O. Afolabi & Ors V. Western Steel Works Limited & Ors (2002)

LawGlobal-Hub Lead Judgment Report

A. OGUNTADE, J.C.A. 

The appellants were the plaintiffs before the Lagos State High Court in Suit No. LD/1285/82 and respondents the defendants. The issues to be decided in this appeal fall within a very narrow compass. The relevant facts are these:

The plaintiffs were employees of the 1st defendant. The 1st defendant declared them redundant. Prior to the declaration, the 1st defendant had entered into in agreement with the plaintiffs to pay them some benefits in consequence of the redundancy declared. The 1st defendant failed and or neglected to pay the benefits. The plaintiffs sued the 1st defendant before the lower Court claiming damages. The plaintiffs amended there pleadings and added several other plaintiffs. The 3rd defendant who is now appellant was joined to the suit. In the pleading it was alleged that the appellant had acquired the assets and liability of the 1st defendant by purchase. The appellant denied that it acquired the liabilities of the 1st defendant. It however admitted that it bought some of the assets of the 1st defendant from a third party. The object of the plaintiffs pleading that the appellant had acquired the assets and liabilities of the 1st defendant was to make the appellant also liable to pay the terminal benefits due to the plaintiffs for which they brought their claim.

At the trial, the plaintiffs called five witnesses. The defendants called none. The trial judge, Famakinwa J. in his judgment held that the plaintiffs had not called sufficient evidence to show that the appellant had acquired the liabilities of the 1st defendant. He therefore dismissed plaintiffs’ suit against the appellant. Dissatisfied, the plaintiffs have brought this appeal. In the appellant’s brief, the issue for determination was formulated thus:

“Whether the learned trial judge was right in refusing to make the 3rd defendant/respondent jointly liable with 1st defendant to satisfy reliefs 1 (a) and (c) of the appellants’ claims.”

The respondent’s issues for determination are these:

“1. Having in its pleadings averred that the 3rd defendant has either merged or acquired Western Steel Works Limited and that it has taken over the assets and liabilities of Western Steel Workers Limited while the 3rd defendant in its pleadings denied being merged with or having acquired the 1st defendant’s assets or liabilities and further stated categorically that it purchased “certain assets, plants and machinery’ through a third party, on whom did the burden to prove that the 3rd defendant acquired the liabilities of the 1st defendant’s lie?

Or put in another way from the pleadings filed in this suit, on who did the burden of proof on the issue of transfer of the liabilities of the 1st defendant lie?

2. Has the burden been discharged by the party on whom it lies.”

A comparison of the issues formulated by the two parties easily reveals that the issues are in substance the same. It is whether or not the plaintiffs (now appellants) called sufficient evidence in support of their case to warrant the lower court give judgment in their favour.

The lower court in a passage of its judgment had said concerning the 3rd defendant:

“From this point we could move on to the 3rd defendant involvement in the case. From the line of evidence given it is disclosed that 3rd defendant had bought over the 1st defendant Company. On the 17th September, 1990, the 3rd defendant was joined in the action filed about 8 years to date.

The evidence revealed that the main reason why the action is instituted is because the companies had changed hand. In his testimony 1st P.W. testified that:

“The 1st defendant company has been transferred to Eurks Metals Ltd.”

So in effect a change has occurred and if anyone is aggrieved by reason of the change he ought to lay his complaint before the Federal High Court and not State High Court. However the question of change in the company is not the cause of action before this court. There is nothing anyone can do about the change in the company. The evidence in the case remains far short to connect or involve 3rd defendant in the action. There isn’t legal evidence to establish the fact that the company has taken over the assets and liabilities of the 1st defendant. A transaction of this nature could only be effectively carried out by written documents and not just made by means of oral evidence. Plaintiffs claim in my respectful view could only succeed against the 3rd defendant, if it could be shown by credible evidence that it had taken over the assets and liabilities of the 1st defendant. None of the witnesses called by the plaintiffs ever go (sic) near even to state that they had taken the assets and liabilities of the 1st defendants.