SAPARA V. U.C.H. BOARD OF MANAGEMENT

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NIGERIAN SUPREME COURT CASES

[1988] 2 N.S.C.C.

SAPARA V. U.C.H. BOARD OF MANAGEMENT

E. SAPARA

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APPELLANT

V

U.C.H. BOARD OF MANAGEMENT

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RESPONDENT

SUIT NO. SC 213/1985

SUPREME COURT OF NIGERIA

OBASEKI,

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J.S.C.

KARI BI-WHYTE,

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J.S.C.

OPUTA,

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J.S.C.

AG BAJ E,

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J.S.C.

NNAEMEKA-AGU, J.S.C.

18th July, 1988

Master and Servant -Action for declaration and damages for unlawful dismissal - Rules

of Natural justice - Applicability - Entitlement to declaration - Damages.

Contract - Elenzents of - Employer and employee - Intention to create legal relationship -

Complimentary document repudiating intention to create legal relationship - Effect -

Variation and rescission of contracts - Effect of secondary and subsequent documents

made pursuant to original contract.

ISSUES:

1.

Whether an intention to create a legal relationship can be negatived in court where

it is clear that an employee took up employment on the basis of an appointment

letter written by the employer.

2.

Whether a document made pursuant to an existing contract of service and

containing the conditions of service applicable thereto, can be construed as

standing on its own to defeat the original contract.

3.

Whether the presence of "consideration" is conclusive evidence of an intention

to create a legal relationship.

4.

Whether there is a presumption to create a legal relationship in commercial

transactions.

5.

Whether an agreement which is capable of mutual benefit but made in fact for

the benefit of one of the parties in a contract can constitute a variation or

rescission of the original contract.

6.

What is the effect generally, where a second contract is made, subsequent and

dependent on an original and giving effect to the same.

FACTS:

The appellant was an employee of the respondent from 17th July, 1962 to 27th

February, 1979 when she was dismissed by the latter on an allegation of stealing.

She sued the respondent for a declaration that her dismissal was wrongful and for

an order of re-instatement etc. At the High Court I badan, the defendant/respondent

sought refuge in a document made by itself in 1971, titled "conditions of service".

Section 2(b) of that document stipulated that "the conditions of service" do not con-

stitute a contract between the Board of Management and its officer/employee and

that nothing in the "conditions of service" shall confer on any officer/employee a legal

right to the benefit of any of their provisions. However, the plaintiff/appellant had, in

her statement of claim pleaded a letter of appointment (Exh.A) by which she was of-

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SAPARA V. U.C.H. BOARD OF MANAGEMENT

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fered employment by the defendants and her own acceptance. The parties joined

issues on the question of whether there had been a binding contract of employm-

ent between them. The trial court resolved the issue in favour of the appellant. Fur-

thermore, the trial Judge, after hearing evidence and address of counsel on both

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sides, dismissed the contention of the respondents based on the applicability of sec-

tion 2(b) of "the conditions of service" which sought to negative an intention to cre-

ate legal relationship between the parties.

He held that the relationship between the parties was one of master and servant

and accordingly, the appellant was not entitled to the benefit of the rules of natural

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justice and could be dismissed without regard to their observance. He however aw-

arded her compensation and damages for wrongful dismissal. The respondent ap-

pealed to the Court of Appeal contending

inter- alia,

that judgment was against the

weight of evidence (in relation to quantum of damages) and that the trial Judge was

wrong to have held that Exh.D, the conditions of service did not apply to the appel-

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lant. It contended further that the trial court was wrong in giving judgment for the

appellant since by section 2(b) of Exh.D, there was no intention to create legal rela-

tionship between the parties. Allowing the appeal, the Court of Appeal held that the

plaintiff/appellant did not sue on Exh.A, hut on the conditions of service, Exh.D with-

in the provisions of which she had no legally enforceable right.

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The appellant appealed to the Supreme Court.

HELD:

1.

The appellant had joined issues with the respondent as to whether there was a

valid contract of employment between them. By the production of the letter of

appointment, Exh.A, the issue was resolved in favour of the plaintiff/appellant.

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It became clear that there was a contract of employment and there was a definite

intention to create a legal relationship between the parties, for otherwise, Exh.A

would not have been written. The Court of Appeal therefore erred when it held

that there was no intention to create legal relations between the parties.

2.

Where there is no contract of employment, the conditions of service do not

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constitute a contract and no legal right or claim can be formulated upon such

conditions. That means that Exli.D, "conditions of service", cannot, and does

not stand alone. The contents can only form part of a contract of employment

or a letter of appointment. The parties in this case bound themselves by the

letters of appointment and acceptance, thereby creating a legal relationship.

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The law recognises the sanctity of contract and will enforce the contract so as

to remedy any breach. Section 2(b) of the "conditions of service" was wrongly

interpreted by the Court of Appeal.

3.

That in addition to the phenomenon of agreement and the presence of

consideration, there must also be an intention to create a legal relationship. The

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very presence of a consideration implies the existence of such an intention. For

to make a bargain is to assume liability and to invite the sanctions of the courts.

4.

That in commercial agreements, there is a presumption (rebuttable) of an

intention to create legal relations The burden of rebuttal is very heavy and that

burden has not been discharged in the present case. The agreement of the

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parties was not a domestic understanding but a business arrangement and the

burden of rebutting the presumption of legal relations lay upon the

defendant/respondent. The appellant could not serve the respondent, 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 services of the appellant in the office for which

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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.

5.

Variation involves a definite alteration as a matter of contract, of contractual

obligations by mutual agreement of both parties. An agreement, capable of

benefit of both parties but actually made for the benefit of one will not be effective