A.O. AFOLABI & ORS – WESTERN STEEL WORKS LTD & ORS

CORAM

BODE RHODES-VIVOUR – JUSTICE, SUPREME COURT

FRANCIS FEDODE TABAI, JUSTICE SUPREME COURT

JOHN AFOLABI FABIYI, JUSTICE SUPREME COURT

OLUFUNLOLA OYELOLA ADEKEYE, JUSTICE SUPREME COURT

OLABODE RHODES-VIVOR, JUSTICE SUPREME COURT

OLUKAYODE ARIWOOLA,JUSTICE SUPREME COURT

PARTIES

1. A. O. AFOLABI

2. A. A. NWANZE

3. A. ADERIBIGBE

4. L. OTUNLA

5. S. ANIFOWOSE (For Themselves And On Behalf Of The Other Employees Of The First Defendant)

6. IRON & STEEL WORKERS UNION OF NIGERIA (For And On Behalf Of The Entire Members Of The Western Steel Works Ltd, Lagos Branch Union)

APPELLANTS 

WESTERN STEEL WORKS LIMITED 2. MR. HERBERT SUM 3. EUPEKA METALS LIMITED

RESPONDENTS 

AREA(S) OF LAW

APPEAL, CIVIL LAW AND PROCEDURE, COMAPANY/CORPORATE LAW, EVIDENCE, JUDGMENT AND ORDER, PRACTICE AND PROCEDURE.

SUMMARY OF FACTS

The 1st to 5th Appellants sued the Respondents for themselves and other employees of the 1st Defendant/Respondent at the High Court of Lagos State. They are Union members of the 6th and 7th Appellants and employees of the 1st Respondent. Sometime in 1982 they were laid off without being paid their entitlements. They claim that since the 3rd respondent acquired the assets and liabilities of the 1st respondent, the 3rd respondent should be made liable for the payment of their entitlements. The Appellant sought among other reliefs a declaration that that their laying-off from February of July 1982 by the 1st Defendant/Respondent and of the 6th and 7th Plaintiffs/Appellants Union members employed by the 1st Defendant/Respondent and numbering about 268 is illegal, wrongful, null and void as being contrary to the provisions of the Labour Act 1974.

The trial Court delivered its judgement on 13th day of May, 1996 wherein the Court held that the Plaintiffs/Appellants failed to call sufficient evidence to show that the 3rd Defendant/Respondent had acquired the liabilities of the 1st Defendant/Respondent. Consequently, the Plaintiffs/Appellants’ suit was dismissed by the trial Court.

Aggrieved with the decision of the trial Court, the Appellants appealed to this Court of Appeal. The Court of Appeal agreed with the trial Court and dismissed the Plaintiffs’/Appellants’ claims with N5,000 costs to the Respondent. The Appellants proceeded further to file the instant appeal.

HELD

Appeal dismissed

ISSUES

1. Whether having agreed that the learned trial Judge made contradictory and inconsistent findings on the status of the 3rd respondent vis-a-vis the 1st Respondent, the lower Court was right not to have resolved these findings to determine who was actually liable to the Appellants claims and thereby occasioning a miscarriage of justice.

2. Whether upon the pleadings; the uncontradicted evidence of the Appellants’ with the clear provisions of Section 146 of the Evidence Act, the lower Court was right to have held that the Appellants’ failed to discharge the burden of proving that the 3rd Respondent had acquired the liabilities of the 1st respondent.

RATIONES DECIDENDI

EVALUATION OF EVIDENCE- WHERE A TRIAL COURT FAILS TO EVALUATE EVIDENCE PROPERLY

“If a trial Court fails to or does not evaluate evidence properly the Court of Appeal is expected to evaluate the evidence and come to a decision that is correct and fair to the parties. See Odinaka v. Moghalu 1992 4 NWLR pt.233 p.1; Olarewaju v. Gov. of Oyo State 1992 9 NWLR pt.265 p.335.

The Court of Appeal observed quite rightly that there was a conflict between the earlier and later findings made by the lower Court. The Court of Appeal proceeded to evaluate evidence and had no difficulty agreeing in part with the trial judge and completely with the Court of Appeal that the 3rd respondent had not acquired the 1st respondent.” – Per RHODES-VIVOUR, J.S.C.

JUDGMENT –DUTY OF THE SUPREME COURT TO DETERMINE WHETHER A JUDGMENT IS CORRECT OR NOT

“This appeal is against the judgment of the Court of Appeal and not against the judgment of the High Court. It is the duty of this Court to determine whether the Court of Appeal’s judgment was correct and really not whether its reasons were right or wrong.” – Per  RHODES-VIVOUR, J.S.C.

ORDER OF RETRIAL- WHERE ORDER OF RETRIAL IS DEMANDED OR NEEDED

“Where both Courts below are/were partly right and/or partly wrong, justice will demand a retrial of the case, but where as in this case the High Court was partly right and partly wrong, but the Court of Appeal proceeds to correct the errors of the High Court in a flawless manner, there would be no need for a retrial as no miscarriage of justice would have occurred. Afterall miscarriage of justice is all about failure on the part of the Court to do justice. See O. Sanusi v. O. I. Ameyogun 1992 4 NWLR pt.237 p.527 ,E. Aigbobahi & ors. v. E. Aifuwa & ors. 2006 6 NWLR pt.976 p.270.” – Per RHODES-VIVOUR, J.S.C.

INCONSISTENT/CONTRADICTORY FINDINGS- WHERE IS NOT BASED ON DEMEANOUR OF THE WITNESSES

“…once the inconsistent and contradictory’ findings were not based on demeanour of the witnesses, the Court of Appeal is in as good a position as the trial Court to evaluate the evidence before it. After observing quite rightly in my view that the trial judge made inconsistent and contradictory findings, the Court of Appeal was correct to state the true position after reviewing evidence led and dismissing the appeal.” – Per RHODES-VIVOUR, J.S.C.

PLEADINGS- WHETHER PARTIES MUST BE BOUND BY THEIR PLEADINGS

“If pleadings are to be of any use parties must be held bound by them. See Owoade v. Omitola 1988 2 NWLR pt.77 p.413 , Abaye v. Ofili1986 1 NWLR pt.15 p.413.” – Per RHODES-VIVOUR, J.S.C.

PURCHASE OR ACQUISITION OF A COMPANY- HOW TO PROVE THAT A COMPANY BOUGHT SHARES AND ACQUIRED LIABILITIES OF ANOTHER COMPANY

“The purchaser of a company buys its assets and liabilities.   To prove to the satisfaction of the Court that a Company had been bought by another Company, the person who asserts must place before the Court documents from the Corporate Affairs Commission to justify the assertion. Documents such as:

(i) Instrument of transfer;

(ii) Documents to show acquisition of shares of the 1st respondent by the 3rd respondent

(iii) Filing of relevant papers.

In the absence of documentary evidence (above) credible evidence was led to show that the 3rd respondent acquired, or bought the 1st respondent. Such an issue is never resolved solely on testimony on oath. There must be documentary evidence to support oral testimony, thereby making oral testimony more credible. The appellants, as plaintiffs failed woefully to discharge the burden of proof placed on them by law.”  – Per RHODES-VIVOUR, J.S.C.

“It occurs to me that the appellants; in a bid to prove their case, asserted that the 3rd respondent acquired the liabilities of the 1st respondent. They have the burden of proof to establish same as dictated by the provision of the applicable Section 135 of the Evidence Act. It is novel that he who asserts must prove same. See: Okubule v. Oyagbola(1990) 4 NWLR (Pt.147) 72; Osawaru v. Ezeiruka (1978) 6-7 SC 135 at 145; Odukwe v. Ogunbiyi (1998) 8 NWLR (Pt.561) 339 at 352.

The legal proof of the fact that the 3rd respondent bought the 1st respondent company is not one that can just rest on mere viva voce evidence. Such is just not enough. There must be documents from the Corporate Affairs Commission placed before the Court to sustain oral evidence of purchase of one company by another company.”  – Per FABIYI, J.S.C.

“It has to be ascertained whether the 1st respondent simply changed its name, or the 3rd respondent completely bought over the assets and liabilities of the 1st defendant.

There are steps to be taken to this effect under the Company and Allied Matters Act, with the approval of the Corporate Affairs Commission. The appellants failed to adduce particularly documentary evidence in support of their propriety to sue the 3rd respondent based on the latter’s acquisition of the 1st respondent. There is no credible evidence before the Court that the 3rd respondent bought the assets and liabilities of the 1st respondent. Anyaegbunam vs. Osaka (2000) 3 SC 1 ;N.N.P.C vs. Lutin Investment Ltd. (2006) 2 NWLR pt.965, pg. 806. ; A.C.B Plc vs. Emostrade Ltd (2002) 8 NWLR, pt.770, pg.501.” – Per ADEKEYE J.S.C.

A BODY CORPORATE OR A COMPANY- CHARACTERISTICS OF A BODY CORPORATE OR A COMPANY

“A body corporate is a juristic person. It has a legal personality and can be an occupier of premises. It can sue and be sued in its corporate name. It also has the capacity to enter into any agreement in its corporate name. In order to prove this corporate status of a Company, one must produce a Certificate of Incorporation in respect of the company.” – Per ADEKEYE J.S.C.

ACQUISITION OF SHARES IN COMPANY TAKEOVER- HOW ESTABLISHED IN COURT

“I cannot but quote from the judgment of the Court of Appeal, that portion of the findings which answers the question raised in this appeal that:-

“The acquisition of shares in Companies take-over of one company by another are matters regulated by Company and Allied Matters Act. The transfer of shares or allotment of shares in a limited liability company must be registered and appropriate papers filed. It is not just a question of removing one company’s signboard and replacing it with another. It was therefore to be expected that documents from Corporate Affairs Commission would be placed before the lower Court to enable it determine whether or not the 1st defendant company had been acquired by the appellant…”– Per ADEKEYE J.S.C.

EVIDENCE- BURDEN OF PROOF IN CIVIL CASES

“In civil cases, the burden of first proving the existence or non-existence of a fact lies on the party against whom the judgment of the Court would be given if no evidence were produced on either side regard being had to any presumption that may arise on the pleadings. See: Section 137 (1) of the Evidence Act.Dongtoe Vs. Civil Service Commission, Plateau State (2001,) 4 SC (Pt.11) 43, Osuji v. Ekeocha (2009) 10 SCM 72, Ekeagwu v. Nigeria Army & Anor (2010) 10 SCM 118 at 147.”– Per ARIWOOLA  J.S.C.

CASES CITED

Not Available

STATUTES REFERRED TO

Companies and Allied Matters Act

Evidence Act, 2004

Labour Act 1974

Supreme Court Rules

Trade Dispute Act 1976

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