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National Industrial Court

MR LEGEMAH OSARENTIN & 4ORS VS EDO TRANSPORT SERVICE LTD

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THE NATIONAL INDUSTRIAL COURT OF NIGERIA

IN THE AKURE JUDICIAL DIVISION

                                           HOLDEN AT AKURE

 

BEFORE HIS LORDSHIP: HON. JUSTICE A. A. ADEWEMIMO    

 

DATED: 10TH APRIL, 2019                            

SUIT NO:  NICN/BEN/34/2016

BETWEEN

  1. MR LEGEMAH OSARENTIN
  2. MR OKOH JAMES
  3. MR ISAAC ESANGBEDO                                              
  4. MR PETER OGBOYE
  5. MR SEGUN BRAMOH            

 

CLAIMANTS

AND

  1. EDO TRANSPORT SERVICE LTD
  2. EDO STATE MINISTRY OF TRANSPORT
  3. ATTORNEY GENERAL, MINISTRY OF JUSTICE,  

EDO STATE

  1. GOVERNOR OF EDO STATE

DEFENDANTS

 

REPRESENTATION:

  1. O. OBUH APPEARS FOR THE CLAIMANT

NO APPEARANCE FOR THE DEFENDANTS

 

JUDGMENT

The Claimants instituted this action on the 18th of October, 2016 by way of Complaint and Joint Statement of Facts with other accompanying processes and amended same on the 9th of May, 2018.   Their extant Joint Statement of Facts and not claim (as recognized by this court) was filed on 9th May, 2018, claiming against the Defendants as follows:

  1.             A declaration that the claimants are still in the employment of the 1st Defendant and entitled to their annual salary and other benefits.
  2.             An Order that the claimants are entitled to their six months’ arrears of Salaries from June 2010 – November, 2010.

 

  1.             An Order that the claimants are entitled to their salaries from December, 2010 till when Judgment is delivered in this Suit.

 

  1.             10% interest on the judgment debt until finally liquidated.

 

  1.             General Damages in the sum of N50, 000,000.00 (Fifty Million Naira only).

The claimants filed along with the complaint all other accompanying processes, i.e. the amended joint statement of facts, depositions on oath, list of witnesses and documents to be relied upon, while the Defendants filed a memorandum of appearance, Joint statement of Defence and other accompanying processes.

The claimants averred that they were employed by the 1st defendant. The Claimants’ claimed that sometimes in November, 2010, the Edo Transport Service Limited was closed down by the State Government, thereby rendering the workers redundant. They stated that prior to this, the staff of the 1st Defendant were being owed six months’ salary, (June to November, 2010).  Claimants averred that the company was later reopened in 2014 under the management of a sole administrator.  Shortly after the reopening of the company, the Government through the 2nd Defendant embarked on a screening exercise of all the staff in 2015.  During the screening exercise, they were asked to indicate if they were still willing to work for the company, while some of them indicated willingness to resume and work, some others declined since they were already engaged in other jobs.

Claimants averred that some of them were reinstated and have been earning salaries since, but their own names were omitted / excluded from the pay list.  Claimants’ stated that they wrote letters of protest dated 4th June, 2015 to the Honourable Commissioner of Transport and the Speaker of Edo State House of Assembly dated 8th November, 2015.  They made several moves to resolve this matter by approaching the aforementioned bodies and personality but to no avail. After exhausting every avenue to get the matter resolved amicably, they thereafter resolved to approach the court.

 

They claimed that failure to address their grievances violates their fundamental rights to dignity of their persons guaranteed under the 1999 Constitution of the Federal Republic of Nigeria (As Amended). Hence, the claimants claim against the Defendants jointly and severally as aforestated.

The Defendants on 28th May, 2018 filed a Memorandum of Appearance, Amended Joint Statement of Defence, Witness Statement on Oath, List of Witnesses as well as List of Documents to be relied upon at the trial.

The defendants averred that although the 1st to 5th claimants were employees of the 1st defendant, they are no longer working with the 1st defendant.  Defendants’ further averred that the 2nd defendant is not a statutory body but a creation of Edo State Government for administrative convenience and therefore has no power to sue and be sued.

The Defendants admitted that the Edo State Government closed down the 1st Defendant but denied that the closure made the Defendants redundant. They further averred that the 2nd defendant only played a supervisory role over the 1st defendant and was never in charge of recruitment, promotion, discipline and payment of the salaries of the 1st defendant, a company duly registered under the relevant laws.

The defendants claimed that the claimants voluntarily withdrew their services from the 1st Defendant since 2014 during the screening exercise organized by the State Government.  The defendants averred that following the request of the Union of the 1st defendant and the state branch of the Amalgamated Union of Public Corporation, Civil Service Technical and Recreational Service Employee, (AUPCTRE) to which the workers of the 1st defendant belonged, pressure was mounted on the Edo State Government to re-open the company and to take over the payment of the salaries of the workers, the Government therefore appointed a sole Administrator to manage the affairs of the company.

The defendants further averred that the Government constituted a Committee to screen all the workers and call back all those who are found eligible.  The committee met and carried out the assignment with due diligence, thus about 200 of the workers were found eligible for continuation in the service of the company and that are willing to work, returned to work and were absorbed into the Edo State Civil Service. Those who resumed work were placed on the State Government Pay Roll.

The defendants averred further that the claimants were the ones who informed the committee of their unwillingness to continue working for the 1st Defendant and that all the claimants except the 2nd claimant fell within the category of voluntary retirement while the 2nd claimant fell within those found ineligible by reason of age. The Defendants also claimed that the 1st defendant is no longer in existence.

The defendants denied that the claimants are entitled to any arrears of salaries.  The Defendants in their defence raised an objection to the joinder of the 2nd Defendant on the ground that he is not a juristic person.

The Defendants urged the court to dismiss the suit with substantial cost as same is grossly misconceived, frivolous, vexations and a gold-digging exercise meant merely to embarrass and annoy the defendants.

The trial in this case commenced on 30th November, 2017 with the claimants, Mr. Peter Ogboye, Mr. Okoh James, Mr. Segun Braimoh, Isaac Esangbedo and Mr. Legemah Osarentin testifying for themselves as CW1, CW2, CW3, CW4 and CW5 respectively.  They adopted their sworn statements on oath and tendered several documents which were admitted in evidence and marked as Exhibits PO(i)-PO(xi), OJ1-OJ4, SB1 – SB4, IE1 – IE4 and LO1 – LO4 respectively and they were duly cross examined.

The defendants on the other hand opened their defence on the 10th of July, 2018.  They called two witnesses – Osaro Mazimia as DW1 and Abbe Osaro Washington as DW2.  They gave evidence and tendered certain exhibits which were marked as Exhibits T (i-xxxiv) and F2(i – xxxvi).  They were also cross examined.The Defence thereafter closed its case and the case was adjourned for the adoption of final written addresses. The parties adopted their addresses on the 5th December, 2018, and the case was adjourned for Judgment.

In the defendants’ final written address dated 22nd November, 2018, Mrs V. U. Adeleye Deputy Director Edo State M.O.J of counsel for the Defendants formulated three (3) issues for determination to wit:

  1. Whether in the circumstances of this case, this action is competent having been commenced by the Claimants in a representative capacity.

 

  1. Whether the 2nd, 3rd and 4th Defendants are proper parties to this case in view of the fact that the 1st Defendant is a corporate entity capable of suing and being sued.

 

  1. Whether the Claimants have succeeded in proving their case on the balance of probability to entitle them to the reliefs sought. 

 

On issue one, the learned counsel submitted that this action as constituted is incompetent in that the requisite ingredients for representative actions are absent such as a common interest, grievances as each of the Claimants has a personal contract of service with the first Defendant, which means each of the Claimants has a contractual relationship with the 1st Defendant to which all the other listed Claimants and those they claim to represent (including the 2nd to 4th Defendants) are not privy to. Consequent upon this, the counsel stated that the Claimants cannot be said to have common interest to pursue in this case. He submitted that once parties to an action have different interests in a matter, they cannot sue in a representative capacity and therefore the Court will lack the jurisdiction to entertain the matter for being incompetent.

 

To underscore this, the counsel argued that each of the Claimants that testified tendered his own letter of appointment, Confirmation, promotion etc and nobody tendered those of the Claimants who they claim to represent.  The question he asked is, how can this court determine the interests of those other Claimants? Can the Court determine their entitlements from the evidence before Court? He cited the case of MARK OBINYIRI & ORS v. PETER IBE & ORS. [2014] LPELR-22482(CA). He also cited the cases of Ofia v. Ejem [2006 ] 11 NWLR (Pt. 992) 652; the case of Oragbade v. Onitiju (1962) 1 SCNLR 70, (162) 1 All NWLR 32 and BEMIL NIGERIA LIMITED v. MARCUS EMERIBE & ORS (2009) LPELR-8732(CA). Learned defence Counsel submitted that from the evidence before the court, each of the Claimants has his own letter of appointment, promotion, salary, retirement date etc peculiar to him.  He also referred to the case of DURBAR HOTEL PLC V. MR. ABELLA ITYOUGH (2010) LPELR-4064(CA); (2011) and others, he submitted that in the light of the authorities cited, this action was wrongly constituted and the court lacks the jurisdiction to entertain it, he urged the Court to resolve issue one in favour of the Defendants and strike out this case with cost.

 

On issue two, the Counsel submitted that the 2nd – 4th Defendants are not proper parties to this suit since the 1st Defendant has the capacity to sue and be sued on its own, in view of its corporate personality. In essence, it is the only necessary party to be sued for its acts and no other party. He submitted further that the above position has been given judicial expression in a host of Nigerian cases following the English locus classicus of Salomon v. Salomon [1879] A.C. 22 at 51, per Lord Halsbury, L.C. and Lord Macnaghten. He also cited Dunlop Nigerian Industries Ltd. v. Forward Nigeria Enterprises Ltd. &Anor. (1976) 1 A.L.R. Comm. 243; this concept of separate personality of incorporated company was reiterated and the court went further to hold that it makes no difference to the rule of corporate personality that one member owns all or substantially all of the shares. Also on the effect of the limited liability status of a company like Edo Transport Service Ltd, he cited the Court of Appeal, Benin Division, decision in Union Bank of Nigeria Plc. v. F.E. Orharhuge (2000) 2 NWLR (pt.645) 495 at 510,517;

Accordingly, any individual who has any grievance against a registered company is precluded from instituting an action either on behalf of the company or against it, in the name of the Shareholders of the company along with the company. He cited Vassile v. Paas Industries Ltd (2000) 12 NWLR (pt 681) at 357 (2000) FWLR (pt. 19) 130, Bebeji Oil Allied Prod. Ltd. v. Pancosta Ltd. (2007) (VOL. 31) WRN 163 at Per Mshelia, JCA 197 lines 35-40 (CA)

 

In the light of the above, the counsel submitted that, although the Claimants had asserted that it was the 4th Defendant that owned and closed down the 1st Defendant, and later absorbed some of the staff, their grievance is still against the 1st Defendant, and not the Shareholder(s) who are merely agents of the Company.

 

Learned Counsel argued that since the Claimants have shown or admitted that they were employed by the 1st Defendant, this means that they have a contractual relationship with it, to which the 2nd – 4th Defendants are strangers, they cannot therefore be sued to enforce the terms of the contract that existed between the Claimants and the 1st Defendant. He cited several cases and urged the Court to resolve this issue in favour of the Defendants.

On the third issue, counsel submitted that from the evidence before the Court, the Claimants have failed to prove their case on the balance of probability and therefore cannot be entitled to the reliefs sought. In arguing this, he adopted his argument on issues 1 and 2 above and urged the Court to hold that the Claimants are not entitled to any of the reliefs sought.

 

In conclusion, counsel urged the court to hold that this action is grossly incompetent in that the Claimants do not have the requisite capacity to commence this action in a representative capacity and no personal liability can accrue to the 2nd, 3rd and 4th Defendants in this case.  He surmised that the reliefs sought by the Claimants are incapable of been enforced, considering that the 1st Defendant is presently none existent having been closed down since 2010. It will therefore be an exercise in futility to grant the reliefs sought.

 

He therefore urged the Court to dismiss this suit as same is totally lacking in merit.

 

The Claimants filed their final written address on 12th December, 2018 and formulated four issues for determination to wit:

  1. Whether the named Claimants have locus standi to sue for the unnamed Claimants in view of their condition of service in a representative capacity.
  2. Whether the Defendants followed it’s laid down procedures for terminating the Claimant’s appointment.
  3. Whether facts admitted needs no further prove.
  4. Whether the Defendants are liable to pay general damages to the Claimants.

 

On issue one, Counsel to the Claimant submitted that all the claimants who are employed by the 1st Defendant have locus standi as they are all interested in this matter and this has been expressly stated in paragraphs 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 and 23 – of the Statement of Facts.  He stated that a party or parties may sue in a representative capacity and what is paramount to the court in this circumstance is whether or not all the parties have similar or common interest in that they are all seeking common reliefs. He reiterated that locus standi has been variously defined in plethora of cases as the legal capacity to institute an action in a court of law based on a sufficient interest in the subject matter of a case.  He cited DILLI vs. ADAMU & ANOR 2016 LPELR – 40227 CA

Counsel posited that the question to be asked is: do the Claimants have sufficient interest in this case given rise to a right to sue in this case? The law is that in private law, locus standi is tied to cause of action. He cited ASUU vs. BPE (2013) 14 NWLR (PT.1324) 378 AT 415 PP. 421. He therefore submitted that it is obvious from the Amended Joint statement of Facts, paragraph 4 thereof, that the Claimants were in the same employment of the 1st Defendant and they have a common interest and the same reliefs, therefore, they are suing in a representative capacity for and on behalf of the former members of staff of the 1st Defendant whose names were excluded from the payroll and who are willing and ready to work.  He cited Order 13 Rule 11(1) and (2) of the National Industrial Court (Civil Procedure) Rules 2017, and DURBAR HOTEL vs. MR. ABELLA ITYOUGH & 4ORS APPEAL NO. SC 174/2010 delivered 1st December, 2016, where the Plaintiffs filed a suit in a representative capacity on behalf of about 295 other persons who were former employees of the Defendant/appellant.

The learned counsel for the claimant submitted that the court reiterated the requirements which a party seeking to sue in a representative capacity must fulfill as spelt out in the case of OLATUNJI vs. REGISTRAR COOPERATIVE SOCIETY (1968) NMLR 9. The law is that as long as all the interested parties have the same interest in the subject matter of the suit; all of them must have the same grievance; the proposed representative(s) must be one of them and the reliefs sought must be beneficial to all of them, they can file a representative action.

The counsel submitted that a representative action is to enable actions to be prosecuted together instead of the inconvenience of prosecuting separately where many persons share an interest in a particular subject matter. He submitted that from the facts in this case, the Claimants can sue in a representative capacity pursuant to Order 13 Rule 11(1) and (2) of the National Industrial Court (Civil Procedure) Rules 2017. In addition, counsel for the claimant submitted that, it does not lie in mouth of the 1st Defendant to contend that the 2nd, 3rd and 4th Defendants are not proper parties to this suit. He referred to paragraphs 2, 3, 4 and 5 of the Claimants Amended Joint Statement of Facts and stated that the 2nd, 3rd and 4th Defendants are not just proper parties but are necessary parties as their absence in this suit will not effectively determine the rights and liabilities of the parties in this suit. He cited BABAYEJU vs. ASHAMU (1998) 9 NWLR (PT. 567) 546

Counsel submitted that, assuming but not conceding that the Claimants do have the express permission or authority of other parties to initiate this action, are the Claimants on record not entitled to judgment in this suit? counsel answered in the affirmative because courts are enjoined to do substantial justice rather than technical justice. He also cited A.G. FEDERATION vs. A.G. ABIA STATE (2001) 11 NWLR (PT. 725) 689.

On issue two, Counsel submitted that it is not in dispute that the Claimants are staff of the 1st Defendant in different departments, it is also not in dispute that the said employment is governed by content of Exhibit PO13.  He argued that the content of Exhibit PO13 contains the procedure to be adopted before the employment of a Staff can be terminated.

He submitted that the said procedure is mandatory and cannot be derogated from in any sense in that there is a step by step approach in the determination of an affected staff’s employment. He cited EZE vs. SPRING BANK PLC (2012) VOL 205 LRCN 157; LONGE vs. FBN PLC (2010) VOL. 185 LRCN 33 PG.42 RATIO 13.  He also submitted that the procedure was not followed in the case of the Claimants as this was violated by the 1st Defendant.

Learned counsel reiterated that the employment of the claimant is not only governed by its regulation but the security of tenure of their employment is in addition protected by Exhibit PO13 and as such, the employment is statutorily flavored and the claimants can only be validly laid off in strict compliance with the procedure laid down in Exhibit PO13.

He argued that no mention was made that the Claimants employments have been terminated by the 1st Defendant in the length and breadth of the evidence of the Defendants’ witnesses, and therefore their employment is still subsisting, he further submitted that even if it is true that the Claimants who are staff of the 1st Defendant have secured employments elsewhere during the impasse, this cannot be a bar to an order of reinstatement. He cited EKPEROKUN vs. UNIVERSITY OF LAGOS (supra), and submitted that in an employment with statutory flavour, the appropriate remedy for wrongful termination is reinstatement and payment of salaries and allowances for the period of the wrongful termination.

On issue three, the Claimants’ Counsel submitted that facts admitted needs no further proof and will be taken as having been established at the trial. He cited Section131 of the Evidence Act 2011 and the case of EGBUNIKE vs. ACB (1995)2 SCNJ 58.  The counsel submitted that 1st Defendant through DW 1 and DW 2 in their depositions on oath both admitted paragraph 6 of the Amended Joint Statement of Facts herein reproduced “The Claimants aver that prior to the close down by the State Government; the workers inclusive of the Claimants were being owed six months’ salary from June 2010 – November 2010”.  Also, on the 10th of July, 2018, DW1 and DW2, particularly DW1, under cross examination answered in the affirmative that the claimants were been owed up to 4-6 month salary arrears.   Learned Counsel therefore submitted that the Court should act on the facts that are admitted by the 1st Defendant in favour of the Claimants. He cited NWABUKU vs. OTTIH (1961) ALL NLR 457, OKPOKO vs. IGWE (2013) 15 NWLR (1..76) 167

On issue four, Claimants counsel submitted that General damages are such as the law itself implies or presume to have accrued from the complaint and by reason an immediate, direct and proximate result from the injury, and without reference to the special character, condition or circumstances of the Claimant. He cited the case of UTB (NIG) LTD vs. AJAGBULE (2006) 2 NWLR (PT.965) 447 AT 499.  He submitted further that it is settled law that General Damages are always made as a claim at large. The quantum need not be pleaded and proved. The award is quantified by what in the opinion of a reasonable person is considered adequate loss or inconvenience which flows naturally, as generally presumed by law, from the act of the Defendant. It does not depend upon calculation made and figures arrived at from specific items. He cited ROCKNONOR PROPERTY CO vs. NITEL (2001) 14 NWLR (PT.733) 468 and ODULAJA vs. HADDAD (1973) 11SC 357.

 

In conclusion, learned Counsel for the claimant urged the court to grant reliefs 1 – 5 as claimed by the claimants, and cited the following authorities Bashir AladeShitta – Bey V. Federal Public Service Commission (1981) 1 S.C.40 @ 56-57; and Odiase V. Auchi Polytechnic (1998)4NWLR (Pt. 546) 477 @ 491; F.C.S.C V. LAOYE (1989) 2 NWLR (Pt. 106) 652; Garba V. F.C.S.C(1988) 1 NWLR (Pt. 71) 449 and W.R. & P.C. LTD & NNPC V. ONWO(1999)12 NWLR(Pt. 630) 312.

The Defendants in their Reply on point of Law submitted that if the action is improperly commenced by bringing it in a representative capacity, the court cannot grant the reliefs of the listed claimants alone simply because the courts are poised to do substantial justice.  He cited the case of UZOHO v. N.C.P. (2007) 10 NWLR (Pt. 1042) 320 C. A, and argued that once a suit is not competent, the court cannot even look at the merit of the case, and it is immaterial that each of the claimants present in court has a good claim.

On issue two raised by the counsel to the claimants, the defendants’ counsel argued that the cessation from work by the claimant is an exceptional circumstance.  It was occasioned not by the act of the 1st defendant but the closure of the 1st defendant by Edo State Government due to the fact that the 1st defendant was in a state of distress.  The closure was done by the 4th defendant who is not privy to the contract between 1st defendant and the claimants.

Counsel contended that the argument of the claimants’ counsel that the 1st defendant did not follow due process in terminating the claimants’ appointment is therefore not applicable in the circumstance of this case as none of the claimants produced any letter issued by the 1st defendant terminating his appointment with 1st defendant, to further prove that the 1st defendant was practically not in existence.

Defence counsel also pointed out that while it is conceded that the 1st defendant owes arrears of salaries, the arrears can only be recoverable from the assets of the 1stdefendant upon a formal winding up Order by a court of competent jurisdiction., and there is no evidence that the company has been wound up. He posited that the case of Haruna v. Uniagric Markurdi (2005) 3 NWLR Pt. 912 is not applicable in this suit.

The learned defence counsel finally argued that an order for reinstatement would only be academic since the claimants have stated that their appointment was never terminated at any time and none of them produced any letter of suspension, termination or dismissal.

He therefore urged the court to dismiss this suit with substantial cost.

I have carefully read through the processes filed in this suit, the arguments of counsel, their written addresses and I have come up with the following issues that will best determine this suit to wit;

  1. Whether or not this suit was properly commenced in a representative capacity to clothe this Court with the requisite jurisdiction.
  2. Whether or not the 2nd-4th Defendants were properly joined in this suit
  3. Whether or not the Claimants are entitled to their claims.

On issue one, it is the contention of counsel to the defendant that this action as constituted is incompetent in that the requisite ingredients for representative action are absent and as a result this court is not clothed with the requisite jurisdiction to adjudicate upon this matter.

The Claimant on the other hand contends that the Claimants have a common interest, same grievances and from the facts in this case, the Claimants can sue in a representative capacity pursuant to Order 13 Rule 11(1) and (2) of the National Industrial Court (Civil Procedure) Rules 2017.

The issue of jurisdiction is fundamental as it touches on the competence of the court. Thus, a proceeding commenced or continued without jurisdiction is futility personified and failure dignified, because it is null and void ab initio. The matter must be initiated by due process of law and sustained therewith by the fulfillment of any condition precedent in relation thereto. See the cases of Iyaka v. Chindo & Ors [2010] LPELR-9018 (CA); NEPA v. Auwal [2010] LPELR-4577 (CA). In order to determine the jurisdiction of a court, a careful examination of the complaint and statement of facts is required to ascertain if indeed a court possesses the jurisdiction to entertain a matter. See Corporate Affairs Commission v. The Governing Council of the Industrial Training Fund and Anor [2015] 1 NWLR (1439) P114.

In the case of Durbar Hotel Plc v. Mr. Abella Ityough [2011] 9 NWLR 41 cited by both counsel in this suit, the Court of Appeal per Okoro, J.C.A held that

“It is the practice in our courts that where more persons than one have the same interest in a suit, one or more of such persons may, with the leave and approval of the court, be authorized by the other persons interested, to sue or defend the suit on behalf and/or for the benefit of all. See Atanda & Anor v. Akunyun & Ors [1988] 3 NSCC 10. The Apex court explained the rationale of this rule of practice in Atanda’s case per Oputa, JSC at p.18 as follows: – “Our Rules of court in the various jurisdictions specifically provided for this. And it is a salutary and commonsense provision for where the parties are very numerous, it will be extremely cumbersome and irritatingly frustrating if everybody is made a named party. The court will find it difficult to come to justice by insisting that everyone interested should be named on the Writ as a party. For the sake of convenience, our courts therefore approve of representative actions. Thus, given a common interest or a common grievance, a representative action is in order if, the relief sought is in its nature beneficial to all whom the named plaintiffs propose to represent. Duke of Belford v. Elis (HL) (PC) (1901) A.C. 1 and 8.” Thus a representative action is not a matter of strict law which requires adherence and compliance. It is as stated above, a rule of convenience. Therefore, its application in cases has often been relaxed. That is to say, it is not to be treated as a rigid rule of law but as a flexible tool in the administration of justice. See Tobi, JCA (as he then was) in Busari v. Oseni [1992] 4 NWLR (pt 237) 557 at 582.

The courts have over time laid down the essential requirements which a party who desires to sue in a representative capacity must fulfill. The principles were laid down in Olatunji v. The Registrar Co-operative Society (Supra) as follows:

(1) There must be numerous persons interested in the case or the side to be represented; All those interested must have the same interest in the suit, i.e their interest must be joint and several.

(2) All of them must have the same grievance;

(3) The proposed representative must be one of them; and

(4) The relief or reliefs sought must be in its nature beneficial to all the persons being represented.

See also Ofia v. Ejem (Supra) Busari v. Oseni (Supra), Atanda & Anor v. Akunyun & Ors (supra)”

The Supreme Court reiterated this view in Durbar Hotel Plc v. Mr Abella Ityough & 4 Ors Suit No SC.174/2010 in a judgment delivered in December, 2016. I dare say that the instant case is similar to Durbar Hotel v. Ityough supra because the claimants in this suit have come to this court to seek redress for their unpaid salaries. Admittedly, they have separate contracts of appointments with the 1st defendant but the golden thread that runs through them is that their salaries were not and till now remain unpaid for the period of June to November, 2010 and the temporary shutdown of the 1st Defendant by the State Government, rendered them redundant.  The 1st defendant later reopened in 2014 under the management of a sole administrator and the 2nd Defendant embarked on a screening exercise of all the staff in 2015.  During the screening exercise, they were asked to indicate if they were still willing to work for the company, while some of them indicated willingness to resume and work, some others declined since they were already engaged in other jobs. It is also in evidence that some of them were reinstated and have been earning salaries since, the claimants names were however omitted/ excluded from the pay list.  It is to be noted that the identity and names of the other parties the claimants are representing are not stated in the originating process nor any document tendered to support the fact they have the authority of the people they are representing in this action, especially given the fact that the action is for a particular set of people and did not affect the entire staff of the 1st Defendant as some of them were reinstated, there was need to disclose their identity in order for the court to decipher whether they have a cause of action or not, save for this,  I find that the position of the law as stated in ALIMI ADELEKE V. AKINYELE LOCAL GOVT 2011 LPELR 8945 CA, by Fasanmi J.C.A at pg 13 para C-D is as follows;

“It is the law that where an action in a representative capacity is not properly instituted, it would be treated as personal action”.

It therefore follows from the above authority that the claimants listed in the originating process are competent to bring and sustain this action as the jurisdiction of court was properly invoked by them. I so hold.

On issue two, whether the 2nd defendants can be made parties to this suit, learned counsel to the defendants contended that that the 2nd – 4th Defendants are not proper parties to this suit since the 1st Defendant has the capacity to sue and be sued on its own, in view of its corporate personality.

 

The Claimant on the other hand contended that the 2nd, 3rd and 4th Defendants are not just proper parties but are necessary parties as their absence in this suit will not effectively determine the rights and liabilities of the parties in this suit.

 

It is a long standing rule of judicial adjudication that no cause or matter shall be allowed to be defeated by reason of misjoinder or non-joinder of parties as such misjoinder or non-joinder is not fatal to the proceedings. A court of law is enjoined in such cause or matter, to deal with the matter in controversy in so far as it regards the right and interest of the parties actually before it. See CBN v. Joseph Azoro [2018] LPELR-44389 (CA); Bello v. INEC [2010] 8 NWLR (Pt 1196) 342.

 

Moreover, it is obvious that the 1st & 3rd Defendants are necessary parties and has sufficient interest in the subject matter of this suit, a party whose presence is necessary for the just determination of this suit is called a necessary party.  In DR THOMPSON NDUBUISI OBAREZI V. CHIEF OSITA ILOZOR & ANOR 2010 LPELR 4667 CA, it was held per Ngwuta J.C.A as he then was, as follows:

 

“A necessary party to an action is one in whose absence the question submitted for determination cannot be completely and effectively settled. A necessary party is one who is bound by the decision in the matter, same one whose presence is necessary as a party”.

 

Also in Uzoho V. NCP supra; the court reiterated that legal personality can be inferred to a party where injustice will be meted out to the opposing party, and sufficient interest was defined  by Ibrahim Tanko Muhammad J.C.A thus:

 

“The term sufficient interest would be determined in the light of the peculiar facts and circumstances of each case”.

 

It is deducible from the cited authorities, that the 2nd – 4th Defendants have sufficient interest and role to play in this suit, as the 2nd defendant is saddled with the responsibilities of supervising 1st defendant, the 3rd defendant the Chief Law Officer of Edo State and the 4th defendant the Chief Executive of Edo State. The 2nd – 4th defendants are therefore necessary parties in this suit and are properly so joined. I so hold.

 

On issue three, the Claimants claims are for;

  1.             A declaration that the claimants are still in the employment of the 1st Defendant and entitled to their annual salary and other benefits.
  2.             An Order that the claimants are entitled to their six months’ arrears of Salaries from June 2010 – November, 2010.
  3.             An Order that the claimants are entitled to their salaries from December, 2010 till when Judgment is delivered in this Suit.
  4.             10% interest on the judgment debt until finally liquidated.
  5.             General Damages in the sum of N50, 000,000.00 (Fifty Million Naira only).

On Claim 1, apart from employment governed by statutory provisions or employment with statutory flavor, as they are described, where termination must follow the provisions of the relevant statutes, an employer in other cases can terminate the employment of an employee for good or bad reasons. He is in fact not bound to give any reason for terminating an employee’s appointment. The only remedy open to an employee whose employment is terminated in breach of the terms and conditions i.e EXHIBIT PO13 in the instant case is damages. However, where a reason is proffered by the employer, the court will have to ascertain whether it is in tandem with the contract of employment. See Evans Bros (Nig.) Pub. Ltd. v. Falaiye [2003] 13 NWLR (Pt.838) 564 CA; Nigerian Society of Engineers v. Ozah [2016] 64 N.L.L.R (Pt.225) CA

In the instant case, it is not in contention that the 1st defendant is a registered company under the Company and Allied Matters Act. In effect, the relationship between the 1st defendants and the Claimants can best be described as an ordinary master/servant relationship distinct from a statutory employment, and thus, it is guided by the contract of employment i.e Exhibit T1. It is the law that a claim for reinstatement is only available in a statutory employment and not in an ordinary Master/ Servant employment such as in the instant case. The relief therefore fails. I so hold.

The Claimants’ are also claiming the arrears of salaries for six months being owed to them. In support of this claim, the Claimants gave evidence that they were being owed six months’ salary, (June to November, 2010) prior to the shutdown of the 1st defendant.  The defendants however contended that the Claimants’ are not entitled to payment of arrears of salaries as the 1st defendant was shut down because it became dysfunctional and could not pay staff salaries. The Edo state Government therefore had to intervene and it was the Amalgamated Union of Public Cooperation, Civil Service Technical and Recreational Service Employee (AUPCTRE) of the state that had to intervene and the State Government was persuaded to appoint a sole Administrator to manage the affairs of the company.

It is trite that he who asserts must prove. See Oscar & Anor v. Isah [2014] LPELR-23620; Section 135 (1) of the Evidence Act 2011, also provides that whoever desires any court to give judgment as to a legal right or liability must assert facts upon which same are hinged and prove that those facts exist. See Nigerian Westminister Dredging and Marine Ltd. V. Smoot & Anor [2011] LPELR-4619 (CA).

In the course of trial, DW1 testified on behalf of the defendants as follows;

  • I know that the 1st Defendant was owing arrears of salaries but I wouldn’t know the exact months
  • possibly 4 or 5 months
  • The arrears of salaries before the closure of the 1st Defendant is still outstanding

It appears from the above evidence by DW1 that the 2nd – 4th defendants are trying to extract themselves from the liability of the 1st defendant.

While it is the law that an incorporated company has a separate personality and its entity is distinct from its members, the court has the power to look behind the incorporation company in certain circumstances i.e where the company is involved in fraud, crime or fraudulent trading activities or where it is used to evade a contractual or other legal obligation.

There is nothing sacrosanct about the veil of incorporation of a company. Thus, if it is discovered from the materials before a court that a company is a creature of a biological person be he a managing director or director and that the company is a device or show or mask, in an attempt to avoid recognition by the eye of equity, the court must be ready and willing to open the veil of incorporation to see the characters behind the company in order to do justice.

Thus, a limited liability company is a mere legal fiction that exists only in the eyes of the law. It has no eyes or brains of its own. It acts through biological persons such as directors and shareholders whose actions are binding on it. See Int’l Offshore Const. Ltd v. S.L.N. Ltd [2003] 16 NWLR (Pt.845) 157 CA; CSCS & 1 or v. Bon kolans Investments Ltd & 5 ors [2007] 2 NISLR 95 Judgment of the investments & Securities Tribunal; Ladejobi v. Odutola Holdings Ltd [2002] 3 NWLR (Pt.753) 121 CA.

The defendants tendered Exhibit T2 through DW1 during the trial, Exhibit T2 is the report of the verification and screening exercise conducted by Edo state Government for staff of the 1st Defendant, it was stated at  page 2 of the said exhibit thus;

“…that the financial implication of payment of 5 (Five months) salary arrears to all the staff prior to the closure of Edo line in November, 2010 be ascertained”

It was also stated at Page 5 as follows;

PAYMENT OF 5 MONTHS SALARY ARREARS

In achieving the above objective(s), the committee took into cognizance number of staff in the last salary payroll as at June, 2010 and the Company’s Nominal Roll and discovered as follows:

  1.             That a total of ₦7,533,142.26 (Seven Million, Five Hundred and Thirty Three Thousand, One Hundred and Forty-Two Naira, Twenty Six Kobo) was the Company’s Monthly Wage Bill as at June, 2010;
  2.             That arising from the above monthly Salary Wage Bill, a total of ₦37,665,711.30 (Thirty-Seven Million, Six Hundred and Sixty-Five Thousand, Seven Hundred and Eleven Naira, Thirty Kobo) would be required to settle 5 months’ salary arrears of the staff with effect from July-November, 2010. (See Annexure I of the Report for the Breakdown);..”

It is now firmly settled that documentary evidence, is the best evidence. It is the best proof of the contents of such document and no oral evidence, will be allowed to discredit or contradict the contents thereof except where fraud is pleaded. See Egharevba v. Osagie [2009] 18 NWLR (Pt.1173) 299 S.C.

Annexure II of Exhibit T2 provides the list of names of staff who are being owed salaries by the 1st defendants inclusive of the Claimants’, see pages 8-21.

It is in evidence that the Defendants for all the years the 1st Defendant was closed down never gave the impression that they are not responsible for the staff of the 1st Defendant, a sole Administrator was appointed by the 4th Defendant, and a screening and verification exercise for staff of the 1st Defendant was also conducted on the authority of the 4th Defendant, see Exhibits PO6 OJ7, SB3, IE4 and LO4 which clearly bears the name of the Edo state Government and listed the claimants’ MDA as Transport i.e 2nd Defendant, these exhibits are in no doubt revealing about the true position in this case, it is therefore too late in the day for the Defendants to deny liability, the claimants’ having been under the impression that the issue of their employment will be resolved, thus lulling them to a false sense of security.

In MRS T.C CHUKWUMA V. MR BABAWALE IFELOYE 2008 LPELR 862 SC, It was held per Aderemi J.S.C, that where a party by its conduct has given out a promise that will affect the legal relations between him and another party, with the other party acting on same by altering its position, the party who gave out the promise is estopped from reverting back to the previous legal relations.

I find therefore from the evidence in this case, that the 1st-5th claimants are entitled to their salaries for the period of June 2010-November 2010 as verified by the Defendants, save for those that have been reinstated by the defendants. I so hold.

The Claimants are also claiming arrears of salary from December 2010 till the date of this judgment. It has been held that the employment relationship in this case is that of a Master/Servant and not statutory, and so the claimants are not entitled to be reinstated, likewise it follows that the Claimants are not entitled to this relief having failed to prove that they worked for the period for which they are claiming, but this will not however preclude them from asking for their terminal benefits upon demand.

In termination of appointment in an ordinary Master/Servant employment, where the terms provides for salary in lieu of notice in case of termination, what is accruable to the employee are his legitimate entitlements or accrued rights at the time the employment was brought to an end. The employee is not entitled to salaries for work not done especially after the termination. See Afribank (Nig) Plc. V. Osisanya [2000] 1 NWLR (Pt.642) 592 CA. the claimant cannot therefore claim salaries for work not done, as his employment is deemed terminated whether rightly or wrongly. The claim therefore fails. I so hold.

On the claim for pre-judgment interest. it is a basic principle of law that for a pre-judgment interest to succeed, it must arise from the mutual agreement (contract) between the parties to the litigation, by the custom governing the transaction, by statute, or under a principle equity such as breach of a fiduciary relationship before it may be claimed, proved and awarded by a court. See the unreported suit of Udeagha Egbe v. Union Bank Plc & Anor suit no: NICN/LA/244/2011 delivered on the 30th of January, 2015. Also by Order 47 Rule 7 of the NICN Rules, 2017 this Court is precluded from granting prejudgment interest. Consequently, this claim fails. I so hold.

The claimants are also claiming general damages in this suit. It is the position of the law that the only measure of damages available to an employee in employment cases is the accrued rights and salaries under the contract of employment. See Ezeuduka v. ANMMCO & Ors [2016] N.L.L.R Part 225, Pg 123 NIC @ 142.  Since the Claimants have been awarded arrears of salaries being owed to them, I find that the Claimants in this case are not entitled to general damages in this case. I so hold.

Finally, I find and hold that the Claimants case succeeds in part and for the avoidance of doubt I hereby order and declare as follows;

  1. The Claimants are entitled to their arrears of salary for the period of June 2010-November 2010 save for those that have been reinstated by the defendants.
  2. The defendants are ordered to pay the Claimants their arrears of salary as laid down in Exhibit T2
  3. The claim for damages is refused.
  4. A cost of ₦250,000.00K (two hundred and Fifty thousand Naira) is awarded against the Defendants.
  5. The monetary sum awarded in this judgment is to be paid within 30 days from the date of this judgment failure upon which it will attract an interest of 10% until same is finally liquidated.

Judgment is accordingly entered

 

HON. JUSTICE A.A. ADEWEMIMO

JUDGE

 

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