IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA
IN THE CALABAR JUDICIAL DIVISION
HOLDEN AT CALABAR
BEFORE HIS LORDSHIP HON. JUSTICE M.N. ESOWE
DATED: 20THFEBRUARY, 2020 SUIT NO: NICN/CA/54/2017
BETWEEN
MR THOMAS OGBIDI ………………………. CLAIMANT
AND
UNICAL MICROFINANCE BANK ………………………………………. DEFENDANT
REPRESENTATION
UBI WILLIAMS Esq. for the Claimant
INDOGESIT ANANA Esq. for the Defendant
JUDGMENT
INTRODUCTION
This suit was instituted by the Claimant vide a Complaint dated 17th November, 2017 whereby the Claimant seeks the following reliefs:
- AN ORDER declaring the purported dismissal of the Claimant as being unconstitutional, null and void and of no effect for violating Claimant’s constitutional right to fair hearing
- AN ORDER compelling the Defendant to release the Toyota Corolla car belonging to Claimant urgently as the seizure was effected without compliance with any known principle of law
iii. Exemplary Damages of N10,000,000.00 for the hardship, psychological trauma and embarrassment caused the Claimant
- N20,000,000.00 for general damages
SUMMARY OF FACTS
The Claimant, who had been in the employment of the Defendant before his dismissal from the employment of the Defendant on the 6th of July 2016, had always been of good conduct, dutiful and dedicated to his work. Before he was dismissed, he had risen to the position of Head of Business Department. The allegation leading to his dismissal was that he fraudulently granted a loan to himself and one Mr Igbinosa Osasuwa to the tune of N1,785,000.00. Besides dismissing him, the Defendant also seized his Toyota Corolla car. It is the case of the Claimant that the procedure, way and manner he was dismissed from office runs foul of the principle of fair hearing, and the seizure of his Toyota Corolla car is an infraction on his fundamental rights.
On the part of the Defendant, she stated in her Statement of Defence dated and filed 15th December, 2017 that Claimant was employed three years prior to time of filing this suit. Initially, Claimant worked in the credit department of the bank but his questionable character which led to his investigation prompted management to post him to the Business Development Unit. The Toyota Corolla seized from the Claimant is a subject of loan collected from the Defendant by the Claimant which loan the Claimant is yet to fully pay. That the Board of Directors properly dismissed the Claimant following a detailed investigation carried out by the internal audit of the bank into unauthorized loans and disbursements. Upon their findings, the Disciplinary Committee of the Defendant recommended the Claimant for dismissal to which the Board of Directors acted upon. Prior to his dismissal, the Claimant was queried severally. It is the case of the Defendant that the Claimant has no cause of action against the Defendant as she acted in line with her policy in terminating the employment of the Claimant.
On receipt of the Defendant’s Statement of Defence, Claimant filed a reply dated and filed 19th February, 2018. In the said reply, Claimant stated that no committee was set up and or if a committee was set up, he was never invited to such a committee to defend the allegations against him. That no disciplinary committee was set up for the purpose of the allegations against the Claimant except the Audit Report which the Defendant now claims to be Disciplinary Committee Report. That he did not receive several queries except one (1) from the Audit Department of the Defendant. Claimant also admitted that he was placed on indefinite suspension during the course of investigation but he was never invited to appear before a committee or even written to concerning the outcome of the investigation.
COMMENCEMENT OF HEARING
Hearing in this suit commenced on the 13th of June, 2018 to which the Claimant himself testified as CW1. He adopted his witness statement on oath, tendered documents admitted as exhibits and was cross examined. Thereafter, Claimant closed his case on 13th February, 2019.
On her part, Defendant opened her defence on 20th March, 2019 by calling one Simon Adinya as DW1, who identified himself as Head of the Audit Department of the Defendant. He adopted his witness statement on oath, tendered documents admitted as exhibits on behalf of the Defendant and was cross examined. Thereafter, Defendant closed their defence on 23rd October, 2019.
Subsequently, the case was adjourned to enable parties file, exchange and adopt their final written addresses.
DEFENDANT’S FINAL WRITTEN ADDRESS
In Defendant’s final written address dated and filed 17th December, 2019, Learned Counsel, while not necessary formulating any issue for determination, submitted that the Claimant has not discharged the onus of proof required of him in this case. That for the Claimant to prove that the termination of his employment was unlawful, he needed to prove the following:
- He was an employee of the Defendant
- Placing before the Court the terms of the contract, terms and conditions of his employment
- Who can appoint and who can remove him
- In what circumstances the employment can be determined by the employer and breach of the terms.
He relied on Oloruntoba-Oju V. Abdul-Raheem (2009) All FWLR (Pt. 497) 1 @ page 42; Okomu Oil Palm Co. Ltd V. Iserhienrhien (2001) FWLR (Pt. 45) 670; Emokpae V. University of Benin (2002) 17 NWLR (Pt. 795) 139; Amodu V. Amode (1990) 5 NWLR (Pt. 150) 356; Ademiran V. NEPA (2002) 14NWLR (Pt. 786) 30.
He submitted that Claimant has not been able to prove any of the foregoing.
It is the submission of Learned Counsel to the Defendant that from the facts and evidence adduced in this case, the Claimant was lawfully dismissed from the employment of the Defendant.
He therefore urged the Court to dismiss this suit with a cost of N200,000.00 (Two Hundred Thousand Naira) against the Claimant.
CLAIMANT’S FINAL WRITTEN ADDRESS
In Claimant’s final written address dated 3rd January, 2020 and filed 8th January, 2020, Learned Counsel to Claimant formulated three (3) issues for determination, that is:
- Whether from the evidence before this Court, fair hearing was accorded the Claimant before his purported dismissal by the Defendant
- Whether having regard to the totality of the evidence before this Court, Claimant has proved his case beyond the preponderance of probability as to have judgment in his favour
iii. Whether the seizure of the Claimant’s car was done following due process or whether Defendant has such right under the law to seize Claimant’s car when there was no default in payment
ARGUMENT
ON ISSUE 1: Whether from the evidence before this Court, fair hearing was accorded the Claimant before his purported dismissal by the Defendant
Learned Counsel to the Claimant, while referring to questions and answers elicited from DW1 during cross examination, submitted that it is glaring that Claimant was not offered fair hearing before his dismissal.
ON ISSUE 2: Whether having regard to the totality of the evidence before this Court, Claimant has proved his case beyond the preponderance of probability as to have judgment in his favour
Learned Counsel submitted that the gravamen of Defendant’s allegation leading to the dismissal of the Claimant is that Claimant granted unauthorised loans to himself. That the onus of proving this does not lie in the Claimant but the Defendant. While referring to Defendant’s Statement of Defence and answers elicited from DW1 during cross examination, Learned Counsel submitted that it is glaring that the position of the Claimant on his employment and unlawful dismissal has been admitted by the Defendant and what has been admitted needs no further proof. He relied on Section 123 of the Evidence Act 2011; Iyere V. B.F & F.M Ltd (2008) 12 MJSC 102.
He therefore urged the Court to resolve issue 2 in favour of the Claimant.
ON ISSUE 3: Whether the seizure of the Claimant’s car was done following due process or whether Defendant has such right under the law to seize Claimant’s car when there was no default in payment
Learned Counsel submitted that the seizure of the Claimant’s car was a calculated move by the Defendant to deny him of the use of his personal car. That there was a third party in this transaction who is the guarantor and the third party guarantee is that in the event of default in payment, the guarantor must be notified so as to take up the repayment plan. That once a party makes an offer and the other party accepts by appending his/her signature, a valid contract has been created. That in every contract, parties are bound by the terms of the contract. He referred Court to Isheno V. J.B.N (2008) 4 MJSC 104.
Learned Counsel submitted further that the seizure of the Claimant’s car without default in monthly payment amounts to enforcement of the contract whereas there was no breach of same on the part of the Claimant. There is no evidence that that the Claimant breached any term of the loan by defaulting to repay. Therefore, what the Defendant ought to have done was to use the machinery of the law in enforcing the contract. In the case of C.D.C Ltd V. SCOA Ltd (2007) 5MJSC 146 Held 6, it was held:
..the Respondent cannot seize the rig without recourse to the Court. It is therefore not the case that if the common law applies, the Respondent can repossess the rig by seizure or otherwise than as provided by law particularly as it is in evidence before the Court that the Appellant has paid up to 3/5th of the purchase price and which has not been denied. The Respondent cannot in law repossess the rig otherwise by law.
It is the submission of Learned Counsel that the case cited above is in tandem with the case of the Claimant herein. He therefore urged the Court to resolve issue 3 in favour of the Claimant
COURT
Having gone through the case of the Claimant, defence of the Defendant, evidence adduced at trial and the submissions of Counsel to Claimant and Counsel to Defendant, this Court has distilled two (2) issues for the determination of this case, to wit:
- Whether the Claimant was wrongfully dismissed from the services of the Defendant
- Whether, considering the fact that the Claimant took the loan of N2,000,000.00 from the Defendant during the pendency of his employment, the seizure of the Toyota Corolla car from the Claimant on his dismissal from the employment of the Defendant was unlawful
ISSUE 1: Whether the Claimant was wrongfully dismissed from the services of the Defendant.
Generally, there are three categories of employment – (i) employment with statutory flavour (ii) contract for service and (iii) master-servant employment. An employment with statutory flavour is so-called because the employment is governed by law/statute. In such an employment, the mode of employment, discipline and termination/dismissal is all codified in a parent law or a subsidiary law, rules or regulations emanating from the parent law. Termination under employment with statutory flavour if not done in accordance with the law is always regarded as unlawful and the Court will have no problem ordering reinstatement. In contract for service, a person is usually employed for a fixed term to which at the end of the term, the contract expires based on the principle of effluxion of time. In such a relationship, if either of the parties fails to perform according to the terms of the contract, the order of specific performance will lie against the defaulting party and damages can also arise against the defaulting party. In master-servant employment, the relationship between the employer and employee are usually stated in the terms and conditions of the contract which can be in the employment letter, an employment manual or any other form. Whenever there is a complaint of wrongful termination, the Court will be minded to look at the words of the termination letter, the procedure adopted leading to the termination and compare same with the terms and conditions of the employment. If the Court is satisfied that the procedure leading to the termination was wrong thereby breaching the terms and condition of the contract, damages will lie against the Defendant/employer. In the event that the Court is satisfied that the way and manner the Claimant’s employment was terminated did not breach any of the terms and conditions of the employment, the Court can proceed and dismiss the case of the Claimant. Coincidentally, the case of the Claimant herein is that of master-servant relationship.
In master-servant employment, the employer wields enormous powers which include hiring and firing at any time; firing with or without reasons; will not reinstate a fired employee even if fired wrongly on the principle that an unwilling employer cannot recall back a willing employee etc. However, there are damages available to the aggrieved employee if his employment was terminated wrongly. Such damages are not limited to a breach of the terms of his employment in the way and manner his employment was terminated but extend to the choice of words used by the employer in the letter of termination/dismissal. An employer who does not choose his words wisely but results to the verbosity of using words like “thief”, “criminal”, etc to describe the employee in the letter of termination/dismissal should brace himself up to prove how he came to the conclusion that the Claimant/employee is a thief or criminal. If he fails to so prove, he cannot walk away a free man because having maligned someone else’s name and image and having brought his chances of a subsequent job to zero, must be made to pay damages to the maligned employee adequate enough to take care of the Claimant for life.
The case of the Claimant is that his right to fair hearing was breached in the way and manner he was dismissed. Before looking at the substance of breach of fair hearing peculiar to this case, I will first of all comment on the general principle of fair hearing. Generally, the principles of fair hearing are surmised in the two Latin maxims Audi alteram partem and Nemo judex in causa sua. Audi alteram partem simply means ‘hear the other party’. What this means is that whatever allegations or accusations laid against the other party, and no matter how true they may look, give the other party an opportunity to be heard on such allegations and accusations. He must not be punished until he is heard first. On the other hand, nemo judex in causa sua simply means ‘no man should be a judge in his own case’. What this means is that in any case or dispute in which you are a person of interest, you cannot be allowed to sit as a judge on the case or dispute because it may affect your good judgment. In other words, a judge should not only be unbiased but seen to be unbiased. This principle has been extended to arbitration even to the extent that if a judge in a regular Court has part-heard a matter and the matter was transferred to an arbitration panel for hearing, the judge who has part-heard the matter cannot be a member of the arbitration panel because, that he has part-heard the matter, may affect his good judgment either in the arbitration panel or when the dispute is referred back to the Court as an appeal or for continuation of hearing.
In the instant case, Claimant pleaded in paragraph 6 of his Statement of Facts that his dismissal was done in negation to the fundamental principles of fair hearing as no opportunity was accorded him to defend himself. The question therefore is – what does fair hearing entail in this regard? In N.J.C. &Ors V. Hon. Justice Jubril Babajide Aladejana & Ors (2015)All FWLR (Pt772) 1798the Court held:
Fair hearing does not necessarily mean oral hearing. Hearing in writing is sufficient so long as the affected party is given an opportunity to respond to the allegation against him. An administrative body has the discretion to decide whether to deal with a matter before it by oral hearing or merely by written evidence. Thus dealing with a matter on printed evidence or communication only is not by itself breach of fair hearing. In the instant case, where the 1st Respondent was given opportunity to defend himself against the allegations against him, the Court of Appeal held he was given fair hearing.
From the foregoing, it is clear that it is not in all cases, especially master-servant, that fair hearing must entail oral defence – written defence can sometimes suffice. In the case herein, the Defendant stated in their Statement of Defence that several queries were issued the Claimant on account of the fraudulent loans. On the part of the Claimant, in paragraph 2 of his reply to Defendant’s Statement of Defence, he stated that no such several queries were issued to him except one issued by the Audit Department of the Defendant. From evidence adduced before this Honourable Court, a query dated April 12, 2017 was issued to the Claimant on unauthorized loans which the Claimant granted himself. The said query was admitted in evidence as Exhibit D6. Claimant replied to the query vide the letter dated April 18, 2017 to which he apologized for granting the loans to himself. The said letter was admitted in evidence as Exhibit D9. It is also evident before me that another query dated May 2, 2017 was issued the Claimant on the irregular loans he granted one Mr Igbinosa Osasuwa. The said query was admitted in evidence as Exhibit D13. Claimant replied to the query vide the letter May 3, 2017 saying once again that he was sorry and promising to pay the sum of N1,600.000 (One Million Six Hundred Thousand Naira) by paying N250,000 (Two Hundred and Fifty Thousand Naira) monthly for a period of 6 months. This letter was admitted in evidence as Exhibit D7. In the face of all of these, I do not know where the Claimant got the confidence from that he was not given fair hearing. He was given fair hearing to explain by the query letters and he could not state any defence than admitting and apologizing for his sins. If he had any defence, he ought to have stated the defence in his replies. All the defences he now puts up in his pleadings to the irregular loans he gave himself and one Mr Osasuwa are defences he would have put up in his replies to the query letters if the defences are genuine. Bringing up such defences now is an after-thought on his part, and I so hold. Furthermore, Claimant stated in paragraph 11 of his reply to Defendant’s Statement of Defence that he was deceived into making the apology. Well, besides the fact that there is no further or addition witness statement on oath before me to give validity and credibility to Claimant’s reply to Defendant’s Statement of Defence, there is no credible and compelling evidence before me that in both cases of advancing loans to himself and advancing loans to one Mr Osasuwa, Claimant was coerced, deceived or lured into apologizing. From the foregoing, this Court finds and I so hold that Claimant was given fair hearing when he was given query letters as such were opportunities given him to be heard and to enable him defend himself.
Furthermore, Claimant stated both in his pleadings that no disciplinary committee was set up and that what Defendant referred to as disciplinary committee was actually an internal audit panel. Well, assuming, without conceding, that no disciplinary committee was set up, the implication is that the whole transaction was not done orally but in writing. Therefore, Claimant’s replies to letters of query should suffice as his defence to the allegation of financial fraud brought against him and it is not open for him to refer to a disciplinary committee if none was ever set up. It could have been different if actually a disciplinary committee was set up and the case of the Claimant is built on the ground that he was not invited by the disciplinary committee to present his case or that witnesses were invited to testify against him and he was not given opportunity to cross examine them. Given the facts and circumstances of this case, the Claimant was given fair hearing when he was issued the query letters and whatever and however he chose to reply to the letters of query was his own decision and not someone else’s own. In his own case, he chose to eat the humble pie of being sorry and sober for his actions.
In the case herein, the Claimant’s Counsel did a good job going to town on what qualifies as fair hearing. Be that as it may, this Court wishes to state that in all fairness to Counsel to Claimant, fair hearing is only taken to an elevated status in employment with statutory flavour but not in master-servant employment. Therefore, this Court cannot take what qualifies as fair hearing in the elevated status of employment with statutory flavour and give same to master-servant employment which by its very nature is limited. Only Jacob could steal the blessing of Manasseh (the elder son of Joseph) and give to Ephraim (the younger brother) because he himself was a beneficiary of stolen blessing. However, this Court is not Jacob and it cannot give the elevated status of fair hearing available to employment with statutory flavour to master-servant employment given the limitations and nature of such employment.
From the facts and evidence adduced in this case, this Court is satisfied that there was allegation against the Claimant on advancing loans to himself without following the right and proper channel; he was queried on this and he replied; there was investigation and the internal audit department found the Claimant culpable; there was also another allegation against the Claimant advancing irregular loans to one Mr Igbinosa Osasuwa; Claimant was queried on this and he replied; there was investigation by the internal audit department of the Defendant which once again found him culpable; he was, among other things, recommended for dismissal. On the long run, Claimant was dismissed from work. Now, I must say, just as I have always said, that those who work in financial institutions owe a duty of care to their employer and customers as to the prudent management and allocation of customers’ money in the custody of the bank or such financial institution. They must know that any slip, negligence, mistake or error (whether anticipated or not anticipated) will lose to a colossal loss of funds on the part of the bank and a colossal loss of trust on the part of the customers. This will usually lead to loss of confidence in retaining money in the bank and apathy of customers in doing business with the bank. Customers will go further in withdrawing their money from such bank for safe keeping elsewhere. When this happens, the bank always suffers a great loss of revenue. I have never seen where the commission or omission of a member of staff of a bank resulted in loss of revenue to the bank and the bank parted the member of staff on the shoulders and say ‘Welldone!’. Rather, what I have seen is that there are always consequences when this happens and the member of staff responsible is not left out.
A person who puts himself out to work in a bank must at all time be financially alert and smart but above all, he must be seen to be honest. Anything which puts a clog on his honesty cannot be excused on the ground of his alertness and smartness. Even though in politics alertness and smartness are virtue, honesty is the hallmark of any person working in the financial sector. A stain or dent on a person’s honesty cannot be excused in the banking sector even though it can be excused in politics. The three things which can stretch any man of humble integrity are power, money and women. To whom much is given, much is expected. Therefore, to those who are entrusted with power, it is expected that they must purge themselves of the spirit of Nebuchadnezzar whom in his pride, forgetting the God who gave him a kingdom, power, strength and glory, built a golden image for himself and ordered that the image he had built must be worshipped (Daniel 3). Those entrusted with power must also purge themselves of the spirit of Belshazzar, the son of Nebuchadnezzar who became king after him, whom, being intoxicated with power, ordered that the golden and silver vessels taken from the temple of God be brought for them to drink with. He got more than he bargained for (see Daniel 5). On the other hand, those who are entrusted with money must purge themselves of the spirit of Mammoth in order to resist the temptation of converting money which does not belong to them to their personal use.
On the essence of the rule of audi alteram Partem, the Court of Appeal held in Mr John Okon V. Hon. Pascal Adigwe (2011) 15 NWLR (Pt. 1270) page 350 @355 as follows:
The essence of the rule of audi alteram partem is that a verdict should not be entered against a man on a matter relating to his civil rights or obligations before a Court or tribunal without being given an opportunity of being heard.
From the facts and evidence adduced in the case herein, this Court is satisfied that before the verdict dismissing the Claimant was made by the Defendant, he was offered opportunity of being heard on the allegations against him. Consequently, this issue is resolved against the Claimant but in favour of the Defendant.
ISSUE 2: Whether, considering the fact that the Claimant took the loan of N2,000,000.00 from the Defendant during the pendency of his employment, the seizure of the Toyota Corolla car from the Claimant on his dismissal from the employment of the Defendant was unlawful
In the case herein, the brother and sister that are the most closest to the nature of the transaction herein are mortgage and hire purchase. In a mortgage, the mortgagee has the right to take possession of the property of the mortgagor which is the subject matter of the mortgage. For the avoidance of doubt, see the case of Four Maids Ltd V. Dudley Marshall (Properties) Ltd (1957) Ch.317 @ 320 where the Court held:
……the right of the mortgagee to possession in the absence of some contract has nothing to do with the default on the part of the mortgagor. The mortgagee may go into possession before the ink is dry on the Mortgage unless there is something in the contract, express or by implication, whereby he has contracted himself out of that right. He has the right because he has a legal term of years in the property.
See also the case of Awojugbagbe Light Industries V. Chinukwe (1995) 4 NWLR (Pt.390) Page 379, where the mortgagor brought a claim against the mortgagee for trespass on the ground that he appointed a receiver who took possession of the mortgaged property with the aid of security men and Alsatian dogs. The Supreme Court, while dismissing the appeal by a unanimous decision, held:
A mortgagee, like a landlord exercising his right to possess after the expiry of his tenant’s lease, or his agent who entered and took possession of the mortgaged property in exercise of his right under the mortgage agreement is not liable for damages for forcible entry because the right to possess the property had become vested in the mortgagee and his agent, the receiver, and the forcible entry was done in furtherance of their rights to possess. Accordingly, in the instant case, neither the 1st respondent nor the 2nd Respondent is liable for damages in trespass.
On whether a mortgagee under a mortgage deed need apply to Court before appointing a receiver, the Supreme Court in ratio 8 of Awojugbagbe Light Industries V. Chinukwe (supra) held that the 2nd Respondent had no obligation to apply to Court for a receiver to be appointed.
Furthermore, in a hire purchase transaction, the owner of goods/vehicle, at common law, has the right to seize the goods/vehicle which is the subject matter of the hire purchase from the hirer in the event that the hirer defaulted in payment. Granted, the Hire Purchase Act, 1965 has whittled down the power of the owner in hire purchase to seize the goods/vehicle from the hirer in cases of default. The law as it is presently is that the owner cannot take possession of the vehicle whereby the hirer has paid up to 3/5th of the purchase price except by order of Court. For the avoidance of doubt, see Section 9 (1) of the Hire Purchase Act, 1965 Act which provides:
Where goods have been let under a hire-purchase agreement and the relevant proportion of the hire –purchase price has been paid (whether in pursuance of a judgment or otherwise) or tendered by or on behalf of the hirer or any guarantor, the owner shall not enforce any right to recover possession of the goods from the hirer otherwise than by action and except as provided by subsection (5) of this section.
(underlining mine for emphasis)
On what amounts to payment of relevant proportion of the hire purchase price, Section 9 (4) of the Act provides that the hirer must have paid:
- In the case of goods other than motor vehicle, one-half of the hire- purchase price.
- In the case of motor vehicle three- fifths of the Hire -purchase price.
See also the decision of the Supreme Court on the effect of payment of 3/5th in Civil Design Construction Nig. Limited V. SCOA Nigeria (2007) 2 S. C. N. J. P.252.
In the event that the hirer has not paid up to 3/5th of the purchase price, the Act empowers the owner to take possession pending the institution of an action. See Section 9(5) of the Hire-Purchase Act, 1965 which provides:
In the application of the provisions of this section to motor- vehicles, where three or more instalments of the hire purchase price of a motor- vehicle under the agreement are due and unpaid, the owner may remove the motor vehicle to any premises under his control for the purpose of protecting it from damage or depreciation and retain it there pending the determination of any action, and the owner shall be liable to the hirer for any damage or loss which may be caused by the removal.
If in the brother case of mortgage and the sister case of hire purchase, the mortgagee in a mortgage and the owner in a hire purchase are not totally robbed of their rights to repossess the property and the goods/vehicle which are the subject matters of the transaction, it is only logical and commonsensical that a borrower should also have a measure of power to seize or take possession of goods/vehicle which form the subject matter of a loan if, from the circumstances, payment of the debt could no longer be foreseeable or perfected by the debtor, and I so hold.
Actually, in the case herein, the Toyota Corolla car in question is not Claimant’s own and it cannot become his until he is done making payment for the loan advanced him. Claimant can only be in possession but cannot be in ownership until he has fully paid the sum total of the purchase price of the car. The loan granted for the purchase of the car is intrinsically tied to the employment of the Claimant in that a fixed sum was to be deducted from his salary for every month in five (5) years. That Claimant was no longer in Defendant’s employment means no salary to be deducted from any longer. Now, except Claimant wanted the Defendant, in her folly, allow him go with the car when he has not so much as made payment up to half what was given him for the purchase of the car, I do not see any wisdom in allowing Claimant go with a car which purchase was essentially tied to his employment when he is no longer in the employment of the Defendant. Learned Counsel to the Claimant tried to make a case on the three elements of a valid contract to wit: offer, acceptance and consideration. In his words, he stated that once a party offers and the other accepts, a contract has been created. On this, he referred Court to Idi V. Yau (2001) 10 NWLR (Pt. 722) P.643 Held 3. Claimant did not say who made the offer, who made the acceptance and what the consideration was. So the Court is minded to ask – Who made the offer? Who made the acceptance? And what was the consideration? In the case herein, it was the Claimant who made the offer by asking for a loan of N2,000.000.00 (Two Million Naira) to enable him purchase a Toyota Corolla car. Now this part is clear that it was not the Defendant who made this offer but the Claimant. On the other hand, it was the Defendant who made the acceptance by accepting to grant the loan facility for the purchase of the Toyota Corolla car to the Claimant with a condition which forms part of the consideration that monthly deductions would be made from the account of the Claimant.
I must say that in all the transactions above, they are usually entered as a gentleman’s agreement which at inception, the Court is never dragged into it nor is the Court put on the know. However, when things fall apart and the center can no longer hold, lo and behold, the Court will be dragged into the messy situation. Be that as it may, once contracts of the nature referred to above have been entered, be it mortgage, hire purchase, bank loans etc, the Court can only do little. This is why in the case of a mortgage, the Court, while not interfering in the right of the mortgagee to seize the property of the mortgagor which is the subject matter of the mortgage, the mortgagee cannot sell except by an order of Court. Furthermore, the mortgagee cannot sell except it has given the mortgagor reasonable time to redeem the property to which the mortgagor failed to so redeem. In the case herein, whereas it is a good try for the Claimant to pray the Court to order the Defendant to release the car to him, I think it would have been a better try if the Claimant has told the Court how he now intends to pay the Defendant the sum advanced him for the purchase of the car since his employment relationship with the Defendant has gone south. If the Claimant had taken a loan, say, N2,000,000.00 (Two Million Naira) based on his status as employee of the Defendant and had spent it not on owning any property but on education or vacation, I am sure by now the Claimant would have been the first person to tell this Court that he cannot pay the loan because he is out of employment and there is no other means of paying the loan. However, since it is something tangible as a car and being that the car is now in the possession of the Defendant, he is desirous of having the car back even when he knows he is out of the employment of the Defendant, without telling the Court how he intends to
pay the total sum still standing to the Two Million Naira advanced him for the purchase of the car. Wisdom, as they say, is profitable to direct.
It is apt to state that in most employer-employee loans, as in this case, even though the original copies of the documents of the car are surrendered to the employer, the real, solid and valid security which the employee submits as collateral for the loan is the pendency of his employment. Loans of this nature which are tied to the pendency of the employment relationship usually enter a state of coma once the employment relationship comes to an abrupt end, and except there is a new contract or a clause in the earlier contract which the Court can enforce after the employment relationship came to an end, the state of coma cannot be resuscitated. Now we all know that a person who has been in a prolonged state of coma is usually pronounced clinically dead, at least that is what the doctors verdict would be. In the case herein, there is no clause which the Court can enforce to give life to the loan agreement that subsisted during the pendency of the employment relationship between the Claimant and the Defendant. Given the facts and evidence adduced in this case, it remains to be seen if there was a new contract giving life to the comatose contract to which the Claimant was asked by the Defendant to pay up the balance sum of the purchase price if he wanted the car back. It also remains to be seen if the Claimant ever agreed to pay up the balance purchase price to enable him have the car back.
On the position of the Claimant that there is a guarantor in this transaction which by his very position he ought to be notified if there is default in repayment so as to take up the repayment, I must say that whereas a guarantor should be ready to take responsibility for the acts of the borrower, however, if there is a collateral to the loan and the borrowee has taken possession of the collateral, the responsibility of repayment has been taken off the shoulders of the guarantor. In the case herein, if the car was still in the possession of the Claimant and he has absconded with the car, surely the guarantor would have be made to go in for it. Perhaps, it is the God of the guarantor that saved him the trouble by making the reverse to be the case.
The Claimant cited the case of C.D.C Ltd V. SCOA Ltd (supra which is also reported in 2007 6NWLR Part 1030) and posited that the Defendant has no right to seize the Toyota Corolla car from the Claimant. I have had the opportunity of reading the case of C.D.C Ltd V. SCOA Ltd (supra) before now. In the said case, there were two rig vehicles – one with the Registration No: LA 2632 WD and the other with Registration No: 8509 WD. The subject matter of that suit was hire-purchase. The one with Registration No: LA 2632 WD had been fully paid for at the time the Defendant (who became the Respondent at the Supreme Court) seized the said rig vehicle. According to the Defendant, they said on one breath that the rig with Registration No: LA 2632 WD was used as a security for two scraps machine which they sold on hire purchase to the Claimant and, on the other breath, they said the Claimant sold the rig vehicle with Registration No LA 2632 WD to them. However, evidence abound that this was not the case. Rather, the Claimant sent the rig vehicle with Registration LA 2632 WD to Defendant for repair to which the Defendant took advantage and seized it. Now one must remember that the said rig vehicle with Registration No: LA 2632 WD had been fully paid for under a previous hire purchase agreement. The question therefore is – given the circumstances, was the Supreme Court right to have held that the seizure was wrong? The answer is in the affirmative. By extension, the question in this case is – Has the Claimant herein fully paid for the car he now calls his own? The answer is in the negative.
While still on the case of C.D.C V. SCOA (supra), the second rig vehicle with Registration No: LA 8509 WD had a subsisting hire purchase agreement on it as at the time the Defendant seized same. As at then, Claimant had already paid the sum of N414,480.00 (Four Hundred and Fourteen Thousand Four Hundred and Eighty Naira) representing 60% of the purchase sum or 3/5th of the purchase price as reflected in the dictum of the erudite jurist himself, the Honourable Chief Justice of Nigeria of our time, Honourable Justice Samuel Walter Onnoghen JSC, as highlighted by the Claimant in their written submission. As such, the Supreme Court held that the Defendant/Respondent cannot repossess the rig otherwise by law. Whereas it stands to reason that being that the Claimant had already paid 60% or 3/5th of the purchase price which by equity he had become an equitable owner of the said rig with Registration No: LA 8509 WD and as such the Defendant cannot repossess same except by law, it is imperative to look at the law which was construed against the Defendant – the law was the Hire Purchase Act, 1965. In the said law, the owner, except by order of Court, lacks the power to take possession of the vehicle, the subject matter of the hire purchase, if the hirer has paid up to 3/5th of the purchase price. The Act also makes it for mandatory for the Defendant to sign the hire purchase agreement. From the facts of the case, it was only the Claimant who signed the hire purchase agreement, the Defendant did not sign. Construing this against the Defendant/Respondent, the Supreme Court held that he cannot enforce the agreement against the Claimant nor against his guarantor and this extended to the fact that he could not seize the rig if Claimant defaulted nor could he enforce payment of default from the guarantor in the event that the Claimant defaulted in payment by instalment. From the foregoing, it is obvious that failure of the Defendant to sign the hire purchase agreement robbed him of all his rights of enforcement and left him with nothing.
From the analyses of the facts above, the case of C.D.C V. SCOA (supra) is distinguishable from the case of the Claimant herein. In the case of C.D.C V. SCOA (supra), the Claimant was a company independent of the Defendant and the hire purchase agreement was entered in this regard. In the case herein, the Claimant was an employee of the Defendant and the loan for the car was advanced to him in this regard. In the case of C.D.C V. SCOA (supra), the Claimant had already paid the sum of 60% or 3/5th of the purchase price (which made him an equitable owner) of the rig vehicle before the seizure. In the case herein, there is no evidence before me that the Claimant had even paid up to 50% of the purchase price of the Toyota Corolla car before the seizure. In the case of C.D.C V. SCOA (supra), the Supreme Court held that it was the Hire Purchase Act 1965 that applied to the transaction of the parties and, relying on same, the Supreme Court construed the law against the Defendant for obvious reasons already highlighted above. The Supreme Court did not raise the issue of the Hire Purchase Act 1965 suo moto. It was the contention of parties as to whether it was the common law or the Hire Purchase Act that governed the transaction. In the case
herein, besides the fact that the transaction is not that of Hire Purchase, the Claimant did not point the Court to any law that was breached by the Defendant in seizing the car.
There are more facts which distinguish the case of C.D.C V. SCOA (supra) from the case at hand but I do believe that from the few ones highlighted above, the Supreme Court will not apply her judgment in C.D.C V. SCOA (supra) to the case herein given the disparity in the facts of both cases.
From the foregoing, issue 2 is therefore resolved against the Claimant but in favour of the Defendant.
Finally, from the findings and the resolutions of the Court in issue 1 and issue 2 above, this Court finds no merit in the case of the Claimant and same is hereby dismissed.
I make no order as to cost to cost. Parties shall bear their respective cost.
Judgment is entered accordingly.
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HON. JUSTICE M.N ESOWE
Presiding Judge
