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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Eurofi Ltd v Teletech UK Ltd [2000] EWCA Civ 245 (31 July 2000) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2000/245.html Cite as: [2000] EWCA Civ 245

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Case No: CHANF/2000/6273/A3
CHANF /1999/0360 /A3
CHANF /2000/6356/ A3
CHANF /2000/6360 /A3

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
Mr. Jules Sher Q.C.
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: Monday 31 July 2000

9 In the letter LIS said that there was scope to adjust the RSA package upwards in lieu of the additional training support. Further negotiations resulted in the elimination of the additional training support and the increase in the figure for RSA from £2,400,000 to £2,950,000.
10 On 23 December 1996 the Scottish Office wrote a letter to Mr. Tarte-Booth, enclosing its formal offer of RSA. Thereby TeleTech was informed that the Secretary of State for Scotland was prepared to pay TeleTech a grant not exceeding £2,950,000 under s. 7 Industrial Development Act 1982 to aid the Hamilton Park project. That offer was made subject to a number of conditions. Thus no payment of grant was to be made until TeleTech had satisfied the Secretary of State that a lease of at least 10 years at an annual rent of at least £200,000 had been signed, and the offer was further conditional on TeleTech's parent company approving the project, agreeing to provide the necessary financial support and guaranteeing the repayment of any sum becoming repayable. The grant was to be payable in three instalments, each of which was dependent on expenditure having been made by TeleTech in an amount in excess of that instalment and the creation of a specified minimum number of jobs. It was provided that the Secretary of State might reduce the final instalment if the total amount defrayed by TeleTech was less than the total which had been estimated. There were further provisions for withholding and repayment of grant in specified events, for example if in the opinion of the Secretary of State there was unsatisfactory progress or a substantial change in the nature or scale of the project, or if financial assistance towards the project had been received or was likely to be received from any public authority in addition to any assistance previously disclosed to the Secretary of State. The offer was open for acceptance until 31 March 1997.
11 The judge regarded the offer by the Scottish Office as the ultimate aim and target of all that Eurofi was striving for since its appointment, and said that this was the very grant offer which was in the mind of both sides from first to last and plumb within the words of the contract as the trigger event upon which the contingency fee became payable. He rejected out of hand an argument by TeleTech that the offer, being conditional, did not come within the contract. The judge considered, but also rejected, an argument based on the last sentence of clause (2)(b) of the standard terms, that it is only when the authority indicates in writing its approval to the payment of monies that the contingency fee becomes due.
12 On 23 December 1996 Eurofi sent TeleTech an invoice claiming commission in respect of the RSA grant of £2,950,000 alone. At that time no formal offer of other financial incentives had yet been made to TeleTech.
13 On 9 January 1997 TeleTech began to explore Eurofi's fees and ways of mitigating them. In a fax that day to Mr. Talbot, Mr. Tasker, TeleTech's commercial director, asked whether Eurofi's fee would be reduced if TeleTech spent less than had been budgeted for. He said that the increased RSA in lieu of additional training support had benefited Eurofi (which implied, as the judge noted, that commission was not payable on additional training support) and he asked whether Eurofi could do something for TeleTech by way of reduction of its fee. Mr. Talbot responded the same day, asserting that Eurofi's fees became due once the irrevocable letter from the Scottish Office had been issued and that there could be no exception to that. The judge noted that Mr. Talbot said nothing about the effect of commuting the additional training support into increased RSA. The judge referred to the oral evidence of Mr. Harris, the chairman and chief executive of Eurofi, that he did not believe that the commission to which Eurofi was entitled was limited to the RSA grant, but rejected it, expressing himself as satisfied that at that time Eurofi did not think that it was entitled to a fee in respect of financial incentives other than the RSA grant.
14 There were acrimonious exchanges between TeleTech and Eurofi in early 1997 which ended with Eurofi commencing proceedings on 21 February, claiming payment of the sum of £165,087.50 shown in the invoice.
15 In the meantime on 15 January 1997 TeleTech heard that it had not obtained the ATOC contract. It decided not to accept the Hamilton Park offer from the Scottish Office, but put to LIS an addendum to its original application. The addendum related to a site at Cardonald Park in Glasgow. On 1 April 1998 the Scottish Office wrote to Mr. Tasker, enclosing a formal offer of RSA in respect of Cardonald Park. This was for a grant not exceeding £3,900,000. Again the offer was made subject to a number of conditions. Again the grant was to be paid by instalments linked to previous expenditure by TeleTech and the creation of a specified number of jobs. Again there were provisions for withholding and repayment of grant.
16 On 7 April 1998 LIS from an American office wrote to TeleTech's American parent. In it reference was made to a letter of intent dated 22 December. The writer continued:
"I have amended the letter to reflect our discussions and changing circumstances to set forth the primary terms and conditions of the agreement between TeleTech UK Limited .... and Locate in Scotland .... regarding TeleTech's commitment for a Call Center project in Cardonald Park, Glasgow, Scotland.
As the lead Scottish investment agency, Locate in Scotland, working with our partners, has agreed with TeleTech the incentives referred to herein, subject to all necessary internal and external approvals being in place.
The following is our understanding of the primary terms and conditions:
1. Description of the Project. The Project consists of the development and ownership by TeleTech of a Call Center that will provide a variety of telecommunications services to TeleTech clients at a site in Cardonald Park, Glasgow, Scotland. The Parties anticipate that the Project will create 500 full- time equivalent jobs in Glasgow over a three-year period.
2. Financial Support to be provided in Scotland for the Project. Subject to the terms and conditions set forth in this Letter of Agreement, Locate in Scotland will recommend the following incentives to be provided by the applicable governmental entities (the "Project Incentives"). The payment of the support is subject to the terms and conditions set out in the Regional Selective Assistance offer and the terms and conditions associated with the training grant, fit out and car parking provision agreement(s) with Glasgow Development Agency ["GDA"] and the licence agreement with Glasgow City Council.

17 10 other numbered paragraphs followed, not all consistent with each other.
18 A covering letter of the same date explained the condition "subject to all necessary internal and external approvals being in place" as being "to allow for the process all of our organisations are currently involved in". It also referred to the fact that so far as RSA was concerned, all approvals were in place and the official offer letter had been issued.
19 In consequence of the Cardonald Park offer, Eurofi amended its pleadings to claim a declaration that it was entitled to be paid a contingency fee based upon any offer of grant (including any of the financial incentives referred to as "project incentives" in the letter of 7 April 1998) for the Cardonald Park call centre.
20 The judge said that of the six "project incentives" the RSA had been offered. He commented that the rent-free accommodation had already been taken up by TeleTech under documentation executed by the Glasgow City Council, TeleTech had had the benefit of the Fit Out costs from the GDA and TeleTech had also secured the benefit of the car parking facilities from the GDA. The judge said of those incentives:
" .... no money was paid out (or offered) to TeleTech. In each case an economic benefit in kind was acquired, but nothing in the sense of an outright grant of monies was offered or made. I have carefully considered the nature of a grant within the meaning of the letter contract and the standard terms. I bear in mind that these documents are Eurofi's drafted documents and there must come a point at which, if there is ambiguity in its documents they will be construed contra proferentem. I think in any event, untrammelled by any such rule, that I would naturally have preferred a meaning for the word "grant" which would exclude benefits in kind of the nature considered above. Taking the contra proferentem rule into account, I have little hesitation in so restricting the ambit of the word. It seems to me that if it was going to have a wider impact as contended for by [counsel for Eurofi], this was indeed a case in which it was incumbent upon Eurofi to spell the details out with considerable precision."
21 The judge then referred to direct training support and training assistance to eligible trainees. He said:
"These benefits may involve payment of money to defray cost of training. The evidence was exiguous in the extreme, but I shall assume that they do involve money payments. The benefits are, however, in a different case from RSA. Mr. Tasker told me that these benefits in respect of training are available from the GDA to any company irrespective of whether it is an inward investor. Anybody employing eligible people in the city of Glasgow would be in a position to claim these training incentives under the schemes in existence and established for the purpose of assisting special categories of persons such as those who have been unemployed for over six months. In this respect the benefit is rather more like the rate free period to which anyone locating in an enterprise zone would automatically become entitled under existing legislation. It is something which does not require any special negotiation. It is there for the asking.
Moreover, as Mr. Harris told me, in order to obtain the benefit TeleTech would have to institute the necessary training programmes. If it does not do the training it will not get the training costs defrayed. In my judgment, this is another area in which, as a matter of construction, I prefer a meaning for the word "grant" in the contract which is akin to an outright capital grant like the RSA, but does not encompass incentives such as those concerning training provided by the GDA."
22 The judge therefore rejected Eurofi's claim in respect of the financial incentives other than RSA, saying that he did so as a matter of construction of the letter of 4 June 1996 and the attached standard terms, without being influenced by his finding that neither side thought the additional financial incentives were eligible for Eurofi's fees.
23 The judge then went on to consider whether Eurofi was entitled to fees in respect of the Scottish Office's offer in relation to Cardonald Park. The judge accepted Eurofi's submission that it was entitled to the fees in respect of Hamilton park plus the amount by which the fees in respect of Cardonald Park exceeded those fees. The judge concluded his judgment by saying that he found it difficult to imagine that there was likely to be any further liability under the agreement. He noted that the offer in respect of Cardonald Park had not been accepted by the time of trial, but said that from the evidence it seemed quite likely that Cardonald Park would mark the end of the project encompassing the first major call centre TeleTech was establishing in Europe. The judge accordingly gave judgment for Eurofi in the sum of £199,162.50 and interest.
24 The judge's view on what would happen at Cardonald Park in the event has not proved true. TeleTech did not accept the Cardonald Park offer. It sought RSA for a new call centre at 225 Bath Street, Glasgow. On 30 September 1999 the Scottish Executive (the successor of the Scottish Office) offered TeleTech a grant of £2,850,000 by way of RSA. That offer was accepted by TeleTech on 27 October.
25 I shall start with the application by TeleTech for leave to cross-appeal against the order of the judge. It seeks a reduction in the amount which it was ordered to pay. Instead of £199,162.50 plus interest, it asks the court to substitute £160,387.50 plus interest. That is the figure appropriate to the grant offered and accepted in respect of Bath Street. It has produced a number of additional documents which it claims to be all the documents relevant to this point.
26 Mr. Murray Rosen Q.C. for TeleTech submitted that on the judge's own reasoning whereby the Cardonald Park project was treated as the same project as the Hamilton Park project, the Bath Street project should likewise be treated as the same as the earlier two projects, and the fees to which Eurofi is entitled should be those measured by the RSA for the Bath Street project. The basis for that submission was that the earlier offers by the Scottish Office had not been accepted by TeleTech whereas the offer in respect of Bath Street had been accepted and finality had been achieved.
27 I confess that I think that, as a matter of construction of the letter of 4 June 1996 and Eurofi's standard terms, there is much to be said for the view that as the fees were dependent upon a contingency, that contingency was only satisfied as provided in the last sentence of clause 2(b) of the standard terms. But that view was specifically rejected by the judge and TeleTech took the decision not to appeal against it. The logic of Mr. Rosen's argument must be that the judge could not properly have ordered the payment of any money by way of commission at a time when the Hamilton Park offer had not been taken up and the Cardonald Park offer had not yet been accepted. The point taken belatedly and opportunistically now is that a lower offer has been received and accepted and that therefore Eurofi's commission should be reduced.
28 Mr. Selwyn Bloch Q.C. for Eurofi opposed the application. He pointed out that not only is the application made substantially out of time but it is dependent upon the exercise of discretion by this court to receive evidence which was not before the judge and upon which no court has found the relevant facts. TeleTech's case depends on the alleged similarity between the Bath Street project and the previous two projects, and that has yet to be established. He further reminded the court that the judge was not asked to decide the issue now raised that TeleTech's liability to Eurofi fell to be reduced by reason of a subsequent lower offer of RSA being accepted by TeleTech.
29 In my judgment it would not be right for this court to entertain this new point at this late stage. TeleTech should have sought to challenge, within the permissible time, the whole basis of the judge's decision on the ground that it was premature. It did not. It is inappropriate for this court as a court of review to be asked to determine the point of construction as applicable to facts which have not been established by any lower court and when that point only emerged clearly after it had been suggested by this court in the course of the argument before us. It was for these reasons that at the hearing I for my part refused the application.
30 I come now to Eurofi's appeal. Mr. Bloch submitted that the judge was wrong to exclude the financial incentives other than RSA as being relevant to the commission which Eurofi earned. He argued that the letter of 4 June 1996 unambiguously equated "grants" with "financial incentives", pointing to the phrases "our grant consultancy services", the inclusion in the reference terms of Eurofi identifying "the opportunities to apply for and negotiate financial incentives", and the reference to "the negotiation of financial incentives". He also referred to the TeleTech - Eurofi brief with its similar reference to Eurofi advising on the preferred location from the perspective of "local, regional, national and supra-national investment incentives". He said that given that Eurofi was instructed on behalf of TeleTech in relation to the grant of all financial incentives and not only RSA and that all such incentives were linked so that the parties were concerned to achieve a total incentive package for TeleTech, it did not make sense to limit Eurofi's fees to RSA. He criticised the judge for construing "grants" as applicable only to cash payments and as not extending to benefits in kind, and he pointed out, and it is not disputed by Mr. Rosen, that direct training support in the sum of £245,000 was paid by the GDA by way of a cash payment. I would add that no point is taken on the fact that this payment was made after the judgment pursuant to a written offer from the GDA on 26 February 1999. He also submitted that the judge was wrong to conclude that the direct training support did not require any special negotiation and was there for the asking like rates relief in an enterprise zone.
31 Mr. Rosen submitted that the judge was right for the reasons which he gave.
32 The question before us is a short point of construction of the letter of 4 June 1996 and Eurofi's standard terms. This falls for determination against the background of facts known to the parties at the time. Subsequent events and documents are of no assistance, except perhaps as illustrations of what might have been expected to occur. Because the agreement related to the obtaining of financial assistance from public bodies, one might have expected some attention to have been given to the statutory powers and duties under which the incentives were provided. But counsel on both sides were taken by surprise by this court's request to see the statutory material.
33 So far as RSA is concerned, there is of course no dispute that it is a grant. S. 7(3) Industrial Development Act 1982 specifically authorised the provision of financial assistance by making grants. The ordinary meaning of "grant" is "a gift or assignment of money by government or public authority out of public funds to a private or individual or commercial enterprise deemed to be beneficial to the public interest" (GTE Sylvania Canada Ltd. v R [1974] 1 FCR 726 at p. 736 per Cattanach J. in the Federal Court of Canada). Eurofi's standard terms support the view that grant has that ordinary meaning of an award of money: see the references in clause 2(b) to "grant, loan or equity monies", in clause 2(e)(i) to "grant or other monies", in clause 2(e)(iii) and (iv) to "grant monies" and in clause 7(b) to "grants, loans or other financial support."
34 Of the five other financial incentives listed in the letter of 7 April 1998, training assistance to eligible trainees appears never to have been the subject of an offer, unless the letter itself can be taken to be the act of a relevant authority signifying its intention to award such a grant (within the meaning of the letter of 4 June 1996), a point to which I will come later. The rent-free accommodation, the fit-out of Centenary House and the car parking facility were, Mr. Bloch accepts, not offers of payment of monies to TeleTech, but offers of the provision of benefits on which LIS has placed a value. On what basis that value has been placed is unclear. Unless there is something in the letter of 4 June 1996 or the standard terms which indicates that the provision of such benefits is to be treated as grants, I cannot see that "grants" in the letter can be construed as extending to them.
35 In my judgment the letter does not equate all incentives with grants. I of course accept that Eurofi was engaged to obtain incentives which included but were not confined to RSA, but it does not follow that Eurofi chose and TeleTech agreed to give Eurofi commission on the basis that the commission was a percentage of all the incentives which TeleTech secured through Eurofi's advice and assistance. The advantage of measuring commission by reference to grants alone (if the term is given its ordinary meaning of grants of money) is certainty and the avoidance of dispute. It would make practical sense for Eurofi to limit its commission claim to a percentage of any monetary awards, that percentage taking account of the fact that benefits in kind might also be achieved but the valuation of which might be open to dispute. Whether that is what Eurofi did, I do not know. All that I am saying is that it is not contrary to commercial common sense to find a provision for fees limited to a percentage of monetary grants. On any footing RSA was the most important and largest incentive or "core funding" (as Mr. Talbot described it) which an applicant would seek to obtain. I therefore agree with the judge on the necessity for a grant to be of a sum of money. If there were any doubt, it would have to be resolved against Eurofi under the contra proferentem rule of construction.
36 I respectfully disagree with the judge in relation to direct training support. When we asked counsel for assistance on the statutory basis for this, Mr. Rosen referred us to the Enterprise and New Towns (Scotland) Act 1990. The GDA was established as a Local Enterprise Company under that Act. It exercises the functions of Scottish Enterprise in the Glasgow area and as such it made arrangements under s. 2(3) and (4) of that Act to assist persons to train. Such arrangements by s. 2(4)(c) included provision for the making of payment by way of grant to persons who provide facilities in pursuance of the arrangements. On the basis that direct training support is such a grant, it is hard to see why it should not be a grant within the meaning of the letter of 4 June 1996. It appears to have been paid in much the same way as RSA was paid, that is to say after acceptance of an offer and after expenditure by the grantee which is reimbursed. There was clear evidence before the judge that direct training support had to be applied for. Mr. Tasker accepted that a business case had to be put in for it. Further it is clear that it might be commuted to RSA if the Scottish Office agreed. In my judgment in those circumstances there is no reason why it should not be within the scope of "grants" as referred to in the letter of 4 June 1996.
37 Mr. Bloch argued that the letter of 7 April 1998 constituted an offer of all the incentives referred to therein and that on that date "the relevant authority" signified its intention to award such grants. He said that LIS was that authority acting on behalf of the Scottish Office, Glasgow City Council and the GDA. He pointed to the fact that the letter was intended to set forth an agreement, and that LIS expressed itself as "working with our partners" in agreeing with TeleTech the incentives referred to therein. But the letter contains no clear statement that it was authorised by, for example, the GDA to bind it and it is to be noted that the agreement was subject to "the necessary internal and external approvals being in place", and that must mean that save where the approvals had already been obtained (as in the case of the Scottish Office having made the RSA offer) LIS was not purporting to agree the incentives. Further in the numbered paragraph 2, LIS was only to "recommend" the provision of incentives by the applicable governmental entities. In my judgment therefore it is plain that the letter cannot be regarded as itself being the signifying by a relevant authority of its intention to award a grant.
38 I would therefore allow this appeal only to the extent of increasing the award to Eurofi by the fees referable to the £245,000 direct training support. Subject to that I would dismiss the appeal.

Chadwick LJ :
39 I agree that this appeal should be allowed; but only to the limited extent indicated by Lord Justice Peter Gibson. It is only because we are differing from the judge below that I add some observations of my own to the reasons which Lord Justice Peter Gibson has given.
40 The terms upon which the appellant, Eurofi Ltd, was engaged are contained in the letter dated 4 June 1996 and in the appellant's Standard Terms and Conditions referred to in that letter. That is made clear by the penultimate paragraph of the letter itself, to which Lord Justice Peter Gibson has referred:
We would be grateful if you would indicate your agreement to our providing to you the services set out above, subject to the above Terms and the attached Standard Terms and Conditions, by executing and returning to us the enclosed copy of this letter and one signed copy of the Standard Terms and Conditions.
The respondent complied with that request. The letter of 4 June 1996 was countersigned on its behalf by Mr Tarte-Booth on 6 June 1996, a copy of the Standard Terms and Conditions was signed by Mr Tarte-Booth on the same date, and both documents were returned to the appellant.
41 Condition 2(a) of the Standard Terms and Conditions provided that, in consideration for the consultancy services described in the letter of 4 June 1996, the appellant should be entitled to charge fees "as specified in the Letter and this Schedule". In that context, "the Letter" is the letter of 4 June 1996 and "this Schedule" is the document containing the Standard Terms and Conditions which was attached to, and referred to in, that letter. Condition 2(b) is directed to the case in which the fees specified in the letter are dependent upon a contingency. It contains the following provision:
Where the payment of such fees (or any part thereof) is contingent upon the Client obtaining grant, loan or equity monies, the contingency shall be deemed to be satisfied when the relevant authority has signified its approval in writing to the payment of such monies to the Client.
42 Condition 2(e) addresses the position where, through some action by the client, it becomes impossible for the contingency to be satisfied; that is to say, where the client takes some action as a result of which the relevant authority does not signify its approval to the payment of the grant or other monies which the appellant was engaged to obtain on the client's behalf. Sub-paragraph (iii) of that condition makes it clear that the parties had in mind that satisfaction of the contingency - by approval to payment - would normally follow an application for payment:
. . . in the event that . . . (iii) the Client takes any other action, or omits to take any action, or makes any statement, which renders the contingency impossible or causes the contingency to be not satisfied (including without limitation the refusal of any application for payment of grant monies because of any act or omission on the part of the Client after the date of the Letter, or because of a statement by the Client that it will proceed with any Project relative to the contingency notwithstanding the refusal of any application for payment of grant monies);
In such a case the appellant company is entitled to charge, in lieu of contingency fees, fees based upon time spent on the project.
43 It is, I think, reasonable to assume that the Standard Terms and Conditions - and, in particular, the provisions in condition 2 - were drawn with the Industrial Development Act 1982 in mind. In any event, that Act clearly forms an important part of the background against which the Standard Terms and Conditions and the letter of 4 June 1996 must be construed. The Act provided the statutory basis upon which regional development grants (Part II) and selective financial assistance (Part III) would be sought from and provided by the United Kingdom government in relation to projects in assisted areas. "Assisted areas" are defined in section 7(6). They are Northern Ireland and any area within Great Britain designated as a development area or an intermediate area under section 1 of the Act. Section 7(1) enables the Secretary of State to provide financial assistance for the purposes set out in section 7(2) where, in his opinion, the financial assistance is likely to provide, maintain or safeguard employment in any part of the assisted areas and the undertakings for which the assistance is provided are or will be wholly or mainly in the assisted areas. Section 7(3) is in these terms, so far as material:
. . . financial assistance under this section may be given on any terms or conditions, and by any description of investment or lending or guarantee, or by making grants, and may, in particular, be -
(a) investment by acquisition of loan or share capital in any company . . . ,
(b) investment by the acquisition of any undertaking or of any assets,
(c) a loan, whether secured or unsecured, and whether or not carrying interest, or interest at a commercial rate,
(d) any form of insurance or guarantee to meet any contingency, . .
44 It can be seen, therefore, that "financial assistance" is a much wider concept than "grant". The making of a grant is one way - but by no means the only way - of providing financial assistance under the Act. This, of course, is recognised in the language of condition 2(b) of the Standard Terms and Conditions, which refers to the client obtaining "grant, loan or equity monies".
45 Further, as is made clear in section 7(3) of the 1982 Act, financial assistance may be given "on any terms or conditions". It is, as it seems to me, almost inevitable that, if a grant or loan is made subject to some condition, then the monies will not be approved for payment until the condition is satisfied. That supposition is borne out by each of the two letters from the Scottish Office which are relied on by the appellant in the present case - that is to say, the letter dated 23 December 1996 (in relation to Hamilton International Business Park) and the letter dated 1 April 1998 (in relation to Cardonald Park) - and by the letter from the Scottish Executive dated 30 September 1999 (in relation to 225 Bath Street) on which the respondent seeks to rely. In each case (i) the offer of a grant is subject to "preconditions" - which include a guarantee of financial support by the respondent's parent company, (ii) the grant is payable by instalments - such that each instalment is payable only when the respondent has made a specified commitment by way of expenditure on fixed assets, (iii) each instalment must be claimed, and the claim must be accompanied by specified information and (iv) the Secretary of State is entitled to withhold payment if he is of opinion that unsatisfactory progress has been made towards the completion of the project.
46 In my view it is reasonably clear that the effect of the provision in condition 2(b) of the Standard Terms and Conditions - to which I have referred - is not satisfied unless and until there is approval by the relevant authority to payment of whatever instalment of grant or loan monies has actually been approved. That is the reason why condition 2(e) makes provision for what is to happen if, through some act or omission by the client, the stage of "approval to payment" is not reached. For my part, I would not regard the provision in condition 2(b) as satisfied on the issue of any of the formal offer letters to which I have referred. But the position, in the present case, is that the letter of 4 June 1996 refers to fees being invoiced: "In respect of grants . . . on the date of the relevant authority signifying its intention to award such grants". And, condition 11(a) of the Standard Terms and Conditions requires that: "In the event of a conflict between the terms of the Letter and the terms of this Schedule, the terms of the Letter shall prevail". The question, therefore, is whether there is a conflict between the terms of the letter of 4 June 1996 and the terms of condition 2(b) of the Standard Terms and Conditions.
47 The judge addressed this point at paragraphs 41 to 45 of his written judgment. He reached the conclusion (i) that the terms of the letter were clear - the contingency was satisfied on issue of the formal offer letter (see paragraph 41 of the judgment), (ii) the provision in condition 2(b) of the Standard Terms and Conditions, properly construed, was to the same effect - the formal offer letter was a document in which the relevant authority signified its approval to the payment of a grant (see paragraphs 42 and 43 of the judgement), and (iii) if the provision in condition 2(b) was inconsistent with the letter of 4 June 1996, then that provision must be rejected as required by condition 11(a) (see paragraphs 44 and 45 of the judgment).
48 Lord Justice Peter Gibson has indicated his doubts whether the judge's conclusion was correct on that point. I share those doubts. But it is unnecessary to resolve the point because it is not the subject of any appeal by the respondent. If the respondent's contentions on this point, advanced below, were well founded, they would have been a complete defence to the appellant's claims as they stood when this matter was before the judge. Put shortly, the claims would have been premature, because the contingency had not been satisfied. Claims for payment could, no doubt, have been made under condition 2(e) of the Standard Terms and Conditions; but those were not the claims made in the action. Nevertheless, for reasons which, no doubt, were well considered at the time, the respondent decided not to appeal the judge's decision on the point.
49 The point became material, on the hearing of the appellant's appeal, only because the respondent sought leave to cross-appeal, so as to rely on the offer letter of 30 September 1999 (225 Bath Street). That letter had not been issued when the matter was before the judge. He assumed that finality had been reached on the basis of the offer letter dated 1 April 1998 (Cardonald Park). The decision to cross-appeal was, no doubt, prompted by the fact that the amount of financial assistance - and, in particular, the amount of regional selective assistance ("RSA") - offered in September 1999 was significantly less than that offered in April 1998. But, in my view, it is beyond argument that the cross-appeal could succeed only on the basis of a successful challenge to the judge's decision on the inter-relation of condition 2(b) of the Standard Terms and Conditions and the contingency as expressed in the letter of 4 June 1996. That was a challenge which the respondent had decided not to mount. It was not until the point emerged during the course of argument on the hearing of the application for permission to cross-appeal that Mr Rosen QC, leading counsel for the respondent, sought to resile from that decision. His attempt to do so may fairly be described, in the phrase used by Lord Justice Peter Gibson, as "opportunistic". It should not be allowed to succeed. It would be unfair to the appellant if this Court were now to entertain a point which the appellant had every reason to think had been abandoned; and it would be inappropriate for this Court to attempt to reach a conclusion as to the practical effect of the point (if made good) in relation to facts which have not been the subject of any investigation before the judge. It was for those reasons that I took the view that the application for permission to cross-appeal out of time should be refused.
50 The point does not arise on the appeal itself because, as we were informed, the respondent has actually received payment of the Direct Training Support (£245,000) offered in the letter from Locate in Scotland dated 7 April 1998; and there has been no formal offer of training assistance under the National Training Scheme (£300,000) referred to in that letter. So, if the correct test is "approved for payment", it is satisfied in relation to the Direct Training Support; and, if the correct test is notification by the relevant authority of "intention to award", it is not satisfied in relation to assistance under the National Training Scheme.
51 The financial incentives - or financial support or financial assistance (however they may be described) - other than RSA listed in the letter of 7 April 1998, to which Lord Justice Peter Gibson has referred, are from two sources: (i) assistance from Glasgow City Council in the form of rent free accommodation and car parking facilities; and (ii) assistance from Glasgow Development Agency in the form of Direct Training Support and "fitting out" of Centenary House and the car park adjoining Laidlaw Street. For the reasons given by Lord Justice Peter Gibson, I have no doubt that the assistance from the Glasgow City Council - in the form of rent free accommodation and car parking - does not fall within the meaning which should be given to the word "grants" in the letter of 4 June 1996.
52 We have been told that Glasgow Development Agency is a body exercising delegated functions under section 19(1) of the Enterprise and New Towns (Scotland) Act 1990. The functions are those of Scottish Enterprise. Section 2(3) of the Act requires Scottish Enterprise to "make arrangements for the purpose of - (a) assisting persons to train so that they may obtain and retain employment suitable for their ages and capacities". Section 2(4)(c) provides that arrangements under section 2(3) may include the making of payments "by way of grant or loan or otherwise" to persons who provide facilities in pursuance of the arrangements.
53 I have already expressed the view that "financial assistance", in the context of assistance from public sector sources, is a much wider concept than "grant". The point is reinforced by section 2(4)(c) of the 1990 Act, which refers to payments "by way of grant or loan or otherwise". For a more complete list of the many and diverse ways in which financial assistance may be provided by a public sector source, reference may be made to section 8(1) of the Act. In my view, the use of the word "grants" in the letter of 4 June 1996 should be taken as deliberately restrictive; there is no reason to think that the parties intended that "grants" should bear the wider meaning of "financial incentives" or "financial assistance". If they had so intended, they could have been expected to say so.
54 That being so, there is no basis for construing the word "grants" to include money laid out by Glasgow Development Agency in improving land or buildings owned by Glasgow City Council for use by the respondent. But the position is otherwise in relation to Direct Training Support. The evidence is less than complete, but it seems reasonably clear that Direct Training Support is provided by reimbursing to the employer the cost (or part of the cost) which the employer has incurred in training its employees - either "in house" or through external trainers. On that basis the payments appear to fall squarely within section 2(4)(c) of the 1990 Act; so that the only question is whether the payments are made by way of grant "or otherwise" - there being no suggestion that they are made by way of loan. I can see no reason why the payments should not aptly be described as being made by way of grant. It is, to my mind, no answer to say, if it be the case, that the grant is mandatory rather than discretionary.
55 Given the context in which the word "grants" is used in the letter of 4 June 1996, I think it perverse to deny that a payment which, within the meaning of the statutory authority under which it is made, is aptly described as being made by way of grant is not a "grant" for the purposes of that letter.
56 For those reasons, as well as for the reasons given by Lord Justice Peter Gibson, with which I agree, I would allow the appeal to the extent indicated.
Buxton L.J.:
57 I agree with both judgments. Although we are differing from the judge below there is nothing that I wish to add.
Order: Appeal allowed in part. No order as to costs.
(Order does not form part of approved judgment.)