Consumer Buying Corporation Ltd (In Liquidation) v Zambia Privatization Agency and Ors (Appeal 156 of 1997) [1998] ZMSC 93 (2 June 1998)

IN THE SUPREME COURT OF ZAMBIA APPEAL NO. 156 OF 1997 HOLDEN AT NDOLA (Civil Jurisdiction) BETWEEN; CONSUMER BUYING CORPORATION LIMITED (IN LIQUIDATION) 1ST APPELLANT AND ZAMBIA PRIVATISATION AGENCY 2ND APPELLANT AND ROBBIE MUMBA AND OTHERS RESPONDENT CORAM: NGULUBE, CJ, SAKALA AND MUZYAMBA, JJS On 5 th March and 2,,d June, 199 S For appellants - Mr. W. A. Mubanga, of Permanent Chambers, and Miss Mwape Mondoloka, of Zambia Privatisation Agency For respondents - Mr. V. K. Mwewa, of V. K. Mwewa and Company JUDGMENT Ngulube, CJ, delivered the Judgment of the Court. On 5th March, 1998, when we heard this appeal, we dismissed it with costs and upheld the learned trial Judge. We said we would give our reasons later and this we now do. For convenience, we will refer to the parties by their designations below. There were close to one thousand plaintiffs, all former workers of the first defendant, a trading parastatal which had a chain of shops throughout the country. With the onset of the privatisation programme and the imminent liquidation of the 1st defendant, the holding company ZIMCO instructed that the workers allowances be merged into their salaries, obviously in order to enhance their forthcoming redundancy packages. The dispute arose out of the implementation or purportted implementation of the ZIMCO instruction by the management of the 1st defendant. The management merged a number of allowances relative to each category of staff into their salaries and the evidence on the record was that the workers were paid these new consolidated salaries. There were arguments and submissions in this appeal from the defendants' advocates to the effect that the workers had never been paid the new consolidated salaries and that the auditors who advised the 2nd defendant to resist the plaintiffs' claim did not know about the new salaries and had not received the supporting documents. As it turned out, these arguments and submissions flew in the teeth of the evidence actually on record: The payslips for one of the plaintiffs used as an example (at page 545 of the record of appeal) showed that the new salary was actually paid to the workers in accordance with the letters advising them of this position from their appropriate manager. Furthermore, the record (especially from page 454 to page 470) shows that the auditors were very much aware of the new salaries which enabled them to tabulate against each plaintiff what they considered to be the correct consolidated salary; what they considered to be the wrongly computed salary; and what they considered to be the difference which would result in an over payment. It was the auditors who reported to the 2nd defendant that management of the 1 st defendant appeared to have awarded salary increments to ZCBC staff without any form of board approval nor authorisation from ZIMCO. The plaintiffs sued inter alia to recover the difference withheld by the defendants. The 2nd defendant by its pleading contended that there was no board approval or ratification for the increases which appeared to go beyond the sum produced by addins the salarv and allowances reflected on the payslips prior to January, 1995. If this contention were correct - which it transpires it is not - then the defendants would be unable to disadvantage the plaintiffs or to resist their claim on the principle which is now settled that those who have dealings with a company through a person of appropriate rank for the kind of business or transaction cannot be concerned about whether or not he or she has the necessary authority. What such a person has transacted with a third party is binding on the company: See, for instance, ZAMBIA BATA SHOE COMPANY -V- VTN-MAS LIMITED SCZ Judgment No. 4 of 1994; see also Sections 23, 24 and 25 of the Companies Act, CAP. 388 the cumulative effect of which is to disallow the kind of contention made here. In particular, under Section 25, the defendants cannot be heard to assert against the plaintiffs that the Human Resources Manager who had always previously been held A out as a proper representative of the management for such matters now had no authority to award salaries or increases. But infact the management of the 1st defendant did not pluck figures from the blue. As Mr. Mwewa pointed out, there were documents on the record which tabulated the types of allowance due to each category of staff and which fell to be merged into the salary. Mr. Mubanga offered a self-defeating argument when he pointed out that in the case of one of the plaintiffs his previous payslip had no allowance in respect of lunch and housing because these were provided free. It is precisely because these perquisites or fringe benefits have a value that when computing the true earnings or the true loss of earnings of an employee they have logically and rationally to be taken into account. The management of the 1st defendant earned out a very proper exercise when the perquisites previously enjoyed in kind were translated into allowances of the allowable kind in terms of the instruction on record from ZIMCO. The whole of the appeal was ill-fated. The grounds and submissions alleging that the Court below had awarded what would amount ro over payments or that there were fraudulent or unauthorised salary increments were all without merit. It was for the foregoing reasons that we dismissed the appeal, with costs to be taxed in default of agreement. M. M. S. W. NGULUBE CHIEF JUSTICE E. L. SAKALA SUPREME COURT JUDGE W. M. MUZYAMBA SUPREME COURT JUDGE