West Construction Company Ltd V Santos M. Batalha (2006)
LAWGLOBAL HUB Lead Judgment Report
The present respondent, Santos M. Batalha, a Portuguese national, instituted this action as plaintiff at Benin High Court in Edo State as suit No. B/643/94 against the present appellant, West Construction Company Limited, as defendant. The dispute that led to the institution of the case arose over failure of the defendant, now appellant, to pay the plaintiff, now respondent outstanding balance of salary/allowance for services rendered to the appellant company. The plaintiff’s claims, as set out in paragraph 13 of the amended statement of claim, are as follows:
‘”1. The sum of N4,000 being arrears of local salary/allowance and interest at the rate of 21% per annum from the 30th of April, 1994 till judgment and thereafter at the rate of 6% per annum until final payment.
- The sum of $17,500 being arrears of his off-shore salary/allowance or its Naira equivalent at the rate of 21% per annum from 30th of April, 1994 till judgment and thereafter at the rate of 6% per annum till final payment.”
The appellant, a construction company, had by a letter dated 14th July, 1992 (exhibit A) employed the respondent as a project engineer. The terms and conditions of the respondent’s appointment were set out in the said letter, exhibit A. The letter reads, inter alia, as follows:
“Mr. Manual DCS Santos Datalha,
C/o West Construction Company Limited,
47 Siluko Road,
Offer of Appointment (Junior Position)
With reference to your application and a subsequent interview, we are pleased to offer you appointment as Project Engineer with effect from 1st July, 1992 on a salary of N4,000.00 (Four thousand naira) per month.
You will also be entitled to $2,500 (Two thousand five hundred dollars) per month. You will be on probation for a period of twelve (12) months after which your appointment will, subject to successful completion of probationary service, be confirmed.
In the event of termination of appointment during and after your probationary period, either party shall give one month’s notice to other or pay one month’s salary in lieu of notice.
While you are employed by West Construction Company, you are not to be involved directly or indirectly in any other employment or activities likely to come into real or apparent conflict with your employment with West Construction Company.
If you accept this offer, you should please signify acceptance by appending your signature to the copy of this letter enclosed herein in the space provided and returning it to the undersigned together with four (4) copies of recent passport photograph of yourself.
For: West Construction Company Limited
The respondent accepted the offer of employment conveyed to him in the letter and he was in the appellant’s employment until he decided to withdraw his services from the company. His decision to withdraw his services was communicated to the appellant in a letter dated 30th April, 1993 (exhibit B). The main reason given in the letter is that he was owed arrears of wages. The letter (exhibit B), reads, inter alia, as follows:
Throu: Barrister A. O. Eghobamien, Esq.,
To: The Chairman
Chief (Dr) Sir,
G.G Igbinedion, J.P
Withdrawal Of Services
I hereby wish to inform you Sir, of my decision regarding the above mentioned matter. In view of my salary arrears, which stands at 7 months, I can no longer afford such a situation.
As I consider the present situation, being a brake of contract by the Company, by failing to honour their responsibilities, for not paying my salary, as stated in my employment letter, I reserve the right to give no notice of quitting my employment with the Company …”
After withdrawing his services from the appellant company, the respondent commenced the present action at Benin High Court in which he sought to claim the arrears of his wages from the company. Pleadings were filed and exchanged. The respondent, as plaintiff, gave evidence in support of his claim. Two witnesses testified for the defence. One of the two witnesses was Frederick Odiawa, a superintendent in the Immigration Department.
The plaintiff’s case as presented at the trial was that he accepted the employment offered to him in the letter, exhibit A. He served the company for 10 months. Both the off-shore salary which was to be paid in U.S Dollars and the local salary payable in Naira were to be paid monthly. He was paid off shore salary for only three months. He was owed one month local salary amounting to N4,000 and seven months off-shore amounting to $17,500. His claim was therefore for the recovery of the outstanding local and off-shore salary/off-shore allowance.
The case for the defence was that the contract was illegal and unenforceable. Reliance was placed on paragraphs 4, 5 and 6 of the joint reply to the amended statement of claim where the appellant pleaded as follows:
“4. The defendants aver in the further reply to paragraphs 9, 10, 11, 12 and 13 of the amended statement of claim that the contract of employment, if at all, is illegal, null and void in that it offends against Central Bank of Nigeria Regulations which prohibits paying salary of expatriates in foreign currency by cash in Nigeria.
- The defendants shall raise a preliminary point of law at the hearing that the plaintiff was given resident permit to work as Instrumentation Engineer in the business known as Jagal Nigeria Limited on 21st March, 1988. The Photostat copy of Form A, Immigration Regulations, 1963, resident permit shall be relied upon at the hearing. The plaintiff is put on notice to produce the original of the said permit at the hearing. It shall be contended that the plaintiff entered into an illegal contract with the defendants which is not enforceable in law.
- The defendants shall contend at the trial that the plaintiff was fraudulently using the resident permit No. 060672 issued to him to work for Jagal Nigeria Limited for the 1st defendant which is against the Immigration Act.”
At the completion of the hearing, the learned trial Judge, Elaiho, J. in his reserved judgment delivered on 10th July, 1997, upheld the defence of the defendant that the contract was illegal. He accordingly dismissed the plaintiff’s claim with N1000 costs in favour of the defence.
The plaintiff was dissatisfied with the decision and a notice of appeal containing four grounds of appeal was filed against the judgment. The relief sought from the Court of Appeal in the notice of appeal is:
“An order setting aside the judgment of the lower court and granting the plaintiff’s claim in its entirety”.
The parties filed their respective brief of argument in the Court of Appeal and at the conclusion of the hearing in that court, the plaintiff’s appeal was allowed. In the lead judgment delivered by Niki Tobi, JCA, as he then was, (Rowland and Ibiyeye, JJ.CA concurring), the learned Justice came to the following conclusion:
“In sum, this appeal is allowed. The judgment of the learned trial Judge is hereby set aside. I award N4,000 cost in favour of the appellant.”
The present appeal is from the said judgment. Five grounds of appeal were filed against the decision. The parties filed their briefs of argument in this court. The appellant formulated the following four issues in the appellant’s brief and they were adopted by the respondent. The four issues are:
“1. Whether there was any evidence to support illegality or the violation of sections 8 & 34 of the Immigration Act, 1990, Cap. 171.
- Whether facts pleaded were sufficient to sustain illegality of the contract pursuant to S. 8 & S. 34 of the Immigration Act, 1990.
- Whether a court of law is permitted to take cognizance of illegality where the evidence, which emerges at trial, shows conclusively that there is illegality, though not pleaded.
- Whether a breach of sections 8 & 34 of the Immigration Act, 1990, Cap. 171 renders the contract between the appellant and the respondent void and therefore unenforceable.”
The contention of the appellant, as canvassed in issue 1 in the appellants’ brief, is that the Learned Justices of the court below were in error in coming to the conclusion that there was insufficient evidence to support violations of sections 8 and 34 of the Immigration Act. References are made to three portions of the evidence extracted from the respondent while he was being cross-examined. The three instances are where he said in answers to question under cross-examination that:
“I am not a Nigerian. I am a Portuguese. I arrived for the first time in Nigeria on 5/10/83. I was previously employed by Albion Construction Co. Nig. Ltd. I was employed in Nigeria by the said Albion Company. I do not hold a Nigerian passport.”
The second instance is where he said;
“When I got the letter of appointment, exhibit A, I started work on 1/7/92. I had no resident permit from the Immigration Authority in Nigeria to work for West Construction Company”.
And the third instance is where he said:
“Within the period 1/7/92 to 30/4/93, I did not have a work permit to work for the 1st defendant and the 1st defendant did not provide for me a work permit.”
It is submitted that it was the above revelations extracted from the respondent under cross-examination that formed the basis of the conclusion reached by the learned trial Judge that the contract of employment was illegal and therefore the action could not be entertained by the court. The learned Justices of the court below are said to be in grave error in reversing this decision of the trial court. The question whether sufficient facts were pleaded to support violation of sections 8 and 34 of the Immigration Act is the one canvassed in the appellant’s issue 2. It is submitted that illegality was duly pleaded and that both the learned trial Judge and the justices of the court below conceded that illegality was pleaded. References are made to portions of the pleadings filed by the appellant.
It is then submitted that although work permit was not specially mentioned, the position of the law is said to be that for illegality to be raised it must be pleaded with sufficient particularity. The decision in George v. Dominion Flower Mills Ltd. (1963) All NLR 72; (1963) 1 SCNLR 117 is cited in support of this submission. It is therefore argued that the requirement of the law was met by the appellant in its pleadings. It is finally submitted that the parties clearly joined issues on illegality at the close of pleadings.
The point discussed in issue 3 is as an alternative to the point canvassed in issue 2. It is that there may even be no need to plead illegality in some cases, such as in the instant case. This is said to be because although the general rule is that where a contract is not ex-facie illegal, the defence of illegality must be pleaded. But there are said to be exceptions to this general rule. Two of such exceptions are said to be (1) where the illegality appears on the face of the contract, and (2) where the evidence which proves the contract discloses the contract to be illegal. It is submitted that the evidence relied on in the instant case clearly established illegality and the court below is said to be wrong in holding a contrary view.
The question whether any breach of the provisions of sections 8 and 34 of the Immigration Act could render a contract illegal and unenforceable is the one discussed in issue 4. It is submitted that as far as statutory prohibition is concerned, the policy of the courts is that it will not enforce a contract that is expressly or impliedly prohibited by statute. The facts in the instant case are said to clearly establish that the contract was apparently illegal and unenforceable. It is finally submitted that upon a proper construction of sections 8 and 34 of the Immigration Act, both parties in this case are prohibited from sueing on the contract since they are both guilty of breaches of the provisions of the said Act.
The trial court is therefore said to have acted rightly in declining jurisdiction.
In reply on issue 1, it is submitted in the respondent’s brief that the court below was right in its conclusion that there was no admissible evidence on the record to support illegality of the contract of employment under sections 8(1) and 34(1) of the Immigration Act. The decision of the court below is said to be based on the evidence of illegality of the contract under sections 8(1) and 34(1) which was not pleaded. Consequently, any evidence given in respect of the unpleaded facts would be inadmissible. The evidence indicating that there was illegality arising out of failure to obtain work permit came out during the trial and it was in answers to questions put to the respondent while he was being cross-examined. That evidence is therefore said to be inadmissible as it was not pleaded. The decision in N.I.P.C. Ltd. v. Thompson Organization Ltd. (1969) All NLR 138 is cited in support of this submission.
In reply to the submissions made in issue 2, reference is made to the paragraphs 4, 5 and 6 of the Statement of defence filed by the appellant. It is submitted that no mention was made of the absence of a work permit. All that the appellant concentrated and restricted its defence of illegality to is said to be the issue of failure to obtain a residence permit and breach of the Central Bank Regulations. It is submitted that under the rules governing pleadings, a reply can only respond to the issues raised in the defence. It cannot go beyond the defence or set up new facts and claims different or inconsistent with the statement of claim or statement of defence.
It is finally submitted that since the parties did not join issues in their pleadings on failure to obtain work permit, it was wrong of the trial High Court to hold or admit evidence on that issue. On Issue 3, it is submitted in reply in the respondent’s brief that the issue is incompetent in that (1) it does not arise from any of the grounds of appeal; and (2) it is hypothetical and academic in nature. Reference is made to the five grounds of appeal filed against the judgment. It is then submitted that the Issue does not flow from any of the five grounds.
Secondly, as the issue of illegality based on sections 8 and 34 of Immigration Act was not raised before the court below, it is submitted that it would be improper for the appellant to now pose the question as issue 3 in this court. As the question posed does not arise from the case, it is contended that this court should ignore such question and treat same as academic in nature which this court should not entertain.
In the alternative, it is submitted that where a contract is not ex-facie illegal and the question of illegality depends on the surrounding circumstances, then as a general rule, the court will not entertain the question of its illegality unless it is raised in the pleadings. In the instant case, it is submitted that the plaintiff’s claim was not ex-facie illegal. And since the issue of illegality was not pleaded, any evidence adduced on the unpleaded illegality would go to no issue.
On issue 4, it is also submitted that since the question of illegality arising from sections 8 and 34 of the Immigration Act was not pleaded, then any argument put up on this issue 4 would become academic. In the alternative, it is submitted that even if the provisions of sections 8 and 34 of the Immigration Act are applicable, they could not render the contract illegal and unenforceable for two reasons: the point of judicial authority and on principle of public policy.
On the point of judicial authority, it is submitted that where a statute is silent as to the civil rights of the parties but penalises the making of the contract, the plaintiff is not necessarily deprived of his civil remedies under the contract. A number of legal authorities were cited in support of this submission. It is further contended that the Immigration Act is silent as to the civil rights of the parties that enter into a contract of employment without the requisite permit. The penalty imposed under the combined effect of sections 34(1) 34(2) and 48(1) of the Act is said to be only on the employer and not the foreigner. It is therefore submitted that the respondent is under no criminal sanction whatsoever under the Act apart from deportation. The decision in Oilfield Supply Centre v. Johnson (1987) 2 NWLR (Pt.58) 625 is cited in support of this submission…
On the principle of public policy, it is submitted that the overriding consideration in the matter is founded on the law of equity with particular reference to estoppel. It is that the appellant whose burden it is to obtain the permit under sections 8 and 34 of the Immigration Act, cannot, after taking the benefit of the contract of employment, be allowed to rely on its illegality to refrain from performing his obligation. It is therefore submitted that a decision not to enforce this contract is a decision to allow the appellant to unjustly enrich itself.
The facts of this case are not in dispute. The appellant, a construction company, employed the respondent, a foreigner, as an engineer and his salary and allowances were set out in the letter of appointment, exhibit A, already reproduced above. The respondent was paid for his services up to a point. The action by the respondent was for the recovery of his outstanding salary and allowances. The appellant did not deny that it ever employed the respondent. But its defence is that the contract of employment was illegal in that it contravened some provisions of the Immigration Act and Central Bank Regulations and as such the court should not entertain the claim.
The position in law is that a contract that is ex-facie not illegal or offend public policy will be enforced by the courts: See UBN v. Odusote Bookstores Ltd. (1995) 9 NWLR (Pt.421) 558; Ogwuru v. Co-op. Bank of E.N. Ltd. (1994) 8 NWLR (Pt.365) 685; Sodipo v. Lemminkainen OY (1986) 1 NWLR (PU5) 220; and Ekwunife v. Wayne (WA.) Ltd. (1989) 5 NWLR (Pt.122) 422. The term “ex-facie” is defined in Black’s Law Dictionary, 6th Edition, 1990, page 572 as follows
“Ex-facie: From the face; apparently; evidently. A term applied to what appears on the face of the writing.
The plaintiff’s claim in the instant case, as already set out above, is briefly for the recovery of his outstanding salary and allowances due to him from the appellant, his former employer. There is definitely nothing apparent or evidently from the face of the claim to show or from which any act of illegality could be inferred. The claim is therefore ex-facie legal and enforceable.
The law is settled that before a claim can be said to be ex-facie tainted with illegality it must be clearly apparent and unequivocal from the claim that what the court is being called upon to entertain is illegal and in breach of specific statute or law. Thus, for example, a contract for the supply of poison has been held not to be ex-facie illegal and that the onus to prove illegality lay on the person claiming such defence: See Agbakoba v. Meka (1962) N.N.L.R. 1.
The law is also settled that whoever intends to claim illegality as a defence must not only plead the illegality, he is also required to set out the particulars of the illegality in his pleadings. This requirement is mandatory in all cases where the contract is not ex-facie illegal and the question of illegality depends on the circumstances of the case. As a general rule therefore, the court will not entertain the defence unless it is raised in the pleadings unless where illegality is apparent on the face of the claim: See Nassar v. Moses (1960) L.L.R. 170; George v. Dominion Flour Mills Ltd. (1963) 1 All N.L.R. 71, (1963) 1 SCNLR 117 and Ogwuru v. Co-op Bank of E.N. Ltd., supra.
Applying the law as declared above to the instant case, I have no doubt in holding that the plaintiff’s claim is a simple claim for outstanding salary and allowances due for services rendered under a contract of employment. The claim was therefore ex-facie not illegal. It follows then that the onus was on the appellant, who wanted to rely on illegality as a defence, to duly plead that defence and set out the particulars of the illegality.
In its attempt to comply with the above legal requirement, the appellant claimed to have raised the defence in paragraphs 4, 5 and 6 of the joint reply to amended statement of claim. The three paragraphs have been reproduced earlier above. The defence put up in paragraph 4 is to the effect that the contract of employment was “null and void in that it offends against Central Bank of Nigeria as follows: Regulations which prohibits paying salary of expatriates in foreign currency by cash in Nigeria”. The details of the Central Bank Regulations were not given and no evidence was led at the trial in support of that pleading. The presumption therefore is that the appellant abandoned that pleading: See Awojugbagbe Light Industries Ltd. v. Chinukwe (1995) 4 NWLR (Pt.390) 379; Ojikutu v. Fella (1954) 14 WACA 628; Emegokwue v. Okadigbo (1973) 4 SC 113; and Olarewaju v. Bamigboye (1987) 3 NWLR (Pt.60) 353.
The defence pleaded in paragraph 5 by the appellant is, inter alia that “the plaintiff was given resident permit to work as an Instrumentation Engineer in the business known as Jagal Nig. Ltd . .., It shall be contended that the plaintiff entered into an illegal contract with the defendant which is not enforceable in law”. The requirement for residence permit is provided for in section 10 of the Immigration Act. The appellant failed to lead evidence to show that the respondent entered the country illegally and that by entering the country illegally would vitiate the contract of employment it had with the respondent. This is because what section 10(5) of the Immigration Act provides for is that:
‘The failure by any person to comply with the requirements of this section or of any conditions imposed shall be an offence under this Act, and such person may, if the Minister thinks fit, be required to leave Nigeria … ”
The sanction prescribed is deportation from the country. It does not prescribe for the nullification of contracts such as in the instant case. The defence pleaded in paragraph 6 of the appellant’s defense is to the effect that:
“The defendants shall contend at the trial that the plaintiff was fraudulently using the resident permit No. 060672 issued to him to work for Jagal Nig. Ltd for the 1st defendant which is against the Immigration Act.”
The averment again is in respect of resident permit which is expected to have been issued under section 10 of the Immigration Act. In other words, no breach of the provisions of section 8(1) of the Immigration Act was pleaded by the appellant. Section, 8(1) of the Immigration Act provides as follows:
“8(1) No person other than a citizen of Nigeria shall- (a) accept employment (not being employment with the Federal Government or a State Government) without the consent in writing of the Director of Immigration …”
Since the appellant failed to plead a breach of the above provisions of section 8(1) of the Immigration Act, it follows that any evidence led in respect of the unpleaded fact, whether directly from a witness or extracted under cross-examination of the respondent, would be inadmissible: See Onamade v. A.C.B. Ltd. (1997) 1 NWLR (Pt.480) 123; Iheanacho v. Chigere (2004) 17 NWLR (Pt.901) 130; and Akaniwon v. Nsirim (1997) 9 NWLR, (Pt.520) 255.
As it has been clearly shown that the appellant failed to plead the illegality of the contract on the ground that a breach of the provisions of either section 8 or section 34 of the Immigration Act was committed, it follows that the question of considering any effect of such a breach would have on the contract does not arise.
In the result, the appeal fails and I accordingly dismiss it. The judgment of the Court of Appeal by which the judgment of the trial court was set aside and the plaintiff’s claim was affirmed is hereby upheld. I therefore hereby enter judgment for the plaintiff/respondent as per his claim as already reproduced earlier above in this judgment. The respondent is also entitled to his costs in the High Court, and in this court which I assess respectively at N5,000 and N10,000. The Court of Appeal awarded him N4,000.