Tidex Nigeria Limited V. Joy Maskew & Anor (1998)

LawGlobal-Hub Lead Judgment Report

AKINTAN, J.C.A.

This is an appeal from the judgment of Obi, J. delivered at Warri High Court in Delta State on 5th March, 1996 in suit no. W/313/94. The action was instituted by way of originating summons as a result of which the trial was to be conducted by means of affidavits and counter-affidavits filed by the parties. However, when the learned trial Judge found that there were conflicting averments in the affidavits filed by the parties, he ordered that pleadings should be filed. In compliance with that directive, the plaintiffs filed a 14-paragraph Statement of Claim on 26th June, 1995.

The plaintiffs’ claim, as set out in paragraph 13 of the Statement of Claim, is as follows:-

“Wherefore the plaintiffs claim as follows:-

(a) Declaration that from the totality of the relationship between the plaintiffs and defendants there exists a Workers Trust Fund.

(b) Order that the defendants do account to the plaintiffs for all moneys which have come into their possession/custody comprising 10% of annual profits after taxation of the business of Zapata from 1968 to 1992. Alternatively N2 billion naira in that the said funds were paid to Zapata home office in dollars. In the further alternative, any other sum as this Honourable court may so order.”

The respondent (now appellant), however, did not file any statement of defence despite the fact that it was granted 3 weeks extension of time within which to file it on 17th July 1995 upon an application for such extension of time to do so.

The plaintiffs pleaded, inter alia, in paragraph 2 of their statement of claim that:-

“Plaintiffs are also members of PENGASSEN and NUPENG Oil Workers Union depending upon whether they belong to the Senior or Junior cadre of the said unions. They pursue this action in the representative capacity shown above…”

The defendant (now appellant) did not file any statement of defence as at 6th October, 1995 when Joy Maskew, the first plaintiff and only plaintiff’s witness gave his evidence. The man told the court, inter alia, in the course of his evidence, that they brought the action “on behalf of ex-employee of Zapata Marine Services Nigeria Limited members of NUPENG and PENGASSEN Trade Unions, Zapata Marine Warri Branch. UNPENG is the junior cadre while PENGASSEN is the senior cadre. He said further that Tidex bought over Zapata on 15/1/92. Tidex then took over the conduct of their employment. The workers Union held several meetings with management of Tidex in the course of which they arrived at the following agreement:

“1. That Tidex was to take over the payment of salaries with effect from 15/1/92. This payment was made up till 1993 when we were declared redundant. Tidex then agreed to pay us our abrupt workstop, extra gratia, payment which we would have been entitled from Zapata.”

The witness further told the court that the Management of Zapata had told the staff of Zapata that there was a message from Houston, Texas (the headquarters of the company, Zapata) that a decision had been taken to create a Workers Trust Fund for the benefit of the workers into which 10% of the annual net profit would be paid.

And that member of staff who served the company for up to 30 years would be entitled to benefit from the workers Trust Fund. But in the event of the company folding up before the expiration of the 30 years, the money accruing in the trust fund would be shared equally to workers then still working with the company at the time.

The trust agreement is said to be in Houston, Texas in U.S.A. The above information was said to have been given to the workers during an annual end of year party where the annual profit of the company was usually disclosed to the workers. The witness further said that the last annual end of year meeting was held in 1991 at Palm Grove Motel, Warri. He gave his account of what the workers were told at the meeting and what led to the institution of the action as follows:-

“That year they disclosed S560 million U.S. dollars profit from Nigeria operations. In 1992 when Tidex took over, we demanded payment from the Workers Trust Fund. The Management of Tidex told us that all the documents in connection therewith have been handed over to them intact. They promised to pay us. It was when we were declared redundant that we asked for our Trust Fund but surprisingly they refused to pay…”

Based on the contents of the plaintiffs’ pleading and the evidence tendered before the court, the learned trial Judge found as a fact, inter alia, that the crucial averments in support of the reliefs claimed are contained in paragraphs 5 to 10 of the statement of claim. The said paragraphs 5 to 10 read thus:-

“5. In or about 1992 in Warri within the jurisdiction of this court Zapata folded up. The first defendant took over all arrangements regarding the future conduct of Zapata’s entire work force. As a first step the workers of the said Zapata were transferred to a success or Logo “T” Company – which successor Company as aforesaid is the 1st defendant, thereafter the 1st defendant made arrangements regarding the future of the plaintiffs some of which arrangements areas setout in a document dated 10/7/92 in the possession of the defendants. Photostat copies of which were later distributed to the plaintiffs present at the meeting where these arrangement were made.

6. Those who carried out these arrangements on the part of the defendants included one Carl Annessa who was reputed to have come to Nigeria from Tidex Water in Louisiana U.S.A. and the second defendant; they covered the transitional period or change of Zapata’s workforce to the point of its elimination making it possible for the 1st defendant to assume ownership of Zapata’s properties.
7. Between 1992 and 1993 when these arrangements were carried out the plaintiffs demanded payment to them of their entitlements under workers Trust Fund created for their benefit as from the date of the establishment of Zapata since 1968. This Trust Fund was made up of 10% of the annual profits of Zapata after taxation. To this fund was paid the quantum of the said profits from year to year until the events giving rise to this action in 1992 and an equal share of the said fund was to be paid to each of the plaintiffs after he had put in 30 years of service to the company or on the occasion of the folding up of the company whichever was earlier.
8. From time to time Zapata held meetings with the plaintiffs concerning the progress of the said Workers Trust Fund. Zapata told the plaintiffs that its responsibility to them was strictly fiduciary, and that all what was needed was for the affected worker to show his credentials at the date of his retirement if he had served 30 years or in the event of the company folding up and he would be paid his share of the said Workers Trust Fund.
9. During the period of these arrangements that is between 1992 and 1993 the said Carl Annesa and the second defendant who also claimed to have come from Tidex Water Louisiana confirmed to the plaintiffs in one of the several meetings they had with them that Tidex Nigeria Limited 1st defendant had firm custody of the said Workers Trust Fund but that they were not in a position to pay these moneys as they were busy with other arrangements concerning the liquidation of Zapata, payoffs of several other entitlements of plaintiffs and the payments to white collar employees of a similar Trust Fund and that on completion of these exercises the defendant would address the demands of the plaintiffs. The Photostat record of one of these meetings distributed to the plaintiffs after one of the said meetings dated 17/6/93 was handed over to the plaintiffs. It will be relied upon during trial.
10. When after several repeated demands made upon them to honour their obligations the defendants refused to pay over to the plaintiffs the said Workers Trust Fund, plaintiffs employed the services of their solicitors to renew these demands whereupon the defendants handed over certain documents to plaintiffs solicitor claiming that the entitlement of plaintiffs were included in an Employees Trust Fund. This was the first occasion that a majority of the plaintiffs knew of such a Trust Fund.”

The teamed trial Judge said further as follows in his reserved judgment delivered on 5th March, 1996:-

“It is clear enough that the only reason why the defendant is being sued is on account of the confirmation made on its behalf that the moneys lodged in the said Workers Trust Fund is in its custody having been handed over to it by Zapata upon its folding up and more importantly, because the defendant promised to pay over this moneys to the plaintiffs but later on reneged on its promise…”

The learned trial Judge then reviewed the evidence given by the 1st plaintiff and made the following findings of facts:-

“His (1st plaintiff) evidence goes to show that Zapata kept to its own part of the bargain until it folded up sometime in 1992 when the entire fund in the Trust Fund was handed over to defendant which not only acknowledged receipt of same but promised to pay over same to the plaintiffs at due time, but failed to do so.

The witness could not be sure about the total amount of money involved but he is categorical that Zapata at the end or every year, used to hold meetings with them at Palm Grove Motel, Warri to tell them the progress and profit made by the company and in this respect in 1991 the management told them that the profit for the year 1991 was the sum of $560 million U.S. Dollars. I believe and accept this piece of evidence. It is therefore reasonable to infer and I so infer, that 10% of this amount forms part of the moneys lodged in the said Trust Fund handed over to the defendant in the circumstances pleaded and given in evidence by the plaintiffs. I am satisfied at the very least, that the defendant is liable to the plaintiffs in this sum of its naira equivalent.”

Based on the above findings of fact, the learned trial Judge came to the conclusion that the plaintiff’s action succeeded. Judgment was accordingly entered in their favour as follows:-

“Accordingly, plaintiffs’ action succeeded. I enter judgment in their favour in terms of the declaration sought in relief (a) of paragraph 13 of their statement of claim. Judgment is also entered in their favour in the sum of S56 million U.S. Dollars or its Naira equivalent. Costs in their favour assessed at N1,000.00.”

The defendant (now appellant) was dissatisfied with the judgment and has appealed against it to this court. The parties filed their briefs of argument in this court. The following issues were formulated in the appellant’s brief.

“(i) Whether the commencement of the action herein is prohibited by law.

In the alternative.

(ii) Whether the two individuals who sued as plaintiffs in this action properly or validly represented the persons whom they claimed or purported to represent in the action herein.

(iii) In the light of the answer to question (ii), whether the court below ought to have entertained the action herein.

(iv) Whether the testimony of PW1 (which the learned trial Judge accepted) to the effect that the management of Zapata Marine Services Co. Limited told the plaintiffs that the profits for the year 1991 was U.S. 5560 million is admissible.

(v) Whether the court below ought to have granted a declaration that there exists a Workers Trust Fund in an action to which the persons who were said to be trustees of the said fund were not parties.

(vi) Whether the award of U.S. S56 million Dollars ought to have been made by the court below in favour of the plaintiffs having regard to the Statement of Claim and the evidence herein.”

On the other hand, 5 issues were formulated in the respondents brief. As I consider the 6 issues formulated in the appellant’s brief adequately embrace the 5 issues formulated in the respondents’ brief.

Chief William SAN, learned leading Senior Counsel for the appellant submitted in respect of the first issue both in his oral presentation and in the appellant’s brief, that the subject-matter of the action is a dispute or controversy between an employer and workers and which is connected with the employment of the terms of employment of such workers. He therefore argued that a dispute of that nature comes within the definition of “trade dispute” in schedule 47 of the Trade Disputes Act (Cap. 432, Laws of the Federation 1990). Reference was made to the provisions of Section IA of the Trade Disputes Act as amended by the Trade Disputes (Amended) Decree 1992 (No.4 7 of 1992). It was then submitted that the trial court lacked jurisdiction to try the case.

The question raised in issues 2 and 3 relate to the capacity in which the respondents instituted the action and whether the court ought to have entertained the action. It was argued that since the respondents instituted the action in a representative capacity in that they described themselves as claiming for themselves and on behalf of ex-employees of Zapata Marine Services Nigeria Limited, members of NUPENG and PENGASSEN Trade Unions, Zapata Marine, Warri Branch”, the provisions of Order 11 rule 8 of the High Court (Civil Procedure) Rules 1988 of the former Bendel State, now applicable in Delta State, would be applicable. Since there was no evidence to show that there was compliance with the provisions of the said rule, the plaintiffs were said to be not properly before the court and the court ought to have held that the action before it was not properly constituted.

Chief Debo Akande, S.A.N., learned Senior Counsel for the respondents, conceded that no leave of the lower court was in fact sought and obtained before the action was filed as required in Order 11 rule 8 of the afore-mentioned High Court (Civil Procedure) Rules 1988. But he argued that the present position of the law is that such omission is usually treated as a mere irregularity that is curable under Order 2 rule 1 of the same High Court (Civil Procedure) Rules 1988, particularly when the objection was raised too late.

The said Order 11 rule 8 provides as follows:-

“Where more persons than one have the same interest in one suit, one or more of such persons may, with the approval of the court, be authorised by the other persons interested to sue or to defend in such suit for the benefit of or on behalf of all parties so interested.”

Order 2 rule 1 of the same High Court (Civil Procedure) Rules, on the other hand provides that:-

“Where in the beginning or purporting to begin any proceedings, or at any stage in the course of or in connection with any proceedings, there has, by reason of anything done or left undone, been a failure to comply with the requirements of these rules, whether in respect of time, place, manner, form or content or in any other respect, the failure may be treated as an irregularity and if so treated, will not nullify the proceedings, or any document, judgment or order therein.”

The position in the instant case is that the plaintiffs failed to obtain the authorisation of the lower court before commencing me present action. That omission therefore constituted a breach of the afore-mentioned Order 11 rule 8 which prescribes, inter alia, that one or more persons in the group of people “may with the approval of the court, be authorised” by the other members in the group to sue. The provision of the rule relates to one of the preliminary steps to be taken in instituting an action. The effect of the provisions Order 2 rule 1, on the other hand, is that failure to comply with any provision of the rules dealing with preliminary steps to be taken in instituting an action may be treated as mere irregularity as a result of which such omission will not nullify the proceedings, judgment or any order subsequently made by the court in the suit.

This flexible attitude is in line with the practice of the Courts in England to rules in pari materia with the afore-mentioned Order 11 rule 8.

The practice in England is as set out in the Supreme Court Practice, 1985, Vol. 1, order 15/12/1 on page 203 which is stated thus:-

“The rule as to representative proceedings should be treated as being not a rigid matter of principle but a flexible tool of convenience in the administration of justice and should be applied, not in any strict or rigorous sense, but according to its wide and permissible scope.”

See also John v. Rees; Martin v. Davies, Rees v. John (1970) Ch. 345; (1969) 2 All E.R. 274 – per Megarry, J. and Anabaronye v. Nwadike (1997) 1 NWLR (Pt. 482) 374.Applying the law as declared above to the facts of this case, it is clear from the facts of this case that the appellant did not raise any objection as to the noncompliance with the requirement by the plaintiffs to obtain the consent of the lower court before they commence their action throughout the trial at the High Court level. The matter is now being raised for the first time at the appellate court level and by the appellant who was the defendant and not by any member of the group on behalf of whom the action was instituted. The purpose of doing so now is to set aside the judgment of the lower court in the case. Such an awkward situation, in my view, is that Order 2 rule 1 of the afore-mentioned High Court {Civil Procedure} Rules 1988 is aimed at preventing. I therefore hold that the omission of the plaintiffs to obtain leave of the lower court before commencing the action cannot now vitiate or have any adverse effect on the judgment of the lower court in the matter. Rather, it is merely an omission which is to be treated as a mere irregularity and which will not have any effect on the final result of the case. The appeal as relates to Issues 2 and 3 therefore lacks any merit and I accordingly dismiss the appeal as it relates to those issues.

On the effect of the provisions of Section 1A of the Trade Dispute Act, as amended by Trade Dispute (Amendment) Decree No. 47 of 1992, the section provides as follows:-

“Subject to the provisions of subsection 3 of section 20 of this Act, no person shall commence an action, the subject-matter of a trade dispute or any inter or intra union dispute in a court of law and accordingly, any action which, prior to the commencement of this section is pending in any court shall abate and be null and void.”

The term “trade dispute” is defined in section 47(1) of the same Trade Disputes Act as follows:-

“Trade dispute” means any dispute between employers and workers or between workers and workers, which is connected with the employment or non employment, or the terms of employment and physical conditions of any person.”As already stated above, it has been argued on behalf of the appellant that the trial court lacked jurisdiction to entertain the respondents’ claim before the court because the court’s jurisdiction had been ousted by the provisions of the aforementioned Section 1A of the Trade Disputes Act. It is, however, submitted both in the respondents’ brief and in the oral presentation of the case by Chief Debo Akande, S.A.N. that it is not every dispute between employees and workers that is a trade dispute. The claim before the court is said to be simply one for a declaration and for recovery of moneys passed on to the defendant by plaintiffs’ former employer. It is further submitted that a claim by an employee from his employer for recovery of unpaid or under paid wages or other benefits or for wrongful dismissal and the like cannot by any stretch of imagination be regarded as trade dispute as to bring it to the exclusive ambit of the National Industrial Court. A decision of the House of Lords in Conway v. Wade (1909) A.C. 506 at 520 and a recent one by this court in Sea Trucks Nigeria Limited v. Ayo Payne (1996) 6 NWLR (Pt. 400) 166 were cited in support of this submission.

There is no doubt that the purpose of section 1A of the Trade Disputes Act is to oust the jurisdiction of the ordinary courts in certain matters set out in the section. These are (a) the subject-matter of a trade dispute; or (b) any inter or intra union dispute. And according to the definition of the term “trade dispute” already set out above, the disputes covered are (1) disputes between employers and workers; or (2) between workers and workers, which are connected with the employment or non-employment, or the terms of employment and physical conditions of work.

The claim in the instant case was instituted by the two Plaintiffs “for themselves and on behalf of ex-employees of NUPENG and PENGASSEN Trade Unions, Zapata Marine Warri Branch”. It is against the appellant company, the plaintiffs’ former employer. The claim, as already set out above, has “three legs.

These are for a declaration; order for account and claim for payment of plaintiffs’ entitlement under a workers trust fund. It is clear from the plaintiffs’ pleadings that the dispute arose over whether there was in existence or not a workers trust fund and failure of the appellant to pay the workers, represented by the respondents, upon their retrenchment in accordance with the terms of their employment with Zapata Nigeria Limited, their former employer before the present appellant took over the workers of Zapata Nigeria Limited. It is not a claim between individual workers for damages for wrongful termination of employment or for arrears of wages due to the workers. I therefore have no doubt in holding that the dispute in the present case is one between an employer (the appellant) and workers (that is, workers making up the members of the two unions on behalf of whom the respondents instituted the action); and the dispute is connected with an aspect of the workers’ terms of employment, viz: that the workers are entitled to a share of the funds set aside as workers trust fund. I therefore hold that the claim comes within one which section 1A of the Trade Disputes Act, as amended, removed from being entertained by the ordinary courts. In the result, the appeal as it relates to that issue succeeds in that the lower court had no jurisdiction to entertain the action. The case should have been struck out for want of jurisdiction. I accordingly make an order striking out the claim.

This conclusion would have determined the entire appeal but for the fact that this court, not being a final court, is required to pronounce on all issues raised in the case before it so as to avoid an awkward situation … in the event of its decision on a particular issue upon which a decision is based, being reversed by the Supreme Court See Katto v. Central Bank of Nigeria (1991) 9 NWLR (Pt.214) 126; (1991) 22 NSCC 736 at 752 per Akpata JSC. It is therefore mandatory on me to consider the other issues raised in the appeal.

The evidence led in support of the plaintiffs’ claim is said to be insufficient to support the claim. In this respect, it was submitted that the evidence led in support of the amount of profit earned by Zapata in 1991 is wholly inadmissible because no facts relating thereto were pleaded in the statement of claim and that as the said evidence relates to the contents of a written document, to wit: the Profit and Loss Account of Zapata which by law the said company must be presumed to have prepared as part of its annual accounts pursuant to the mandatory requirements of Sections 334(2)(c) and 335(8) of the Companies and Allied Matters Act, oral evidence of the contents of such existing document ought not to have been admitted.

It has also been submitted that since the evidence led was to the effect that the trustees of the Workers Trust Fund are in Houston, Texas, there is no way in which the funds or money under the control of the said trustees who are not made parties to the action can lawfully find its way into the appellant’s custody unless the plaintiffs can show that the said money had in fact been transferred to the appellant by the said trustees. Such was not pleaded and as such the appellant ought not be made liable for the fund which has not been proved to be in the appellant’s custody.

It was submitted in the respondents’ brief that the evidence relied on in support of the existence and terms of the Workers Trust Fund is based on the information given to the workers by members of the management staff of Zapata and that such evidence is admissible. The fact that the balance sheet of Zapma for the period in question was not produced is also said not to make the information inadmissible by virtue of Section 131(2) of the Evidence Act.

It is very clear from the judgment of the lower court that the learned trial Judge found as a fact that there was in existence a Workers Trust Fund created by Zapata and later transferred to the appellant company when the former company folded up. There was sufficient evidence admissible in support of that finding of fact and I have no doubt in holding that what a member of the management staff of Zapata told the workers of the same company at a meeting of the workers and management is admissible in evidence even though such information is not in written form. Similarly, I believe that oral evidence of the annual profit of Zapata is admissible even though the relevant annual balance sheet of the company is not produced and is not tendered. Such evidence, in my view, is admissible under Section 131(2) of the Evidence Act which provides as follows:-

“(2) Oral evidence of a transaction is not excluded by the fact that a documentary memorandum of it was made if such memorandum was not intended to have legal effect as a contract, grant or disposition of property.”

See also Nsirim v. Omuma Construction Co. Ltd. (1994) 1 NWLR (Pt. 318) 1. But the most important requirement is that such fact must be pleaded. In the instant case, although the fact that the terms of the Workers Trust Fund included the payment of 10% of the annual profit into the Trust Fund and the workers would be entitled to benefit out of the fund so paid into the Fund after serving for 30 years or upon the folding up of the company, and that such was duly pleaded, no where in the Statement of Claim was it pleaded that the annual profit of Zapata was S560 million in 1991. It follows therefore that evidence given by the 1st plaintiff to that effect and upon which the learned trial Judge based his S56 million U.S. Dollars award which represents 10% of the 1991 profit of $560 million, ought to have been ignored by the learned Judge.

I am satisfied, therefore, that the award of $56 million U.S. Dollars is wrong in that it was based on evidence which was not pleaded. The appeal on that point is accordingly allowed.

It is pertinent to mention that an objection was raised in the respondents’ brief to the competency of the appellants’ entire appeal. The facts relied on in support of this contention is briefly as follows:- The original notice and grounds of appeal were filed on 12/3/96 against a judgment of the lower court given on 5/3/96. On 27/5/96, the defendant filed an application for leave to amend its notice and grounds of appeal on 11/3/96 by substituting fresh notice and grounds of appeal.

That motion was not taken until 1997 when it was granted as prayed. It is submitted that the defendant in order to effectively substitute, must withdraw his appeal filed on 12/3/96 and since by the time the motion for substitution was allowed, the defendant was completely out of time and having not asked for extension of time within which to substitute the fresh notice and grounds of appeal, its notice of appeal is said to be incompetent.

My reason to the above submission is that the court is not competent to make any pronouncement on the submission. This is because doing so will amount to sitting on appeal over our earlier ruling by which we granted the appellant’s motion for substitution. The appropriate step which the respondents ought to take in the situation should be to appeal against our said ruling to the Supreme Court.

Finally, it is necessary to mention that the Lower Court failed to make any pronouncement on the plaintiffs’ alternative claim for account of all money paid into the trust fund. But since there is no cross-appeal on that issue, I hold that it will be out of place to make any pronouncement on that aspect of the claim.

In conclusion, therefore, and for the reasons set out above, I hold that the lower court had no jurisdiction to entertain the claim before it in the instant case. I accordingly set aside the verdict. In its place, I hereby make an order striking out the plaintiffs’ claim. Alternatively, and for the reasons, I have also given above, I hold that the award of $56 million U.S. Dollars made by the lower court cannot stand in that the evidence led in support of that award was not pleaded. The appeal therefore succeeds and the appellant is awarded N2, 000.00 costs.

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Other Citations: (1998)LCN/0389(CA)