The central issue before the court in Netomnia Ltd v MJ Quinn Integrated Services Ltd [2026] EWHC 1824 (TCC) was if the Defendant’s application for payment (the “AFP”) constituted a valid payment notice for the purpose of section 110B(4) of the Housing Grants, Construction and Regeneration Act 1996 (“HGCRA”). The court concluded that the AFP did not, due to failure to comply with the requirements of clause 6.5 of the Master Services Agreement (“the MSA”). Therefore, the court made clear the importance of strict compliance with contractual payment mechanisms.
Factual background
For context, the Claimant is the operator of a fibre-optic network, and the Defendant is a contractor engaged in expanding the network across the United Kingdom. On the 7th April 2021, the Claimant and the Defendant entered into the MSA. The MSA provided a detailed payment regime for interim payments. The Defendant’s submission of an AFP would trigger the Claimant’s requirement to provide a payment notice, and then payment was due within 14 days of the notified sum.
On 5th February 2026, the Defendant sent the Claimant an AFP (the “Disputed AFP”), which was one of 168 AFPs sent on that day in a similar format, totalling over £4.717 million.
However, the Claimant did not make payment, holding that the Disputed AFP was invalid. The Defendant referred the dispute to adjudication which resulted in the adjudicator finding it in favour of the Defendant.
The Claimant commenced Part 8 proceedings seeking, inter alia, declarations that the Disputed AFP failed to comply with the MSA and could not operate as a valid payment notice under the HGCRA. The Claimant was successful, overturned the adjudicator’s decision, and was awarded the relief sought.
The court’s analysis
The Defendant argued that the less prescriptive set of requirements in the Scheme for Construction Contracts (“the Scheme”) instead applied, due to deficiencies in clauses 6.5.4 and 6.5.5 of the MSA, which resulted in inadequate mechanisms for determining sums due.
However, the court considered these clauses and determined that the information requested was reasonably required.
Clause 6 addressed “Charges and Payment”. Clause 6.5 provides,
“6.5 Subject to the Customer’s prior written Acceptance or Sign Off of the relevant Services and/or Deliverables, the Supplier shall submit to the Customer an itemised VAT invoice in respect of the Charges (an ‘Application for Payment’):
[…]
6.5.4 accompanied by such documentation and other information with respect to the invoice as may reasonably be required in order to verify the accuracy of the invoice; and
6.5.5 referencing the corresponding Purchase Order for the applicable Services and/or Deliverables. Payment shall be due on the date of receipt by the Customer of a valid Application for Payment (the ‘Due Date’).”
Clause 6.5.4
When considering the operation of Clause 6.5.4, the court placed emphasis on the commercial context in which the clause was operating to determine if the information requested (that is, the unique identification numbers described as the Polygon ID and the Feature IDs) was reasonably required to verify the accuracy of the invoice.
The court found that a Work Order on its own did not provide enough detail to identify the work being invoiced, particularly because the Claimant's network was divided into 12,396 separate areas. The court also emphasised the importance of efficiency: the Claimant needed to respond to the AFPs quickly and therefore required enough information to identify the work carried out and verify that the amounts claimed were correct.
Clause 6.5.5
Similarly, in relation to Clause 6.5.5 the court emphasised that proper interpretation of the clause requires consideration of its purpose and the context. In this instance, the court found that the contractual requirement, that each AFP referenced the corresponding Purchase Order, was necessary to ensure the sums claimed could be confirmed.
Estoppel by convention
The Defendant’s argument that estoppel by convention arose was confidently dismissed by the court. The Defendant could not show that there was any practice of the Claimant accepting and making payment in respect of an AFP, which did not comply with the contractual requirements. This highlights the court’s attitude that a course of conduct or informal understanding will rarely prevail over clear and unambiguous contractual language.
Practical implications
Overall, this case reinforces the position that the courts will uphold strict contractual payment provisions. Parties should therefore ensure that payment applications contain all information required by the contract and are issued in the prescribed form to secure entitlement to payment.
Additionally, this case illustrates the court’s reluctance to override an agreed payment regime by reverting to the Scheme where the parties have chosen more onerous contractual requirements.
