MR. JOSEPH AKINOLA & ORS v. LAFARGE CEMENT WAPCO NIGERIA PLC
(2015)LCN/7843(CA)
In The Court of Appeal of Nigeria
On Monday, the 27th day of April, 2015
CA/L/554/2010
RATIO
CONTRACT: FORMATION OF A CONTRACT; FORMATION OF A CONTRACT
To begin with, we have to determine how a contract is formed or created. This court per Oguntade, J.C.A (as he then was) in GOMWALK vs. MIL. ADM. PLATEAU STATE (1998) 7 NWLR (Pt.558) 413 at 433 stated as follows:-
I am in grave difficulty to agree with the submission of learned Counsel for the Appellant that there was no contract between the Appellant and the Respondent. A contact could be in writing. It could also be on parol. The Law even allows the Courts to infer the existence of a contract by the conduct of the parties in the circumstances of the case. And what is more, a particular trade practice which the parties have adopted or followed in the past to their mutual advantage could also ripen into a contract. It is clear to me from the totality of the pleadings and the exhibits (e.g Exhibits “A, A1-A2, B, C and S”) that there was a contract between the parties, and the contract was to remit money to the Respondents overseas Customers Youngstars Traders Importers and Exporters of Hong Kong: Although there was no specific agreement to that effect, the pleadings, the exhibits and even the evidence in Court show the existence of the contract. per. SIDI DAUDA BAGE, J.C.A
CONTRACT OF SERVICE; TERMS OF CONTRACT; WHETHER PARTIES TO A CONTRACT OF SERVICE ARE BOUND BY THE TERMS OF THE CONTRACT
In keeping with the decisions of the Supreme Court above, this court also added its voice to this subject. Thus court per Tobi, JCA (as he then was) in CALABAR CEMENT CO. LTD. VS. DANIEL (1991) 4 NWLR (PT.188) 750 at 760 stated as follows:-
I say so because in contract of service parties are bound by the terms of the contract. Where the terms of the contract are clear and unambiguous, the parties cannot move out of them in search for more favourable terms or greener pasture. However, where the terms of the contract are clear and unambiguous, a Court of Law cannot move out of them and invoke the general rule of contract applicable to the nature of the contract of service. See: generally OLANIYAN VS UNIVERSITY OF LAGOS & ANOR (1985) 2 NWLR (Pt.9) 588; I.D.C. VS. AJIJALA (1976) 2 S.C. 115. per. SIDI DAUDA BAGE, J.C.A
JUSTICES
SIDI DAUDA BAGE Justice of The Court of Appeal of Nigeria
CHINWE EUGENIA IYIZOBA Justice of The Court of Appeal of Nigeria
JAMILU YAMMAMA TUKUR Justice of The Court of Appeal of Nigeria
Between
1. MR. JOSEPH AKINOLA
2. MRS. IYABO ABIOLA OLANIPEKUN
3. MR. FREDERICK KEHINDE OGUNMOLA
(For themselves and on behalf of 1999 WAPCO Disengaged Staff Association) Appellant(s)
AND
LAFARGE CEMENT WAPCO NIGERIA PLC Respondent(s)
SIDI DAUDA BAGE, J.C.A. (Delivering the Leading Judgment): This is an appeal against the decision of High Court of Lagos State contained in the judgment of Hon. Justice O. H. Oshodi delivered on the 30th of June, 2008 wherein judgment was entered in favour of the Respondent. The judgment is at pages 451 – 461 of the record.
Firstly the Appellants as Plaintiffs at High Court of Lagos state, sitting at Ikeja, by their Further Amended Writ of Summons and Statement of Claim both dated 29th June, 2006 they claimed against the Defendant as follows: –
(i) A Declaration that the offer of three years basic salaries and allowances made by the Defendant to the Claimants as payable for the Disengagement Exercise and accepted by the Claimants amounts to a valid contract.
(ii) A Declaration that the failure of the Defendant to fulfill the terms of the offer as offered and accepted between the Parties constitutes a breach of contract.
(iii) A Declaration that the content of the Defendants letter dated 12th February, 1999 with reference No.GMP/45A to the Claimants is an admission that the Claimants entitlements have not been paid.
(iv) A Mandatory order against the Defendant to pay each Claimant as computed in the lists of the affected ex-employees of the Defendant the remaining two years basic salaries and other entitlements under the Disengagement Exercise as contained in the said lists.
(v) An Order of Court awarding interest on the judgment sum at the rate of 21% from 10th February, 1999 until judgment and at a rate of 15% from the date of judgment until final liquidation of the judgment sum.
(vi) Costs of this action.
The Respondent as Defendant denied being liable to the Appellants via Amended Statement of Defence dated 28th of September, 2006.
The facts as gathered from the records indicates that Appellants instituted the suit at the Lower Court in a representative capacity, that is on behalf of themselves and on behalf of over 1,400 (One Thousand Four Hundred) disengaged staff of West African Portland Cement Plc, WAPCO, the Respondent herein. That sometime in December 1998, the Respondents’ erstwhile Managing Director, Engineer Joseph Makoju Addressed the entire workforce of the Respondent on the intended redundancy exercise to be carried out by the Respondent. The main reason given for the exercise was that the Respondent planned to build a new plant at the Ewekoro Plant which would require a lot of funds and as a result the workforce of the Respondent had to be down sized. The exercise would be in two phases. The 1st Phase would involve those who opted for voluntary retirement while the 2nd phase would affect those the Respondent would retire compulsorily. The MD further stated that those who opted for the 1st Phase would get amongst others 36 months basic salaries pay as an incentive to encourage them to choose the option of voluntary retirement. The Appellants and those they represent by the nature of their contract of employment with the Respondent were not entitled to gratuity, hence their acceptance of the voluntary disengagement exercise on the terms stated earlier. The Appellants subsequently filed and returned the voluntary disengagement forms sent through their various departmental heads to the management of the Respondent. The Respondent thereafter vide their Letter to the Appellants dated 27th January, 1999 changed its offer of 36 months basic salaries to 12 months basic salaries. The Appellants were paid the 12 months basic salaries only through the Respondents letter of February 10, 1999. The Appellants are by this action demanding their balance of 24 months basic salaries earlier on promised by the Respondent. The Respondents refusal to honour their promise to pay the balance of the 24 months basic salaries which gave rise to this action. From the Appellants Amended Notice of Appeal dated 14th of April, 2014 and filed on the 16th of April, 2014, from the three (3) Grounds thereto, the following three (3) were distilled for the determination of this appeal as follows:-
(i) Whether the mere acceptance by Appellants of their entitlement (that is 12 months basic salaries and allowances), would bar them from contending that they have been short paid and that Appellants could therefore be said to have waived their full or remaining entitlements.
(ii) Whether from the oral and documentary evidence before the Trial/Lower Court the Appellants have proved the existence of any legal right that has been breached by the Respondent, or a contract/promise between the Appellants and the Respondent which entitles the Appellants to the payment of the remaining 24 months basic salaries and other allowances under the Voluntary Disengagement Exercise.
(iii) Whether the erstwhile Managing Director of the Respondent Engineer Joseph Makoju is a vital witness whose evidence would have determined the issue in contention in this suit one way or the other and whether the Appellants have established the existence of the promise made to them by Engineer Makoju, which promise the Appellants relied upon.
On the other hand, the learned Counsel to the Respondent also proposed the following three (3) issues for the determination of this appeal as follows:-
(1) Whether the Appellants have established the existence of an oral contract between them and the Respondent wherein the Appellants are entitled to 36 months basic salaries as a result of the Voluntary Disengagement exercise.
(2) Whether the Appellants acquiesced in the Voluntary Disengagement exercise when they filled out, submitted the Voluntary Disengagement form (VDF) after rejecting the offer to receive one year basic salary and collected their entitlements.
(3) Whether the Appellants can succeed on the alleged “Weakness” of the Respondent’s defence when they failed to establish the existence of an oral agreement.
After a careful examination of the two sets of issues proposed by the parties for the determination of this appeal, the said issues are basically the same, but differently worded. In that respect therefore, I tend to be guided by the three(3) issues as proposed by the Appellants in the determination of this appeal.
ISSUE ONE(1)
Whether the mere acceptance by Appellants of their entitlement (that is 12 months basic salaries and allowances), would bar them from contending that they have been short paid and that Appellants could therefore be said to have waived their full or remaining entitlements.
In arguing this issue learned Counsel to the Appellants submitted that from the facts of this case, and the surrounding circumstances, the Appellants did not at any time surrender or abandoned their right to the remaining balance of 24 months basic allowances. The fact from which non-waiver could be inferred include but not limited to the following:-
(i) Several letters that transpired between the Appellants and the Respondent which showed conclusively that Appellants have consistently demanded for their right to the remaining balance of 24 months allowances. See: “Exhibits DWA7, and DWA8”.
(ii) The consistency of Appellant’s demand for the right to the remaining balance necessitated the issuance of Exhibit “DW4/B4”.
(iii) The Appellants have always strongly protested Respondents contention that it could only pay 12 months basic salaries and allowances. See: Paragraph 14 of the Further Amended Statement of Claim, Appellants witness statement on Oath and the evidence led at trial by Appellants. The Appellants have therefore not waived or surrender their entitlements. See: ADEYEMI ADENIYI VS. YABATECH (1993) 6 NWLR (Pt.300) 427 at 462 para C – D; ARIORI v. ELEMO (1983) 1 SCNLR 1, 1 ACLR 26 at 59.
In reply to this submission, learned Counsel to the Respondent submitted that, the court will only confine itself to the letter of employment and employment handbook to determine parties rights and liabilities. The relationship between a master and his servant or an employer and his employee is a contractual one and it is governed by the terms and conditions of the contract between them. It is trite that court must in construing the relationship between parties in any contract confine itself to the plain words and meaning which can be derived from the provisions containing the rights and obligations of the parties. See: LAYADE VS. PANALPINA WORLD TRANSPORT LTD. (1996) 6 NWLR (PT.456); IBAMA vs. SPDC (2005) 17 NWLR (Pt 954) 364; ACHIBONG vs. ITA (2004) 2 NWLR (PT.858) 590; ODUTOLA VS. PAPERSACK NIG. LTD (2006) 18 NWLR (PT.1012) 470; OGBORU VS. IBORI (2006) 17 NWLR (PT.1009) 542.
Learned Counsel submitted further that where there is documentary evidence to the contrary, such available documentary evidence is to be preferred to the Ipse dixit of a party. See: F.A.T.B. LTD vs. PARTNERSHIP INVESTMENT COMPANY LTD (2003) 18 NWLR (PT.851) 35 at 45 ratio 12, ODUTOLA VS. PAPERSACK (supra).
In their reply brief dated and filed 2/12/2014, and Deemed filed on the 26/2/15 the Appellant contended on the Respondents argument to issue No. 1 that contrary to paragraphs 19 – 23 of the Respondents brief in Law the Appellants are only obliged to prove their case on preponderance of evidence only. See: CHAMI VS. U.B.A. (2010) 3 SCM 59 at 52; ORLU VS. GOGO-ABIKE (2010) 1 SCM 161.
Further learned counsel submitted that contrary to the submissions and authorities cited by Respondents to issue one the position of the Law is that where a documentary evidence (such as B4/DW4 admitted via the Appellants) supports oral testimony (such as promise of 36 months salaries canvassed by the Appellants), then such oral testimony becomes more credible. See: JOLASUN vs. BAMGBOYE (2010) 11 SCM 127.
In the determination of this issue, the learned trial judge on page 461 of the records paragraph 6 stated as follows:
These entitlements they received, without protest or rejection. Their acceptance of their entitlement bars them from contending that they have been short paid based on a promise. There is no document to indicate this promise they rely upon. Exhibits C and DWA1, the Employees Handbook does not contain the procedure of voluntary disengagement. The only documentary evidence before the Court outlining the terms and condition in the event of voluntary disengagement are exhibits DWA and DWA2 tendered by the Defendant. In this respect, oral or extrinsic evidence cannot be accepted to vary the contents of these exhibits. See LARMIE VS. D.P.M.S. (2005) 18 NWLR (Pt.958) 438.
On the part of this Court, the submissions of Counsel, and the position of the trial court to this issue are all carefully examined. From the arguments of the Appellants to this issue, what they seek to enforce is a parol contract or contract made on parol outside the terms and or condition of their service agreed with the Respondent. The simple fact was that the erstwhile Managing Director of the Respondent on the intended expansion of the Respondent, and to attend that by saving more funds, targeted the rationalization of staff. It went with an oral promise of those going on voluntary retirement will receive a compensation of their salaries for 36 months. After the Appellants accepted the offer and submitted their forms for voluntary retirement, the management of the Respondent, changed its position. The Appellants were offered 12 months salaries in lieu of that retirement. Although the Appellants accepted and collected the 12 months salaries, the ground of this action is the balance of the 24 months salaries on parol contract.
To begin with, we have to determine how a contract is formed or created. This court per Oguntade, J.C.A (as he then was) in GOMWALK vs. MIL. ADM. PLATEAU STATE (1998) 7 NWLR (Pt.558) 413 at 433 stated as follows:-
I am in grave difficulty to agree with the submission of learned Counsel for the Appellant that there was no contract between the Appellant and the Respondent. A contact could be in writing. It could also be on parol. The Law even allows the Courts to infer the existence of a contract by the conduct of the parties in the circumstances of the case. And what is more, a particular trade practice which the parties have adopted or followed in the past to their mutual advantage could also ripen into a contract. It is clear to me from the totality of the pleadings and the exhibits (e.g Exhibits “A, A1-A2, B, C and S”) that there was a contract between the parties, and the contract was to remit money to the Respondents overseas Customers Youngstars Traders Importers and Exporters of Hong Kong: Although there was no specific agreement to that effect, the pleadings, the exhibits and even the evidence in Court show the existence of the contract.
What is relevant to our present discourse from the decision of the learned jurist above is the creation of contract on parol. What then is parol contract? The Black’s Law Dictionary, the Eights edition at page 347 defines parol contract as follows:-
“A contract or modification of a contact that is not in writing or is only partially in writing. Also termed oral contact: parol agreement; (Loosely) verbal contact. At common Law, a contact not under seal although it could be in writing.”
In the circumstance of this case which is strictly outside the agreed terms of condition of service as to employment and the termination of employment, but based on an extrinsic promise said to have been made by the employer, who now denies its existence, no doubt, such proof of its existence, and enforceability, resile on the shoulder of the Appellants.
What is so grave about the present claim is that, the absence of any documentary evidence as part of the committal of the Respondent to this contract. Another aspect is that when the Respondents made its offer for salaries of 12 months, as against the parol offer of 36 months, the Appellants readily accepted and collected the 12 months salaries. It was after that, that the Appellants returned to Court to enforce the remaining balance of 24 months salaries orally said to have been promised. The Law places the burden on the Appellants to prove their entitlement to this oral contract. What is enforceable in contract before the Court is express terms of the contract, there is none from the records before this Court on this contract. Where there is no express terms, the Law looks for implied terms. There is also nothing from the records to show the implied terms of this contract to move or derive the trial Court to its enforceability. The Appellants cannot expect the trial Court to be a soothsayer or magician to arrive at a verdict in their favour in the absence of anything to that effect placed before the court. The state of the Law is that in a contract of employment, or service, the terms of such contract is the bedrock of the Appellant’s case. The Appellant is bound by his pleadings and if it contains no averment as to the contract of service, he could not complain that he was wrongfully terminated or asked for any entitlement outside of it, or that which he had failed to plead. See: AMODU VS. AMODE (1990) 5 NWLR (PT.150) 356 at 367 – 368; DOMINGO PAUL VS. GEORGE (1959) 4 FSC 198, (1959) SCNLR 510; THE NATIONAL INVESTMENT PROPERTIES CO. LTD VS. THE THOMPSON ORGANISATION LTD & ORS (1969) NMLR 99.
In keeping with the decisions of the Supreme Court above, this court also added its voice to this subject. Thus court per Tobi, JCA (as he then was) in CALABAR CEMENT CO. LTD. VS. DANIEL (1991) 4 NWLR (PT.188) 750 at 760 stated as follows:-
I say so because in contract of service parties are bound by the terms of the contract. Where the terms of the contract are clear and unambiguous, the parties cannot move out of them in search for more favourable terms or greener pasture. However, where the terms of the contract are clear and unambiguous, a Court of Law cannot move out of them and invoke the general rule of contract applicable to the nature of the contract of service. See: generally OLANIYAN VS UNIVERSITY OF LAGOS & ANOR (1985) 2 NWLR (Pt.9) 588; I.D.C. VS. AJIJALA (1976) 2 S.C. 115.
In view of the above decision of this Court, the decision of the learned trial judge in this case, at on page 461 of the records is correct to say that the terms and condition of service of the Respondent and the present Appellants in the event of voluntary disengagement as contained in Exhibits ‘DWA and DWA2″ cannot be varied. In that respect, oral or extrinsic evidence cannot be accepted to vary these exhibits.
Perhaps, what is uppermost for consideration is the nature of the contract between the Appellants and the Respondent. The contract between the parties is a contract of employment which is governed by its own terms outside of the general terms or rules of contract. This court has pronounced on when a party to a contract of employment can seek remedy in court. See: STRABAG VS. ADEYEFA (2001) 19 WRN 64 at 79; (2001) 15 NWLR (PT.735) 1 at 21.
“The only situation where a party to a contract of employment can successfully seek remedy in a Court of law is when the terms of employment are breached.”
The present Appellants did not approach the trial Court with a complaint that any of the conditions or terms of their employment had been or are breached by the Respondent. They cannot therefore approach the Court for any entitlement outside the terms of their employment. I resolve issue No. 1 against the Appellants.
On issue No.2 to wit whether from the oral and documentary evidence before the Trial/Lower Court, the Appellants have proved the existence of any legal right that has been breached by the Respondent or a contract/promise between the Appellant and the Respondent which entitles the Appellants to the payment of the remaining 24 months basic salaries and other allowances under the Voluntary Disengagement Exercise.
And issue No. 3 to wit whether the erstwhile Managing Director of the Respondent Engineer Joseph Makoju is a vital witness whose evidence would have determined the issue in contention in this suit one way or the other and whether the Appellants have established the existence of the promise made to them by Engineer Makoju, which promise the Appellants relied upon.
The resolution of this Court to issue No. 1 which is anchored on the principle established in the case of STRABAG VS. ADEYEFA (supra), to wit the fact the only situation where a party to a contract of employment can successfully seek remedy in a Court of Law is where the terms of employment are breached, has reduced both issues No. 2 and 3 to mere hypothetical or Academic question. Neither of the two issues are connected or even remotely connected to the terms of contract between the Appellants employment and the Respondent. To proceed to consider the arguments proffered on those issues, will serve no useful purpose to this appeal.
On the whole therefore, having resolved issue No. 1 against the Appellants, and having found that the issues No. 2 and 3 in the appeal have constituted hypothetical Academic question, the appeal is devoid of any merit, and it is hereby dismissed. The judgment of Hon. Justice O. H. Oshodi of the High Court of Lagos State, Ikeja judicial Division in suit No.ID/1855/2003 delivered on the 30th of June, 2008 is hereby affirmed by this Court.
Parties to bear their own costs.
CHINWE EUGENIA IYIZOBA, J.C.A.: I read before now the judgment just delivered by my learned brother, SIDI DAUDA BAGE JCA. I am in full agreement with the reasons given and the conclusions reached in the appeal. I agree that the appeal lacks merit I also dismiss it and abide by the consequential orders of my learned brother in the lead judgment.
JAMILU YAMMAMA TUKUR, J.C.A.: My Lord Sidi Dauda Bage JCA., afforded me the opportunity of reading in draft the lead judgment.
My Lord has exhaustively dealt with the issues, and I agree that the appeal lacks merit and should be dismissed. I dismissed same and abide by the consequential orders made therein including that as to costs.
Appearances
Akin AladesuaFor Appellant
AND
J. I. OgunuFor Respondent
