The Technology and Construction Court has provided another important reminder that an application for payment must comply not only with the minimum statutory requirements of the Housing Grants, Construction and Regeneration Act 1996, but also with any additional and more restrictive requirements agreed by the parties in their contract.
In Netomnia Ltd v MJ Quinn Integrated Services Ltd [2026] EWHC 1824 (TCC), Mr Justice Eyre considered whether an application for payment that identified the relevant work order, but omitted the applicable purchase order number, Polygon ID and Feature IDs, was capable of operating as a valid payment notice.
The Court concluded that it was not.
Although the individual application was for the relatively modest sum of £3,770.84, it formed part of a series of 168 applications submitted on the same day in sums totalling more than £4.7 million. The judgment therefore provides significant guidance on the relationship between contractual payment machinery, statutory payment notices, documentary requirements and alleged established courses of dealing.
Background
Netomnia Limited operates and expands an ultra-fast fibre-optic network across the United Kingdom.
MJ Quinn Integrated Services Limited was engaged to undertake the design, installation and maintenance of telecommunications and electrical systems, including the construction and installation of cabling and associated infrastructure.
On 7 April 2021, the parties entered into a Master Services Agreement. The agreement operated as a framework under which Netomnia could call off services by issuing individual work orders.
The work commonly involved the installation of fibre, the construction of underground chambers and related works carried out on or adjacent to the highway. The locations at which the work was undertaken were organised through a detailed hierarchy.
An “Exchange” represented the telecommunications centre serving a particular town or city. Each exchange contained a number of geographically defined “Polygons”. Within each polygon, the individual elements of the infrastructure were identified as “Features”, such as a particular chamber or length of cable.
Each polygon and each feature had a unique identification number.
Those identifiers were used within Netomnia’s electronic systems to locate, manage, verify and approve the work undertaken by its contractors.
The contractual payment mechanism
Clause 6.5 of the Master Services Agreement required MJ Quinn to submit an itemised application for payment detailing:
- the sum considered due;
- the basis upon which the sum had been calculated;
- a breakdown of the activities performed;
- the documentation and other information reasonably required to verify the accuracy of the application; and
- the corresponding purchase order for the applicable services or deliverables.
Payment became due upon receipt of a valid application for payment.
Netomnia was then required to issue a payment notice no later than five days after the due date. If it failed to do so, the sum stated in the application would become the notified sum, subject to the service of any valid pay less notice.
The validity of the contractor’s application was therefore critical. Unless the application complied with the contractual requirements, it could not trigger the payment mechanism or operate as a statutory payment notice.
The application for payment
On 5 February 2026, MJ Quinn submitted an application for payment concerning Work Order WO 0079.
The application claimed a balance of £3,770.84. That sum principally comprised amounts said to be due for indexation and for network adjustments and permits.
The application identified the work order and gave Stoneycroft as the location. However, it did not include:
- the relevant purchase order number;
- the Polygon ID; or
- any applicable Feature IDs.
The application was one of 168 applications submitted by MJ Quinn that day in a similar format.
Netomnia responded with a payment notice stating that no sum was due. It maintained that the application did not provide sufficient evidence or information to substantiate the amount claimed.
MJ Quinn referred the dispute to adjudication.
The adjudication
Paul Jensen was appointed as the adjudicator.
By his decision dated 30 March 2026, Mr Jensen found that MJ Quinn’s application for payment was valid and that Netomnia’s payment notice had been served late. He therefore awarded MJ Quinn £3,794.60, comprising the amount of the application together with interest.
Netomnia subsequently commenced Part 8 proceedings in the Technology and Construction Court.
It sought two declarations. The first concerned the enforceability of Mr Jensen’s decision on the basis of alleged breaches of natural justice. Netomnia contended that the adjudicator had failed to consider a material part of its defence and had decided the dispute on a basis that had not been advanced by either party and of which no prior warning had been given.
MJ Quinn did not consent to that declaration but chose to make no submissions in relation to it. It was therefore accepted that the only live substantive issue before the Court was the second declaration concerning the validity of the application for payment.
The Court considered that question afresh and was not constrained by Mr Jensen’s decision.
The central issue
The central question was whether the application complied with clauses 6.5.4 and 6.5.5 of the Master Services Agreement.
Clause 6.5.4 required the application to be accompanied by such documentation and information as might reasonably be required to verify its accuracy.
Clause 6.5.5 required the application to reference the corresponding purchase order for the applicable services or deliverables.
MJ Quinn argued that the information contained in the application was sufficient because the work order related to only one polygon. It therefore contended that Netomnia could identify the relevant location and works by searching against the work order number.
It also argued that Feature IDs were not required in respect of the permit claim and that the indexation claim related to work for which payment had already been made.
In relation to the purchase order, MJ Quinn argued that the corresponding purchase order had not properly been provided to the relevant members of its organisation. It also contended that the purchase order did not cover the additional amounts claimed for indexation and permits.
Information reasonably required to verify the application
Mr Justice Eyre rejected MJ Quinn’s argument that the work order reference alone provided sufficient information.
The Court emphasised that the question of what information was reasonably required had to be considered objectively and in its proper commercial context.
The Master Services Agreement governed a nationwide operation involving:
- more than 100 exchanges;
- 12,396 polygons;
- more than five million individual features;
- more than 200 work orders issued to MJ Quinn;
- numerous applications for payment; and
- several contractors undertaking work for Netomnia.
Many work orders related to more than one polygon. Consequently, searching by reference to a work order would not normally identify the particular polygon or features to which an application related.
The fact that Work Order WO 0079 happened to relate to only one polygon did not remove the requirement to provide the information that would ordinarily be necessary to verify an application.
The Court was particularly influenced by the practical operation of the payment mechanism. Netomnia was required to assess an application and issue its payment notice within five days. The final date for payment followed only 14 days after the due date, with any pay less notice required no later than one day before that date.
Netomnia therefore had to be placed in a position where it could readily identify and verify the work for which payment was claimed.
It was not required to embark upon a detailed investigation or search through its various systems in an attempt to identify the subject matter of the application.
The Polygon ID and Feature IDs
The Court found that the Polygon ID was reasonably required in respect of the permits claim.
Although a permit might not relate to a particular physical feature, it related to work undertaken within a particular polygon. The Polygon ID would therefore enable Netomnia to identify the relevant area and connect the application to its records.
The Court also found that the Feature IDs were reasonably required in connection with the indexation claim.
MJ Quinn argued that the underlying works had already been paid for and that Netomnia therefore did not need to reconsider whether they had been completed.
The Court rejected that submission.
Netomnia was entitled to identify the works to which the indexation uplift was being applied and verify both that the relevant work had been undertaken and that payment had previously been made.
MJ Quinn could not merely state that the works had been completed, that payment had been made and that an uplift was therefore due. It was required to provide the information that would allow Netomnia to verify each stage of that proposition.
Importantly, the relevant identifiers were available to MJ Quinn. The Polygon ID appeared in the agreed programme appended to the work order, and the Feature IDs could be obtained from Netomnia’s electronic systems.
The Court therefore concluded that the Polygon ID and Feature IDs were information reasonably required to verify the application. Their omission meant that the application did not comply with clause 6.5.4.
The corresponding purchase order
The application also failed to reference the corresponding purchase order.
Purchase Order PO-008324 had been created in August 2023, shortly after the work order was agreed. It was sent to an employee in MJ Quinn’s accounts team more than two years before the application was submitted.
MJ Quinn argued that the purchase order had not effectively been provided to the company because it had been sent to an employee whose role was principally concerned with remittances. The employee had apparently done nothing with the purchase orders she received and had not distributed them internally.
The Court rejected that argument.
The purchase order had been emailed to an employee of MJ Quinn. There was no contractual requirement for a purchase order to be served at the company’s registered office or in accordance with the separate contractual provisions governing formal notices.
It had therefore been provided to MJ Quinn.
The fact that it had not been properly processed or circulated within MJ Quinn’s organisation did not mean that it had not been received by the company.
The Court also noted that the purchase order had been sent promptly after the work order was agreed and before the relevant work was undertaken. That was consistent with the contractual definition of a purchase order as an order specifying services or deliverables “to be supplied”.
MJ Quinn’s internal belief that purchase orders were generated only after completion of the works was mistaken and inconsistent with the express wording of the agreement.
Did the purchase order cover indexation and permits?
MJ Quinn further argued that Purchase Order PO-008324 did not correspond to the sums claimed because the application included amounts for indexation and permits which were not expressly included within the original purchase order value.
The Court again rejected that argument.
The requirement was to identify the purchase order corresponding to the applicable services or deliverables. Purchase Order PO-008324 related to the relevant polygon and the work performed within it.
The indexation claim arose from the contractual adjustment of the charges payable for the services and deliverables covered by that purchase order.
The fact that indexation could increase the amount payable beyond the original purchase order value did not prevent the purchase order from corresponding to the claim. The contractual indexation provision necessarily contemplated that the amount ultimately due might be greater or less than the sum originally stated.
The permit claim was also connected to the work covered by the purchase order. The permits were obtained to enable the relevant works to be performed within the polygon identified by the purchase order.
Purchase Order PO-008324 was therefore the corresponding purchase order for both elements of the application.
MJ Quinn’s failure to reference it meant that the application did not comply with clause 6.5.5.
Did the Scheme for Construction Contracts apply?
MJ Quinn argued in the alternative that, if the contract required a purchase order to be referenced in circumstances where it was impossible to do so, the contractual payment mechanism was inadequate for the purposes of section 110 of the Housing Grants, Construction and Regeneration Act 1996.
It contended that the relevant provisions of the Scheme for Construction Contracts should therefore apply.
Under that argument, it was said that the application need only constitute a claim for payment and did not have to comply with the additional contractual conditions.
That argument failed because the Court found that a corresponding purchase order existed and had been provided to MJ Quinn.
There was nothing impossible or unworkable about the contractual requirement.
Clause 6.5.5 therefore remained effective and the Master Services Agreement provided an adequate mechanism for determining what payments became due and when.
The Scheme did not displace the contractual payment machinery.
Estoppel by convention
MJ Quinn also argued that the parties’ previous dealings had created an estoppel by convention.
It contended that Netomnia had previously accepted applications which did not contain all of the information now said to be required. Netomnia should therefore be prevented from insisting upon strict contractual compliance.
The Court reviewed the principles governing estoppel by convention.
For such an estoppel to arise, the parties must have conducted their dealings on the basis of a shared assumption or understanding. That assumption must have been communicated between them, relied upon and be such that it would be unfair or unjust for one party subsequently to depart from it.
The difficulty for MJ Quinn was evidential.
Its evidence suggested, at its highest, that Netomnia had occasionally accepted applications that did not include a purchase order number.
However, the application in question omitted not only the purchase order number, but also the Polygon ID and all relevant Feature IDs.
MJ Quinn did not establish any previous practice under which Netomnia had accepted applications containing only a work order reference and none of the other identifying information.
The existence of a practice relating to applications that omitted only one item could not establish a convention that applications omitting all three identifiers would be accepted.
There was therefore no shared assumption capable of preventing Netomnia from relying upon the contractual requirements.
The estoppel argument failed.
The Court’s decision
The Court concluded that the application did not comply with clause 6.5 of the Master Services Agreement.
The Polygon ID and Feature IDs were reasonably required to verify the accuracy of the application for the purposes of clause 6.5.4.
Purchase Order PO-008324 was the corresponding purchase order for the services and amounts claimed and should have been referenced pursuant to clause 6.5.5.
The application was therefore not a valid application for payment and was not capable of operating as a payment notice under section 110B(4) of the Housing Grants, Construction and Regeneration Act 1996.
Netomnia was entitled to the declaration it sought.
Payment notices must satisfy the contract as well as the Act
The judgment confirms the established principle that a payment notice must satisfy both the statutory requirements and any additional contractual requirements governing its substance and form.
The statutory minimum is not necessarily sufficient.
Where the parties have agreed that an application must contain particular supporting information, identifying references or documents, those requirements cannot simply be disregarded on the basis that the payer might be able to locate the information elsewhere.
The question will be whether the information is reasonably required to enable the payer to understand, identify and verify the claim within the contractual payment timetable.
A payer is not ordinarily required to undertake its own investigative exercise to cure deficiencies in the payee’s application.
The wider commercial context matters
The Court did not assess the application in isolation.
It considered the scale and practical operation of the parties’ contractual relationship, including the number of work orders, polygons, features, contractors and payment applications involved.
That context was decisive.
A work order number that might ultimately enable a party to locate the relevant work after further investigation will not necessarily provide the information reasonably required for contractual verification.
The information must allow the recipient to assess the application efficiently and within the limited time available for issuing a payment notice or pay less notice.
This is particularly important in large infrastructure projects where payment administration depends upon digital systems, unique identifiers and substantial volumes of data.
Internal administrative failures will not excuse non-compliance
The judgment also contains an important warning concerning the internal distribution of contractual documents.
A company cannot ordinarily argue that a document was not provided to it merely because the employee who received it failed to process, circulate or understand it.
Where a purchase order is sent to an employee of the contracting company and no objection or alternative address is provided, the company is likely to be treated as having received it.
Contractors should therefore ensure that purchase orders, work orders and other payment-related documents are captured within an effective internal system and made available to those responsible for preparing applications.
An internal breakdown in communication will not necessarily relieve the contractor from complying with the contractual payment provisions.
Applications should be clear, complete and self-contained
The decision reinforces the importance of ensuring that an application for payment is clear, complete and self-contained.
The application should identify not merely the general project or work order, but the particular work, location, purchase order, activities and contractual basis upon which the sum is claimed.
Where the contract requires supporting documents or references, those should be provided with the application rather than left for the payer to locate.
The consequences of getting this wrong can be substantial.
An invalid application may fail to establish a due date. If there is no valid due date, the subsequent payment notice, notified sum and final date for payment machinery may not operate at all.
A contractor cannot rely on the absence of a valid payment notice from the employer where its own application was incapable of triggering the payment regime in the first place.
Established practice requires compelling evidence
The rejection of the estoppel argument is equally significant.
A party seeking to establish an estoppel based upon previous payment practices must identify the alleged shared assumption precisely and support it with clear evidence.
It will not be sufficient to demonstrate that the parties sometimes adopted a flexible approach to one requirement if the application in dispute departs from the contract in several materially different respects.
The previous conduct must correspond closely with the particular non-compliance now in issue.
Evidence that a payer occasionally accepted applications without a purchase order number did not establish an agreement or convention that it would accept applications containing no purchase order, Polygon ID or Feature ID.
Practical implications
For contractors, the decision highlights the need to review the contractual payment provisions before submitting every application.
Standard templates should be checked against the particular contract rather than assumed to satisfy every payment mechanism. All required purchase order numbers, work order references, location identifiers, supporting documents and calculations should be included.
For employers and contract administrators, the decision confirms that genuine contractual requirements may be enforced, particularly where they serve the legitimate commercial purpose of enabling applications to be verified within a compressed payment timetable.
However, the requirements must still be interpreted objectively and applied in their proper context. A payer cannot impose additional requirements that have no contractual basis or are not reasonably necessary to verify the application.
For adjudicators, the case is a reminder that the validity of an application may require careful consideration of the complete contractual payment mechanism rather than simply asking whether the document states a sum and a basis of calculation.
It also demonstrates that an adjudicator’s conclusion on contractual validity may subsequently be examined afresh by the Court in appropriate Part 8 proceedings. Here, the Court reached a different conclusion from Paul Jensen and determined that the application upon which his award had been based was not contractually valid.
Conclusion
Netomnia Ltd v MJ Quinn Integrated Services Ltd demonstrates that the statutory payment regime does not relieve a contractor from complying with the payment procedure it has agreed.
An application for payment must be assessed against both the Housing Grants, Construction and Regeneration Act 1996 and the express contractual requirements governing its validity.
Where unique identifying information and purchase order references are reasonably required to enable the payer to verify the claim, their omission may prevent the application from triggering the payment mechanism altogether.
The decision is ultimately a reminder of a straightforward but frequently overlooked principle: in payment disputes, the detail and form of the application matter.
A contractor seeking the protection of the notified sum regime must first ensure that its own application is contractually valid.