomson applied for a court order appointing an arbitrator pursuant to GC 18 and s. 10(1) of the Arbitration Act, 1991. The application judge accepted the Board’s argument, finding that GC 18 imposed a strict deadline requiring parties to seek mediation within 30 days of a dispute arising - a deadline Thomson had allegedly missed.
On appeal, the Court of Appeal reversed that decision. The Court held that GC 18 does not require parties to seek mediation within 30 days of a dispute arising. Rather, the clause establishes a minimum 30‑day period during which the parties must attempt to resolve their dispute before requesting the appointment of a mediator. Applying ordinary principles of contractual interpretation, the Court emphasized that contractual language should be interpreted in a manner “consistent with sound commercial principles and good business sense”. The Court further observed that the overall structure of GC 18 reflects a deliberate escalation model: informal negotiation first, followed by mediation, and only then arbitration if necessary. This framework makes particular sense in long‑term, complex construction relationships, where disputes may develop gradually rather than crystallize at a single moment in time. Against that backdrop, it would be commercially unreasonable to require parties to serve a notice of mediation every time they failed to resolve an issue within a 30‑day window. Accordingly, the Court held that Thomson had not lost the right to arbitrate by failing to serve a notice to mediate within thirty days of a dispute arising.
Key takeaway - Parties operating under similar multi‑tier dispute resolution clauses should be attentive to the purpose and structure of escalation provisions, rather than adopting a hyper‑technical reading of timelines. Courts are likely to favour interpretations that encourage good‑faith negotiation and preserve access to agreed‑upon dispute resolution mechanisms, especially where rigid deadlines would undermine commercial reality.
Ontario (Transportation) v J & P Leveque Bros. Haulage Ltd.
In Ontario (Transportation) v. J & P Leveque Bros. Haulage Ltd., the Ontario Court of Appeal again addressed a standard contractual dispute resolution clause, this time in the context of a referee‑based claims review process. The central issue was whether the Ministry’s notice to protest the referee’s decision was out of time under the contract. The referee’s decision has been rendered after the contractual deadline to file a notice of protest in respect of the decision. J & P Leveque Bros. Haulage Ltd. argued that the appeal deadline had expired, relying on a strict reading of the contractual timelines. The Court rejected this argument, grounding its analysis in commercial common sense rather than what it described as a “minute parsing of time periods.”
The Court of Appeal held that where a referee’s decision - an essential step in the contractual claims process - is released outside the contractual timeframe, the contractual appeal period no longer governs. In those circumstances, the statutory limitation period applies instead. To hold otherwise would unfairly prejudice a party for delays outside its control and would distort the purpose of the dispute resolution scheme.
Key takeaway - While contractual timelines remain critically important, parties should be cautious about assuming that technical non‑compliance will be dispositive. Where delay arises from the dispute resolution process itself, courts may prioritize commercial fairness and the functional integrity of the process over rigid enforcement of contractual deadlines.
Integricon Construction Inc. v Stevens et al.
In Integricon Construction Inc. v. Stevens et al., the Ontario Superior Court of Justice considered the binding nature of an adjudicator’s determination under the Construction Act and the availability of garnishment.
The owners engaged the Integricon Construction (“Integricon”) to provide contractor services for part of the construction of a single-family home which was financed by RBC. The contract included a draw schedule that sets out the conditions and timing of payments to Integricon. After the contractor completed foundation and backfilling work, it invoiced the owners, but RBC did not release the funds because only 15% of the overall project had been completed, and the bank required 25% of the overall project to be complete.
An adjudicator determined that the owners were required to pay the disputed draw. The owners did not follow the adjudicator’s decision. Integricon filed the adjudicator’s decision with the Court to seek enforcement of the order through, among other things, garnishment. The owners’ motion to set aside, stay, or refuse garnishment on the basis of unfairness was dismissed.
The Court found that the motion was an effort to appeal or stay the adjudicator’s determination without following the proper statutory route. The owners had not sought leave for judicial review or a stay from the Divisional Court, as required under the Construction Act. The Court emphasized that it cannot exceed its jurisdiction or undermine the legislative intent behind the prompt payment and adjudication regime under the Construction Act. The Court reiterated that grounds to set aside an adjudicator’s determination are narrow and include invalid contracts, bias, fraud, or matters beyond the scope of adjudication (s. 13.18(5)). Where payment is ordered, it must be made within 10 days and may be enforced as though it were a court order (ss. 13.19(2)).
Key takeaway - Litigants dissatisfied with an adjudicator’s decision should keep in mind that under the Construction Act, an adjudicator’s decision is binding until determined by a court, arbitration, or agreement of the parties. Attempts to resist enforcement indirectly—without seeking leave for judicial review or a stay—are unlikely to succeed. Compliance first, challenge second remains the governing principle under Ontario’s adjudication regime.
Feldt Electric Ltd. v Gorbern Mechanical Contractors Limited
In Feldt Electric Ltd. v. Gorbern Mechanical Contractors Limited, the Ontario Superior Court of Justice considered whether a subcontractor’s failure to comply with an adjudicator’s determination justified discharging its lien under s. 47 of the Construction Act. Gorbern Mechanical Contractors Limited (“Gorbern”), the general contractor on a school heating and ventilation upgrade project, subcontracted electrical work to Feldt Electric Ltd. (“Feldt”). A dispute over the scope of Feldt’s work led Gorbern to issue notices of default, retain another trade to complete the disputed work, and commence an adjudication under the Construction Act.
The adjudicator determined that Feldt was required to pay Gorbern $94,017.20, plus interest and costs, for the completion work. Feldt did not pay the adjudicated amount. Gorbern moved under s. 47 of the Construction Act to discharge Feldt’s lien and stay the lien action, arguing that Feldt’s non-compliance with its mandatory payment obligation under s. 13.19(2) of the Construction Act warranted dismissal of the lien claim.
The Court dismissed the motion. While acknowledging Feldt’s breach of the Construction Act’s provisions relating to adjudication, the Court held that discharging the lien solely on that basis would be unjust and disproportionate in the circumstances. Relief under s. 47(1) is discretionary, and where discharge is sought on the merits, the moving party must demonstrate the absence of a triable issue - an onus Gorbern failed to meet. Proportionality under s. 50(3) further informed the analysis. Although the Court expressed concern about parties ignoring adjudication determinations, it declined to impose an automatic consequence without a contextual assessment of fairness. The Court also refused Gorbern’s request for the return of lien security, as doing so would effectively discharge the lien and undermine the Construction Act’s purpose.
Key takeaway - Non-payment of an adjudicator’s determination does not automatically bar a lien claim. Courts retain discretion under s. 47 and will assess fairness and proportionality in context, even where statutory payment obligations have been breached. With that said, parties should ignore adjudication decisions at their own risk.
Re Fakoori
In Re Fakoori, the Ontario Superior Court of Justice considered whether creditors should be granted leave under s. 69.4 of the Bankruptcy and Insolvency Act (“BIA”) to lift the automatic stay imposed by s. 69.3 of the BIA and continue an action against a debtor arising from alleged construction-related misconduct. The creditors sought to proceed with an action alleging misrepresentation and breaches of trust under ss. 8 and 13 of the Construction Act against multiple defendants, including a construction company (HiLife) and its principals, one of whom was the debtor. The debtor opposed the motion, arguing that the bankruptcy stay barred continuation of the claims.
The Court reviewed the governing jurisprudence and confirmed that, to obtain leave, creditors must plead specific facts demonstrating “sound reasons” to lift the stay—namely, facts which, if proven, could support claims that are not released upon discharge under s. 178(1) of the BIA, including claims grounded in fraud or breach of trust. Applying this test, the Court found that the creditors had pleaded detailed material facts in their statement of claim, supported by evidence filed on the motion, which—if believed—could bring the claims within ss. 178(1)(d) and (e) of the BIA. The onus therefore shifted to the debtor to show that the claims were frivolous or had little chance of success. The debtor failed to meet that burden. The evidence showed that the debtor had voluntarily assumed a directorial role, obtained credit for the company, and did so with knowledge of a prior construction-related bankruptcy involving another principal.
The Court lifted the stay, finding that denying leave would materially prejudice the creditors by depriving them of discovery and trial rights, and that it was equitable to allow the action to proceed. The Court also found a reasonable prospect that the claims would ultimately be non-dischargeable.
Key takeaway - Where construction creditors plead specific facts capable of supporting non-dischargeable claims under s. 178 of the BIA, courts may lift the bankruptcy stay to permit the action to continue. Directors and officers in the construction context remain exposed to personal liability that may survive bankruptcy where allegations of fraud or breach of trust are properly advanced.