Sapara V. University College Hospital Board Of Management (1988)

LawGlobal-Hub Lead Judgment Report

O. OBASEKI, J.S.C. 

The appellant was in the service of the respondent for 17 1/2 years before her dismissal from the service. Upon her dismissal, she filed an action in the High Court of Justice of Oyo State at Ibadan claiming:

1. ”Declaration that the purported dismissal of the plaintiff from the defendant’s service by a letter Ref. No. P4191/103 of 27th February, 1979 and the procedure adopted by the defendant in connection therewith were irregular. null and void and were contrary to the procedure laid down in the conditions of service drawn up by the defendant for their employees and, or were contrary to the principles of natural justice.
2. An order that the plaintiff be reinstated in her post as Kitchen Supervisor (Dining Room) with effect from 1st March, 1979 OR

Alternatively, the plaintiff claims the following as damages:

(i) Salary for 7 1/2 years N34,020.00

(ii) Gratuity at 60 years 5,832.00

39,852.00

(iii) Order for the payment of pension at the rate of N756.00 per annum i.e. 30% of terminal salary.”

The defendant’s main contention in the High Court and the Court of Appeal is that:

“The action is not maintainable in law as there was no legal right of contract vested in the plaintiff and that there was no intention to create legal relationship with the plaintiff as provided for in sub-section (2)(b) of the “Condition of Service”.

This subsection (2)(b) stipulates that:

“The ‘conditions of service’ do not constitute a contract between the Board of Management and its officer/employee and nothing in this ‘conditions of service’ shall confer on any officer/employee a legal right to the benefit of any of their provisions and the Board of Management may at any time revoke, alter, add to or amended the conditions laid down therein.”

The High Court (Olowofoyeku, J.) dismissed the contention after hearing evidence of the parties and their witnesses and the addresses of counsel to the parties. He gave judgment in favour of the plaintiff for N5,091.20 damages. The learned trial Judge in his judgment dealing with the issue of legal relationship, said:

“I have not found it easy on the evidence before me to place the relationship between the plaintiff and the defendant or more precisely, to place it outside that of a purely master and servant relationship in which case she will not be entitled to the protection of the Rules of natural justice….Counsel for the plaintiff has not pressed her claim on the breach of the procedure for discipline provided in the relevant regulation 61 of the Conditions of Service Exhibit D. Even if she did, I have not been informed that the mandatory procedural requirement therein prescribed have express statutory sanction.

…….am therefore of the view that the relationship between the plaintiff and the defendant is that of master and servant and accordingly she is not entitled to the observations of the rules of natural justice before she could be dismissed from her employment.

It appears in the circumstances that she is not entitled to the declaration that her dismissal is null and void.”

Earlier the learned trial Judge dealing with defendant’s submission and reference to regulation (2)(b) of Exhibit D he said:

“But here the situation is different. As counsel for the plaintiff has argued a contract of employment between the plaintiff and the defendant subsisted before the advert (sic) and Independently of the conditions of service Exhibit D which were made only in 1971. The plaintiff’s employment under the defendant commenced in 1962, that is, nine years before the Conditions of Service came into being. But there can, in my view, be no better testimony of a contract of employment between the plaintiff and the defendant than is implicit in the provisions of regulation 2(D) of Exhibit D itself.” ….

It reads:

The italicized words imply, to my mind, that there subsists independently of the Conditions of Service, a contract of employment which those conditions set out partially to regulate.”

The defendant was not satisfied with the decision of the High Court, so the Board filed a notice of appeal against the decision. The grounds of appeal set out in the notice are three in number and read:

“1. That the judgment is against the weight of evidence;

2. That the learned trial Judge erred in law to have held that Exhibit ‘D’ which is the condition of service operating between the defendant/appellant and the plaintiff/respondent is not binding on the respondent and thereby came to a wrong decision;
3. That the learned trial Judge erred in law in his interpretation of section 2 of Exhibit D and thereby- erred in law in giving judgment in favour of the plaintiff/respondent when by section 2 of Exhibit D there was no intention to create legal relationship between the parries and thereby engendered substantial miscarriage of justice.”

The Court of Appeal heard the appeal and after considering the submission of counsel, allowed the appeal. The lead judgment (concurred in by Akpata and Onu, JJ.C.A.) was read and delivered by Maidama, J.C.A. who observed and said that

“It was submitted by the learned Counsel for the appellant that the trial Judge was wrong in holding that there existed a contract independently of the conditions of service. Counsel further submitted that when Exhibit D came into effect in 1971, the conditions of service contained in the said Exhibit D superseded those in Exhibit A ….

Mr. Esan, learned Counsel for the respondent in reply contended that ground 2 of the ground of appeal is misconceived ….The other point made by Mr. Esan is that Exhibit A is independent of the conditions in Exhibit D. Therefore the respondent has a right of action.

Now the learned Justice of the Court of Appeal said:

“The question for our determination is whether the respondent is precluded from bringing this action …. In his submission Mr. Esan submitted that the respondent’s action was not founded on the conditions of service but on the contract of employment contained in Exhibit A.

In my view, the respondent was not suing on Exhibit A but on the conditions of service Exhibit D which she had no right to do by virtue of section 2(b) of the conditions of service. The provisions are quite explicit. It is not open to the respondent to say that her contract of service was independent of the conditions of service Exhibit D. This case in my view, is on all fours with the case of E. B. Lala v. U.C.H. Board of Management F.C.A./1/50/80 delivered on the 20th October, 1983. In my view the appellant has no legal enforceable right and the learned Judge was wrong in giving judgment for the respondent. The appeal succeeds.”

Aggrieved by this judgment, the plaintiff filed a notice of appeal against the decision of the Court of Appeal. In the notice of appeal, she set out two grounds of appeal which read:

1. The learned appellate Judges erred in law in the interpretation they placed on section 2(b) of the conditions of service of the University College Hospital to the effect that it deprived the appellant of the legal right to an enforceable contract when, on a proper construction, the section produced no such effect.
2. The learned Justices of the Court of Appeal erred in law in holding that there was no intention to create legal relations between the appellant and the respondent when by the nature of an employment contract as a strictly business relationship, the law implies an intention to create legal relationship.

With leave of this Court, a third ground was filed and argued. This third ground reads:

“The learned trial Justices of appeal erred in law when they held that the plaintiff had no legally enforceable contract with the defendant in spite of the fact that being a public servant, the employment is contractual and in fact statutory rather than being held at the pleasure of the institution.”

On these grounds, the appellant formulated six (6) questions for determination as follows:

1. whether apart from the conditions of service of the respondent, the appellant has a contract of employment
2. whether the effect of section 2(b) of the conditions of service is to take away all the rights of the appellant under her contract of employment with the respondent or merely those rights conferred in the conditions of service;
3. whether the effect of section 2(b) of the conditions of service is that there is no intention to create legal relationship between the appellant and the respondent;
4. whether the effect is to show that there is no intention that the appellant can enforce the provisions of the conditions but can bear the burden and can only enforce any of his (sic) rights that do not derive from the booklet ‘Condition of Service’
5. whether the plaintiff, as someone employed in the institution established by statute, can be said to hold her appointment at the pleasure of the U.C.H. and can therefore not sue for unlawful dismissal
6. whether on the whole the appellant is precluded from suing for a breach of his (sic) contract of employment.”

The respondent in his brief adopted these issues for determination formulated by the appellant as the issues this Court can properly consider in this appeal.

Learned Counsel for the appellant submitted that the learned trial Judge was right in holding that a contract of employment came into existence in 1962 since the Justices of appeal found in their judgment that the respondent made an offer of employment to the appellant on 24th July, 1962 with detailed terms and the appellant accepted the offer and resumed duty.

I agree with counsel and I accept his submission that a contract of employment came into existence in 1962. He further submitted that section 2(a) of the conditions of service impliedly recognised the existence of contract of employment. He then cited:

Rose and Frank Co. v. J. R. Crompton Brothers Ltd. (1923) 2 K.B. 261 at 282; and

sections 1 to 21 of the Labour Decree 1974 and paragraph 117 page 56 Chitty on Contract 24th edition Vol. 1. Learned Counsel then concluded that section 2(b) of the conditions of service cannot and did not deprive the appellant of the legal relationship already created by the appointment.

In my view, all that section 2(b) of the conditions of service says is that “the conditions do not constitute a contract between the Board and its officers and that nothing in the conditions shall confer a legal right to the benefit of the provisions of the conditions.” These conditions are terms of the contract and the declaration is inconsistent with section 2(a). Where section 2(a) of the conditions of service operates section 2(b) is inoperative and so section 2(b) cannot be made the ground for reversing the decision of the learned trial Judge. Learned Counsel referred to and cited the case of Adeyemo v. Oyo State Public Service Commission (1978) 2 L.R.N. 268 at 276 and said that the facts are on all fours with the instant appeal. He submitted that the appellant was a public officer and entitled to fair hearing and natural justice in the investigation of the allegation of stealing at 24-27 and C.O.L. Olaniyan & Ors. v. University of Lagos (1985) 2 N.W.L.R. (Pt.9) 578 at 642 in support and then went on to submit that appellant is a public officer in the employment of a public institution and so the employment cannot be at the pleasure of the institution. The respondent’s trial of the appellant and finding of guilt of stealing fishes and tomato soup tins was a breach of the right of fair hearing in section 33 of the 1979 Constitution and the principles of natural justice.

The respondent is precluded by law from trying the appellant for a criminal offence and assuming the jurisdiction of a court of law. See Garba & Ors. v. University of Maiduguri (1986) 1 N.W.L.R. (Pt. 18) 550.

There is a general presumption against ousting the jurisdiction of a court of unlimited jurisdiction like the High Court and any clauses in statutes, contracts or other documents which purport to oust the jurisdiction of the court will be strictly construed. In support of this statement of the law, learned Counsel cited:

Pyx Granite Co. Ltd v. Ministry of Housing and Local Government 1960 AC.260.

Wilson v. Attorney-General for Bendel State (1985) 1 N.W.L.R. 572 at 587 and 594

Barclays Bank v. Central Bank (1976) 6 S.C. 175 at 188

Anisminic Ltd. v. Foreign Compensation Commission (1969) 2 A.C. 147 at 170 Halsbury’s Laws of England 4th Ed. Vol. 10 para. 720

Maxwell on Interpretation of Statutes page 258 12th Ed.

Cross Statutory Interpretation pages 147/148

The 3 cases: Ariori v. Elemo (1983) 1 S.C. 13 at 26, 50/51

State v. Oba Ogunoye Ex-parte Olakunrin (1985) 1 N.W.L.R. (Part 4) 652 at 681/682; and

Adigun v. Attorney-General of Oyo State & 2 Ors. (1987) 1 N.W.L.R. (Pt. 53) 6/8 cited by appellant’s Counsel.

are not strictly applicable. Finally, learned Counsel submitted that the only ground relied on by the Court of Appeal to support its judgment cannot stand.

Mr. Adedayo Ajakaiye, learned Counsel for the respondent was at pains to support the decisions of the Court of Appeal. He adopted the issues for determination formulated by the appellant. He half-heartedly submitted that the letter of appointment as opposed to a contract of employment referred to section 2(a) of the conditions of service of the respondent Exhibit D. He contended that Exhibit D is not in conflict with Exhibit A.

In my opinion, it is for a different reason from what learned Counsel thinks. It is interesting to note that section 2(a) makes no distinction between contract of employment and letters of appointment. I referred to the section earlier on in this judgment and for the purpose of emphasis of his point I have just made, it is desirable to set out the provisions again. It reads:

“(a) The provisions of these ‘Conditions of Service’ apply to all officers/employees except where they conflict with specific terms approved by the University College Hospital Board of Management and written into the contract of employment or letters of appointment.”

In other words, if the conditions do not conflict, they are applicable to all employees. It is conceded however, by the respondent’s counsel that the appellant had a letter of appointment Exhibit A. A close examination leaves one in no doubt as to the intention of the respondent to create a legal relationship with the appellant. The letter reads:

University College Hospital

Ibadan, Nigeria

Chairman: Chief the Honourable Sir Kofo Abayomi

PC; MD., LL.D., D.O.M.S.F.R.S.A.,

House Governor: Gerard Parker, F.H.A.

Tel. Agodi 21811

Telegrams Teachers Ibadan

Ref. No. DP.911/4

Date 24th July, 1962.

Miss E. Ogunsola,

c/o The Catering Officer,

U.C. Hospital,

Ibadan.

“Dear Madam,

I write on behalf of the Board of Management to offer you appointment as Cook Grade II at the rate of pay of 5/6d. per day on Scale SL.II & I with effect from 17th July, 1962.

2. This offer of appointment is subject to your being passed medically fit for service in this Hospital.
3. You will be eligible for seven days leave on full pay each calendar year except the calendar year in which you are first employed. After three years of continuous and satisfactory service, you will be eligible for fourteen days’ leave on full pay for each calendar year excluding Sundays.

You will not be eligible for free transport or any allowances.

4. If it is established to the satisfaction of the Head of Department in which you are serving that you are not qualified for efficient service, or unsuitable in other ways, your appointment may be terminated at any time by giving you seven days notice in writing or by payment of seven days wages in lieu of notice.
5. Absence from duty without permission renders you liable for dismissal without notice or payment of wages in lieu of notice.
6. Unless you are dismissed; you may terminate your engagement by seven days notice in writing or with the consent, in writing of your Head of Department, by the payment of seven days wages in lieu of notice.
7. You will be subject in all respects to all conditions of service stipulated from time to time by the Board of management.
8. If you are prepared to accept this offer, I shall be glad if you do so in writing.

This cancels my letter of appointment No.DP.911/3 of 23rd July, 1962.

Yours faithfully,

Sgd.

House Governor”

The issues joined on the pleadings are better appreciated by referring to the statement of claim and statement of defence. I am not concerned with the many issues raised on the pleadings apart from the issue whether in their exchange of correspondence actions and reactions and omissions there is shown an intention to create legal relation. I will therefore refer to paragraphs 2, 3, 4, 5, 6, 7, 8, 9, 10, 12, 19, and 20 which read:

2. The defendant is a body corporate with perpetual succession established under the University College Ordinance No. 26 of 1952 Laws of the Federation;
3. The plaintiff was offered the post of Cook Grade II with retrospective effect from 17th July, 1962 by letter Ref. No. D.F.911/4 of 24th July, 1962 by the then House Governor of the University College Hospital, Ibadan on behalf of the defendant.
4. The plaintiff accepted the offer of appointment referred to above by assuming duties on the 17th July, 1962 on a rate of 5s.6d. per day on Scale SL.II & I;
5. The plaintiff’s appointment was confirmed in the customary manner and this guaranteed her permanent employment till the retiring age of 55;
6. The plaintiff’s retiring age is 60;
7. The plaintiff who is 42 1/2 years old still has 17 1/2 years to work for the defendant before reaching her retiring age;
8. The plaintiff on retirement is entitled to gratuity, pension and other allied benefits from the defendants;
9. The plaintiff was promoted to the post of Dining Room Supervisor in the service of the defendant by letter No.P.4191/42 dated 25th April, 1967 by the then House Governor of the defendant;
10. The plaintiff was again promoted to Kitchen Supervisor (Dining Room) by letter dated 19th May, 1978 with retrospective effect from 1st April, 1978 and with a salary of N1944.00 per annum on Grade Level 06;
11. The plaintiff’s appointment at all material times was regulated by the conditions of service drawn up by the defendant;
12. The defendant by their letter No. P.4191/103 of 27th February, 1979 by the Under Secretary (Establishment) wrongfully dismissed the plaintiff from their service summarily;
13. The plaintiff throughout the period of her employment served the defendant conscientiously, honestly and obediently to the best of her ability.

The relevant paragraphs of the statement of defence I need set down here for the purposes of this judgment are paragraphs 1, 2, 3, and 5. They read:

1. The defendant admits paragraphs 1, 2, 9, 10, 11, 12, 13, 15, 17 of the statement of claim;
2. The defendant denies paragraphs 3, 4, 5, 6, 7 and 8; 16, 18, 19, 20, 21, 22 sub-paragraphs 1 & 2 and the alternative claim and puts the plaintiff to the strictest proof of the facts alleged therein;
3. The defendant avers that the contract of employment of the plaintiff in the services of the defendant is governed by the “conditions of service” of officers and employees of the University College Hospital, Ibadan 1971. This document shall be relied upon at the trial of this case.
4. The defendant contends that this action is not maintainable in law as there was no legal right of contract vested in the plaintiff and that there was no intention to create legal relationship with the plaintiff as provided for in sub-section 2(b) of the “Conditions of Service” as follows:

“The conditions of service do not constitute a contract between the Board of Management and its employer/employee and nothing in the “Conditions of Service” shall confer on any officer/employee a legal right to the benefits of any of their provisions and the Board of Management may at any time revoke, alter, add to or amend the conditions laid down therein.”

It is therefore crystal clear from the pleadings that the defendants now respondent in this appeal denied making any offer of employment to the plaintiff by the letter pleaded. Issue was therefore joined on the existence of a letter of employment. When the letter of employment Exhibit A was produced, tendered and admitted in evidence, this issue was definitely resolved in favour of the appellant. It became clear that there was a contract of employment and that there was definite intention to create legal relations between the parties otherwise Exhibit A would not have been written.

The Court of Appeal therefore erred when the learned Justices of that Court held that there was no intention to create legal relations. The learned trial Judge was therefore right and justified when he held and found that:

“It is however common ground that the plaintiff held before her dismissal what was regarded as a permanent appointment entitling her to remain employed under the defendant until the age of 60.”

To be entitled is to have a right to remain employed. This is legal relation. The breach of that right entitles the appellant to relief or remedy in the court.

The defendant/respondent even denied paragraph 19 of the statement of claim which pleaded the summary dismissal of the appellant although in paragraph 17 of the statement of defence the defendant asserted that the dismissal was lawful and was on ground of misconduct. The defendant however acted as prosecutor witness and Judge contrary to Garba v. University of Maiduguri (1986) 1 N.W.L.R. (Pt.18) 550 Sofekun v. Akinyemi (1980) 5-7 SC. 1

The evidence on record is that the appellant accepted the appointment and as reflected in the letter assumed duty on 17th July, 1962. The contract was therefore concluded. There was therefore established a legal relationship between the appellant and the respondent with terms or conditions of service spelt out and the rights of the employees spelt out.

In April, 1967, she was promoted and this promotion was followed by another promotion on 19th May, 1978 as reflected in Exhibits ‘B’ and ‘C’.

Her appointment was suddenly terminated on a false allegation of stealing which the respondent tried as Judge in his own cause. Learned counsel for the respondent was wrong when he submitted that the appellant had no contract of service independent of the conditions of service in Exhibit D. The provisions of section 2(b) of the Conditions of Service have, in my view, been given a totally erroneous interpretation by learned Counsel for the respondent and unfortunately by the Court of Appeal. Unless you have a contract of employment, the conditions of service do not constitute a contract and no legal right or claim can be formulated upon the conditions therein. In other words, Exhibit D cannot and does not stand alone.

The contents can only form part of a contract of employment and a letter of appointment. Both the appellant and the respondent bound themselves by the letter of appointment; the respondent bound itself to appoint the appellant and keep her in the employment of the Board and to terminate the contract of employment only on certain conditions in a certain way while the appellant on the other hand bound herself to serve the respondent (sic) and remain in the employment of the Board and to terminate the contract of employment on certain conditions in a certain way. Therein lies the legal relationship. These are elementary principles of contract. The law recognizes the sanctity of contract and will enforce the contract so as to remedy any breach. Contracts in the words of Lord Stowell:

“must not be the sport of an idle hour, mere matters of pleasantry and badinage, never intended by the parties to have any serious effect whatever Dalrymple v. Dalrymple (1811) 2 Hag. Can. 54 at 105”

In addition to the phenomenon of agreement and the presence of consideration, a third contractual element is required. It is the intention of the parties to create legal relations. The very presence of consideration implies the existence of such an intention. To make a bargain is to assume liability and to invite the sanctions of the courts.

In commercial agreements, it will be presumed that the parties intended to create legal relations and make a contract. But the presumption may be rebutted but the burden is very heavy. Certainly, in the instant appeal, it has not been rebutted. This was a business and not a domestic agreement and the burden of rebutting the presumption of legal relations lay upon the defendant/respondent. It is unthinkable that the appellant will serve the employer and carry out the duties of her office and not have a legal right to her wages. Similarly, the respondent has a legal right to the service of the appellant in the office for which she was employed. It is only in the course of family life that many agreements are made which could never be the subject of litigation. If a husband arranges to make a monthly allowance to his wife for her personal enjoyment, neither would normally be taken to contemplate legal relations. See

Balfour v. Balfour (1919) 2 K.B. 571 at 578-579

See also

Pettitt v. Pettitt (1970) A.C. 777 at pp.822, 413-4

Agreement between parent and child may present problems similar to husband and wife. See Jones v. Padavatton (1969) 2 All E.R. 616; (1969) 1 W.L.R. 328. These are distinguishable from the instant appeal.

It should be observed that the order of performance of obligations by the parties in contract of employment is a pointer to the intention to create legal relations. The normal approach is work first, payment later, and the doing of the work is a condition precedent. The reasons for this approach are not easy to find. It is that the employer will usually be a better credit risk than the employee. There is also the point that the employee who has performed has a relatively simple method of forcing the employer to perform by bringing an action for wages while the employer who has paid in advance can get his money back if the work is not done but cannot get an order for specific performance against the employee.

By the letter of employment Exhibit A accepted by the appellant, it was the intention of the parties to create legal relations and the justices of the Court of Appeal were clearly in error when they held that the appellant could not institute a claim in this action because there was no intention to create legal relation. See section 7(1); Section 9(2), (6), (7); Section 11(1), (2); Section 16(1) Labour Decree 1974 No. 21.

The parties did not appeal on the quantum of damages awarded either to the Court of Appeal or to this Court to warrant an examination of that issue.

Having disposed of the only issue raised, i.e. whether there was legal relations intended by the parties to enable the appellant to invoke the sanction of the court, I hereby allow the appeal.

The decision of the Court of Appeal is hereby set aside and the judgment with the order as to costs delivered by the High Court restored. The appellant is entitled to costs in this Court fixed at N500.00 and in the court below assessed at N250.00.

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SC.213/1985