SCOA NIGERIA PLC v. MR. MIKE IFEBUZOH
(2018)LCN/12226(CA)
In The Court of Appeal of Nigeria
On Friday, the 30th day of November, 2018
CA/L/221M/2012
RATIO
CONTRACT: WHETHER PARTIES ARE BOUND BY TERMS OF CONTRACT
“Therefore, all other documents are extraneous to the contract of employment. Parties are bound by the terms of contract they entered into. See DARNLEY ANIFOWOSE v WEMA BANK PLC (2015) LPELR – 24811 (CA) where it was held that: ‘…Terms and conditions of contract of employment are the bedrock of any case where the issue of wrongful termination of employment calls for determination and should, therefore, be pleaded by the employee who is aggrieved. The contract is personal to the employee…'” PER ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.
CONTRACT: WHERE A PARTY WAIVES HIS RIGHT
“Therefore if having full knowledge of the right interest, profits or benefits conferred upon or accruing to him by and under the law but he intentionally decides to give up all or some of them he cannot be heard to complain afterwards that he has not been permitted to the exercise of his rights or that he has suffered by his not having exercised his rights, he should be held to have exercised his right. He should be held to have waived those rights. See IMPORTS EXPORTS v ADEBAYO [2005] 19 NWLR (PT 550) 544 FASADE v BABALOLA [2003] 11 NWLR (PT 830) 26 ADECENTRO (NIG) LTD v OAU [2005] 15 NWLR (PT 9481) 290; EKUNDAYO v FCDA (2015) LPELR – 24512.” PER ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.
DAMAGES: SPECIAL DAMAGES
“Special damages are damages which are actual credible evidence exceptional in character has crystallized in terms of cash and value, and are ascertainable. See KOPEK CONSTRUCTION LTD v EKISOLA (2010) LPELR – 1703 (SC); UBN PLC v AJABULE & ANOR (2011) LPELR 8239 (SC).” PER ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.
JUSTICES
MOHAMMED LAWAL GARBA Justice of The Court of Appeal of Nigeria
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO Justice of The Court of Appeal of Nigeria
GABRIEL OMONIYI KOLAWOLE Justice of The Court of Appeal of Nigeria
Between
SCOA NIGERIA PLC Appellant(s)
AND
MR. MIKE IFEBUZOH Respondent(s)
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A. (Delivering the Leading Judgment):
This appeal flows from the decision of the High Court of Lagos State delivered on the 19th of September, 2011, wherein the lower Court entered judgment in favour of the Respondent against the Appellant in the sum of N2, 196, 356.80 (Two Million One Hundred and Ninety Six Thousand, Three Hundred and Fifty Six naira Eighty kobo) being sales commission due from the Appellant to the Respondent together with interest at the rate of 6% per annum from 6th of July 2004 to 19th of September, 2011, and thereafter at the rate of 10% per annum until the date of final liquidation.
The main crux in this appeal revolves around the commission to be paid on sales of company products. The Respondent contends that it is part of his contract which was breached. While the Appellant herein contend that the commission is at the discretion of the company. They both rely on correspondence on the issue which were tendered as Exhibits at trial.
The Appellant’s brief in compliance with the Court of Appeal rules is dated 18th April, 2013 and filed on 25th April, 2013 but was deemed on 2nd October, 2018, wherein he formulated three issues for determination:
a) Was the learned trial Judge correct in holding that there was a contract for the payment of sales commission by the Appellant to the Respondent having regard to the various documents tendered before the Court especially Exhibits A16 AND A17?
b) Was the learned trial Judge correct in holding that the respondent has not waived his right to claim the clearly to be entirely at the discretion of the Appellant company and same communications the Respondent?
c) Was the learned trial Judge correct in holding that the respondent proved the sum of N2,196,356,80 (Two Million One Hundred and Ninety-six Thousand three Hundred and Fifty-six-naira eighty kobo) claimed as special damages together with interest when from the record there is no evidence to support same?
The Respondent’s brief is dated 1st July, 2013 and filed 2nd July, 2013 deemed 2nd October, 2018. The Respondent adopted the Appellant?s issues for determination. The parties having agreed on the issues for determination, these shall be the issues to be resolved also in this appeal.
ISSUE 1
The Appellant counsel contends that the lower Court was wrong in holding that there was a contract for the payment of sales commission by the Appellant to the Respondent and that the conclusion is not borne out by the various documentary evidence before the Court. He referred to page 164 of the record and specifically paragraphs 2 & 3 of the judgment.
Appellant also referred to Exhibits A8, A12, A13, A14, and A16 & A17 as documents dealing with the commission issue and submitted that the lower Court wrongly placed reliance only on Exhibit A8 whilst neglecting Exhibits A16 and A17 which he said stated clearly that the right to commission was entirely at the discretion of the Appellant. He submitted that Exhibit A17 is most relevant but the Court held that it was parole evidence which cannot modify or alter Exhibit A8. That Exhibit A16 was issued more than 18 months before the Respondent gave notice of retirement, and the lower Court ought to have considered the totality of all the documents and not pick and choose between the documents tendered. He relied on UDEAGU V BENUE CEMENT COMPANY PLC [2006] 2 NWLR (PT. 965) 600 at 628, paras A – E and a host of other cases.
Counsel submitted that the remunerations due to an employee from the employer are clearly defined by the terms and conditions of service voluntarily entered into between the parties. He referred to Exhibits A1, A2 & A3 and that it is no where stipulated in the exhibits that payment of commission is part of the terms and conditions of service, and upon retirement the Respondent was paid his entitlements and made no complaints.
Counsel submitted that having regard to the contents of Exhibits A8, A12, A13, A16 & A17 wherein the Appellant constantly made variations and alterations to the terms and conditions of payments of commission, that no contract can be inferred from such documents. He contended that where the performance of a thing is left to the discretion of another, it cannot be said that such a situation imposes a mandatory obligation that must be done under normal contractual situation.
The Respondent counsel on the other hand submitted that the lower Court took all the correspondence between parties into account and properly construed same. He submitted that this issue of assessment of evidence and ascription of probative evidence are matters within the province of the trial Court. He relied on BALOGUN & ORS v AGBOOLA [1974] ALL NLR (PT. 2) 66.
He submitted that even if the lower Court was wrong in reference to Exhibit A17 as parole evidence, that such a mistake does not result in being overturned by this Court. He relied on NDULUE v IBEZIM [2002] 12 NWLR (PT. 780) 139; OWHONDA v EKPECHI [2003] 17 NWLR (PT. 849) 321; ODOFIN v ONI [2001]3 NWLR (PT. 701) 488.
RESOLUTION
The statement of claim paragraphs 13 – 20 and statement on oath of the Respondent in paragraphs 10 – 17 vis-a-vis the Appellant’s statement of defence in paragraphs 10 – 20:-
STATEMENT OF CLAIM
13. At this point, the Claimant states that he is entitled to be paid his sales commission to the tune of N2, 196, 356.80k (Two Million, One Hundred and Ninety-Six Thousand, Three Hundred and Fifty-Six Naira Eighty Kobo) for the year running part of 2000, 2001 and 2002 when he voluntarily retired.
14. The Defendant vide a letter dated 12th November, 2002 accepted his retirement and promised contacting the Claimant on the issue of his entitlements. Attached and marked Annexture E is the said letter.
15. The Claimant further states that the Defendant paid to him part of his sales commission due to him in July 2001 and August 2001 vide cheques FBN Isolo No: 0004767 for the sum of N43, 179.90 (Forty-Three Thousand, One Hundred and Seventy-Nine Naira Ninety Kobo) and FBN Isolo No: 0004664 FOR THE SUM OF N125,055.95 (One Hundred and Twenty-Five Thousand, Fifty-Five Naira Ninety-Five Kobo)respectively. Copies of the cheque are attached and marked Annextures F – F1.
16. The Claimant further avers that he has made both oral and written demand to the Defendant to pay him his commission, but the Defendant has refused or neglected to pay the Claimant. The Claimant pleads his letters of demand dated 7th April, 2003 and 22nd October, 2003 respectively. Attached and marked Annexure G – G1 are copies of the letters.
17. The Claimant states that when the Defendant still refused to pay him his sales commission, he contacted his lawyers Messrs Keyamo Chambers, who wrote a letter of demand on his behalf of the Defendant. The Claimant pleads that letter dated 19th February, 2004 and a reminder dated 12th 2004. Attached and marked Annexture H – H1 are copies of the letters.
18. The Claimant avers that in response to those letter, the Defendant wrote a letter dated 24th March, 2004 stating that they had referred the matter to their lawyers C. O. Toyin Pinhero & Co., attached and marked Annexture H2.
19. That the Claimant waited for over a month before the Defendant?s lawyers contacted him stating that the Defendant denies owing the Claimant. The Claimant pleads that letter dated May 4th 2004. Attached and marked Annexture I is a copy of that letter.
20. The Claimant shall contend that the Defendant having entered into a valid contract with him as per sales commission/incentives, which made the Claimant to successfully sell the Defendant?s products at very high profits to the Defendant, the Defendant cannot now refuse to pay him his sales commission.
STATEMENT ON OATH OF MR. IFEBUZOH MIKE CHINWEIKE
10. That as a Sale Manager, I am entitled to sales commission on every sales made. The percentage commission rate is reviewed periodically by the management to encourage sales performance.
11. That as at November 2002, I had unpaid sales commissions on several sales concluded between 2000 and 2002 amounting to N2,196,356.80 (Two Million, One Hundred and Ninety-Six Thousand, Three Hundred and Fifty-Six Naira Eight Kobo).
12. That my basic salary as a field Sales Manager was between N7,000.00 (Seven thousand Naira) and N11,000.00 (Eleven Thousand Naira) per month.
13. That I do spend an average of N10,000.00 (Ten Thousand Naira) monthly to fuel, repair and maintain the car that I move about with to bring in millions of naira sales which I am yet to be paid the commissions.
14. That due to the accumulated unpaid sales commissions, I was forced into borrowing money from friend and relations which I have not been able to repay up till date.
15. That on 7th November, 2002, I was given a transfer letter to Port Harcourt.
16. That on 11th November, 2002, since I cannot afford the borrowing of money to finance my sales activities in Port Harcourt and my commissions were not being paid, I had no other option than to give six (6) months notice of my voluntary retirement from the services of SCOA Nig. Plc after twenty-three (23) years of service.
17. That on 12th November, 2002, my notice of retirement letter was accepted by the management.
STATEMENT OF DEFENCE
10. The Defendant further avers that it acted on the said circular dated the 18th of December, 2002 on all its staff concerned including the Claimant who took benefits therefrom.
11. That by the Defendant circular dated 19th of June 2001, it stated clearly that payment for sales and other incentive is not a right or entitlement in any way whatsoever, but meant at all times to encourage performance, productivity and profitability to be determined at the Defendant’s discretion.
12. The Defendant states that it is not indebted to the Claimant on the sales commission of N2,196,356,80 (Two Million One Hundred and Ninety Six thousand Three Hundred and Fifty Six Naira Eighty Kobo) or any other sum.
13. The issue of entitlement referred to in paragraph 14 only refers to Claimant retirement benefits and not sales commission which is not part of the retirement benefits or any other benefit whatsoever under the Claimant’s employment.
14. The Defendant states in reply to paragraph 15 that the payment referred to is not part-payment but full payment of the sales commission for the period to the Claimant.
15. In reply to paragraphs 16,17,18 and 19, the Defendant never refused nor neglected to pay any sum for sales commission to the Claimant at any time but states that the Claimant is not entitlement to the sum claimed or any other sum.
16. The Defendant avers that it never enter into any valid contract or any other contract whatsoever with the Claimant.
17. In regard to paragraph 21 the Defendant denies being responsible for the loan incurred by the Claimant or responsible for payment for any whatsoever to the Claimant.
18. The Defendant denies any act whatsoever to amount to any breach of contract s the Defendant has fulfilled all its obligation in the contract of employment to the Claimant, which said contract did not contain any provision on sales commission.
19. The defendant further avers that all times material to the issue of the circular dated 18th of December, 2002, the Claimant was still an employee of the Defendant and cannot claim ignorant or otherwise of the effects attached to the said circular.
20. The Defendant shall also lead evidence that the failure to protect or otherwise on the said circular by the Claimant constitutes a waiver which stopped the Claimant from making any other claim after his acceptance of the contents of the said circular.
The Respondent was employed as a cashier and was later redeployed to sales department as a sales manager his terms of service changed in that he was now entitled to commission on sales to be determined by the management sharing formulae from time to time. These the Appellant called incentives while the Respondent says it’s part of his contract and so an entitlement.
The determination of this will depend on what was agreed at the point of redeployment in Exhibit A8 – internal memo and not Exhibit A1 – offer of employment of 24/6/80. The Exhibit A8 reads:
RE: INTER-DEPARTMENTAL TRANSFER/REASSIGNMENT
As already been informed you are to sell all the various products distributed by the company.
Your monthly sales target will be given to you by your HOD. Also commissions are to be paid on all sales you make and at the end of each quarter you will be appraised to determine your performance.
I wish you successful performance in your new department.(Underlined for emphasis)
Before delving into these issues, in Exhibit A14 the Appellant began to call these commissions on sales incentives. As incentive the word has been defined to mean a thing that motivates or encourages someone to do something, an inducement, motivation, motive, reason, stimulus, stimulant, spur, impetus, encouragement, impulse. See Blacks Law Dictionary 8th edition page 776. A payment or concession to stimulate greater output or investment. It is actually a compensation pay plan in which increased productivity is rewarded with higher pay.
Therefore at the time the Respondent was redeployed his terms changed i.e. conditions of service and were replaced by Exhibit A6 which is now the existing contract between the parties. The parameters for commission will be determined by the Appellant. See ENEMCHUKWU V OKOYE & ANOR (2016) LPELR 40027 (CA) where OGUNWUMIJU, JCA at page 12-13 paras E-A held thus:
“a contract is an agreement between two or more parties creating obligations that are enforceable or otherwise recognisable at law. According to Blacks Law Dictionary 8th edition, contract is defined as a set of promises, for breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.
Therefore, all other documents are extraneous to the contract of employment. Parties are bound by the terms of contract they entered into. See DARNLEY ANIFOWOSE v WEMA BANK PLC (2015) LPELR – 24811 (CA) where it was held that:
“…Terms and conditions of contract of employment are the bedrock of any case where the issue of wrongful termination of employment calls for determination and should, therefore, be pleaded by the employee who is aggrieved. The contract is personal to the employee…”
See also BABA v NIGERIA CIVIL AVIATION & ANOR [1991] LPELR – 692 (SC), NNAEMEKA ? AGU in page 11, paras F – G) held that:
“That parties enjoy their freedom of contract carries with it the inevitable implication of sanctity of their contracts. This means that if any question should arise with respect to the contract, the terms in any documents which constitute the contract are, invariably the guide to its interpretation.”
Therefore all other documents cannot vary unilaterally the terms of employment especially A16 & A17 it can only vary the rate of payment on commission but cannot vary the term of payment of commission because it is what makes an employee choose to stay and put in his best. Once it is withdrawn, it knocks the bottom off the contract or deployment. I agree with the reasoning of the lower Court who analysed the documents expertly and legally too where he held that:
“Once a right is vested in one party in a contractual situation, it cannot be taken away by the other to the contract except with the consent of the beneficiary.”
I therefore resolve this issue against the Appellant.
ISSUE 2
Appellant counsel submitted that based on the level of various correspondence communicated to the Respondent the failure or omission of the Respondent to protest or contest the terms as modified as per Exhibit A16 constitute a palpable act of waiver by the Respondent of his right to insist that payment of sales commission was contractually mandatory.
Furthermore he submitted that from the facts before the Court it is clear that the claims made by the Respondent actually arose in 2001 and urged this Court to set aside the holding.
The Respondent counsel denied the contentions of the Appellant and submitted that that the judge gave due consideration to the defence put forward as well as the issue of waiver he referred to pages 186, 187, 194, 201, 203 & 204 – 212 of the record where he contended the lower Court considered Exhibits A9, A10, A16, A19, A21 & A22 rejected the Appellants case.
RESOLUTION
The starting point here is to find out what constitute waiver and if it qualifies herein in the light of Exhibits A6, A16, A17 & A21. In NPA v AMINU IBRAHIM & CO [2018] 12 NWLR (PT. 1632) 62 at 97, paras F – H, the meaning of waiver was explained thus:
“The concept presupposes that the person who is to enjoy a benefit or who has the choice of the benefit is fully aware of his right to the exercise his right in the benefit or where he has a choice of two he decides to take one not both. The exercise has to be a voluntary act; this is so because a man who is not under any legal disability should be the best judge of his own interest.”
Therefore if having full knowledge of the right interest, profits or benefits conferred upon or accruing to him by and under the law but he intentionally decides to give up all or some of them he cannot be heard to complain afterwards that he has not been permitted to the exercise of his rights or that he has suffered by his not having exercised his rights, he should be held to have exercised his right. He should be held to have waived those rights. See IMPORTS EXPORTS v ADEBAYO [2005] 19 NWLR (PT 550) 544 FASADE v BABALOLA [2003] 11 NWLR (PT 830) 26 ADECENTRO (NIG) LTD v OAU [2005] 15 NWLR (PT 9481) 290; EKUNDAYO v FCDA (2015) LPELR – 24512.
With the above, it is clear against the background of this case that the Respondent having agreed to Exhibit A6 and seen Exhibit A16, 17 and he signed which was accepted and he wrote to demand for his arrears of compensation, the Appellant did not respond till Exhibit A21 requesting him to fill all claims on commission, and he complied in Exhibit A22. Therefore can the Appellant contend here that he waived his right to his commissions? I’m afraid the Appellant is estopped from contending this.
I therefore resolve this issue against the Appellant.
ISSUE 3
This issue relates to the fact of whether or not there was evidence before the Court from the Respondent in support of the sum of N2, 196, 356.80 claimed as special damages. The Appellant counsel conceded that there were particulars of special damages introduced in the amended statement of claim but it was not supported by any additional witness statement on oath.
Appellant counsel submitted that sequel to the order granting an amendment at pages 100 – 105 of the record of appeal and that it was in the amended statement of claim that contained the particulars and not the original statement of claimant pages 3 – 6 of the record and that the Respondent ought to have filed a new (additional) statement on oath and it meant that such averments were abandoned. He referred to Order 24 Rule 3 of the High Court Rules Lagos State, 2004; BALOGUN & ANOR v ONIKOLOBO COMMUNITY BANK (NIGERIA) LIMITED [2007] 5 NWLR (PT. 1028) 584 at 602, paras A – B. Appellant also contended that the only written evidence on oath relied on by Respondent is Exhibit A at page 174 – 176 which he said made no reference to particularised items of special damages. He relied on GOYOL V INEC (NO. 2) [2012] 11 NWLR (PT. 1311) 218 at 233, paras B – E; amongst other cases. He urged the Court to resolve the issue in their favour.
Respondent counsel on the other hand submits that evidence was adduced in support of the special damages and that the particulars were elaborately pleaded and set out in the amended statement of claim after same was tendered and admitted as Exhibit A22 by the trial Court on 6th day of November, 2006 while the trial went on in presence of the Appellant counsel but they neglected or elected not to contradict the piece of evidence in the pleading and during cross-examination of the Respondent, he referred to pages 244 of the record.
Respondent counsel submitted that having not been contradicted it stood unchallenged and therefore established and accepted. He relied on the case ofMILITARY GOVERNOR OF LAGOS STATE & 4 ORS v ADEYIGA & 6 ORS (2012) 2 SC (PT 1) 68. He urged the Court to hold that the award of special damages was in order.
RESOLUTION
In paragraphs 11 of the Statement of Claim the Respondent it was so stated as pleaded the sales person incentive/commission He tendered in support Exhibit A22 made up of 22 pages. The defence of the Appellant in paragraph 8 of their statement of defence was that the documents referred to by the Respondent (Exhibit A 22) did not emanate from them without more, to which the Respondent in paragraphs 1 & 4 of the reply to the statement of defence put them to strict proof, therefore issues were joined on this issue. The Statement on Oath in paragraphs 7, also relied on Exhibit A22 – the said document is in answer to outstanding TPC and commission columns entry of claims, Exhibit A22 contained particulars of invoice, customer, product, margin and figures all reflecting the periods of the commission.
The Appellant had copies of these Exhibits and it was front loaded and tendered. They did not object nor cross-examine upon it. What more they were satisfied.
I have examined, the lower Court’s judgment at page 166 of the record and find that the lower Court painstakingly itemised and scrutinized page after page and item after item in the list before making a finding.
The trial was by largely by documentary evidence, what was to be said in this respect had been put down and the annexure formed part of the statement of claim, therefore the Statement of Defence goes to no issue, proof was documentary.
At cross-examination, the Respondent at page 244 of the record stated that his claims are in Exhibit A22. I find that each of the 9 pages in the Exhibit has commission claims and the claims totalled N2, 196, 356.80k. The Appellant has not pointed to any item which has is contrary to their records.
Therefore, the Respondent has particularised the special damages item by item with dates and specifications. The amount claimed is ascertainable in line with ratio/formulae of commission set by the company. To my mind, the Respondent has meet the criteria for proof of same and I agree with the lower Court that special damages was duly proved.
Special damages are damages which are actual credible evidence exceptional in character has crystallized in terms of cash and value, and are ascertainable. See KOPEK CONSTRUCTION LTD v EKISOLA (2010) LPELR – 1703 (SC); UBN PLC v AJABULE & ANOR (2011) LPELR 8239 (SC).
This case is not one for injury or loss but that of entitlements calculatable on known parameters. I’m therefore satisfied in the circumstances of this case that the entitlement to commission has been proved.
It was the erroneous contention of the Appellant that the Respondent was not entitled to be paid commission and that was their defence in the action at the lower Court. The Appellant will not and cannot now change its case on appeal.
On this note I resolve this issue against the Appellant.
Having resolved all the issues in this appeal against the Appellant, I accordingly dismiss this appeal for lacking in merit. The judgment of the lower Court is hereby affirmed. Costs is awarded to the Respondent in the sum of N200,000.
MOHAMMED LAWAL GARBA, J.C.A.: I agree with the lead judgement delivered by my learned brother Abimbola Osarusue Obaseki-Adejumo, JCA which I read in draft, that the appeal is lacking in merit and is for all the reasons set out therein, dismissed by me too.
GABRIEL OMONIYI KOLAWOLE, J.C.A.: I agree with the lead judgment of my learned brother, ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, JCA which has just been delivered.
I agree with the decision reached that the appeal lacks merit and its accordingly dismissed.
Appearances:
Emmanuel Bwala with him, Victoria OresanwoFor Appellant(s)
Respondent not representedFor Respondent(s)
