consent of the owner. Only the GC is required to provide a Proper
Invoice. Subcontractors and suppliers have no prescribed form
for their invoices but should also provide their invoices on a
monthly basis in order for their invoices to be included in the
Of note for those familiar with CCDC standard form construction
contracts, and the important role of the “payment certifier” in
CCDCs, the new statute provides that a contract provision (such
as would be found in a CCDC) that makes the giving of a “Proper
Invoice” conditional on the prior certification of a payment certifier
or on the owner’s prior approval is of no force or effect. As such,
additional amendments to the CCDC Supplementary Conditions
will be required when using CCDCs to ensure they do not contradict
the legislation and, therefore, become unenforceable.
Bill 152 defines numerous deadlines under the prompt payment process.
Such deadlines are something that all parties – owners, GCs and
subcontractors – should be intimately aware of so deadlines are not
missed. For example, an owner has 28 days to pay the “Proper Invoice”
received pursuant to the legislation. After the owner pays the GC, the
GC must pay all its subcontractors and suppliers within seven days.
They must then, in turn, pay their own subcontractors and suppliers
within seven days and so on.
If the owner disputes some or all of the amount of the “Proper
Invoice,” it has 14 days following receipt of the “Proper Invoice” to give
notice of any refusal to pay all or any portion of the “Proper Invoice.”
This is done through a “Notice of Non-Payment.” A contractor who receives
a “Notice of Non-Payment” must advise its subcontractors and
suppliers of the receipt of that notice without delay. The GC then has
seven days to decide if it will issue a “Notice of Non-Payment” to its
subcontractors and suppliers for their portion of the “Proper Invoice.”
If a “Notice of Non-Payment” is not provided by the GC for the invoices
of its subcontractors and suppliers, the GC will have to pay the
full amount of their invoices in accordance with the legislated payment
timeline, even if it is, itself, unpaid by the owner. This is also true
for subcontractors. Each level of the construction pyramid has seven
days from the receipt of a “Notice of Non-Payment” addressed to
them to provide a “Notice of Non-Payment” to their subcontractors
and suppliers for their invoices, lest they be liable to pay their entire
invoices despite being unpaid.
There are two kinds of notices of non-payment which a subcontractor
may receive from a contractor above them in the construction
pyramid. The first can be described as a “without cause” notice,
where the only reason provided is the “Notice of Non-Payment” the
contactor received. In essence, non-payment is not caused by any defect
in the subcontractor’s work or unreasonableness of its invoice,
but solely because the contractor is itself not being paid. That notice
must be accompanied with an undertaking by the one providing it to
commence an adjudication for payment of its invoice within 21 days.
When served with such a notice, the subcontractor must, in order to
be paid, simply await the outcome of the adjudication which the party
that served the notice has promised to commence.
The second kind is a “with cause” notice. That kind of notice includes
causes for non-payment which have to do with disagreements
over the propriety of the subcontractor’s or supplier’s invoice itself. In
order to obtain payment, the subcontractor or supplier who receives
such a notice will have to commence its own adjudication contesting
the “Notice of Non-Payment” it has received.
A contractor who receives partial payment of its own “Proper
Invoice” must use those funds to pay its subcontractors and suppliers
the amount of their invoices on a proportionate basis. However, if the
amount unpaid by the owner relates to services or materials supplied
by one or more subcontractors in particular, the contractor must first
pay the other subcontractors in full. The contractor can then use the
remaining funds to pay the subcontractors who are implicated in the
dispute on a proportionate basis.
The most significant change arising with Bill 152 is the introduction
of the adjudication system. Saskatchewan will have to set up a
process for training and appointing adjudicators who will be authorized
to act under the bill. A Nominating Authority will be designated
and required to establish continuing education programs, a code
of professional conduct, and a registry of approved adjudicators.
To be an adjudicator, an individual must:
1. Have at least 10 years of relevant professional experience in the
2. Successfully complete the required training programs;
3. Not be an undischarged bankrupt.
4. Not have been convicted of a criminal offence in Canada or a
comparable offence elsewhere.
5. Pay the authority the applicable fees for his training and
qualification as an adjudicator.
6. Agree in writing to comply with the requirements applicable to
A person holding a certificate of qualification as an adjudicator
must successfully complete the continuing education programs,
comply with the code of ethics, pay the applicable fees,
and comply with the Act, the regulations, and the Authority’s directions
Under the new legislation, parties can refer the following matters
1. The valuation of services or materials provided under the contract.
2. Payment under the contract, including in respect of a change
order, whether approved or not, or a proposed change order.
3. Disputes that are the subject of a “Notice of Non-Payment.”
4. Amounts retained following set-off by a trustee or a lien set-off.
5. Payment of a basic holdback.
6. Non-payment of the basic holdback.
7. Any other matter that the parties to the adjudication agree to or
that may be prescribed.
The adjudicator may then render interim decisions. Interestingly,
a party to a contract or subcontract may refer a matter to adjudication
even if the matter is the subject of a court action or arbitration
proceeding. However, adjudication cannot be commenced once a
contract has been completed.
The issue of whether an invoice is in fact a “Proper Invoice,” as prescribed
by the Act, is not specifically provided for in the bill as being
an issue that can be decided by adjudication. However, according to
common law principles, an adjudicator has reasonable discretion to
determine the disputes they can hear. In our opinion, the adjudicator
MONSIT JANGARIYAWONG / 123RF
52 Think BIG | Quarter 3 2019 | saskheavy.ca