An Adjudicator’s Decision awarding payment in favour of an assignee was enforced by the Technology and Construction Court

In Paragon Group Limited v FK Facades Limited the Technology and Construction Court heard a claim in which it had to consider whether the claimant was legally entitled to refer its claim as assignee against the defendant contractor to adjudication. This article provides a summary of the judgment and highlights its key implications for the construction industry.

BACKGROUND

The parties in question were Paragon Group Limited (“Paragon”) and FK Facades Limited (“FK”). Paragon was the latest assignee of the building contract, which was made between the original Employer, Office Depot International (UK) Limited (“ODI”) – the assignor, and FK as the Contractor. The contract was entered into in October 2018, being a standard form JCT Minor Works Building Contract 2016 edition with a Schedule of Amendments (“the Contract”). The Contract related to remedial works to the roof installation at a commercial property in Ashton Moss, Greater Manchester (“the Works”).

It is worth noting that:

• The Contract was entered into as part of a settlement agreement, relating to a pre-existing dispute in respect of the original works.
• There were two assignments, first in 2021 from ODI to OT Group Ltd (“OTG”) and second in 2024 from OTG to Paragon. Both were notified to FK.
• In April 2024, Paragon terminated the Contract and in May 2025 notified FK that it was liable for liquidated damages due to its culpable delay in completing the Works. This was disputed by FK.

THE ADJUDICATION

Paragon referred the dispute to adjudication. FK raised several jurisdictional points. The Adjudicator gave a non-binding decision that had he had jurisdiction, then Paragon was awarded £80,500 and FK should pay or reimburse the Adjudicator’s fees in the sum of £17,787 (“the Adjudicator’s Decision”). FK refused to pay the same.

COURT PROCEEDINGS

Paragon raised summary enforcement proceedings to enforce the Adjudicator’s Decision.

Due to the jurisdictional points raised by FK in the adjudication, the Court was asked to determine whether Paragon, as the assignee, had “all of [the employer’s] rights, title, interest and benefit in and to” the Contract. If in the affirmative, then the Adjudicator had jurisdiction and FK was bound by his decision unless and until the dispute was finally determined by the Court or by agreement.

From the outset, the Court observed that “Surprisingly, it appears that there is no direct authority on the point, whether in relation to adjudication under the Housing Grants, Construction and Regeneration Act 1996 (the HGCRA) and Part 1 of the Scheme for Construction Contracts (the Scheme), or under the express terms of the contract, whether incorporating the Scheme or otherwise. The issue is not entirely straightforward and the arguments…have necessarily proceeded from first principles”.

THE APPROACH TO ADJUDICATION ENFORCEMENT

The Court confirmed that it is “common ground” that the test which applies to summary judgment applications is “whether or not the defence has a real prospect of success (or there is some other reason for the case to be determined at a trail”. However, the Court also acknowledged that where a “dispute raises a short self-contained point of law there is no reason why the court should not decide it at a summary judgment hearing”. References were made to the Court of Appeal decision in Carillion Construction Ltd v Devonport Royal Dockyard Ltd - that the TCC adopts a “robust approach to adjudication enforcement” and that where there is a substantial point of law as to jurisdiction raised “the courts must engage with it on its merits”.

ASSIGNMENT OF THE CONTRACT TO PARAGON

Accordingly, the Court heard the parties’ submissions on assignment as relevant to the Scheme and the Contract. In short, the Court was not convinced that only the original parties to the Contract (being the Employer and the Contractor) had the right refer disputes to adjudication. The judge noted that “…the use of “party” in the Scheme…did not have a conscious intention to differentiate between the position of an original contracting party and that of an assignee when referring to a “party to a construction contract…”. As the Contract contained provisions allowing assignment by the Employer, the right to adjudicate passed to Paragon as the assignee. However, this did not mean that Paragon became a “party” to the Contract “in the full sense” as that would require novation (which was not the case here).

DECISION

The Court granted the summary judgment to Paragon and the Adjudicator’s Decision was enforced.

IMPLICATIONS FOR CONSTRUCTION INDUSTRY

This judgment clarifies that an assignee to a construction contract may adjudicate against a contractor, subject to the terms of the applicable contract, and that an Adjudicator’s decision can be enforceable in such circumstances.

We refer to our previous blog article on Grove Construction (London) Ltd v Bagshot Manor Ltd, where an Adjudicator’s decision against an assignee was unenforceable due to the lack of jurisdiction.

The key differences between the decisions in Paragon and Grove Construction (London) Ltd can be said to be as follows:

• In Grove Construction (London) Ltd, the Deed in question assigned to Bagshot “no more and no less that BMDL’s benefits accrued and to accrue in the future under the contract”, and so not the burden of liability under the contract that was in place.
• Whereas, in Paragon, benefit of payment (by the assignee from the Contractor) under the Contract was the key reason why adjudication was pursued.