Commercial Law Reports Nigeria

10/10/2017

EMPLOYMENT AFTER PROBATION RAISES A PRESUMPTION THAT THE EMPLOYMENT HAS BEEN CONFIRMED

RELIANCE TELECOMMUNICATIONS LIMITED v. MR. OLAORE OLUFEMI ADEGBOYEGA

COURT OF APPEAL LAGOS DIVISION

(IKYEGH, OGAKWU, TUKUR, JJ.CA)

In 2004, the respondent entered into a contract of employment with the appellant. The terms of contract indicated that the respondent would be on probation for a period of three months and either party could immediately terminate the employment during the period of probation. Furthermore, the contract of employment stipulated that after three months, the employment of the respondent would be confirmed and that three months’ notice will be required to be given by each party in case of termination of the employment. After the expiration of the three months probationary period, the appellant failed to confirm the employment of the respondent but continued to retain his services, paying him his entitlements and making representations to third parties suggesting that the respondent was in its employment. The relationship between the parties continued until sometime in 2005 when the appellant terminated the employment of the respondent without giving him any notice. The respondent was aggrieved and filed a suit against the appellant at the High Court of Lagos State alleging wrongful dismissal and claiming damages. After the conclusion of trial, the judge gave judgment in favour of the respondent and held that the appellant was liable in damages to the respondent. The trial court however, failed to consider and make pronouncement on the counter-claim incorporated into the statement of defence of the appellant.

The appellant was dissatisfied with the judgment of the trial court and filed a notice of appeal at the Court of Appeal, Lagos Division urging the court to reverse the decision of the trial court. One of the issues formulated for determination was whether the trial court was right in holding that the respondent’s employment was deemed confirmed immediately after the probation period without meeting the other conditions precedent and in the absence of a formal confirmation letter.

Arguing the issue, learned counsel for the appellant submitted that it is trite that parties are bound by the terms of contract freely entered into. Reference was made to a term of the contract of employment stating that the offer of employment is subject to a satisfactory medical examination, satisfactory completion of a three months’ probation period to take effect from date of assumption of duty and that the offer is subject to other terms as set out in the letter of employment and conditions of service as may be determined by the board from time to time. Learned counsel posited that since the employment of the respondent was not confirmed by the appellant before the termination, a condition precedent was not fulfilled and as such the respondent was not entitled to the three months’ notice. Counsel urged the court to resolve the issue in favour of the appellant.

Responding to the argument of the appellant, learned counsel for the respondent relied on the decision Kablemetal Nigeria Limited v. Gabriel Ativie to submit that in an action for wrongful termination of employment, the claimant is under obligation to plead and prove not only the appointment but also the terms and conditions for it to constitute the foundation of the action. Counsel submitted further that even though the contract of employment stipulated that the employment of the respondent must be confirmed after three months, the fact of non-confirmation was inconsequential and that the trial court was right in holding that the employment of the respondent was deemed confirmed since the appellant allowed the respondent to continue to work beyond the three months’ probationary period stipulated in the contract. Learned counsel relied on Obafemi Awolowo University v. Dr. A.K. Onabanjo and urged the court to discountenance the argument of the appellant and resolve the issue in favour of the respondent.

In resolving the issue, the court held thus:

The Appellant having allowed the Respondent to continue in his employment beyond the three months’ probationary period, paying him all his entitlements and further making representation via Exhibit C5 to third parties affirming that the Respondent is its employee several months after the end of the probationary period must be deemed to have waived its rights in insisting on issuance of a formal letter of confirmation to the Respondent. In such circumstances as obtained in the instant case Estoppel by conduct/representation can readily be invoked.

See: Military Government of Lagos State & Ors v. Adeyiga & Ors (2012) LEPLR 7836 (SC)

Issue is resolved in favour of the respondent.

M.T Odechima with V. I. Okafor for Appellant
TS. Adewuyi with T. O. Sh*ttu Miss for Respondent

This summary is fully reported at (2017) 8 CLRN
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31/07/2017

FUNDAMENTAL BREACH IS A VALID GROUND FOR REPUDIATING A CONTRACT

IBEON ENERGY NIGERIA LIMITED v. WILBROS (OFFSHORE) NIGERIA LIMITED

COURT OF APPEAL LAGOS DIVISION

(GARBA; OTISI; EKANEM, JJ.CA)

The appellant is in the business of providing various categories of skilled and unskilled labour to service companies. The respondent entered into a Service Agreement with the appellant to provide workers for the respondent’s facility along East-West Road, Isiolu in Rivers State.

The agreement made provisions for termination with ninety days’ notice which must be given by parties before termination can be effective. The agreement also provided for cases of strike action by the workers and stated inter alia that the appellant shall take all measures to prevent a strike, provide adequate warning to the respondent and that the appellant shall take immediate steps to bring about resumption of normal work.

The workers at the respondent’s facility embarked on a strike, and without complying with the termination provision of the agreement, the respondent immediately terminated the contract on the ground that the appellant had committed a fundamental breach by not complying with its obligations to the respondent with respect to the provision dealing with strike.

The appellant was aggrieved and filed an action against the respondent at the Lagos State High Court. After trial, the court gave judgment in favour of the respondent. The appellant appealed to the Court of Appeal, Lagos Division. One of the issues raised for determination was whether from the facts of the case and evidence admitted and a proper construction of the service agreement, the contract can be terminated outside the contemplation of the relevant provisions.

In his argument in support of the issue, learned counsel for the appellant referred to clause 8(iii) of the service agreement and posited that under the provision of the clause the parties had agreed that under no circumstance shall a party to the agreement rescind or terminate the contract without giving the other party a 90 days’ notice or payment in lieu of notice. Learned counsel further contended that the termination of the agreement by the respondent is not valid having violated the clause. Learned counsel submitted that the trial court was wrong to have held that the termination of the contract by the appellant was valid by virtue of other clauses of the contract. He cited and relied on Union Bank Nigeria Limited v. Ozigi to submit that parties are bound by the terms of their contract and therefore urged the court to resolve the issue in favour of the appellant.

Responding to the argument of the appellant on the issue, learned counsel for the respondent referred to and quoted several clauses of the service agreement indicating that the appellant was under a duty to notify it and do everything possible in its powers to prevent any strike action by the workers and to notify the respondent within a reasonable time of any impending strike. Counsel posited that failure of the appellant to do all in its power to prevent the strike and its failure to notify the respondent of the impending strike is a fundamental breach of the contract giving the respondent the choice to terminate the contract. Furthermore, learned counsel for the respondent cited and relied on the cases of Coker v. Ajewole and Balogun v. Alli-Owe to submit that if a party who is entitled to put an end to a contract by reason of a fundamental breach does not exercise that right on becoming aware of the breach, he loses the right and cannot afterwards exercise that right without giving notice of his intention to do so. The respondent acted timeously by rescinding the contract in order to mitigate its losses. He posited that the respondent had the option of either suing for damages for breach of contract or rescinding the contract and that the respondent cannot be liable in damages by reason of not giving the required notice. He urged the court to resolve the issue in favour of the respondent.

In resolving the issue, the court held thus:

The effect of a fundamental breach of a contract by a party thereto has been the subject of pronouncements by courts over the years. In Dantata v. Mohammed (2000) 7 NWLR (Pt. 664) 176,198-199 Ayoola, JSC, stated as follows:

"Where one party has committed a serious breach of contract the innocent party has a right to rescind the contract. It has been said that the contract is in such circumstances rescinded de futuro (See Halsbury's laws of England, (4th edn.) Vol 9(1) Par. 989 ... When there is a serious breach of contract, one of the consequences is that the innocent party who has elected to rescind de futuro the contract is released from further obligations under the contract. The law is put succinctly thus in Halsbury's (op. cit) par. 1003 as follows:

"If the innocent party (B) can and does elect to rescind the contract de futuro following a breach by the other party (A), all the primary obligations of the parties under the contract which have not yet been performed are terminated.
.. Thus the innocent party is released from further liability to perform ..."

In Bekederemo v. Colgate -Palmolive (Nig) Ltd (1976) 6-12 SC 24, 27 Sowemimo, JSC, as he then was, put it this way;

"... the learned trial judge was justified in refusing the appellant's claim on the ground that he had committed a breach of an essential condition, which had the effect of putting the contract itself at an end".

See also Rank Xerox (Nig) Ltd v. Centrex (Nig) Ltd (1995) 1 NWLR (Pt 374) 703, and Savannah Bank Plc v. Ibrahim (2000) 6 NWLR (Pt 662) 585.

Issue is resolved in favour of the respondent.

O.J. Ajakpovi, Esq. with Messrs O. A. Adenaike and O.B. Oduntan for the appellant.
Respondent's counsel absent.

This summary is fully reported at (2017) 5 CLRN
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18/07/2017

ONE VALID GROUND IS SUFFICIENT TO SUSTAIN AN APPEAL
ROBICON ALUMINIUM LIMITED v. ASSET AND INVESTMENT LIMITED

COURT OF APPEAL LAGOS DIVISION

(GARBA; OTISI; EKANEM, JJ.CA)

The respondent filed a petition at the Federal High Court, Lagos Division to wind up the appellant. The court, pursuant to the petition, granted the respondent’s application to advertise the petition on the 26th of October 2004 and adjourned the hearing of the petition to the 26th of January, 2005. Subsequently, the matter was adjourned on several occasions for the parties to explore settlement.

On the 18th day of November, 2008 when the matter came up for hearing, an interested party informed the court that the appellant had settled its claim and that the court should discharge him from further appearance in the matter. Thereafter, the respondent moved its petition against the appellant who hitherto, did not file a reply but asked for adjournment in order to provide the court with additional facts showing why the respondent’s petition should not be granted. The court did not grant the appellant’s request and went ahead to adjourn the matter for judgment. The court ruled in favour of the respondent granting an order winding up the appellant and appointing a provisional liquidator to manage the affairs of the appellant.

The appellant was dissatisfied with the trial court’s decision and filed a notice of appeal at the Court of Appeal, Lagos Division praying the court to set aside the decision of the trial court. One of the issues raised in the appeal is whether the learned trial judge was right to have proceeded to hear and grant the petition for winding up of the appellant in spite of the facts presented to it that the appellant had started paying off its creditors. However, the respondent upon being served with the processes, filed a notice of preliminary objection incorporated in its brief of argument challenging the competence of the appeal. The kernel of the preliminary objection is that the original notice of appeal is incompetent and that some of the grounds of appeal are invalid.

Arguing the preliminary objection, counsel for the respondent contended that the notice of appeal is in violation of Order 6 Rules 2 (2) and (3) and 3 of the Court of Appeal Rules as ground (a) alleges error in law but that the particulars are not in harmony with the said ground by not showing the error, nor was the decision attacked. The ground was therefore vague and incompetent. Furthermore, counsel for the respondent argued that the amended grounds of appeal included a complaint against an interlocutory decision which was not part of the trial court’s decision and that the appellant ought to have sought and obtained leave of court before filing same. Failure to seek and obtain leave renders the ground incompetent.

Responding to the preliminary objection, counsel for the appellant stated that the original notice of appeal is competent because the error of law complained about is apparent and incorporated in the ground itself and as a result, the particulars thereof are relevant and on record. Counsel further submitted that the amendment to the notice of appeal is valid as the court will always allow amendment of any error on appeal to correct such blunders.

In resolving the issue, the court held thus:

Ground (a) of the original notice of appeal is also not vague as its purport is clear and does not leave anyone in doubt as to its meaning. See Statoil (Nig) Ltd v. Star Deep Water Petroleum Limited (2015) 16 NWLR (Pt. 1485) 361, 385. It was also contended that the ground (a) did not attack the ratio of the decision of the trial court. That may be so but it is clear that the substance of the ground is the alleged omission by the trial court to consider the statement of appellant's counsel and proceeding therefore to order the winding up of the appellant. In the case of Akpan v. Bob (2010) 17 NWLR (Pt. 1223) 421,464 the Supreme Court held that a ground of appeal may arise from;

(i) the text of a decision;

(ii) the procedure under which the claim was initiated;

(iii) the procedure under which the decision was rendered;

(iv) other extrinsic factors such as issue of jurisdiction of the lower court; and

(v) commission or omission by the lower court in either refusing to do what it ought to do or vice-versa or even overdoing it.

The complaint in ground (a) fits into (v) above and so it is competent.

In respect of ground (ii) of the original notice of appeal, the fact that it is stated that the Petitioner was appointed as the Official Receiver is an error which does not go to the root of the ground. However, the lone particular in support of the ground is a statement of fact injected into it and it has no place whatsoever in the record of appeal. It was not stated in the court below, either by way of affidavit or statement of counsel. I therefore strike out the particular. Without the particular ground (ii) does not show in what respect the trial court erred in law and in fact. It is therefore incompetent. See Okorie v. Udom (1960) 5 FSC 162 and Anyaoke v. Adi (1986) 6 SC 75. Ground (ii) of the original notice of appeal is incompetent.

The result of what I have said thus far is that there is one valid ground of appeal ground (a) to sustain the original notice of appeal and that is enough to make it competent. See South Atlantic Petroleum Ltd v. Ministry of Petroleum Resources (2014) 4 NWLR (Pt. 1396) 24, 39. I hold therefore that the amendment of the original notice of appeal is valid.

Issue is resolved in favour of the appellant.

O. A. Olufon; Esq. with Mrs. I. O. Oyekan for Appellant
Omoniyi Akinmola, Esq; for Respondent.

This summary is fully reported at (2017) 5 CLRN 55
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07/06/2017

THE GOVERNMENT BREACHES THE CONSTITUTION WHERE IT FAILS TO IMPLEMENT FREE AND COMPULSORY PRIMARY EDUCATION.
LEGAL DEFENCE AND ASSISTANCE PROJECT (LEDAP) GTE & LTD v. FEDERAL MINISTRY OF EDUCATION & ANOR

FEDERAL HIGH COURT ABUJA DIVISION

(J.T. TSOHO, J)

The plaintiff by originating summons sued the defendants at the Federal High Court Abuja seeking several declarations and orders against the defendants. The plaintiff sought a declaration that the right to free, compulsory and universal primary education up to junior secondary school for all Nigerian citizens under section 18 (3) (a) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) is an enforceable constitutional right by virtue of the Compulsory, Free Universal Basic Education Act, 2004.

Furthermore, the plaintiff sought a declaration that the Federal and State Governments are under constitutional obligation to provide financial and institutional resources for free, compulsory and universal primary education and junior secondary education for all qualified Nigerians in fulfilment of their obligations under section 18(3)(a) of the 1999 Constitution and section 2 of the Compulsory, Free Universal Basic Education Act, 2004.

Several orders were also sought by the plaintiff one of which was to compel the Federal and State Governments to forthwith provide financial assistance and institutional resources for citizens’ exercise of their right to free, compulsory and universal primary education and free junior secondary education in terms of section 11 of Compulsory, Free Universal Basic Education Act, 2004.

The ground relied on by the plaintiff is that even though the provisions of Chapter 2 of the Constitution are unenforceable by virtue of section 6 (6) (b) of the Constitution, the provisions of the said chapter of the Constitution becomes justiciable the moment a legislation is enacted pursuant to it. The plaintiff therefore, contended that since the National Assembly had in 2004 enacted the Compulsory, Free Universal Basic Education Act, it becomes justiciable and that the Federal and State Governments are under obligation to ensure that Nigerian citizens are allowed to enjoy and reap the benefits of section 18 (3) (a) of the Constitution of the Federal Republic of Nigeria 1999 (as amended).

In resolution, the court held thus:

I have found very useful, the decision of the Supreme Court in A.G. Ondo State v. A.G. Federation (2002) 9 NWLR (Pt. 772) 222 in the resolution, not just of question I posed by the Plaintiff, but indeed the entire suit. For that reason, I will quote at length the pronouncements of the Supreme Court, which are elucidating, Uwaifo, J.S.C. at page 382 (paragraphs A - D) stated as follows:

“As to the non-justiciability of the Fundamental Objectives and Directive Principles of State Policy in Chapter 11 of our Constitution, Section 6 (c) says so (sic). While they remain mere declarations, they cannot be enforced by legal process but would be seen as a failure of duty and responsibility of state organs if they acted in clear disregard of them, the nature of the consequences of which having to depend on the aspect of the infringement and in some cases the political will of those in power to redress the situation. But the Directive Principles (or some of them) can be made justiciable by legislation. This is the point Chief Babalola seemed to have elaborated upon when he said that the Fundamental Objectives and Directive Principles had lain dormant in our Constitution since 1979 and that the Act was the first effort to activate just one aspect of them in order that there may be, good and transparent government throughout the Federation of Nigeria."

Uwaifo, J.S.C. further stated at page 391 (paragraphs F - H).

“We do not need to seek uncertain ways of giving effect to the Directive Principles in Chapter II of our Constitution. The Constitution itself has placed the entire chapter II under the Exclusive Legislative list. By this, it simply means that all the Directive Principles need not remain mere or pious declarations. It is for the Executive and the National Assembly, working together, to give expression to anyone of them through appropriate enactment as occasion may demand. I believed this is what has been done in respect of section 15(5) by the present Act the National Assembly can well legislate if in its wisdom it considers it necessary…….”

The essence of the decision of the Supreme Court in A.G. Ondo State v. A.G. Fed. (supra) is that the Courts cannot enforce any of the provisions of Chapter II of the Constitution until the National Assembly has enacted specific laws for their enforcement, as done in respect of section 15 (5) of the 1999 Constitution by the enactment of the Corrupt Practices and Other Related Offences Act, 2000. That Act was enacted pursuant to the provision of Section 15(5) of the 1999 Constitution which says:

"The State shall abolish all corrupt practices and abuse of power.”

In the instant case, there is no doubt that the National Assembly enacted the Compulsory, Free Universal Basic Education Act, 2004, based on the provisions of Section 18 (1) & (3) of the CFRN 1999 (as amended).

Those provisions read as follows:

"18. (1) Government shall direct its policy towards ensuring that there are equal and adequate educational opportunities at all levels.

(3) Government shall strive to eradicate illiteracy; and to this end Government shall as and when practicable provide –

(a) Free, Compulsory and universal primary education;

(b) Free secondary education;

(c) Free University education; and

(d) Free adult literacy programme."

Having been guided by the pronouncements of the Supreme Court in the case of A.G. Ondo State v. A.G. Fed. (supra), I hold that with the enactment by the National Assembly of the Compulsory, Free Universal Basic Education Act, 2004, the specific provisions covered by that Act have become justiciable or enforceable by the Courts

Issue is resolved in favour of the plaintiff.

E. C. Obiagwu Esq with P. Egbele (Miss) for the Plaintiff.
Mrs. U. C. Ikpe for the 1st Defendant.

This summary is fully reported at (2017) 3 CLRN
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