Virgin Nigeria Airways Limited V. John Roijien (2013)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

CHINWE EUGENE IYIZOBA, J.C.A. (Delivering the Leading Judgment)

This is an appeal against the Ruling of Idowu J of the High Court of Lagos State in Suit No ID/1904/2009 delivered on the 12th day of May 2011. By a Writ of Summons dated 4th day of November 2009, the Respondent who was the Chief Finance Officer of the Appellant and the Claimant in the court below sued the Appellant his Former Employer as Defendant claiming the following reliefs:-

(a) The sum of Euro 120,325.00 being the outstanding benefits due:

(b) Interest on the sum of Euro 120,325.00 at the rate of 18% per annum from December 28, 2008 to June 20, 2009;

(c) Interest in the sum of Euro 120,325.00 at the rate of 18% per annum from August 4, until judgment;

(d) N5,000,000 being the cost of this action including Solicitor’s fee.

The background facts of this case are that in the course of a meeting of the Board of Directors of the Appellant on 26th November 2008, it came to light that the Respondent had obtained a loan of $15,000,000.00 from Guarantee Trust Bank Plc (GTB) without the express authority of the said Board of Directors and in breach of the terms of an All Assets Debenture between the Appellant and the United Bank for Africa Plc (UBA), who was the Appellant’s primary banker.

In the course of discussions at the said Board of Directors Meeting, the Respondent accepted full responsibility for the loan from GTB and offered to resign if his resignation would save the Appellant’s relationship with UBA. The Board accepted the Respondent’s offer to resign in order to placate their primary Banker, UBA.

The Respondent’s case is that after his resignation from the Appellant’s employment, he entered into a Separation Agreement with the Appellant which set out in detail the terminal benefits due to him in consequence of his resignation. The Appellants subsequently paid him some of the amounts agreed upon under the Separation Agreement but defaulted in liquidating the balance, hence the institution of the suit and the reliefs claimed as set out above.

The Appellant filed a Statement of Defence and Counter claim on 18th May 2010 in which it averred that the terms of its contract of employment with the Respondent were embodied in the Respondent’s letter of employment, a Service Agreement and the Appellant’s Employee Handbook. The Appellant claimed that the Service Agreement provided that if the Respondent ceased to be a Director of the Appellant by reason of his resignation, his employment shall automatically terminate and that he shall have no claims under the agreement or otherwise in respect of such termination.

The Appellant further averred that it’s then Managing Director was not expressly or impliedly authorized to enter into the purported Separation Agreement and that neither the Appellant nor its Board of Directors authorized or ratified the same.

The Respondent filed a Reply and Defence to Counter Claim on 2nd June, 2010. At the close of pleadings, the process of pre-trial conferences under the High Court of Lagos State (Civil Procedure) Rules 2004 commenced. On 7th February 2011, the Respondent’s Counsel informed the Court that she would state a case pursuant to Order 28 rules 1 & 3 of the High Court of Lagos State (Civil Procedure) Rules 2004 with the consent of the Defendant. The Court thereafter adjourned “for the issues for Determination to be stated”. On 24th February 2011, Respondent’s Counsel filed a Special Case for the opinion of the Court pursuant to Order 28 rule 2 of the High Court of Lagos State (Civil Procedure) Rules 2004 as follows:-

i. Whether Mr. Conrad Clifford as Managing Director and Chief Executive Officer of the Defendant had any implied authority to enter into binding agreements on behalf of the Defendant?

ii. Whether the Separation Agreement dated 04 December 2008 is binding on the Defendant?