UNITED BANK FOR AFRICA PLC v. MRS DOREEN NKOLIKA ORANUBA
(2013)LCN/6192(CA)
In The Court of Appeal of Nigeria
On Friday, the 10th day of May, 2013
CA/L/921/2009
JUSTICES
AMINA ADAMU AUGIE Justice of The Court of Appeal of Nigeria
JOSEPH SHAGBAOR IKYEGH Justice of The Court of Appeal of Nigeria
CHINWE EUGENIA IYIZOBA Justice of The Court of Appeal of Nigeria
Between
UNITED BANK FOR AFRICA PLC – Appellant(s)
AND
MRS DOREEN NKOLIKA ORANUBA – Respondent(s)
RATIO
WHETHER OR NOT WHERE A CONTRACT OF EMPLOYMENT IS PROPERLY TERMINATED, INTENTION BECOMES IRRELEVANT
The law is that where a contract of employment is properly terminated, intention and motive become irrelevant. But where as in this case, the Appellant as defendant in his statement of defence pleaded that the Claimant was dismissed for gross misconduct, the dismissal cannot be justified in the absence of adequate opportunity being given to the claimant to explain or justify the alleged misconduct. Taiwo v. Kingsway Stores 19 NLR 123; Ajayi v Texaco Nig. Ltd (1987) 3 NWLR 577; Olaniyan v. University of Lagos (1985) 2 NWLR 599: Olatunbosun v Niser (1988) 3 NWLR (Pt.80) 25.
The proper procedure to adopt in the situation is as laid down by the Supreme Court in the case of Baba v. N.C.A.T.C. (1991) 5 NWLR (Pt.192) 388 @ 418-419, per Nnaemeka-Agu JSC of blessed memory: “Where some allegations have been made against an employee…..the employer is entitled to set up a panel to investigate the allegations. Such an investigating panel is not a court of trial; so it is enough if it gives to any of the persons whose names feature in the inquiry the opportunity of making some representations, oral or written, before it. In the process of investigation, it can receive its information from any source.. …….The panel of inquiry not being a court of trial, none of the persons whose names feature in the inquiry can insist on any right to cross-examine other persons who make allegations or present memoranda at the inquiry. But once the panel has concluded its inquiry and makes up its mind that any points had prima facie been made out which point to the fault of any person, the employer must first inform such an employee of the points in the case against him and give him the opportunity to refute, explain or contradict them or otherwise exculpate himself by making any representations or defence thereto before the employer can lawfully use those points as bases for dispensing with his services.” PER IYIZOBA, J.C.A.
AWARD OF PRE-JDUGEMENT INTEREST
The law is that pre-judgment interest is awarded where there is an agreement for payment of interest or under mercantile custom or under a principle of equity such as breach of fiduciary duty. In such cases, the pre-judgment interest must be pleaded and proved. See Hausa v F.B.N Plc (2000) 9 NWLR (Pt.671) 64; Ekwunife v Wayne W/A Ltd (1989) 5 NWLR (Pt.122) 422. PER IYIZOBA, J.C.A.
ENTITLEMENT TO PRE-JUDGEMENT INTEREST
The entitlement of the Respondent to pre-judgment interest being an issue of law must be established by evidence whether her pleading was traversed or not. Having found as a fact that no evidence was led by the Respondent, the trial Judge erred in turning round to award her 10% pre-judgment rate. Order 35 Rule 4 of the High Court of Lagos State (Civil Procedure) Rules 2004 empowers the judge to award interest at a rate not less than 10% per annum upon any judgment. This power is clearly restricted to post judgment interest and does not apply to pre-judgment interest. Unity Bank Plc. v. Denclag Ltd & Anor (2012) LPELR – 9729 (SC); Himma Merchant Bank Ltd v. Kachalla (1994) 5 NWLR (Pt.347) 667. PER IYIZOBA, J.C.A.
CHINWE EUGENIA IYIZOBA, J.C.A. (Delivering the Leading Judgment): This is an appeal against the judgment of the High Court of Lagos state Coram Adesanya J. delivered on the 27th day of November 2008 granting most of the reliefs claimed by the Respondent for wrongful dismissal from her employment in the Appellant bank.
The Respondent was an employee of the Appellant for over 20 years at its Nnewi Branch. She rose from the position of special Trainee on grade level 5 in 1982 when she was employed to Branch Relationship Manager in the commercial Department of the bank in December 1997. The Respondent claimed that during the pendency of her employment, she discharged her duties with due care, diligence, honesty, maturity and loyalty to her employer. She claimed she duly complied with the Defendants code of professional Conduct and Ethics and that her impressive performance earned her elevation to various sensitive post in the bank such as Branch Relief Accountant in 1995, Relief Manager in 1996 and Account Officer in the Commercial Division in 1997. She claimed that during her time in the commercial Division of the Nnewi Branch as the Relationship Manager, the Branch Profit rose from six million naira in the year 2000 to over sixty-four million naira in 2002. She received high commendation from the bank. She claimed she was dismayed to have received a letter of suspension dated 16/4/03 and subsequently another letter of dismissal dated 6/5/03. She claimed the letters were illegal and unlawful and also against the principles of natural justice, equity and good conscience as the letters did not disclose any reason for her suspension and dismissal. Consequently, by a writ of summons dated 5/8/05 and a first amended statement of claim dated 17/4/07 at pages 233 – 237 of the record of appeal, the Respondent sued the Appellant claiming the following reliefs:
a. An Order of Declaration that the letter dated 16th April 2003 from the Defendant suspending the Claimant from work as a staff of the Defendant is unlawful, null, void and of no legal effect whatsoever;
b. An Order of Declaration that the letter dated 6th, May, 2003 from the Defendant dismissing the Claimant from its employment as a staff is unlawful, wrongful, null and void.
c. An Order of Declaration that the claimant committed no gross misconduct or any other misbehavior to warrant or justify her purported suspension and dismissal under the conditions of service of the Defendant;
d. Special and general damages in the sum of N13,872,416.00 (Thirteen Million, Eight Hundred and Seven Two Thousand, Four Hundred and Sixteen Naira) for unlawful suspension and dismissal of the Claimant from the service of the Defendant and with interest thereon at the rate of 21% per annum from the 31st of July, 2005 up to Judgment and thereafter at the rate of 21% per annum until fully paid.
e. An Order directing the Defendant to pay the Claimant’s salary allowances and bonuses up to the age of retirement and all other entitlements including pension and gratuities as provided for in the Terms and Conditions of service of the Defendant; and
f. Any Order or further order as the Court may deem fit to grant in the circumstance.”
In its Statement of Defence dated 6/12/05 at pages 64 – 66 of the record, the Appellant emphatically denied the Respondent’s Claims in their entirety and asserted that the Respondent was grossly negligent in the course of her work with the Appellant; that she contravened the Defendant’s Credit policy Manual by failing to monitor the arrival of vessels and shipping documents in respect of the import finance facilities for two customers which she initiated; that her gross negligence and dereliction of duty resulted in the Defendant incurring losses in the sum of N43.3 million naira in the case of the first customer Judyke Industries Ltd and N56.5 million in the case of the second customer, Morrison and comfort Ltd; that her dismissal from the employment of the Appellant was consistent with the provisions of her contract of employment as stipulated in the Appellants staff Hand Book, credit Policy Manual, and the code of professional conduct and Ethics; and that she was not entitled to any of the reliefs claimed in the First Amended Statement of Claim.
The suit proceeded to trial before the lower Court on 10/1/08. The Respondent gave evidence on her own behalf and called no other witness. She tendered 10 exhibits, C1 – C10. The Appellant called one witness and tendered 11 exhibits, D1 – D11. The lower court delivered Judgment in the suit on 27/11/08 granting reliefs a, b and c of the Respondent’s claims. The lower court further awarded the sum of N2,628,110.06 as damages to the Respondent with interest on the said sum at the rate of 10% per annum from 6/5/03 till Judgment and thereafter at the same rate until final liquidation of the total judgment debt.
The Appellant being dissatisfied with the Judgment appealed to this court by a Notice of Appeal dated 26/1/09 containing ten grounds of appeal. In compliance with the rules of this court briefs of argument were filed and exchanged. The Appellants brief was settled by Fred Onuobia Esq., while he Respondent’s brief was settled by Chief Philip Ndubuisi Umeh. The appellant out of the ten grounds of appeal formulated six issues for determination. The issues are as follows:
1. Was the learned trial Judge right when she held that the suspension and dismissal of the Respondent from the employment of the Appellant was wrongful and unlawful having regard to the totality of the evidence adduced at the trial? (Grounds 1 and 2 of the Notice of Appeal);
2. Was the lower Court right when it held that the dismissal of a bank’s employee is justifiable only when there is an unacceptable and untoward behavior on the part of the employee and in particular when such behavior borders on fraud and dishonesty? (Grounds 5 and 6 of the Notice of Appeal);
3. Was the learned trial judge right in making a defence of non inflation of prices and quantity of the goods purchased by the Appellant’s customer and founded a decision thereon in favour of the Respondent to the Appellant’s prejudice? Ground 4 of the Notice of Appeal)
4. was the learned trial Judge right when she (with respect) strayed away from the two issues identified and formulated for determination by the parties and thereby suo motu raised an additional issue for determination to wit “whether the procedure employed by the defendant in dismissing the Respondent was wrong in that it violated the terms of her employment and the rules of natural justice, equity and good conscience” and rendered a decision on this new and strange issue without affording the Appellant a hearing on the said issue?
(Ground 3 of the Notice of Appeal)
5. Was the lower Court right when it held that the Respondent was not granted fair hearing before the Committee investigating the allegations of misconduct against the Respondent? (Grounds 7 and 8 of the Notice of Appeal); and
6. Is the Respondent entitled to the award of the pre- and post-judgment interest at the rate of 10% and/or any other rate at all on the judgment sum under the High Court of Lagos State (Civil Procedure) Rules, 2004 or under any other law? (Grounds 9 and 10 of the Notice of Appeal).
The Respondent in her brief adopted the six issues formulated by the Appellant. I am of the view that issues 2, 3 and 4 are un-necessary as the rationale behind them are subsumed in issues 1, 5 and 6 which are adequate for the determination of this appeal
ISSUE ONE
Was the learned trial Judge right when she held that the suspension and dismissal of the Respondent from the employment of the Appellant was wrongful and unlawful having regard to the totality of the evidence adduced at the trial? (Grounds 1 and 2 of the Notice of Appeal.)
APPELLANTS ARGUMENTS:
The contention of learned Counsel for the appellant on this issue is that the lower court erred when it held that the suspension and dismissal of the Respondent were wrongful and unlawful. The lower court, counsel argued had wrongfully taken the view that a combined reading of clauses 9.0 of Exh. D1 (UBA Staff Hand Book) and 4.2.3 of Exh. D2 (Credit Policy Manual) suggests that the Respondent can only be suspended from the employment of the Appellant after a query has been issued to the Respondent and the Respondent’s explanation was found unsatisfactory. Learned Counsel submitted that the issuance of a query was never a condition precedent to the Appellant exercising its power of suspension pending investigation under the contract of employment between the parties (Exhs D1 and D2). Relying on Amede v. UBA (2008) 8 NWLR (Pt.1090) 623 counsel submitted that the parties and the Court are bound by the contract the parties entered into, and that the lower Court lacked the jurisdiction to rewrite the contract for the parties.
Counsel further submitted that the Respondent’s employment with the Appellant was regulated by the provisions of Exhibits D1, D2, and D3 because the Respondent’s letter of employment (Exhibit C9) incorporated the Exhibits by reference. The parties are therefore bound by their contract of employment. Counsel relied on Texaco Nigeria Plc v. Kehinde (2001) 6 NWLR (pt.708) 224 and Nwaka v. Shell Petroleum (2003) All NLR 456.
Learned Counsel argued that the dismissal of the Respondent by the Defendant was as a result of gross negligence, incompetence and misconduct in the course of her work as the Relationship Manager of the Nnewi Branch of the Appellant. Counsel submitted that the term “misconduct in the employer employee con means any act that could undermine the interest of the employer; and that the economic loss occasioned to the Appellant as a result of the Respondent’s gross negligence amount to misconduct. Counsel relied on Uzoho v Task Force on Hospital Management (2004) 5 NWLR (pt 867) 627. Counsel submitted that the Respondents dismissal is justified and ought not to have been disturbed by the lower Court because once there is a provision in a written contract of employment permitting dismissal or termination of employment, and once it is shown that the parties acted in accordance with those terms, the Respondent would be deemed to have been lawfully dismissed.
Adams v. Lagos State Development and Property Corporation (2000) 5 NWLR (Pt.656) 291.
Learned Counsel contended that the Respondents negligent conduct resulted in economic and financial loss to the Appellant; about N43.3m in the Judyke Nigeria Ltd’s transaction and N46m in the Morrison & Comfort Limited’s credit transactions. The losses it was contended were due to the negligence and refusal of the Respondent to monitor the vessels conveying the customer’s goods and that these acts are sufficient gross misconduct on the part of the Respondent for which the Appellant can exercise disciplinary action dismissing the Respondent from it’s employment. Counsel relied on the following cases:
Usen v. Bank of West Africa Ltd. (1965) 1 All NLR 244, Ningi v. First Bank of Nig. Plc (1996) 3 NWLR (Pt.435) 220 and Yusuf v. Union Bank of Nigeria (1996) 6 NWLR (Pt.457) 632. Counsel further argued that the Appellant is empowered by the provisions of clause 2.9.4 of Exh. D2 to dismiss from its employment any permanent member of staff found to have committed any act of gross misconduct. It was contended that the failure of the Respondent to discharge her responsibilities as contained in clause 2.2.4 of Exh. D1 to monitor the arrival of the shipping documents and vessels amounts to acts of gross misconduct for which the Appellant rightly exercised its sanction of dismissal against the Respondent. The learned trial Judge was therefore wrong to have held that the dismissal of the Respondent from the employment of the Appellant was wrongful and unlawful.
RESPONDENT’S ARGUMENTS:
Learned Counsel for the Respondent in his brief submitted that the Learned Trial Judge was right to have held the suspension and dismissal of the Respondent from the employment of the Appellant wrongful and unlawful. Counsel contended that the Trial Judge properly evaluated the evidence led by the parties and made proper use of his opportunity of seeing and hearing the witnesses during the Trial. Counsel submitted that the findings of the learned Judge are not perverse in any way but based on evidence adduced before her. He referred to and relied on Mrs. Dele Akingboye Vs. Latifu Salisu & Ors – (1999) 7 NWLR (Pt.611) 434 AT 440. Counsel referred to the case of Olafimihan vs. Nova Lay Tech. Ltd (1998) 4 NWLR (Pt. 547) 608 and submitted that the decision therein is applicable to the facts of this case and clearly supports the decision of the Trial Court in holding both the suspension and dismissal wrongful and unlawful. Counsel further submitted that the trial Judge correctly found as a fact that the alleged breaches of rules of natural justice by the defendant in the procedure leading to the dismissal of the Claimant averred to in paragraphs 15 (a) – (l) of the first amended statement of claim were not denied or controverted by the defendant. There was consequently no obligation on the Claimant to proffer further proof of the facts as the facts must be deemed admitted. Counsel referred to Okesuji vs. Lawal (1986) 2 NWLR (Pt.22) and Owosho & Ors Vs. Dada (1984) 7 S.C. 149.
Counsel submitted that the issue of fair hearing and/or natural justice raised by the Claimant is unassailable and since the Trial Judge and the parties are bound by the pleadings of the parties, the Court had no choice but to proceed to give judgment on the basis of the case as presented by the parties. See Udengwu vs. Uzuegbu – (2003) 13 NWLR (Pt 836) 136 at pages 141 & 142.
Counsel further submitted that even assuming (without conceding) that the Respondent was guilty of gross negligence, incompetence and misconduct in the cause of her work as the relationship Manager of the Nnewi Branch of the Appellant, her suspension and dismissal would still have been unlawful and wrongful, if the suspension and dismissal failed the test of fair hearing and/or natural justice. He referred to Olafimihan Vs. Noca – Lay Tech Ltd. (Supra); NBCI Vs AFIV JIR for (Minina) Nigeria Limited (1993) 4 NWLR (part 287) 346 at 350 Ration 9; Incar Nigeria Limited vs. Adegboye Estate Limited (1977) S.S.C. 115.
APPELLANT’S REPLY:
Learned Counsel for the Appellant in his reply on issue 1 submitted that the argument by the Respondent that by failing to traverse the averments in paragraph 15(a) – (l) of the first amended statement of claim, the Appellant is deemed to have admitted same is misconceived and should be discountenanced by the Court. Counsel submitted that the Appellant properly traversed the averments contained in the said paragraphs in paragraphs 13-18 of the Statement of Defence at page 65 of the Record. Counsel consequently submitted that the cases of Okesuji v. Lawal (1986) 2 NWLR (Pt 22) 417 and Owosho v Dada (1984) 7 SC 149 cited and relied on by the Respondent are irrelevant and inapplicable to the present case. Counsel further submitted that the judicial authority of Olafimihan v. Nova Lay-Tech. Ltd. (1998) 4 NWLR (Pt. 547) 608 relied on by the Respondent is irrelevant and inapplicable to the present case because in Olafimihan the dismissal of the Appellant was declared wrongful because “… the Appellant was not given any opportunity to defend himself on the allegations made against him contrary to the finding of the lower court..”. In the instant case, the Respondent was given enough opportunity to defend herself against the allegations leveled against her before the Staff Disciplinary Committee.
RESOLUTION OF ISSUE 1
It is settled law that in an action for wrongful dismissal from employment, the burden is always on the Claimant to prove the terms and conditions of his contract of employment and in what manner the said terms were breached by the employer. Angel Spinning & Dyeing Ltd v Ajah (2000) 13 NWLR (Pt.685) 532. Further, in a contract of employment between a master and a servant without statutory flavour, once the master complies with the terms of the agreement, he may relieve the servant of his job with or without reason. But where the master gives a reason, the burden rests on him to establish that reason. Olatunbosun v. Nigerian Institute of Social & Economic Research Council (1988) 3 NWLR (Pt 80) 25. The master must in addition give the servant a fair hearing as enshrined in the Constitution of the Federal Republic of Nigeria. The learned trial Judge in his judgment at page 418 of the record correctly stated the law that in a master and servant relationship such as the one in this case, the primary consideration is whether in the dismissal of the employee, the employer complied with the terms of the contract of employment. The parties herein are ad idem that exhibit C9, the Respondent’s letter of employment which specifically incorporated exhibits D1 (UBA Credit Policy Manual), D2 (UBA PLC Staff Handbook) and D3 (Code of professional Conduct and Ethics) by reference govern the relationship between the parties. In his judgment at page 434 -435 of the record, the learned trial Judge observed:
“The Defendant in Clause 4.2.3 of exhibits D2 stipulates as part of its disciplinary measures suspension “where an investigation of a suspected or reported infraction is in progress”. The preponderance of authorities is that if it becomes necessary to suspend an employee in order to facilitate investigate into some alleged malpractice or infraction of duty, the employer is at liberty to suspend without affording an employee any hearing. Since parties are bound by the terms of their contract and a combined reading of Clauses 9.0 of exhibit D1 and 4.2.3. of exhibit D2 is that the Claimant can only be suspended after a query had been issued to her and her explanation was found to be unsatisfactory, having thus found that no queries were issued to the Claimant before her suspension, it follows that the suspension was in contravention of her terms of employment and was therefore unlawful and wrongful and I so hold.”
Learned Counsel for the Appellant found fault with the above reasoning of the trial Judge. He argued that the contract between the Appellant and the Respondent recognized two modes of suspension and that Clauses 9.0 of Exh. D1 (UBA PLC Credit Manual) and 4.2.3 of Exh. D2 (UBA PLC Staff Handbook) apply in respect of different situations. Counsel argued that Clause 9.0 of Exh. D1 (UBA PLC Credit Manual) would apply after the investigation of any alleged infractions have been completed and there is a finding of wrongdoing on the part of the Respondent. On the other hand, clause 4.2.3 of Exh. D2 (Staff Handbook) applies where an investigation of a suspected or reported infraction is ongoing and to enable proper investigation of a suspected or reported infraction, the Appellant may suspend its staff as it did in the present case. Counsel argued that the Appellant suspended the Respondent from its employment pending the investigation of the wrongdoing regarding Judyke Nigeria Ltd. And Morrison & Comfort Ltd’s transactions; and was in accordance with the terms of the contract between the Appellant and the Respondent.
The problem with the Appellants contention is that the Respondent was suspended on half salary which is punitive in nature. It is certainly against fair hearing and the rule of natural justice to take such a punitive measure against the Respondent without first giving her a hearing through a query. Where the Appellant desired to proceed under Clause 4.2.3 of exhibit D2 to suspend the Respondent in order to make room for proper investigation, such suspension ought to be on full salary in order not to create the impression that the Respondent has already been found guilty without giving her any hearing. In support of his stand, the appellant had referred to the case of Lewis v. Heffrer & Sons (1978) 3 All ER 254. But in that case the suspension was with full pay. Lord Denning stated the law thus:
“Very often irregularities are disclosed in a government department or in a business house; and a man may be suspended on full pay pending inquiries, Suspicion may rest on him; and so he is suspended until he is cleared of it. No one so far as I know, has ever questioned such a suspension on the ground that it could not be done unless he is given notice of the charge and an opportunity of defending himself, and so forth. The suspension in such a case is merely done by way of good administration. A situation has arisen in which something may be done at once. The work of the department or the office is being affected by rumours and suspicions. The others will not trust the man. In order to get back to proper work, the man is suspended. At that stage the rules of natural justice do not apply.”
It will appear therefore that the learned trial Judge was right in his conclusion that the Appellant by suspending the Respondent on half salary without giving her a hearing, acted in breach of clause 9.0 of Exhibit D1 and the rules of fair hearing and natural justice. The finding is not perverse and the appellant is wrong in his contention that the trial Judge by that finding rewrote the contract of the parties.
Learned Counsel for the Appellant had contended that the dismissal of the Respondent was justified and ought not to have been disturbed by the lower Court because once there is a provision in a written contract of employment permitting dismissal or termination of employment and once it is shown that the parties acted in accordance with those terms, the Respondent would be deemed to have been lawfully dismissed. From the provisions of Clauses 2.9.4 and 4.2.3 of Exhibit D2, the only act of an employee for which dismissal is a sanction is any “act of gross misconduct”.
Clause 2.9.4 provides:
“Dismissal: The Bank may, without notice or the payment of any entitlements, dismiss from its employment any permanent member of staff found to have committed any act of gross misconduct.”
Clause 4.2.3 on discipline provides:
“UBA strives to promptly address all issues arising from misconduct by members of staff. The Bank’s disciplinary procedures are designed to promote and enforce the appropriate professional behavior amongst members of staff.
Where a member of staff is habitually negligent, disobedient, persistently absent from work without good reason, or performs below standard, the bank will take necessary disciplinary action to address the situation. Disciplinary measures that may be employed by the Bank include …………Dismissal “Used where a member of staff is found to have committed acts of gross misconduct. Acts of gross misconduct are those acts that fall within the Bank’s list of infractions and sanctions.”
The question therefore is whether the Appellant in dismissing the Respondent acted in accordance with the above provisions. In answering this question, the learned trial Judge at pages 422 – 428 examined in great detail the activities of the Respondent in the two Import Finance Facilities (IFF) transactions for which she was dismissed in order to ascertain if indeed she was guilty of gross misconduct. I shall with apologies reproduce in extensio the reasoning of the learned trial Judge as it brings into clear focus the rationale for the judgment as a summary of same may lose some of its impact:
“As regards the 1st IFF transaction for Judyke, by exhibit D4 which is same as D5, the Claimant initiated the process of IFF for Judyke by making a request to the ED, Commercial Banking Sector at the Headquarters. In the said document, the Claimant gave background information on the customer, source of repayment, profitability analysis and a recommendation. Exhibit D6 is the authorization of credit for Judyke in the sum of $500, 000.00 equivalent of N39,515,000.00; same was signed by the approving officers listed therein as Aliyu Dikko, ED, Commercial and Banking and E.A. King, Senior Manager, Commercial and Public Sector. The Claimant was therein listed as “Responsible Officer”. The condition precedent for draw down of the facility was clearly stated on the document. The Defendants position on this transaction is that Judyke barely had one month’s active banking with the bank and so recommending it for IFF as was done by the claimant was clearly in breach of the provisions of the credit manual, it was also alleged that the Claimant did not monitor the arrival of the vessel carrying the goods bought with the facility neither did she monitor the arrival of the shipping documents which arrived Nnewi branch August 21st 2001 and was not attended to until six months later. DW1 however admitted under cross examination that there was no evidence to show that the information given by the Claimant on exhibits D4 and D5 are false. She again admitted that the branch manager did not inform the Claimant in writing of the arrival of the shipping documents as specified in Clause 2.2.4 of exhibit D1; the credit manual. In effect on this last issue it was not conclusively shown when the Claimant was informed of the arrival of the shipping documents at her branch.
Although the Claimants evidence under cross examination is that she was not aware that the customer cleared the goods from the port without the knowledge of the bank or that the latter incurred any loss, exhibits C1 (b) and (d) however show that whilst she may not have been certain as to how the goods were cleared and by whom, she knew and confirmed in these memos that customers account was in debit to the tune of N38,240,620 as at 15th August, 2002.
From the provisions of the credit manual, the Claimant as relationship manager has the responsibility to give accurate information on the suitability of the customer for the type of credit that is being applied for, that this is so is also confirmed by the contents of the information given by the Claimant on Judyke in exhibits D4 and D5. That heavy reliance is placed on the information given by the relationship manager in the request for facility on the customer cannot be over emphasized considering the fact that the approving authorities who are based at the head quarters would usually not have had direct dealing and personal knowledge of the customer’s dealing with the bank. The Claimant had in paragraph 2 of exhibit D4 stated thus:
“The MD Mr. Jude Ezenwanne is a seasoned business man whose years of experience is over 10 years. Company annual turn over is over N5bn, Account relationship started in April, 1998, However, account was abandoned for reasons that had to do with the inability of the bank in processing their request for an IFF. The truth of the matter was that they mistook the branch’s position that their newly opened account must be operated for a while to mean refusal. Their other Bankers are FBN, Citizens, Fidelity, Continental Trust and Savannah to mention a few.”(Underlining mine)
Firstly, the bank’s position in Clause 2.2.3 of exhibit D1 that IFF was to be availed prime customers of the bank with proven track records and who are not known for defaulting on their obligations seem to have been effectively communicated to the customer. More importantly is the evidence of DW1 that there is no evidence showing that the information given on D4 and D5 are false save that the transaction went awry. It would therefore seem that the Claimant did not contravene the above provision in recommending Judyke.
On the failure of the Claimant to monitor the arrival of the ship which was admitted it was argued for the Claimant that it was impracticable for the Claimant who was in Nnewi to monitor the arrival of the ship at Lagos. In view of the clearly spelt out responsibility of the Claimant as relationship manager in Clause 2.2.4 of exhibit D1 to monitor the arrival of vessels at ports, it cannot be successfully argued that an alleged impracticability renders the clause not binding on the Claimant as she was bound by the provision. In any event monitoring does not necessarily imply physical presence. The position of the law is that a party who pleaded and founded his claim on a particular document cannot turn round to assert that he is not bound by those documents or a portion of the document. See NICON Vs POWER & INDUSTRIAL ENGINEERING CO. LTD. (1986) 1 NWLR (Pt 14) Pg 1.
The question however is in view of the failure of the branch manager to notify the Claimant of the arrival of the shipping documents at the branch office in writing, which leaves the issue of when the Claimant became aware of the arrival of the said documents inconclusive, was the Claimants failure to monitor the arrival of the vessel fatal and liable to undermine the interest of the defendant bank? The Claimant’s evidence which is uncontradicted, is that usually the shipping documents arrive before the vessel, in the circumstance, bearing in mind the failure of the branch manager to promptly inform the Claimant of the arrival of the shipping documents, it was not unreasonable for the Claimant to assume that the shipping documents had not arrived until her attention was called to it by the Risk review team since normally the goods could not have been cleared either by the customer or bank. In other words, the arrival of the shipping documents would in fact seem to be a precursor or pointer to the arrival of the ship.
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Most cases where negligence as grounds for dismissal has been upheld have been with regard to bank employees. This is for the obvious major role that banks play in the economy and the need for public confidence not to be eroded as it was, not too long ago in the wake of the collapse of many banks and financial institutions in this country either due to large scale employee fraud or bad and unrecoverable debts. In Usen Vs Bank of West Africa (1965) ALR Comm. 425, the appellants neglect led to the loss of employer’s #235 (pounds); the Supreme Court upheld his dismissal even though he had worked for 14 years without blemish. In Union Bank of Nigeria Ltd. V. Edet (1993) 4 NWLR (Pt.287) 288, the respondent who had served meritoriously for over two decades was terminated with no reason given. A few months earlier, the respondent had been involved in irregular foreign exchange transactions for which she was queried. Her explanation was that it was a mistake arising from the hectic pace of work on the fateful day. The Court of Appeal was not impressed. In Ningi V. First Bank of Nigeria Plc. (1996) 39 LRCN 1139, the appellant an accountant opened an account for a prospective customer without obtaining due reference on him in accord with banking practice and express instructions of his employer. The customer later defrauded the bank of N868,201,60. The magnitude of the fraud influenced the Court of Appeal in concluding that the singular act of negligence could ground a dismissal. It would seem from the above stated cases that the magnitude of the loss occasioned by the employee’s negligence weighed heavily on the mind of the court and was definitely a factor in the employers consideration of whether the act amounts to or qualify as misconduct, grave or serious misconduct than the fact it might well be the first of the employee’s transgression. In all of these cases cited above there were however unacceptable and untoward behaviours on the part of the employees, sometimes bordering on fraud or dishonesty.
In the instance, the Defendant bank lost the sum of N43,000,000.00 on the Judyke transaction and the sum of N46,000,000.00 on the Morrison and Comfort transaction, losses which were confirmed in the Claimant’s status report on both companies i.e. in exhibits D8, D9 and D10 respectively. Was there however an unacceptable and untoward behaviour on her part with regard to the two facilities in question or should the court find the Claimant guilty of misconduct simply because of the magnitude of the loss resulting from the grant of facilities initiated by her? I would have to answer the latter question in the negative and hold that there was no unacceptable and untoward behaviour on the part of the Claimant. I therefore find and hold that the Claimant did not commit any act or acts of gross misconduct warranting her dismissal from the bank,” In spite of this brilliant exposition of the law, with all due respect to the learned trial Judge, I do not agree with her view that the Respondent did not commit any act of gross misconduct. In determining whether or not there was an act of misconduct, gross or otherwise, the place to look is the contract of employment of the Appellant with its appendages. First, the bank’s position in Clause 2.2.3 of exhibit D1 is that IFF was to be availed prime customers of the bank with proven track records and who are not known for defaulting on their obligations. The bank’s view was that Judyke did not qualify and should not have been recommended. I am of the view that the explanation given by the Respondent for recommending Judyke notwithstanding that the account it opened in April 1998 was abandoned is untenable. It indeed confirms that Judyke did not qualify for the facility. It was not a prime customer of the bank with proven track records. Judyke opened the account and when he was informed that he has to operate the account for a while before being eligible for IFF, it abandoned the account. No doubt in her anxiety to attract the patronage of the customer’s business amidst intense competition, the Respondent recommended the approval of the transaction. She attempted to explain the reason for the abandonment of the account to the approving authority. It is a point in her favour that she did not try to hide it or cover it up and that the approving authority did approve the facility. They could have turned it down. But from the provisions of the credit manual, the Respondent as relationship manager has the responsibility to give accurate information on the suitability of the customer for the type of credit that is being applied for as the approving authorities who are based at the head quarters would usually not have had direct dealing and personal knowledge of the customer’s dealing with the bank. No doubt, the Respondent had good intentions and was probably motivated by getting the business of Judyke but it is to avoid what eventually happened with the account that the bank included in its exhibit D1, the credit manual the requirement that such facility should be availed only prime customers of the bank with proven track records and who are not known for defaulting on their obligations. The Respondent in my view knew that she did not comply with the rule and that was why she was evasive under cross-examination on the point or even lied. Hear her at page 380 of the record of proceedings:
“Q: Was it part of your duty as a Relationship Manager who had initiated the credit facility to monitor the arrival of the vessel conveying the goods for which the facility was purchased.
A; Yes, it was part of my responsibility.
It was not part of my responsibility to monitor the shipping documents. When shipping documents come they go to the branch Manager who then informs the Relationship Manager. Judyke Coy had operated the account for 5 years i.e. 1998 – 2001.
I don’t know if the account was operated between 1998 (when it was opened) and 2001.
I don’t know if the account was only operated for a short while before the grant of the credit facility.
Q: Did you complete an Authorization of Credit form in favour of Judyke.
A: No
Q: Did you monitor the arrival of the vessel
A: No I did not. I did not monitor the arrival of the Shipping documents because it was not my job. I was told by the Manager when it arrived.
If the Respondent had complied strictly with that part of the credit manual and the loss arose, she may not have been blamed but with the huge amount of money lost by the bank, it is not surprising that the bank saw her slip as gross misconduct.
On the allegation that the Claimant did not monitor the arrival of the vessel carrying the goods bought with the facility neither did she monitor the arrival of the shipping documents, the view of the learned trial Judge that it was not unreasonable for the Claimant to assume that the shipping documents had not arrived until her attention was called to it by the Risk review team is contrary to the evidence led by the Claimant/Respondent. In paragraph 5 of the Respondent’s witness deposition on oath on the Reply to the Statement of Defence at page 202 of the record, the Respondents evidence was that the Nnewi branch manager received the shipping documents from the Head office and kept them; that the bank manager informed her verbally, against formal writing as required by the bank’s credit manual of the arrival of the shipping documents and that she and her team then called on the customers to fund the account in repayment of the loan. In paragraph 9 (a), she categorically denied that her attention was called to the shipping documents by the Risk Review Team six months after the arrival of the shipping documents. She maintained that before the Risk Review Team came to Nnewi, they had already initiated calls and visits to the customers for repayment. The learned trial judge rightly pointed out that the Respondent was wrong in denying the duty and obligation to monitor the vessel as according to her it was impracticable for her to do so from Nnewi as the staff at Headquarters were better positioned to perform the task. I agree with the learned trial Judge that in view of the clearly spelt out responsibility of the Claimant as relationship manager in Clause 2.2.4 of exhibit D1 to monitor the arrival of vessels at ports, it cannot be successfully argued that an alleged impracticability renders the clause not binding as she was bound by the provision. The Respondent in some instances as shown in her cross-examination set out above admitted that it is her duty to monitor the vessel and in other instances denied that it is. She did however admit that she did not monitor the arrival of the vessel. Her explanation that the branch manager did not inform her in writing of the arrival of the shipping documents does not in my view affect her responsibility to monitor closely the arrival of the goods. She admitted that he informed her orally. All these added to the fact that the Respondent recommended Judyke knowing that it did not meet the requirements laid down by the bank constitute infractions; and acts of gross misconduct are defined as those acts which fall within the Bank’s list of infractions. An act of infraction that leads to the loss of N43,000,000.00 is by the bank’s conditions of service gross misconduct. In addition to all of the above issues, in the second IFF transaction involving Morrison & Comfort Ltd, there was over invoicing of the goods purchased with the facility as the bank only realized N10.5 Million upon clearing the goods and selling them. The bank lost N46,000,000.00. Somebody is responsible for this gross negligence. The Respondent cannot claim to be blameless. She initiated the process leading to the grant of the facility. Clause 4.2.5.1 of Exhibit D2 on Credit Discipline requires an officer of the bank who has responsibility for the creation of and management of credit exposure to apply utmost skill, experience and judgment in the analysis and approval of facilities. The fact that the over-invoicing occurred at all is evidence that The Respondent’s judgment did not meet the required standard. I do not accept the contention of the learned trial Judge that the Respondent could not be held liable on the transaction unless it is shown that she could have detected the over invoicing by applying her utmost skill, experience and judgment in her analysis of the project. The fact that it occurred at all is evidence that proper analysis was not carried out. The Respondent, in my candid view cannot like Pontius Pilate wash her hands off this huge loss suffered by the bank with respect to the two IFF facilities which she initiated. Other staff of the bank such as the bank manager and the approving authorities may be culpable as well but the business of the court in this appeal is not to bother itself about other bank officials who ought to have been sanctioned also. Our business is to determine whether the trial Judge was right in holding the dismissal of the Respondent wrongful and unlawful. It’s been shown that the Respondent was guilty of infractions of the bank’s policies and negligence leading to the loss of huge sums of money by the bank. There is of course evidence that the Respondent had never been queried or involved in any negligent act before the present case and had served the bank well and diligently. It seems however from the cases analyzed by the trial Judge that the magnitude of the loss occasioned by the employee’s negligence weighed heavily on the mind of the court and was definitely a factor in the employer’s consideration of whether the act amount to or qualify as misconduct, grave or serious misconduct than the fact it might well be the first of the employee’s transgression.
In sum, I hold that the suspension of the Respondent on half pay without first issuing her a query is wrongful and unlawful. While there is evidence that her conduct over the two facilities is such as could lead to dismissal, whether the dismissal was wrongful and unlawful depends on the outcome of issue 5 which I shall now consider.
ISSUE 5:
Was the lower court right when it held that the Respondent was not granted fair hearing before the committee investigating the allegations of misconduct against the Respondent? (Grounds 7 and 8 of the Notice of Appeal).
Appellant’s arguments:
Learned counsel for the Appellant on issue 5 submitted that in order to investigate the allegations of wrongdoing regarding the Judyke Nigeria Ltd. and Morrison & Comfort Ltd.’s transactions, the Appellant issued queries to the Respondent in her capacity as the Relationship Manager that initiated the transactions. Counsel stated that some of the Memoranda are: (i) Status Report on Sale of IFF Imported Goods Morrison & Comfort Limited and Comfort (M+C) dated July 25, 2002 (Exhibit D10); (ii) Judyke Nigeria Ltd. Industries Limited IFF – Present Position – N39.5M. DR. dated July 25, 2002 (Exhibit D9); and (iii) Judyke Nigeria Ltd. Present Position – N28,240,620 DR. dated August 15, 2002 (Exhibit D8). Counsel submitted that in the course of the investigation, the Appellant suspended the Claimant via a letter of April 16, 2003. Thereafter the Appellant wrote and invited the Respondent to its Management Staff Disciplinary Committee (‘the Committee”) via an Internal Memorandum of April 23, 2003 captioned, “Notice of Management Staff Disciplinary Committee – Poor Credit Initiation and Weak Account of Import Finance Facilities” (Exhibit D11). Counsel submitted that on Monday May, 5, 2003, the Respondent appeared before the Committee in order to defend herself against allegations of violation of the Appellants Credit Manual in initiating and monitoring the Judyke Nigeria Ltd. and Morrison & Comfort Ltd. transactions which caused the Appellant huge financial loss. The Committee found that she contravened several provisions of the UBA Hand Book (Exhibit D1), the Credit Manual (Exhibit D2) and the Code of Professional Conduct and Ethics (Exhibit D3). Counsel submitted that the Appellant considered the contravention as constituting gross misconduct and consequently, on May 6, 2003, the Appellant dismissed the Respondent from its employment. Counsel submitted that the dismissal was in accordance with the terms and conditions of the Respondent’s employment.
Learned counsel submitted that contrary to the contention of the Respondent that she was not given adequate time to make her defence before the Committee, she was afforded adequate time. Counsel argued that on April 23, 2003, the Respondent was requested to appear before the Committee and that she appeared on May 5, 2003 and had adequate time for her defence. Counsel submitted that the Committee was an administrative tribunal and not a court of law and that the Respondents right to fair hearing was observed and respected by the Committee as she made written representations to it. He relied on Baba v. NCATC (1991) 5 NWLR (Pt.192) 388 and further submitted that the law is settled that fair hearing does not mean oral hearing and that no rule of administrative procedure obliges the Committee to take oral evidence from parties before coming to its conclusion or determination of the issue before it, if such decision could be reached by consideration of documentary evidence. Counsel cited Ansambe v. BON Ltd (2005) 8 NWLR (Pt.928) 650 and Okereocha v. Minister of Commerce and Tourism (2001) 1 NWLR (Pt.693) 126. He finally submitted that the Respondent was afforded her constitutionally guaranteed right to fair hearing before the decision to dismiss her from the Appellant’s employment was reached.
RESPONDENTS ARGUMENTS:
Respondent’s counsel in reply submitted that the lower court was right in holding that the Claimant/Respondent was not granted fair hearing. Counsel submitted that the Appellants counsel was totally wrong in alleging that the Appellant issued queries to the Respondent in her capacity as the Relationship Manager that initiated the transactions”. Counsel referred to the findings of the lower court at page 431 lines 26-41 of the Records of Appeal which run thus:-
“It is observed however that those memos by the Claimant referred to various memos written by the defendant, to which the Claimant was responding i.e. memo dated 25/7/02 UAD/A4J/553/2002, of 18/07/12 and RM/AUD/AJ/DR/549/2002, none of these was tendered by either of the parties. Moreover, the contents of the Claimant’s Exhibits D8, D9 and D10 did not address the issue of her alleged breach of duty as relationship manager. Her correspondences were not answers to queries as the learned counsel for the Defendant would have the court believe, they were simply internal memos, updates on the status of the two customers viz-a-viz the facilities granted them. It would therefore seem that the Defendant did not follow its laid down procedure of first issuing the Claimant with a query and receiving written explanation in response thereto as stipulated in clause 9.0 of exhibit D1 already reproduced above”.
He submitted that an appellate court will not disturb the findings of facts of a trial court unless it is shown:-
(a) That the findings are perverse or
(b) That there is a miscarriage of justice or
(c) That there is a violation of some important principle of law or procedure which, if corrected the Court cannot stand.
Counsel referred to the cases of Stool of Abinahina v. Enyimadu (1995) 12 WACA 171 at 173 Enang v. Adu (1981) 11 – 12 SC 25 at 42 Nwadike v. Ibekwe – (1987) 4 NWLR (Pt 67) 718.
Learned counsel submitted that the Appellant did not succeeded in establishing any of the three (3) grounds above which would entitle an appeal court to disturb the findings of fact of the lower court.
Counsel submitted that the lower court also found that:
“the evidence of the Claimant on the alleged breach of the rules of natural justice by the Defendant in the procedure leading to the Claimant’s dismissal which is contained in the averment in paragraph 15 a-l of her further amended statement of claim was not denied or controverted by the Defendant” page 430 lines 14-18 of Records.
Counsel referred to paragraphs 12, 13, 14 15 and 16 of the Claimants first Amended Deposition on Oath at page 238 of Record; paragraphs 12, 13, 14 and 15 of the Claimants/Respondent’s Reply to Statement of Defence at page 197 of Record and paragraph 13, 14, 15, 16 and 17 of the Claimant Witness Deposition on Oath on the Reply to Statement of Defence at page 201 of Records on fair hearing and natural justice and insisted that the averments were not challenged by the Defendant/Appellant and therefore deemed proved by the lower court. Counsel submitted that it is impossible on the face of all these pieces of evidence for the Appellant’s Counsel to sustain his submission on this issue which are not supported by evidence on Records. He urged the court to dismiss his arguments as incorrect and misleading.
RESOLUTION OF ISSUE 5:
The law is that where a contract of employment is properly terminated, intention and motive become irrelevant. But where as in this case, the Appellant as defendant in his statement of defence pleaded that the Claimant was dismissed for gross misconduct, the dismissal cannot be justified in the absence of adequate opportunity being given to the claimant to explain or justify the alleged misconduct. Taiwo v. Kingsway Stores 19 NLR 123; Ajayi v Texaco Nig. Ltd (1987) 3 NWLR 577; Olaniyan v. University of Lagos (1985) 2 NWLR 599: Olatunbosun v Niser (1988) 3 NWLR (Pt.80) 25.
The proper procedure to adopt in the situation is as laid down by the Supreme Court in the case of Baba v. N.C.A.T.C. (1991) 5 NWLR (Pt.192) 388 @ 418-419, per Nnaemeka-Agu JSC of blessed memory:
“Where some allegations have been made against an employee…..the employer is entitled to set up a panel to investigate the allegations. Such an investigating panel is not a court of trial; so it is enough if it gives to any of the persons whose names feature in the inquiry the opportunity of making some representations, oral or written, before it. In the process of investigation, it can receive its information from any source.. …….The panel of inquiry not being a court of trial, none of the persons whose names feature in the inquiry can insist on any right to cross-examine other persons who make allegations or present memoranda at the inquiry. But once the panel has concluded its inquiry and makes up its mind that any points had prima facie been made out which point to the fault of any person, the employer must first inform such an employee of the points in the case against him and give him the opportunity to refute, explain or contradict them or otherwise exculpate himself by making any representations or defence thereto before the employer can lawfully use those points as bases for dispensing with his services.”
On the application of the principles of fair hearing, the Supreme Court at page 415 of the case observed:
“Where a body, whether judicial, quasi-judicial, administrative or executive in inception, acts judicially in the sense that it is to determine the civil rights and obligations of a person, or to find him guilty or liable to a fault, then he must be given a hearing before the issue can be properly decided. That is the intendment of section 33(1) of the 1979 Constitution and is also the essence of fair haring as a constitutional right. In such cases the hearing body must be seen to have observed all the implications and attributes of fair hearing.
Further, in the case of Olafimihan vs. Nova Lay Tech Ltd, (1998) 4 NWLR (Pt.547) 608 at 611 the Court held:
“……in an action for wrongful dismissal where the employer contended that the employee was removed or dismissed for a specific misconduct, the removal or dismissal cannot be justified in the absence of adequate opportunity afforded to the employee to explain, justify or defend the alleged misconduct. In the instant case, since the Appellant was not given any opportunity to defend himself on the allegations made against him contrary to the finding of the trial court, his removal or dismissal was clearly wrongful…”
With these principles in mind, can it be said that the Appellants observed the principles of fair hearing before dismissing the Respondent? The Respondent in paragraphs 15(a) – (l) of the first amended statement of claim set out the particulars of non-compliance with the principles of natural justice. However learned counsel for the Respondent in his brief wrongly claimed that the Appellant did not traverse the averments in an amended statement of defence and so did not contradict the Respondent. This view which the learned trial Judge accepted in her judgment is not correct. Exactly similar averments were made in the original statement of claim and they were duly traversed in the Appellants statement of defence paragraphs 12 – 18 at page 65 of the record. These facts were also in the witness deposition of DW1 sole witness called by the Appellants. That notwithstanding, the procedure adopted by the Appellant is really not in dispute and I agree with the Respondent’s counsel that the Respondent was not given fair hearing. The letter of invitation to appear before the Disciplinary Committee was not signed and did not disclose any charges against the Respondent or provide any notice of the case against her at the said Disciplinary Committee.; the Respondent was not present all through the proceedings of the Disciplinary Committee to hear all the evidence against her. She was not given any opportunity to read any documents used or tendered in evidence at the hearing. She was not told the case against her and did not have adequate opportunity to prepare for her defence. The Appellant’s response was that the various memos written by the Respondent were queries which she responded to and that in view of those memoranda, she could not claim to be ignorant of what the Disciplinary Committee was all about. The learned trial Judge was right in her view that the memoranda did not address the issue of the Respondent’s alleged breach of duty as relationship manager and could not therefore qualify as queries, The Appellant had also argued that the caption on the letter of invitation to the Respondent to appear before the Disciplinary Committee meeting was adequate information to the Respondent as to what the meeting was about. The caption read: “Notice of Management Staff Disciplinary Committee – Poor Credit Initiation and Weak Account of Import Finance Facilities.” This letter of invitation with the caption will certainly not create the impression in the mind of the Respondent that she was going to the Disciplinary Committee meeting as an accused person to defend herself. In his submissions above, Appellant’s counsel argued that the Respondent appeared before the Committee in order to defend herself against allegations of violation of the Appellants Credit Manual in initiating and monitoring the Judyke Nigeria Ltd. and Morrison & comfort Ltd. transactions which caused the Appellant huge financial loss. The Committee found that she contravened several provisions of the UBA Hand Book (Exhibit D1), the Credit Manual (Exhibit D2) and the Code of Professional Conduct and Ethics (Exhibit D3). The underlined words are precisely the allegations that should have been clearly set out in the letter of invitation to the Respondent to appear before the Disciplinary Committee. That way she would know precisely the charges she was facing and would prepare adequately to explain herself. She was denied that opportunity. It is unarguable that she was not given the chance to explain the role she played in the transactions and was consequently not given fair hearing. Learned counsel for the Appellant further complicated matters by claiming that the Disciplinary Committee was an administrative tribunal and not a court of law and that the Respondents right to fair hearing was observed and respected by the Committee as she made written representations to it. There is nothing in the record of proceedings to show that what the Disciplinary Committee worked with was written representations by the Respondent, Under cross-examination at page 384 of the record, the Respondent said:
“At the committee no allegations were leveled against me. I was queried as to why I did not clear Judyke goods, I was given time but it was not enough for me to respond to the queries. I was not prepared for the panel.”
It appears from the evidence above that the Respondent made oral presentation. Whatever the case, the appellant ought to have tendered a copy of the proceedings of the Disciplinary Committee in order to support its claim that the Respondent was given fair hearing. It did not tender the document. As observed by Oputa JSC in Olatunbosun v. Niser Council, “the right to be heard is such an important, radical and protective right, that the courts strain every nerve to protect it and even to imply it where a statutory form of protection will be less effective if it did not carry with it the right to be heard”. I need mention that the fact that the individual appeared before a panel or committee does not imply that he was given fair hearing. I think the view of Ngwuta J.C.A. as he then was in Osumah v EBS (2004) 17 NWLR (Pt. 902) 332 @ 336 puts the matter in the proper perspective:
“The fact that the appellant appeared before a court or a panel does not ipso facto mean that he was given a fair hearing in a matter in which his conduct is called to question. He may have been heard, but there can be no fair hearing if the appellant did not know what his employer had against him. If the purpose of the hearing is to determine his guilt or the propriety vel non of his conduct it is not enough that he is heard; the hearing must relate to his defence of the complaint against him. Being the person to be affected by the outcome of the hearing, there is need to afford him the opportunity not just be heard, but to be heard in this defence of whatever allegation is made against him.”
I have no difficulty whatever in finding that due to some oversight, the Appellant failed woefully in its duty to give the Respondent fair hearing in accordance with natural justice before the dismissal. The Appellant simply assumed that the Respondent knew her sins. True, the two facilities she initiated led to a huge loss. But the bank should have given her notice in clear terms of what she did wrong that gave rise to the loss. Neither her letter of suspension nor the letter inviting her to the Disciplinary committee meeting nor her letter of dismissal stated any reason. The gap cannot be filled by internal memos on the facilities. I hold therefore that the learned trial Judge was right in her conclusion that the dismissal was wrongful and unlawful. Issue 5 is resolved in favour of the respondent and against the Appellant.
ISSUE 6:
Is the Respondent entitled to the award of the pre- and post-judgment interest at the rate of 10% and/or any other rate at all on the judgment sum under the High Court of Lagos State (Civil Procedure) Rules, 2004 or under any other law? (Grounds 9 and 10 of the Notice of Appeal).
I have considered carefully the submissions of both counsel on issue 6. The Respondent in paragraph 23 (d) of the first amended statement of claim at page 235 of the record claimed as follows:
“Special and general damages of N13,872,416.00 (Thirteen million, eight hundred and seventy-two thousand, four hundred and sixteen naira) for unlawful suspension and dismissal of the Claimant from the service of the Defendants and with interest thereon at the rate of 21% per annum from the 31st July, 2005 until judgment and thereafter at the rate of 21% per annum from fully paid.”
In other words the Respondent claimed both pre and post judgment interests. The learned trial Judge at page 439 of the record held that no evidence was adduced by the Claimant in support of the rate at which she claims pre-judgment interest as required by law. The learned judge none the less awarded pre-judgment interest at the rate of 10% per annum. The law is that pre-judgment interest is awarded where there is an agreement for payment of interest or under mercantile custom or under a principle of equity such as breach of fiduciary duty. In such cases, the pre-judgment interest must be pleaded and proved. See Hausa v F.B.N Plc (2000) 9 NWLR (Pt.671) 64; Ekwunife v Wayne W/A Ltd (1989) 5 NWLR (Pt.122) 422. This case did not come under any of the situations where interest is as of right. Even it did, the Respondent did not plead facts or lead evidence entitling her to such interest or the rate. Learned counsel for the Respondent was wrong in his contention that the Respondent didn’t need to prove the issue of interest because her claim of 21% was not challenged or controverted by the Appellant. The entitlement of the Respondent to pre-judgment interest being an issue of law must be established by evidence whether her pleading was traversed or not. Having found as a fact that no evidence was led by the Respondent, the trial Judge erred in turning round to award her 10% pre-judgment rate. Order 35 Rule 4 of the High Court of Lagos State (Civil Procedure) Rules 2004 empowers the judge to award interest at a rate not less than 10% per annum upon any judgment. This power is clearly restricted to post judgment interest and does not apply to pre-judgment interest. Unity Bank Plc. v. Denclag Ltd & Anor (2012) LPELR – 9729 (SC); Himma Merchant Bank Ltd v. Kachalla (1994) 5 NWLR (Pt.347) 667. Even if the Respondent claimed interest as of right and/or under a principle of equity following the breach of fiduciary relationship as suggested by learned counsel for the Respondent, she must plead and lead evidence of the circumstances entitling her to such interest, not just the rate of interest. In sum, the learned trial Judge erred in awarding the Respondent pre judgment interest of 10%. This issue is resolved in favour of the Appellant.
In the final result, this appeal succeeds in part. The appeal is allowed only in respect of the grant of 10% interest per annum from the 6th of May 2003 until the date of judgment that is the 27th of November, 2008. That aspect of the judgment is hereby set aside. Subject to this, the appeal lacks merit and is dismissed on all other heads. For the avoidance doubt, the judgment of the trial court in suit No.LD/1273/05 delivered on 27/11/08 is upheld but the Claimant is awarded interest at the rate of 10% per annum from 27/11/08 until the total judgment debt is paid. Cost is assessed at N100,000.00 in favour of the Respondent.
AMINA A. AUGIE, J.C.A.: I have read in draft the lead Judgment just delivered by my learned brother, Iyizoba, JCA, and I agree with his reasoning and conclusion. It is settled that an employee cannot be removed or dismissed for a specific misconduct in the absence of adequate opportunity afforded to him to justify or explain same – see Yusuf v. Union Bank (1996) 6 NWLR (Pt.457) 632, where Wali, JSC stated –
” – – Before on Employer can dispense with the services of his Employee under the common law, all he needs to do is to afford the Employee an opportunity of being heard before exercising his power of summary dismissal, even where the allegation for which the Employee is being dismissed involves accusation of crime”.
See also Nigerian Oil Mills V. Daura (1996) 8 NWLR (pt.465) 601, and Arinze v. First Bank (Nig.) Ltd. (2000) 1 NWLR (pt. 639) 78 where Olagunju, JCA, held –
“It seems to me from the perspective of the decisions on the powers of an Employer to dismiss summarily his Employee for gross misconduct that the propelling keystone is the preservation of the constitutional right of fair hearing. Whether the Employee was first prosecuted for the criminal offence arising from his acts of misconduct pales into insignificance once the Court is satisfied that the Employee was given a fair hearing in the sense of being confronted with the allegation against him and afforded the chance to make representation in his own defence. In sum, contrary to the argument of learned counsel for the Appellant, the principle that where the act of misconduct by on Employee also amounts to a criminal offence, the criminal offence must first be prosecuted before the Employee can exercise his power of summary dismissal of the Employee is not intended as law of the Medes and Persians. It is not an immutable principle”. (Italics mine)
In this case, it is clear from the record that the Respondent was not given a fair hearing before she was dismissed, and I also allow the appeal. I abide by the consequential orders in the lead Judgment including the order as to costs.
JOSEPH SHAGBAOR IKYEGH, J.C.A.: Pre-judgment interest must arise from the mutual agreement (contract) between the parties prior to the litigation or dispute that led to the litigation, or by the custom governing the transaction that brought about the litigation, or by statute, or under a principle of equity such as breach of a fiduciary relationship before it may be claimed, proved and awarded by a court. It is not granted as a matter of routine. See Ekunife v. Wayne (West Africa) Ltd. (1989) 5 NWLR (Pt.122) 422 at 445 which was followed in Himma Merchants Ltd. v. Alhaji Inuwa Audu (1994) 5 NWLR (pt.347) 667 at 676 -677. To the extent that the claim of pre-judgment interest was not based on any of the criteria stated above and coupled with the fact that the respondent did not plead and prove facts showing her entitlement to pre-judgment interest, the court below was wrong to award pre-judgment interest rate of 10% on the judgment debt. That aspect of the judgment is accordingly quashed.
For the reason given above and the lucid reasons given in the resourceful lead judgment of my learned brother, Iyizoba, J.C.A., which I had the honour of preview and with which I agree, I too would allow the appeal in part and stand by the consequential orders contained in the said lead judgment.
Appearances
Fred Onuobia Esq.For Appellant
AND
E. C. Ukawoko (Mrs) holding brief for Chief Phillip Ndubuisi UmehFor Respondent
