The Nigerian Produce Marketing Board Vs A. O. Adewunmi (1990)
LawGlobal-Hub Lead Judgment Report
In the Lagos High Court in Suit No. LD/346/68, the respondent as plaintiff claimed from the defendants the sum of £30,000 as damages for wrongful dismissal from the defendant’s employment as their Sales Officer on the 4th day of May, 1968. He also claimed, in the alternative, a declaration that the said dismissal by the defendants is “illegal, null and void, and of no effect.” Paragraphs 26-28 of the Statement of Claim filed by the plaintiff read-
“26. The plaintiff has never at any time acted in breach of the terms, expressed or implied, of his employment with the defendants. 27. The plaintiff will contend at the trial of this action that his dismissal was against the principles of natural justice. 28. The plaintiff will further contend at the trial of this action that the review undertaken by the Board of Directors of the defendants is in excess of its power, and that the members who attended the meeting of the Board of Directors on the day this case was ‘reviewed’ acted maliciously.
WHEREUPON the plaintiff claims as follow:- (a) Loss of Gratuity and/or Non-contributory Provident Fund £10,000 (b) Loss of salary withheld by the defendant during the period of suspension i.e., 1st November, 1967, to 20th November, 1967… £56 3s. 4d. General Damages (c) Damages not already covered under (a) and (b) above … … £19,943 6s. 8d.”
After reviewing the evidence adduced by both parties, the learned trial Judge, in a reserved judgment, found inter alia as follows:- “On the evidence before me I find that the Directors of the Company when dealing with the plaintiff’s case did not observe the principles of natural justice and that they acted ultra vires. The dismissal was therefore wrongful and I award the sum of £4,500 as damages in respect of the non-contributory Provident Fund which would be due to the plaintiff.
I consider this amount to be reasonable as the plaintiff is comparatively young and could still get another suitable employment. I refer to the decision of the Supreme Court in Electricity Corporation of Nigeria v. George Nicol, SC. 591/1966 of 3/6/68 unreported. Also Manubens v. Leon (1919) 2 KBD p. 208 and Salt v. Power Plant Co. Ltd. (1936) 2 All ER p. 322. I award the sum of £56 13s. 4d., loss of salary, and £1,000 as General Damages in favour of the plaintiffs with 100 guineas costs.”
In the appeal now before us, Mr. Lardner who appeared for the defendants/appellants informed us, quite rightly we think, that he had no complaint against the finding of the learned trial Judge that the defendants/appellants were liable for wrongful dismissal. His main complaint, and indeed the only complaint, was about the quantum of damages awarded.
His main grounds of appeal in this respect, all of which he argued together, read- “1. On the question of award of damages the learned trial Judge misdirected himself in law and on the evidence by failing to make certain essential and definite finding of fact, to wit, (a) whether the contract of service of the plaintiff was determinable only on his attaining the age of 55; (b) if not so, the circumstances thereof with regard to (i) the notice required and whether it was an express term of the contract or implied and to be determined as a fact having regard to all the circumstances. (ii) the contractual terminal entitlements of the plaintiff particularly his entitlement, if any, against the defendant under the Staff Provident Fund.
2. The learned trial Judge misdirected himself in law and on the evidence in awarding against the defendant damages in the sum of £4,000 under the Non-contributory Provident Fund without stating the basis of his award when (a) there is nothing in Exhibits A (the Trust Deed of Rules of the Staff Provident Fund), B and C (Conditions of Service which in law entitled him to make any award under this head. (b) the plaintiff did not plead any facts whereby the court could take cognisance of anything in Exhibit A in awarding the plaintiff damages under it. (c) the plaintiff did not plead or establish his contract with the defendant was for a definite and fixed term determinable only on his attaining the age of 55.
3. The award of £4,500 damages under the Staff Provident Fund is arbitrary and cannot be supported having regard to the award of 6 months salary as damages for wrongful dismissal in which case the plaintiff would only be entitled to 25% of 6 months salary if a claim for damages under the Staff Provident Fund were established. 4. The verdict insofar as the award of damages is concerned is against the weight of evidence.” The argument of Mr. Lardner in support of these grounds of appeal may be summarised as follows. The learned trial Judge did not consider the law dealing with the measure of damages in cases of breach of contract. If he had done so he would have tried to ascertain from the Condition of Service (Ex. ‘B’) whether the plaintiff’s/respondent’s contract was determinable only at the age of 55 as he had assumed or at an earlier date.
There was machinery in the Conditions of Service (Ex ‘C’) by which either party could bring the contract of employment to an end; where one party fails to follow the machinery the measure of damages would be such amount as would put the injured party in the same position as if such machinery had been followed. In other words, the measure of damages is the amount of money due to the plaintiff/respondent in lieu of notice, which in this case, is £1,020.0s.0d., that is, six months’ pay. He is also entitled to his salary for November which is £56 13s.4d. As for the award of £4, 500 made to the plaintiff/respondent under the Staff Non-Contributory Provident Fund, this could only be based on the provisions of the Staff Provident Rules (Ex. ‘A’). All that the plaintiff/respondent could get under this head are set out in the formula at p. 14 of the Rules.
According to that formula, he is only entitled to the sum of £692 11s. 5d. On this calculation, the plaintiff/respondent, learned counsel finally contended, was only entitled to the sum of £1,769 7s. 9d., and was not to the total sum of £5, 556 13s. 4d. awarded him by the learned trial Judge. In reply, Mr. Adesanya for the plaintiff/respondent, pointed out that the plaintiff/respondent adduced evidence in respect of the damages claimed by him, that both his evidence and that of the 4th P.W on the point were never challenged by the defendants/appellants who called no evidence on the point at all.
The defendants/appellants, it was further contended, merely addressed the court, not on the law as to measure of damages, but only on the justification of the dismissal. For that reason, learned counsel finally submitted, this court should not interfere with the amount awarded by the learned trial Judge. In a claim for wrongful dismissal, the measure of damages is prima facie the amount that the plaintiff would have earned had the employment continued according to contract. (See Beckham v. Drake (1849) 2 HLC 579 at pp. 607-608).
Where, however, the defendant, on giving the prescribed notice, has a right to terminate the contract before the end of the term, the damages awarded, apart from other entitlements, should be limited to the amount which would have been earned by the plaintiff over the period of notice, bearing in mind that it is the duty of the plaintiff to minimise the damage which he sustains by the wrongful dismissal. In the case in hand, there is provision in the Condition of Service (Ex. ‘B’) which is agreed by both parties as governing the terms of the plaintiff/respondent’s employment, whereby either party could bring the contract to an end.
In this connection, we refer to para. 1402 of Exhibit ‘B’ which reads “1042. Pensionable appointments are normally subject to determination at six months’ notice on either side, provided that:- (a) The Company may at any time determine the engagement of an officer:- (i) forthwith, on payment of six months’ salary in lieu of Notice, or (ii) at less than six months’ notice on payment at the time the notice has effect of salary in lieu of notice for the period by which the notice falls short of six months. (b) An Officer may apply to the Chairman to be permitted to resign at less than six months’ notice, whereupon the Chairman may agree to the waiver of all or any part of the notice.
If the Chairman does not agree to such waiver, the date of the application may, if the officer so requests, be deemed to be that from which the notice runs. An Officer leaving the service in accordance with the procedure set out in this paragraph will be entitled to those benefits for which he may be eligible within the Rules of the Superannuation Fund.”
Where, as in this case, the defendants/appellants have failed to follow the machinery laid down in the above provisions of paragraph 1402, the measure of damages, as Mr. Lardner has rightly pointed out, is enough money to put the plaintiff/respondent in the same position as if such machinery has been followed.
In other words, the plaintiff/respondent is only entitled to what he would have received had he been given the six months’ notice provided for in paragraph 1402 of the Conditions of Service applicable to the plaintiff/respondent. Since his salary at the time of his dismissal on 4th May, 1968, was £2, 040. 0s. 0d. per annum, he would be entitled to only £1, 020 0s. 0d. in this respect. The learned trial Judge was therefore in error in awarding £1,000 as general damages.
In this connection, we refer to the case of Swiss-Nigerian Wood Industries Ltd. v. Danilo Bogo SC. 14/70 delivered on 3rd March, 1970, where we observed as follows:- “the terms ‘general’ and ‘special’ damages are normally inapt 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. SC. 20/68 dated 13th March, 1970) and we make the point that apart from damages naturally resulting from the breach no other form of general damages can be contemplated.” This observation was referred to with approval in Paterson Zochonis & Co. Ltd. v. A.J. Ogedengbe SC. 636/66 delivered on 17th March, 1972.
In addition to the award of six months’ pay in lieu of notice, we are of the view that the plaintiff/respondent is also entitled under the same paragraph 1402- “to those benefits for which he may be eligible within the Rules of the Superannuation Fund.” The learned trial Judge awarded him the sum of £4,500 0s. 0d. under this head without showing how he arrived at this sum. He merely stated that he considered “this amount to be reasonable.”
In order to arrive at the correct sum to which the plaintiff/respondent is entitled under this head, reference must be made to Rules 11 and 12 of the Staff Provident Fund Rules (Ex. ‘A’) which read – “11. If a member leaves the Service of the Employer in circumstance other than those set out in Rule 12 the Trustees shall pay to him the whole or a proportion of the sums standing to his credit in this account according to the length of service with the employers calculated on the following scales: Years of Qualifying Amount payable to member Less than 3 years Nil 3 years & over 20% 5 years & over 40% 7 years & over 60% 10 years & over 100%.
12. If the service of a member is terminated on account of any grave fault, misconduct, dishonesty or breach of contract justifying dismissal, the balance of his account shall fall into the Fund be dealt with in the same way as interest earned on investments and not credited to Members’ Accounts in accordance with rule7(ii) provided that the Trustees on the recommendation of the member’s employer may in their absolute discretion pay to such member a gratuity of such amount as they think fit but not in any circumstances and notwithstanding proviso (a) to rule 11 e
Other Citation: (1990) LCN/2425(SC)