Gondgwe v B.P Zambia Ltd (Appeal 53 of 2001) [2002] ZMSC 156 (26 April 2002)

TN THE SUPREME COURT OF ZAMBIA HOLDEN AT LUSAKA APPEAL NO. 53/2001 (CIVIL JURISDICTION) BETWEEN HASTINGS O’BRAIN GONDGWE APPELLANT AND B. P ZAMBIA LIMITED RESPONDENT Coram: Sakala, Chibesakunda JJS and Mambilima Ag. JS 4th, 5th September 2001 and 26th April 2002 For the Appellant: For the Respondent: MrB Wilombe ofMMW and Company Mr A J Shonga of Shamwana and Company Mr W A Lungu in House Counsel, BP JUDGMENT Chibesakunda, JS, delivered the judgment of the Court Authorities referred to: 1. 2. Mariot Vs Oxford and Distinct Cooperative Society Limited 1970 IQBD/86 Mike Musonda Kabwe Vs BP Zambia Limited ZR 218 In this appeal, the Appellant who was a successful litigant before the High Court when he sued BP Zambia Limited, his former employer, now the Respondent, in a judgment delivered on the 19th day of October 2000, was awarded damages on a number of claims plus costs. He is now before us challenging the decision of the High Court on some of the claims the court refused to award damages to him. - J2 - The history of the case is that the Respondent employed the Appellant, initially, in a junior position as a sales trainee manager in 1968. He had a successful career. He rose through ranks to the post of senior economic manager, a post that made him part of the management team until the events of mid 1994. On Ist April 1994 the salaries of the employees of the Respondent Company were increased by 130% against a background of stormy meetings between the workers and management. The Respondent in their evidence testified that the increase was only for unionized workers and not the management team. But the contention of the Appellant is that this was not true because there was documentary evidence which showed that salary increased included the management team to which the Appellant belonged. On 1st July 1994, the Respondent Company revised the salary increment. According to the Respondents, this was so because as a result of those increments, the Respondent had made a huge loss. This upset the shareholders, particularly the Government of the Republic of Zambia. ZIMCO gave instructions that salaries increase must be by resolution of the Board and based on ability to pay. The evidence of the Appellant is that although this was done, the salary reduction was not effected because this was not in excess of the budget and so the Managing Director refused to accept this and also refused to reduce salaries. So the Managing Director according to the Appellant’s evidence, did not accept salary reversal as proposed by the Shareholders and refused to cooperate. Consequently, the Board of Directors in a tag of war informed personnel to reduce the salary increases. Subsequent to this Board’s decision, it was decided to ask some of the managers to leave employment but the Managing Director decided to retain the services of the Appellant, but in a position, according to the Appellant which was inferior in many respects to the one he held and it took him out of the management team. The Appellant maintained that he was being demoted. So he rejected and sought early retirement. After some reluctance and refusal, the Respondent Company, after consultation with shareholders, finally agreed to accept the Appellant’s early retirement. - J3 - According to the Appellant and his witnesses, although this early retirement scheme was restricted to employees with medical complications, the managing director had authority to waive the medical requirement and permit an employee to go on early retirement even if that employee had no medical complications. There were examples given. For instance, Mr Lishomwa and Mr Kabwe had been allowed to on go on early retirement on the fiction of medical grounds. These were the Appellants’ second and third witnesses who were allowed to go on early retirement. This scheme applied to people who had done 20 years of service like the Appellant but had used medical grounds to get early retirement formula applied to them. So the Appellant had to be paid according to the formula in paragraph 15(a) of the affidavit in support. So in the letter addressed to the Appellant the Respondent Company allowed him to go on early retirement but ended with a sentence: - “This letter is in duplicate, please do sign both copies to signify your acceptance of the term. ” The Appellant refused to accept these terms. According to him, the package was based on the reduced salary of KI,760,428.00 and not on K3,167,185.00 per month, which was effective from 1st April 1994. He went on to say that the package left out a lot of his entitlements as his terminal benefits. The Appellant then asked the Managing Director to review this package. The Managing Director, however, refused to review his retirement package. So when they reached stalement on the package, the Managing Director wrote to the Appellant a letter, Exhibit HOG 17 attached to the affidavit in support, asking him to return to work. The Appellant on the other hand refused to go back to work as his Managing Director had already accepted his early retirement and his terminal benefits had already been worked out. The Managing Director asked the Appellant to return to work because according to him, the Appellant’s letter, Exhibit HOG 16 attached to the affidavit in support, was a counter offer, which was not acceptable to the Respondent Company. When the Appellant did not return to work, the Managing Director, who took over, summarily dismissed the Appellant for abscondment pursuant to the Personnel Administration Manual (Exhibit HOG 23). - J4 - The High Court found for the Appellant on his claim that the purported summary dismissal was null and avoid. The court also relying on the case of Mariot Vs Oxford and Distinct Cooperative Society (1) and Mike Musonda Kabwe Vs BP Zambia Limnited (2) ruled that the Appellant’s terminal benefits as a result of the early retirement had to be calculated on the Appellant’s salary of K41,600,250.00 per annum and not the reduced salary. On the Appellant’s claim for his repatriation allowance and home scheme, the court awarded the Appellant repatriation allowance but rejected his claim of K6,818,802.00 as home ownership repayment as this had not been proved before the court. On the Appellant’s claim to purchase a personal to holder motor vehicle using the formula used in the Kabwe case (2) the court rejected that and ordered that the purchase price of the vehicle to be at K21,855,344.00. On the Appellant’s claim of 1993 financial year, air tickets to and from London the court rejected that claim as according to the findings before it the Appellant had collected these tickets after leaving employment. On the claim that the 1994/1995 financial year air tickets to and from London the Appellant should be given the value on a prorata basis, the court dismissed that application because it was never pleaded in the pleadings. On the Appellant’s claim BP Africa Holiday Allowance in the sum of US SI,250 the court awarded the Appellant on a prorata basis. The court also made a number of awards, which are not relevant before us. In conclusion, the learned trial Judge ordered that after assessment of the judgment sum by the learned Deputy Registrar that sum would carry interest rate of ten percent simple interest from the date of commencement of the proceedings to the date of judgment in the High Court and thereafter to carry the interest at the current Bank of Zambia lending rate until final payment. Mr Shonga, learned counsel for the Respondent, initially raised preliminary points. His first preliminary point is that the record of appeal was filed long after the statutory period of sixty days had elapsed. So it was improperly before the court Consequently, Mr Shonga argued that in view of this point the awarding of costs when the court adjourned during the Kabwe session on 8th August 2001 because of his non - J5 - attendance, should be refused by this court as that was improperly done. His other point is that the record of appeal was incomplete as it left a number of documents relevant to ground two. He referred to page 621 in the record of appeal and pointed out to us that the record on assessment of damages had just been done before the Deputy Registrar on the previous day before our sitting. So there was no notice of appeal against the ruling. He submitted that that was improperly before us. In reply, Mr Wilombe, learned counsel for the Appellant initially expressed surprise with the turn of events as on 8th August 2001 when the court sat in Kabwe, he sought an adjournment on behalf of Mr Shonga even though the communication for this adjournment was done through another learned counsel. He argued that the issues raised by Mr Shonga ambushed him. He therefore sought leave of court to file out of time the records of appeal as according to him the application to file the record out of time had been filed before the court but the court had not heard this application. The court on that first application granted leave for the record to be filed out of time. It also ruled that since the parties were comfortable with the record as it was before the court, the second issue raised by Shonga was a non-issue. On the question of costs for the adjournment the court ruled that it be left in the cause. Mr Wilombe argued on specific issues. He had filed a number of grounds of appeal but argued only three and abandoned the rest. His first argument was on the formula used by the Respondent to sell the personal to holder vehicle to the Appellant. It was argued that the court misdirected itself in ordering the Respondents to sell to the Appellant the personal to holder vehicle using different formula from the one used in selling in Kabwe Case (2), Mr Kabwe who was the work colleague to the Appellant and whose contract of employment was terminated on early retirement on medical ground scheme. He pointed out to us that Mike Musonda Kabwe Vs BP Zambia Limited (2) cited supra was similar to the case before us in that since Mr Kabwe enjoyed the same conditions of service as the Appellant, the formula used to sell to Mr Kabwe his personal to holder motor vehicle should have been ordered by the court to be used in the selling to the Appellant. - J6 - On the second ground he argued that the court also erred in law and in fact in holding that the Appellant had not pleaded the two air tickets, first class, Lusaka-London for the 1994/95 financial year. According to him, it had been specifically pleaded in the originating notice of motion at page 33 of the record in clause 5 line 15. He cited clause 5 which reads:- “For unutilized air tickets to London and back for the year 1993 and 1994 totalling US $18,090. ” He went on to state that 1992/93 air tickets referred to leave days earned under that financial year Is' April 1992 to 31st March 1993 and he could only claim from 1st April 1993 as leave accrued in arrears. He went on to say that the Appellant was claiming as arrears for the 1994 air tickets. Also he was claiming prorata the air ticket value from the period of 1st April to October 1994 when he left his employment. He argued that this was specifically pleaded as being for 1994. So the court was wrong to have held that there were no pleadings for that. He referred to the affidavit in support of the originating motion at page 42 lines 1 to 2 asking this court to consider these arguments. He referred to the Kabwe case whose facts were similar to the case before us and argued that the court below should have equally granted him the prayers sought, namely the air tickets for 1994 as it granted him the US SI,250 as allowance for the year 1994 which went with the air tickets and that this prayer was on prorata basis. The next argument was on home ownership. It was argued for the Appellant that the Appellant led evidence before the court, which was never, challenged that on a monthly basis he contributed from his own salary and that the pay slips were exhibited. Therefore, the court should have granted that prayer. He pointed to the Housing Scheme Personnel and Administrative Manual which according to him clearly established this scheme for senior management personnel. - J7 - The Other argument for the Appellant is that the court misdirected itself in awarding ten percent interest on the judgment sum, which was to be assessed by the learned Deputy Registrar. He argued that the Supreme Court in a number of cases has made awards, which have not followed by the lower court in this case because the Kwacha power has been greatly reduced. This court has to review this amend in line with its own authorities. His last argument was on the costs. He argued that as the appeal was successful he ought to have been granted costs arising out of the injunction. Citing a number of English cases he urged this court to grant the Appellant costs for the injunction and for these proceedings. Mr Shonga in response on substantive issues supported the lower court’s orders and argued that although he agreed that the Mike Kabwe case had similar facts to the case before us, he went on to argue that the formula used in the Mike Kabwe case, with respect to the rules of disposal of motor vehicles, was that the vehicle had to have been at least four years old to be disposed of at book value, the formula applicable to vehicles which were four years in use. He cited the case of Mutapa, unreported, where the court refused to order Mutapa to purchase the vehicle at an economic value or book value because the age of vehicle according to him was important. In this case according to him the motor vehicle used by the Appellant as can be seen at page 614, was not four years old. On ground two, he argued that the lower court was on firm ground in rejecting the prayer of the Appellant for air ticket for the year 1994 as according to him this was not pleaded in the originating motion. He referred to page 32 and 33 and argued that the lower court treated clause 5(a) as referring to 1993/94 financial year. He went on to mention that even the evidence of the Appellant at page 603 line 16 did not establish that the Appellant was referring to 1993/94 financial years. He urged that the onus is always on the claimant to establish before the court his claim. On ground three, he echoed his sentiments on ground two. On ground four he argued that the submissions by the learned counsel for the Appellant before us amounted to evidence and that that evidence was not supported by any document. - J8 - He referred to the submissions on the K4,000,000.00 deducted from the benefits as being not supported by any documentary evidence. According to him even the Appellant’s pay slip as at pages 58 and 59 of the record were not put to any witnesses to show home ownership scheme. He went on to refer to the abbreviation of HOG and explained what that stand for and dismissed the Appellant’s submission as an invitation for the court to conjuncture. He further argued that the learned trial Judge was right not to have ruled in favour of the Appellant. On the claim for interests on ground six, he argued that there were two claims: the first being the effective date of interest from the date of retirement as opposed to the date of originating notice of motion; and the second claim was on the rate of interest. He argued that the court has discretion in awarding interests. We have looked at the arguments and the records of the lower court before us. We hold the view on the first ground of appeal that the formula ordered by the court to effect the purchase of the motor vehicle by the Appellant was correct. Although we agree with Mr Wilombe that the court found that the facts in Mike Kabwe case were similar to the case before us, nonetheless, because there is evidence at page 614 that the motor vehicle in question was not four years in usage the formula in the Kabwe case on effecting the sale of personal to holder vehicle to Mr Kabwe cannot be used. We, therefore, hold that the learned trial Judge did not misdirect himself on that point. On the second ground of appeal we agree with Mr Wilombe that clause 5(a) as pleaded in the originating notice of motion is capable of referring to the 1993/94 as well as the 1994/95 financial years. Mr Shonga referred us to page 603 as establishing that there was no evidence referring to the 1994/95 financial year. We on the contrary hold the view that that evidence can easily be seen to refer to the 1993/94 financial year as well as 1994/95 financial year as it refers to “1993/94 financial years.” In fact the Appellant referred to four tickets due to him in arrears and can only mean two tickets - 1993/94 and two tickets - 1994/95 financial years. We therefore see merit in this ground of appeal. - J9 - We therefore order that the Appellant to be paid prorata the value for the two first air tickets London-Lusaka for 1994/95 financial year. On ground three relating to home ownership we hold the view that there was evidence that there was a monthly deduction from the Appellant’s salary and the amount deducted up to the time he was retired was K6,618,802,00. That was the Appellant’s money deducted as part of the home ownership scheme. So there was a misdirection by the learned trial Judge on that point. So we order repayment of that amount to the Appellant by the Respondents. On the last ground relating to the interests ordered by the court, this court has in a number of cases pronounced itself on the rate of interests to be awarded to a successful litigant. We, therefore, order that the interest rate due to the Appellant should be average short term deposit from the date of writ up to the date of the High Court judgment and thereafter at the average lending rate as determined by the Bank of Zambia from the date of judgment up to date of paying. Costs for the Appellant. E L Sakala SUPREME COURT JUDGE L P Chibesakunda SUPREME COURT JUDGE I C M Mambilima SUPREME COURT JUDGE