KOUSSAY USSUF HAIDAR (APPELLANT)
BERINI (BEIRUT-RIYAD) (NIGERIA) BANK LIMITED (RESPONDENTS)
(1963) All N.L.R. 139
Division: Federal Supreme Court
Date of Judgment: 15th March, 1963
Case Number: (FSC 68/1962; Suit No. L.D./180/60)
Before: Brett, Taylor, and Bairamain, f.j.j.
Appeal by plaintiff:
(This note is on the amount of damages.)
The plaintiff, an alien engaged in the Lebanon to come out to Lagos as an employee of the Bank on a contract for three years (Clause 4) as from 24th October, 1959, at £1,200 per annum (Clause 3), was wrongfully dismissed on 1st June, 1960. The contract stated in Clause 7 that at the end of the three years, unless three months notice was given he either side, the contract would be renewable every year; and in Clause 8 that if the Bank, without cause, revoked the contract during the currency of the 33 year period, he could not claim more than the salary for the remainder of that period, and that if he revoked it during that period he would have to pay a pre-estimated indemnity of £3,600 which is considered as penalty." The Bank dismissed him without offering compensation. He sued at once, the judgment was given on 27th January, 1961. The trial Judge allocated the plaintiff damages on the basis of three months notice, viz £300. In his appeal the plaintiff argued for an amount equivalent to the salary from the date of dismissal to the end of the three-year period in accordance with Clause 8. For the Bank it was argued that damages should not be such as to enable the plaintiff to sit in idleness for twenty-nine months, but to compensate him for the time reasonably needed to find employment, on the principle that he has a duty to minimise the damages; also that three months salary was enough, or, reading Clauses 3 and 8 together, at most salary for the remaining five months of the first year of employment.
(1) The plaintiff could not treat the contract as subsisting until the end of the three years; the contract was broken and he could only have damages for the breach.
French v. Brookes and others 130 Eng. Rep. 1316, 1319.
(2) Clause 8 did not provide for a pre-estimate of damages for breach in the genuine sense.
(3) As the plaintiff was an alien, his case differed from that of a local employee; he would be awarded damages with an eye to his having to stay here for the hearing of his suit and afterwards to lodge his appeal and then to return to the Lebanon to seek work.
Appeal allowed; damages reckoned on the basis of salary for twelve months.
Other cases cited:-
McClelland v. Northern Ireland General Health Service Board  2 All E.R. 129; Garabedian v. Jamakani  All N.L.R. 177; Brace v. Calder  2 Q.B. 255
APPEAL from the High Court of Lagos.
G. L. Impey (with him Miss Rose Taylor) for the Appellant.
Chief M. E. R. Okorodudu, Q.C. (with him F. Okunnu) for the Respondents.
Bairamian, F.J.:-The plaintiff (now appellant) was engaged at Beirut, Lebanon, to come out to Lagos as an employee of the Bank on certain terms, which are shown in a letter dated 24th October, 1959. For present purposes it is enough to refer to Clause 3, which fixes his salary at £1,200 a year payable monthly; to Clause 4, which fixes his period of employment at three years; and to Clause 8, which provides that:-
"In case the present contract is revoked by us before the expiration of the three years period agreed upon only the Clause of this contract would be applied and therefore you would not be entitled if the revocation is without any reason or legal cause, to claim anything besides your salary mentioned in the third paragraph of this contract and covering only its remaining period.
And if you come to revoke this contract before its expiry date you would be required to pay a pre-estimated indemnity of £3,600 (three thousand six hundred pounds) which is considered as penalty and could not be amended."
The Bank dismissed the plaintiff on the 1st June, 1960, and he sued for damages for wrongful dismissal, claiming (among other items, which are not in question now):-
(a) £2,900 as salary for the unexpired period;
(b) £300 being three months pay in lieu of notice;
(c) general damages for wrongful dismissal-£1,200.
The Bank denied that the dismissal was wrongful, and denied liability. Onyeama, J. decided that the dismissal was wrongful, and allowed three months notice as reasonable; he also gave judgment for payment of the salary for May, 1960, and of the price of return air tickets to Beirut; these two items are not in question.
The plaintiff's complaint is that £300 for a three months' notice is erroneous, in view of Clause 8, which entitles him to twenty-nine months' salary. It is argued that the contract is exhaustive, and pointed out that Clause 8 provides also for indemnity to the Bank in the event of the plaintiff revoking the contract. As for the claim of three months salary in lieu of notice, that was based on Clause 7 of the contract, which provides that:-
"On the expiration of the date mentioned in paragraph 4, this contract would be renewable every year unless it is revoked by any of us with at least three months notice."
The judge erred, in the submission for the plaintiff, in taking that as the proper length of notice.
Two cases were cited in support, namely, McLelland v. Northern Ireland General Health Services Board  2 All E.R. 129; and Garabedian v. Jamakani  All N.L.R. 177. In the latter Savage, J. awarded the plaintiff the salary for the remainder of the period of employment as damages for wrongful dismissal. The plaintiff had come out from the Lebanon for one year. It was presumably the right award in that case. In the former case, there was considerable disagreement on the meaning of a Clause in the conditions of employment. Mr Impey was relying on the majority view in the House of Lords, that the Clause was exhaustive.
The parties to a contract sometimes agree upon a pre-estimate of the damages in the event of breach. Clause 8 does not provide such a pre-estimate. That is clear in the case of breach by the plaintiff, as the provision is that he shall pay £3,600-his salary for three years-as a "pre-estimated indemnity.... which is considered as penalty and could not be amended." Equally the provision in the case of breach by the Bank is not a pre-estimate of damages in the genuine sense. The flaw in the argument for the plaintiff is that it treats the contract, which has been broken and does not exist, as subsisting until the end of the three-year period and entitling the plaintiff to salary for the unexpired term of 29 months. That is the mistake, as pointed out by Tindal C.J. at the beginning of his judgment in French v. Brookes and others, 6 IBing. 354; 130 Eng. Rep. 1316 at 1319; his Lordship said:-
"My brother Wilde's motion stands on the construction of the agreement: he argues that the contract between the parties not having been determined in the mode pointed out by the agreement, it must be considered as subsisting for the whole time originally contemplated. But this action, like others of the same sort, is brought because the contract has been violated; and the case has been correctly dealt with if the jury have given damages for the breach."
(That case was not cited in the argument.)
For the Bank the argument is that the damages should not be such as to enable the plaintiff to sit in idleness for 29 months, but to compensate him for the time reasonably needed to find employment, on the accepted principle that the plaintiff has a duty to minimise the damages: Chitty on Contracts, 21st ed., Vol. 1, at 434; and that in the present case account must also be taken of the fact that the Bank offered the plaintiff a fresh appointment in the Lebanon. Brace v. Calder,  2 Q.B. 253 was cited in support.
In Bruce v. Callder the continuing partners of the firm offered the servant a new service on the old terms, but he refused it; the court decided that he was entitled to nominal damages. In the present case the defendant Bank wrote to the plaintiff on 28th May, 1960, telling him to report at Beirut on the 31st, to the Managing Director of Berini Bank Limited, "for further instructions as to your new duties under your contract." But the defendant Bank had written to the Principal Immigration Officer on 23rd May, informing him that the plaintiff "is no longer in our employment with effect from 23rd May, 1960." Comment is superfluous; that letter cannot help the defendant Bank on the assessment of the damages.
For the Bank it has been submitted that three months salary was enough, as awarded by the trial Judge; alternatively, that the most he could have was the salary of the remaining months of the first year ending 31st October, 1960, viz salary for five months: the Bank's argument on the latter submission is that that is what Clause 8 contemplates when read with Clause 3, which fixes the salary at £1,200 a year payable monthly.
In my view that interpretation of Clause 8 is not possible; and in any event the Bank did not offer the plaintiff any money as compensation for dismissal. He found himself obliged to sue which he did immediately; and he had to wait here until his case was decided. One has to bear in mind that he was an alien in Nigeria, brought here as an employee of the Bank by leave of the Immigration Authorities, and that factor was overlooked by the trial Judge when assessing the damages. It may be reasonable in the normal case to award damages on the basis of three months notice in the case of Nigerians dismissed by a bank: they can seek other employment, and they should; but an alien like the plaintiff is in a different position. 'I' here is no evidence on the possibility of his finding other employment and on the restrictions in that regard which apply to him as an alien; he was not cross-examined, and the Bank offered no evidence at all. The Bank by its unreasonable conduct having obliged the plaintiff to stay on for his case, cannot also complain that he did not minimise the damages. It is worth noting that the argument for the Bank on minimising damages is confined to the plaintiff's refusal to go to Beirut immediately.
In the light of the above considerations I am of opinion that the damages should include salary to the end of January, 1961-the judgment was given on the 27th January-plus salary for one more month thereafter to allow the plaintiff time to arrange for appeal against the judgment and return to Beirut and settle down there, plus salary for another three months in which to seek suitable employment-which means 12 months in all.
Having regard to the circumstances of the case, I think that a year's salary should have been awarded. I would allow the appeal and order:-
That the judgment of January 27, 1961, in the Lagos High Court Suit No. 180 of 1960, be and is hereby varied in the plaintiff's favour by increasing the six hundred and eight pounds to fifteen hundred and eight pounds (£1,508) as the amount payable by the defendants, with sixty guineas as costs of appeal to the plaintiff.
BRETT F.J.:- I concur.
TAYLOR, F.J.:- I concur