⦿ CASE SUMMARY OF:
Dr. Ben O. Chukwumah V. Shell Petroleum Development Company Of Nigeria Limited (1993) – SC
by PipAr Chima
⦿ LITE HOLDING
Malice, bad faith etc, are non-issues in determining the lawfulness or otherwise of the termination of a contract.
⦿AREA OF LAW
Contract of service.
Contract of employment.
Terms of termination.
Dr. Ben O. Chukwumah
Shell Petroleum Development Company Of Nigeria Limited
(1993) JELR 43291 (SC)
⦿ LEAD JUDGEMENT DELIVERED BY:
* FOR THE APPELLANT
– Chief Chukura, SAN.
* FOR THE RESPONDENT
– Onomigbo Okpoko, SAN.
The plaintiff, Dr. Ben O. Chukwumah is a registered medical practitioner and a specialist in obstetrics and gynecology. In October 1975 he was offered (and he accepted) a locum appointment by the Shell Petroleum Development Company (Nig) Ltd, as a medical officer in the company’s service at its Port-Harcourt branch. By a letter dated 26th November 1976 the company offered him (and again he accepted) a regular appointment as a general duties Industrial Medical Officer at its Warri branch with effect from 17th December 1976. He performed so well that a year later his appointment was confirmed and he became a member of the Shell-BP Contributory Pension Fund and was entitled to other benefits other employees of the company enjoyed. It would appear, however, that relations between him and employer soon became strained and by a letter dated 18th August 1981 his appointment with the Company was terminated with effect from the date of the letter. While in the employ of the Company, the plaintiff was residing with his family in a house provided by the Company and situate within its premises at Warri. With the termination of his employment, the Company gave him a month’s notice to vacate the house. According to the plaintiff, he was ejected from the house on 15th October, 1981.
Aggrieved by the termination of his employment and his ejection from the company’s house he occupied as a paying tenant, plaintiff sued the Company in the High Court of the former Bendel State, in the Warri Judicial Division claiming: ”
(1) A declaration that the defendants’ letter dated 18th August 1981 addressed by the defendants’ branch at Warri to the plaintiff at Warri by which the defendants purported to terminate the employment of the plaintiff with the defendant company is actuated by malice and bad faith, is grossly unreasonable and capricious and is ineffective to terminate the plaintiff’s said employment.
(2) Further and in the alternative, the plaintiff claims from the defendants the sum of ₦385,529.00 (Three hundred and eighty five thousand, five hundred and twenty nine Naira) being compensation for the loss caused to the plaintiff by the defendants by reason of their so acting maliciously, capriciously, grossly unreasonably and in bad faith to the detriment of the plaintiff.
(3) The plaintiff also claims the sum of ₦100,000.00 (one hundred thousand Naira) being damages for trespass in that the defendants on 17th September 1981 invaded the residence of the plaintiff situate at 4 Benue Road, Ogunu, Warri, vi et armis, which at all material times is occupied and is in possession of plaintiff and therein disconnected the electric power and water supply to the premises to the inconvenience of the plaintiff and generally committed sundry, wanton acts of trespass and annoyance in the said premises in the bid improperly and unlawfully to oust the plaintiff from possession.
(4) An injunction restraining the defendants, their servants and/or agents from disturbing the possession of the plaintiff of the said premises.”
Pleadings having been ordered and exchanged and amended with leave of court (the plaintiff also filing a reply to the amended statement of defence), the case proceeded to trial at the end of which, after addresses by learned counsel for the parties, the learned trial Judge, in a reserved judgment, found that: “The plaintiff is not entitled to any of the reliefs claimed by him. I hold that he is only entitled to the two month’s salary in lieu of notice and other dues which the company stated in his letter of termination that it would credit him with. Subject therefore, this action is dismissed.”
Being dissatisfied with this judgment, the plaintiff unsuccessfully appealed to the Court of Appeal. He has now further appealed to this Court.
1. Whether the termination of the plaintiff’s employment was proper in accordance to the contract between the both parties?
2. Whether there was trespass by the defendant on the plaintiff’s housing occupation, and consequently entitled to damages?
⦿ RESOLUTION OF ISSUE(S)
[APPEAL: ALLOWED, IN PART]
1. ISSUE 1 WAS RESOLVED IN FAVOUR OF THE APPELLANT BUT AGAINST THE RESPONDENT.
i. With profound respect, however, they appeared not to have adverted their minds to the evidence of D.W.4 to the effect that payment was not made to plaintiff’s bank until 25th November 1981. In my respectful view, where a contract of service gives a party a right of termination of the contract by either giving a particular length of notice or payment of salary in lieu of the length of notice and the latter course is chosen, the party seeking to put an end to the contract must pay to the other party the salary in lieu of notice at the time of termination of the contract. It is not enough that in the letter of termination he offers to pay salary in lieu of notice. Thus in the case on hand, the defendant having terminated plaintiff’s employment without giving him the required notice, must pay him at the time of the termination, salary in lieu of notice. Payment made three months after termination cannot be in fulfilment of defendant’s obligation under clause II. The defendant ought to have paid the salary either directly to the plaintiff or through his designated bank on 18th August 1981; and, where it is by payment into bank, the plaintiff must be so informed promptly. The payment into bank on 25th November 1981 cannot, in my respectful view, by any stretch of imagination, be said to be in compliance with clause II. Consequently I must hold that when on 18th August 1981 the defendant terminated the appointment of the plaintiff it did so without giving him two months notice nor pay him two months’ salary in lieu of notice as required by clause II of the terms of contract between the parties. In the circumstance, I must hold also that the termination of plaintiff’s employment by the defendant on 18th August 1981 was in breach of the contract between the parties and was therefore, wrongful.
Having held however that plaintiff’s employment was not terminated in compliance with the terms of the contract between the parties, is he entitled to reinstatement which, in effect, is what the claim for declaration is all about? This issue has been dealt with exhaustively in the judgments of the courts below. The general law is that the court will not grant specific performance of a contract of service. Therefore, a declaration to the effect that a contract of service still subsists will rarely be made. Special circumstances will be required before such a declaration is made and its making will normally be in the discretion of the court.
Such special circumstances have been held to arise where the contract of employment has a legal or statutory flavour thus putting it over and above the ordinary master and servant relationship. Equally so where a special legal status such as a tenure of public office, is attached to the contract of employment. While I am not prepared to hold that the list of special circumstances is exhaustive, I must say however, that in the appeal on hand I can see no special circumstance to warrant a “declaration being made in his favour having regard to his admitted breach of clause 6 of the terms of his contract with the defendant which required that during his employment he must give his whole time service to his employer. In paragraph 11 of his amended statement of claim, he admitted that during his period of service with the defendant he engaged in private medical practice. Although he claimed in that paragraph that this was in accordance with the defendant’s policy, he did not prove this policy. Paragraph 11 was not admitted by the defendant – see paragraph 6 of the amended Statement of Defence. In conclusion I am of the view that the Court below was right in refusing to grant a declaration in favour of the plaintiff as claimed by him.
Having held however that his employment was wrongfully terminated, he is undoubtedly entitled to damages. On the authorities as they stand, he is only entitled to what he would have earned over the period of notice.
Under the contract of service plaintiff’s appointment could he terminated by the defendant by giving him two months’ notice or pay him two months’ salary in lieu of notice. As his appointment was summarily terminated on 18th August, 1981, plaintiff was entitled to two months’ salary in lieu of notice. In my respectful judgment the court below was right in holding that is all that he was entitled to. In addition, however, he would also be entitled to other allowances for the period of two months normally enjoyed by him such as car allowance, et cetera. Equally so he would be entitled to his entitlement under the pension scheme.
2. ISSUE 2 WAS RESOLVED AGAINST THE APPELLANT BUT IN FAVOUR OF THE RESPONDENT.
i. It may be that the defendant company used some unorthodox method in seeing to it that the plaintiff vacated the house, such as preventing plaintiff and his visitors gaining entrance into the estate thereby preventing them coming to the house where he lived with his family. It is not the same thing as saying that trespass, as pleaded, was proved. In view of this conclusion I consider it necessary to dwell in depth on the issue whether the plaintiff was a tenant or licensee in respect of the premises, the subject matter of the claim for damages for trespass and injunction. I have no reason to disturb the concurrent findings of the two courts below. I hold, therefore, that the claims for damages for trespass and injunction were rightly dismissed.
⦿ CONTRIBUTIONS OF OTHER JUSTICES TO ISSUE(S)
per Bello CJN:
In my view, since the respondent had been paying the appellant’s salaries to his bank, the respondent ought to have paid the salary in lieu of notice to the Bank immediately after the appellant had failed to contact the Staff Supervisor. To wait for three months before making the payment was not compliance with the term of the contract. The time of payment exceeded the two months period of notice for terminating the contract. Accordingly, the contract was wrongfully terminated.
⦿ ENDING NOTE BY LEAD JUSTICE – Per Ogundare JSC
The net result of all I have been saying is that this appeal succeeds only on the point as to the wrongfulness of the termination of plaintiff’s employment, he not having been given two months notice nor paid two months’ salary in lieu of notice at the time of the termination. Subject to this, I affirm the dismissal by the two courts below of his claims as contained in his writ of summons. As the authorities now stand, he is only entitled, as damages, to two months’ salary in lieu of notice and, in addition, to his terminal benefits – all of which were awarded him by the two courts below. To that extent I affirm the judgment of the two courts below. For the avoidance of doubt, plaintiff is entitled by way of damages not only to two months’ basic salary but to other monthly allowances (for 2 months) normally enjoyed by him when in the service of the defendant and to pro-rated end of year bonus and proportionate leave allowance. The damages herein awarded are clear of any deductions such as enumerated in Exhibit N14. That is, those deductions are not to be made from the damages herein awarded. In addition to the damages awarded, the plaintiff is to be paid his entitlement in the Company’s Non-contributory Pension Fund.
⦿ REFERENCED (STATUTE)
⦿ REFERENCED (CASE)
Ewerami v. African Continental Bank Limited (1978) 4 SC.99. In that case, Ewerami claimed for a declaration that by reason on his wrongful dismissal by the defendant bank he was still in their employment. The facts found by the trial Court which were not challenged was that plaintiff was employed by the defendant bank on 21st March, 1964. At the commencement of action in 1974, he was a member of the permanent staff of the defendant bank in the post of Archivist. On the 25th June, 1973. plaintiff received a letter from the defendant, transferring him from the Ring Road Branch, Benin City where he was then posted to their Jos Branch, he was to resume there on the 2nd July, 1973. Plaintiff was under subpoena to appear before the High Court Benin City on 2nd July, 1973 to testify in an action brought by the Customer of the defendant bank against the Bank. Then a catalogue of events followed. An order of court was applied for and obtained restraining the defendant bank from transferring plaintiff to Jos till the suit in which he was subpoenaed to give evidence was disposed of. Plaintiff fell ill and was issued with sick leave certificate excusing him from duty. Unknown to plaintiff, defendant proceeded on the 3rd August, 1973 to transfer him to Jos. Meanwhile the Ring Road Branch of the defendant had stopped paying plaintiff’s salary. On the 25th September, 1973, plaintiff instructed a Solicitor to write to defendant bank. In their reply dated 13th November, 1973, plaintiff learnt for the first time that he had been instructed in another letter dated 3rd August, to proceed to Jos. The defendant formed the view that plaintiff was guilty of gross insubordination by refusing to go on transfer to Jos. Before the learned trial Judge the issue was whether plaintiff was lawfully dismissed by his employers for insubordination, or whether a case for dismissal had not made out in the absence of proof that he had received the letter of 3rd August, 1973 transferring him to Jos? At the trial defendant did not offer any evidence. Relying on the case made by the plaintiff, the trial Judge held that the purported dismissal of plaintiff from the employment of the defendant company was null and void. He accordingly declared that plaintiff was still in the employment of the defendant company. Defendant company appealed. On appeal, this Court held that there was no material before the court from which it could hold that the plaintiff had been insubordinate by failing to proceed on transfer to Jos pursuant to a letter of August 3, 1973 from the defendant directing that he should do so. Their Lordships held that the onus of establishing the existence of this letter was on the appellant and that they had failed to do so. It was held that the learned trial Judge was right.
Torbett v. Faulkner (1952) 2 TLR 659, it was held that where a servant is given the personal privilege to live in a house for the greater convenience of his work, and this is treated as part of his remuneration, then he is a licensee, even though the value of the house is quantified in money. However, where he is given an interest in the land, separate and distinct from his contract of service, at a sum properly to be regarded as a rent, then he is a tenant, and nonetheless a tenant because he is a servant.
⦿ REFERENCED (OTHERS)
⦿ NOTABLE DICTA
The claim to which the declaratory relief relates must be substantial – A declaration will only be granted where there is a breach. – Karibe-Whyte, JSC. Chukwumah v. SPDC (1993)
Both in his pleadings and evidence the plaintiff concentrated so much on his allegations of bad faith, hatred, malice etc; but all these are of no consequence in determining whether or not his contract of employment was lawfully terminated by the defendant, considering that no reason was given for the termination. – Ogundare, JSC. Chukwumah v. SPDC (1993)
Trespass, of course, is a wrong against possession of land. It is not in dispute that by virtue of his employment the plaintiff was let into possession of the premises situate at 4 Benue Road in the defendant Company’s estate at Ogunu and was paying rent to the Company. Under the contract by which he held the premises he was to quit the premises within one month of his ceasing to remain in the employ of the Company. When plaintiff’s employment was terminated on 18th August 1981, he was given notice by the Company to quit the premises by 18th September 1981. If he remained in possession after that date, he would become a trespasser. But this fact did not give the defendant company right to forcibly evict him. If it did so, it would be liable to the plaintiff in trespass. It is immaterial, in my respectful view, that he was a tenant or a licensee. – Ogundare, JSC. Chukwumah v. SPDC (1993)
The common law principle is that no specific performance could be awarded for wrongful dismissal: accordingly, where a contract is purported to have been determined, even if wrongfully, it ceases to exist. – Karibe-Whyte, JSC. Chukwumah v. SPDC (1993)
I consider it necessary to say something about the phrase “in lieu of notice” which is liable to be misunderstood, in this connection. The phrase has been defined in the Concise Oxford Dictionary of English Language 4th Ed. page 687 as “in the place, instead of “. Black’s Law Dictionary, Sixth Ed. P.787, also defines the phrase as “instead of, in place of, in substitution of….Thus when the condition of termination of the contract of service is the giving of two months’ notice or the payment of two months’ salary in lieu of notice, it can only mean the payment of two months’ salary instead of, in place, in substitution of the giving of two months notice. – Karibe-Whyte, JSC. Chukwumah v. SPDC (1993)
With due respect to learned Senior Counsel to the appellant the proposition that the motive for doing an act does not necessarily determine the legality of the act is too well settled to require discussion. If there is a right to do an act, the fact that the motive for doing the act is bad will not affect its validity or legality. Similarly where there is no right, or the thing done is illegal, the purity of the motive or magnanimity of the act done will not alter the legal consequence. The motive of the party determining the contract is not one of the conditions stipulated for termination of the contract in “Exhibit N17”. See Mayor of Bradford v. Pickles (1895) A.C 587; Taiwo v. Kingsway Stores Ltd. (1950) 19 NLR.122. – Karibe-Whyte, JSC. Chukwumah v. SPDC (1993)
Ordinarily and consistent with the common law principle, the Court will not impose an employee on an employer. – Karibe-Whyte, JSC. Chukwumah v. SPDC (1993)
In any event even where a servant is wrongfully terminated, the contract comes to an end. He has his remedy in damages. – Karibe-Whyte, JSC. Chukwumah v. SPDC (1993)