Banda v Leopold Walfold (Z) Ltd (Appeal 12 of 1987) [1987] ZMSC 69 (8 September 1987)

IM THE SUPREME COURT OF ZAMBIA Appeal No. 12 of 1967 HOLDEM AT LUSAKA (Civil Jurisdiction) B 6 T W E E MS D. A. BANDA Appellant and LEOPXD WALFORD (2) LIMITED Respondent CORAM* Ngulube, D. C. J., Gardner and Sakala. JJ. S., B. B. Kaweche, Messrs Kaweche and CCoipany, for the appellant O. E. A. Dzt^Hzeke, Messrs IMG Kemp and Company, for the respondent 8th September, 1987. JUDGMENT Gardner. J. S.. delivered the judgment of the court This is an appeal from a judgment of the High Court refusing a declaration in respect of entitlement to a pension scheme. In this judgment we will refer to the appellant as the plaintiff and the respondent as the defendant respectively. The facts of the case are that the appellant was employed by the defendant as an invoice clerk and his contract for employment was contained in a letter written to him by the respondent, and dated the 18th August, 1969. This letter read as follows: "Dear Mr. Banda, I understand you have alreacy been told that arrangements have been made for this company to acquire certain of the assets and business interests of Allen, Hack 4 Stepherd (Zambia) Limited with effect from the 1st Novwter, 1969. You will also know that Allen. Hack & Shepherd will step trading in Zambia on the last day of October, 1960. It is sy hope that you will be willing to transfer your services to Leopold Walford (Zasbia) Limited, and I an, therefore writing to Invite you to join the staff of this ccnpany at Klt» on the 1st Nwertber. 1969 on the following terns and conditions:* G Q^egory * Invoice clerk 2/Comnsncing......... .......... 2 - 2. Cwmencing Salary K125 per month 3. Leave 4. Pension Scheme 5. Medical Aid 6. Termination of Employment 7. Office Hours 30 days per annusrafter twelve months continuous service with the company. The company operates a non- contributory pension < T scheme, which you will be eligible to join on the 15th January, following the (completion of twelve months' continuous service with the company. The company ts a member of the fidota Medical Aid Society, which you are e eligible to Join. One calendar months' notice on either side. Those laid down by the company from time to time. Will you please let me know as early as you can whether you are agreeable to transferring to this company and, if so, perhaps you will sign the attached duplicate of this letter and return it to m. 4.6. Ml tf end WfWHNS DDCTR" There was evidence that at the time of writing that letter there was In existence a pension scheme and a policy with an insurance company. However, on the 6th of November. 1970 the respondent wrote to the insurance the Legal and General Society limited. The contents of the letter were as follows': “Your letter of 5th October, 1970 was today discussed at the director's meting of the company when It was agreed that the pension schane be closed to raw entrants on and after the 15th of January, 1971, and accordingly enclose the authority for the asenchant of tester Policy rinber 1039, duly signed. Will you kindly acknowledge receipt of this letter. tours faithfully LEOPOLD WALFCRD (ZWIA) LIMITED A. C. Wtfond WAGING DIRECTOR The plaintiff gave evidence that he had not seen the notification that th? pSWiOri scwifie wad KWH olscurttrnnwi hor aru nd niar from any source 3/whatsoeve« -3 J whatsoever of such discontinuation. He further said that he was aware that at least two of the members of the defendant company had retired since the plaintiff's employment and such members had received the sums of K15.000 and K18. OT0 as retirement benefits. The plaintiff agreed that tie was a member of the Zambia National Provident Fund and there was evidence that some other members of the defendant company were beneficiaries of both the pension's scheme and the National Frdvident Fund. The plaintiff retired from the defendant's employment after fourteen years of service, and when he applied for his benefits under the pension scheme he was informed that he had never been a member of that scheme and consequently he was entitled to no benefits therwmder. The plaintiff sued the defendant for benefits due to him under the pension scheme and his statement of claim in paragraph 11 read as follows: ■11 W H£ plaintiff claims for' a. A declaration that on a true construction of Defondcnt's letter to the plaintiff dated 18th August, 1969, the plaintiff is entitled to a pension on retirement and/or that the plaintiff by virtue of the said letter became a renter of the Defendant's pension setae on 15th January 197! after 12 months continuous service. b. An accant be taken of how such money Is due end owing to the plaintiff from the Defendant by way of Pension. c. The Defendant be ordered to pay the Pension monies to the plaintiff. d. Interest on the sun due at 13 as from the date of retirement, *T5th Decanter. 1983. e. Further or other relief. f. Costs. The defendant’s Defence was that the plaintiff was not entailed in thef pension scheme on the 16th January 1971 and as a result he did not receive a certificate of Insurance and was not entitled to benefit under the pension scheme which had been discontinued, so far as the employees such, as the plaintiff, as from the 15th of January. 1971. The learned trial Judge found that by working for a continuous period of twelve months prior to the 15th of January 1971, the plaintiff had become entitled to be a member of the pension scheme but that he did not make an application to Join the scheme, that the option to Join was entirely up to him and his failure to Join rendered him unable to claim any benefits to the pension scheme. The learned trial Judge said "having ^satisfied - - L satisfied the pre-cenditlens he became eligible to apply end had be done so the defendant would have then been bound to accept hie as a member of the $chese.. A and further * *1 find that the plaintiff had become a member of the scheme and consequently I dismiss his claim for a declaration*. Mr. Kaweche an behalf of the plaintiff* has argued before us that, as the scheme was non-contrlbutory, there was no onus upon the plaintiff to take any action to Join the scheme, and membership of the scheme was part of the contract of service contained in the letter dated 18th of August. 1969. Mr. Kaweche argued that the learned trial judge had erred in finding that there was any duty upon the plaintifff to make any application to join the scheme and that there was no evidence as to what were the trules of the insurance company making it necessary for an applicant to make specific application to join the scheme as opposed to a duty on the defendant to inform the insurance company of the name of the new members of the scheme one of whom should have been the plaintiff. In reply Nr. Dzekedzeke on behalf of the defendant argued that as the plaintiff was sufficiently aware of the Medical Aid Scheme referred to in the contract to become a member o^ such scheme to which he contributed a proportion of the joint contribution and* to decide not to continue with such Mmbership and to notify the medical aid society accordingly, he should equally have been aware of the existence or discontinuance of the pension scheme. In respect of this argument we would say Immediately that, In view of the fact of the medical aid schew^^ntributory scheme to which the plaintiff had to make payment by way of deductions from his salary, he was quite clearly aware by such deductions that the scheme was in force. Whereas* In respect of the „ pension scheme, which was non-contributory, there was nothing to tell the plaintiff whether It had been discontinued or not. In general* Mr. Pzekedzeke supported the finding of the learned trial judge and argued that the fact that the plaintiff was eligible to join the scheme on a ccertain date did not make him automatically a member of the scheme. Mr. Dzekedzeke further argued that the writ and statement of claim do not claim damages for breach of contract and that the claim for a declarat ihsn that a pension was payable to the plaintiff:^ was uncertain in that the plaintiff himself was not aware of the tterms of the pension . 5 - The liability or otherwise of the defendant.. depends entirely on the construction of the phrase "you will be eligible to join" in the context of the conditions of serviA. The learned trial judge found that this did not make the appellant automatically a meeker of the pension scheme but that there was a duty wpon the plaintiff to make an application to join before the could benefit under the provisions of the scheme. We are guite satisfied that the proper cconttructlcn of the contract between the parties is that the ontltleaant to be a member of the pension scheme was a condition of «^>Ioyaent, and that, as it was non-contributory. the defendant had a duty to notify the insurance company of the plaintiff’s entitlement to join the scheme on the 15th of January 1971 a^ter the plaintiff had completed Ms i initial qualifying period of twelve months service. We do not agree that there was any onus on the plaintiff to make an application to join the scheme himself. So Tar as the question of whether or not the plaintiff should have been aware that there has been a discontinuance of the scheme such a discontinuance was a breach of the condition of employment and did not affect the plaintiff’s rights to a pension under such conditions. We are further satisfied that* as there was a pension scheme in existence at the time of the entering into of the contract, the terms of such pension scheme were ascertainable by both parties and there was* therefore, a binding contract tn respect of such terms. For the reasons we have given this appeal must succeed. We allow the appeal and grant to the plaintiff a Acieration that he Is entitled to a pension from the defendant as if he had been a member of the pension schema which was in force on the 18th of August* 1969 at the commencement of the contract. We oncfe* that-on account be .taken of the amount of contributions which the defendant should have paid under that pension scheme and the amount to which, the plaintiff would have been entitled had he been properly ensiled as a member of the scheme. We further order that judgment be entered in favour of W plaintiff in the sum found to bo due to him from the 'clefendaF^- Wo further order that Interest shall be payable by the defendant to the plaintiff on the sum found to be due from the date of retirement of the plaintiff, that is 13th December 1983, until the date of this judgment at the rate of 12%. This rate 1$ an average of the rate which we cons!Ar to A applicable for the years prior to the general devalua­ tion of the kwacha and the years thereafter. There will be liberty k 6/to.............. to apply to thft registrar of the High Court. Fhe plaintiff will be awarded the costs of this appeal and in the court below. M. S. Kgulube DEPUTE CHIEF JUSTICE B* T. Gardner SUPREME COURT JUDGE E. U Sakaia SUPREME COURT JUDGE