Standard Chartered Bank Zambia PLC v Wotela and Ors (Appeal 1 of 2014) [2016] ZMSC 254 (14 June 2016)

IN THE SUPREME COURT OF ZAMBIA HOLDEN AT NDOLA (Civil Jurisdiction) APPEAL NO. 1/2014 BETWEEN: STANDARD CHARTERED BANK ZAMBIA PLC APPELLANT AND KAMBINDIMA WOTELA & 164 OTHERS RESPONDENTS CORAM: MAMBILIMA, CJ, MUSONDA, CHINYAMA; JJS On 7th June, 2016 and 14th June, 2016. For the Appellant: Mr. E. S. Silwamba, SC, and Mr. L. Linyama, of Messrs. Erick Silwamba, Jalasi and Linyama Legal Practitioners; For the Respondent: No Appearance. JUDGMENT MAMBILIMA, CJ, delivered the Judgment of the Court. CASES REFERRED TO- 1. STANDARD CHARTERED BANK PLC V. WILLIAM SOLOMON NTHANGA AND 402 OTHERS(2008) ZR 127; 2. EXP. WATSON 21 QBD 31; 3. DAVY V. GARRET, 7 CH. D 489; 4. SABLEHAND ZAMBIA LIMITED V. ZAMBIA REVENUE AUTHORITY (2005) ZR 109; 5. NKONGOLO FARMS LIMITED V. ZAMBIA NATIONAL COMMERCIAL BANK LIMITED, KENT CHOICE LIMITED (IN RECEIVERSHIP) AND CHARLES HURUPERI (2007) ZR 149; 6. BARRY V. BUTLIN (1838) 2 MOO PC 480 AT 482-483, 12 ER 1089 AT 1090; 7. LONDON CONGREGATIONAL UNION INC. V. HARRIS AND HARRIS (A FIRM) (1988) 1 ALL ER 15; 8. CARTLEDGE V. E JOPLING 8s SONS LTD (1963) 1 ALL ER 341; JI 9. HANIF MOHAMMED BHURA (SUING PURSUANT TO A POWER OF ATTORNEY GRANTED IN HIS FAVOUR BY MERRUNISHA BHURA) V. YUSUF IBRAHIM ISSA IAMAIL, APPEAL NO. 146/2013; 10. BELMONT FINANCE CORPORATION LIMITED V. WILLIAMS FURNITURE LIMITED (1979) 1 All ER 118; 11. ZESCO LIMITED V. IGNATIOUS MULEBA SULE & 15 OTHERS SCZ/170/2002; 12. CHRISTINE MALOSA BANDA V. COPPERBELT ENERGY CORPORATION, ZCCM INVESTMENTS HOLDINGS PLC AND MARTIN NTINGA MULENGA, APPEAL NO. 187/2013; HARDOON V. BELLIOS (1901) AC 118; IMPERIAL GROUP PENSION TRUST LTD V. IMPERIAL 13. 14. TOBACCO LTD (1991) 2 ALL ER 597; LEGISLATION REFERED TO- THE LIMITATION ACT 1939; (i) (ii) THE SUPREME COURT RULES, CHAPTER 25 OF THE LAWS OF ZAMBIA; AND (iii) THE RULES OF THE SUPREME COURT, 1999 EDITION (WHITE BOOK). OTHER WORKS REFERRED TO- BLACK’S LAW DICTIONARY, 8th EDITION; AND (a) (b) HALSBURY’S LAWS OF ENGLAND, 4th EDITION, VOLUME 48, PARAGRAPH 501. This is an appeal from a Ruling of the High Court delivered on 5th November, 2013. The Ruling followed an appeal from a Ruling of the Deputy Registrar delivered on 31st July, 2012. The history of this matter, in so far as it is relevant to this appeal, is that on 8th February, 2012, the Respondents commenced 'an action against the Appellant by way of a Writ of Summons and Statement of Claim. The Respondents are former employees of the J2 Appellant, who retired on different dates between December, 1994 and May, 1997. On 9th November, 1998, the Appellant introduced a Voluntary Severance Scheme (VSS) whereby it invited members of staff, who for one reason or another had been found wanting in the performance of their duties, to leave its employment. The Respondents were among many other employees who chose to leave the employment of the Appellant under the said VSS. The Respondents contended that they were not fully paid their separation benefits after they left employment. They, accordingly, claimed for the following reliefs: (i) (ii) payment of their retirement benefits inclusive of all allowances from the various dates of retirement up to the date of full settlement less what was paid to them; payment of the difference between the last drawn basic salary and the average basic salary wrongfully used for calculation of terminal benefits; (iii) payment of arrears of housing allowance effective 1st October, 1993 at 100% of basic salary less what was paid up to dates of retirements; (iv) payment of salary arrears pursuant to salary increments of June, (v) (vi) 1995 backdated to January, 1995; payment of the Deferred Pension and arrears thereof in line with the June, 1996 Anglo American Corporation Actuarial Valuation; interest thereon at current Bank rates on Nos. (i), (ii), (iii) and (iv) above from various dates of retirement to the date of full payment; (vii) any other relief the Court may deem fit; and (viii) costs J3 On 14th March, 2012, the Appellant filed an application, before the learned Deputy Registrar, to set aside the originating process on the following grounds: (i) (ii) (iii) that the process was procedurally irregular; that the process was statute barred; and that the matter was res judicata. The Deputy Registrar dismissed the application. The Appellant appealed to the learned trial Judge. After conducting a rehearing of the Appellant’s application, the learned trial Judge found that the claims for retirement benefits, inclusive of all allowances; differences between basic salary and average basic salary; arrears of housing allowances effective 1st October, 1993, at 100% of basic salary; as well as salary arrears pursuant to salary increments of June, 1995, backdated to January, 1995, were contractual claims. She, therefore, held that they were caught up under section 2 of the LIMITATION ACT 1939 (hereinafter referred to as “the Act”). The relevant portion of the said Section 2provides that- “2(1) The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued, that is to say- J4 (a) actions founded on simple contract The learned trial Judge stated that the cause of action, in relation to the above claims, accrued on the dates the Respondents were allegedly underpaid their separation benefits. She pointed out that since the Respondents retired between 1994 and 1997, more than six years had elapsed before they commenced this action. She, accordingly, held that the said claims were statute barred. With regard to the claim for payment of Deferred Pension and arrears of the Pension, in line with the June, 1996 Anglo American Corporation Actuarial Valuation, the lower Court expressed the view that a pension fund qualified to be described as a trust. On the contention that the cause of action, in relation to the pension, accrued more than six years earlier and that it was consequently statute barred, the lower Court found that the claim was not statute barred. She stated that this was because the Appellant had concealed the enhanced pension entitlement from the Respondents. According to her, this amounted to defrauding the Respondents. She based her holding on Section 26 of the ACT, which states that- “26. Where in the case of any action for which a period of limitation is prescribed by this Act, either- J5 (a) the action is based upon the fraud of the defendant or his agent or of any person through whom he claims or his agents; or (b) the right of action is concealed by the fraud of any such person as aforesaid; or (c) the action is for relief from the consequences of a mistake, the period of limitation shall not begin to run until the plaintiff has discovered the fraud or the mistake, as the case may be, or could with reasonable diligence have discovered it.” The learned trial Judge found that there was no indication that the Respondents discovered the concealment of the enhanced pension benefits earlier than the date of this Court’s 2008 judgment in STANDARD CHARTERED BANK PLC V. WILLIAM SOLOMON NTHANGA AND 402 OTHERS1. She, accordingly, held that the Respondents’ claim for the enhanced value of the deferred pension was not statute barred. On the Appellant’s contention that the Respondents’ action was resjudicata, the lower Court stated that this contention was unsustainable. The Court expressed the view that the claim relating to the enhanced value of the pension had never been litigated before any court of competent jurisdiction by the parties to this action. The Appellant has now appealed to this Court, against the Ruling of the lower Court, advancing four grounds of appeal, namely, that- J6 1. the Court below erred both in law and in fact when it found that the Respondents had pleaded fraud against the Appellant in the absence of any clear and distinct allegation of fraud or particulars thereof being set out in the Statement of Claim filed by the Respondents; 2. the Court below erred both at law and in fact when it found that the claims for payment of Deferred Pension and arrears thereof in line with the June 1996 Anglo American Corporation Actuarial Valuation were in the nature of trust claims; 3. the Court below erred both at law and in fact when it found that the Respondents had established a prima facie case of fraud against the Appellant and that the question that remained to be determined was when the alleged fraud was discovered by the Respondents; and 4. the Court below erred both at law and in fact when it found that claim number (v) as relates to the enhanced value of the deferred pension was not statute barred and as such, the Respondents could proceed with their claims. In support of these grounds of appeal, the learned Counsel for the Appellant, Mr. Silwamba, SC, and Mr. Linyama, filed written heads of argument on which they entirely relied. Counsel argued the first and third grounds of appeal together. They submitted that the lower Court misdirected itself when it found that the claim for enhanced value of the deferred pension was not subject to the limitation period of 6 years set by Section 19(2) of the ACT. Further, Counsel faulted the learned trial Judge for having come to the conclusion that the Respondents had sufficiently pleaded fraud. They criticized the lower Court for having relied on the cases of EXP. WATSON2 and DAVY V. GARRET3,to find that the Respondents had sufficiently pleaded fraud. The J7 following were the portions relied on by the lower Court from the two cases: From the case of EXP. WATSON2, the Court quoted the following portion: “‘Fraud’ in my opinion, is a term that should be reserved for something dishonest and morally wrong, and much mischief is, I think, done as well as much pain inflicted by its use where illegality and illegal are really the appropriate expressions.” From the case of DAVY V. GARRET3,the Court cited the following portion: “an allegation that the defendant made to the plaintiff representations on which he intended the plaintiff to act, which representations were untrue and known to the defendant to be untrue is sufficient.” Counsel submitted that the contexts in which the Courts made the pronouncements in the above two cases were different from the circumstances of this case. They argued that in order for an allegation of fraud or an inference of fraud to be drawn, sufficient facts must be alleged to support such a finding. According to Counsel, in the DAVY V. GARRET3 case, the Court found that the pleading was insufficient to ground an allegation of fraud. To support their arguments, Counsel quoted a portion of the holding J8 by THESIGER, LJ, in the DAVY V. GARRET3 case, where he said the following- “The Plaintiffs say that fraud is intended to be alleged, yet it contains no charge of fraud. In the Common Law Courts no rule was more clearly settled than that fraud must be distinctly alleged and distinctly proved, and that it was not allowed to leave fraud to be inferred from the facts... it may not be necessary to in all cases use the word “fraud”-indeed in one of the most ordinary cases it is not necessary. An allegation that the Defendant made to the Plaintiff representations on which he intended the Plaintiff to act, which representations were untrue and known to the Defendant to be untrue, is sufficient. The word “fraud” is not used but two expressions are used pointing at the state of mind of the Defendant- that he intended the representations to be acted upon, and that he knew them to be untrue. It appears to me that a Plaintiff is bound to shew distinctly that he means to allege fraud. In the present case facts are alleged from which fraud may be inferred, but they are consistent with innocence. They were innocent acts in themselves, and it is not to be presumed that they were done with a fraudulent intention.” According to Counsel, the decision by THESIGER, LJ, in the above quotation, established the following principles: 1. a plaintiff is bound to show distinctly that he means to allege fraud on the part of the defendant; 2. fraud must be distinctly alleged in the pleadings and should not be left to be inferred from facts; and 3. fraud can only be inferred from facts where the facts disclose or impute a state of mind/ intent on the part of the defendant to act in a fraudulent or dishonest manner in the defendant’s dealings with the plaintiff. Counsel submitted that the above principles are consistent with the position taken by this Court in a number of cases. For J9 this, they referred us to the case of SABLEHAND ZAMBIA LIMITED V. ZAMBIA REVENUE AUTHORITY4, where we said that- “Where fraud is an issue in the proceedings, then a party wishing to rely on it must ensure that it is clearly and distinctly alleged. Further, at the trial of the cause, the party alleging the fraud must equally lead evidence, so that the allegation is clearly and distinctly proved.” Counsel further cited the case of NKONGOLO FARMS LIMITED V. ZAMBIA NATIONAL COMMERCIAL BANK LIMITED, KENT CHOICE LIMITED (IN RECEIVERSHIP) AND CHARLES HARUPERI5, where this Court stated that- “Fraud arises from acts and circumstances of imposition. It usually takes the form of a statement that is false or suppression of what is true. The withholding of information is not in general fraudulent unless there is a special duty to disclose it.” Counsel contended that from the above authorities, it was clear that a Court should not entertain or make a prima facie finding that there is an allegation of fraud where such an allegation has not been clearly and distinctly set out in the Statement of Claim or where the facts do not impute an intent by the defendant to act fraudulently or dishonestly. In their view, paragraph 18 of the Respondent’s Statement of Claim did not clearly and distinctly set out an allegation of fraud against the Appellant. The said paragraph 18 states that- J10 “In June, 1996 the Anglo American Corporation Limited undertook an actuarial valuation of the Pension Scheme which exercise enhanced the value of the scheme but this information and benefits was given to serving employees only to the detriment of Deferred Pensioners (the Plaintiffs) who had their terminal benefits calculated at old rates thereby suffering loss.” Counsel submitted that it would have been appropriate, at that preliminary stage, for the lower Court to have considered the wording of paragraph 18 of the Statement of Claim to ascertain if- 1. the pleadings alleged that the actuarial valuation carried out in 1996 also included the Respondents and as such, entitled them to receive an enhanced pension; and 2. the Appellant had withheld information which the Respondents’ were entitled to receive pertaining to the actuarial valuation carried out in 1996; 3. the withholding of such information was with intent to defraud the Respondents and pay them lower sums than what was due to them after the enhancement; and 4. that the Appellant converted the enhanced value of the pension benefits to its own use. On the basis of the above submissions, Counsel concluded that the lower Court misdirected itself when it found that the Respondents had established a prima facie case of fraud against the Appellant. Coming to the second ground of appeal, Counsel argued that all the matters pleaded in the Statement of Claim related to claims for breach of contract. They contended that the finding by the learned trial Judge that the pension, under the Anglo American jii Corporation Actuarial Valuation was in the nature of a trust, was erroneous. That the Respondents did not allege that the Appellant was the trustee under the pension scheme. That the Respondents did not make any claim against a trustee; or allege that a trustee had committed fraud and that a trustee had converted trust property to its own use. Counsel faulted the lower Court for having shifted to the Appellant, the onus of proving who managed the pension scheme. They stated that this was contrary to the rules and procedures of Court, which require that a plaintiff should sue the right party and should prove its allegations. For these arguments, Counsel relied on the case of BARRY V. BUTLIN6, where Parke B stated the following: “The strict meaning of the term onus probandi is this, that if no evidence is given by the party on whom the burden is cast, the issue must be found against him.” On the basis of the above, Counsel urged us to hold that the Respondents’ claim was not a trust claim but a claim under contract law. With regard to the fourth ground of appeal, Counsel contended that it was erroneous for the lower Court to find that the claim under the deferred pension was not statute barred. In their view, J12 that claim was statute barred because the limitation period of 6 years for claims under contract, had already elapsed. They submitted that the onus of proof lay on the Respondents to show that their claim was not statute barred and that they failed to discharge that burden. In support of these arguments, they cited the case of LONDON CONGREGATIONAL UNION INC. V. HARRIS AND HARRIS (A FIRM)7, where the Court held that- “(4) It was for a plaintiff to show that his cause of action accrued within the limitation period. Accordingly, since the plaintiffs had not tendered any evidence to show that the damage caused by the omission of a damp-proof course had occurred to the plaster within the six years prior to the issue of the writ, and since the available evidence was equally consistent with the damage having been caused outside that period, the plaintiffs had failed to prove that the cause of action in respect of the damp-proof course had accrued within the limitation period, and the defendants were accordingly entitled to a reduction of damages in respect of the damp-proof course. To that extent the appeal would be allowed ....” Counsel went on to argue that it was wrong for the learned trial Judge to shift to the Appellant, the onus of proving when the cause of action accrued. In support of this argument, they referred us to the words of Lord PEARCE in the case of CARTLEDGE V. E JOPLING & SONS LTD8, where he said the following: “... I agree that when a defendant raises the statute of limitation, the initial onus is on the plaintiff to prove that his cause of action accrued within the statutory limitation. ...” J13 < Counsel contended that the burden of proof would only shift, to a defendant raising a defence of limitation, after the plaintiff has discharged the initial burden of proving that the cause of action accrued within the limitation period. In response, the learned Counsel for the Respondent filed written heads of argument. Counsel also filed a notice of non­ appearance pursuant to RULE 69 OF THE SUPREME COURT RULES. Counsel did not, therefore, appear before us. Counsel argued the first, second and third grounds of appeal together. They submitted that although it is trite law that fraud must be specifically pleaded, this Court has pronounced itself to the effect that there are some exceptions to this general rule. In support of this argument, they referred us to the case of HANIF MOHAMMED BHURA (SUING PURSUANT TO A POWER OF ATTORNEY GRANTED IN HIS FAVOUR BY MERRUNISHA BHURA) V. YUSUF IBRAHIM ISSA IAMAIL9, where this Court said that- “Our view is that in specific cases, depending on the peculiar facts of the case, a court cannot ignore the glaring face of fraud or corruption simply because fraud has not been specifically pleaded.” J14 Counsel went on to refer us to the NKONGOLO FARMS LIMITED5case, where we said:- “We agree that the appellant did not plead fraud or misrepresentation with subheads stating particularities of fraud or misrepresentation as provided under Order 18 rule 8 of the Rules of the Supreme Court .... However, looking at the five (5) paragraphs quoted above, we hold the view that these paragraphs brought out sufficient details of the fraud and misrepresentation ... Even if we had to agree with the learned trial Judge that the pleadings were defective, we hold that there was evidence adduced before the High Court by the appellant on the misrepresentation by the third respondent, which evidence was not objected to by the respondents. The Court has an obligation to weigh that evidence....” Counsel further cited the case of BELMONT FINANCE CORPORATION LIMITED V. WILLIAMS FURNITURE LIMITED10. In that case, BUCKLEY, LJ said that- “An allegation of dishonesty must be pleaded clearly and with particularity. That is laid down by the rules and it is a well- recognised rule of practice. This does not import that the word ‘fraud’ or the word ‘dishonesty’ must necessarily be used. ... The facts alleged may sufficiently demonstrate that dishonesty is allegedly involved, but where the facts are complicated this may not be so clear, and in such a case it is incumbent on the pleader to make it clear when dishonesty is alleged. If he uses language which is equivocal, rendering it doubtful whether he is in fact relying on the alleged dishonesty of the transaction, this will be fatal; the allegation of its dishonest nature will not have been pleaded with sufficient clarity.” Counsel submitted that paragraph 18 of the Statement of Claim made it clear that the information on enhanced pension benefits was only made available to employees in service to the detriment of deferred pensioners. In Counsel’s view, this was a J15 deliberate act by the Appellant aimed at concealing the information which they knew was of material benefit to the Respondents. In support of these arguments, Counsel relied on the case of ZESCO LIMITED V. IGNATIOUS MULEBA SULE & 15 OTHERS11, where this Court said that a public concern of the nature of the Zambia Electricity Supply Corporation Limited had an obligation to communicate information to its former employees which they knew was to their interest. With regard to the issue of whether the pension and arrears is trust property, Counsel contended that the pension and the arrears were trust property and the Appellant was the trustee in that regard. They submitted that it was inconceivable that the Appellant, as the nominal holder of the pension, could deny the Respondents their pension on the basis of limitation of time. As for the argument that the Appellant was not the trustee in relation to the pension, Counsel supported the conclusion by the lower Court that there was no evidence on the record to suggest that the Appellant was not the right party to be sued. He added that, in any case, the denial that the Appellant was the one J16 administering the pension only arose in the submissions of Counsel for the Appellant. Coming to the fourth ground of appeal, Counsel pointed out that by the time this Court determined the WILLIAM SOLOMON NTHANGA AND 402 OTHERS1 case, all the Respondents had had no benefit of the Anglo American Actuarial Valuation. Counsel submitted that one of the claims under the WILLIAM SOLOMON NTHANGA AND 402 OTHERS1 case was for the underpaid pension resulting from the non-inclusion of the enhancements to the pension. According to Counsel, that claim succeeded. Counsel added that it was after the success of the said claim that the Respondents came to know that their pension had been enhanced by the actuarial valuation. On the basis of the above arguments, Counsel contended that this appeal lacks merit. We have carefully considered the evidence on the record of appeal, the heads of argument filed by Counsel and the Ruling appealed against. We will deal with grounds one, three and four together because they have raised related issues. We will then deal with ground two separately. J17 • The issue for our determination under the first, third and fourth grounds of appeal is- ‘whether the Respondents distinctly pleaded fraud in their Statement of Claim.’ Counsel for the Appellant has maintained that the Respondents did not plead fraud with sufficient particularity. According to Counsel, for an allegation of fraud to be considered to have been clearly and distinctly pleaded- 1. the plaintiff is bound to show distinctly that he means to allege fraud on the part of the defendant; 2. fraud must be distinctively alleged in pleadings and should not be left to be inferred from the facts; 3. fraud can only be inferred from facts where the facts disclose or impute a state of mind on the part of the defendant to act in a fraudulent or dishonest manner in the defendant’s dealings with the plaintiff. From the outset, we must say that we agree with Counsel for the Appellant that it is trite law that fraud must be distinctly alleged and proved. This is evident from Order 18/8/16 of the Rules of the Supreme Court, 1999 which states that ‘Any charge of fraud or misrepresentation must be pleaded with the utmost particularity....’Order 18/12/18 of the Rules of the Supreme Court, 1999, is also couched in a similar manner. It provides that ‘Fraudulent conduct must be distinctly alleged and distinctly J18 proved, and it is not allowable to leave fraud to be inferred from the facts.’ Further, in the case of SABLEHAND ZAMBIA LIMITED V. ZAMBIA REVENUE AUTHORITY4, we said the following: “With regard to ground one, counsel for the appellant has complained that it was wrong for the learned trial Judge to make a finding of fact on fraud when it was never alleged in the pleadings of the respondent through its affidavit in opposition to the application for judicial review and neither did the respondent prove fraud in its evidence before the trial court. On the authorities cited to us ... we entirely agree with the appellant’s Counsel that where fraud is to be a ground in the proceedings, then a defendant or respondent wishing to rely on it must ensure that it is clearly and distinctly alleged. Further, at the trial of the cause, the party alleging fraud must equally lead evidence so that the allegation is clearly and distinctly proved. The clear message from the two cited cases is that allegations of fraud must, once pleaded, be proved on a higher standard of proof than on a mere balance of probabilities because they are criminal in nature.” For the sake of clarity, we will again reproduce paragraph 18 of the Respondents’ Statement of Claim, which is at the center of the parties contentions in relation to the plea of fraud. The said paragraph was couched in the following manner: “In June, 1996 the Anglo American Corporation Limited undertook an actuarial valuation of the Pension Scheme which exercise enhanced the value of the scheme but this information and benefits was given to serving employees only to the detriment of Deferred Pensioners (the Plaintiffs) who had their terminal benefits calculated at old rates thereby suffering loss.” J19 * J * « Clearly, paragraph 18 did not contain the word ‘fraud’. However, it is settled law that although fraud must be clearly pleaded, the plaintiff does not necessarily need to use the word ‘fraud’ in the Statement of Claim. It is enough if the plaintiff gives sufficient and distinctive particulars of the alleged fraudulent conduct. To this effect, in DAVY V. GARRET3, THESIGER, LJ stated that- F “an allegation that the defendant made to the plaintiff representations on which he intended the plaintiff to act, which representations were untrue and known to the defendant to be untrue, is sufficient.” We also pronounced ourselves on this issue when we decided the case of CHRISTINE MALOSA BANDAV. COPPERBELT ENERGY CORPORATION, ZCCM INVESTMENTS HOLDINGS PLC AND MARTIN NTINGA MULENGA12. In that case, the Appellant, among other things, faulted the learned trial Judge for having found that the " Respondents had pleaded fraud when there was no specific reference to fraud in the Statement of Claim. In dismissing the Appellant’s arguments, we said the following: “We have taken a look at the pleadings of both the Respondents and the Appellant. We hold the opinion that although the Respondents did not mention the word ‘fraud’ in their pleadings, they, nevertheless, gave sufficient and distinctive particulars of Mr. Mwalula’s fraudulent conduct.” J20 In the instant case, the Respondents claim that they sufficiently and distinctly pleaded fraud in paragraph 18 of their Statement of Claim. We have carefully studied the said paragraph of the Statement of Claim. To start with, we wish to state that at the stage that this case reached in the Court below, the Respondent could not have been expected to have proved their allegation of fraud to the required standard. We must also stress that at this stage, we are not concerned with whether the Appellant is liable for the alleged fraud. In addition, we are not concerned with whether the Respondents are entitled to be paid the enhanced pension. In this appeal, we are concerned with determining whether the Respondents pleaded fraud with utmost particularity in their Statement of Claim. Looking at the words of paragraph 18 of the Statement of Claim, we are convinced that the Respondents pleaded fraud with sufficient particularity. That paragraph gave sufficient and distinctive particulars of allegations of fraudulent concealment, by the Appellant, of the enhancements made to the pension scheme following the Anglo American Corporation Limited Actuarial J21 Valuation of the pension scheme. The paragraph contains an allegation that, instead of paying the Respondents the enhanced pension rates, the Appellant paid them the old pension rates. It is our considered view that the words of paragraph 18 clearly assert that the Appellant’s conduct was not innocent. In our judgment, the allegation in paragraph 18 properly fits into the definition of fraud in BLACK’S LAW DICTIONARY, where ‘fraud’ is defined as “a knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment.” Consequently, we hold that although the Respondents did not specifically mention the word ‘fraud’, in their Statement of Claim they, nevertheless, distinctly pleaded fraud. Accordingly, we hold that the learned trial Judge properly directed herself when she held that the deferred pension was not subject to the limitation period of six years set by section 19(2) of the LIMITATION ACT. For the above reasons, the first, third and fourth grounds of appeal have no merit. J22 Coming to the second ground of appeal, we are of the view that the issue to be resolved is-‘whether the deferred pensions were in the nature of trust claims’. Counsel for the Appellant has argued that all the matters pleaded in the Statement of Claim relate to claims for breach of contract. They have further argued that for the Appellant to be liable to be sued as trustee, the onus was on the Respondents to prove that the pension fund was managed by the Appellant. In our view, the starting point to the determination of ground two is an illustration of what constitutes a trust. The authors of HALSBURY’S LAWS OF ENGLAND have defined a trust in the following terms: “Where a person has property or rights which he holds or is bound to exercise for or on behalf of another or others, or for the accomplishment of some particular purpose or particular purposes, he is said to hold the property or rights in trust for that other or those others, or for that purpose or those purposes, and he is called a trustee.” In the case of HARDOON V. BELLIOS13, the Privy Council had occasion to pronounce itself on what is required to exist to establish the relation of trustee and cestui que trust. In that case, Lord LINDLEY said the following: J23 * “It appears from the evidence as it stands that the defendant became in October, 1892, the sole beneficial owner of these shares, the legal title to which was vested in the plaintiff. Assuming this to be established, their Lordships are at a loss to understand what more was required to create the relation of trustee and cestui que trust between the plaintiff and the defendant. The fact that they never stood in the relation of vendor and purchaser, that there was no contract between them, that the defendant never requested the plaintiff to become his trustee, are quite immaterial. All that is necessary to establish the relation of trustee and cestui que trust is to prove that the legal title was in the plaintiff and the equitable title in the defendant.” The question then still remains - ‘whether a claim under a pension scheme can be instituted as a trust claim’. We are of the considered view that a member of a pension scheme has both contractual and trust rights. He or she can bring a pension claim under either contract law or trust law depending on the relief they would want to be granted by the Court. This position was restated by Sir Nicolas Browne-WILKINSON, V-C, in the case of IMPERIAL GROUP PENSION TRUST LTD V. IMPERIAL TOBACCO LTD’14’, when he said the following: “Pension schemes are of quite a different nature to traditional trusts.... In every contract of employment there is an implied term- ‘that the employers will not, without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee ....’ I will call this implied term ‘the implied obligation of good faith’. In my judgment, that obligation of an employer applies as much to the exercise of his rights and powers under a pension scheme as they do to the other rights and powers of an employer. Say, in purported exercise of its right to give or withhold consent, the company were to say, capriciously, that it J24 would consent to an increase in the pension benefits of members of union A but not of the members of union B. In my judgment, the members of union B would have a good claim in contract for breach of the implied obligation of good faith.... In my judgment, it is not necessary to found such a claim in contract alone. Construed against the background of the contract of employment, in my judgment the pension trust deed and rules themselves are to be taken as being impliedly subject to the limitation that the rights and powers of the company can only be exercised in accordance with the implied obligation of good faith. ... Although, in certain circumstances, it may be necessary for the members of the scheme to sue in contract (eg to obtain a mandatory order that the company do exercise its powers in a particular way), I can see no valid reason why the members of the scheme should be forced to sue in contract in all cases: contractual and trust rights can exist in parallel.’’(Emphasis by underlining ours). Taking a leaf from the IMPERIAL GROUP PENSION TRUST*14) case, we are of the firm view that the Respondents in this case have both contractual and trust rights under the pension scheme. They cannot, therefore, be compelled to sue only under contract law. They reserve the liberty to pursue their rights under trust law. Further, we hold that the Appellant is the trustee for the said pension scheme. The evidence on the record of appeal clearly establishes that the Appellant held the Respondents’ pension benefits under its pension scheme. There is no evidence that the pension scheme was managed by any entity other than the Appellant. Consequently, in our opinion, a relationship existed J25 ‘ » whereby the Appellant was the trustee and the Respondents were the cestui que trust. Accordingly, we hold that the lower Court properly directed itself when it held that the claims for deferred pension were in the nature of trust claims and the Appellant was the trustee under the pension scheme. Therefore, the second ground of appeal, too, has no merit. The appeal having failed on all the four grounds of appeal, we dismiss it with costs for the Respondents, to be taxed in default of agreement. I. C. Mambilima CHIEF JUSTICE ^4. Musonda, SC \ SUPREME COURT JUDGE '4J. Chinyama SUPREME COURT JUDGE