Paragon Group Limited v FK Facades Limited [2026] EWHC 78 (TCC)

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Paragon Group Limited v FK Facades Limited

[2026] EWHC 78 (TCC) | High Court of Justice, Business and Property Courts in Manchester, Technology and Construction Court (KBD)

Before HHJ Stephen Davies sitting as a High Court Judge | Heard 17 December 2025 | Handed down 20 January 2026

Interactive Process Flow | Assignee's right to adjudicate

Case Analysis Process Flow

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1. Case Overview

Case: Paragon Group Limited v FK Facades Limited [2026] EWHC 78 (TCC)
Court: High Court of Justice, Business and Property Courts in Manchester, Technology and Construction Court (KBD)
Judge: HHJ Stephen Davies sitting as a High Court Judge
Hearing Date: 17 December 2025
Judgment Date: 20 January 2026
Case No: HT-2025-MAN-000058

Paragon Group Limited sought summary judgment enforcing an adjudicator's award for £80,500 plus reimbursement of £17,787 in adjudicator's fees. FK Facades Limited had contracted with Office Depot International (UK) Limited for remedial roof works under an amended JCT Minor Works Building Contract 2016. The employer's contractual benefits were assigned twice, first to OT Group Limited and then to Paragon, with written notice given to FK. Paragon terminated the contract and referred a liquidated-damages dispute to adjudication. FK resisted enforcement solely on the ground that an assignee was not a contractual 'Party' entitled to adjudicate. The court held that the permitted statutory assignment carried the right to adjudicate the assigned claim and granted summary judgment (paragraphs 1-3 and 15-17 and 77-81).

Central Legal Test: The question was whether, on the objective interpretation of the JCT contract and the incorporated Scheme, 'Party' included a permitted legal assignee of the employer's benefit. The court considered the statutory transfer of the assigned right and all legal and other remedies under section 136 of the Law of Property Act 1925 (paragraphs 21-27 and 55-80).

Parties and Representation

Claimant: Paragon Group Limited, represented by Mathias Cheung, instructed by Gunnercooke LLP.

Defendant: FK Facades Limited, represented by Max Twivy, instructed by Beyond Corporate Limited.

Contract and Assignment Terms

The JCT Minor Works Building Contract 2016 was entered on 17 October 2018 between Office Depot International (UK) Limited as Employer and FK as Contractor for remedial roof works at a commercial property in Ashton Moss (paragraphs 5-12). Clause 3.1 was amended to allow the Employer to assign or charge the benefit at any time without FK's consent, while FK could assign only with prior written consent (paragraphs 13-14).

Core Jurisdiction Issue

Article 6 and clause 7.2 allowed either Party to refer a dispute arising under the contract to adjudication under the Scheme. FK said Paragon became the owner of assigned rights but did not become the Employer or a Party to the original contract. Paragon said the assigned benefit included the contractual remedy of adjudication (paragraphs 8-11 and 28-43).

2. Procedural History

Assignments

2021: Office Depot International assigned all rights, title, interest and benefit in the contract to OT Group Limited.

2024: OT Group Limited made an assignment in the same terms to Paragon. Both assignments were notified to FK (paragraphs 15-16).

Termination and Adjudication

Paragon considered FK to be in culpable delay, terminated the contract in April 2025 and notified a liquidated-damages claim in May 2025. FK disputed liability. The adjudicator rejected FK's jurisdiction objection, awarded Paragon £80,500 and directed FK to pay or reimburse £17,787 in fees (paragraph 17).

Enforcement Proceedings

FK did not pay the award or fees, so Paragon paid the adjudicator and issued its summary enforcement claim on 17 November 2025. The sole surviving defence was the short legal issue whether the right to adjudicate had passed to Paragon as assignee (paragraphs 1-4 and 17-20).

3. Defendant's Position

FK argued that assignment transferred contractual benefits and remedies but did not make Paragon a party to the construction contract. It said the statutory and contractual adjudication language was confined to the original Employer or Contractor (paragraphs 27-43 and 55-76).

Assignee Is Not a Contracting Party

FK relied on the distinction between assignment and novation. An assignee receives the benefit of rights but does not assume contractual burdens or replace the original party for all purposes; that substitution requires novation (paragraphs 25-27 and 40).

Literal Scheme Wording

Section 108 and paragraph 1(1) of the Scheme confer adjudication rights on a 'party to a construction contract'. FK said Article 6 and the definitions likewise restricted referral to the named Employer or Contractor (paragraphs 28-40 and 55-58).

Practical Difficulties

FK pointed to the assignee's inability to accept counterclaims, uncertainty about whether an adjudication decision would bind the assignor, possible inconsistent decisions and confidentiality issues. It said these consequences showed that assignment should not carry the adjudication right without express wording (paragraphs 64-76).

4. Claimant's Position

Paragon said the amended contract expressly permitted assignment of its benefits and that a statutory assignment transferred both the assigned thing in action and all legal and other remedies. It argued that the right to adjudicate was one of those remedies (paragraphs 21-43 and 59-80).

Statutory Assignment of Remedies

Section 136 of the Law of Property Act 1925 transfers the legal right to the assigned thing in action and all legal and other remedies for it once written notice is given. The assignee may enforce the right in its own name as if it had been theirs from the beginning (paragraphs 21-24).

Contract Permitted Assignment

The parties deliberately replaced the original mutual restriction with a clause permitting the Employer to assign its benefit without consent. Paragon said the references to Employer, Contractor and Party had to be read with that clause and the general law governing the consequences of an assignment (paragraphs 13-14 and 60-63).

Dispute Still Arose Under the Contract

Paragon's liquidated-damages claim existed only by virtue of the building contract. Assignment was the means by which Paragon acquired the claim; it did not change the source of the dispute from the contract to the assignment (paragraph 79).

5. Court's Analysis

The Scheme Did Not Clearly Exclude Assignees

The Scheme used 'party', 'parties to the contract' and 'parties to the dispute' without a consistent distinction. That drafting could be read as including a legal assignee where applicable and did not clearly reserve adjudication to the original signatories (paragraphs 55-59).

Article 6 Had to Be Read With the Assignment Clause

Article 6 was the primary contractual right to adjudicate. The references to Employer or Contractor had to be construed alongside amended clause 3.1, which permitted assignment, and against the legal background that an assignee receives the assigned right and its remedies (paragraphs 60-63).

Adjudication Passed as a Remedy

Although assignment did not make Paragon a full contractual party or transfer contractual burdens, it passed all legal and other remedies attached to the assigned benefit. Without express or necessarily implied exclusion, that included adjudication of the assigned claim (paragraphs 62-63 and 77).

Practical Objections Did Not Change the Construction

FK retained all equities and defences available against the assignor, and a respondent ordinarily cannot introduce a separate counterclaim in an adjudication anyway. Any inconsistent interim decisions could later be resolved in litigation, while parties concerned about assignment can draft a restriction or exclude adjudication by assignees expressly (paragraphs 64-76).

The Claim Arose Under the Building Contract

Paragon's assigned claim remained one arising under the building contract because that contract created the right. The assignment explained Paragon's title to sue; it did not become the substantive source of the claim (paragraphs 78-80).

6. Decision and Outcome

Winner: The Claimant (Paragon Group Limited) succeeded.

Result: The court held that Paragon was entitled as legal assignee to refer the assigned contractual claim to adjudication. The adjudicator therefore had jurisdiction, and Paragon was granted summary judgment for the adjudicated amount and fees (paragraphs 3, 17 and 77-81). The Defendant (FK Facades Limited) did not succeed on this application.

Practical Effect: FK had to pay the £80,500 award and reimburse the £17,787 adjudicator's fees. A permitted statutory assignee may adjudicate an assigned claim unless the contract excludes that remedy expressly or by necessary implication.

Jurisdiction Upheld

Paragon's legal assignment included the right to adjudicate the assigned liquidated-damages claim, so the adjudicator was validly seized of the dispute (paragraphs 77-80).

Summary Judgment

Paragon was entitled to summary judgment for the £80,500 awarded by the adjudicator (paragraphs 3, 17 and 81).

Adjudicator's Fees

FK was also liable to pay or reimburse the adjudicator's fees of £17,787, which Paragon had paid after FK refused (paragraph 17).

7. Key Legal Principles and Practice Points

Assignment and Novation Remain Distinct

Assignment transfers the benefit of contractual rights but not the burden and does not replace the original contracting party for every purpose. Novation requires agreement of all relevant parties and substitutes the new party for both benefit and burden (paragraphs 25-27 and 63).

Statutory Assignment Transfers Remedies

A valid written assignment notified under section 136 transfers the legal thing in action and all legal and other remedies for it. The assignee may enforce the assigned claim in its own name, subject to equities having priority (paragraphs 21-24).

Adjudication May Be an Assigned Remedy

Where a construction contract permits assignment and does not exclude adjudication by an assignee, the contractual term 'Party' may include a legal assignee for the assigned claim. The adjudication right remains attached to the underlying contract (paragraphs 60-80).

The Contract Can Restrict the Result

Parties can prevent or qualify this outcome through a no-assignment clause, a consent requirement or an express term barring adjudication by an assignee. The court's conclusion depended on the contract's permitted-assignment wording and absence of an exclusion (paragraphs 61-77).

Practice Implications

For Claimants:
An assignee should obtain a written assignment covering all rights, title, interest and benefit and ensure that formal notice is given to the contractual counterparty. Before adjudicating, check that the underlying contract permits assignment and does not exclude the remedy. Plead the chain of assignments and the assigned contractual claim clearly.

For Defendants:
A contractor facing an assignee's adjudication should check the validity, scope and notification of each assignment and preserve all equities and substantive defences available against the assignor. A jurisdiction objection based only on the word 'Party' may fail where assignment is expressly permitted. If restriction is required, it must be drafted into the contract.

General Practice Points:
Assignment documents should state whether dispute-resolution rights and remedies pass. Construction contracts should address adjudication by assignees, service of notices, access to confidential material and the handling of related claims by the assignor. A full assignment of benefits does not transfer burdens or eliminate the need for novation where substitution of the contracting party is intended.

Legal Disclaimer

This interactive process flow is provided for educational and professional development purposes only and does not constitute legal advice. The content reflects interpretations and analyses that may not apply to specific circumstances. Contract interpretation depends on specific wording, jurisdiction, and factual context. Always consult qualified legal professionals before making decisions based on this content. SCCSI and its contributors accept no liability for reliance on this material.