Accurate Railroad Construction Ltd v Sierra Infrastructure Inc: Judicial Review of an Adjudicator’s Determination in light of Fraud Allegations

The recent case of Accurate Railroad Construction Ltd v Sierra Infrastructure Inc., 2024 ONSC 3722 provides guidance on fraud allegations in adjudication proceedings and whether or not to stay an adjudicator’s determination pending judicial review.

Facts

In this matter, the adjudicator required that the applicant, Accurate Railroad Construction Ltd. (“Accurate”) repay over $288,000.00 to the respondent, Sierra Infrastructure Inc. (“Sierra”). Accurate brought an application for judicial review alleging fraud and submitting that Sierra misled the adjudicator by filing a summary chart that contained errors that were “so precisely mixed and matched” that the misrepresentation had to have been deliberately made. In response, Sierra submitted that there is a difference between an error in a summary chart and an overt, intentional act of deceit and fraud.

Accurate sought a stay of the requirement to pay pending the hearing of its leave motion and a further stay until the date of the hearing of the judicial review. The key issue for the court was how to deal with an interim stay until the leave application was heard.

Sierra did not contest a stay of the adjudicator’s order if Accurate secured the amount in court. In his endorsement, Justice Myer emphasized the court’s preference for expedited proceedings and stated that while it is difficult to determine whether the mistake in the chart was intentional or constituted fraud, he was reluctant to put the parties through a lengthy road of legal battles for an interim order.

As a result, Justice Myers relied on the guidance of the Divisional Court in Anatolia Tile & Stone Inc. v Flow-Rite Inc 2023 ONSC 1291, and ordered that the sum of $288,493.07 be paid into court as security. Justice Myer’s order struck a balance between the Construction Act’s goal of ensuring timely payments while permitting judicial oversight for cases that allege fraud.
 

Key takeaways:

• It is evident from this case that in situations where a stay of a determination is sought, courts may require disputed amounts to be secured in court pending judicial review proceedings.

By Rapti Ratnayake