Wawanya v Malawi Housing Corporation (40 of 2007) [2009] MWSC 6 (9 September 2009)

IN THE MALAWI SUPREME COURT OF APPEAL MSCA CIVIL APPEAL NO. 40 OF 2OO7 (Being HigLt Court Ciuil Appeal No. 69 of 200a) BETWEEN: G. M. WAWANYA ... .... APPELLA}{T AND - MALAWI HOUSING CORPORATION . ... RESPONDENT CORAM: HON. JUSTICE TEMBO, SC, JA HON. JUSTICE I{YIRENDA, SC, JA HON. JUSTICE SINGINI, SC, JA Masanje, of Counsel for the Appellant Kaphale, of Counsel for the Respondent Beni, Officia-l Interpreter Ethel Matunga Chisale (Ndunya) lVpesetter JUDGMENT NYIRENDA, SC, JA The appellant, in the main, challenges the remedies awarded by Justice Chimasula Phiri in the High Court by his judgment of 11th March 2005. The High Court determined that the appellant be paid three month's pay in lieu of notice and also housing a-llowance for the three months. The case originates from the Industrial Relations Court, herein after referred to as the Court of first instance, where the appeliant's action against the respondent was as a result of the respondent's termination of the appellant's employment. According to the appeiiant's statement of claim before that Court the action was for invalid termination, withholding of wages and benefits and, in the alternative, unfair and wrongful dismissal. Among the issues which arose before the Court of first instance was whether the appellant was at al1 employed by the respondent because the final details of the contract had not been discussed aLthough the parties had agreed to do so. Briefly the facts of the case are that the appellant responded to an advertisement from the respondent for the position of general manager in the respondent organization. The appellant was invited for an interview after which he was offered the position. The appellant accepted the position and started working for the respondent. At the time he started working the terms of engagement were not agreed upon except for the Chairman of the respondent verbally informing the appellant that his sa1ary was K150,000.00 per month and that his contract was for a fixed term of three years. The appellant worked for five days only when he was told at the close of the fifth day that his services were terminated and no reason was given for that decision. The letter of termination stated that the appellant would be paid three months salary tn lieu of notice. The Court of first instance found that there was a valid contract of employment between the appellant and the respondent. The Court found further that the respondent had unfairly dismissed the appellant. The Court however referred the determination of remedies to the Registrar upon inquiry pursuant to section 63 (2) of the Empioyment Act. Dissatisfied with the judgment of the Court of first instance the respondent appealed to the High Court mainly on the ground that the Court of first instance fe1l in error when it found that there was a valid contract of employment between the appellant and the respondent. The argument was that al1 there was was an agreement to agree. The High Court dismissed the appeal and then proceeded to award compensation to the appellant. It is that award of compensation that is now the subject matter of this appeal. The grounds of appeal are as follows: 1. Having found that there existed between the appellant and the respondent a contract of empioyrnent and that the appellant had been unfairly dismissed, the lower Court erred in proceeding to order compensation for the appellant without an inquiry as to the remedy in which the appellant was interested as directed bv the Court of first instance. 2. The lower Court erred in holding that the appellant is not entitied to be paid his salary and benefits for the unexpired period of his three year fixed contract, contrary to decided cases on the matter. 3. The lower Court erred in holding that the benefits other than salary and housing aliowance that the appellant lost are unclear; and in not awarding him such benefits for the unexpired period of his three years fixed contract or. a-lternativeiv. for three months in lieu of notice. At the hearing counsel on behalf of the appeliant informed the Court that the third ground of appeal was not being pursued. The respondent a-lso withdrew the cross appeal they had made. On the first ground of appeal both the appellant and the respondent were very brief. For the appellant it is submitted firstly that the High Court did not consider the wishes of the appellant and went ahead to award compensation against the provisions of section 63 (2) of the Employment Act. It is submitted that the High Court overlooked the Order of the Court of first instance which would have allowed. the appellant express his wishes on the type of remedy he preferred. Secondly it is submitted that the issue of remedies was not raised in the appeal before the High Court and therefore that the Court, agatnst the pleadings, awarded compensation to the appellant when that was not prayed for before the Learned Judge. It is sought, by this ground, that the question of remedies should be referred back to the Court of first instance for determination. The respondent submits that the first ground of appeal has been overtaken by events in that the appellant has long accepted the compensation ordered by the High Court. It is argued that by accepting the compensation the appellant has waived his right to alternative remedies of reinstatement or reengagement. The argument is simply that the appellant cannot get compensation as well as be reinstated or be re* engaged. Section 63 (2) of the trmployment Act provides: The Court shall, in deciding uhich remedg to auard, first consider the possibilitg of making an award of reinstatement or re-engagement, taking into account in particular tlrc wishes of the emplogee and the circumstances in which the dismissal took place, including tLrc extent, if ang, to wLticLt the emplogee caused or contributed to the dismissal. The correct position therefore is that before the Industrial Relations Court makes a determination on appropriate remedy an inquiry must be made, in particular, as rega-rds the wishes of the employee. Section 63 (2) however should be read very carefully. Our reading of the provision is that the inquiry is for the purpose of determining which remedy to award as opposed to what remedy to award. The inquiry is for the purpose of priotising the remedies provided for in section 63 (1) according to the wishes of the employee and also taking into account the circumstances of the individual case. The remedies to be priotised are reinstatement, reengagement and an award of compensation. It is acknowledged that the matter was before the High Court on appeal before an inquiry into remedies was made as ordered by the Court of first instance. The question of award of compensation was therefore sti1l before the Court of first instance. There are two observations we wish to proceed on. The first observation is that according to the statement of claim the appellant was only interested in the sala4y and benefits until termination of employment or expiry of contract and, in the alternative, paSrment of three months salary in lieu of notice and al1 benefits for the period of three months. Clearly in our view the appellant was estopped by his own pleadings even before the Court of first instance to seek reinstatement or reengagement. The importance of pleading has been emphasrzed again and again in our Courts and the often cited passage is by Sir Jack Jacob in his essay "The Present Importance of Pleadings", Current Legal Problems (1960) where he said: As the parties are aduersaries, it is lefi to each one of them to formulate his ca.se in his own uaA, subject to the basic rules of pleadings For the sake of certainty and fi"nalitg, each partA ls bound by his oLUn pleadings and cannot be allowed to raise a" different or fresh case witLtout due amendment properly made. Each partA thus knouts the case he has to meet and cannot be taken bg surpise at the trial. The court itself ls as bound bg the pleadings of the parties as they are themselues. It is no part of the dutg of the court to enter upon an inquiry into the case before it other than to adjudicate upon the specifi.c matters in dispute which the parties themselues haue raised by their pleadings. The only issue therefore that could have arisen before the Court of first instance would have been to what extent to award salary and benefits. The second observation is that before the High Court the parties presented extensive arguments on compensation. The appellant in particular took quite a while, by his skeleton arguments, to address what was considered as appropriate compensation in the circumstances of this case. As expected and for the reasons we have advanced eadier in this judgment, the appellant could not and did not advance any arguments for reinstatement or reengagement. The fact though is that the appellant seized the opportunity before the High Court to respond to and extensively address the High Court on compensation. That effectively gave the matter to the Judge. If the matter was not before the High Court or the appellant did not want it to proceed before that Court, an objection should have been raised at that stage although as a matter of caution the appellant might stil1 have proceeded to make the submissions. The Court wouid have been put on alert that the appellant was still looking at the Court of first instance for appropriate remedies. There was no objection of any sort raised. We find therefore, and we so determine, that the issue of remedies was before the High Court and the Learned Judge was entitled to deal with it. It is our further determination that the only issue the Judge had to deal with was one of determining the amount of salary and benefits as compensation for the appellant on the facts presented before him. In those circurnstances there was nothing for section 63 (2|. We now turn to the second ground of appeal. The appellant's argument is that his contract with the respondent was for a specific period of three years. It is submitted that that being the case and considering the manner in which the appellant's services were terminated, this is a proper case where he should be paid for the entire unexpired term of the contract. It is argued further that there was no evidence that it was a term of the contract that either party could terminate the services by three months notice. Counsel submits as follows: If ls not in dispute that the contract was for a specified period of time, As per the euidence before the High Court and the Industrial Relations Court there u)as no euidence that it was a term of the contract that the contract shall be determined by tLtree months notice. There u)as no euidence that this term u)a"s agreed upon. What the High Court found u)as in respect of tLrc existence of the contract and the amount of salary and housing allotaance pagable. The other terms u)ere not certain. It was therefore wrong to hold that the damoges au.tarded are those equiualent to tltree months salary when that was not part of the contractual term yet. The cases of Chautani -Vs- Attorneu General MSCA Ciuil Appeal Number 18, of 2000; and Council for the Uniuersitg of Malawi -Vs- Mkanclawire, MSCA CiuiI Appeal Number 3B of 2003 are therefore distinguishable. The autardable damages should be the salary and benefits for the unexpired period of the Appellant's three gear fixed contract. In his further argument counsel has submitted that the Employment Act does not restrict the Industrial Reiations Court to award only those damages provided for under section 63 of the Act. Counsel argues that section 63 read together with section 65 of the Act a-llows for damages at common law. The argument, as we understand it, is that the Judge in the High Court having decided to proceed to award damages should not have felt unduly restricted in considering what was appropriate by way of damages. Section 63 (4) of The Employment Act provides as foliows: "An award of compensation shall be such amount as the Court considers just and equitable in the circumstances hauing regard to the loss sustained by the employee in consequence of the dlsmlssal in so far as the loss is attributable to the action taken by the employer and the extent, if ang, to uhich the emplogee caused or contributed to the dismissal. Section 63 (5) then sets out the minimum the Court shall award. Our reading of section 63 (4) is that a court has considerable latitude in awarding compensation under the Employment Act. In the end it realiy should not make any difference whether one walts to ca-11 the award arr award under Section 63 of the Employment Act or a common 1aw award or any other description as one may please. The provision allows for what the Court would consider just and equitable in the circumstances of the case. If the Court was minded, and the circumstances were compelling, there is nothing to stop it from awarding compensation for the unexpired term of a fixed term contract or indeed a shorter period. Where the contract of employment provides for a period of notice for termination and aLso payment in lieu of such notice, the compensation under section 63 (4) may be in addition to the payment tn lieu of notice. In awarding three months pay and three months housing allowance this is what the Learned Judge said, after artalyzrng the Chawani case: The uieuts o/ this Court are inline tuith the alternatiue submissions of the appellant. The Emplogment Act has tabulated anaard of compensation for unlawfuI dlsmlssal in section 63 (5). It should be noted that the scLrcdule does not make prouision for employment period for less than one Aear. The reasons could include the fact that employment for less than a Aear lacks permanencA. The uietps of tltis court are that in such a situation, common law practice should applA. The case of Chawani ce.n be distinguished on the ground that such q case of senior ciuil seruant uLto had worked for a uery long time and had onlg B Aears to reach retirement age. In the present ca"se the respondent had uirtually been in office for a uteek. I would order that he be paid 3 montLts salary in lieu of notice at the rate of K150,000.00 per month. Further, he should also be paid housing allowance for 3 months at the monthly rate of K45,000.00. The other benefits uthich the respondent lost are unclear because the respondent ntshed into accepting emplogment u.titltout ascertaining and agreeing on those terms. The Court will not labour itself into formulating and reformulating terms bettueen the app ellant and re sp ondent. A couple of issues come out very clearly from this statement. It is clear that the learned Judge rea)tzed that the case for the appellant fe1l outside section 63 (5) of the Employment Act in that the period of service was too short. The Judge nonetheless fe1t, in his discretion, that it was just and equitable that he should award compensation in accordance with common law practice. In that regard the Judge felt three months pay and three months housing allowance was a reasonable measu,re of remedy. It is important to make clear that the learned Judge never found and did not say the three months was based on a term of the contract between the appellant and the respondent. Our understanding of the Judge's determination is that three months was what the Judge felt was just and equitable compensation. This comes out very clear from the passage when the Judge stresses that this case could not be compared with the Chawani case. It is not a case deserving an award for the remaining unexpired term of the contract because the appellant's period of service was too short to deserve the considerations and the sentiments that compelled the Court in the Chawani case to decide as it did. To conclude the discussion on the award it is important that we point out that the appellant is being less than sincere in blaming the learned Judge for adopting three months as a good measure for the award of compensation. We have eariier referred to the statement of claim where the appeliant himself suggested that three months wouid be an acceptable alternative measure of remedy. The Judge cannot therefore be fauited for having accommodated the appellant who is his observation had virtually been in office for just one week. We are of the firm view that the decision of the High Court cannot be faulted in any respect. We uphold it in its entirety. in the result this appeal is dismissed. We make an order of costs for the respondent. DELMRED in open Court this 10tn day of September 2OO9 at Blanytre. BO, SC, JA Signed: Signed: Signed: E. M. SINGINI SC, JA 10