Baskind engaged Speymill to carry out works to a country house hotel to a home. The agreement incorporated terms the JCT Standard Form of Building Contract, 1998 edition, private without quantities, however a formal contract was never executed.

During the course of the building works the architect issued payment certificates for a total value of £753,490.44. Baskind did not pay in respect of certificates 13, 14, 15 and only made partial payment in respect of certificate 12.

Speymill commenced an adjudication seeking payment of all outstanding monies. One of the issues that arose during the adjudication was whether Baskind had issued valid withholding notices. Baskind was unable to produce copies of the withholding notices because, he alleged, the files containing these documents had been stolen by Speymill and coincidentally the computer on which the electronic copies were stored was irreparably damaged, rendering copies unobtainable. Baskind submitted that as a result that as it would be difficult for the adjudicator to resolve such a controversial issue of fact and that it should make no award at all in favour of Speymill. Speymill responded inviting the adjudicator to dismiss or disregard the allegations of fraud and leave it to be determined if necessary by the court.

The adjudicator wrote to the parties stating that to the extent Baskind was able to prove its assertions of fraud, it would serve as a defence in the adjudication. The adjudicator subsequently made an award in favour of Speymill as he concluded that it was for Baskind to discharge the burden of proving it had issued the withholding notices, and he had not conclusively done so.

Baskind failed to make any payment following the adjudicator’s decision and Speymill sought to enforce the award. The judge at first instance decided that Baskind had an arguable defence on the basis of fraud and so refused to grant summary judgment in Speymill’s favour. Speymill appealed.

Speymill contended that the issues that were the substance of Baskind’s arguable defence were before the adjudicator and that, whether right or wrong, the adjudicator’s decision should be enforced. Baskind’s position was that the parties had agreed that the adjudicator should not decide the theft issue and that court was the appropriate forum to determine the theft issue, which it did in the enforcement proceedings and allowed leave to defend on that basis. Baskind also argued that the adjudicator’s decision was tainted by the fraud of Speymill.

Lord Justice Jackson summarised the law on fraud in the context of adjudication enforcements and approved the following propositions outlined in SG South Limited v King’s Head Cirencester LLP:

(a) Fraud or deceit can be raised as a defence in adjudications provided that it is a real defence to whatever the claims are; obviously, it is open to parties in adjudication to argue that the other party's witnesses are not credible by reason of fraudulent or dishonest behaviour.

(b) If fraud is to be raised in an effort to avoid enforcement or to support an application to stay execution of the enforcement judgment, it must be supported by clear and unambiguous evidence and argument.

(c) A distinction has to be made between fraudulent behaviour, acts or omissions which were or could have been raised as a defence in the adjudication and such behaviour, acts or omissions which neither were nor could reasonably have been raised but which emerge afterwards. In the former case, if the behaviour, acts or omissions are in effect adjudicated upon, the decision without more is enforceable. In the latter case, it is possible that it can be raised but generally not in the former."

Applying those principles, and noting that if there was to be a full arbitration, then things may turn out differently. the appeal was allowed and summary judgment should be entered for Speymill, subject to the stay of execution ordered by the judge at first instance (a decision against which there was no appeal).