ADEDAPO MOKUOLU(Practising as Mokuolu Rubens & Co Auditors & Chartered Accountants) (PLAINTIFF)
1. INCAR (NIGERIA) LTD (1st DEFENDANT)
2. PANNEL, FITZPATRICK & CO (2nd DEFENDANT)
(1971) All N.L.R. 443
Division: High Court, Lagos
Date of Judgment: 14th April, 1971
Case Number: SUIT NO. LD. 345/1970
Before: Bakare, J.
Action for breach of contract.
(1) It appears to be well settled by the authorities that if the documents or letters relied on as constituting a contract contemplate the execution of a further contract between the parties, it is a question of construction whether the execution of the further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law does not recognize a contract to enter into a contract. In the latter case there is a binding contract and the reference to the more formal document may be ignored.
(2) An offer of employment of this nature to be firm must include a remuneration of the post, and the date of commencement of the employment.
(3) Upon the true construction of Exhibit "A" the court was of the view that following the interview the plaintiff reported that he had with a staff of the defendant company, enquiries were made from him with a view to considering his candidature for the post of auditor. Exhibit "A" contemplated the sending to the plaintiff a further formal letter of offer if his candidature succeeded. Consequently, Exhibit "A" and "C" did not constitute a binding contract.
Plaintiff's claim dismissed.
Case referred to:
Von. Hatzfeldt-Wildenbury v. Alexander, (1921) 1 Ch.D. 284.
ACTION FOR BREACH OF CONTRACT.
SUIT NO. LD. 345/1970
Adesina for the Plaintiff.
Adeleke for the Defendants.
Bakare, J.:-The plaintiff claims against the 1st and 2nd defendants/Companies jointly and severally the sum of £12,000 as damages for breach of contract.
After the Statement of Claim was filed and delivered, the 2nd defendants moved the court for an order dismissing them from the suit as the Statement of Claim disclosed no cause of action against them. In his ruling of the 3rd August, 1970 Kazeem J. held "that there is nothing in either the writ of summons or the Statement of Claim which substantiates the plaintiff's claim of breach of contract against the 2nd defendants." He struck out the 2nd defendants from the suit.
Thereafter, the case proceeded to trial before me against the 1st defendants alone. The plaintiff gave evidence and called the Secretary/Registrar of the Institute of Chartered Accountants to produce the Certificate/Licence issued by that body following the plaintiff's application to it to practise as private Auditor. For the defence, no evidence was led.
It is clear that the plaintiff's case rests upon the construction of the documents, Exhibits "A" and "C" and for a proper appreciation of the documents, they are reproduced below:-
29th Oct. 1969
Messrs Adedapo Mokuolu, P.O. Box 2098,
Our Company is pleased to offer you the appointment of Auditors under the Regulations and Laws of the Federal Republic of Nigeria and we are therefore asking you to let us have, at your earliest convenience, a brief Curriculum concerning your good selves in order to enable us submit your candidature to our Board of Directors in Italy.
Your kind attention on this subject will be highly appreciated. Thanking you we remain,
24th Nov. 1969
Incar (Nigeria) Limited, P.O. Box 2581, LAGOS.
Further to my letter of the 15th November, 1969, I have now received another letter from Messrs Peat, Marwich, Cassleton Elliott & Co.
I hereby accept the appointment as the Auditor of Incar (Nigeria) Limited. Please note that I am practising as Mokuolu Rubens & Co. as shown above.
Kindly let me know when I can start the audits.
In paragraph 4 of the Statement of Defence, the defendants aver as follows:-
"With regards to paragraph 4 of the plaintiff's statement of claim the 1st defendants admit writing the letter dated 29th October, 1969 but deny the same to be a letter of offer of appointment to the plaintiff."
The question I am called upon to decide therefore is whether Exhibit "A" constitutes a firm offer capable of acceptance by the plaintiff's letter Exhibit "C", in consequence of which a binding contract was formed.
It is my view that question will be better answered if Exhibits "A" and "C" are read in the light of the rest of the correspondence between the parties.
On the 19th November, 1969 the plaintiff received a letter from Messrs Peat, Marwich, Cassleton Elliott & Co. Exhibits "B" which reads:-
19th Nov. 1969
Thank you for your letter dated 11th November, 1969.
At the meeting with you on 7th November, 1969 we explained the reason we were not prepared to continue to act as auditors of the above company, in accordance with Institute Recommendations.
We suggest it is now for you to decide whether you can accept the appointment.
We return our letter dated 7th November.
Peat, Marwich, Cassleton Elliott & Co"
It was upon the receipt of this letter that Exhibit "C" was written. In their letter dated the 13th December, 1969, Exhibit "D" and referring to Exhibit "C" the defendants write:-
Reference is made to your letter dated 24th November, and the subsequent discussion with our Mr S. Avanzi.
We have therefore no other alternative than to consider our approach and your proposal as cancelled by common agreement.
And finally in their letter dated 14th January, 1970, Exhibit "E" the defendants wrote the plaintiff as follows:-Dear Sirs,
We are in receipt of your letter dated January, 1970, which is most surprising to us since after the discussion you had with the writer we thought we had satisfactorily expressed our will.
At any rate we wish to point out, for the sake of being correct, that there have never been any "contract" between your Company and our Company, but only an enquiry from our side among the most reliable of the Auditing Firms.
There was no need for us to cancel an agreement which never existed and it is not in any way necessary to show you correspondence from our Head Office concerning private and confidential matters.
We sincerely hope that you will allow us to decide upon matters that strictly concern our Company and therefore consider, in the light of the foregoing explanation that the matter is finally closed, as we did previously.
(SGD.) INCAR (NIG.) LTD."
No evidence was given of the contents of the plaintiff's letter to the defendants of the 15th November, 1969. Learned Counsel for the plaintiff submitted that the offer to the plaintiff as contained in Exhibit "A" was firm and unambiguous, that the defendant company being a Nigerian Company under the Companies Decree 1968 no rectification of the offer by Board of Directors outside the country was necessary. It was also submitted that the provisions of Section 152 of the Companies Decree supplemented the offer made to the plaintiff.
I must say that the submission of learned Counsel relating the purported offer to the Companies Decree was, at best, mere conjecture on his part. There is no specific reference to this decree in Exhibit "A".
Even if it can be said from the peculiar nature of this case that it was in the contemplation of the parties that the said decree should apply, then the onus was on the plaintiff to show the manner of the offer to him in accordance with the provisions of the said decree. Section 152 of the Companies decree prescribes for the appointment of an auditor in the following manner:-
(a) at each annual General meeting of the Company,
(b) by the Registrar on the direction of the Commissioner and
(c) by the Directors filling casual vacancy.
Not only did Exhibit "A" not show in which of the above categories the offer to the plaintiff falls, the plaintiff did not establish that the letter Exhibit "A" was written by or on behalf of the Directors of the defendant company.
The plaintiff admitted that as at the 29th October, 1969, the date of the purported offer to him he was in employment as servant of the 2nd defendants. Although he applied on the same day for a licence to practise on his own as Chartered Accountant, the licence, Exhibit "G" did not issue till the 20th December, 1969.
In Von. Hatzfeldt-Wildenburg v. Alexander (1912) 1 Ch.D. 284, Parker J. said at page 288: "It appears to be well settled by the authorities that if the documents or letters relied on as constituting a contract contemplate the execution of a further contract between the parties, it is a question of construction whether the execution of the further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law does not recognize a contract to enter into a contract. In the latter case there is a binding contract and the reference to the more formal document may be ignored."
An offer of employment of this nature to be firm must include the remuneration of the post, and the date of commencement of the employment.
Upon a true construction of Exhibit "A", I hold the view that following the interview the plaintiff reported he had with a staff of the defendant company, enquiries were made from him with a view to considering his candidature for the post of auditor. Exhibit "A" contemplates the sending to the plaintiff a further formal letter of offer if his candidature succeeded.
I have therefore come to the conclusion that Exhibits "A" and "C" do not constitute a binding contract. The plaintiff's claim fails and it is dismissed with costs assessed at 25 guineas.
Plaintiff's claim dismissed.