Prompt Payment Legislation Process

Summary

As of March 1, 2022, payment of a Proper Invoice, from Owners to Contractors, is required within 28 days of filing a proper invoice. Undisputed portions of an invoice can no longer have payment withheld while disputed portions are adjudicated – it is the law for clients to pay their contractors, and contractors their subcontractors, in a timely manner.

Prompt Payment is outlined in Part I.1 of the Saskatchewan Builders’ Lien Act.

Additional information on Prompt Payment can be found here: Saskatchewan Builders’ Lien Regulations.

If there is a dispute about payment, a fast-moving adjudication process must be initiated to resolve the dispute and provide enforceable judgement. This is initiated by sending the appropriate form to one of our certified Adjudicators (form and Adjudicator directory available here) and paying a non-refundable filing fee. From here, the details of the dispute must be outlined, including specific amounts withheld, Parties must be notified, and the Adjudicator can begin the process.

In the case that a contractor still has not been paid after a favourable judgement, they can walk off the job, cannot be replaced on the job site, and their demobilization and remobilization costs would be the responsibility of the party owing the money.

The Proper Invoice

Proper Invoice means a written bill or other request for payment for services or materials with respect to an improvement under a contract.

  • A proper invoice is required to contain the following information;
    • the contractor’s name and address;
    • the date of the invoice and the period during which the services or materials were supplied;
    • information identifying the contract or other authority under which the services or materials were supplied;
    • a description, including quantity if appropriate, of the services or materials that were supplied;
    • the amount payable for the services or materials that were supplied, and
      the payment terms;
    • the name, title, telephone number and mailing address of the person to whom payment is to be sent;
    • any other prescribed information.
  • A proper invoice must be given to an owner on a monthly basis, unless the contract provides otherwise.
  • A Proper invoices cannot be contingent on prior certification by the client or their consultant.
  • A definition of a proper invoice can be found in section 5.1 of the Prompt Payment Legislation here.
  • A proper invoice template can be found on the Adjudicator Directory & Forms page here.

Prompt Payment

  • The Payment clock starts with the submission of a “proper invoice” from the prime contractor to the client.
    • The Owner must: Issue payment by day 28 OR issue a Notice of Non-payment by day 14 
  • An owner has 14 days to issue a Notice of Non-payment for all or any portion of the proper invoice.
    • Notice of non-payment forms can be found here.
    • Documentation outlining the reason and value of the disputed portion is required.
    • The balance of the proper invoice remains due within the 28 days.
  • Once the Prime Contractor has received payment from the owner, they must pay their sub-contractors within 7 days, proportion to their invoices included in the proper invoice.
    • If the work of a sub-contractor is disputed, their payment will be limited proportionally.
  • If the prime contractor has not been paid 28 days after proper invoice, they must issue a Notice of Non-payment to their sub-contractors no later than 35-days following the submission of the Proper Invoice OR issue payment to their subs.
    • The Contractor must issue a Notice of Adjudication within 21 days of providing a Notice of Non-payment to their sub-contractors.
    • Please note that there are Filing Fees & Adjudications Fees, details on fees are outlined here.

Interest on Overdue Payments

  • Interest begins to accrue when payment is due.
  • Interest will be the greater of pre-judgment interest or that specified in the prime contract.
  • Interest is not charged on interest.

Dispute Resolution

  • A party to a contract may refer to adjudication a dispute with the other party to the contract respecting disputes that are the subject of a Notice of Non-payment pursuant to Part I.1 of the Saskatchewan Builders’ Lien Act legislation
  • Learn More about Adjudication
  • The cost of adjudication is borne equally by both parties to the adjudication – unless ruled otherwise (see section 21.61 of the Prompt Payment legislation here)

 

Adjudication Timelines

  • A Notice of Adjudication is served by the Claimant, to the Responding Party. That Notice, and the filing fee is then provided to the SCDRO within 24 hours to initiate the Adjudication process
  • Parties have four days to agree to an adjudicator (select from the Adjudicator directory here). If Parties cannot agree, the Claimant must request the Authority to appoint an adjudicator and they have seven days from the date of request to appoint.
  • The Adjudicator will provide procedure and direction for the adjudication process to the parties.
  • Within five days of appointment, an adjudicator must be provided with the construction contract and any documentation that the Claiming Party intends to rely on.
  • Within five days of receiving the documents from the Claiming party, the Responding party will submit their data.
  • An adjudicator has 30 days from receiving the claimants documentation to issue a ruling.
  • The period can be extended for 14 days on the agreement from the parties.
  • Adjudicators have broad discretion and determinations are binding, and can be filed with the Court of King’s Bench to be converted to a court order.
  • Applications for judicial review of an adjudication must be made within 30 days of ruling (see section 21.62(1) of the Builders’ Lien legislation here). An application does not act as a stay of the operation.
  • Applications for judicial review can be dismissed without cause.
    • The situations in which an adjudication will be set aside by judicial review are very limited and tightly prescribed – as outlined in section 21.62(1) of the Prompt Payment legislation here.
  • Any party owing on an adjudicated outcome has 10 days to pay in full.
    • Enforcement by the Court, must take place within two years of the determination (see section 21.71(1) of the Prompt Payment legislation here)

 

Suspension of Work

  • If an adjudicated amount is not paid in full within 10 days, a contractor has the right to suspend work.
  • Contractors are also entitled to reasonable costs associated with suspending work, the resumption of work, and interest throughout.
  • If a contractor suspends work, they cannot be replaced on the job site without agreeing to a settlement.