Raphael Chisupa v African Banking Corporation Zambia Limited (t/a Banc ABC) [2019] ZMCA 363 (23 October 2019)

IN THE COURT OF APPEAL OF ZAMBIA APPEAL NO. 111 OF 2019 If 1,7,ml HOLDEN AT KABWE (Civil Jurisdiction) BETWEEN: AND 'APPELLANT AFRICAN BANKING CORPORATION ZAMBIA LIMITED (t/a BANC ABC) (cid:9) RESPONDENT CORAM: Chashi, Mulongoti and Lengalenga, JJA ON: 16th and 23rd October 2019 For the Appellant: M. J Katolo, Messrs Milner and Paul Legal Practitioners For the Respondent: G. Pindani, Messrs Chonta, Musaila and Pindani Advocates JUDGMENT Chashi, JA delivered the Judgment of the Court. Cases referred to: -12- 1. Charles Mambwe and Others v Mulungushi Investments Limited (In Liquidation) and Another - SCZ Selected Judgment No. 36 of 2016 2. Standard Chartered Bank Zambia Plc v Kambindima Wotela and 164 Others - SCZ Appeal No. 7 of 2014 3. Zambia 4. Seed Company Limited v Chartered International (PVT) Limited (1999) ZR, 151 S. Standard Chartered Bank Zambia Plc v Chansa Kabwe (2013) ZRVo1, 13 6. Elias Tembo v Florence Chiwala Salati and Two Others - SCZ Appeal No. 200 of 2016 Legislation referred to: 1. The Industrial and Labour Relations Act, Chapter 269 of the Laws of Zambia 2. The Pension Scheme Regulations Act, No. 28 of 1996 3. The Income Tax Act, Chapter 323 of the Laws of Zambia Rules referred to: -13- 1. The High Court Rules, Chapter 27 of the Laws of Zambia 2. The Industrial Relations Court (Arbitration and Mediation Procedure) (Amendment) Rules 2005 3. The Court of Appeal Rules, 2016 Other works referred to: 1. Haisbury Laws of England, Volume 12 (2009) 5th Edition 1.0 INTRODUCTION 1.1 This appeal emanates from the ruling of Hon. Madam Justice I. Z Mbewe delivered on 15th March 2018, in which the learned Judge dismissed the Appellant's counter claim for abuse of process on account of it being res judicata. 2.0 BACKGROUND TO THE CASE 2.1 The background to this matter is that, the Appellant who was the defendant in the court below resigned from the Respondents' employment and claimed that he had constructively been dismissed. 2.2 The Appellant then brought an action in the Industrial Relations Court (IRC) on that account, claiming the following reliefs: j4- --14- 2.2.1 (cid:9) 2.2.1 Payment of the sum of K5,848,538,750.00 being damages for constructive dismissal calculated at annual salary rate of K540,776,250.00 for the remaining eleven (11) years until normal retirement. 2.2.2 (cid:9) Redundancy package at two (2) months' pay for each year served. 2.2.3 (cid:9) Interest on (1) and (2) above. 2.3 On 1311 February 2013, the parties executed a mediation settlement. (cid:9) According to the said settlement, the Respondent was to pay the Appellant the sum equivalent to thirteen (13) months salary, plus legal costs, less loan obligations. 2.4 The computed amount in the sum of K505.520.00 plus agreed costs were paid to the Appellant's Advocates. 2.5 On 22nd February 2013, the deducted sum of K63,287.50 covering the loan obligations was credited to the Appellant's current account to await transfer to his staff loan account in settlement of the loans. However, before the transfer could -J 5- be effected, the Appellant withdrew the sum of K53,289.68 from the said amount. 2.6 The withdrawal prompted the Respondent to commence proceedings in the commercial division of the High Court on 24th September 2014 for recovery of the withdrawn amount by way of restitution. 2.7 The Appellant settled a defence and counter claimed the following reliefs: 2.7.1 (cid:9) K812, 114.00 as allowances, not consolidated into salary resulting into underpayment. 2.7.2 (cid:9) K150,000.00 being pension due. 2.8 (cid:9) It is not clear from the record, but it would seem at this stage that the Respondent recovered its claim of the said sum of K53,289.68 from the pension money due to the Appellant which were paid to the Respondent by Madison Life Insurance Company Zambia Limited (MLife) for onward transmission to the Appellant and therefore only the counter claim was left. 2.9 On 1311 November 2017, the parties executed a Consent -J 6- Order, in which it was agreed that the Respondent; claim fell away and that the Appellant be at liberty to proceed with the counter claim in the manner he had proposed as exhibited in the affidavit in support for leave to amend as shown at page 399 of the record of appeal (the record) 2.10 On 251 July 2018, the Respondent by way of summons applied to strike out and/or dismiss the amended counter claim. 3.0 FINDINGS OF THE COURT BELOW 3.1 After considering the effect of a mediation settlement under Order 36/12 of The High Court Rules' (HCR) and the principles relating to the plea of res judicata and a number of notable authorities, the learned Judge opined that the counter claim was res judicata. 3.2 Further, that although Counsel for the Appellant had argued that where there are special circumstances, justice demanded or required non-application of the doctrine of res judicata, Counsel had not shown any special circumstances to preclude the plea. 3.3 Having found the counter claim to be res judicata, the -57- learned Judge then proceeded to consider the effect of the Consent Order and on the basis of the holding by the Supreme Court in the case of Charles Mambwe and Others v Mulungushi Investments Limited (In Liquidation) and Another' where it was guided that on account of the finding that the matter having been mediated and settled, it could not be referred to the trial court, the learned Judge was of the considered view that the Consent Order was a nullity and therefore stripped it of any force of law. 4.0 GROUNDS OF APPEAL 4.1 Dissatisfied with the ruling of the learned Judge, the Appellant has appealed to this Court advancing five (5) grounds of appeal couched as follows: 4.1.1 (cid:9) The learned Judge in the court below erred in law and fact when she held that the Appellant's counter claim being a claim for pension was res judicata as it should have been raised and determined in the matter under cause number IRC/Comp No. 253/2012 before the then -J 8- Industrial Relations Court, as that court had no jurisdiction to determine claims for trust property in the possession of trustees. 4.1.2 (cid:9) The learned Judge in the court below erred in law and fact then she held to the effect that the Mediation Settlement Order dated 13th February 2013 entered into between the Appellant and the Respondent estopped the Appellant from taking an action to claim his pension without considering the position that the claim for pension was neither a claim under IRC/Comp No. 253/2012 nor was it part of the Mediation Settlement Order. 4.1.3 (cid:9) The learned Judge in the court below erred in law and fact when she nullified the Consent Order entered into on 13t November 2017 under cause No. 2014/HPC/0353 when there was neither an application nor an action challenging the Consent Order by the Respondent. -J 9- 4.1.4 (cid:9) The learned Judge in the court below erred in law and fact when she relied on the case of Charles Mambwe and Others' in dismissing this action when the said case was clearly distinguishable from the facts of the case that was before the court below. 4.1.5 (cid:9) The Court below erred in law and fact when she held that she was of a settled mind that the Appellant had every opportunity to litigate all issues at once including pension benefits when the issue of pension benefits only arose in October 2014, while mediation settlement was entered in January 2013, more than 20 months before the issue of pension payment arose. 5.0 ARGUMENTS IN SUPPORT OF THE APPEAL 5.1 (cid:9) In arguing the first ground of appeal, Mr. Katolo, Counsel for the Appellant submitted that a perusal of the Appellants counter claim under paragraph (c) and (i) of the Consent Order demonstrates that it is essentially a claim for pension, and being trust property in the possession of a trustee for -J 10- the benefit of the beneficiary. It is not a claim that could be determined within the jurisdiction of the then Industrial Relations Court. 5.1.1 (cid:9) It was contended that the counter claim is essentially a claim for the settlement of a pension, being trust property in the possession of inter alia the Respondent for the benefit of the Appellant. 5.1.2 (cid:9) Our attention was drawn to Section 85 (1) of The Industrial and Labour Relations Act' which provides that: "The court shall have original and exclusive jurisdiction to hear and determine any industrial relations and any proceedings under the Act." 5. 1.3 (cid:9) Further reference was made to Section 85 (9) which defines industrial relations matters as to include issues relating to: (cid:9) (cid:9) (cid:9) -ill - "(i,) Inquiries, awards and decisions in collective disputes. (i) Interpretation of the terms of the awards, collective agreements and recognition agreements. (ii) General inquiries into and adjudication, on, any matter affecting the rights at litigations privileges of employees, employers and their respective bodies." 5. 1.3 (cid:9) Our attention was also drawn to the case of Standard Chartered Bank Zambia Plc v Kambindima Wotela and 164 Others' where the Supreme Court had occasion to determine a pension beneficiary's right of action in pension claims relating to a pension scheme run by an employer. 5. 1.4 (cid:9) On the issue of res judicata, it was submitted that the Appellant's claim for payment of pension is against the Respondent as settlor and MLife as the trustee and is therefore in the nature of a (cid:9) (cid:9) -J12- claim for trust property in possession of trustees and not a claim arising properly from the contract of employment between the Appellant and the Respondent. 5.1.5 (cid:9) It was contended that consequently the claim could not have been raised under cause No. IRC/ Comp No. 253/2012 and therefore the principle of resjudicata is not applicable. 5.2 In arguing the second ground of appeal, Counsel submitted that The Industrial and Labour Relations Act' provided for settlement of disputes before the Industrial Relations Court by alternative mechanisms of dispute resolution, amongst which is mediation. The Industrial Relations Court (Arbitration and Mediation Procedure) (Amendment) Rules, 20052 clearly enumerates the effect of a Mediation Settlement Order. Rule 23 (3) provides that: "A mediation settlement sealed and registered by the court shall have force and effect of a Judgment Order or any decision of the court or Judge and shall be enforced in. the like manner." -J '3- 5.2.1 (cid:9) Counsel submitted that the execution of a settlement Order brings to an end proceeding that are subject of the settlement. That in this case, the settlement Order brought to a close the dispute which was subject of the complaint before the court. 5.2.2 (cid:9) That therefore as observed in Charles Mambwe' case the mediation settlement Order cannot extend to issues that were not part of the proceedings giving rise to the Order. 5.3 As regards the third ground of appeal, Counsel submitted that after the execution of the Consent Order, there was no application to set aside the same, and no action was commenced to challenge the same. 5. 1.3 (cid:9) It was contended that a Consent Order or Judgment can only be nullified if an application is made or proceedings commenced to specifically challenge the Order on grounds prescribed by law. Reliance was placed on the case of Zambia Seed Company Limited and Chartered (cid:9) (cid:9) (cid:9) -J 14- International (PVT) Limited' where the Supreme Court held that: "By law, the only way to challenge a Judgment by consent would be to start an action specifically to challenge that Consent Judgment." 5.3.2 (cid:9) Further reliance was placed on the case of Standard Chartered Bank Zambia Plc v Chansa Kabwe4 where it was held that: "(i) A Consent Order can be set aside on grounds offraud or mistake. But special circumstances have to exist before a party can rely on mistake in Order to escape liability, under a Consent Order." 5.3.3 (cid:9) Counsel further drew our attention to the learned authors of Haisbury Laws of England' where it is stated that: "A Judgment given or an Order made by consent may be set aside on any ground which would invalidate a compromise not contained in a (cid:9) (cid:9) S -J15- Judgement or Order. Compromise have been set aside on the ground that the agreement was illegal as against public policy or was obtained by fraud or misrepresentation for non-disclosure of a mentioned fact, which there was an obligation to disclose..." 5.3.4 (cid:9) According to Counsel, none of the aforestated grounds for setting aside a Judgment Order arose. It is contended that the learned Judge, therefore fell into grave error when she proceeded to set aside the Consent Order without being moved. 6.0 DECISION OF THIS COURT 6. 1 Before we proceed to consider the appeal, we hasten to mention the following: 6.1.1 (cid:9) Following the application by the appellant, the Respondent's arguments which were filed into court on 8th October 2019 were expunged from the record as they were filed outside the requisite (cid:9) (cid:9) -J16- period of thirty (30) days and without leave of the court in contravention of Order 10/9/16 of The Court of Appeal Rules'. In accordance with the Supreme Court decision in Elias Tembo v Florence Chiwala Salati and Two Others', we held that consequently, Mr. Pindani, Counsel for the Respondent had automatically disqualified himself 6.1.2 (cid:9) Although the Appellant's memorandum of appeal contains five (5) grounds of appeal, only three (3) grounds were argued as per the Appellants heads of argument. We shall therefore take grounds four and five as having been abandoned. 6.2 We have considered the ruling being impugned and arguments by Counsel for the Appellant. 6.3 We will address grounds one and two together as they are entwined. The two grounds attack the learned Judge's finding that the claim in respect to the pension dues was res judicata taking into account that the Industrial Relations court as it then was, had no jurisdiction to entertain and -J 17- determine claims relating to pensions as they were trust property in the possession of trustees. 6.3.1 (cid:9) In other words, the Appellant is alleging that issues relating to claims for pension refunds did not fall under the jurisdiction of the Industrial Relations Court for the claim to have been brought together with the claims under IRC/ Comp No. 253/2012 which was settled by mediation. 6.3.2 (cid:9) It is not in dispute that the law of pensions rests mainly on principles of the law of trusts. Most pension schemes are administered and the funds held by trustees and governed by increasingly detailed statutory regulations; in the case of Zambia these are, The Pension Scheme Regulations Act' and the fourth schedule of The Income Tax Act3 , 6.3.3 (cid:9) In the United Kingdom, when it comes to claims and disputes over pension rights, some employees' rights may be taken to an employment (cid:9) (cid:9) (cid:9) tribunal. These These include claims in respect of membership or benefits. 6.3.4 (cid:9) In addition, employee's rights against employers in relation to employees are in their nature contractual as in most cases they are entrenched in the conditions of service and are therefore, industrial and labour related and in England the Court of Appeal has held this to be so in principle also for members relationship to the trustees. Accordingly, pension disputes may be taken to an employment tribunal by an aggrieved employee if they arise on or are outstanding at the termination of his employment. 6.3.5 (cid:9) We note that under Clause (7) of the agreement of employment, the Appellant was entitled to participate in the pension fund and life assurance. The Appellant was a member of African Banking Corporation Pension Scheme, a contributory scheme administered by MLife a separate legal entity. (cid:9) (cid:9) -J19- 6.3.6 (cid:9) The claim relating to pensions is the Appellants entitlement of his pension benefit upon leaving the Respondent's service. 6.3.7 (cid:9) Taking into consideration what we have stated, this far and the mandate of the Industrial Relations Court under Section 85 (9) (c) of the Act, to generally inquire into and adjudicate on any matter affecting the rights and privileges of the employees, the Industrial Relations Court as it then was, had the jurisdiction to hear matters relating to pension claims. 6.3.8 (cid:9) We, however note, that at the time the Appellant lodged his complaint and the matter was settled through mediation, the delay in the payment of claim was not anticipated. The claim, therefore arose much later after the mediation settlement Order was executed. 6.3.9 (cid:9) Furthermore, the pension scheme was being administered by MLife, a separate legal entity from the Respondent, which entity was not a (cid:9) (cid:9) (cid:9) (cid:9) I -J 20- party to the proceedings in the Industrial Relations Court which culminated into a mediation settlement Order. 6.3. 10 (cid:9) We also note that under Clause (2 1) of The Pension Scheme Rules, the scheme provided for arbitration as a vehicle for dispute resolution and that the proceedings shall be regulated by the provisions of The Arbitration Act in force in Zambia. 6.3.11 For the reasons we have articulated and not those advanced by the Appellant, we are of the view that the pension dues to the Appellant could not have been claimed together with the claims that were mediated and settled. In the view that we have taken, the pension claim is not resjudicata. 6.4 As regards the third ground of appeal, the ground attacks the learned Judge's nullification of the Consent Order when there was neither an application nor an action challenging the same. 6.4.1 (cid:9) Indeed it should be realized that a Consent Judgment or Order has the same force and effect as the Judgment -J 21- or Order of the court as it is made in the name of the court. 6.4.2 (cid:9) We are in agreement with the authorities cited by the Appellant and as such we are of the view that the learned Judge should not have nullified the consent Order at her own volition. What was being challenged by the Respondent was the amended counter claim which had been made pursuant to the Consent Order. 6.4.3 (cid:9) There was no challenge to the Consent Order. In our view, there was no need by the learned Judge to tamper with the Consent Order in the manner she did. She should have determined the issue of whether the amended counter claim was resjudicata or not without tampering with the Consent Order. 7.0 CONCLUSION 7.1 The net result of this appeal is that the appeal succeeds. We accordingly set aside the Orders of the learned Judge to dismiss the counter claim on account of abuse of court process for being res judicata and the nullification of the Consent Order. (cid:9) (cid:9) -122- 7.1.2 (cid:9) The matter is sent back to the High Court, Commercial division to be allocated to another Judge of the High Court for further Orders for directions. 7.1.1 (cid:9) The costs of this appeal will abide the outcome of the matter in the court below. J. CIIA HI COURT OF APPEAL JUDGE J. Z. MULOGOTI (cid:9) COURT OF APPEAL JUDGE (cid:9) F. M. LENGALENGA COURT OF APPEAL JUDGE (cid:9) (cid:9)