Paragon Group Limited v FK Facades Limited

Summary

The sole issue was whether the assignee of an employer's rights under a construction contract can itself refer a dispute to adjudication.

Paragon, as assignee of the original employer's rights under a JCT Minor Works contract, had won an adjudication award against the contractor and sought to enforce it. FK Facades resisted on one ground: an assignee is not a Party to the contract, so the adjudicator had no jurisdiction.

HHJ Stephen Davies held that the assignee could adjudicate and enforced the award. A statutory assignment under section 136 of the Law of Property Act 1925 passes all legal remedies for the assigned right, which include the right to adjudicate unless the contract excludes it, and the references to a Party in the Scheme can be read to include a legal assignee. The judge called the point finely balanced.

Background and facts

The contract was a JCT Minor Works Building Contract 2016, entered into in October 2018. The works were remedial works to a roof at a commercial property in Ashton Moss, Greater Manchester.

The original employer was Office Depot International (UK) Limited and the contractor was FK Facades. Clause 3.1 had been amended so that the employer could assign the benefit of the contract at any time without the contractor's consent. The contractor could not assign without the employer's consent.

The benefit of the contract was assigned twice, first in 2021 and again in 2024, ending with Paragon Group as assignee of all the employer's rights, title, interest and benefit. Both assignments were notified to FK.

Paragon then treated FK as being in culpable delay, terminated the contract in April 2025, and claimed liquidated damages. It referred the dispute to adjudication.

The adjudicator ruled on a non-binding basis that he had jurisdiction, awarded Paragon 80,500 pounds and directed FK to pay his fees of 17,787 pounds. FK paid neither, so Paragon paid the adjudicator and brought this enforcement claim.

The issue

By the enforcement stage FK relied on a single jurisdictional point: an assignee is not a Party to the contract, so it had no right to refer a dispute to adjudication and the adjudicator had no jurisdiction.

The court had to decide whether Paragon, as assignee of the employer's rights, was entitled to adjudicate the assigned claim against FK. There was no direct authority either way, so the point fell to be decided from first principles.

The decision

The judge held that Paragon was entitled to summary judgment.

A statutory assignment under section 136 of the Law of Property Act 1925 passes not only the legal right but all legal and other remedies for it, transferred to the assignee as if they had been the assignee's from the beginning. That principle was explained in Read v Brown (1888) 22 QBD 128.

An assignee does not thereby become a Party to the contract in the full sense, because only a novation substitutes one contracting party for another. That distinction was drawn in Bexhill UK Ltd v Razzaq [2012] EWCA Civ 1376 and Energy Works (Hull) Ltd v MW High Tech Projects UK Ltd & Ors [2020] EWHC 2537 (TCC).

The right to adjudicate is contractual, so its scope turned on the ordinary interpretation of this contract. In the judge's view the references to a Party and the Parties in the Scheme were essentially neutral. They could be read as including an assignee without straining the language.

Reading Article 6 with clause 3.1 as amended, which allowed the benefit to be assigned, and with the general law of assignment, the right to adjudicate passed to the assignee as one of the remedies carried by section 136 unless the contract excluded it.

FK raised practical objections: that it could not counterclaim against the assignee, that findings might not bind the assignor, and that adjudication is confidential. None outweighed that reading. FK kept its equities and defences against the assignor, and any inconsistency could be corrected later in litigation.

The judge made the drafting answer explicit for anyone who dislikes the result:

"any prospective contracting party concerned about this risk can always stipulate for a no-assignment clause or a no-assignment without prior consent clause or, if it wished, a 'no adjudication by an assignee' clause."HHJ Stephen Davies, paragraph 71

His conclusion was expressed with candour about how close it was:

"an assignee can adjudicate an assigned claim against the original other party and, accordingly, that the adjudicator had jurisdiction to decide the dispute which was referred to him by Paragon."HHJ Stephen Davies, paragraph 77

Practical implications

For anyone who takes an assignment of a construction contract, a funder, a purchaser, or a group company, this decision says you can adjudicate in your own name on the assigned rights.

You do not have to persuade the assignor to lend its name to the reference, which had been the safe assumption. Notify the assignment in writing so that the statutory assignment under section 136 is effective, and check that the contract permits assignment and does not carve out the right to adjudicate.

For contractors and employers on the receiving end, an assignee can bring an adjudication against you on this reasoning. You keep every equity and defence you had against the assignor.

The general rule that a responding party cannot counterclaim against the referring party still applies, so you may be answering a claim without being able to advance your own cross-claim in the same reference. Plan for that when you assess the exposure.

The result is not a general licence. It turned on this contract permitting assignment, on the absence of any provision excluding an assignee's right to adjudicate, and the judge held it finely balanced at first instance.

If you do not want an assignee adjudicating against you, deal with it in the contract. The judgment lists the options: a bar on assignment, a bar on assignment without consent, or an express clause that no assignee may adjudicate. Silence now runs in the assignee's favour.

Paragon Group Limited v FK Facades Limited [2026] EWHC 78 (TCC), Technology and Construction Court, Manchester, HHJ Stephen Davies sitting as a High Court Judge. Heard 17 December 2025, judgment handed down 20 January 2026.