TCC judgment reaffirms that compliance with a contract is key for payment

A recent Technology and Construction Court (TCC) case highlights the importance of strict compliance with contractual payment provisions. In Netomnia Ltd v MJ Quinn Integrated Services Ltd, a dispute arose regarding the validity of an application for payment (AFP) under the Housing Grants, Construction and Regeneration Act 1996 (HGCRA). The court held that the AFP was invalid because it did not comply with clause 6.5 of the parties’ Master Service Agreement (MSA).

Background

Netomnia operates a large UK fibre-optic telecoms network. MJ Quinn (MJQ) is a contractor engaged in the design, installation and maintenance of telecoms systems.

Netomnia and MJQ entered into a MSA on 7 April 2021, under which Netomnia would call off the services of MJQ by issuing work orders. The work orders specified the works required and, following completion, MJQ would then submit an AFP to Netomnia. Clause 6.5 of the MSA contained a detailed payment procedure that required an AFP to include:

The sum due and the underlying calculation
A breakdown of the activities
Supporting information as reasonably required for Netomnia to verify the accuracy of the AFP (clause 6.5.4)
Reference to the corresponding Purchase Order (PO) (clause 6.5.5)

Netomnia tracks its large-scale network operations by separating coverage into ‘polygons’ and ‘features’. Polygons are geographical areas served from the central telecommunications exchange. Netomnia manages over 12,000 polygons, each of which is assigned its own unique polygon ID. Under the MSA, features are individual pieces of infrastructure within a polygon. Each feature is assigned its own identifying number.

Dispute

On 5 February 2026, MJQ submitted an AFP for £3,770.84. The AFP was one of 168 applications submitted by MJQ on the same day, with a combined value of more than £4.7 million. The AFP referred to a work order but did not include a PO number, feature ID or polygon ID. Netomnia considered the AFP was invalid and refused to pay. MJQ referred the dispute to adjudication, and the adjudicator found in favour of MJQ. Netomnia initiated Part 8 proceedings seeking a declaration from the court that the AFP in dispute was invalid.

Netomnia contended that the AFP did not comply with the MSA and did not function as a valid payment notice under section 110B(4) of the HCGRA.

MJQ submitted that the inclusion of a polygon ID and feature ID was not information reasonably required for verification purposes. It also contended that the relevant items were not described by the PO and so they could not refer to it. MJQ then argued that the contractual payment mechanism was insufficient and that the Scheme for construction contracts applied instead.

The court found in favour of Netomnia. Two issues were key to the decision.

Clause 6.5.4 – the verification clause

In determining which information was reasonably required to verify the AFP, the court considered the broader commercial background in which the agreement operated. The MSA covered an operation with over 12,000 polygons and over 5 million features. A work reference alone was insufficient in distinguishing which polygon it related to. The court also considered the strict contractual timeframe whereby Netomnia had only five days to issue a Payment Notice if they disagreed with the invoice. Factoring in the commercial circumstances and the short timescales, it was necessary to be able to identify easily and accurately what a payment application referred to.

Therefore, the court concluded that the polygon ID and the feature ID were substantive verification tools reasonably required to verify the accuracy of the invoice.

Clause 6.5.5 – the PO requirement

Under Clause 6.5.5 of the MSA, an AFP was strictly required to reference the corresponding PO number. MJQ had omitted the PO number from all 168 invoices submitted on 5 February 2026. MJQ argued that the invoices should be permitted because Netomnia had previously accepted invoices missing PO numbers, suggesting this was an accepted practice in their business relationship. They also claimed that the final sum of the works included additional costs such as inflation and permits, meaning the original PO was incorrect and that a general work order was sufficient.

The court rejected this. It held that additional works arising from an original invoice are still fundamentally part of the same job. Therefore, the root PO number is still required so that the employer’s accounts team can measure expenditure against the initial approved budget for the works. The court also rejected MJQ’s assertion that omitting the PO number was accepted practice, highlighting that Netomnia’s previous flexibility did not erase its right to enforce contractual provisions. It was held that the AFP in dispute was invalid.

Key takeaway

Netomnia Ltd v MJ Quinn Integrated Services Ltd highlights the importance of careful consideration of contractual provisions relating to payment notices, and the court’s reluctance to strike them down. However, it should also be noted that commercial reality is considered by the court when assessing disputes of this nature, and that an omission in a payment notice is not necessarily fatal for the payment notice.

The decision also shows that the TCC is not opposed to using CPR Part 8 proceedings as a means of resolving disputes arising from contractual interpretation and adjudication.

This article was co-authored by Trainee Cristina Antonacci.

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