Speymill Contracts Ltd v Baskind

An adjudicator’s decision provides an interim resolution and ordinarily must be enforced despite errors of fact, law or procedure. Enforcement may be refused where the adjudicator exceeded jurisdiction or seriously breached natural justice.

Fraud may constitute a defence in an adjudication. Where alleged fraud was or could have been raised and was adjudicated upon, it does not ordinarily prevent enforcement. Fraud which neither was nor reasonably could have been raised, and which emerges only afterwards, may stand differently. Enforcement proceedings are not the forum for determining the underlying merits.

A contractor obtained an adjudicator’s decision requiring a residential employer to pay sums due under interim certificates and a further valuation. The employer alleged that the contractor’s employees had stolen copies of withholding notices. That allegation was presented to the adjudicator, who found that the employer had not proved that effective notices were issued.

In enforcement proceedings, HHJ Platts declined to enter unconditional summary judgment. He held that the theft allegations disclosed an arguable defence, although he required the employer to pay the claimed sum into court. The contractor appealed.

The central issues were whether the parties had excluded the theft issue from the adjudication, whether the adjudicator had adequately addressed it, and whether the alleged fraud prevented enforcement.

1. Appeal allowed unanimously. Summary judgment was to be entered for the contractor, subject to the existing stay of execution.

2. The parties had not agreed to remove the theft issue from the adjudicator’s consideration or reserve it for enforcement proceedings. The employer had argued that the allegation prevented any award, while the contractor had asked the adjudicator to dismiss or disregard it. Those opposing positions disclosed no agreement. It is not the function of a court enforcing an adjudicator’s decision to investigate the underlying dispute.

3. The adjudicator addressed the theft allegation to the extent required. He considered whether the employer had proved, on the balance of probabilities, that effective withholding notices were issued. His letter and decision showed that he took the allegation into account. His conclusion was open to him, although the parties remained free to obtain a final determination in arbitration.

4. Adjudicators’ decisions provide interim resolutions under section 108 of the Housing Grants, Construction and Regeneration Act 1996. They must ordinarily be enforced despite errors of procedure, fact or law. Excess of jurisdiction and serious breach of natural justice remain grounds for refusing enforcement: Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] EWCA Civ 1358.

5. Jackson LJ agreed with the analysis in SG South Ltd v Kings Head Cirencester LLP [2009] EWHC 2645. Fraud may be raised as a defence in adjudication if it answers the claim. An allegation relied upon to resist enforcement must have clear and unambiguous evidential and argumentative support. Where the alleged conduct was or could have been raised and was adjudicated upon, the decision remains enforceable without more. Conduct which neither was nor reasonably could have been raised, and which emerges afterwards, may potentially be relied upon.

6. The alleged theft had been raised directly before the adjudicator and considered in his decision. It was not fraud discovered only afterwards. It therefore supplied no basis for refusing enforcement. The existing stay remained because the contractor had not appealed the ruling based on its financial position. The contractor could later apply to lift it if its position improved or adequate security was provided.

1. Court of Appeal (Civil Division): The contractor’s appeal was allowed unanimously. Summary judgment was entered in its favour, subject to the stay of execution ordered below: [2010] EWCA Civ 120.

2. Technology and Construction Court at Liverpool: HHJ Platts declined to grant unconditional summary judgment. He held that the theft allegations disclosed an arguable defence and granted permission to defend conditional upon payment into court of the whole sum claimed. He separately ordered a stay of execution because of the contractor’s financial position.

3. Adjudication: The adjudicator ordered the employer to pay sums due under interim certificates and a further interim valuation. He found that the employer had not proved the issue of effective withholding notices.