Monarch Zambia Ltd v Hamalambo (SCZ Appeal 97 of 1999) [2000] ZMSC 150 (2 August 2000)

IN THE SUPREME COURT OF ZAMBIA SCZ APPEAL NO. 97/99 HOLDEN AT LUSAKA (CIVIL JURISDICTION) MONARCH ZAMBIA LIMITED AND GILBERT HAMALAMBO (Suing as Administrator Of the Estate of Abin Hamalambo-Deceased) APPELLANT RESPONDENT Coram: Ngulube, C. J., Sakala, AG. D. C. J.,Chirwa JS 20th June and 2nd August, 2000. For the Appellant, Mr. F. Chishimba of Fraser Associates. For the Respondent, Mr. S. Sitwala of Lighthouse Chambers. Sakala AG. D. C. J delivered the Judgment of the Court. JUDGMENT Case Referred to: - I. Wilson Masauso Zulu Vs A vondale Housing Project Ltd (1982) ZR 172. This is an appeal against a judgment of the High Court holding that the estate of the deceased was entitled to five times the annual salary calculated at time of death of the deceased and not at renewal date of the policy and that the respondent was entitled to K20,574,698-00 with interest and costs. For convenience, we will refer to the respondent as the plaintiff and the appellant as the defendant, which were their designations at trial. The parties at trial filed a statement of agreed facts and issues in dispute. The deceased, Abin Hamalambo, was an employee of the defendant. He was covered by a Group Life Insurance Scheme administered by Zambia State Insurance Corporation Ltd. The estate of the deceased was, under the Scheme, entitled to five times the annual salary of the deceased. The Scheme :J2: was subject to renewal every year and had for the year in question been renewed. The deceased died on 6th October 1996 receiving an annual salary of K7,200,000-00. But the estate of the deceased was, under the Scheme, credited with a sum of KI5,425,31 1-00 by the defendant based on a salary of K3,085,006-24, instead of being based on a salary of K7,200,000-00, which was the deceased’s salary at the time of his death. The facts in issue, as contended by the plaintiff, were that the estate of the deceased, as an employee of the defendant was, under the Scheme administered by the Zambia State Insurance Corporation Limited, entitled to five times the deceased employee’s annual salary at the time of his death. And that the payment under the Scheme was, a term under the deceased employee’s contract with the defendant. The facts in issue as contended by the defendant were that the estate was correctly paid under the scheme based on the deceased’s annual salary as at the last renewal date of the Scheme and not at the time of death. And that the deceased person was not privy to the contract between the defendant and Zambia State Insurance Corporation Limited. The parties invited the trial court to determine whether or not the payment under the Scheme was to be based on five times the annual salary of the employee at the time of death or at other times and whether the plaintiff had locus standi in the matter. : J3: The plaintiff commenced an action by a specially endorsed writ and subsequently took out a summons under Order 13, There were several affidavits in support of the summons and there were also affidavits in opposition. The affidavits exhibited a number of documents. The trial judge considered the affidavit evidence and examined the deceased’s payslip immediately before his death. The trial judge was satisfied upon perusal of further documents that the defendant was not opposed to the claim. According to the trial judge the only opposition to the claim arose out of the salary advised by the defendant to the Group Insurance Scheme. From the affidavit evidence the trial judge concluded that the entitlement of five times annual salary upon an employee’s death was a condition of service between the employer and the employee and any arrangement the employer made with the Scheme did not affect an employee. The trial judge rejected the affidavit evidence in opposition but accepted in evidence the affidavit in support of the summons and awarded the claim as constituted in the statement of claim. The effect of the whole judgment of the trial court, although not in clear terms, was that the estate of the deceased was entitled to five times his annual salary at the time of death as contended by the plaintiff and not at the time of renewal of the policy as contended by the defendant. Two grounds of appeal were argued before us. The first was that the learned trial judge contradicted himself and failed to capture the argument by the defendant when he found that the claim was not opposed, then later :J4: found that there was opposition as to what salary was to be the basis of calculation of the benefits upon death. Although this ground would not necessarily affect the outcome of the whole appeal, it was nevertheless well taken. The learned trial judge clearly or perhaps inadvertently contradicted himself. First, if there was no opposition to the claim, the parties would not have come to court. Secondly, the parties themselves set out the agreed issues in dispute upon which the trial judge was asked to determine. This is what he did at the end of his judgment. The second ground of appeal was that the learned trial judge erred by holding that the plaintiff was entitled to benefits from the Group Life Assurance Scheme calculated at the deceased’s annual salary at the time of death instead of the deceased’s annual salary at the time of renewal of policy. In addition to written heads of arguments, we heard brief oral submissions by both learned counsel. We have considered both the written and oral submissions as well as the judgment of the learned trial judge and the affidavit evidence on record. The deceased was offered employment by the defendant by a letter dated 24th August 1988. The offer of employment was subject to a number of terms and conditions of service. The first Term and Condition of Service read: : J5: *7. Conditions of Service Your conditions of service will be governed by the Zimco Conditions of service currently in force and applicable to all members of staff on permanent and pensionable establishment, two copies are enclosed for scrutiny and signature. In the event of any discrepancy between the Standard Zimco Conditions of Service and the terms and conditions expressed in this letter, the provisions of the later will prevail. You will be required to retain one copy with you and return the other signed copy to us for record purposes.” The seventh Tenn and Condition of Service stated:- “7. Zimco Group Pension Scheme Upon satisfactory completion of probationary period, employees in receipt of KI,800.00 per annum and above automatically qualify for membership to the Zimco Group pension Scheme, however, full details of the Scheme are communicated to the affected employees at the time of confirmation. ” It was common cause that the deceased accepted the offer and signed the letter of offer as requested. The ZIMCO Group Pension Scheme was governed by certain Rules. Rule 5 stated as follows:- :J6: “5. BENEFIT PAYABLE Subject to the provisions of the Scheme and in accordance with the Law of succession, the amount of Life Assurance benefit payable in respect of each member in the event of his death from any cause whilst in the service of the Employer shall be an amount equal to five (5) times the member’s basic annual salary on the Renewal Date immediately preceding the date of death. This level of benefits may be modified by the Employer at any renewal date. The death benefit will be payable to such one or more of the deceased’s dependants and /or to the benefit of his estate in such shares as the employer at its absolute discretion sees fit. ” The submission on behalf of the defendant was that the computation of death benefits be on a date of renewal of the policy and not on the date of the employee’s death. But according to counsel for the plaintiff, the five times annual salary was regardless of the Scheme because conditions of Service of ZIMCO Limited did not apply to the defendant as ZIMCO LIMITED was a different company from the defendant. To support this submission Mr. Sitwala referred to Rules of Zambia National Building Society Group Pension and Life Assurance Scheme where Rule 9(1) reads “9. LIFE ASSURANCE BENEFIT (i) In the event of a death of a member from any cause whilst in the service of the Employer before the Normal Pension Date, an amount equal to FIVE times the salary payable to the : J7 : member on the date immediately preceding his death shall be paid to his dependants. ” Mr Sitwala pointed out that the same rule, that is, five times annual salary at time of death and not date of renewal of policy was applicable at Zambia State Insurance Corporation Limited and at Zambia National Provident Fund. Mr. Sitwala submitted that had the defendant brought the correct scheme, it would have shown that the death benefit was to be calculated using the annual salary at time of death. In reply Mr. Chishimba submitted that there was no evidence on record suggesting that the defendant maintained an independent inhouse scheme arguing that in respect of the defendant, Clause 7 talks of ZIMCO Group Pension Scheme. He submitted that none of the affidavits on behalf of the plaintiff exhibited an independent scheme of the defendant. We have considered the submissions before us. On the plaintiffs affidavit evidence on record we are satisfied that at Zambia National Building Society, at ZIMCO Properties Limited, and at Zambia State Insurance Corporation Limited and perhaps at Zambia National Provident Fund there are or there could be Rules of the Group Pension and Life Assurance Scheme which specifically provided or provide that:- “In the event of death of a member— an amount equal to FIVE times the salary payable to the member on the date immediately preceding his death shall be paid to his dependants. ” : J8 : There is no evidence on record suggesting that the “five times annual salary Rule” also applied to the defendant here. At page 75 of the Record is a letter dated 29th inarch, 1989 addressed to the deceased headed “ZIMCO GROUP PENSION SCHEME” This letter in part reads “This letter serves to inform you that you have qualified for membership to the Zimco Group Pensions Scheme with effect from ....19... Needless to explain in detail how the Scheme operates J enclose herewith a booklet which is self explanatory. Furthermore I enclose herewith Form DA 14(1) and two beneficiary forms. Please complete form DA 14(1) in duplicate and return both copies to me. The beneficiary forms should also be completed very carefully and return only one copy to me for record’s purpose. ” The defendant exhibited the Rules of the Group Life Insurance Scheme for ZIMCO Limited, which Rule five among others, state that “....the amount of Life Assurance benefit payable in respect of each member in the event of his death from any cause... shall be an amount equal to five times the membership’s basic annual salary on the Renewal Date immediately preceding the date of death. ’’ According to Mr. Chishimba this is the relevant rule governing the case before us. He contended that the deceased’s offer of employment cited ZIMCO Group Pension Scheme and Rules of the Group Life Assurance Scheme for ZIMCO Limited. Mr. Chishimba submitted that there was no evidence and none of the plaintiffs affidavits exhibited an independent Scheme for the defendant. : J9: We take note of Mr. Sitwala’s complaint and spirited submissions that the defendant exhibited conditions of service of ZIMCO Limited and not ZIMCO Group of Companies and that had the defendant brought the correct Scheme, it would have shown that the “five times annual salary” was to be computated at the time of death and not at the time of “renewal.” This, he submitted, is and was in line with what prevailed at Zambia National Building Society, Zambia State Insurance Limited as well as at Zambia National Provident Fund. The contention of Mr. Sitwala was that this appeal should not have come before us because it is based on facts which are a preserve of a trial court. In arriving at our decision in this appeal, we have taken into account the principles governing reversal of findings of a trial judge and the burden of proving allegations. In Wilson Masauso Zulu V Avondale Housing project Limited (1982) ZR 172, this court said:- “Before this court can reverse findings of fact made by a trial Judge, we would have to be satisfied that the findings in question were either pervese or made in the absence of any relevant evidence or upon a misapprehension of the facts or that they were findings which, on a proper view of the evidence, no trial court acting correctly could reasonably make. ” : J10: On proof of allegations the court said in the same case.- “I think that it is accepted that where a plaintiff alleges that he has been wrongfully or unfairly dismissed, as indeed in any other case where he makes any allegations, it is generally for him to prove those allegations. A plaintiff who has failed to prove his case cannot be entitled to judgment, whatever may be said of the opponent’s case. As we said in Khalid Mohamed Vs The A ttorney-Gen er a 1(1): “Quite clearly a defendant in such circumstances would not even need a defence. ” In the instant appeal, the plaintiff established the Rules of computation of a deceased’s salary at the time of his death at different companies but not at the defendant company. In the circumstances, the defendant did not need to establish a defence. This appeal is therefore allowed with costs to be taxed in default of agreement. M. M. S. W. Ngulube, CHIEF JUSTICE, E. L. Sakala, AG. DEPUTY CHIEF JUSTICE. D. K. Chirwa, SUPREME COURT JUDGE.