MOBIL OIL (NIG.) LTD. & ANOR v. S. T.ASSAN
In The Court of Appeal of Nigeria
On Monday, the 15th day of April, 2002
GEORGE ADESOLA OGUNTADE Justice of The Court of Appeal of Nigeria
PIUS OLAYIWOLA ADEREMI Justice of The Court of Appeal of Nigeria
CHRISTOPHER MITCHELL CHUKWUMAH-ENEH Justice of The Court of Appeal of Nigeria
- MOBIL OIL (NIG.) LTD.
2. ROBERT C. PARKER Appellant(s)
- T.ASSAN Respondent(s)
ADEREMI, J.C.A. (Delivering the Leading Judgment): In the court below, (High Court of Lagos State), the respondent as plaintiff claimed against the appellants as defendants in that court as follows:
(1) A declaration that the plaintiff being a grade 17 officer within the 1st defendant’s establishment and having been enjoying the benefits and prerequisites attached thereto is entitled to retain the salary status and fringe benefits of that grade.
(2) A declaration that the circular issued by the 2nd defendant on 6th June 1990 in so far as it relates to the plaintiff is penal in nature, is a violation of the plaintiff’s vested right and is therefore illegal and unconstitutional.
(3) An injunction restraining the defendants from carrying out the instruction of the 2nd defendant contained in an INTER-OFFICE CORRESPONDENCE (CIRCULAR) dated 6th June, 1990 as it affects the plaintiff in his present position in E.R. DEPARTMENT.
(4) An order directing the 1st and 2nd defendants to reinstate the plaintiff to his status of a Grade 17 Officer with liberty to enjoy all the fringe benefits attached thereto.
The writ of summons and the statement of claim were served on the defendants/appellants who only entered an appearance but did not file a statement of defence. While the suit was still pending, the defendants/appellants by a letter dated August 1, 1990 terminated the employment of the plaintiff. An application dated 22nd August, 1990 was thereafter brought by the plaintiff praying the court to set aside the letter of termination for the reason of being contemptuous.
The application was opposed by a 9 paragraph counter-affidavit filed by the defendants/appellants. In his ruling delivered on 13th September, 1990 the trial Judge granted the application. It is against the ruling that the defendants/appellants have appealed to this court, upon five grounds, 5 issues are identified by the appellants for determination and as set out on their brief of argument, they are as follows:
(1) Whether it is in accordance with the settled practice of the court to, entertain the plaintiffs’ claims for prohibitory and mandatory injunctions i.e. the 3rd and 4th claims in this action.
(2) If the answer to question (1) is in the negative whether there is any basis whatsoever for the interlocutory orders granted by the High Court.
(3) Whether it was proper for the High Court to have granted the order setting aside the letter of termination of appointment dated 1/8/90.
(4) Whether the order of interlocutory injunction ought to be allowed to stand in the absence of an undertaking as to damages by the plaintiff?
(5) Whether the fact that an employee has sued his employer for the type of reliefs claimed by the plaintiff in this action renders it illegal or unlawful for the employer to exercise his right to terminate the employment by notice.
On the other hand, the respondent raised only one issue for determination; it is in the following terms:
“Whether the learned trial Judge in the circumstances of this case exercised his discretion correctly – that is judicially, judiciously, bonafide in accordance with justice and having had regard to all the necessary and relevant considerations-in setting aside the letter of termination of appointment dated 1/8/90 until the final determination of the substantive suit.”
When this appeal came before us on the 4th of February, 2002, Mr. Williams of counsel for the appellant adopted the appellant’s brief filed on 18/1/91 and submitted that all the issues arising for determination in this appeal have been determined in the Supreme Court case of Chukwumah v. Shell Co. (Nig.) Ltd. (1993) 4 NWLR (Pt.289) 512; he relied on that decision as well as the decision in Shell Co. (Nig.) Ltd. v. Lawson-Jack (1998) 4 NWLR (Pt.545) 249 at 276 – 278 while urging that the appeal be allowed. Mr. Demuren of counsel for the respondent adopted the respondent’s brief filed on 2/11/2000 and while relying on the decision in Garba v. Federal Civil Service Commission (1988) 1 NWLR (Pt.71) 449 at 480 he urged the court to hold that the termination was wrongful and consequently, to dismiss the appeal.
I have examined very carefully the issues identified by the appellants and the respondent for determination in this appeal, the fundamental point that offers itself for determination in this appeal is whether the application dated 22nd August, 1990 brought by the plaintiff/respondent praying the court to set aside the letter of termination and the ruling of 13th September, 1990 granting the prayer flow from or have any connection with the reliefs sought by the plaintiff. In considering this fundamental point, I find it convenient to take all the issues raised by the appellant and the respondent together, while I shall examine the arguments proferred by both sides. It is the argument of the appellants, through their brief of argument, that by 3rd and 4th reliefs the plaintiff/respondent is inviting the court to interfere with the internal running of the affairs of a limited liability company, this they contend, the court must not do; reliance was placed on the decision in Burland v. Earle (1902) A.C. 83. They further argued that in an ordinary case of employer/employee relationship which is not affected by any statute or regulation, the court must not make a practice of ordering prohibitory or mandatory injunction because, according to them, if the termination of the employment is even wrongful that termination of employment will nevertheless be effective and will never be treated as a nullity. In support of this submission the following cases; (1) Barber v. Manchester Regional Hospital Board (1958) 1WLR 181, (2) Ajayi v. Texaco( Nig.) Ltd. (1987) 3 NWLR (Pt. 62) 577 and (3) Olaniyan v. University of Lagos (1985) 2 NWLR (Pt. 9) 599 were relied upon. In opposition to the above submissions, the respondent through his brief of argument, contended that from the way the reliefs sought were framed, he has not invited the court to interfere in the internal management of the affairs of the company. Rather according to him, all that he is contending is that the contract of service between the employer and the employee does not confer any power on the defendants to demote the plaintiff or to reduce his fringe benefits.
To him, the action of the defendants/appellants is a breach of the contracts of service which is justiciable. The letter of termination which was subsequently served was calculated to render the decision of the court in the case nugatory.
The relationship between the appellant and the 1st respondent is that of pure master/servant and no more. In a contract of employment which is of the ordinary nature other than one with statutory flavour where the terms provide for a length of notice being given before termination or salary in lieu thereof, the only remedy an employee who has his appointment wrongfully terminated can get is that period’s salary in lieu of notice and any other legitimate entitlements to which he may be entitled at the time the employment was put to an end. This is because, in law, an employer has the right to terminate the employment of his employee for good reason or for bad reason or for no reason at all see Osiyemi v. Societe Generale Bank Ltd. (2001) 11NWLR (Pt. 725) 563. In granting the application on notice for an order of interlocutory injunction to restrain the defendants and to set aside the letter of termination of appointment of the plaintiff, the trial Judge said:
“The essence of a discretionary remedy is that the court has the power, taking unto consideration the circumstances of the case, even where the legal rights to the reliefs is established, to refuse the relief or award and if so upon terms … Indeed, from time immemorial, all courts of record, be they trial or appellate posseses power of preservation of the “res” in their custody ….. But each case must be decided in the light of its own peculiar circumstances … It is in line with the above set out principles that I hereby grant the application for interlocutory injunction; and also set aside the letter of termination of appointment dated 1st August, 1990 pending the determination of the substantive suit here.”
As I have said, it is this ruling that the appeal is attacking. I shall therefore confine myself to the ruling of 13th September, 1990 and the grievance of the appellants thereto as expressed in the notice of appeal. Do the defendants/appellants have the right or authority to terminate the employment of the plaintiff/respondent? Jurisdiction has been variously described as the right or authority by which a court of law enters into adjudication on disputes presented before it. See Volume 10 Halsbury Laws of England 4th Edition paragraph 715 page 323. I bear in mind that the issue of termination of the appointment of plaintiff/respondent is not part of the reliefs claimed. It can therefore be said to be an independent action of the defendants/appellants, the employers of the plaintiff/respondent, which may itself give rise to a new cause of action. But until an action or suit is in place in the sense that a writ of summons or originating summons, as is applicable, has been filed no interlocutory application can properly be entertained. Ordinary, I would have ended the treatment of this appeal on the ground that there is no substantive action on which the application for interlocutory injunction – the consideration of which led to the ruling can be predicated. In case I am held to be wrong I will now examine the point whether the issuance of the letter of termination, the subject-matter of the appeal is proper in law. I have said somewhere in this judgment that the relationship between the defendants/appellants and the plaintiff/respondent is that of master/servant or of employer/employee. I have also said that the position of the law is that an employer can terminate the appointment of an employee for good reason or for bad reason or for no reason at all. It is also a sacrosanct position of the common law that an employee can not be forced on an employer. It therefore follows that the issuance of a letter of termination of appointment by an employer to the employee is a legitimate exercise of his right.
In his ruling, the learned trial Judge had said inter alia:
“A court has a duty to show its resentment against an act which is designed to subvert the authority of a court of trial. To refuse the present application would, in my view, tantamount to sanctioning the contemptuous conduct of the defendant or giving a warrant of propriety to an act intended to render nugatory a possible decision of the court in the substantive trial.”
I hasten to say that in law, the motive which impels the termination of the employment is immaterial where the contract of employment gives either party the right to bring the employment to an end with or without notice see (1) N.N.P.C. v. Idoniboye-Obu (1996) 1NWLR (Pt.427) 655 and (2) Chukwumah v. Shell Petroleum Dev. Co. (Nig.) Ltd. (1993) 4 NWLR (Pt.289) 512. In the Mobil Employee Hand-Book which is part of the record of proceedings there is a provision for termination of appointment by either side and it reads:
”The company reserves the right to terminate the employment of a regular employee subject to appropriate notice or pay in lieu of notice thereof. The employee also retains the right to resignation or voluntary resignation.”
The appellants had in support of their submission that the issuance of the letter of termination was proper, cited the decision in Chapman v. Honig (1963) 2 A.E.R. 513, a decision of the Court of Appeal (England). The dicta of Lord Denning M.R. and Pearson L.J. The dicta are very instructive; I shall hereunder reproduce them:
Pearson L.J. at page 522 said:
“The act complained of, the service of the notice to quit, was on the face of it a lawful exercise of a contractual right, duly implemented in accordance with the provisions of the tenancy agreement and effective to terminate the tenant’s estate and to convert the landlord’s interest from a reversion to an estate in possession. Common experience is that, when the validity of an act done in purported exercise of a right under a contract or other instrument is disputed, the inquiry is limited to ascertaining whether the act has been done in accordance with the provisions of the contract or other instrument. I cannot think of any case in which such an act might be invalidated by proof that it was prompted by some vindictive or other wrong motive. Motive is disregarded as irrelevant. A person who has a right A under a contract or other instrument is entitled to exercise it and can effectively exercise it for a good reason or a bad reason or no reason at all”
In support of the contention that employee cannot be imposed on an employer Lord Denning M.R. in the same case said at page 518 thus:
“The case was put of the valet who gives evidence against his master in a divorce suit. Next day the master, out of spite, dismisses him by a month’s notice. Clearly the notice is unlawful. But the servant cannot stay on against the master’s will. The law never enforces specifically a contract for personal service.”
I shall be guided by the above dicta along with the principles of law that I have earlier on in this judgment stated: I pause to consider, issue No.1 on the appellants’ brief which poses the question as whether, the 3rd and 4th reliefs claimed by the plaintiff/respondent and which reliefs are prohibitory and mandatory in nature respectively can be entertained by this court. I think it is presumptuous to proffer an answer to that issue at this stage. It is not in doubt that generally, a court of law must not interfere in the internal management of a company. That principle is circumscribed by another principle that to be able to resist effectively interference by the court, a company must show that in the management of its affairs, it has acted within its powers see Burland v. Earle (1902) A.C. 83. The memorandum and the Articles of Association are yet to be examined to see whether the company has acted within the powers conferred on it. I make this point with particular reference to reliefs 1 and 2. I shall therefore refrain from answering issue No.1. From all I have been saying supra issues Nos. 2, 3 and 5 must be answered in the negative and I hereby answer them in that direction. In answering issue No.4 which reads:
“Whether the order of interlocutory injunction ought to be allowed to stand in the absence of any damages by the plaintiff?”
I will like to be guided, indeed I am bound by the decision of the Supreme Court in Afro Continental (Nig.) Ltd. v. Ayantuyi (1995) 9 NWLR (Pt. 420) 411, the full court in that case laid down the following principles on the issue of giving an undertaking as to damages; they are:
(1) That it is not in all cases that extraction of an undertaking as to damages is necessary;
(2) That a trial court has a discretion on the question whether or not to order an undertaking as to damages.
(3) The absence of an undertaking as to damages will not of itself lead to setting aside the order made.
(4) That indeed where the trial court failed to extract an undertaking as to damages an appellate court can vary the order to include an undertaking by the plaintiff to pay damages.
I only need to add that a court of law does not impose on the plaintiff an undertaking which he has not given see Tucker v. New Brumswick Trading Co. of London (1890) 44 CH. 249. In proferring an answer to issue No.4 I therefore would say that if the application dated 22nd August, 1990, had been on a firma terra, in law, I would have considered extracting an undertaking as to damages from the plaintiff/respondent at this appellate stage of the case but I would certainly not have set aside the order of 13th September, 1990 simply for the reason of absence of an undertaking as to damages. But, I have said that the ruling on 13th September, 1990 is not on a firma terra, in law. The only issue identified by the plaintiff/respondent 1 for determination deserves no other answer but one in the negative.
I therefore profer an answer in the negative for that issue. In the final analysis, I hold that this appeal is partly meritorious and it should be so allowed and is accordingly so allowed. The ruling of the court below delivered on the 13th of September, 1990 is hereby set-aside while the application dated 22nd August, 1990 on which it was predicated is hereby struck-out. It is further ordered that upon the completion of the pleading, the Chief Judge of Lagos State shall assign this case to another Judge for trial.
There shall be no order as to cost.
OGUNTADE, J.C.A. I agree.
CHUKWUMA-ENEH, J.C.A. I agree.
Appeal allowed in part
- E. Williams, Esq. (with him, Dan Nwanyanwu)For Appellant
Segun Demuren, Esq. (with him, Tunde Adesanya, Esq. and Dayo AdesanyaFor Respondent