Hybrid Poultry Farm (Z) Ltd v Tembo (Appeal 66 of 2001) [2003] ZMSC 133 (17 April 2003)

IN THE SUPREME COURT FOR ZAMBIA -APPEAL NO. 66 OF 2001 HOLDEN AT LUSAKA [CIVIL JURISDICTION] BETWEEN: HYBRID POULTRY FARM (Z) LIMITED - APPELLANT AND COSTA I. TEMBO - RESPONDENT Coram: Sakala CJ, Mambilima and Chitengi, JJS on the 16th of July, 2002 and 17th April, 2003 For the Appellant - Mr. Lagos Nyembele of Ellis and Company. For the Respondent - Mr. M. V. Kaona of Nakonde Chambers. JUDGMENT Mambilima, JS delivered the Judgment of the Court. Athorities referred to: (1) Pamodzi Hotel vs Mbewe (1987) ZR 56 (2) Municipal Council of Kuala Lumpur [1962] 3 All ER 633 (3) Zambia National Broadcasting Corporation Limited vs Penias Tembo SCZ Judgment No. 9 of 1996. (4) Chitomfwa vs Ndola Lime Company Limited SCZ Judgment No. 28 of 1999. (5) Times Newspapers Zambia Limited vs Kapwepwe [1983] ZR 292. (6) Marshall vs Harland & Another [1972] 2 All ER 715. (7) Mususu Kaleya Building Limited vs Richman Money Lenders Enterprises SCZ Judgment No. 4 of 1999. This is an appeal against the Judgment of the Court below, in which it was declared that the retirement of the Respondent from the employment of the Appellant in October, 1991 was unlawful and therefore null and void and of no effect. The Court deemed the Respondent to have been retired on 6th April, 1994 and awarded him salary arrears from the date of his purported retirement in 1991 up to 6th April, 1994. The Respondent was also awarded punitive and exemplary damages in the sum of K3,000,000. The facts which were before the lower court appear to be common cause. The Respondent was an employee of the Appellant as a Sales Manager from 1976 up to October, 1991. From 1990 he started experiencing problems with his sight apparently caused by diabetes. He was diagnosed as suffering from diabetes retinopathy. He was sent to South Africa where he underwent surgery and laser treatment. The cost of this treatment in South Africa was borne by the Appellant in accordance with the Respondent's conditions of service. Upon his return from South Africa, the Respondent continued with treatment at the University Teaching Hospital. On 9th July, 1991, Dr. S. M. Shukla, a Consultant Ophthalmologist at the University Teaching Hospital wrote: " Certified that Mr. Tembo is suffering from diabetes mellitus, which has affected his eyes. He developed diabetic retinopathy both eyes with vitreous haemorhage in one eye. He was referred to South Africa for vitreous surgery. Surgery in South Africa was done, but the final visual outcome is depressing. He developed severe iridocyclitis in both eyes few days after surgery with severe pain. He was admitted at the University Teaching Hospital and treated for iridocyclitis and secondary glaucoma. He is now better but the vision is still light perception only" In his evidence in the Court below, Dr. Shukla testified that although the Respondents vision was "still light perception only", he was totally blind. On the basis of this letter, the Appellant retired the Respondent on 10th October, 1991 on medical grounds. The Respondent however told the Court that at the time when this letter was written in 1991, he was able to see. He contended that contrary to his conditions of service, he was not given six months notice of his retirement. Instead, the Appellant paid him four months salary in lieu of notice. He contended further that according to his conditions of service, he could only be medically discharged on the recommendation of a Medical Practitioner or a Medical Board and also that the termination of his employment was without the approval of a Labour Officer or Labour Commissioner as provided in Regulation 4(i) (a) of the Employment (Special Provisions) Regulations of 1989. The Respondent further told the lower Court that after he had been retired, the Appellant wrote to the University Teaching Hospital on 13th December, 1991 stating that they intended'to retire the Respondent on medical grounds. The letter in question stated inter alia: " We are considering to retire the above-named Mr. C. I. Tembo on Medical Grounds as per your Eye Clinic Observations. In order to be able to process his retirement and pension contributions, we have been advised by the Zambia National Insurance Brokers to secure a Medical Report from you. We shall be grateful if you could kindly assist us in this matter'". A Medical Board was convened and in January, 1994, the Board recommended that the Respondent be retired on grounds of blindness. The Board found that in view of blindness in both eyes, the Respondent was unsuitable for employment. The Respondent sued the Appellant seeking a declaration that his purported retirement by the Defendant was in violation of the Conditions of Service and therefore unlawful and is contrary to regulation 4 of the Employment (Special Provisions) Regulations 1989. After considering the evidence before her, the learned trial Judge found that the Appellant had acted unfairly and irregularly by retiring the Respondent in 1991 when the Medical Board which was convened to examine him and make its recommendations as to whether the Respondent was able to continue in active employment did so in 1994. The Judge then declared the retirement of the Respondent to have been unlawful and therefore null and void and ordered that damages be paid to him. The Appellant has appealed to this Court advancing seven grounds of appeal namely: " - that the court below erred when it found that the retirement of the Respondent was null and void; that the court below erred in awarding the Respondent salary arrears from the date of retirement up to 6th April, 1994; that the court below erred in fact and in law when it found that the Appellant had acted out of the malice as the finding is not supported by the evidence in the court below; that the court below erred in awarding punitive and exemplary damages; that on the evidence the court below should have found that the contract of employment was frustrated on account of the Respondent's ill health. that the court below erred in awarding interest when same was not claimed in both the Writ and Statement of Claim; and that the court below erred in awarding costs to the Respondent", The 1st and 2nd grounds of appeal were argued together. In his written and oral arguments in support of these two grounds, Mr. Nyembele submitted that the retirement of the Respondent in 1991 was proper in that the Respondent was unable to perform his duties and he would not have offered any consideration because the contract was frustrated due to ill-health. According to Mr. Nyembele, the only issue that could arise would be the failure to award the Respondent six months notice or payment in lieu.. He submitted that on this point, the Appellant is prepared to concede. On the claim that the Appellant's retirement was contrary to Regulation 4 of the Employment (Special Provisions Regulations), Mr. Nyembele submitted that failure to comply with this provision merely attracts a penal sanction and it does not render a retirement null and void. He further argued that the failure to convene a Medical Board did not also render the Respondent's retirement to be null and void because the issue of the Medical Board could only arise where the employer chose to discharge the employee. Mr. Nyembele further pointed out that the provisions of the Employment (Special Provisions) Act relied on, only come into effect when there is a state of emergency. To this submission, Mr. Kaona on behalf of the Respondent submitted that the Court below was on firm ground to declare that the dismissal of the Respondent was null and void and also to award the Respondent the salary arrears from the date of the purported retirement up to 6th April, 1994. According to Mr. Kaona, the Appellant does not dispute that it did not comply with the Employment (Special Provisions) Regulations of 1989 and the Collective Agreement. Relying on our decision in the case of Pamodzi Hotel vs Mbewe (1) and the Privy Council decision in the case of Francis vs Municipal Councilors of Kuala Lumpur (2), he submitted that where termination is in breach of a statute or collective agreement the termination is unlawful, null and void. He stated that the Appellant is therefore in error to argue that failure to comply with the Provisions of the Statute in question merely attracted a penal sanction and did not render the termination null and void. According to Mr. Kaona, the finding that the termination was null and void and the penalty or sanction for such a finding are two different things. He went on to state that once a Court finds that a termination is null and void, it will proceed to award an appropriate remedy, which in this case, was an award of damages. On the convening of a Medical Board, Mr. Kaona submitted that the issue of a Medical Board arises not only when the employer chooses to discharge an employee, but also when the employer decides to put the employee on early retirement on medical grounds. He argued that medical evidence was necessary for the processing of the retirement benefits of the Respondent. On the award of salary arrears by the Court to the Respondent from the date of retirement up to 6th April, 1994, Mr. Kaona submitted that the Court was on firm ground to have made such an award. The Court found that the Respondent ought to have been retired on 6th April, 1994 when the Medical Board gave its recommendation that due to blindness in the eyes, the Respondent was not able to continue in active employment. He referred us to our decision in the cases of Zambia National Broadcasting Corporation Limited vs Penias Tembo (3) and Chitomfwa vs Ndola Lime Company Ltd (4) where we awarded damages of one year's salary and two years salary respectively. In support of the third ground of appeal, Mr. Nyembele argued that the Respondent over-stretched his sick leave. He was guilty of desertion and that no charge was laid against him. According to Mr. Nyembele, the Respondent was provided with medical treatment in South Africa showing that the Appellant acted in good faith. To this submission, Mr. Kaona replied that the Court below was on firm ground to have found that the Appellant acted out of malice. The Appellant's Personnel Officer collected the Respondent's referral letter of 9th July, 1991 on the pretext that he was going to show it to the General Manager but instead the said letter was used to retire the Respondent. According to Mr. Kaona, this is an example of malice. It was compounded by the Appellant's decision to subject the Respondent to a medical examination years after his purported retirement. As a result, the Respondent further lost a salary and company accommodation. Mr. Kaona argued further that there was no evidence or pleading in the Court below that the Respondent had over-stretched his sick leave or that he was guilty of desertion. He pointed out that treatment of the Respondent, in South Africa at the cost of the Appellant was supported by his conditions of service. On the fourth ground of appeal; that the Court below erred to have awarded punitive and exemplary damages; Mr. Nyembele submitted that this was a contract of employment and exemplary or punitive damages could only be awarded in three instances: where they are authorised by statute; where the matter involves oppressive conduct by Government servants and when the conduct of the Defendant is calculated to result in profit. According to Mr. Nyembele, the first two instances did not apply to the Respondent. On the third instance, Mr. Nyembele submitted that the Respondent did not prove that the Appellant's conduct was calculated to result in profit. In reply to this ground of appeal, Mr. Kaona submitted that the Court was on firm ground to award punitive and exemplary damages. He referred us to the case of Times Newspapers Zambia Limited vs Kapwepwe (5) in which Baron, DCJ, stated inter alia that ".....exemplary damages may be awarded in any case where the Defendant has acted in contumelious disregard of the Plaintiff's rights". On the fifth ground of appeal, it is Nyembele's submission that the contract of employment in this case was frustrated on account of the Respondent's ill health. He stated that the evidence in the Court below established that the Respondent could not actually see at the time that he was retired and as a result, he was unable to return to work from leave. Relying on the case of Marshal vs Harland and Another (6), he submitted that incapacitation due to ill-health can be a ground for the contract of employment to be held to have been frustrated. Mr. Nyembele submitted further that notwithstanding the clauses in the employment contract on medical discharge and retirement on ground of ill-health, the Appellant was entitled to rely on his common law right to consider the contract as having been frustrated and rescinded it. In reply to this ground, Mr. Kaona submitted that frustration of contract was not pleaded in the Court below and the Court cannot therefore be faulted for not having considered it. He referred us to the case of Mususu Kaleya Building Limited , Winnie Kaleya vs Richman Money Lenders Enterprises Limited (7) in which we stated; ” we have said before, and we wish to reiterate here that where an issue was not raised in the Court below, it is not competent for any party to raise it in this Court. On the sixth ground of appeal regarding the issue of interest, Mr. Nyembele submitted that there was no claim for interest by the Respondent in the Court below both in his Writ of Summons and the Statement of Claim. According to Mr. Nyembele, "it is shocking" that the Court awarded the Respondent a claim which he was not seeking. Mr. Kaona's reply is that interest is a discretionally remedy awarded by the Court whether or not, it is pleaded in the Writ or Statement of Claim. For this submission, he has referred us to Section 4 of the Law Reform (Miscellaneous Provisions) Act (2). On the seventh and last ground of appeal, Mr, Nyembele submitted that the Respondent took eight years to present his claim in the Court below and that at one time, the claim was even dismissed. He submitted that on these facts, the Respondent should not have been awarded costs because the Court should be seen to penalize litigants who are found guilty of failing to prosecute their cases expediently. He pointed out that in this case, the Respondent was guilty of inordinate delay and should therefore have been penalised. Mr. Kaona's brief response to this submission is that costs follow the event and the award of costs is not based on the time it takes to dispose of a case, but on what the winning party will be required to pay his solicitors. The trial Court was therefore on firm ground to have awarded costs to the Respondent. We have considered the evidence on record, the Judgment of the Court below and the submissions by Counsel. In the first ground of appeal, it is contended that the Court below erred when it found that the retirement of the Respondent was unlawful, and therefore null and void. Mr. Nyembele argued this ground together with the second ground of appeal that the Court below fell into error when it awarded the Respondent salary arrears from the date of retirement up to 6th April, 1994. It is common cause that on the basis of the letter of 9tb July, 1991 written by Dr. S. M. Shukla of the University Teaching Hospital, the Appellant placed the Respondent on "Early Retirement on Medical Grounds" on 10th October, 1991. It is also common cause that on 13th December, 1991, the Appellant wrote to the University Teaching Hospital Medical Board intimating that they were 'considering to retire the Respondent'. The Appellant requested for a Medical report on the advice of the Zambia National Insurance Brokers which needed the said report to process the Respondent's retirement and pension contributions. The University Teaching Hospital constituted a Medical Board which recommended in January, 1994 that the Respondent be retired on Medical grounds. Clause 10 of .the Respondent's Conditions of Service provided for a medical discharge if an employee continued to be unwell after sick leave unless a "medical Practitioner or board advises that it is probable that the officer will be able to return to duty at the end of the period". The clear meaning of this clause is that a medical discharge is on the advice of a medical practitioner or a medical board. The Respondent appears to have been terminated under clause 16 which is on Retirement . This clause also provides that "early retirement can be considered on Medical grounds." There is no mention that such a retirement can only be done on the recommendation of a medical practitioner or board, suffice it to say that there must be some medical basis on which to base such a retirement. The letter from Dr. Shukla of 9th July, 1991 on which the Appellant relied to retire the Respondent described his vision as "still light perception only". The Respondent testified that he was able to see at the time. This cannot be true because the evidence of Dr. Shukla was that at the time, the Respondent was totally blind. He was therefore unable to perform his duties. It is clear to us that the only reason that the Appellant sought a medical report was to enable the insurance company to process the Respondent's retirement and pension benefits. It cannot therefore be convincingly argued that there was no basis on which to place the Appellant on early retirement on medical grounds when clearly he could not see in both eyes and was therefore unable to perform his duties. Regulation 4 of the Employment (Special Provisions) Regulations of 1989 which requires approval of a proper officer before an employee can be dismissed or otherwise terminated cannot be called in aid because these Regulations are made under the Employment (Special Provisions) Act, Cap. 270 of the Laws of Zambia. The object of this Act is to 'make special provision with respect to employment during any period when a declaration under Section 29 of the Constitution is in force; and to provide for matters incidental thereto." Article 29 of the Constitution empowers the President to declare war. Clearly therefore, the provisions of the Employment (Special Provisions) Act and the Regulations made there under are not relevant to the Respondent's situation. From the foregoing, we find that the Court below fell into error to have found that the retirement of the Respondent was unlawful, null and void and of no effect because there is nothing in clause 16 of the conditions of service which makes the recommendation of a medical board a condition precedent to a retirement on medical grounds. The Appellant was at liberty, on being satisfied that on account of ill health, the Respondent would not perform his duties to retire him on medical grounds. On retirement under clause 16, an employee is entitled to notice period of six months. According to the letter of retirement, the Respondent was paid four months pay in lieu of notice. Mr. Nyembele has properly conceded that this requirement was not fulfilled. We hold that the Respondent should have been paid six months pay in lieu of notice and we accordingly order that the remaining two months pay should be paid to the him with interest at the average short term deposit rate from the date of the Writ up to the date of Judgment and thereafter, at the average lending rate as determined by the Bank of Zambia from the date of Judgment up to the date of payment. Subject to this Order, the first ground of appeal succeeds. Having found that the Respondent was properly retired in October 1991, it follows that the orders for payment of salary and arrears from October 1991 up to April, 1994, and the order to pay punitive and exemplary damages cannot be upheld. They are set aside. On the question of award of interest, the Court has a discretion under Section 4 of the Law Reform (Miscelleneous Provisions) Act, Cap 74 of the Laws of Zambia to award interest on a Judgment sum "if it thinks fit" whether or not interest has been claimed. On costs, although the Court has a discretion in the award of costs, as a general rule, costs follow the event. A successful litigant will get his costs unless the Court orders otherwise for very good reasons. On this appeal, the Respondent has partially succeeded in that he will have to be paid the remaining two months salary in lieu of notice as we have already ordered. On this premise, we make no order on costs. The rest of the grounds of appeal consequently fall away. E. L. S AKA LA CHIEF JUSTICE I. M. C. MAMBILIMA JUDGE SUPREME COURT JUDGE SUPREME COURT