Ligoya & Othersv v Reserve Bank of Malawi (Civil Cause 196 of 1993) [1996] MWHCCiv 25 (19 July 1996)

IN THE HIGH COURT OF MALAWI PRINCIPAL REGISTRY CIVIL CAUSE NO. 196 OF 1993 BETWEEN PERKS LIGOYA AND OTHERS . . . . . . . . . . . . . . . . . . . . . . PLAINTIFFS AND RESERVE BANK OF MALAWI . . . . . . . . . . . . . . . . . . . ... DEFENDANT CORAM W. W. Qoto, Deputy Registrar Bazuka Mhango of counsel for the plaintiffs Banda of counsel for the defendant ORDER The plaintiffs , Perks Ligoya, W. W. QOTO, DEPUTY REGISTRAR: Nimrod Chidati, Veronica Hiwa and Andrew Kumwenda, claimed against the def e ndant, damages for breach of contract, terminal benefits and costs of the action. The action proceeded to trial and in the course of it, the parties entered a consent order for the settlement of the action. That consent order is in the following terms:- "The parties having agreed to settle the above matter in full and final satisfaction of all claims herein that the plaintiffs have against the defendant and consenting that an order be made in such terms as hereinafter provided BY CONSENT it is ordered that :- The 1st, 2nd and 4th plaintiffs be reinstated into the defendant with effect from 1st (1) the employment of April, 19 9 5 . (2) lawful plaintiffs and plaintiff all salaries which The defendant pay the to the 1st, representative of would have been payable to 2nd and 4th the 3rd -2- That the amounts due the computation of the respective plaintiff s from the date of termination of their services until 31st Marc h, 1995. t h e (3) int o account all plaintiffs 1n paragraph 2 above annual salary revisions increments) l ess all terminal benefits, ex-gratia payments, gratuity a nd other sums received or credited to the respective accounts of the plaintiffs. judge to be paid by ( 4) Save for costs by the th e plaintiffs the th e plaintiffs, the defendant do p,;1y legal co st s of this act.ion. The costs to b e taxed if not agreed. (including annual t.r i c,.l. ta k e to Dated this 21st March, 1995." to The h a d the defendant. factual background the action can briefly be state d. The plaintiffs were and st ill are in th e employ of the defe nd a nt, the Reserve Bank of Malawi, a Statutory Corporation. the def e ndant's acti ng Governor, one On 27th August, 1992, Francis Zebr on Perekamoyo , call ed the plaintiffs individually and terminated their services from the defendant on the grounds of the ir par ticipation in the St a ff Re pr esenta tiv e CounciJ . . The staff Representative Council The plaintiffs were elected grieva nce s with off icia .1. s of there was an express agreement betwee n the said Council and the d ef endant that n o me mb er of the counci l would be subjected to thr ea ts, s uspension or expulsion from t h e defendant on account of hi s or h er participation in the counci l. The plaintiffs, by a wr it of s ummons issued on 16th Febr u ar y, 1993 claimed against th e defendant damag es for breach 'l'h ey of contract , averred in the statement of cJ.aim that the purpor t ed terminatio n in breach of the agreement betwee n by the Acting Governor was They further averred the said the Council and the def e ndant. agree ment was employment the contract of to subsisti ng between them and the def e ndant. terminal ben e fits and cos t.s of the action. the council and to discuss additional form ed been The defendant served a defence and the action wen t In the course of it the parties agreed to se ttle the action by have consent . adu mbrat ed above . the set tJ.e ment are t e rms of to triaJ .. those The I into take the employmen t of reinstated the The pJ.aintiffs were from 1st Aµril, 1995 and I a m called upon defenda nt with effec t to assess a ll sa la r ies which would have been du e a nd payable to them between th e date of termination of their cont racts and the In making the assessments, I have date of t heir reinstatement. (inc: l udi ng to ann u a l termina J benefits , ex-grat.i.a payments, gratuity a nd other sums received The case of BRI'fISH or c:redi.ted to the plaintiffs' accounts. to TRANSPORT COMMISSION V GOURLEY reduce the salaries on accou nt of the tax to whic:h the salaries are s ubj ect . in to account al 1 annual salary rev is i ans (1956) A. C. 185 obliges me increments). to subtrac:t from have them I -3- Bo th parties called witnesses. For the plaintiffs th e ev i d e nc e wa s given by one plaintiff, Mr. Nimrod Robert Chidati, o n his the o wn behalf and on behalf of others. e vidence was given by its Personnel Manager Mr. Adams Kajiya. the defendant For to the Ac cording the defendan t was same settlement order, o r d e red to pay "all salaries which would have been pay a ble to the respective plaintiffs from the date of termination of their se rvices until 31st March, 1995." In computing such sal ar ies, a n account had to be taken of all annual revisions ( inc luding a nnual increments). Apart from tax, what had to be subt ra cted f r om such salaries are terminal benefits ex-gratia paym e nts, g ratuity and other sums received or credited to the r e sp e ctive a ccounts of the plaintiffs. These salaries have not be e n paid to the plaintiffs to this day. i s that again common ground the defendant computed the I t to the plaintiffs between 26th August, 1992 and sa laries due The plaintiffs also computed those s a laries 31 s t March, 1995. The computation by the defendant is s hown on o n e xhibit P3. ex hibit P4. There are differences between the two compu tat ions b u t Th e I do not regard those djffarences as of great moment. fig u r es computed by l: I)(' plaintiffs on exhibit PJ c1re high er. than t ho se t h ose computed by computed by items which are not sa la r ies. the defendant on exhibit P4 b e caus e the plaintiffs include some in arriving at th e net amounts both parties Aga in .in t o increments) which a ccount all saJ.ary revisions (including annuaJ ha d been made during the period the plaintiffs' servic es were ter minated from the defendant. the co nsent order. The net. salari.es due to the plaintiffs wi t hout t aking into account items which are not salaries and which are ag r e ed b e tween the parties as correct are a s fol .lows:- in complianc e o f This was t oo k ( 1) ( 2) ( 3) ( 4) Mr. Perks Ligoya Mr. Nimrod Chidati Mr. Andrew Kumwenda Mrs Veronica Hiwa Kl48,229.38 Kl.15,960.00 Kl42,119.70 K67,283.67 accordingly order I p laintiffs. that these salaries be paid t o the the bank. The plaintiffs' What is in dispute and what first arises for determin a ti o n is whether, the plaintiffs were also entitled to commutation of leave days' pay during the material period when they were away f rom testimony as given by Mr. Chidati is that they were entitled to such commutation of l e av e da ys pay. The defendant denies this. Mr. Kajiya told th e court t hat leave pay, according to the terms and conditions of s e rvice a ppl i cable is only payable where the defendant is satisfi e d that ther e is pressure of work which makes difficult for the officer The reJ.evan t condl t ion is rule 7 (a) (ii j_ ) of t o go on leave. This t h e Terms c:o nd J t sic.i h and Conditions of Service, exhlbJt D r a adl'I t I. -4- of staff mu st avail "All membe rs their annua l Provided that wh ere a member of staff due leave. to press ure of work or some other reason accepted to the bank has been unabJe take his leave, he sha ll be entit led to sell his leave days on the last working day of that year in which the l e ave was due." themselves of to to They were take his/h er the plaintiffs wer e the commutation of leave days is unabl e in It 1.s clear from rule that leave relation to an officer who to the depends on pressure of work or other reason ar.ceptabl e bank. I accept the plaintiffs' claim that they were entitled to sell their leave days during the period they were away from the bank. They had been re instated to their posts and the letter from the defendant's Governor, exhibit Pl, said t he plaintiffs' services were deemed therefore to be unbroken. entitled to all benefits pertaining to thier posts one of which is leave. In the circumstance of this case, it is difficult to argue that during the period they were away from the bank, they should have gone on leave. It was impossible for them to go on leave and since their servir.es with the defendant are ''viewed as unbroken" t~hercfore entitled to sell their leave days during the relevant per i.od. By n ecessary impl _i_cation the defendant has therefore aJ . .lowed the plaintiffs to seJ. J. their the bank leave days during because it is the defendant who had made it impossible for the plaintiffs to go on leave. To hold otherwise would not only defeat the letter and spirit of the consent order but would be so because grotesque reinstatement , according to Tucker J. in HODGES V UTRA ELECTRIC "involv es putting a specified LTD person back , the same pas it i_on as he occupied in the undertaking before the e mploy er terminated his emp loyment''. The e mploy er is put back in the same job and under I cannot therefore give accord the same to the plaintiffs are not that entitled to sell their leave days when they were away from the bank. IKB 462 at p 480 law a nd the defendant's submission th e period Lhey we re away terms and conditions. as well. the more 1s all inf ac L, (1943) This f ram in in I now turn to the defendant's powerful submission that in terms of the consent order, l ea ve pay does not fall to be assessed as it is not a salary and as such it is outside the scope of the consent order. Mr. Banda for the defendant argued that what I have to compute is salaries only and not leav e pay. think one has to turn to the d efinition of a salary. In ADAMS I V LIVERPOOL CORPORATION (1927) 137 L. T. 396 C. A . Lord Banks 397 said, "It seems to me after the dee is ion in the House of Lords in RAILWAY CLEARING HOUSE V ORUCE to say that when the resolution speaks of man' s full salary or wages, it is not speaking of something that somebody also in the same grade may be entitled to, but it is speaking of his full salary th ink, Druce 's case does establish that where, or wages, and I 'wage s ' you are entitled the word used is ' s a l a r~ or -, pay' or a that to person is contractually entitled." language as meaning something (1926) 135 L . T. 417 interpret to which -5- reference to be determined with Thus there must be some degree of permanancy of employment and whether a particular sum paid to an empJ.oyee is a salary or not the contract of has to look at the terms employment. With respect to Mr. Banda, when I and conditions of service as contained in exhibit Dl, I find ( iii) that leave pay is something to which the from rule 7 (a) plaintiffs were contrac::tually entitled . It was a financial remuneration for discharging duties of a definite rank and is payable where a member of staff who is unable, due to pressure of work or due to some other reason acceptable by the defendant, to take his leave. I have already held that in the instant case it was impossible for the plaintiffs to go on leave as such they became entitled to sel l their leave days on the last working day in each year in which the leave· was due. This .leave pay is, I hold payable to the plaintiffs in terms of paragraph 2 of the consent order . The number of l eave days and their value have been worked out by I must say that the plaintiffs' evidence on the plaintiffs. this score as testified to by Mr . Nimrod Chidati was undisputed I accordingly find it as a fact that during and unchallenged. the entire period the plaintiff were away from the b,1 nks, they were entitled to leave days and leave pay as folJ.ows:- 1. 2. 3. 4 . Mr Nimrod Chidati Mr L. Ligoya Mr Kumwenda Mrs Veronica Hiwa GROSS AMOUNT KJ.8,197.00 K18,736.24 K28,065.38 Kl0,550.57 find these the I undisputed evidence on record, they are taxable at the rate of The net leave pay due to the plaintiffs are therefore as 38%. follows:- taxable and according .leave pays are to 1. 2 • 3. 4 . Mr Nimrod Chidati Mr L. Ligoya Mr A Kumwenda Mrs V. Hiwa K.1.2,010.02 KJ.2,365.92 Kl0,666.55 K 6,963.38 gardener the hearing of assessment During the plaintiffs also claimed subsidies on utilities like water and electricity which they would have received had they remained in the bank. They further telephone claimed allowances. the plaintiffs testified that attached to the letter from the governor, exhibit P2, is a form to be worked out. on which leave Apart from salary, the form includes housing allowance, telephone allowanc::e and gardener and pay, water allowance, watchman allowance. they say, bonus payments and other pecuniary bonefitR. remuneration packages had Through Mr Ch j dat i form also shows, and watchmen allowances the i r and The The plaintiffs would have awarded to them as well. these assessed by the court and -6- The plaintiffs testified that these allowances are non-taxable and the total allowances to which each was entitled and would have received had he be in the bank the period they were away are as follows:- 1. 2 . 3. 4. Mr Nimrod Chidati Perks Ligoya Mr Kumwenda Mrs Hiwa K26,033.00 K23,283.75 K23,283.75 NIL through Kaj iya, testified that these allowances The defendant, are not, and were not due and payable to the plaintiffs. The housing allowance was payable to those officers of the defendant who had obtained a loan from the defendant to build their own houses and who also become tenants of those houses. None of the plaintiffs had obtained such a loan and as such they were not entitled to housing allowances. The defendant's evidence the gardener and watchman allowances are paid to management grade officers who are housed in fully furnished bank houses. idea is to protect the bank ' s property in those houses. that The is I have already defined my duty in have to assess all salaries that taking into account all annual I have already annual increments). sum of is interpreted a meaning a contractually entitled and this has to the contract of employment. I terms of the consent order. which would have been payable salary revisions (including stated what a salary is. It money to which a person is to be defined with reference There is no dispute that the terms and conditions of employment the contract between the defendant are contained in exhibit DI. The allowances to which the plaintiffs were contractually entitled are contained in article 10. They are payable in line with laid down and approved policies. the plaintiffs and the plaintiffs were contractually The only allowance to which entitled according to exhibit Dl is house rent allowance. The other allowances the plaintiffs claimed such as electricity and water subsidies telephone allowances and gardener and watchmen allowances are not mentioned. The plaintiffs were therefore not contractually entitled to these allowances and as such these allowances are not salaries. They cannot therefore be assessed in this exercise as they faJ. J_ outside the purview of the consent order. The house rent alJowance is a salary but in terms of art. 10 it is paid whenever applicable in line with laid down and approved is policies. I uncontroverted to officers of the defendant who obtained loans from the defendant The to build the.ir own houses of which they are also tenants. plaintiffs I find did not get loans to build their own houses the evidence of Mr Kajiya which rent allowance was paid accept that this house -7- and as such they were not entitled to house Whilst the house rent allowance was a salary, find, were not entitled to it. rent allowanr:e. the plaintiffs I I accordingly refuse non-taxable allowances claimed by the plaintiffs. to make any assessment with regard to them allegedly on I have stated above that the defendant did compute the salaries due but failed to pay the ground that the plaintiffs did provide it with information about employment and salaries earned when they were away from the ban k . The request for such information was made line with the defendant's terms and conditions of serv i ce. According to these conditions, Mr Kajiya _said an officer of the defendant cannot receive two salaries. in exhibit P2 and was in The plaintiffs cl.aim that they supplied the defendant with the information but still the defendant did not pay the salaries due in terms of the consent order. to even seek to deduct the defendant the defendant require or oblige is of no effect. What The action of defendant was ultra vires Let me say without mincing words that the defendant's request was unnecessary and most irrelevant. The consent order does not require salary gained from employment elsewhere to be taken into acr:ount either for or against the salaries due. That order does such not information. the the consent order consent order and enjoins the salaries due are terminal benefits, ex-gratia payments, gratuity and other sums received or credited the plaintiffs. terminal benefits, sums of money namely, ex-gratia payments, gratuity are sums of money the defendant paid to termination of their contracts of employment and the phrase ''other sum received or credited to the respective accounts of the plaintiffs" must according to the taken to refer only to things of the e jusdem generis rule, be kind which fall within that category i.e. the category of monies received by the plaintiffs on termination of the ir contracts of employment with include salary received by the plaintiffs after termination of their contracts of employment with the defendant. the plaintiffs on the defendant. It does not accounts of respective These from the to record the bank. is no evidence on the there On another score they were away incomes from elsewhere when plaintiffs earned from imposes a duty upon a the Of course plaintiff to take reasonable steps to mitigate the loss caused by the breach of contract and debars him from compensation for to his neglect to do so. any part of the damage which is due BRITISH WESTING HOUSE ELECTRIC & MANUFACTURING CO. V UNDERGROUND the ELECTRIC RLY CO OF LONDON plaintiff failed to take reasonable opportunity of mitigation is a question of fact dependent upon particular c i rcumstances of each case and the burden of proving such faiJ.ure rests upon the defendant (PAYZU LTD V SANDERS (1919) 2 K. B. 581). (1912) A. C. 673. Whether It is clear that law -8- from a read ing of this case t h at the burden which lie s on the defenda nt is not a n easy o n e . The defendant has not discharged thi s burden in this case. Thus deductions of tax are as fo J.lo ws : total net salaries du e the to the plaintiffs after l. Mr Perks Ligoya Kl48, 229 . 38 -1- Kl2,365.92 = Kl60,595.30 2 . Mr Ni mr od Chiclati Kl35,960.00+ Kl 2 ,010.0 2 = Kl47,970.02 Kl42 , 119.70 -1- Kl0,666.58 = r<1.s2, 786. 25 3 . Mr A. Kumwenda K67 , 283 . 67 4 . Mrs V . Hiwa = K74, 247.05 -1- K6,963.38 The consent order e nj oi n s me these amo unts terminal bene f its , ex-grat i a payment , gratuity and other sums received or credited to the plaintiffs' accounts . to s ub tract from I must n ot deduct Here, in respect of which the d e f endant paid water and electricity bills Those amounts left by the plaintiffs as shown o n ex hibit 10. had been ded ucted fro m the plaintiffs' payments paid to them on termination of their services . these sa l aries the amounts from I propose I deal with e~c h pl.a intiff 1n tur n. that h e is Mr . N. Chidati Exhibit D2 shows the sum o f K4,024.85. received First , Exhibit D3 also ex -gratia payment 1.n In shows he was p aid K2,509.00 as sa l ary in liu e of no tice. from this total he was paid K6,531 . 85 . Kl47,970.02 it leaves a balance of Kl41,4 38 .1 7 . Exhibit 03 shows that Mr N. Chidati h ad a balanc e of K4 , 931 . 76 in respect of 1 s to him for a cooker . deducted fro m Kl41,738.17 it J eaves a balanr.e of Kl36,506.4l. There is evi dence t hat wh e n Mr N. Chi.d a t~i rejoi ned t h e defendant he sought a nd was granted some mo ney from the de f endant and it was agreed that the same be deducted from the compensation. the defendant is entitled to d e du ct the loan so granted from the Kl36 ,506.41 which I aw ard to him. l oan granted this too deduct Wh en Wh e n a I I now t ur n to Mr P . Ligoya. s h ows that h e Exhibit 07 f<20,520.88. The total of these two co mes from Kl 60,595 . 30 it l eaves a this to him. The sa l ary u1 sum of receiv ed gratuity J.iu e of notice c,1 me to K2,852.00. to K23,372.88. When I deduct this I award balance of Kl37,222.42. the in Next 1.s A Ku mwenda . Exhibit D5 The ex -g ratia payment he received was , accordi n g to exhibit D6 the one month s salary he K4,892.44. received The total of these payments is K7,313.44 when this is deducted fro m Kl 52 , 786.25, it leaves a balance of Kl45,472.81. Exhibit D5 aJ.so shows he had a balance on a J.o an which had bee n extended to him o f K2,680.83. in l iue of not ice was K 2,421.00. s h o ws that -9- When this is deducted from Kl4 5 ,47 2 .81 it l eaves Kl42,791.98. award this to him. I Finally I come to Mrs V. Hiwa. Exhibit 08 shows that the one month due to he r and which was paid to her was K2,126.25. The the total comes to K6,5ll.64. ex-gratia payment was K4,385.39. When this is subtracted from K74,247.0 S , it leaves K67,735.41. I award this to her. In the final analysis therefore I award N. Chidati Kl36,506.41 loan granted to him after joining the bank must be from which a deducted. Kumwenda I Kl42,791.98 and Mrs V. Hiwa K67,735.41. award P. Ligoya KL37 , 2 2 2. 4 2 , A. Save for the costs ordered by the trial. judge to be paid by the plaintiffs, the defendant do pay plaintiffs costs of the action to be taxed if not agreed . MADE IN CHAMBERS THIS 19TH Dl\Y OF JULY 1996. (-Wi~1 .. l !.,.,.,.. ' j \ 1\;oTo "1 ''\ • - - -· DEPUTY REGIS'I'RAR •