Mr. Ogheneochuko Pedro -VS- Ascot Flowlines Limited & ORS

IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA

IN THE LAGOS JUDICIAL DIVISION

HOLDEN AT LAGOS

BEFORE HIS LORDSHIP HON. JUSTICE ELIZABETH A OJI PhD.

DATE: TUESDAY 19^TH MARCH 2019 SUIT No. NICN/LA/444/2017

Between:

OGHENEOCHUKO PEDRO CLAIMANT

And

ASCOT FLOWLINES LIMITED

[RC. 6667 F.K.A. WILLBROS NIG LTD]

DEFENDANTS

ASCOT CONSTRUCTORS OFFSHORE LIMITED

[RC. 357851 F.K.A. WILLBROS (OFFSHORE) NIG LTD]

Representations:

G A Okebu appears for Claimant, with CG Ifenkwe

S O Uzuh appears for Defendants

JUDGMENT

Introduction and Claims:

Claimant instituted this Suit by a General Form of Complaint on the 18^th of September 2017 and claims as follows:

AN ORDER directing the Defendants jointly and severally to pay the Claimant the total liquidated debt of N32,929,519.33 (Thirty Two Million Nine Hundred and Twenty Nine Thousand Five Hundred and Nineteen Naira Thirty Three Kobo) being the summation of the following debts/sums:
N25,988,480.63 (Twenty Five Million Nine Hundred and Eighty Eight Thousand Four Hundred and Eighty Naira Sixty Three Kobo) being a debt by way of arrears of salaries and allowances payable by the Defendants to the Claimant as Company Secretary/Legal Adviser as at 17^th July 2012
N6,941,038.70 (Six Million Nine Hundred and Forty One Thousand Thirty Eight Naira Seventy Kobo) being deducted but unremitted pension contributions from the Claimant’s emoluments.
AN AWARD of damages in respect of erosion and loss of monetary value by way of interest (14% being the prevailing CBN interest rate) on the sum of N32,929,519.33 (Thirty Two Million Nine Hundred and Twenty Nine Thousand Five Hundred and Nineteen Naira Thirty Three Kobo); resulting in a monetary interest of N4,610,132.71 (Four Million Six Hundred and Ten Thousand One Hundred and Thirty Two Naira Seventy One kobo) per annum, from 2012 till the date of final liquidation of the debt.
AN AWARD of special damages of N4,000,000.00 being the legal fees, for the prosecution of this action.
AN AWARD of the costs of this action.

Attached to the Complaint form is the Statement of Facts, Witness Statement on Oath of the Claimant and a List of Documents, all dated 18^th September 2017. The Defendants on the other hand, filed their Statement of Defence dated 11^th October 2018 along with a List of Witnesses and a List of Documents, all of even date.

Trial commenced on 21^stMarch 2018 with the Claimant, Ogheneochuko Pedro Esq. testifying for himself as CW1. He tendered Exhibits C1-C7. The case was adjourned for cross-examination to 23^rd April 2018. The Defendants failed to show up in Court and the case of the Claimant was closed. The Defendants eventually entered appearance, consequent upon which the Claimant reopened his case on 29^th October 2018 and tendered further documents marked as Exhibits C8-C13, after which the Claimant was cross examined by Defence Counsel. The list of Exhibits tendered by the Claimant are as follows:

Defendants’ Certificate of Change of Name – Exhibit C1
Defendants’ board resolution appointing Claimant – Exhibit C2
Letter dated 20^th November 2009 – Exhibit C3
Letter dated 19^th December 2011 – Exhibit C4
Letter of resignation dated 18^th June 2012 – Exhibit C5
Invoice from GM George Taylor & Co. – Exhibit C6
Defendants computation of the Claimants

entitlement as at 10^th July 2012 – Exhibit C7

Financial Due Diligence Report by PriceWater

HouseCoopers Limited dated 26^th February 2007 – Exhibit C8

Press releases issued by the then owners/management

of the Defendants in August 2006 – Exhibit C9

Revised collective bargaining agreements (CBAs) – Exhibit 10
Email Exchange of 7^th February 2013 – Exhibit 11
Letter dated 19^th March 2011 Issued by DSV – Exhibit 12
Letter dated 18^th May 2011 issued by DSV – Exhibit 13

The Defendants opened their case on 12^thNovember 2018, calling one Mr. Afolabi Oyedele as DW1 who was sworn, testified and cross examined. Through the Defendants’ witness, the following documents were admitted in evidence:

Loan purchase agreement between Asset Management Corporation of Nigeria and Intercontinental Bank Plc (Exhibit D1)
Selected pages of the KPMG report (Exhibit D2 bundle)
Copies of the processes filed in Suit Nos. NICN/LA/127/2018, NICN/LA/138/2018 and NICN/LA/332/2018 (Exhibit D3[1-3])

Facts of the Case:

Claimant was appointed the Company Secretary/Legal Adviser of the Defendants by a Board Resolutions of 1^st June, 2007. Pending the completion of an on-going company-wide compensation review for employees of the Defendants which was eventually completed in 2009, the finalisation of the Claimant’s compensation package was deferred and the Claimant’s monthly remuneration was, in the interim, put at N1, 000,000.00 monthly(N12,000,000.00 per annum). On completion of the compensation review, the express terms and conditions of the Claimant’s appointment, including remuneration and entitlements, were reduced into writing in a formal letter of employment dated 20^th November, 2009, which provided a gross compensation of N18,640,000.00 per annum and a vehicle allowance at the annual rate of N1,750,000.00, made to apply retrospectively from 1^st June 2007. About 5 years after the Claimant’s appointment vide the board resolutions dated 1^st June 2007, the terms and conditions of the Claimant’s appointment, as contained in the Letter dated 20^th November 2009, were reviewed upwards, by another letter dated 19^th December, 2011, which revised the Claimant’s compensation to a gross sum of N24,831,975.00 per annum and a vehicle allowance at the annual rate of N1,750,000.00. From the inception of his appointment/employment relationship with the Defendants, there were recurring and consistent irregularities in payments and defaults in the payment of appropriate salaries, allowances and entitlements. It is Claimant’s case that between June 2007 and June 2008 (13 Months) the Defendants owed the Claimant salaries and allowances to the tune of N6,500,000.00 (Six Million Five Hundred Thousand Naira Only), owing to the fact that the Defendants only paid the Claimant N500,000.00 (Five Hundred Thousand Naira) for these 13 months, as opposed to N1,000,000.00 (One Naira) per month, which was the Interim Payments agreed, pending the outcome of the company-wide compensation review. After the completion of the company wide compensation review, the Claimant ought to have been paid N17,153,333.33 (Seventeen Million One Hundred and Fifty Three Thousand Three Hundred and Thirty Three Naira. Thirty Three Kobo), being the arrears/difference between the Interim Payments and N18,640,000.00 (Eighteen Million Six Hundred and Forty Thousand Naira) which was the approved compensation for the Claimant from 1^st June 2007, being the date of Claimant’s appointment; culminating in a period of 2 years and 7 months. Also, in the year 2010, the Defendants did not pay the Claimant his car allowance of N1,750,000.00 (One Million Seven Hundred and Fifty Thousand Naira) for the year 2010. The Defendants continued to default in the payments of the Claimant’s salaries and entitlements in 2011 as follows:

The Claimant was not paid his Salary/allowances for the month of September 2011, being the sum of Nl,248,645.83 (One Million, Two Hundred and Forty Eight Thousand, Six Hundred and Forty Five Naira, Eight Three Kobo)
The Claimant was not paid his enhanced Salary/allowances for the month of October 2011, being the sum of Nl,367,063.23 (One Million, Three Hundred and Sixty Seven Thousand Sixty Three Naira Twenty Three Kobo), as per the letter of review of employment, earlier referenced.
The Claimant was not paid his Salary/allowances for the month of November 2011, being the sum of Nl,367,063.23 (One Million, Three Hundred and Sixty Seven Thousand Sixty Three Naira Twenty Three Kobo)
The Claimant was not paid his reviewed Salary/allowances (as per the letter dated 19^th December 2011) for the month of December 2011, being the sum of Nl,367,063.23 (One Million, Three Hundred and Sixty Seven Thousand, Sixty Three Naira, Twenty Three Kobo)
By the terms and conditions of the Claimant’s employment, the Claimant was entitled to 13^th Month Salaries. The Defendants did not pay the Claimant his 13^th Month December Salary for the year 2011, being the sum of Nl,433,004.48
The Defendants also failed to pay the Claimant his car allowance for the year 2011 in the sum of N1,750,000.00 (One Million Seven Hundred and Fifty Thousand Naira) per annum.

In 2012, between the months of January and February 2012 the Defendants owed the Claimant the sum ofN2,734,126.46 (Two Million Seven Hundred Thirty Four Thousand One Hundred and Twenty Six Naira Forty Kobo) being his salaries and allowances for the months of January and February 2012 at the revised rate of N1,367,063.23 (One Million, Three Hundred and Sixty Seven Thousand, Sixty Three Naira, Twenty Three Kobo) per month.

In the months of March, April, May, June and July of the year 2012, the Defendants’ made part payments of 500,000.00 (Five Hundred Thousand Naira) in each of the aforementioned months, as opposed to the sum of N1,367,063.23 (One Million, Three Hundred and Sixty Seven Thousand, Sixty Three Naira, Twenty Three Kobo) being the Claimant’s monthly salary and allowances. The total difference between what the Defendants ought to have paid and what the Defendants actually paid, in the five (5) aforementioned months is N4,335,316.15 (Four Million Three Hundred and Thirty Five Thousand Three Hundred and Sixteen Naira Fifteen Kobo). i.e. [N1,367,063.23 x 5 – N500,000 x 5]

The Defendants also failed to pay the Claimant his leave allowance for the year 2012, being the sum of N2,055,060.00 (Two Million Fifty Five Thousand Sixty Naira) which was payable at the anniversary of his employment, being 1^st June 2012.

The Defendant also ought to have paid the Claimant a pro-rated 13^th month salary for the year 2012, being the sum of N835,919.28 (Eight Hundred and Thirty Five Thousand Nine Hundred and Nineteen Naira Twenty Eight Kobo) but the Defendants failed to so do.

It is also Claimant’s case that the Defendants deducted pension contributions from the Claimant’s emoluments over the years and did not remit same to Claimant’s pension account in Stanbic IBTC, the Pension Fund Manager. The total amount of unremitted pension deductions and contributions transmuted into N6,941,038.70 (Six Million Nine Hundred and Forty One Thousand Thirty Eight Naira Seventy Kobo). Claimant also states that that the personal income taxes deducted from his emoluments over the years, by the Defendants, were not remitted to the relevant tax authorities causing him to lose his entitlement to lucrative housing schemes offered by the Lagos State Government, to tax payers, working and living in Lagos State.

Owing to the serial defaults of the Defendants, in their contractual obligations to the Claimant, the Claimant on 18^th June, 2012, issued and served on the Defendants a 30 day notice of resignation of his appointment. After serving the notice of resignation on the Defendants, The Claimant requested for a detailed breakdown of his arrears, salaries and allowances which were owed him by the Defendants. Following the Claimants request, the account department computed and issued to the Claimant a duty signed copy of Claimants outstanding entitlements, before the Claimant severed from the Defendants on 17^th July 2012.

Defendants however contend that the Claimant is not entitled to the Claim as a result of the role he played in the liquidation of the Defendants. Defendants agree as stated by Claimant that Ascot Offshore Nigeria Limited is the parent company of the Defendants. That. the Defendants, although subsidiaries of Ascot Offshore Nigeria Limited, are not independent of their parent company as both Defendants and Ascot Offshore Nigeria Limited had common management i.e. Managing Director (Steve Judd), Company Secretary/Legal Adviser (the Claimant herein), Chief Finance Officer (Emmanuel Nwachukwu) and Assistant Chief Finance officer (Angela Onwuka). That, the aforementioned persons were the principal officers responsible for the day to day management of the entire Ascot group of companies, who ran the companies aground thus leading to the accumulation of several debts running into several billions of Naira owed to Intercontinental Bank Plc, now Access Bank Plc. The Defendants state that the Ascot companies became heavily indebted to AMCON after AMCON had purchased the multibillion naira debts of the Ascot group from Intercontinental Bank Plc (now Access Bank Plc). As result of the inability of Ascot to repay AMCON, Berkeley Group Plc, the majority shareholder of Ascot Offshore Nigeria Limited relinquished its shares to AMCON via board resolution dated August 30, 2011 to enable AMCON have total control and rehabilitate the companies to make them saleable to interested investors.

The Defendants deny that there was any company-wide compensation review as alleged; and any upward review of Claimant’s salary via letter dated 19^thDecember 2011 and states that it was a ploy by the Claimant in connivance with other principal officers, to benefit from their mismanagement of the Ascot companies because they felt that Ascot has become solvent by virtue of AMCON becoming the major shareholder. That, the Defendants and the entire Ascot group have been financially distressed as well as under the life support of AMCON as at December 19, 2011 and as such were not in a financial position to review the salaries of employees.

The Defendants state that the Claimant as Company Secretary/Legal Adviser breached his fiduciary duties to the Defendants as well as other Ascot companies by failing to ensure that there was absolute compliance with relevant pension and tax statutes resulting in the Defendants having unpaid tax liabilities amounting to billions of naira. Defendants state that the Chief Finance Officer (CFO) Emmanuel Nwachukwu and the Assistant Finance Officer (Angela Onwuka), who have also sued the Defendants separately for salaries, and unpaid pension in Suits Nos. NICN/LA/127/2018 and NICN/LA/332/2018, were in conjunction with the Claimant, the officers responsible for the remission of pensions and taxes to the relevant authorities but failed to do so. Defendants further state that the purported computation of the Claimant’s entitlements was done by parties interested in the outcome of this suit who themselves are Claimants in Suit Nos. NICN/LA/138/2018 and NICN/LA/332/2018. That the Claimant wants to hide behind the separate legal personality of the Defendants to benefit from his failure to properly manage the affairs of the Ascot companies.
Claimant in Reply countered the allegations of mis-management levelled against him. He states that the debts owed by the Defendants were all pre-existing condition of the Defendants before his employment; and that Ascot Offshore Nigeria Limited, resuscitated the Defendant’s operation in 2007 under a new management that carried out extensive wage negotiations with workers culminating in the revised Collective Bargaining Agreements (CBAs) in 2009. He states that the allegation of mismanagement is a fabrication as Amcon had invited him to be Company Secretary of the Defendants, after their take-over.

Arguments of Counsel:

Defendants, in their Final Written Address formulated the following issues for determinationto wit;-

Whether under the doctrine of lifting the veil, it is just and equitable to hold the Defendants who are artificial entities, liable to the Claimant for purported unpaid arrears of salaries and pension in the light of the established fact that the Claimant was part of the Management that mismanaged the Defendants and under whose watch the Defendants accumulated several massive debts?

Whether even without the application of the doctrine of lifting the veil, the Claimant is entitled to payment of purported arrears of salaries and pension as claimed in the circumstances of this case?

On the 1^stissue, Defendants argued that the doctrine of lifting the veil is an exception to the general rule of separate legal personality of an incorporated limited company as laid down in the case of Salomon v. Salomon Company Limited (1897) AC 22. They submit that this is a good cause for the listing of veil on the grounds that the Claimant as the Company Secretary/Legal Adviser of the Defendants was part of the Management of the Defendants under whose management the debts owed by the Defendant were incurred. He states that the Claimant in suing the Defendants whose affairs he managed in conjunction with other members of the Management team, for unpaid salaries and unremitted pension, is relying on the general doctrine of the separate legal personality. Defendants argue that Claimant should be estopped from so doing based on the principle of lifting the veil laid down in a plethora of cases – Bolton (Engineering) Co. Ltd v. Graham & Sons (1959) 1 QB 159 and the case of Panorama Development (Guildford) Ltd v. Fidelis Furnishing Fabrics Ltd (1971) 3 WLR 440, where the English Court of Appeal per Lord Denning held as follows:

Times have changed. A company secretary is a much more important person nowadays than he was in 1887. He is an officer of the company with extensive duties and responsibilities… He is no longer a mere clerk. He regularly makes representations on behalf of the company and enters into contracts on its behalf which comes within the day – to – day running of the Company’s business. So much that he may be regarded and held out as having authority to do such things on behalf of the company. He is certainly entitled to sign contracts with the administrative side of the company’s affairs such as employing staff…All such matters now come within the ostensible authority of a company secretary.

Defendants also referred to the Nigerian case of Wimpey (Nig) Ltd v. Balogun (1986) 3 NWLR (PT. 28) 324 @ 337 PARA. G, where the Court of Appeal per Ogundare JCA (as he then was) held that:

It was stated in the ruling that the company secretary is not a member of the management of any company. Learned counsel for the respondent also echoed this view in his brief. Unfortunately, no authority was cited for this proposition. I hope a Company Secretary is not being confused with a secretary/typist. They are two different things. A company secretary is indeed a high ranking officer in the company set up and is indeed part of the management of the company.

Defendants argue that from the authorities, it is clear that a Court of law has the power to pierce the corporate veil of a limited liability company on the ground of equity, or where the interest of justice so demands or where there is an attempt to defeat the aim of the law and where the device of incorporation has been employed to perpetrate fraud, to carry out improper conduct or unfair act, and to evade legal obligation. They argue that in considering whether the Claimant’s claims are equitable, it is necessary for this honourable Court to lift the corporate veils of the Defendants in order to see those really running the Defendants and under whose leadership, the Defendants failed to pay salaries, remit pensions and committed tax evasion. The Defendants notes that the other members of the Management of the Defendants have taken out actions against the Defendant in this Court in suits numbers NICN/LA/127/2018, NICN/LA/138/2018 and NICN/LA/332/2018.

On the 2^ndissue, whether even without the application of the doctrine of lifting the veil, the Claimant is entitled to payment of purported arrears of salaries and pension as claimed in the circumstances of this case. Defendants argue that according to the Claimant, the Defendants started owing him salaries from 2007 (the year of his appointment as Company Secretary) up till 2012. They argue that Claimant failed to tender any document in proof of the irregular or non-payment of salaries, allowances and entitlements. Defendants submit that in the absence of any correspondence between the Claimant and the Defendants showing that the Claimant complained about irregular or non-payments of salaries or that the Defendants acknowledged owing the Claimant unpaid salaries; or any pay slip or statement of account showing irregular or non-payments of salaries, allowances and entitlements, that there are no cogent materials placed before this Court that would enable the Court come to the irresistible conclusion that the Claimant was being paid irregular salaries or no salaries at all from 2007 to 2012.

On the issue of deduction and non-remittance of pension amounting toN6,941,038.70, Defendants argue that Claimant did not equally lead credible evidence to establish how such sum was arrived at.

In Counsel’s arguments on behalf of the Claimant, two issues were raised for determination,to wit,
Whether the evidence adduced by Claimant proved the liquidated debts comprising unpaid salaries and allowances claimed against Defendants?
Whether the defence of mismanagement of Defendant companies alleged against Claimant amounts to a defence in law to the claims for unpaid salaries, and if so, whether it was proved?
On issue one, Claimant argues that he had proved the liquidated debts by exhibits C3, C4 and C7. On issue two, Claimant argued that the issues raised by the Defendants are matters for a separate and distinct legal action; and are unrelated to the cause of action brought by the Claimant for unpaid salaries and entitlements. Claimant submits that in this circumstance, there is no competent defence to the claim in this Suit. He refers to the case ofLonge v. First Bank Plc (2010) LPELR-1793 (SC) particularly at Page 14. On the call by Defendants for the veil of incorporation to be lifted, Claimant submits that this invitation is nothing more than an academic exercise, as the case for determination before this Court has nothing to do with the personalities behind the company neither are the personalities behind the companies in question. Clamant argues that it is the claim of the Claimant and the reliefs sought that a Court must be concerned with – as held in Society Bic S.A & Ors v Charzin Industries Ltd (2014) 4 NWLR [Pt. 1398] 497 at 551-552 where the Supreme Court held that:

To expatiate, it can safely be said that jurisdiction is determined by what the Plaintiff is demanding and cannot be determined by a situation where the response that is anticipated, if I may say so would be decider. Going contrary to using the Claim as a determinant is like begging the question, allowing the cart before the horse or a possible journey into speculation in getting into materials outside what the initiator of the Court process has put forward.

Claimant argues that lifting the veil of incorporation would amount to granting reliefs not sought and setting different questions besides those brought before the Court by the initiator of the Court process. He further posits that the purpose of lifting the veil of incorporation is always to discover the minds and persons behind the company, which is not in question in this case. He further submits that it is not usual to lift the veil of incorporation for the purpose of seeing the company secretary. Claimant also argued that that the veil of incorporation is usually only lifted where there is an allegation of fraud or crime against the company on a third party; which is also not the case in this suit. Claimant also urged the Court to discountenance exhibit D2 as being incomplete and tendered by someone who had no part in its making. He also urged the Court to discountenance the evidence of the Defence Witness for being hearsay, since all the events relating to the Claimants case, starting from the Claimant’s employment up on till his resignation, all took place before DW1 was employed by an AMCON subsidiary company.

In response to Claimant’s submissions that exhibit D2 be discountenanced by the Court, Defendants note that Claimant’s Counsel had urged this Court to rely on the same Exhibit D2 to found on the issue of the Defendants’ indebtedness to the Clamant, and submit that the Claimant cannot ask this Court to rely on Exhibit D2 to found a case of admission against the Defendants, and in another breathe, ask this Court to expunge the said Exhibit D2. On Claimant’s Counsel submission that this Court discountenances the evidence of DW1 on the ground of hearsay, Defendant citing section 38 of the Evidence Act 2011; Defendants refer to the case ofSaleh v. Bank of the North(2006) 6 NWLR (PT. 976) 316 @ 326 – 327, where the Supreme Court per Musdapher JSC (as he then was) held that:

I entirely agree with the opinion of the court below, that the mere fact that – a bank staff was not around when a customer’s bank account was opened was not enough to prevent the staff from testifying or giving evidence on customer’s account. It is settled law, that a company such as the respondent bank herein is a juristic person and can only act through its agents or servants. Any agent or servant can consequently give evidence to establish any transaction entered into by a juristic personality. Even where the official giving the evidence is not the one who actually took part in the transaction on behalf of the company, such evidence is nonetheless relevant and admissible, will not be discountenanced or rejected as hearsay evidence. The learned trial Judge was clearly in error to have ignored the evidence led by the respondent’s witnesses on the ground that they were not around when the appellant opened its account with the respondent”

Defendants submit that it is not disputed that the Defendants’ majority shares were relinquished to AMCON to enable AMCON have control for the purpose of selling the Defendants to interested investors; and that although AMCON is not a party in this suit, the position of AMCON makes AMCON a necessary witness in this matter. By virtue of AMCON being an artificial entity and a creation of Statute, AMCON can only testify through any of its agents. Defendants therefore submits that by the authority of Saleh v. Bank of the NORTH (supra), the evidence of Afolabi Oyedele (DW) is admissible and is not a hearsay evidence.

In response to Claimant’s assertion that the issues raised by the Defence are unrelated to the case of the Claimant, Defendants responded to say that their defences are direct responses to the facts averred in the Claimant’s statement of claim. That, the Claimant has imputed the commission of crimes to the Defendants, and the Defendants being artificial persons could only act through human beings, the management. Defendants referred to the case ofOlawepo v. SEC (2011) 16 NWLR (PT. 1272) 122 @ 144 – 145, PARAS. H – B.

On Claimant’s argument that the veil of incorporation should not be lifted on the grounds that the Defendants were not used to commit crime and that the Defendants did not allege fraud or the commission of any crime, Defendants argue that it is the Claimant who made allegations of crime against the Defendants by his allegations of non-remittance of statutory deductibles. That, by Section 103 of the Pension Reform Act, 2014:-

“Where an offence under this Act is committed by a body corporate, the body corporate or every –

(a). Director, Manager, Secretary or other officers of the body corporate;

(b) person who was purporting to act in such capacity mentioned in paragraph (a) of this section, who had knowledge or believed to have had knowledge of the commission of the offence and who did not exercise due diligence to ensure compliance with the Act shall be deemed to have committed the offence and shall be proceeded against in accordance with the Act.

Defendants then submit that their call to the Court to lift the corporate veils of the Defendants is very much in order.

Court’s Decision:

I have carefully considered the processes filed in this suit, and the evidence led by both parties. I have also considered Counsel’s written submissions and authorities cited in the final addresses. I find need to state briefly, the delay occasioned by the non-service of the originating processes on the Defendants promptly. As already stated, this suit was commenced on the 18^th of September 2017. It came up for mention, for the first time on the 9^th of October 2017. There was no proof of service of the processes on the Defendant and the matter was further adjourned. Claimant’s Counsel called the Court’s attention to their application for summary judgment. On the next date, 31^st October, the Court noted that there was still no proof of service. On 14^th November 2017, there was evidence that Defendants had been served at their last known address in Port Harcourt by dropping same there. The application for summary judgment was taken and subsequently dismissed on the ground that there were facts and issues deposed in the Claimant’s pleadings that required clarification, hence the need for the suit to be put to trial. With the evidence that Defendants could not be served in their Port Harcourt location because they had moved, and considering the nature of reliefs sought, the Court insisted the Claimant submits another address for service, and to a responsible member of the Defendants, especially, considering that Claimant have been the Company Secretary of the Defendants. Defendants were then served. As stated in the affidavit of service dated 27^th February 2018, deposed to by Friday Sule, Litigation Officer in the law firm of Claimant’s Counsel:

I personally dropped the hearing notices issued upon the Defendant, by this Honourable Court on 29^th January 2018 at the Registered Address of the Defendants, which is located at Fortune Towers 47 Adeyemo Alakija Victoria Island, Lagos, Lagos. Attached herewith and marked Exhibit GMGT 01 is a photograph showing the hearing notice pasted on the wall of the office, alongside other Court processes served in the like manner, by other Plaintiffs in other suits.

That I personal served Mr. Babs Kasali, the last known Director of the Defendants, who is in the employ of Asset Management Corporation of Nigeria, with a letter dated 23^rd February 2018, informing him of this suit. I equally attached a copy of the hearing notices dated 29^th January 2018 to the said letter. Attached and marked exhibit GMGT 02 is the acknowledgment copy of the letter dated 23^rd February 2018.

That I also sent the hearing notices dated 29^th January 2018 by courier to the Defendant’s at their respective operational yards at Port Harcourt in Rivers State…

From the above, and by reference to the Statement of Facts, the Defendant’s registered office was at all material time located at Fortune Towers, 2^nd floor 27/29 Adeyemo Alakija Street, Victoria Island, Lagos State , where Claimant, as former Company Secretary, now carries on his legal practice. Precious judicial time would have been saved, early in time, by serving Defendants in this obviously known address.

I now proceed to set down the following issues for determination:

Whether the Claimant is entitled to his claim.

In addressing the above issue, I shall delve into the issues raised by both parties, and consider their arguments in resolving the issue set by the Court. After considering the evidenc of parties, I find that the following issues are not in dispute:

That Claimant was appointed as Company Secretary of the Defendnats on 1^st June 2007.
That from the inception of the appointment/employment relationship with the Defendant, there were recurring and consistent irregularities in payments and defaults in the payment of appropriate salaries, allowances and entitlements.

In proof of his case, Claimant relies on exhibits C3 and C4 as constituting the terms of his agreement and exhibit C7 showing computed outstanding arrears, salaries and allowances. It is trite that he who approaches the Court has the burden of proving the entitlement to the reliefs sought. Both the case law and the statute support this proposition. See Chairman, EFCC & Anor. v. Littlechild & Anor (2015) LPELR-25199 (CA) & Section 131(1) & (2), Evidence Act, 2011. Except in relation to express and unambiguous admission, the burden of proof remains on he who asserts. Also, by the principles in Oloruntoba-Oju v. Lawal (2001) FWLR(Pt. 72) 2029 at 2033 and Okomu Oil Palm vs. Iserhienrhien (2001) 5 NSCQR 802, where an employee complains that his employment has been wrongfully terminated, he has the onus to place before the court the terms of the employment and to prove in what manner the said terms were breached by the employer.

As held in Adegbite v. State, (2017) LPELR-42585(SC)

It is trite principle also that a Court should not decide a case on mere conjecture or speculation. Courts of Laws are Courts of facts and laws. They decide issues on facts established before them and on laws. They must avoid speculation. “See Ohue v. NEPA (1998) 7 NWLR (Pt.557) 187; Oguanzee V. State (1998) 5 NWLR (Pt.551) 521; Animashaun v. UCH (1996) 10 NWLR (Pt.476) 65; Adefulu v. Okulaja (1996) 9 NWLR (Pt.475) 668.” Per GALINJE, J.S.C. (Pp. 13-14, Paras. C-B

Also in the case of Okesoto v. Total Nigeria Plc, (2010) LPELR-4716(CA), the Court of Appeal held that:

It is quite elementary that no court is allowed to go outside the facts and evidence before it to fish for evidence in order to decide a case before it. In fact all courts are to consider only evidence and issues canvassed before it in trying to reach its judgment.

I see from the evidence that Claimant was employed first in 2007 as per exhibit C2 which is the resolution appointing the Claimant as Company Secretary of the Defendants. Exhibit C3 titled ‘Employment Review’ formally offers Claimant employment in the Defendants. Exhibit C4 which is again titled ‘Employment Review’, further reviews Claimant’s salary upwards. It is the law that parties are free to enter into whatever conditions they please, in regulating their contractual relationship, and it is not for the Court to determine the terms of such contract. The evidence of Claimant as shown in exhibit C4 is that there was a further review of his employment, and his pay increased from N18, 640,00 to N24, 831,975.00. All these review and increments occurred while, from Claimant’s evidence, there was recurring and consistent irregularities in payments, and while, the Defendants were on poor financial stead, which culminated in its sale in 2012 – see exhibit C5 which is Claimant’s letter of resignation.

There is no evidence to challenge the authenticity of exhibits C3 and C4. However, it is also Claimant’s evidence that Defendants had paid some salaries. For instance, Claimant stated in his evidence that:

The Claimant avers that from the inception of his appointment/employment relationship with the Defendants, there were recurring and consistent irregularities in payments and defaults in the payment of appropriate salaries, allowances and entitlements.

The Claimant avers that between June 2007 and June 2008 (13 Months) the Defendants owed the Claimant salaries and allowances to the tune of N6,500,000.00 (Six Million Five Hundred Thousand Naira Only), owing to the fact that the Defendants only paid the Claimant N500,000.00 (Five Hundred Thousand Naira) for these 13 months, as opposed to N1,000,000.00 (One Naira) per month, which was the Interim Payments agreed, pending the outcome of the company-wide compensation review, earlier referenced.

All these beg for proof of what was paid and what was not paid. An examination of the account/s of the Claimant would have determined the consistency or inconsistency of the payment of Claimant’s salaries and allowances; and would have been conclusive evidence of what is accruable to Claimant. Exhibit C7 confirms the need for a perusal of the statement of accounts of the Claimant. It is more than a computation of Claimant’s unpaid salaries and allowances, but a computation of the deductibles drawn and/or draw-able from the Claimants entitlements. This is so especially when considered against Claimant’s statement during cross-examination that the “deductions were book entries, they were not cash backed because the funds were not there”.

Of importance now, is the case of the Defendant. Claimant had challenged the competence of the Defence witness to testify on facts that occurred before he was employed and that it is thereby hearsay contrary to Section 38 of the Evidence Act 2011. The case of Ishola v. Societe Generale Bank (Nigeria) Ltd 1997) LPELR-1547(SC) settles this issue. The Supreme Court held that such a person in the stead of the DW can testify on behalf of its company. I therefore find and hold that the evidence of DW is admissible. See also Saleh v. B.O.N. Ltd. (2006) 6 NWLR (Pt.976)316; (2006) LPELR-2991(SC). In Ishola v. Societe Generale Bank (Nigeria) Ltd (supra) the Court held that:

It cannot be over emphasised that a company being a legal person or a juristic person can only act through its agents or servants and any agent or servant of a company can therefore give evidence to establish any transaction entered into by that company. Where the official giving the evidence is not the one who actually took part in the transaction on behalf of the company, such evidence is nonetheless relevant and admissible and will not be discountenanced or rejected as hearsay evidence. The fact that such official did not personally participate in the transaction on which he has given evidence may in appropriate cases, however, affect the weight to be attached to such evidence. See Kate Enterprises Ltd. v. Daewood (Nig.) Ltd. (1985) 2NWLR (Pt.5) 116,Anyaebosi v. R.T.Briscoe (Nig.) Ltd (1987) 3 NWLR (Pt.59) 84, Chief ogunbor and others v. Chief Ugbede (1976) 9-10 SC 179 at 187 etc.”Per Iguh,J.S.C.(P.25, paras.G-E)

In their defence, Defendants sought to establish by evidence that the Defendant companies were so mismanaged by Claimant and other senior management officers of the companies that it would not be equitable to have them seek their salaries and other allowances from the Defendant. Defendants relied on exhibit D2 as evidence of the mis-management. Claimant objects to exhibit D2 on the grounds that; first it was a draft report. Secondly, the report was balkanized and selected segments were detached from the document and tendered in a way that was bound to interfere with the holistic interpretation of the document. Thirdly, the report was never shown to Claimant to enable him respond to any issues that would require his clarification. This Report is relied on to prove that Claimant and his colleagues mismanaged the Defendants. In pushing this argument, Defendants did not cite any authority that suggests that proof of that automatically deprives Claimant to his earned salary. That being so, I do not find need to refer to this document. I therefore discountenance exhibit D2 in this judgment.

Defendants other issue is that the veil of incorporation be lifted, to see the actual person who acted for the Defendants. Claimant argues that the lifting of veil is done in cases where the corporate entity is used to perpetuate fraud and not where employees are seeking to be paid their salaries.

In New Nigerian Newspapers Ltd. v. Agbomabini (2013) LPELR-20741(CA), the Court of Appeal held that:

The courts do not make a habit of going behind the facade of corporate personality of a company to hold the shareholders or directors liable for the acts of the company except in very rare instances such as where the company has be used as an instrument for illegality or fraud – Adeyemi vs Lan & Baker (Nig) Ltd (2000) 7 NWLR (Pt.663) 33, FDB Financial Services Ltd Vs Adesola (2000) 8 NWLR (Pt 688) 170, Mezu Vs Cooperative & Commerce Bank (Nig) Plc (2013) 3 NWLR (Pt 1340) 188. This was explained by ADEKEYE, JCA (as he then was) in Vilbeko (Nig) Ltd Vs Nigerian Deposit Insurance Corporation (2006) 12 NWLR (Pt 994) 280 at 295 F-H thus:

An incorporated limited liability company is always regarded as a separate and distinct entity from its shareholders and directors. The consequence of recognizing the separate personality of a company is to draw the veil of incorporation over the company. No one is entitled to go behind the veil. This corporate shell shall however be cracked in the interest of justice. Particularly where the company is used as a mask or sham by the director to avoid recognition in the eyes of equity, the court must be ready and willing to open the veil of incorporation to see the characters behind the company in the interest of justice. Since a statute will not be allowed to be used as an excuse to justify illegality or fraud, and once there is clear evidence of fraud or illegality, the veil will be lifted.” Per ABIRU, J.C.A. (Pp. 40-41, Paras. F-E)

The Courts have also held that by the theory of lifting or piercing or going behind the corporate veil, the legislature and the courts in exceptional circumstances and where expedient, can unveil or unmask a company to see the individuals or members behind it – See F.D.B. Financial Services Ltd. v. Adesola (2000) 8NWLR (pt.668) 170 at 13. The tables appear to be turned in this case, as the Defendant alleges that fraud is being perpetuated against the Company, as against the usual practice of lifting the veil to protect third parties from being defrauded under the cloak of incorporation. As stated in the case of New Nigerian Newspapers Ltd. v. Agbomabini cited above, “This corporate shell shall however be cracked in the interest of justice. Particularly where the company is used as a mask or sham by the director to avoid recognition in the eyes of equity, the Court must be ready and willing to open the veil of incorporation to see the characters behind the company in the interest of justice.

It is my view that justice cannot be done in this case, without piercing through the veil of incorporation of the Defendant companies, to see the characters who acted on their behalf, in relation to the case at hand. This is even more imperative, considering the status of the Claimant in the Defendants. I therefore hereby pierce the veil of incorporation of the Defendants to see who acted on behalf of the companies in respect of the facts constituting the present case.

Having pierced the veil of incorporation of the Defendants, it is revealed that the Company acted, in the appointment, review and computation of the interests of the Claimant via the Managing Director, Mr. Steve Judd, in issuing exhibits C3 and C4. It acted through the same Steve Judd and Angela Onwuka, the Assistant Controller to the Defendants in executing exhibit C7. The Chief Finance Officer/Financial Controller is Mr. Emmanuel Nwachukwu. These three persons, with the Claimant as Company Secretary constituted the Management of the Defendants. The various acts of the management team would not have been of interest in this case except for the fact that it is alleged that they are persons interested in the outcome of this suit. It has been shown via exhibits D3A, D3B and D3C that the members of the management of Defendants who originated the documents relied on by Claimant – exhibits C4, C5 and C7 all have instituted actions against the Defendants, under the same conditions as that instituted by the Claimant in this suit. In addition, exhibits D3A, D3B and D3C show that Claimant is Counsel to the three other members of management, who ran the Defendants along with the Claimant and who originated the documents relied on by Claimant. This relationship, to me, indicts and questions the weight to be attached to the various documents emanating from Defendants, in favour of the Claimant in this suit, particularly exhibit C7. Exhibit C7 was prepared after Claimant had purportedly resigned. There is no date showing the exact date of its preparation and deliverance to the Claimant; but from evidence of Claimant, it could not have been earlier that June 2012. By the circumstance of this case, it was obvious that C7 was prepared with this suit in contemplation; subsequently after which the other team members entered their resignation and commenced there separate suits. Can the documents, particularly exhibit C7 pass the test of section 83(3) of the Evidence Act, 2011? That section provides that:

Nothing in this section shall render admissible as evidence any statement made by a person interested at a time when proceedings were pending or anticipated involving a dispute as to any fact which the statement might tend to establish.

The provisions of Section 83 (3) of the Evidence Act 2011 will catch up with the Claimant where:

(a) The maker of the document is interested when proceedings were pending

(b) The documents were made in anticipation of the dispute.

PER OGUNWUMIJU J.C.A in the case of A.L. ( O.A.O) Nig Ltd v. Umanah (2013) 4 NWLR (Pt. 1344) 323 at 347 C.A. stated that:

an interested person contemplated in the exclusion of evidence or disqualification, therefore is a person who is interested in the outcome of the litigation…’ the overriding raison d’etre of the legislation in my humble view is that the courts would not allow a person interested to cook up a statement during the pendency of a suit or its anticipation in order to defeat the course of Justice.

The Courts have further determined the meaning of Persons interested to be:

A person is held to be interested within the meaning of section 83 (3), if he has temptation to depart from the truth on one side or the other, or is a person who can be swayed by personal interests. A person cannot be said to be interested under the provision, if such person is detached, judicial, impartial or independent. SEE HIGHGRADE MARITIME SERVICES LTD VS. FBN LTD (1991) 1 SCNJ 110.

In the case of Omac Oils Nigeria Ltd & Ors v. Egbadeyi & Anor (2014) LPELR-24112(CA) , the Court had this to say on the definition of a person interested:

A person interested was considered in the case of N.S.I.T.F.M.B v Klifco Nig Ltd (2010) 13 NWLR (Pt 1211) 307 where the Supreme Court held as follows:

As regards the phrase “a person interested” I agree with the Respondent that the phrase has been examined in the case of Evan v. Noble (1949) IKB 222 at 225 where a person not interested in the outcome of an action has been described as “a person who has no temptation to depart from the truth on one side or the other, a person not swayed by personal interest but completely detached, judicial, impartial, independent.” In other words, it contemplates that the person must be detached, independent and non – partisan and really not interested which way in the contest the case goes.

Normally, a person who is performing an act in his official capacity cannot be a person interested under Section 91 (3). I think the phrase “a person interested” even moreso has been quite definitely put in the case of Holton v. Holton (1946) 2 AER 534 at 535 to mean “a person who has a peculiarly or other material interest in the result of the proceedings” – a person whose interest is affected by the result of the proceedings, and therefore would have a temptation to pervert the truth to serve his personal or private ends. It does not mean an interest in the sense of intellectual observation or an interest purely due to sympathy. It means an interest in the legal sense which imports something to be gained or lost.” Per NIMPAR, J.C.A. (Pp. 36-37, paras. C-C)

In E.F.P.C. Ltd. v. N.D.I.C. (2007) ALL FWLR (Pt. 367) 793 at 814; Paras. B – G (SC), the Supreme held on the issue that:

The test of interest to determine a person interested is whether the person could have been joined as a party to the suit. A person interested includes, a person affected or likely to be affected or aggrieved or likely to be aggrieved by the proceedings.

In this case, I am of the opinion that the three persons who formed the Management with the Claimant, meets the definition of ‘persons interested’ in the context of this suit. It is my view that, in the circumstance of the employment of the Claimant and his colleagues, where right from the beginning of the employment, there was clear default on payment of salaries and allowances, yet the Defendants continued to issue apparently binding documents, in the face of liquidation and take-over. It suggests, and that is my view, that exhibit C7, which is the basis of Claimant’s action for payment of salaries and allowances, was made with this action in mind. What is more, the persons who executed the document have suits with the same facts pending in this Court against the same Defendants. It would be obvious to the least discerning mind that whatever argument that succeeds for Claimant would succeed for the other parties, with respect to the computations as expressed in exhibit C7, which turns out to be the only document showing Defendants’ indebtedness to Claimant.

The effect is that exhibit C7 particularly is vitiated by the fact that they were made by persons, who were interested in the result of this action. By that fact, and by the fact that no other document has been presented in evidence to show the payment and/or non-payment of the salaries and allowances claimed by Claimant, I find that Claimant has not established by credible evidence, that he is entitled to his 1^st Relief; Relief A(1). The Relief A(ii) for N6,941,038.70 being deducted but unremitted pension contributions from the Claimant’s emoluments suffer the same fate as the Relief A(i) as there is no proof of any deductions nor of non-remittance, by the production of any statement of account of Claimant’s bank account of pension account.

Reliefs B, C and D, equally fail, as a consequence of the failure of Relief A. By that holding, the entire suit fails and is hereby dismissed.

I make no Order as to cost.

Judgment is entered accordingly.

…………………………………………………

Hon. Justice Elizabeth A. OJI, PhD