Construction and Planning Update – August 2026 – Top Five 

Here are our top five for August:

1. Director’s duties considered by the Supreme Court

Saxon Woods v Costa concerned a director’s decision to delay the sale of a company in breach of a Shareholder’s Agreement (SHA).

Had the director breached a duty under s172 Companies Act 2006, by pursuing a different sale strategy from that agreed in the SHA which had been approved by the board?

The High Court held that the director’s “conduct had not amounted to a breach of fiduciary duty (under section 172) or involved dishonesty on his part.”

The Court of Appeal held that the SHA was an agreed strategy, it was not for the director to follow a different strategy. It held that the director had acted dishonestly and breached the duty under s172. The Court of Appeal ordered the director to buy the shares.

The director appealed to the Supreme Court. The key issue was whether the test to determine whether a director has committed a breach of duty under section 172 was subjective.

Lord Briggs: “I have however been unable to trace any authority or any academic writing prior to 2006 which suggests that the court’s respect for the business judgment of directors extends to a case where one director has sought to pursue his own judgment as to the best way to promote the company’s best interests by a covert strategy (i.e. concealed from his fellow directors) to pursue an objective which directly conflicts with the business judgment and strategy already resolved upon by the board as a whole. It would not appear to be acting bona fide or, in the English translation, in good faith.”

The Supreme Court unanimously dismissed the appeal.

A director/s might be acting bona fide, but diverting from agreed company strategy could land a director in breach of s172 of the Companies Act 2006.

Link: Saxon Woods Investments Limited and others (Respondents) v Costa (Appellant) – UK Supreme Court

2. Is your Payment Application valid?

Netomnia Limited (the Claimant) engaged MJ Quinn Services Limited (the Defendant) to expand its fibre-optic network. The parties entered into a Master Services Agreement (the “MSA”) in 2021. The MSA established an interim payment process under which the Defendant submitted an application for payment (“AFP”), and the Claimant either issued a payment notice and paid the notified sum within 14 days of the AFP or served a pay less notice no later than one day before payment was due.

The Defendant sent the Claimant an application for payment (“the AFP”) in the sum of £3,770.84. The Claimant contended the AFP was invalid because it didn’t contain the agreed identification details. The application had been one of 168 made on the same day.

The Defendant referred the dispute to adjudication and the adjudicator found that the AFP was valid and the Claimant’s payment notice was not valid by reason of being late. The adjudicator awarded the Defendant £3,794.60 (plus interest)

The Claimant brought Part 8 claim and sought a declaration that the Defendant’s AFP was invalid as it did not comply with the terms of the MSA. Eyre J found in favour of the Claimant, the payment notice was not valid as it failed to comply with the express payment provisions of the MSA.

This case is an important reminder of the importance to adhere to the contractual terms and payment provisions.

Link: Netomnia Ltd v MJ Quinn Integrated Services Ltd [2026] EWHC 1824 (TCC) (24 July 2026)

3. When is two stage litigation the right approach to bring a claim?

The Claimant sought declaratory relief concerning the meaning and effect of a Master Service Agreement, which the Defendant had terminated. The Claimant argued that four price variations imposed by the Defendant between March 2023 and June 2024 were invalid and as a result the Claimant was overcharged. However, the Claimant did not claim any damages but contemplated bringing a damages claim later, if if the declaration claim was successful.

The claim was struck out on the grounds that seeking declaratory relief concerning the meaning and effect of a terminated agreement disclosed no reasonable grounds and was an abuse of the process under CPR3.4(2)(a) and (b). Split liability and quantum trial increased the legal costs, delayed recovery of damages and deprived the court of its case management powers. The court further stated that by adopting this unusual approach the Claimant ignored its obligation under CPR 1.3.

It is important to consider when to issue split proceedings. Had the claim involved an ongoing agreement rather than a terminated one, two stage litigation may have worked in the Claimant’s favour. As the agreement was already terminated a conventional claim for damages should have been issued, the court might have directed a split trial for liability and quantum.

Link: Yello Voice Solutions Ltd v Onecom Partners Ltd [2026] EWHC 1856 (Comm) (30 July 2026)

4. Both parties failed to provide sufficient evidence to the adjudicator

The Claimant employed the Defendant to construct a hospital under an amended JCT Design and Build Contract 2016. On completion, the Defendant refused to release retention sums, claiming liquidated damages for late completion. The dispute was referred to adjudication. The Claimant argued that the Defendant issued a defective notice for liquidated damages as it included incorrect completion date and wrong amount for liquidated damages. The Claimant argued the liquidated damages should be £14,500 per week and the Defendant stated it should be £1000 per day.

The adjudicator held that neither party provided sufficient evidence to support their argument. The adjudicator found in favour of the Claimant, as the Defendant had failed to establish its defects claim and was required to pay a substantial sum of the retention money. The Defendant was also required to pay the adjudicator’s fees.

The Defendant argued that the adjudicator only had jurisdiction to find that liquidated damages were £14,500 or £1000 per week and so had exceeded his jurisdiction.

The court rejected this argument and found in favour of the Claimant. It held that rejecting both parties evidence was not a breach of natural justice nor had the adjudicator exceeded his jurisdiction by opting for a third outcome.

5. Scaffold tower toppled on members of the public

A London based construction company was fined £27,000 and its sole director was fined over £3,500.

A tower scaffold fell onto two members of the public in South-West London. The scaffold tower was assembled incorrectly, with inadequate measures to separate it from members of the public. When it fell it struck and trapped two members of the public.

HSE guidance states that tower scaffolds must be erected by trained and competent persons and in accordance with manufacturer’s instructions.

Link: Company and director fined after public seriously injured by falling scaffold tower on busy high street – HSE Media Centre