Swiss-nigerian Wood V. Bogo (1970)
LawGlobal-Hub Lead Judgment Report
The plaintiff, now the respondent, instituted an action against the defendants who are the present appellants claiming a total amount of 20,000 pounds described by him as special and general damages for breach of contract occasioned by his wrongful dismissal from the employment of the defendants.
Originally, there were two defendants to the action, the first being Swiss-Nigerian Wood Industries Ltd., and the second a Mr. Solomon Fried who was the Managing Director of the first defendant company.
The second defendant was, in the course of the judgment in the court below, dismissed from the action with costs, the learned trial Judge holding that he “had only acted as their (i.e., the first defendants’) agent throughout this transaction.” In this judgment the references to “defendants” imply only the first defendants.
The plaintiff’s statement of claim avers that he is a Swiss national holding a diploma in business administration and that pursuant to an advertisement by the defendants in a Swiss national newspaper he applied for and later secured a job with the defendants as their Deputy Managing Director “at a salary of 3,600 (Three Thousand Six Hundred Pounds) per annum plus other benefits and entitlements.” The plaintiff’s statement of claim also avers that a written contract of employment was executed by the parties on July 22nd, 1968. Paragraph 10 of the statement of claim reads as follows:
“10. By the terms of the said agreement the plaintiff was entitled:
(a) To have the said employment continue until the expiration of two years from the date of employment unless otherwise determined.
(b) To receive two years’ salary if for any reason whatsoever the employment is otherwise terminated.
(c) To receive thirty days’ notice of intention to terminate the said employment within the first three months’ probationary period only and to have the said employment continues until the expiration of such notice.
(d) To receive two months’ leave with full pay at the expiration of the two years’ employment.
(e) That the period of the three months’ probation would commence on the date the plaintiff arrived in Nigeria.
(f) To receive free air passage tickets tourist class for himself and his family from Lagos to Zurich (g) To receive a free furnished house, free steward, free car and a chauffeur and free medical treatment.”
The plaintiff further avers by his statement of claim that by letter dated April 29th, 1969 the defendants wrongfully determined the plaintiff’s employment and neither gave him the requisite notice nor paid him the salaries and prerequisites to which he was entitled. The statement of defence filed by the defendants denies the averment of wrongful dismissal and states that the summary dismissal of the plaintiff was proper as he had been guilty of wilful and persistent disobedience of instructions from the Managing Director of the defendant company.
Evidence was given at the trial by both sides and a number of documentary exhibits were tendered and produced. The contract of employment between the parties was produced and admitted as Exhibit J3, and the letter by which the plaintiff’s appointment was determined was produced and admitted as Exhibit J13. In the course of his judgment the learned trial Judge, Sowemimo, J., expressed the view that in the events which had happened the defendants breached their contract with the plaintiff and were liable to him in damages. After setting out the law relating to the measure of damages the learned trial Judge stated as follows:-
“Applying this principle therefore to the particulars of special damages, the plaintiff would be entitled to all the items of special damages totalling 13 pounds,115 less the amount which I have ordered during these proceedings to be paid to him, and in addition I award 500 pounds as general damages.”
A total award of 13 pounds,615 was therefore made to the plaintiff and this appeal is brought by the defendants against that judgment. Although both the original and the substituted grounds of appeal questioned the finding of the court below that the defendants were liable in damages, no argument has been addressed to us by or on behalf of the defendants concerning the fact of their liability, and learned counsel representing the defendants has before us conceded the issue of liability.
The arguments on the appeal ranged around the measure of damages and put in issue the amount of the awards. In Para.18 of his statement of claim the plaintiff has itemised the amount of damages claimed on his writ for that paragraph reads as follows:
“18. By reason of the matter aforesaid the plaintiff has suffered and is still suffering damage and has not been able to obtain employment elsewhere.”
Whereof the plaintiff claims as follows:-
Particulars of Special Damage
1. Salary due for the month of April 1969 which is unpaid.
2. Salary due for the unexpired period of contract of service in Nigeria.
3. Estimated costs of employment benefits and entitlements including free house, free medical treatment, free car and chauffeur and steward effect. Before us in this court and during the pendency of the a
4. Expenses incurred on behalf of the defendants in Switzerland for trans-portation, visa, medical treatment and for the delay of the travelling of the plaintiff to Nigeria at the defendants’ request.
5. Unpaid retained salary for November 1st, 1968 to January 12th, 1969 for the services rendered in Europe to the defendants at their request.
6. General damages for wrongful dismissal Total amount claimed:
p s d
We were told that whilst the case was pending in the High Court, Lagos a total amount of 600 pounds representing salary was paid to the plaintiff by the defendants pursuant to an order of the court to that effect. Before us in this court and during the pendency of the appeal an application was made by the plaintiff and acceded to by this court that an amount of 1,000 pounds be paid to him by the defendants in part satisfaction of his claims.
The position then is that at the time that the appeal was being argued the plaintiff had already received a total amount of 1,600 pounds from the defendants apart from his salary for the month of April 1969 which was agreed had in fact been paid to him.
With respect to items Nos, 1, 4 and 5 of the damages claimed, learned counsel for the defendants submitted that they are items of debt owing to the plaintiff and not claims properly recoverable in consequence of the breach of contract. With respect to items Nos.2 and 3, learned counsel submitted that as put the claims are misconceived and must have been founded on the continued existence of the contract, an assumption which must be fallacious.
Furthermore, in counsel’s submission even if item NO.3 is accepted as claimable it had to be, and it was indeed not, proved. Learned counsel for the defendants also contended that the Judge’s award of 500 pounds under item No.6 is in the circumstances of this case insupportable, since the item was not attached to any particular head of claim and such award may in fact be tantamount to reparation being made twice over in respect of the same detriment or a mere bestowal by way of punitive damages.
The law with respect to the measure of damages has not changed ever since the famous dictum of Alderson, B. in Hadley v. Baxendale, where he observed as follows (9 Exch. at 354, 156 E.R. at 151):-
“Now we think the proper rule in such a case as the present is this:- Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract as the probable result of the breach of it.”
In the preparation of the claim for, as well as in the consideration of an award in consequence of, a breach of contract, the measure of damages is the loss flowing naturally from the breach and incurred in direct consequence of the violation.
The damages recoverable are the losses reasonably foreseeable by the parties and foreseen by them at the time of the contract, as inevitably arising if one of them broke faith with the other. In the contemplation of such a loss there can be no room for claims which are merely speculative or sentimental unless these are specially provided for by the terms of the contract.
It is only in this connection that damages can be properly described as “special” in the conception of contractual awards and it must be borne in mind that damages normally recoverable are based on the normal and presumed consequences of the breach complained of: see Koufus v. C. Czarnikow Ltd.
Thus the terms “general” and “special” damages are normally inept in the categorisation of damages for the purposes of awards in cases of breach of contract. We have had occasion to point this out before: see Agbaje v. National Motors Ltd; and we must make the point that apart from damages naturally resulting from the breach no other form of general damages can be contemplated.
We think therefore that the argument of learned counsel for the defendants that the further award of 500pounds as general damages in this case could not be supported as such is well founded, and the award must be set aside.
In the course of the hearing of this appeal, we were informed by counsel on both sides that item NO.1 on the itemised list had been satisfied. We therefore do not propose in this judgment to deal further with that item. Items Nos. 4 and 5 consist of claims for money spent or work done by the plaintiff on behalf of the defendants and unpaid for by them. Clearly these are items of debt and learned counsel for the plaintiff must and did concede that they were.
In Abdallah v. Achou, this court extensively considered the differences between claims for liquidated debts and claims in respect of damages arising through a breach of contract. In the course of that judgment we observed as follows:-
“The decision of Adedipe, J. was on the writ and statement of claim, which we have quoted, based on damages for wrongful dismissal and he was therefore in our view in error in awarding as damages sums for past salary and two other items (leave pay and air ticket) which had been earned already under the contract so that they were incurred debts and should have been sued for as such.”
In the present case as well the learned trial Judge dealt with the claims on items Nos. 4 and 5 as if they were damages on the breach. They are not, and should not have been dealt with as such. Claims in these items should have been made separately, for, if proved, they succeed not by virtue of the breach complained of but by virtue of the existence and subsistence of the contract. We are of the view that the attack on the awards in items Nos. 4 and 5 succeeds and the awards on these items must be set aside.
The claims on items Nos. 2 and 3 have been attacked before us as misconceived in the way they are constituted. Item No.3 was also challenged on another ground, i.e., that it was not proved.
For the purposes of this argument it was assumed that the claim on item No.3 was properly constituted and indeed it was conceded by learned counsel for the defendants that if properly constituted and proved the claim is recoverable by virtue of the breach of the contract of employment. The complaint however was that the claim was not proved.
This court took the same view in E.C.N. v. Nicol. The evidence given in that case concerning a similar claim was of better quality than has been given in the present case, but both the court below and this court were in agreement in Nicol’s case that the item was not properly proved.
The damages claimed by virtue of items Nos.2 and 3 in the present case are not any “special” damages but are simply parts or portions of the loss occasioned to the plaintiff by reason of the wrongful determination of his contract of employment; but whichever way one looks at it the plaintiff always has the burden of proving his claim to damages before he can recover them.
The rule is axiomatic and is a natural deduction from the provisions of s.134 (1) of the 35 Evidence Act (cap.62). Both the fact and the amount of damage alleged must be proved, the party claiming can only recover nominal damages, if anything at all. The evidence concerning the claim in item No.3 in this case is hopelessly meagre, and it is to the following effect:-
“I estimate that I would lose benefits for free house, free chauffeur driven car, free medical treatment and free steward to a total amount of 6,000 pounds if my contract had not been unlawfully and prematurely terminated. I had to pay for stewards, electric bills, gas, petrol, taxis (when car was under repairs).”
No further evidence appears on the record of appeal in support of this item of claim, and indeed learned counsel for the plaintiff conceded that the plaintiff gave no further evidence on the point. It is manifest therefore that the Judge had no material before him upon which to proceed to sustain the claim and to agree to the quantification of a claim on which he had heard only such precious little. We agree therefore that this claim was not proved.
But the claim in item NO.3 is, like item No.2, challenged as well on the ground that as fashioned in the action it is not such as could properly be awarded in consequence of a breach of contract. In the course of his judgment the learned trial Judge acceded to the claim as an item of special damages. We have already referred to the rule concerning the measure of damages.
What an employee-party to a contract of employment loses by premature determination of his contract may be co-extensive with the amount of his presumed salary or wages for the unexpired residue of the life of the contract, but it is not necessarily so.
In all cases of breach of contract the award by the court must be based on the loss naturally flowing from the breach, and it is the duty of the court to apply the legal method of assessment to any qualification and clearly not to take any pre-estimated determination as if the damages were special and so provided for in the contract. In Haidar v. Berini Bank Ltd the Federal Supreme Court considered a similar situation and the following observations of the report are pertinent (1963) 1 All N.L.R. at 142-143):
“Equally the provision in the case of breach by the Bank is not a pre-estimate of damages in the genuine sense. The flaw in the argument for the plaintiff is that it treats the contract, which has been broken and does not exist, as subsisting until the end of the three year period and entitling the plaintiff to salary for the unexpired term of twenty-nine months. That is a mistake, as pointed out by Tindal, C.J. at the beginning of his judgment in French v. Brooks and Others 6 Bing 354…”
In the case in hand there was no pre-estimate of the measure of damages for the type of breach which had occurred, and the learned trial Judge was in error to take a view which is tantamount to accepting that there was such a pre-estimate, which can only be grounded on the illogical argument that the contract of employment must be presumed to be, though in fact it was not subsisting for the entire period of two years. The point that the claims in items Nos.2 and 3 are not properly constituted is therefore, in our view, well taken, and as claimed and pleaded the awards must be set aside.
We do not however agree that the success of the objection on this point should deprive the learned trial Judge and a fortiori this court of the power to make such awards as would be justified on the evidence. In the course of the argument we indicated to counsel that we should be willing to treat the claim on item No.2 as a measure of the extent of the damage which the plaintiff had suffered from the breach of the contract by the defendants: see Haidar’s case. Counsel was not opposed to this and we shall deal with this aspect of this case at a later stage in this judgment. The plaintiff has established that the defendants were in breach of their contract with him and, prima facie, he is entitled to damages. The plaintiff has also proved that had the contract continued to its natural expiry he would have received so much as salary and the court should have awarded him the damages to which he was legally entitled.
In the case of Haidar v. Berini Bank Ltd, the Federal Supreme Court took the view that the measure of damages should be the plaintiff’s remuneration for a total period of twelve months allowing for the duration of the case the time for deciding on and filing his appeal and the time thereafter that it would likely take him to find alternative employment.
He was a bank official and was employed by the Bank in Lebanon and sent out to work in Lagos. In the present case, the plaintiff was described as holding a diploma in business administration and there is uncontroverted evidence on the record that the plaintiff on being offered employment by the defendants sold out his confectionary factory in Switzerland at a loss. His appointment which commenced in January 1969 was determined in April 1969 and his salary for the month of April, we are now told had been paid him. He instituted the present action in May 1969 and judgment was given in the High Court at the end of November, 1969, so that the action lasted for a period of seven months. We think that in the particular circumstances of this case the plaintiff is entitled to be indemnified for all that period during which the case was pending.
We think also that he would require some time, say a month, to decide on his appeal and file same. On his return to Switzerland he would have to start all over again, but he must seek alternative employment and not organise his life on the basis that the Lagos contract, which was breached and determined, however wrongly, was still in operation.
We consider that a period of six months from the time of his return to his country should be adequate for him to re-settle down to another business. On the whole, we consider that he would be entitled to damages measured by his loss for a total of 14 months beginning from and including the month of May 1969 i.e., a total amount of 4,200 pounds using his monthly salary of 300 pounds as a basis.
If the total amount of 1,600 pounds which we are told had been already received by the plaintiff is then taken into consideration, as indeed it should be, he would now be entitled to the difference between his total entitlement of 4,200 pounds and that amount, that is 2,600 pounds.
We have already dealt with all the items of claim in respect of damages sought by the plaintiff; and for the reasons contained in this judgment, we concluded that the appeal succeeds, and it is allowed.
The judgment of the High Court of Lagos State in Suit No. LD/227/69, in so far only as it concerns the measure of damages, is set aside, and for the avoidance of doubt it is ordered that all the awards under each and every one of the items of claim on the statement of claim be set aside.
It is hereby adjudged that the plaintiff be paid total damages for breach of his contract of employment by the defendants of 4,200 pounds, from which amount should be deducted a sum of 1,600 pounds already paid to him in virtue of orders of court in the course of this case, that is, a balance of 2,600 pounds.
The plaintiff will pay the costs of the appeal in this court fixed at 63 guineas. As both parties have succeeded in part before the High Court, we will not disturb the awards made as to costs in the court below.
Other Citation: (1970) LCN/1760(SC)