Santos M. Batalha V. West Construction Company Limited (2001)
LawGlobal-Hub Lead Judgment Report
NIKI TOBI, J.C.A.
The appellant is a Portuguese. By letter, dated 4th July, 1992, he was appointed as a Project Engineer, at the West Construction Company Limited, the respondent. It has its registered office at No. 47 Siluko Road, Benin City. The 2nd defendant was the Chairman/Managing Director of the Company. The appellant said that when he left the services of the respondent, he was not paid his salaries. By a letter, dated 30th April, 1993, the appellant withdrew his services. He filed an action claiming
(1) the sum of N4,000.00 being arrears of local salary/allowance and interest at the rate of 21% until judgment is delivered
(2) USD $17,500, being arrears of offshore salary/allowance and interest at the rate of 6% until judgment is delivered.
The learned trial Judge took evidence from the parties. After the address of counsel for the parties, he gave judgment in favour of the respondent on the ground that, the contract of employment was illegal for non-compliance with section 8 of the Immigration Act. The learned trial Judge also held that, the name of the 2nd defendant be struck out from the suit on the ground that he was improperly joined.
Dissatisfied, the plaintiff filed an appeal. Briefs were filed and exchanged. The appellant formulated three issues for determination:
“(1) Whether the learned trial Judge was right in holding that, the appellant’s contract of employment was illegal for non-compliance with section 8(1) of the Immigration Act in the absence of any pleaded facts to that effect.
(2) Whether on a true construction of sections 8 and 34(1) of the Immigration Act the contract of employment was illegal and therefore, unenforceable at the instance of the plaintiff.
(3) Whether the learned trial Judge was right in holding that the contract was unenforceable having held that the duty to obtain a permit was on the respondent and the said respondent had benefited therefrom.”
The respondent formulated two issues for determination:
“1. Whether the contract of employment of the appellant was tainted with illegality punishable under the Immigration Act by virtue of non-compliance with the said Act and as such cannot be enforced by either party to the contract.
- Whether appellant’s issue 2 is incompetent and ought to be struck out.”
Learned Counsel for the appellant, Mr. Adedolapo Akinrele submitted on issue No.1 that parties joined issues in their pleadings specifically in relation to failure to obtain a residence permit. He pointed out that the provisions and effect of section 8(1) and section 34 of the Immigration Act 1990, which were not pleaded but which the trial Judge based his judgment differ materially from the pleaded facts relating to “non-obtainance” of residence permit.
Learned Counsel contended that section 8(1) of the Immigration Act deals specifically with work permit and not residence permit and section 34(1) provides that failure to comply with the provisions of the section shall be an offence under the Act. He also examined section 48(1) of the Act.
It was the submission of learned Counsel that illegality arising out of non-compliance with section 8(1) and section 34 of the Immigration Act was neither raised in the pleadings nor evidence led by the respondent at any material time during the trial in respect of “non-obtainance” of a work permit.
In a contract of employment such as in the instant case, which is in itself not ex-facie illegal, counsel submitted that the law makes it obligatory on the defendant to plead the particular defence of illegality relied upon at the trial. To counsel, failing to plead illegality prevents the court from entertaining the issue and evidence led in that regard goes to no issue. He cited Okagbue and others v. Romaine (1982) 5 S.C. 133 at 156 and Sodipo v. Lemminkainen OY (1986) 1 NWLR (Pt. 15) 220 at 233.
On issue No.2, learned Counsel submitted in the alternative 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 and the critical question is to ascertain the true intention of the Act, regard being paid to relevant aids to statutory interpretation. Counsel cited Chitty 24th Edition, page 1144 at paragraph 1146 and the case of Oilfield Supply Centre v. Johnson (1987) 2 NWLR (Pt.58) 625.
Learned Counsel further submitted that the object of section 8 of the Act was the creation of a legal scheme whereby an expatriate, that is, a non-Nigerian who would otherwise be disentitled to practice his profession in Nigeria would become entitled to do so once his Nigerian employer complies with the requirements of the section. Having regard to this, it would be paradoxical to hold that such expatriate is disentitled from recovering the fruits of his labour on account of an omission on the part of his Nigerian employer, counsel contended.
It was the further submission of learned Counsel that the Act cannot render the transaction null and void. The courts, counsel said, are sensitive to the fact that non-enforcement may result in unjust enrichment to the party to the contract, who has not performed his part of the bargain and secondly where there exists a charge or penalty the court has to be careful to examine whether the act is forbidden or whether there is merely a charge imposed on it. He cited once again, Chilly on Contract pages 619 and 620 paragraph 1147 subparagraph 3. Learned Counsel also gave two other principles and relied on Chitty on Contract. He submitted that the facts of the case satisfy all the principles he enumerated at pages 10 and 11 of his brief.
With regard to the first principle, learned Counsel contended that the respondent would certainly be unjustly enriched if this court fails to grant the plaintiff’s claim, particularly in the light of the specific finding of the learned trial Judge at page 83 of the record to the effect that the respondent is indebted to the appellant. He cited section 48 (1) of the Act with regard to the second and third principles and section 34(1) of the Act with regard to the fourth principle. Learned Counsel urged the court to hold that section 8(1) of the Act does not render the contract unenforceable.
On issue No.3, learned Counsel contended that even if the circumstances and the provision of section 8(1) of the Act was specifically pleaded as required by law, he could not have relied on the provision having taken the benefit of the contract. The basis of this, counsel argued, is founded on the law of equity with particular reference to estoppel and the principle is simply that a person who has benefited from a transaction cannot turn around and raise a plea of illegality. This is more so, where the burden of avoiding the illegality rests on such person as in this case where section 34 of the Act imposes the burden on the respondent to obtain the required consent, counsel argued. He called the court’s attention to page 83 of the record where he claimed the learned trial Judge accepted the uncontroverted evidence that the respondent benefited from the contract. He cited Oilfield Supply Centre Limited v. Joseph O. Agbor Lloyd Johnson (supra) and Adedeji v. National Bank of Nigeria, (1989) (Pt. 96) 212.
Learned counsel urged the court to allow the appeal.
Learned Senior Advocate for the respondent, Mr. A.O. Eghobamien, raised a preliminary objection that issue No.2 in the appellant’s brief is incompetent and ought to be struck out.
It was the submission of learned Senior Advocate that the issue which was formulated in respect of ground 6 of the additional grounds of appeal embraces a finding of the learned trial Judge, which was not appealed against. He reproduced ground 6 of the additional grounds of appeal and issue No.2 at page 4 of the respondent’s brief and argued that it is apparent that from the additional ground 6 from which the issue is distilled, there was no grievance raised by the appellant in respect of section 34(1) of the Immigration Act, not even from the particulars in respect of the ground. The issue, according to learned Senior Advocate, therefore borders on complaints not appealed against. Issue No.2 cannot be said to flow from ground 6 of the additional ground of appeal.
Learned Senior Advocate submitted that where a party has not appealed against a finding of the trial court, he cannot be heard to question that finding on appeal. He cited Ogunbiyi v. Ishola (1996) 6 NWLR (Pt.452) 12 at 23. Learned Counsel further submitted that it is only arguments which are within the grounds of appeal that can be entertained and pronounced upon by the court. An appellate court cannot embark on a consideration of arguments of which no complaint has been made in the grounds of appeal or upon issues to which the court has not drawn the parties’ attention and heard their arguments thereon in appropriate cases. He cited NDIC v. FMB (1997) 2 NWLR (Pt.490) 735 at 752.
If the court holds that part of the issue formulated by the appellant covers the additional ground 6 of the appellant, counsel argued in the alternative, that when an issue is based partly on a ground of appeal and partly on a complaint not appealed against the issue is liable to be struck out. He likened it to a situation where a competent ground of appeal is argued with an incompetent ground of appeal in which case both grounds would be deemed incompetent and liable to be struck out. He cited Geosource (Nig.) Ltd v. Biragbara (1997) 5 NWLR (Pt. 506) 616-617. On the issue of raising preliminary point of law in the respondent’s brief, learned Senior Advocate cited Ajide v. Kelani (1985) 3 NWLR (Pt. 12) 248 at 257.
Dealing with issue No. 1 in the appellant’s brief, learned Senior Advocate submitted that the issue of non-compliance with section 8(1) and section 34 of the Immigration Act was neither raised in the pleading nor evidence led, by the respondent at any material time during the trial in respect of “non-obtainance” of a work permit does not arise for consideration in this appeal. He quoted what the learned trial Judge said at page 86 of the record and maintained that the trial Judge did the correct thing. To learned Senior Advocate, it is erroneous as stated by the appellant, that the learned trial Judge pronounced on the issue of work permit when such was not in the pleadings.
Learned Senior Advocate referred the court to pages 46 and 47 of the record, where according to him the respondent pleaded copiously the issue of work permit and residence permit. He also referred the court to pages 55 to 57 and 61-62 of the record, particularly at page 55 lines 25 to 38 and page 56 lines 1-32, where according to learned Senior Advocate the trial judge evaluated the evidence and considered the address of counsel before coming to the conclusion that the transaction was illegal. He cited Okoya v. Santilli (1994) 4 NWLR (Pt.338) 256 at 290 and Alao v. ACB Ltd (1998) 3 NWLR (Pt.542) 339 at 355 and submitted that the learned trial Judge was right in invoking section 8(1) and section 34(1) of the Immigration Act, 1990.
Dealing with issue No.3 of the appellant’s brief, learned Counsel submitted that the case of Oilfield Supply Centre v. Johnson (1987) 2 NWLR (Pt.58) 625 relied upon by the appellant is inapplicable to the case. Unlike the Oilfield Supply Centre’s case, the appellant in the instant appeal is asking the court to enforce obligations arising out of an illegal contract, learned Senior Advocate argued. He submitted that when a penalty is imposed on an illegal transaction, the whole transaction would be void. He also cited Oilfield Supply Centre v. Johnson (supra). Citing section 48(1) of the Immigration Act, learned Senior Advocate argued that it is not the law that the illegal transaction would not be void when the penalty prescribed for same is once and for all, as the appellant would want the court to believe.
It was the contention of learned Senior Advocate that a person who has benefited from a transaction, cannot turn round and raise a plea of illegality. This principle of law, according to learned senior Advocate, which is founded on equity is only applicable when no penalty is provided for the illegality, which is not the case in this appeal. To learned Senior Advocate, it is criminal for the appellant to have contravened sections 8(1) and 34(1) of the Immigration Act for which penalty is provided for in section 48(1) of the Act. The case of Adedeji v. National Bank of Nigeria (1989) 1 NWLR (Pt.96) 212 cited by counsel for the appellant is inapplicable, learned Senior Advocate contended. He cited Awojugbagbe Light Industries Ltd. v. Chinukwe (1995) 4 NWLR (Pt.390) 379 at 435 and 436.
Learned Senior Advocate contended that it is not correct as submitted by the appellant that the penalty for the offence is only deportation. Deportation is at the discretion of the court, which may be added to the main penalty as prescribed for in section 48(1) of the Act, learned Senior Advocate submitted. He urged the court to dismiss the appeal.
In his reply brief, learned Counsel for the appellant submitted that the rule that an illegal contract will not be upheld by a court of law is founded in general principles of public policy embodied in the maxim, in pari delicto potior est conditio defendantis and ex turpi causa non oritur actio. He cited Holman v. Johnson (1776) 1 Cowp 341, 343 and Goff and Jones: The law of Restitution 4th Edition (1993) at pages 498 and 499.
Contending that the above general rule is subject to exceptions, counsel submitted that the appellant’s case falls within the following exceptions: (a) Collateral contract: A plaintiff who is a party to a contract that is adjudged illegal, is not prevented from enforcing causes of action, which are collateral to the contract, learned Counsel submitted. He cited Chitty on Contract at page 1167 and the case of Strongman Limited v. Sinecock (1955) 2 Q.B. 525 and called the attention of the court to the evidence of the appellant. (b) Quantum meruit: Other remedies in restitution premised on the principles that the plaintiff is not in pari delicto with the defendant have been held to be available to a plaintiff who was unable to recover sums claimed in a suit under an illegal contract. He cited Mohammed v. Alaga (1999) 3 All E.R. 699.
Let me first take the preliminary objection, which is based on the additional ground 6 and issue No.2 formulated by the appellant.
The ground of appeal reads:
“The learned trial Judge erred in law in holding that section 8(1) of the Immigration Act (supra) rendered the contract of employment illegal when such statute was silent as to the civil remedies of the plaintiff.”
Issue No. 2 is in the following terms:
“Whether on a true construction of sections 8 and 34(1) of the Immigration Act the contract of employment was illegal and therefore, unenforceable at the instance of the plaintiff.”
Both the ground of appeal and the issue are based on illegality of the contract. The expression “illegal” is a common denominator in both. I therefore, find it extremely difficult to agree with learned Senior Advocate that the issue does not flow from the ground of appeal. Although, the ground of appeal does not contain section 34(1) of the Immigration Act that is not the reason to contend that the issue does not flow from the ground of appeal. Contrary to the submission of learned Senior Advocate, I am of the firm view that both the additional ground of appeal and the issue raise grievance and it is that section 8(1) of the Immigration Act could not have rendered the contract of employment illegal.
It is the position of the law, that issues must be formulated from grounds of appeal Ali v. Central Bank of Nigeria (1997) 4 NWLR (Pt.498) 192: Unegbu v. Woli (1997) 2 NWLR (Pt.486) 194; Oruobu v. Anekwe (1997) 5 NWLR (Pt. 506) 618; Akaniwon v. Nsirim (1997) 9 NWLR (Pt.520) 255. The moment an issue relates to the decision of the trial Judge, an appellate court cannot strike out such issue. See Agro v. Millers Ltd. v. CM.B. (1997) 10 NWLR (Pt.525) 469.
I have carefully examined the issue and I hold that it is competent and the objection therefore fails. Learned Senior Advocate cited Ogunbiyi v. Ishola (supra); NDIC v. FMB (supra) and Geosource (Nigeria.) Ltd. v. Biragbara (supra). With the greatest respect to learned senior advocate, the cases are inapposite. The case of Afide v. Kelani (supra) is however, apposite and the result is that I have taken the preliminary objection.
Learned Counsel for the appellant raised the issue that the illegality of the contract of employment was not pleaded by the respondents. Is he correct? I think not. Paragraph 4 of the joint reply to the amended statement of claim reads:
“The defendants aver in further reply in 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 prohibit paying salary of expatriate in foreign currency by cash in Nigeria.”
It is clear to me that the issue of illegality of the contract was duly pleaded by the respondent. It is a different matter whether the issue of illegality was based on resident permit or work permit.
The learned trial Judge invoked the provisions of sections 8(1) and 34(1) of the Immigration Act. He said at page 86 of the Record:
“I hold that the plaintiff and the defendant knowingly, entered into an illegal contract of employing a non-Nigerian in contravention against sections 8(1) and 34(1) of the Immigration Act, 1990, Laws of the Federation of Nigeria.”
The relevant portion of section 8(1) of the Act reads:
“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.”
Section 34(1) of the Act provides as follows:
“Where any person in Nigeria is desirous of employing a person who is a national of any other country he shall, unless exempted under this section, make application to the Director of Immigration in such manner as may be prescribed and shall give such information as to the provision to be made for repatriation of that national and his dependants as the Director of Immigration may reasonably require; and no such person shall be employed without the permission of the Director of Immigration given on such terms as he thinks fit; the provisions of this section shall extend and apply to persons in employment immediately before, as well as to those employed or to be employed at any time after the commencement of this Act.”
While section 8(1) enjoins a non-Nigerian to seek the consent of the Director of Immigration before accepting any employment. Section 34(1) enjoins a Nigerian employer who wants to employ a non-Nigerian to seek similar consent that is the consent of the Director of Immigration. Both section 8(1) and section 34(1) deal with employment.
Respondent was more concerned with resident permit in the Joint Reply to Amended Statement of Claims; as deposed to in paragraph 8 thereof:
“It shall be contended at the trial that the plaintiff as an expatriate has no right to enter into contract of employment with the defendants without a resident permit issued by the Federal Government under the Immigration Act.”
The respondent pleaded particulars of offence in paragraph 8 as follows:
“(a) It is an offence under S.15 of the Immigration Regulations of the Immigration Act, Cap 171, Laws of the Federation of Nigeria, 1990,for the Plaintiff to submit resident permit No. 060672 issued to him to work for Jagal Nigeria Limited to the 1st defendant.
(b) It is an offence for the plaintiff to work for the 1st defendant, without resident permit as provided by the Immigration Act 1990.”
In his examination-in-chief, the representative of the 1st defendant, which is now the respondent, said in court:
” … I requested for the Federal Government permit which enables foreigners to take up any employment in this country of Nigeria. The plaintiff did not produce any resident permit to my company… The plaintiff bought a work permit from another company in Lagos.”
Apart from the fact that illegality of the contract under sections 8(1) and 34(1) was not duly pleaded in the joint reply to the amended statement of claim, the learned trial Judge wrongly invoked the provisions of the sub-sections in this matter. In view of the pleadings in paragraph 8 of the joint reply, the learned trial Judge ought to have invoked section 10 of the Immigration Act, if that section was appropriate or relevant in the circumstances. I say this because it is section 10 that deals with resident permit and not sections 8(1) and 34(1) of the Act.
The above apart, there is no evidence before the court to substantiate the illegality of the contract of employment under sections 8(1) and 34(1) of the Immigration Act.
In Okagbue v. Romaine (supra) the Supreme Court said at page 156:
“Where a contract is not exfacie 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 pleading, in such circumstances evidence adduced in support of the unpleaded illegality clearly goes to no issue.”
In Sodipo v. Lemminkainen or (supra) Eso JSC said at page 233:
“If the true intention of the respondent was to show that the appellant’s contract of employment contravened specific provisions of the law, which makes the contract unenforceable, then the law makes it incumbent upon the respondent to specifically plead these provisions so that the appellant may have the opportunity of reaching to them and challenging evidence that may be adduced in support of these facts.”
It is trite law that parties are bound by their pleadings. See Edokpolo and Co. Ltd v. Sem-Edo Wire Ind. Ltd. (1989) 4 NWLR (Pt.116) 473; Owoade v. Omitola (1988) 2 NWLR (Pt.77) 413; Ehimare v. Emhonyon (1985) 1 NWLR (Pt. 2) 177; Mohammed v. Ali (1989) 2 NWLR (Pt.103) 349; Oredoyin v. Arowolo (1989) 4 NWLR (Pt.114) 172 and Adeleke v. Balogun (2000) 4 NWLR (Pt.651) 113.
Since the provisions of sections 8(1) and 34(1) were not duly pleaded, it was not open to the learned trial Judge to invoke them even if they were relevant. I have held that they are not relevant as the issue raised by the respondent was on resident permit.
In the event that I am wrong, let me take section 8 of the Act, in the alternative. Assuming that section 8 is applicable, does its application render the contract of employment between the parties void? In other words, does breach of section 8 make a contract void ab initio?
In Oilfied Supply Centre Ltd. v. Johnson (supra) where the appellant contended that at the time the respondent got involved with the appellant and was working, he had not obtained an expatriate quota thus, making all contracts entered into by him illegal, the Supreme Court upheld the decision of the Court of Appeal. In that case, Belgore, JCA, (as he then was) quoted in the Supreme Court decision as follows:
“The purport of section 8(1) Immigration Act is to protect certain businessmen from exploitation by non-Nigerians and make sure that Nigerians are not at any disadvantage. Section 8 imposes no penalty for failure to apply, apart from deportation. The petitioner has not been deported. It is only when a penalty is imposed that the whole transaction will be void.”
Eso, JSC, thereafter said at page 638 of the judgment:
“The real question is, could the company meet this case by saying that their own foundation was illegally procured and the benefit that has accrued to the company that is the over eight million naira, procured from illegal basis?”
There is one other point worth mentioning. Section 34(1) ought to have been complied with by the respondent. It did not do so. Can the same respondent receive benefit from the same subsection? That is the whole essence of the judgment of the learned trial Judge. I do not think the doctrine of equity and fair play will allow that to happen. I rely on Chitty on Contract 25th edition by learned Counsel for the appellant at page 620, paragraph 1147(3):
“The courts have also been sensitive to the fact that non-enforcement may also result in unjust enrichment to the party to the contract, who has not performed his part of the bargain but who has benefited from the performance of the other party. As was stated by Devlin, J., in the St. John Shopping case, non-enforcement of the contract in the forfeiting of a sum which will not go into the public purse, but into the pocket of someone who is lucky enough to pick up the windfall or astute enough to have contrived to get it.”
The above is so relevant, when taken in the con of the findings of fact by the learned trial Judge at page 83 of the record:
“I accept the evidence of the plaintiff as correct that he is still owed the sum of $117,500 and N4,000 by the 1st defendant. My belief is strengthened by Exhibits 9 and 9(1) where an Executive Director of the 1st defendant has stated the breakdown of salaries of the plaintiff from September, 1991, to March 1993.”
Let me still fall back on the decision of Oilfield Supply Centre Limited v. Johnson (supra) where Eso, JSC, said at page 639:
“It is the appellant who should have applied for a permit for him and failed to, before he helped them found the company that now intends to meet him with illegality perpetrated by the same company. Certainly equity will not permit the company to benefit from their own illegality.”
In Adedeji v. National Bank of Nigeria (supra) Akpata, JCA (as he then was) said at page 226:
“It is morally despicable for a person, who has benefited from an agreement to turn round and say that the agreement is null and void. In pursuance of the principle that law should serve public interest, the courts have evolved the technique of construction in bonam partem. One of the principles evolved from such construction in the interpretation of statutes, is that no one should be allowed to benefit from his own wrong… As Widgery L.J. said in Buswell v. Godwin (1971) 1 All ER 418 at 421, ‘the proposition that a man will not be allowed to take advantage of his own wrong, is no doubt a very salutory one, and one which the court would wish to endorse.’ The effect is usually that the liberal meaning of the enactment is departed from where it would result in wrongful self benefit.”
Paradoxically the learned trial Judge agreed with the above and yet, held that the contract was illegal. He had earlier said at page 88 of the record:
“I am in complete agreement with the remark in Adedeji v. National Bank of Nigeria by Hon. Justice Akpata, JCA, then but now a retired Justice of the Supreme Court, when he remarked in that case that, apart from the principle of law involved in this case, it is morally despicable for a person who has benefited from an agreement to turn round and say the agreement is null and void.”
The above apart, the learned trial Judge observed at the same page that the “refusal of employers of labour to pay the rightful wages for their employees, has often led to unpleasant consequences in this country.”
While it is possible that the learned trial Judge could have taken what he said as a moral issue, his agreement with the decision of Akpata, JCA in Adedeji (and he had no choice in the matter) ought to have changed the position he took in this matter. This is more so when the learned trial Judge did not make any distinction in his judgment. By the well established rules of stare decisis he was bound by the decision in Adedeji.
Let me further deal with the issue of pleadings with particular reference to the submission of learned Senior Advocate, at page 6 of his brief. He called the court’s attention to paragraphs 6, 7, and 8 of the defendant’s reply to the plaintiff’s amended statement of claim, and contended that the issue of work permit and resident permit were copiously pleaded.
I will produce the ipsissima verba of the paragraphs, to show that the pleadings were in respect of resident permit and not work permit:
“6. 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.
- The 1st defendant shall contend that all efforts to prevail on plaintiff to produce his resident to work for 1st defendant failed.
- It shall be contended at the trial that the plaintiff as an expatriate has no right to enter into contract of employment with the defendants without a resident permit issued by the Federal Government, under the Immigration Act.”
There was no mention of work permit which section 34(1) of the Immigration Act covers.
In sum, this appeal is allowed. The judgment of the learned trial Judge is hereby set aside. I award N4,000 costs, in favour of the appellant.
Other Citations: 2001)LCN/0977(CA)
