England and Wales Court of Appeal (Civil Division) Decisions

IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LIVERPOOL TCC
HHJ Platts
9LV22750/TC12/09 AND 9LV30739/TC11/09

		Royal Courts of Justice Strand, London, WC2A 2LL
		25/02/2010

Lord Justice Jackson :

1. This judgment is in five parts namely:-

Part 1 – Introduction;

Part 2 – The Facts;

Part 3 – The Present Proceedings;

Part 4 – The Law;

Part 5 – Decision.

Part 1. Introduction
2. This is an appeal by a contractor against the decision of HHJ Platts in the Technology and Construction Court in Liverpool in which the judge declined to give summary judgment enforcing an adjudicator's decision. Speymill Contracts Limited ("Speymill") is the claimant in the adjudication, the claimant in the litigation and the appellant in this court. Mr Eric Baskind ("Mr Baskind") is the respondent in the adjudication, the defendant in the proceedings to enforce the adjudicator's decision and the respondent in this court.
3. The property the subject of these proceedings is Raby House, Willeston, Neston, Cheshire. I shall refer to it as "Raby House".
4. The JS Design Partnership ("JSD") were the architects for the building project. Summerfield Robb Clark Limited ("SRC") were the quantity surveyors for the building project.
5. The statutory provisions which are relevant background to this appeal are contained in the Housing Grants, Construction and Regeneration Act 1996 ("the 1996 Act"). Section 108 of the 1996 Act provides: -

"108 Right to refer disputes to adjudication

(1) A party to a construction contract has the right to refer a dispute arising under the contract for adjudication under a procedure complying with this section.

For this purpose "dispute" includes any difference.

(2) The contract shall –

(a) enable a party to give notice at any time of his intention to refer a dispute to adjudication;

(b) provide a timetable with the object of securing the appointment of the adjudicator and referral of the dispute to him within 7 days of such notice;

(c) require the adjudicator to reach a decision within 28 days of referral or such longer period as is agreed by the parties after the dispute has been referred;

(d) allow the adjudicator to extend the period of 28 days by up to 14 days, with the consent of the party by whom the dispute was referred;

(e) impose a duty on the adjudicator to act impartially; and

(f) enable the adjudicator to take the initiative in ascertaining the facts and the law.

(3) The contract shall provide that the decision of the adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement.

The parties may agree to accept the decision of the adjudicator as finally determining the dispute."

6. Section 111 of the 1996 Act provides:-

"111 Notice of intention to withhold payment

(1) A party to a construction contract may not withhold payment after the final date for payment of a sum due under the contract unless he has given an effective notice of intention to withhold payment.

The notice mentioned in section 110(2) may suffice as a notice of intention to withhold payment if it complies with the requirements of this section.

(2) To be effective such a notice must specify –

(a) the amount proposed to be withheld and the ground for withholding payment, or

(b) if there is more than one ground, each ground and the amount attributable to it,

and must be given not later than the prescribed period before the final date for payment.

(3) The parties are free to agree what the prescribed period is to be."

7. After this brief introduction I must now turn to the facts.
Part 2. The Facts
8. Raby House was formerly a country house hotel; Mr Baskind purchased Raby House on a date before 2005 with a view to making the property his home. He engaged JSD as architects to design the conversion works. He engaged SRC to act as his quantity surveyors in respect of the proposed works. In March 2005 the project went out to tender. Speymill was the successful tenderer. Speymill commenced work at Raby House in August 2005.
9. No formal contract for the conversion works was ever executed. However, agreement was reached in correspondence between the parties. That agreement incorporated the terms of the JCT Standard Form of Building Contract, 1998 edition, private without quantities, I shall refer to this as "the JCT Contract". Article 5 of the JCT Contract provided:-

"If any dispute or difference arises under this Contract either Party may refer it to adjudication in accordance with clause 41A."

The conditions of the JCT Contract included the following clauses:

"30.1.1.4 Not later than 5 days before the final date for payment of the amount due pursuant to clause 30.1.1.1 the Employer may give a written notice to the Contractor which shall specify any amount proposed to be withheld and/or deducted from that due amount, the ground or grounds for such withholding and/or deduction and the amount of withholding and/or deduction attributable to each ground.

30.1.1.5 Where the Employer does not give any written notice pursuant to clause 30.1.1.3 and/or to clause 30.1.1.4 the Employer shall pay the Contractor the amount due pursuant to clause 30.1.1.1.

………………….

41A.4.1 When pursuant to article 5 a Party requires a dispute or difference to be referred to adjudication then that Party shall give notice to the other Party of his intention to refer the dispute or difference, briefly identified in the notice, to adjudication. If an Adjudicator is agreed or appointed within 7 days of the notice then the Party giving the notice shall refer the dispute or difference to the Adjudicator ('the referral') within 7 days of the notice. If an Adjudicator is not agreed or appointed within 7 days of the notice the referral shall be made immediately on such agreement or appointment. The said Party shall include with that referral particulars of the dispute or difference together with a summary of the contentions on which he relies, a statement of the relief or remedy which is sought and any material he wishes the Adjudicator to consider.

……………………………….

41A.5.2 The Party not making the referral may, by the same means stated in clause 41A.4.2, send to the Adjudicator within 7 days of the date of the referral, with a copy to the other Party, a written statement of the contentions on which he relies and any material he wishes the Adjudicator to consider.

41A.5.3 The Adjudicator shall within 28 days of the referral under clause 41A.4.1 and acting as an Adjudicator for the purposes of S.108 of the Housing Grants, Construction and Regeneration Act 1996 and not as an expert or an arbitrator reach his decision and forthwith send that decision in writing to the Parties. Provided that the Party who has made the referral may consent to allowing the Adjudicator to extend the period of 28 days by up to 14 days; and that by agreement between the Parties after the referral has been made a longer period than 28 days may be notified jointly by the Parties to the Adjudicator within which to reach his decision.

41A.5.4 The Adjudicator shall not be obliged to give reasons for his decision.

41A.5.5 In reaching his decision the Adjudicator shall act impartially and set his own procedure; and at his absolute discretion may take the initiative in ascertaining the facts and the law as he considers necessary….

41A.7.1 The decision of the Adjudicator shall be binding on the Parties until the dispute or difference is finally determined by arbitration or by legal proceedings [xx] or by an agreement in writing between the Parties made after the decision of the Adjudicator has been given."

10. Those contract terms reflect the provisions of sections 108 and 111 of the 1996 Act. Since building works were being carried out to a dwelling house, the parties were not obliged to include adjudication provisions in their contract: see section 106 of the 1996 Act. Nevertheless they chose to do so.
11. Let me now return to the narrative. During the course of the building works JSD issued a total of fifteen interim payment certificates between 31^st August 2005 and 10^th October 2006 to a total value of £753,490.44. Mr Baskind made payments against those certificates up until 12^th April 2006 in the total sum of £652,786.20. After that he made no further payments. In particular he made no payments in respect of interim payment certificates numbered 13, 14 or 15, and only partial payment in respect of interim payment certificate 12. Furthermore JSD granted extensions of time under the contract and issued a certificate of practical completion on 27^th June 2006.
12. The parties were unable to agree what further payments were due to Speymill. The parties were also in dispute about a number of other matters, which are not material to this appeal.
13. On 28^th November 2008 Speymill served a notice of adjudication, seeking payment of all outstanding sums which were due. In due course Mr Peter Vinden was appointed as adjudicator. The contractual procedures were followed, whereby each party served its submissions and the material on which it relied.
14. One of the issues in the adjudication was whether Mr Baskind had served withholding notices in respect of interim payment certificates 12, 13, 14 and 15. Mr Baskind alleged that he had served withholding notices. Speymill asserted that he had not. Mr Baskind was unable to produce to the adjudicator any copies of the withholding notices that allegedly he had served. Mr Baskind's explanation for the absence of copy withholding notices was as follows. On 14^th September 2006 two employees of Speymill, namely Mr Cowlin and Mr Harrington, stole from Raby House some files belonging to Mr Baskind. These files included copies of the withholding notices. Electronic copies remained on Mr Baskind's computer, but most unfortunately there was a lightning strike and power surge in October 2006 which damaged that computer beyond repair. Speymill, for its part, denied that its employees had stolen any files belonging to Mr Baskind. I shall refer to this area of dispute between the parties as the "theft" issue. The parties themselves tended to refer to it as the "fraud" issue.
15. There was some debate between the parties and the adjudicator as to how he should deal with the theft issue. Mr Baskind in his response dated 16^th December 2008 submitted that it would be difficult for the adjudicator to resolve such a controversial issue of fact. Therefore the adjudicator should make no award at all in favour of Speymill. Speymill, in its reply on jurisdictional issues dated 19^th December 2008, argued as follows:

"44. A party should not be able to make allegations of fraud, which could be totally unfounded, and thereby call an end to the adjudication process. The adjudicator, even using best endeavours, cannot make a proper assessment of fraud in the context of an adjudication where oral evidence will not be heard and if it was it will have limited value as it will not be under oath. Further, given that the issue goes largely to jurisdiction which is not a matter upon which the adjudicator can make a binding ruling, Speymill considers that it would be inappropriate to 'rehearse' the evidence on the fraud issues by the adjudicator hearing live witness evidence before the adjudicator prior to that evidence being tested, if necessary, in Court. The adjudicator is therefore invited to dismiss or disregard the allegations of fraud in this adjudication and leave the matters to the Court to determine should that prove necessary."

Speymill explained in a footnote that it used the word "court" as a shorthand for court or arbitration as applicable.

16. The adjudicator considered these competing arguments and set out the approach which he would adopt in a letter to the parties dated 23^rd December 2008. He said:

"50. I note that serious allegations have been made by the Responding Party in this adjudication. Allegations of theft and fraud are criminal matters which I clearly have no jurisdiction to deal with in their own right. Nevertheless, to the extent that the Responding Party is able to prove its assertions of fact with respect to the alleged fraud on the part of the Responding Party, I will consider these assertions as a defence to the Referring Party's claims in this adjudication."

17. Thereafter both parties continued to serve evidence in relation to the theft issue as well as other issues in the case. On the 14^th April 2009 the adjudicator issued his decision. That decision was in favour of Speymill. The adjudicator ordered Mr Baskind to pay to Speymill £100,704 plus VAT in respect of interim payment certificates 12, 13, 14 and 15. The adjudicator ordered Mr Baskind to pay £264,039 plus interest in respect of a further interim valuation of the works. He also made orders for the payment of interest.
18. The adjudicator dealt with the theft issue as follows in his decision:

"10.1.2 Mr Baskind maintains that he issued valid withholding notices in respect of the sums certified for payment by J S Design Partnership in Interim Payment Certificate numbers 12, 13, 14 and 15.

10.1.3 Mr Baskind says that files containing copies of the withholding notices issued by him to Speymill were stolen by Speymill operatives from Raby House in September 2006.

10.1.4 I am further advised that the electronic copies of the Withholding Notices held on Mr Baskind's personal computer were destroyed as a result of an electrical thunder storm or power surge which caused irreparable damage to Mr Baskind's computer some time in October 2006.

10.1.5 In the circumstances, Mr Baskind is not able to provide me with copies of the Withholding Notices he says he issued to Speymill and Mr Baskind relies on his witness statement to convince me that Speymill operatives committed a criminal act in order to prevent him from being able to evidence the issue of the said Withholding Notices.

10.1.6 Speymill for its part has denied that there has been any removal of documents from Mr Baskind's property and has no record of receiving any Withholding Notices either from Mr Baskind or from any member of Mr Baskind's professional team.

10.1.7 My duty as Adjudicator is restricted to deciding disputes under the Parties' Contract. I clearly have no power to deal with allegations which are of a criminal nature and I have restricted my deliberations to considering whether or not valid and effective Withholding Notices were issued by Mr Baskind such that Mr Baskind was not obliged to make payment of the amounts identified in Interim Payment Certificate numbers 12, 13, 14 and 15.

10.1.8 I have attempted in this adjudication to meet with the Parties and their respective experts in order to enquire further into the Parties' dispute and ascertain the facts.

10.1.9 Mr Baskind has refused to co-operate with my directions in relation to my requested meetings with the Parties and their experts.

10.1.10 In order for Mr Baskind to show that he is entitled to withhold payment from Speymill it is necessary for him to satisfy me on a balance of probabilities that effective Withholding Notices were issued by him.

…………..

10.1.15 From Mr Baskind's witness statements it is apparent that Mr Baskind believes he issued his first Withholding Notice in January 2006, a second Withholding Notice in March 2006, a third Withholding Notice in August 2006 and a fourth Withholding Notice in October 2006. Mr Baskind in his original witness statement indicated a fifth Withholding Notice was issued in November 2006, although this suggestion was withdrawn in his further statement comprising part of the Rejoinder served by Colemans on his behalf.

…………

10.1.19 What I am left with is two conflicting positions with Mr. Baskind saying he issued Withholding Notices and Speymill saying he did not.

10.1.20 As it is Mr Baskind that is asserting the right to withhold payment from Speymill, it is Mr Baskind that has the burden of proving this entitlement.

10.1.21 As Mr Baskind is unable to provide me with copies of the Withholding Notices he alleges he issued to Speymill and given that Speymill clearly state that no Withholding Notices were received by it, I am unable to conclude that Mr Baskind has discharged the burden of proof.

10.1.22 For the above reasons I have come to the conclusion that no valid and/or effective Withholding Notices were issued by Mr Baskind in respect of the sums due and payable in respect of Interim Payment Certificate numbers 12, 13, 14 and 15."

19. Mr Baskind failed to make any payment in respect of the adjudicator's order. Accordingly Speymill commenced the present proceedings.
Part 3. The Present Proceedings
20. By a claim form issued in the Technology and Construction Court at Liverpool Speymill claimed against Mr Baskind payment of £427,737 pursuant to the decision of the adjudicator.
21. On 1^st June 2009 Mr Baskind served a defence running to some 32 pages, advancing a variety of ingenious arguments as to why the adjudicator's decision should not be enforced. With one exception, all of those ingenious arguments were rejected by the judge and there is no appeal against that part of his decision. I shall therefore make no further reference to those particular lines of defence.
22. For present purposes, the relevant part of Mr Baskind's defence is to be found at paragraph 33 which reads as follows:

"33. The Defendant contends that in various ways the Claimant has undertaken conduct amounting to fraud in that inter alia it has……

33.3. stolen crucial documents from the Defendant and in particular the withholding notices which were issued by the Defendant in the course of the Claimant's performance of the Works.

33.4 denied receipt of the said withholding notices notwithstanding that the Claimant had, by its former managing director Andrew Latham, and by Ron Parsons, discussed the said notices with the Defendant and further had copies of the said withholding notices at the time of the said meetings."

23. As is the normal practice in adjudication enforcement proceedings, Speymill applied for summary judgment. HHJ Platts heard the application for summary judgment in late June and delivered his reserved judgment on 22^nd July 2009.
24. The judge concluded that paragraphs 33.3 and 33.4 of Mr Baskind's defence disclosed an arguable defence. However, unsurprisingly, the judge had reservations about the strength of Mr Baskind's defence on this point. Accordingly he granted leave to defend conditional upon Mr Baskind paying into court the whole sum claimed.
25. Speymill is aggrieved by the judge's refusal to grant summary judgment. Accordingly Speymill appeals to this court.
26. Speymill's case on appeal, although embodied in "skeleton" arguments of surprising length, is essentially a simple one. It is that the issues raised by paragraphs 33.3 and 33.4 of Mr Baskind's defence were issues before the adjudicator and taken into consideration in the course of the adjudication. The adjudicator's decision, whether right or wrong, should now be enforced. If the adjudicator was wrong, no injustice is done thereby. The correct position will be established in the forthcoming arbitration between the parties. The adjudicator's decision is only binding in a short term, namely until that arbitration is concluded.
27. Mr Baskind's case on the appeal was originally somewhat diffuse and spanned no less than 35 pages of "skeleton" argument. However Mr Marcus Taverner QC, in his oral submissions was much more focussed. Mr Taverner's argument may be summarised as follows. The parties agreed that the adjudicator should not decide the theft issue. The parties also agreed that the court in enforcement proceedings was the appropriate forum for determining the theft issue. Accordingly the judge was right to address the issue and to give leave to defend on that basis. Alternatively, says Mr Taverner, if the theft allegation was an issue in the adjudication, then the adjudicator failed to address it, or at least to address it properly. Therefore the adjudicator's decision, to the effect that Mr Baskind served no withholding notices, is flawed. That decision should not be enforced. Mr Taverner also argues that the adjudicator's decision was tainted by the fraud of Speymill. Therefore it should not be enforced.
28. Finally, for good measure, both sides applied to this court for permission to adduce further evidence under CPR rule 52.11(2), although Speymill's application was conditional upon Mr Baskind's application being granted. Mr Baskind sought to put in further evidence supportive of his theft allegation. Speymill responded with further evidence to refute the theft allegation. I do not propose to say anything about the content of that evidence. Suffice to say that both parties' applications to adduce further evidence were ill founded. The proposed further evidence would not assist this court in addressing the issues of principle raised by Speymill's appeal. The proper forum in which the parties should deploy their evidence and their further evidence on the theft issue is the forthcoming arbitration. Accordingly, in the course of the hearing this court refused the application to adduce further evidence.
29. Before addressing the issues in this appeal, I must first review the law.
Part 4. The Law
30. In a series of decisions over the last twelve years both the Technology and Construction Court and this court have emphasised the special character of adjudicators' decisions and the policy considerations which underlie section 108 of the 1996 Act. In essence, the adjudicator's decision provides an interim resolution of the referred dispute. If both parties are content with that interim resolution, they can agree to treat it as final. If any of the parties are discontented, they can litigate or arbitrate, in order to achieve the correct determination of the matters in issue.
31. In Carillion Construction Limited v Devonport Royal Dockyard Limited [2005] EWCA Civ 1358; [2006] BLR 15 at paragraph 52 the Court of Appeal approved the following summary of the relevant principles:

"52…

1. The adjudication procedure does not involve the final determination of anybody's rights (unless all the parties so wish).

2. The Court of Appeal has repeatedly emphasised that adjudicators' decisions must be enforced, even if they result from errors of procedure, fact or law: …

3. Where an adjudicator has acted in excess of his jurisdiction or in serious breach of the rules of natural justice, the Court will not enforce his decision; …

4. Judges must be astute to examine technical defences with a degree of scepticism consonant with the policy of the 1996 Act. Errors of law, fact or procedure by an adjudicator must be examined critically before the Court accepts that such errors constitute excess of jurisdiction or serious breaches of the rules of natural justice:"

In setting out this summary, I have omitted the authorities which the Court of Appeal listed in support of the various propositions.

32. At paragraph 53 the Court of Appeal set out a further proposition, which the court held to be correct at paragraph 81. That proposition reads as follows:

"53…

1. If an adjudicator declines to consider evidence which, on his analysis of the facts or the law, is irrelevant, that is neither (a) a breach of the rules of natural justice nor (b) a failure to consider relevant material which undermines his decision on Wednesbury grounds or for breach of para 17 of the Scheme. If the adjudicator's analysis of the facts or the law was erroneous, it may follow that he ought to have considered the evidence in question. The possibility of such error is inherent in the adjudication system. It is not a ground for refusing to enforce the adjudicator's decision."

33. Neither Carillion nor any of the cases cited by the Court of Appeal in Carillion involve allegations of fraud or theft. There are, however, three authorities in which the effect of fraud has been considered in the context of adjudication.
34. In Pro-Design Limited v New Millenium Experience Company Limited (Liverpool TCC, 26^th September 2001) a lighting sub-contractor sought to enforce an adjudicator's decision against a main contractor. It was alleged in the enforcement proceedings that the claimant was a fraudulent vehicle, being a company owned and operated by an employee of the defendant. The court refused to grant summary judgment for the claimant on the basis of the adjudicator's award. It appears from the judgment that the whole fraud issue arose after the conclusion of the adjudication.
35. In Andrew Wallace Limited v Artesan Regeneration Limited [2006] EWHC 15 (TCC) the claimant sought to enforce an adjudicator's award that the claimant should be paid architectural fees of £128,845. The defendants, who had employed the claimant, advanced several lines of defence including allegations of fraud. HHJ Kirkham rejected the allegations as untenable. She added that the court's enforcement of the decision would not constitute assistance in the perpetration of a fraud. The facts upon which the fraud allegation was based emerged after the date of the adjudication. However, the judge concluded that on the evidence the defendant had no real prospect of establishing its allegation of fraud.
36. In SG South Limited v Kings Head Cirencester LLP [2009] EWHC 2645 (TCC) the defendant employer raised allegations of fraud in adjudication proceedings. The defendant failed to establish any factual basis for his allegations. Akenhead J analysed the legal position as follows:

"19. So far as fraud is concerned, it is or may be, depending on the facts, a defence in adjudication proceedings as it is in court or arbitration proceedings. There is nothing in the Housing Grants Construction and Regeneration Act 1996 to limit any type of dispute "arising under" the construction contract in question being referred to adjudication (see Section 108). Thus, it might be a defence, for instance, for a defending party to assert that the contract was induced by fraudulent misrepresentation or that the certificate on which the claiming party relies was procured by fraud. It is perhaps more arguable that a claiming party may not be able to refer a claim for the tort of fraud or deceit to adjudication (depending on the wording of the contractual adjudication clause); it might be arguable that such a claim does not arise "under" the contract as such. I do not have to decide that point, even more so because I have not heard full argument on the point. Obviously it may well properly be a defence to an adjudication claim for work done and materials and plant supplied for the defending party to argue that the work, materials or plant said to have been provided was not in fact provided; part of that defence may be that on the evidence some of the claim is based on forged invoices or on some other criminal or fraudulent behaviour; that may be the "cut and thrust" of some types of construction dispute.

20. Some basic propositions can properly be formulated in the context albeit only of adjudication decision enforcements:

(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."

I agree with that analysis. I also note that on 17^th February 2010 (after the hearing in this case) Ramsey J adopted a similar approach in GPS Marine Contractors Ltd v Ringway Infrastructure Services Ltd [2010] EWHC 283 (TCC).

37. Counsel have also cited numerous authorities concerning the effect of fraud upon judgments and arbitration awards. For my part I do not find these authorities to be of direct assistance. Judgments of the court and arbitration awards are of permanent effect unless and until reversed on appeal or set aside on some ground such as fraud. An adjudicator's decision, however, under the 1996 Act or equivalent contractual provisions is of a different character. The adjudicator's decision merely establishes the position from which the parties shall start their arbitration or litigation. This judgment is not the place to review the policy considerations underlying the adjudication system or the Latham Report on which that system is based. It is sufficient for the purposes of this appeal to state that I agree with Akenhead J's analysis of the effect of fraud upon adjudication decisions.
38. After this review of the law, I must now give my decision on the issues raised by this appeal.
Part 5. Decision
39. The first question is whether the parties agreed that the adjudicator should not consider the theft issue. I do not think that they did. Mr Baskind was arguing that the theft allegations could not properly be resolved by the adjudicator; therefore the adjudicator should make no award whatsoever. Speymill on the other hand was arguing that the theft allegation was a tactic which should not be allowed to derail the adjudication. The adjudicator should either dismiss or disregard the allegation of theft. It is quite impossible to spell out of the parties' submissions to the adjudicator any agreement that the theft issue should be carved out of the adjudication or reserved for determination in the enforcement proceedings. Furthermore, such an agreement (if made) would have been most irregular. It is not the function of the court in adjudication enforcement proceedings to investigate the underlying dispute between the parties.
40. The next issue is whether the adjudicator did in fact address the allegation of theft to the extent that it was necessary for him to do so. In relation to this issue, it is necessary to begin by looking at the context in which the theft allegation arises. Speymill was claiming (inter alia) payment on interim payment certificates 12, 13, 14 and 15. Mr Baskind's defence was that he had various cross-claims and that he had served withholding notices which, under clause 30.1, entitled him to withhold payment. Speymill denied that such withholding notices had been served. In support of that denial Speymill pointed to the fact that Mr Baskind could not produce any copies of the withholding notices.
41. On any substantial building contract such as this, one would expect the employer and his professional team to retain copies of any formal notices served under the contract. Mr Baskind therefore faced the difficulty of explaining the absence of copy notices. He sought to do so by alleging theft on the part of Speymill followed, coincidently but most unfortunately, by the lightning strike which disabled his computer.
42. The adjudicator dealt with these issues in a measured way. On the balance of probabilities the adjudicator concluded that Mr Baskind had not served withholding notices. In doing so it is clear, both from his letter dated 23^rd December 2008 and from the terms of his decision, that the adjudicator took into account the allegations of theft. The adjudicator's decision is hardly surprising. The alleged theft occurred before the date of the fourth alleged withholding notice: see paragraphs 10.1.3 and 10.1.14 of the adjudicator's decision. Therefore copies of the fourth withholding notice could not have been stolen and should have been produced, if in truth they existed. Furthermore even if Mr Baskind's personal copies of the first three withholding notices were stolen, that hardly explains the failure to produce other copies, for example those held by the professional team.
43. Of course, in the full arbitration, things may turn out differently. Mr Baskind may produce ready answers to all these points. However, the adjudicator proceeding on an interim basis plainly reached a decision which was open to him. I reject the argument that the adjudicator disregarded a material consideration namely the allegation of theft. I reject the argument that the adjudicator failed properly to address that issue. The adjudicator took the theft allegation into account to the extent that it was necessary to do so in reaching his decision.
44. I turn finally to the allegation that the adjudicator's decision should not be enforced because it is tainted by the fraud of Speymill. I reject that allegation. The allegation of theft was raised directly before the adjudicator and taken into account in the course of his decision. This is not a case of fraud coming to light after the adjudicators' decision. Applying the principles set out SG South, I hold that the allegation of theft forms no basis for refusing to enforce the adjudicator's decision.
45. Let me now draw the threads together. Despite the ingenuity of Mr Baskind's lawyers, deployed over many months, no grounds have been established for not enforcing the adjudication award, in the usual way, by summary judgment. In my view, therefore, Speymill's appeal should be allowed and summary judgment should be entered for Speymill.
46. I should add, however, that this may possibly be a Pyrrhic victory for Speymill. The judge held that by reason of Speymill's financial position, there should be a stay of execution on any judgment which Speymill may obtain. There is no appeal by Speymill against that decision.
47. In the result, therefore, I conclude that summary judgment should be entered for Speymill subject to the stay of execution which was ordered by the judge. If Speymill wishes to do so in the future it can apply to the judge to lift the stay either on the ground that Speymill's financial position has improved, alternatively on the ground that adequate security can be provided. Those matters, however, lie in the future. The outcome of the present proceedings is that Speymill's appeal is allowed.

Sir David Keene:

48. I agree.

Lord Justice Waller:

49. I agree.