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FIRST DIVISION, INNER HOUSE, COURT OF SESSION

[2022] CSIH 3

CA42/20

Lord President

Lord Woolman

Lord Pentland

OPINION OF THE COURT

delivered by LORD PENTLAND

in the reclaiming motion

in the cause of

GAVIN LOUDON

Pursuer and Respondent

against

STEWART MILNE GROUP LIMITED

Defenders and Reclaimers

______________

Pursuer and Respondent: Lake QC, Watt; MBM Commercial LLP

Defenders and Reclaimers: Dean of Faculty (Dunlop, QC), G. Reid; Burness Paull LLP

18 February 2022

Introduction

[1]

Contracts of employment often contain bonus schemes for employees. The usual

purpose of such schemes is to provide an incentive for employees to carry out their duties to

a high standard. They are intended to reward performance that is considered to be above

and beyond a merely acceptable level. The issue in this case is whether the employee was

entitled to be paid bonuses after his employment contract came to an end by reason of

agreed redundancy. The commercial judge held that he was. The employers challenge that

ruling. The answer turns on a correct interpretation of the contract of employment.

Background

[2]

The respondent, a chartered surveyor by profession, had a long and successful

career in the house building industry. A key stage in the process of developing land for

housing involves finding sites, usually arable land in the greenbelt, that may be suitable in

the fullness of time for new housing. Once potential sites, known as strategic land, have

been identified, it can take many years, up to 20 in some cases, for planning permission to be

granted for residential development and for the developers to acquire the land. The

respondent explained in his unchallenged evidence that he had built up substantial skill and

experience over a long career in identifying and introducing strategic land that might be

suitable for future development and that the reclaimers, a house building company,

considered that these attributes would be useful to them.

[3]

In 1996 the respondent sold his company, Ambion Homes Limited, to the reclaimers.

He had been employed as managing director of Ambion since 1991 and had a large

shareholding in the company.

[4]

In November 1999 the respondent entered into a contract of employment with the

reclaimers. It is important to note that the respondent was 53 years of age at the time.

Normal retirement age for men was then 65. It must have been obvious to all concerned that

some of the strategic land projects in which the respondent would become involved would

not come to fruition until after he had retired. The contract of employment was entered into

against that background; it was an important feature of the factual matrix.

[5]

The contract provided that the respondent's employment had commenced on

29 March 1996. His job title was stated to be: managing director Ambion Homes Limited.

He acted essentially as the director of the reclaimers' strategic land division. The

respondent's role with the reclaimers was to identify suitable strategic land for ultimate

acquisition and development as sites for housing. The respondent was also responsible for

negotiating option agreements with landowners and obtaining planning permission, and

other relevant legal and development permissions, for sites.

[6]

On 31 March 2020 the respondent retired from the employment of the reclaimers

because he was redundant. He did so with their agreement. He was, therefore, what is

sometimes known as a "good leaver".

[7]

The respondent's contract of employment with the reclaimers provided for the

payment of performance bonuses where certain criteria were met in the case of sites with

which he had been involved. The present dispute concerns the meaning and application of

these contractual terms.

The bonus provisions

[8]

Clause 6 of the respondent's contract of employment provided inter alia as follows:

"6.

You will be eligible for a performance bonus based on the achievement of the criteria

set out here or as the Company and the Employee may otherwise agree. The parties recognise

that it is not possible to predict all the circumstances in which a bonus will be payable, but a

performance bonus will be payable in the following 2 circumstances:

(i) Volume Bonus

A bonus of £7,500 will be paid for every 100 residential units on new land controlled or

purchased by the Company achieving planning permission acceptable to the Company. This

new land must be identified and introduced to the company by you or otherwise included by

agreement within the bonus structure where an appropriate amount of your time has been

devoted to the acquisition of the new land and/or obtaining the planning permission.

...

The bonus will be payable one month after the achievement of planning permission acceptable

to the Company. This may be either outline planning permission or detailed planning

permission (entirely dependent on the Company's decision). For the avoidance of doubt, this

element of the bonus can only be paid out once in respect of any piece of land.

(ii) Value Bonus

This element of the bonus relates to you receiving a share of any amount under Market Value

at which new land is purchased. This new land must be identified and introduced to the

company by you or otherwise included by agreement within the bonus structure where an

appropriate amount of your time has been devoted to the acquisition of the new land and/or

obtaining the planning permission.

Where new land is purchased by the Company at a Company land cost of no more than 95%

of Market Value you will receive a bonus of 13.5% of the differential between full Mark et

Value and the total price paid by the Company.

The bonus will be payable one month after the completion of the purchase (i.e. payment of the

purchase price) of the new land.

...

In the event of you leaving the employment of the Company with the express agreement of the

Company, or you retiring from the Company in line with the Company's normal retirement

policy, all bonuses which are earned at that time but which have not been paid will remain

due and payable on the timescale as set out in Clause 6 (i) and (ii)."

[9]

Finally, the clause set out the following definitions and condition:

"Definition:

Market Value is the price which when used in a normal Company land appraisal calculation

produces a gross margin, before overheads, but after development interest, of 15% or such

other lesser margin as the Company has accepted as being appropriate to acquire the site.

Company land cost is the total cost to the company of acquiring land, including all normal

costs of acquisition, such as legal costs, planning and planning appeal costs, environmental

audit and ground investigation costs.

From the year 2001 onwards, in any year in which a payment under Clause 14 (ii) has been

made to the Employee's personal pension plan, any such bonuses shall only be paid to the

extent that the aggregate bonus payments payable in such year exceed £16,600. From the

year 2001 onwards, if the aggregate bonus payments fall short of £16,600, any such shortfall

will be deducted from aggregate bonus payments which exceed £16,600 which are earned in

any future year."

The commercial judge's decision

[10]

The respondent sought a number of declarators to the effect that he was entitled to

bonuses under his contract of employment. For present purposes the details of the orders

do not matter. Having heard evidence at a proof, the commercial judge found that the

respondent had identified and introduced a number of specific sites in respect of which he

was entitled to a bonus in terms of clause 6(i) in the event that planning permission for

residential use of the sites came to be granted. He also held that the respondent had

identified and introduced a number of other sites in respect of which he was entitled to a

bonus under clause 6(ii) in the event that the reclaimers (or a person or entity they controlled

or nominated) came to purchase the sites or part of them. Finally, the commercial judge

held that in respect of one particular project, the Robroyston project, the respondent was

entitled, as a result of a separate agreement between the parties, to a bonus of 13.5% of the

management fee paid to the reclaimers by the land owners.

[11]

Having made those findings the commercial judge then had to consider whether the

respondent's entitlement to bonuses survived the agreed termination of his contract of

employment.

[12]

The commercial judge held that the respondent's contract of employment drew a

distinction between (a) when a bonus was earned and (b) when it was paid. The timing of a

bonus payment was linked to the grant of planning permission or to the purchase of the

land; however, the earning of the bonus was not dependent on these events. All the sites

which the commercial judge found to have fallen within the bonus scheme came within its

first limb, that is the respondent had identified and introduced those sites. The respondent

earned bonuses by his work in identifying and introducing the land; the payment of a

bonus for that work was conditional on planning permission, land purchase or payment of a

management fee. If one of those conditions was satisfied after termination, it was a bonus

which had been earned but not yet paid. The respondent was entitled to payment upon

satisfaction of the condition, whether that happened before or after termination. Such an

interpretation was consistent with the factual matrix of the construction industry. Strategic

land development proceeded on a long timescale. It could take up to ten years or more to

reach the stage in a project where planning permission was granted or land was acquired.

Given the timescales involved, a bonus scheme which ceased to pay out on termination of

employment would provide little incentive in respect of strategic land. There would then be

no reason for an employee to produce exceptional performance in the last five to ten or more

years before retirement, or if he was younger in the five or ten years before he thought he

might leave. It would be an incentive instead to work on short-term projects rather than

strategic land projects. The law was slow to allow an employer to frustrate an employee's

bonus by terminating his contract (Rutherford v Seymour Pierce 2010 EWHC 375 (QB); Noble

Enterprises v Lieberum (EAT) 67/98). On the reclaimers' interpretation, in the circumstances

of this case, they would be permitted to deprive the respondent of his bonus merely by

terminating his employment.

[13]

At the proof a separate issue arose in relation to a large scale development project at

Robroyston comprising the 325 acre site of a former hospital. It was agreed that the

respondent had identified and introduced this site. The commercial judge found on the

evidence that the parties had agreed that the respondent was entitled to a bonus of 13.5% of

the management fee paid to the reclaimers by the owners of the site, a company known as

Elmford Limited. These bonuses had been paid to the respondent in 2005, 2006, 2016, and

2019. The contemporaneous correspondence from the reclaimers had not challenged these

payments. The bonuses were paid automatically and without question or comment (with

the exception of one bonus claimed in 2016 which was ultimately resolved out of court on a

without prejudice basis). This was inexplicable unless there had been an agreement to pay a

bonus on the management fees for the Robroyston project. Accordingly, the commercial

judge granted declarator that the respondent was entitled to bonuses at the 13.5% rate on

management fees paid to the reclaimers for the Robroyston project.

The issues in the reclaiming motion

Reclaimers' submissions

[14]

Properly construed, clause 6 conferred an entitlement to a bonus only where it had

been earned before termination of the contract. Reading the clause as a whole and in

context, a bonus was earned where (a) the respondent had identified and introduced land to

the reclaimers, and (b) acceptable planning permission had been obtained or the reclaimers

had acquired the land. Any other reading would result in a bonus becoming payable in

circumstances where the respondent had identified and introduced the land but no value in

the land had enured to the reclaimers. That would not make commercial sense. It was

incongruous to speak of a bonus being "earned" but not being payable. That was also the

sense in which the word "earned" was used in the final paragraph of clause 6 in the

admittedly different context of the relationship between bonus payments and contributions

by the reclaimers to the respondent's personal pension plan.

[15]

Identification and introduction of a site was a necessary but not a sufficient

precondition for payment of a bonus. The purpose of the termination provision was to

preserve the respondent's right to be paid a bonus according to the agreed timescale but

only where the bonus had been earned as a result of each of the relevant preconditions

having been satisfied before termination.

[16]

The commercial judge had erred by focussing too heavily on the first part of the

second sentence in clause 6 (i) and (ii) and by giving insufficient attention to the first

sentence. The second sentence conferred no entitlement. It was merely a restriction on the

first sentence. On the other hand, without the first sentence the second sentence was

meaningless. The second sentence was needed because without it a bonus would be payable

even where the respondent had not made any personal contribution to the development

process.

[17]

The respondent's interpretation of the clause elevated a qualification on the

entitlement to a bonus to the entitlement itself. It was nonsensical to say that a bonus could

be earned if planning permission had not been granted or the land had not been acquired.

[18]

If a bonus had not become payable by the time of termination, it could not be said to

remain payable. The incentive reflected in the clause was directed towards th e stage at

which value in the land was released to the reclaimers; that only occurred once acceptable

planning permission had been obtained or the reclaimers had acquired the land. In this

connection it was notable that the respondent's duties were not restricted to the stage of

identification and introduction; they extended to working to obtain planning permission

and other necessary consents.

[19]

It was true, as the commercial judge observed, that the law was slow to allow an

employer to frustrate an employee's bonus by terminating his contract. This was not

relevant in the present context. The pertinent principle was that an employer could not rely

upon the fact that the employee had been dismissed to avoid liability for a bonus that was

otherwise payable (Clark v Nomura International plc [2000] IRLR 766, Burton J at para [38]). In

the present case the bonuses claimed could not be said to be "otherwise payable" because

entitlement to them had not accrued by the time that the contract was terminated.

[20]

In response to the good leaver argument relied on by the respondent the reclaimers

submitted that the termination provision created an enhanced entitlement by providing for

payment after termination in circumstances where the obligation to make payment arose

after the contract had come to an end. Where one party was in breach of contract, such as

where he was a bad leaver, he would not be allowed to enforce the innocent party's

obligation to make payment of sums falling due after the date of the breach. That was the

effect of the mutuality principle (Graham & Co v United Turkey Red Co 1922 SC 533, Lord

Justice-Clerk (Scott Dickson) at pp 542, 543). The termination provision, therefore, created

enhanced rights over and above those available at common law. In any event, the fact that a

contractual term replicated the common law could show that it was in line with commercial

common sense as opposed to being contrary to it (Ashtead Plant Hire Co Ltd v Granton Central

Developments Ltd 2020 SC 244, Lord Drummond Young at para [21]).

[21]

The commercial judge disregarded elements of the factual matrix which supported

the interpretation advanced by the reclaimers. He ought to have taken into account that the

interpretation advanced by the respondent would impose a liability of uncertain scope upon

the reclaimers, which could extend potentially for more than a decade. The respondent's

responsibility for advancing planning applications meant that he would be incentivised to

progress the applications and thereby earn bonuses before termination of his contract of

employment.

[22]

As regards the bonus entitlement on Robroyston management fees, the evidence at

the proof was that one such fee had been paid to the reclaimers in February 2020, and the

other had been paid to them in August 2021. Only the first of these could be said to have

been earned before termination of the respondent's contract of employment. He was

entitled to a bonus in respect of the February 2020 fees but not in respect of the August 2021

fees.

Respondent's submissions

[23]

Clause 6 had to be interpreted against the factual background explained in the

respondent's unchallenged evidence. Development of strategic land could take up to

20 years. The critically important part of the respondent's work occurred at the outset of the

process. He had no control over whether planning permission would eventually be granted.

The reclaimers' approach would mean that for the last decade of the respondent's

employment he would have no incentive to identify and introduce sites.

[24]

The purpose of the termination provisions in clause 6 was to encourage the

respondent to leave his employment at a time and on terms which suited the reclaimers. In

return they had to provide the respondent with an incentive to leave on good terms. The

reclaimers were wrong to equiperate a so-called bad leaver with a party who was in breach

of contract. A bad leaver could be someone who left in accordance with the contractual

notice provisions at a time which did not suit the employer. The respondent's contract of

employment entitled him to terminate the contract on 12 months' notice (clause 8).

[25]

In incorporating a clause specifically designed for good leavers, the parties must

have intended to confer an advantage or benefit on the respondent, extending beyond the

position which would otherwise have obtained under the common law. At common law,

where rights had accrued under a contract, they were not affected by recission or

cancellation of the contract (Johnson v Agnew [1980] AC 367, Lord Wilberforce at 396;

Hyundai Heavy Industries Co Ltd v Papadopoulos [1980] 1 WLR 1129, Viscount Dilhorne at

1136B). If accrued rights survived termination by way of recission or cancellation, they

should survive termination by agreement.

[26]

Therefore, at common law, if a bonus had accrued because planning permission had

been obtained or the land acquired, but it had not yet been paid, the right to payment would

survive termination. The good leaver aspect of clause 6 can only have been intended to

ensure that the respondent was placed in a better position that he would have been under

the common law. It would not be a commercially sensible construction to assume that the

clause simply restated the common law position. On that approach the clause achieved

nothing.

[27]

The draftsman differentiated between bonuses "earned" and bonuses "payable". The

commercial judge was correct to distinguish between them. To earn something meant to

obtain it in return for labour or services. It was apparent from the use of the word "earned"

that the intention was to protect payment of bonuses which had not become payable by the

time of termination, but in respect of which the respondent had fulfilled the role required of

him so as to give rise to them if and when planning permission was granted or the land was

acquired. The element of the respondent's work which was to be rewarded was that which

had led to land being identified and introduced. It was when doing this work that he

earned a bonus. It would have been open to the parties to structure the bonus scheme so

that it reflected and rewarded his work on all stages of the process, but they had not done

so.

[28]

On the language of clause 6 the reclaimers' analysis was too narrow. It failed to take

account of the entirety of the clause. "Earned" was an ordinary word which connoted being

paid in return for doing something. The clause set out what the respondent had to do in

order to earn payment, namely identify and introduce land to the reclaimers. That was the

work which the parties had agreed to reward the respondent for.

[29]

The reclaimers' emphasis on the word "remains" had two flaws: it considered

particular words rather than the overall effect of the agreement; and, it took part of the

clause out of context. Clauses 6(i) and 6(ii) envisaged that the bonus would be payable on a

date some time after the work giving rise to the entitlement had been undertaken, and the

leaver clause stipulated that this should "remain" the position after termination.

[30]

The reclaimers' suggestion that a requirement to pay bonuses some time after

termination did not accord with business sense was no more than an unsupported assertion.

The provisions had been operated by the parties without difficulty between 1999 and 2020.

They were not disproportionate and did not operate in an unpredictable way. The

reclaimers' approach would result in their obtaining an unjustified windfall from the

respondent's work, for which he would not be properly rewarded. The fact that the

reclaimers might remain liable to pay bonuses for an extended period was consistent with

the nature of their business. The law expects commercial parties to conduct their affairs in a

manner which makes their agreement work; the courts would not shy away from enforcing

a bargain because of claimed difficulty (R & J Dempster Ltd v Motherwell Bridge & Engineering

1964 SC 308; Royal Bank of Scotland v Carlyle 2015 SC (UKSC) 93).

[31]

It was no part of the respondent's case that planning permission for the sites had

been obtained, nor that they had been purchased by the reclaimers prior to the date of

termination of his employment. No payment was sought in the present proceedings. The

respondent's case was that his entitlement to bonuses remained and could crystallise when

planning permission was granted or when the relevant sites were acquired.

[32]

Finally, the management fee bonuses for Robroyston were earned by the respondent

when he identified and introduced the site. The commercial judge found that there was

agreement these bonuses would be 13.5% of the management fee received by the reclaimers.

His approach to this issue was correct.

Analysis and decision

[33]

It is unnecessary to embark on another review of the extensive case law on

interpretation of contracts. The principles are well established and in recent years have been

the subject of much reiteration and judicial analysis. In 2018 the Scottish Law Commission

concluded that there was no need for legislation on the interpretation of contracts in view of

the fact that judicial decisions had clarified the correct approach to be taken (Report on

Review of Contract Law: Formation, Interpretation, Remedies for Breach, and Penalty Clauses (Scot

Law Com No 252)). The pertinent principles were helpfully drawn together by

Lord Drummond Young in delivering the opinion of an Extra Division of the Inner House in

Ashtead Plant Hire Co Ltd v Granton Central Developments Ltd 2020 SC 244, paras [9] to [17].

First, a contact must be construed contextually; words in a contractual provision can only be

properly understood when they are read against the background of the contextual setting in

which they were used by the parties to the contract. Second, interpretation of a contract is

an objective exercise. A clause in a contract must be given the meaning which a reasonable

person in the position of the parties at the time they entered into the contract would have

given the words used in the clause. A corollary of this is that the subjective understanding

of the words by one (or more) of the parties is irrelevant. Third, a court should have regard

to the fundamental objectives that reasonable persons in the parties' position would have

had in mind at the time of the contract; in short construction is a purposive exercise. Finally,

where words are capable of bearing more than one meaning the court is entitled to adopt the

meaning which best aligns with commercial (or business) common sense.

[34]

Applying these principles to the present case, it is important to recall that the

respondent was 53 years old at the time the parties entered into the contract. He could

therefore reasonably have expected to continue working for the reclaimers for around

12 years; that would have taken him up to the then prevailing normal retirement age of 65.

In these circumstances it would have been obvious to the parties that many of the strategic

land development projects which the respondent was responsible for identifying and

introducing would not be likely to come to fruition during the remainder of his working life.

Therefore there was a real likelihood that the respondent would not receive any bonus for

sites he had succeeded in identifying and introducing unless the reclaimers remained liable

after termination of the contract to pay bonuses at the time when the projects crystallised.

[35]

From the reclaimers' perspective, it would have made sense for them to have some

leverage over when the respondent left their employment. They could achieve this objective

by conferring on the respondent the entitlement to receive bonuses where a project

materialised after his employment ended, but only where he ceased employment at a time

that suited the reclaimers' business needs.

[36]

Bearing these factors in mind, it is notable that clause 6 sets out specific and tailored

provisions governing what the respondent's entitlement to bonuses would be in

circumstances where he left the employment of the reclaimers on good terms. It is

reasonable to assume that the parties must have considered at the time when they entered

into the contract that it would be appropriate for some concrete benefit to flow to the

respondent in the event that he left the employment of the reclaimers in such circumstances.

Otherwise, why include these provisions? It seems unlikely that the intention was simply to

restate what the rights of the respondent would be under the common law. As

Lord Drummond Young observed in Ashtead Plant Hire Co Ltd at para [21], the main

substantive terms of a contract will usually be the subject of specific negotiation and legal

advice. In the present case the contract was drafted by lawyers instructed by the reclaimers.

The bonus scheme set out in substantial detail in clause 6 must be regarded as a substantive

clause. There is no presumption or rule of construction that such clauses should be taken

merely to replicate the common law.

[37]

What then was the benefit to which the respondent would become entitled where, to

quote the words of the relevant part of clause 6, he left the reclaimers' employment "with

the express agreement of the company or (retired) from the Company in line with the

Company's normal retirement policy ..."?

[38]

To answer this question it is appropriate to begin by asking what the rights of the

respondent would have been in the event that he were to leave the reclaimers' employment

without their express agreement or otherwise than in accordance with their normal

retirement policy. The respondent could, for example, have exercised his right to terminate

the contract by giving 12 months notice, as he was entitled to do by virtue of clause 8. He

did not require to obtain the reclaimers' agreement to such a course of action. He would

then be a so-called bad leaver, but he would not be in breach of contract. Suppose that

before the termination date in such circumstances (a) the respondent had identified and

introduced a site; (b) planning permission for residential development of the land in terms

that were acceptable to the reclaimers had been granted; but (c) the bonus had not yet been

paid to the respondent. Would he have been entitled to a volume bonus under clause 6 in

the absence of the termination provisions?

[39]

The answer is that under the common law he would. This is because where rights

have already accrued under a contract, they are not affected by rescission or termination of

the contract. In Johnson v Agnew [1980] AC 367 Lord Wilberforce at 396 approved what

Dixon J. had said in the High Court of Australia in McDonald v Dennys Lascelles Ltd (1933)

48 CLR 457:

"When a party to a simple contract, upon a breach by the other contracting party of a

condition of the contract, elects to treat the contract as no longer binding upon him,

the contract is not rescinded as from the beginning. Both parties are discharged from

the further performance of the contract, but rights are not divested or discharged

which have already been unconditionally acquired. Rights and obligations which

arise from the partial execution of the contract and causes of action which have

accrued from its breach alike continue unaffected."

[40]

In Hyundai Heavy Industries v Papadopoulos [1980] 1 WLR 1129 Viscount Dilhorne said

at 1136B:

"I conclude that save in the case of sales of land and goods and where there has been

a total failure of consideration, it was the law prior to the decision in Lep Air Services

Ltd v Rolloswin Investments Ltd [1973] AC 331 that cancellation or rescission of a

contract in consequence of repudiation did not affect accrued rights to the payment

of instalments of the contract price unless the contract provided that it was to do so."

His Lordship went on to consider the case of Lep Air Services and concluded that it did not

alter the law on accrued rights (page 1137E-F).

[41]

As the reclaimers observed in their submissions, both these cases concerned parties

who were in breach of contract. There may be circumstances in which a party who is breach

will not be permitted to enforce the innocent party's obligation to make payment of sums

falling due after the breach (Graham & Co v United Turkey Red Co 1922 SC 533). What the

reclaimers' submissions failed to recognise, however, is that a bad leaver is not necessarily

someone who is in breach of contract. The accrued rights of a bad leaver, who is not in

breach, will survive termination by way of rescission or cancellation of the contract. They

would do so even if the termination provisions in clause 6 had not been included in the

contract. The same must be true in the case of a good leaver. So, the purpose of the

termination provisions may reasonably be inferred to have been to achieve an advantage for

a good leaver extending beyond what would have been his rights under the common law.

The aim of those provisions was to put him in a better position than he would have been in

as regards entitlement to receive bonuses which had become payable but had not in fact

been paid by the date of termination of the contract. On the reclaimers' approach to the

construction of clause 6 the respondent, as a good leaver, would derive nothing of value

from the termination provisions and the clause would be stripped of any sensible

commercial purpose. Good leavers and bad leavers would have the same rights on the

reclaimers' approach. By contrast on the respondent's approach the good leaver would be

entitled to a meaningful advantage.

[42]

It can thus be seen that the respondent's approach to construction of clause 6 makes

sound commercial sense whereas the reclaimers does not. On the reclaimers' approach the

respondent would not be entitled to a bonus for sites he identified and introduced that came

to fruition after the end of his employment even in circumstances where he left their

employment by agreement. He would have no incentive to leave on good terms. Nor

would he have any incentive to identify and introduce sites during the final decade of his

employment.

[43]

Having regard to these aspects of the commercial realpolitik, it is entirely reasonable

to read the word "earned" where it appears in th e phrase "all bonuses which are earned at

that time but which have not been paid will remain due and payable on the timescale as set

out in Clause 6 (i) and (ii)" as meaning what the respondent contends for. That is that the

word refers in that context to bonuses for sites where the respondent had performed prior to

termination of the contract the sole obligation incumbent on him under clause 6, namely the

identification and introduction of the sites. In such circumstances the reclaimers would

remain liable to pay a bonus on the agreed timescale. This construction means that the

reclaimers' liability may extend substantially beyond the date of termination of the contract,

but there is nothing uncertain about its scope or the circumstances in which it arises. The

liability is triggered by either the granting of planning permission on acceptable terms, or

the acquisition of the land.

[44]

The commercial judge was right to recognise that the approach reflected in clause 6

drew a distinction between when a bonus was earned and when it was paid. The timing of

payment was linked to the grant of planning permission or to acquisition of the site, but the

earning of a bonus was not. The pursuer earned a bonus by his work in introducing and

identifying a site; payment of his bonus was, however, conditional on the grant of planning

permission or acquisition of the land.

[45]

That leaves only the issue concerning the bonus entitlement on the Robroyston

management fees. Here too we consider that the respondent earned a bonus through

identifying and introducing the project to the reclaimers. He was accordingly entitled to be

paid a bonus when management fees were paid to the reclaimers both in February 2020 and

in August 2021.

[46]

The reclaiming motion is refused. We have reserved all questions of expenses.