Zambia Telecommunications Company Limited v Amos Chimbo and 2 Ors (Appeal No. 156/2015; Selected Judgment No. 46 of 2018) [2018] ZMSC 613 (30 October 2018)

J1 Selected Judgment No. 46 of 2018 P.1609 IN THE SUPREME COURT OF ZAMBIA HOLDEN AT LUSAKA (Civil Jurisdiction) Appeal No.156/2015 BETWEEN: ZAMBIA TELECOMMUNICATIONS COMPANY LIMITED • AND APPELLANT AMOS CHIMBO SYLVESTER D. CHANDA ANDREW P. TANGANYIKA 1 ST RESPONDENT 2ND RESPONDENT 3RD RESPONDENT CORAM: Mwanamwambwa DCJ, Kajimanga and Musonda JJS On 8 t h May 2018 and 30th October 2018 FOR THE APPELLANT: Mr. N. Nchito, SC and Mr. C. Hamwela of Nchito and Nchito Advocates • FOR THE RESPONDENT: Mr. M. M. Mwitumwa of M. L. Mukande and Company JUDGMENT Kajimanga, JS delivered the judgment of the court Cases referred to: 1. Wickman Machine Tools Sales Limited v LG Schuler AG (1874] AC 235 J2 P.1610 2. Maamba Collieries Limited v Douglas Siakalonga and Others - Appeal No.51 of 2004 3. Meamui Kongwa v Zambia National Commercial Bank Limited - Appeal No. 132 of 2011 4. Bank of Zambia v Caroline Anderson and Andrew Anderson ( 1993-94) Z. R. 47 5. Samuel Miyanda v Raymond Handahu (1993-1994) Z. R. 187 6. Violet Kesenge Bwalya and Others v Zambia Telecommunications Company Limited-Comp/70/2010 and 75/2010 7 . Indo Zambia Bank Limited v Mushaukwa Muhanga (2009) Z. R. 266 8. Norwich Union v British Railways Board (1989] E. G. L. R 137 9. Investors Compensation Scheme v West Bromich Building Society (1998] 1 ALL ER 98 10. Anderson Mazoka and 2 Others v Levy Patrick Mwanawasa, Electoral Commission of Zambia and Attorney General (2005) Z. R. 138 11. Rodgers Chama and 4 Others v Zambia State Insurance Corporation Limited (2004) Z. R. 151 12. Zambia Telecommunications Company Limited v Ireen Simate, Perine C Zulu and 54 Others - Appeal No. 52 of 2017 (CA) 13. Zambia Telecommunications Company Limited v Felix Musonda and Others - Appeal No. 51 of 2014 14. James Mankwa Zulu and Others vs Chilanga Cement - Appeal No. 12 of 15. Geoffrey Muyamwa and 88 Others v Zambia National Commercial Bank Selected Judgment No. 37 of 2017 16. Indeni Petroleum Refinery Company Limited v V. G. Limited (2007) Z. R. 17. Kapiri Glass Products Limited v Maruti Oil Industry Limited (1993 - 1994) Z. R. 73 18. Jefford and Another v Gee (1970] 1 All ER 1202 19. Trollop and Colls Limited v Northwest Metropolitan Regional Hospital Board [1973] 2 All ER 260 Legislation and other works referred to: 1. High Court Rules, Chapter 27 of the Laws of Zambia, Order 36 rule 8 2. Chitty on Contracts (28th edition) Volume 1, paragraphs 12-050; and (30th edition) Volume 1, paragraphs 12-063 3. Phipson on Evidence (5th Edition) paragraph 421 4. Black's Law Dictionary (7th Edition) page 1379; (8th Edition) page 352 J3 P.1611 Introduction 1. This appeal arises from a judgment of the High Court dated 12th June 2015 which upheld the respondents' claims against the appellant. Background to the dispute in this appeal 2. The background facts, to the extent relevant to this appeal, are that the respondents were employees of the appellant, engaged on various dates and serving in various capacities. They initially served under Zambia Industrial and Mining Corporation ("ZIMCO") conditions of service until the introduction of new conditions namely, Zambia Telecommunications Company Limited ("Zamtel") conditions of service. Sometime in 1995, Mr. Ronald Penza (deceased) then Minister of Finance, as shareholder in ZIMCO directed the appellant and other ZIMCO subsidiaries to incorporate all allowances into the basic salary thereby enhancing the employees' basic salaries. The respondents' basic salaries were not enhanced by inclusion of allowances when the appellant introduced the Zamtel conditions of service under which the respondents served until their retirement. Upon their retirement, J4 P.1612 the respondents were only paid gratuity without inclusion of allowances and were also not paid retirement benefits. 3. The respondents contended that they were entitled to retirement packages over and above the gratuity and that the appellant was obliged to incorporate allowances into the basic salary in computing their gratuity and retirement packages as per the 1995 directive from the then Minister of Finance. In addition, they were entitled to several allowances pertaining to housing, furniture , domestic servant, water, electricity, education, cell phone and landline but they only received repatriation which was not inclusive of allowances, thus resulting in an underpayment. - 4. The respondents further contended that it was a term of their conditions of service that they were to continue receiving housing allowances from the appellant until their retirement packages were paid but the same were not being paid to them. By reason of these alleged underpayments, the respondents took out an action against the appellant in the court below claiming: a) Retirement package at the rate of 3 months' salary for each year of service inclusive of allowances. JS P.1613 b) Allowances on gratuity paid. c) Allowances on repatriation paid. d) Housing allowances from the date of retirement until date of payment of retirement benefits. e) Interest from the date of retirement. f) Any other relief the Court may deem fit. g) Costs. 5. The appellant denied the r espondents' claims and contended that prior to its incorporation as a limited company, all employees were retrench ed and paid their requisite p ackages so that the employees that were subsequently retained would serve on n ew conditions of service. Additionally, the respondents retired on Zamtel conditions of service for non-repres ented employees and not the ZIMCO conditions of service. Under the Zamtel conditions of service, th e word "salary'' was defined and there was absolutely no provision for the incorporation of allowances into the basic pay for purposes of computing terminal b en efits for retired employees. The a ppellant r efu ted th e respondents' claim that they were entitled to the in corporation of allowances into their basic pay and in th e computation of their gratuity and retirement. 6. According to the appellant, the respondents were correctly paid all J6 P.1614 their dues . Their claim for the inclusion of allowances amounted to a retrospective negotiation of their terms and conditions of service throu gh the judicial process. Evidence of the parties in the High Court 7. On behalf of the respondents, the 2 nd respondent testified that the respondents joined what was then called Posts and Telecommunications Corporation Ltd ("PTC") on different dates but between 1975 and 1982. On 6 th September 1994, PTC changed its name to Zamtel but there were no noticeable changes which resulted from the change of name . When ZIMCO was later dissolved, the respondents ceased to operate under the ZIMCO conditions of service and began serving under the Zamtel conditions of service. The respondents were neither retrenched nor re-engaged on new conditions of service but they merely continued their employment in the same capacity and under the same employer. 8 . The 2 n d respondent stated that on 28 th March 1995, the government, being the major shareholder of ZIMCO and its J7 P.1615 subsidiary and associate companies, issued a directive through a ministerial letter written by the then Minister of Finance ("the Penza letter"). In the said letter, all state enterprises were directed to incorporate allowances which were being paid separately, into the basic salaries in order to enhance the salaries. The effect of this letter, according to the witness, was that it became an additional condition of service thereby amending clause 30 .5 of ZIMCO conditions of service on gratuity. As a consequence, his entitlement was going to increase if the appellant had incorporated the allowances into the basic salary. 9. It was his further testimony that on retirement, the respondents were paid gratuity, leave days and repatriation allowances but their retirement package has not been paid to date. The claim for a retirement package was being made on the basis of clause 9 ( a) (iv) and 9 (c) of the Zamtel conditions of service. The said conditions referred to early retirement which included allowances. He admitted, however, that basic pay excluded allowances under clause (b) of the definition section in the Zamtel conditions of service. J8 P.1616 10. The 2 nd respondent also stated that the claim on repatriation allowances was based on the then shareholder's directive to ZIMCO, as all state enterprises were bound by this directive. However, the appellant, being a state-owned company, failed to implement this directive, resulting in underpayments on gratuity and repatriation because contractual allowances were not included. As for the basis of the claim for housing allowances, t h e 2 nd respondent testified that the respondents' terminal benefits to which they were entitled were not paid in full contrary to clause 9 (h) (v) of the Zamtel terms and conditions of service. 11. The testimony of Gregory Lungu , the appellant's manager for compensation and benefits, was that the respondents were paid their benefits by the appellant upon retirement in accordance with the Zamtel terms and conditions of service. In computing their benefits, the conditions provided that the appellant pays 3 months' basic salary for each completed year of service and pro rata for any incomplete year served. In addition, the respondents were entitled to payment of repatriation and pension which was administered by ZSIC Limited. J9 P.1617 12. The witness stated that the basis of the computation referred to was clause 9(a) as read together with clause 8.3 of the Zamtel terms and conditions of service. Clause 8 categorized who would be eligible for long service gratuity; clause 8.3 provided the formula for what was to be paid on retirement; clause 8.4 provided that in computing the long service gratuity, the last drawn monthly basic salary shall be the amount to be used; and clause 9(a)(iv) provided for specific entitlement on normal retirement. According to the witness, the conditions were very specific as to who would get what and under what circumstances. It was his testimony that 'basic salary' was a salary without the addition of allowances. He, however, admitted that 'salary' is monthly pay inclusive of allowances and that under clause 9 (a) (iv), pay includes allowances. With respect to the claim relating to housing allowance, the witness stated that the same could only be triggered if the appellant failed to pay benefits in full. In the present case, the claim could not hold because in his view the appellant paid the respondents all their benefits. 13. The appellant's witness further testified that the respondents were JlO P.1618 not paid under ZIMCO conditions of service , as at the material time they were not serving under the said conditions of service. He stated that ZIMCO ceased to exist in 1994 and the appellant was established in the same year, following a resolution to change the name of PTC and split the company into two separate entities namely Zampost and Zamtel. Consequently, the appellant ceased to be a member of ZIMCO group of companies at that time. He conceded that the contracts of the respondents were never terminated at that juncture nor were they paid any dues. He, however, insisted that the respondents did not continue with the same conditions from PTC into Zamtel as the appellant introduced its own conditions of service. The appellant, according to the witness, did not obtain any consent from its employees to change their conditions of service. He also admitted that the appellant did not comply with the directive to the ZIMCO group of companies to integrate allowances into the salary as indicated in the Penza letter. Jll P.1619 Consideration of the matter by the learned High Court Judge and decision 14. After considering the evidence deployed before her and the submissions made by the parties, the learned trial judge found that there was no evidence to show that the respondents were paid the full retirement packages they were entitled to, although the use of the word 'shall' in clause 9 of the terms and conditions of service made it mandatory for the appellant to pay the same. She also found th at clause 8 of the conditions of service made it mandatory for both gratuity and retirement packages to be paid. She opined th at it was implausible that the former, could be equated to a retirement package in that, as the name suggests, it is basically paid for long service. 15. The learned trial judge concluded, therefore, that the respondents were entitled firstly to long service gratuity under clause 8 which was paid and secondly, a retirement package under clause 9 (iv) which was not paid. She found that under clause 9 (a) iv, retirement ben efits were to be paid at the rate of 3 months 'pay' for each year served and that the reference to pay as opposed to 'basic J12 P .1 620 salary' should be construed to mean that the same includes allowances. 16. On the claim for allowances on gratuity and repatriation benefits, the learned trial judge found that the appellant was bound by the decision of the sole shareholder of the company to integrate allowances into the basic salary. Therefore , the Zamtel conditions of service in question were invalid to the extent that they conflicted with the directive in the Penza letter of 28th March 1995. She found that the letter became part and parcel of the respondents' conditions of service and that since the appellant did not follow the former shareholder's directive, the respondents suffered loss by being paid long service gratuity without allowances for which they should be compensated. 17. She held further, that the resolution by the appellant's former shareholder could not be varied to the detriment of the respondents by a subsequent change in their conditions of service which they did not agree to. According to the learned trial judge, while the appellant could actually introduce new conditions of service, they could not take away the respondents' entitlement to I J13 P.1621 integration of allowances without their consent. Having found that the respondents were not paid their dues in full, she concluded that they should also be paid housing allowance for the period in question. The respondents' claims were accordingly upheld with costs. - The grounds of Appeal to this court 18. Aggrieved by the lower court's decision, the appellant has now appealed to this court advancing four grounds as follows: 1. The Court below erred in law and fact when it held that the Respondents were entitled to retirement packages at the rate of 3 months' salary for each year served inclusive of allowances. 2. The Court below erred in law and fact when it held that the Respondents were entitled to allowances on gratuity and repatriation paid. 3. The Court below erred in law and fact when it held that the respondents were entitled to housing allowance from the date of retirement to the date of payment of retirement benefits. 4. The Court below erred in law and fact when it awarded the Respondents interest from the date of cause of action to the date of payment. Arguments presented by the parties 19 . Both parties filed written heads of argument on which they relied I J14 P . 1622 and were briefly augmented by counsel at the hearing. In support of grounds one and two which were argued together, Mr. Nchito , SC began by referring us to the judgment of the lower court at page Jl8 lines 11 - 13, where the learned trial judge observed as follows: "It seems to me that the resolution of this matter is predicated on the interpretation of clauses 8 and 9 of the Zamtel conditions of service." 20. State Counsel agreed with the lower court's position quoted above and submitted that the provisions of clause 8 were very clear and unambiguous. He contended that clause 8.4 clearly states that long service gratuity is computed on the basis of the employee 's last drawn monthly basic salary and that allowances were excluded from the basic salary under clause [l). Thus, it was untenable and contrary to the Zamtel conditions of service for the respondent to assert that their long service gratuity was underpaid because it was computed on the basis of the basic salary without allowances. 21. He pointed out that the court below awarded the respondents retirement benefits under clause 9 (a) (iv) and that to determine • JlS P.1623 this claim, the said clause had to be interpreted. It was his contention that the starting point in construing a contract or any other written legal instrument is that words must be given their ordinary and natural meaning. However, the principle that words must be construed in their ordinary sense may be departed from where the meaning would result in absurdity or would create some inconsistency with the rest of the instrument. 22 . Mr. Nchito, SC submitted that in order to clearly interpret the provisions of clause 9 ( a) (iv), the clause had to be consider ed in the context of the conditions of service as a whole and not in isolation. He r eferred us to the learned authors of Chitty on Contracts, Volume 1, paragraph 12-063 who state at page 848- 849 as follows: "Every contract is to be construed with reference to its object and the whole of its terms, and accordingly, the whole context must be considered in endeavouring to collect the intention of the parties even though the immediate object of inquiry is the meaning of an isolated word or clause." 23. He contended, therefore, that in the present case, clause 9 (a) (iv) must be construed in light of the provisions of paragraphs (b), (c), J16 P.1624 (d), (e) and (g) of clause 9 and other cla uses of th e conditions of service to establish its t rue meaning. Our a ttention was drawn to clause 9 which r eads as follows: "9. RETIREMENT (a) Normal Retirement (i) An employee shall retire on the last day of the month on which he/she attains the age of fifty-five . (ii) An employee due for retirement will be notified to that effect at least six months in advance. (iii) The benefits on retirement shall be in accordance with the company's pension scheme. (iv) In addition to the retirement benefits accruing from the pension scheme, an employee retiring from service shall be entitled to payment of three months' pay for each completed year of service and pro rata for any uncompleted year served. (b) Retirement on Medical Grounds An employee may retire on medical grounds where the company received satisfactory medical evidence from a Medical Board that the employee is incapable by reasons of some infirmity of mind or body of discharging the duties of his office and that such an infirmity is likely to be of long duration. An employee leaving on medical ground shall be entitled to the following benefits: (i) Long service gratuity (ii) Pension (iii) Repatriation J17 P.1625 (iv) For the purpose of medical assistance to the employee the company shall pay an additional two months' basic salary. (c) Early Retirement Early retirement is at the discretion of the company. An employee may apply for early retirement provided that he/she has been in service for a period of at least ten years. The benefits payable shall be as for normal retirement at 9(a)(iii) and (iv) above. (d) Benefits Upon Death In the event that an employee dies during the period of employment, the death benefits to the estate shall be: (i) Long Service Gratuity (ii) Group Life Assurance (GLA) and (iii) Group Personal Accidents (GPA) in case of death as a result of an accident. (e) Retirement under other circumstances Where an employee is required to retire in the national interest, the benefits will be long service gratuity and pension as provided for under the company's pension scheme. " 24. It was his submission that in terms of clause 9 (a) (iii), retirement benefits are the benefits payable out of the company's pension scheme and that clause 9 (a) (iv) provides that in addition to the said benefits, an employee who retires from service will be entitled to payment of three months' pay for each completed year served J18 P.1626 and pro-rata for any incomplete year. He argued that a literal interpretation of clause 9 (a) (iv) means that an employee who retires normally under clause 9 (a) is entitled to three months' pay for each completed year of service and pro rata for any incomplete year, in addition to the benefits due from the pension scheme. - 25. Mr. Nchito , SC also submitted that in order to determine what an employee is entitled to upon retirement, it is important to consider the other provisions of clause 9 regarding separation from employment and benefits payable. He contended that an examination of clause 9 reveals that in all types of separation, an employee is entitled to long service gratuity and pension benefits and that for normal retirement, clause 9 (a) (iv) provides that an employee is entitled to three months' pay for each completed year served and pro rata for any incomplete year in addition to the pension benefits. 26. He also argued that in the case at hand, the retirement letter provided that the respondents would be paid gratuity payment of three months' pay for each year served and pro rata for any incomplete year, cash in lieu of leave days, repatriation and J19 P.1627 pens10n ben efits. However, wh en th e respondent s' benefits were paid ou t, the t hree m onths' pay for each year served was described as long service gr atu ity and the resp on dents, therefor e, conten ded that they were not paid th eir retirem ent benefits as t h ey were only paid long service gratuity wh ich was their entitlem en t u n der clause 8 of t h e conditions of service. He referred us to clause 8 of the Zamtel condition s of service wh ich p r ovides that: I "Long service gratuity shall be payable in the following circumstances a) Normal retirement; b) Death while in service; c) Retirement on medical grounds; d) Voluntary or early retirement at the request of the employee; e) Discharge on disciplinary grounds." 27. State Counsel contended that these same circum stances were provided for under clause 9 (a), (b) , (c), (d) and (e) of t h e conditions of service on th e retirem en t or death of an employee in service. He then referred us to clause 8.3 which provides as follows: "The level of long service gratuity payment shall be three months' pay for each completed year of service and pro-rata for the incomplete year." J20 P.1628 28. Mr. Nchito, SC argued that a consideration of the provisions of clause 9 (a), (b), (c) and (e) reveals that employees of the a ppellant who retire early, normally or in n ational interest are treated in exactly the same way in that they are all entitled to long service gratuity in clause 8 of the conditions of service in addition to r etirem ent b enefits payable from the company's p ension scheme. He , therefore, contended that it was the appellant's intention that on retirement or separation from employment 1n the circumstances specified in clauses 9 (a), (b), (c) and (e) of the Zamtel conditions of service, an employee would be paid lon g service gratuity in a ddition to retirement benefits from the pension scheme. It 29. State Counsel s ubmitted that to give clause 9 (a )(iv) an interpretation that suggests that it provides for additional r etirem ent benefits other than gratuity would create incon sistency with clauses 8 and 9 (b) , (c), (d) and (e) of the conditions of service. Moreover, such a consideration would lead to a very unreason a ble r esult in that employees of the a ppellant who proceed on early retirement or who r etire normally could be entitled to double the J21 P.1629 level of gratuity paid to employees who r etire on medical grounds or in national interest. He relied on the case of Wickman Machine Tools Sales Limited v LG Schuler AG1 , where Lord Reid stated as follows: "The fact that a particular interpretation leads to a very unreasonable result must be a relevant consideration. The more unreasonable the result, the more unlikely it is that the parties can have intended it and if they intend it the more necessary that they shall make their intention abundantly clear." 30. It was State Counsel's submission th a t there was n o way that the appellant would have intended for the respondents to be paid double gratuity upon retirement. He argued further, that the finding by the court below th a t the respondents were entitled to long service gratuity a nd retirement p ack ages was unten able at law as it results in absurdity. He, therefore , contended that t h e a ppellant should succeed on this ground as the respondents were paid their retirem ent benefits in full in line with clau se 9 (iv) of the appellant's terms and conditions of employment. 3 1. On the issue of allowances, it was submitted t h at the court below m isdirected itself when it held that the r e spondents were entitled J22 P. 1630 to retirement packages at the rate of 3 months' pay inclusive of allowances as well as allowances on the paid gratuity and repatriation. That this was so because clause 1 of the appellant's conditions of service defines the word 'salary' as not inclusive of allowances. Therefore, State Counsel contended, the respondents were not entitled to be paid allowances on gratuity and repatriation already paid out. • 32. Mr. Nchito , SC further submitted that the respondents were paid all their dues in line with the Zamtel conditions of service which were applicable to them at the date of separation from employment. He referred us to the case of Maamba Collieries Limited v Douglas Siakalonga and Others2 , where we stated - that: "This court's reasoning in the case of Professor Ra m Copa! (Dr) v Mopani Copper Mines Plc was that when computing terminal benefits of any employee , the existing conditions of service at the t i me of separation, have to be used for computing such benefits. " 33. State Counsel argued that it was absurd for the respondents to rely on the principle of unilateral variation of fundamental terms J23 P. 1631 of employmen t b ecause the respondents were aware of the Zamtel con ditions of service bu t chose to con tinu e working under the same condition s withou t raising any obj ection s. In support of th is ar gum ent, h e cited t h e case of Meamui Kongwa v Zambia National Commercial Bank Limited3 , wh ere this Court held that: • "Where an employee is aware that her conditions of service have been varied without her consent but continues in employment, she is deemed to have acquiesced to the variation of the contract." 34 . It was his con tention t h at the r espon dents having been aware of the Zamtel con ditions of service, acquiesced to t h e variation and cannot seek to challenge th e changes made many years lat er. He therefore, su bmitted that t h e respon dents ' repatriation and gratuity were p rop erly paid wit h out inclusion of allowances as provided for in th e Zamtel conditions of service. 35. In arguing ground three , Mr. Nch ito, SC referred us to clau se 9 (h) (v) of th e a p pellant's con dition s of service wh ich provides that: "An employee who has been retired shall continue to receive housing allowance until the benefits accruing from the company shall have been paid in full except for benefits from the National J24 P.1632 Pension Scheme Authority which is not administered by the company." 36. He contended that clause 9(h)(v) is very clear in that it only applies to employees whose benefits have not been paid in full. However, in the present case, the respondents were paid all their dues and as such, they are not entitled to any payment under this clause. It was, therefore, his submission that the court below misdirected itself when it awarded the respondents payment under this clause notwithstanding that their benefits were paid in full upon separation from employment. 37. In arguing ground four, Mr. Nchito , SC referred us to the judgment of the court below at page J31 , where the learned trial Judge made the following pronouncement: "On the whole, the plaintiffs succeed in all their claims and are awarded interest from the date of cause of action until judgment and thereafter at the current lending rate as determined by the Bank of Zambia." 38. He submitted that the above award was a misdirection at law and relied on the case of Bank of Zambia v Caroline Anderson and J27 P.1635 Compensation Scheme v West Bromich Building Society9 when he said that: - "The 'rule' that words should be given their natural and ordinary meaning' reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had." We have applied this general principle in this jurisdiction. We did hold, in the case of Mazoka and Others v Mwanawasa and Others 10 that: "It is only if there is ambiguity in the natural meaning of the words and the intention cannot be ascertained from the words used by the legislature, that recourse can be had to other principles of interpretation." Although what was in issue in that case was a legislative enactment, the principle also applies to the interpretation of other legally binding instruments." 42. According to Mr . Mwitumwa, t h e question for determination is, therefore, what is the natural and ordinary meaning of th e words "retiremen t ben efits" in clause 9 of the appellants' conditions of service? He in vited us to apply the literal rule in interpreting the conditions of service , con tending that th ere are no ambiguities to th e cond ition s of service that may necessitate recourse to other J28 P.1636 rules of interpretation. It was his submission that in line with the parol evidence rule, no oral evidence tendered before Court that seeks to add, subtract or in any way alter the meaning of the conditions of service is admissible and should be taken into consideration. - 43. He argued that when an agreement has been reduced to or recorded in writing either by requirement of law or agreement of the parties, extrinsic evidence is in general inadmissible to contradict, vary, add or subtract from the terms of the documents. To support this argument, Mr. Mwitumwa referred us to the learned authors of Phipson on Evidence, 15th Edition who state at paragraph 421 that: "When a transaction has been reduced to, or recorded in writing either by requirement of law, or agreement of the parties, the writing becomes in general, the exclusive record thereof, and no evidence may be given to prove the terms of the transactions except the document itself or secondary evidence of its contents." 44. He also relied on the case of Rodgers Chama and 4 Others v Zambia State Insurance Corporation 11 , where this Court held J29 P.1637 that: "Parol evidence is inadmissible because it tends to add, vary or contradict the terms of a written agreement validly concluded by the parties." 45. Counsel, however, submitted that should the Cou rt find an ambiguity in the conditions of service, the same should be resolved in favour of the respondents in line with the contra proferentum rule as the appellant is t h e author of th e said conditions and the respondents were mere beneficiaries and should not s uffer consequences of such ambiguity. He referred us to Black's Law Dictionary, 8 th Edition which defines the contra proferentum rule at page 352 as fallows: "The doctrine that in interpreting documents, ambiguities are to be construed unfavorably to the drafter." 46. We were further r eferred to the Indo Zambia Bank Limited7 case where t h e contra proferentum rule was applied against the employer which drafted the conditions of service . 47. Mr. Mwitumwa, therefore, s ubmitted that this Court should a pply the literal rule and should ignore any testimony that tends to add J30 P.1638 to, subtract from or vary the express provisions of the conditions of service in line with the parol evidence rule. 48 . Counsel contended that the respondents are claiming retirement packages und er clause 9 (a) of the Zarn tel conditions of service. He referred us to their retirement letters in the record of appeal which showed that they were only paid long service gratuity and that t h e 2 nd respond ent gave oral evidence to that effect. He pointed out that apart from long service gratuity that accrued under clause 8, the respondents were also entitled to a retirement package under clause 9 (a). 49. It was his submission that the use of the word 'shall' in both clauses 8 and 9 of the conditions of service, made it mandatory for the appellant to pay both the lon g service gratuity and retirement package. He argued that it is n ow a well established rule that the word 'shall' does not provide for discretion unless a different intention appears. Counsel cited the Violet Kasenge Bwalya6 case, where it was held that: "The emphasis is on the word 'shall', which denotes a mandatory or preemptory requirement as opposed to discretion which would J31 P . 1639 have arisen from the use of the word 'may' .. . the word 'shall' indicates that something must happen or somebody is obliged to do something because of a rule of law." 50. Mr. Mwitumwa also referred us to Black's Law Dictionary, 7 t h Edition which defines the word 'shall' at page 1379 as follows: "Has a dut y to; more broadly, is required to." 51. Counsel further submitted that it was mandatory for the appellant to pay the respondents their retirement b enefits inclusive of allowances. He argued that the inclusion of allowances was based on the fact that under clause 9 (a) (iv), retirement benefits were to be paid at the rate of th ree months pay for each year served and that the reference to 'pay' includes allowances. He added that the interpretation section of the conditions of service under clause 1 (b) of the conditions of service defines 'basic salary' as not including allowances and t h erefore, the reference to 'monthly pay' includes allowances in t h at if it did not, then the respondent could have specifically referred to 'basic salary'. J32 P.1640 52. Reliance was also p laced on the case of Zambia Tele communications Company Limited v Ireen Simate, Perine C Zulu and 54 Others 12 , where the Court of Appeal held as follows: "The view we take is that Zambia Telecommunications Company Limited v Felix Musonda and others 13 dealt with long service gratuity only. In this case, it is non-contentious that long service gratuity was supposed to be based on the last drawn basic salary. The case before us, is similar to the James Mankwa Zulu and others14 case in that the word 'salary' was not defined in the conditions of service. The word 'salary' therefore accordingly means salary plus allowances. As regards grounds two and three, we are inclined to accept the submissions made by the respondent's advocates. The learned trial judge rightly directed himself when he found that as regards conditions of service for non-represented staff the benefits provided for under clause 8 are different from those provided for under clause 9. It is our measured view that clause 8 pertains to long service gratuity only. Clause 9 pertains to benefits on retirement which shall be in accordance with the company's pension scheme and in addition to the retirement benefits accruing from the pension scheme, a retiree shall be entitled to payment of three months' pay for each completed year of service and pro rata for any uncompleted year served. The drafters have made it perfectly clear that the payments to be made under clause 9 (iv) are mandatory by using the word 'shall'. The fact that these were to be paid in addition to the retirement benefits accruing from the pension scheme can also be deciphered. J33 P . 1641 The intentions of the parties must be put into effect no matter the sentiments of the appellant which to us have come as an aforethought. The view we take is that there will be no unjust enrichment on the part of the respondents should their conditions of service be applied as interpreted above. The lower court's findings on clauses 8 and 9 were supported by the evidence and fortified by the case of Indo Zambia Bank v Mushaukwa Muhanga. 7 Therefore, we find no reason to interfere with them. For the reasons we have given above, we find no merit in the appeal and hereby dismiss it with costs which may be taxed in default of agreement." 53. Counsel accordingly prayed tha t although the foregoing authority is only persuasive, this Court s hould come to a similar conclusion. 54. Regarding ground two, Mr. Mwitumwa submitted t h at in view of our recent d ecision in the case of Geoffrey Muyamwa and 88 Others v Zambia National Commercial Bank15 , the respondents would concede this ground. 55. The respondents' brief submission in response to ground three is that the housing a llowance is payable if t h e Court finds that the respondents are entitled to the retirement p ack age being claimed. 56. In respon se to ground four, Mr. Mwitumwa referred us to Order J34 P.1642 36 rule 8 of the High Court Rules which provides that: "Where a judgment or order is for a sum of money, interest shall be paid thereon at the average of the short-term deposit rate per annum prevailing from the date of the cause of action or writ as the court or judge may direct to the date of judgment." 57. We were also referred to the cases of Indeni Petroleum Refinery Company Limited v V. G. Limited1 6 and Kapiri Glass Products Limited v Maruti Oil Industry Limited17 on the principle governing th e award of interest. 58. Mr. Mwitu mwa accordingly submitted that it was within the discretion of t h e lower Court to award interest from the date of the cause of action as that was when the money was due and the respondents ought to have been paid b u t were not. He argued that the respondents were kep t out of their money as it remained in the hand s of the appellant. As su ch , the learned trial judge was on firm groun d to award interest from the date of the cause of action. Decision by the Court 59. We have considered t h e evidence deployed by t h e parties in t h e court below, the judgment appealed against and the written as well J35 P.1643 as oral arguments of the parties. 60. Ground one assails the lower court's finding that the respondents were entitled to a retirement package inclusive of allowances. 61. This ground of appeal is twofold: the first limb being that the respondents were not entitled to the payment of a retirement package in addition to gratuity; and the second relates to the respondents' alleged entitlement to the inclusion of allowances in their retirement package. The issue of allowances is the central theme of ground two and we will, therefore, consider this issue when determining the second ground of appeal. 62. As aptly submitted by both counsel, the determination of this ground centres on the interpretation and application of clauses 8 and 9 of the Zamtel conditions of service. The appellant contends that employees who retired early, on medical grounds and in national interest were treated the same in that they were all entitled to long service gratuity in clause 8 and pension benefits payable from the company's pension scheme and the same entitlements applied to normal retirement. It was also contended that an interpretation of clause 9 (a) (iv) that suggests the payment J36 P.1644 of retirement benefits in addition to gratuity would create inconsistency with clauses 8 and 9 (b) , (c) , (d) and (e). That this would consequently lead to an unreasonable result whereby employees of the appellant who retire early or normally could be entitled to double gratuity unlike those retiring on medical grounds or in national interest. 63. We think that in interpreting clauses 8 and 9 of the appellant's conditions of service, regard must also be had to their historical perspective. As correctly argued by Mr. Mwitumwa in his oral submissions, clause 30 of the ZIMCO conditions of service, which is in the record of appeal contained the initial clause on long service gratuity. This clause was maintained in the current Zamtel conditions of service as clause 8. These conditions of service, which came into force in 1994, contain an additional retirement package in clause 9. To the extent relevant to this appeal, clause 8 provides as follows: "8 LONG SERVICE GRATUITY 8.1 Eligibility Long Service Gratuity shall be paid in the following J37 P.1645 circumstances: a. Normal retirement b. Death while in service c. Retirement on medical grounds d. Voluntary or early retirement at the request of the employee 8.2 8 .3 The level of Long Service Gratuity payment shall be three months pay for each, completed year of service and pro-rata for the incomplete year. 8.4 ... " 64. Clause 9 was reproduced earlier at pages J 15 to J 1 7 under paragraph 23 of this judgment. In this case, it is plain to us that according to clause 8, an employee who goes on normal retirement, voluntary or early retirement is entitled to long service gratuity. And according to clause 8.3 the level of such gratuity is three moths pay for each completed year of service and pro-rata for any incomplete year. In terms of clause 9(a) (iv), such an employee is again entitled to a retirement package of three months pay for each completed year of service and pro-rata for any uncompleted year served. 65. Albeit State Counsel lamented during oral submissions that clauses 8 and 9 were drawn in very unhappy terms and there was J38 P.1646 recklessness which has created an absurdity, h e nevertheless reiterated that it could not have been the appellant's intention to make double payments under clauses 8 and 9. The view we take is that if it was the appellant's intention to only pay gratuity on retirement of an employee under clause 8 which was a carry over from the ZIMCO conditions of service, the appellant could not have included a new clause (clause 9) in the Zamtel conditions of service introducing another benefit for a retiring employee . 66. As we see it, the inclusion of clause 9 (a) (iv) suggests that it is an a dditional b enefit to the gratuity payable under clause 8 . The two clauses set out separate conditions of service . Clause 8 sets out the entitlement relating to long service gratuity, while clause 9 deals with normal and early retirement benefits, among others. Both benefits under the two clauses are in addition to the benefits accruing from the pension scheme. Stated differently, the two clauses stand on their own feet and to that extent, they must be construed or understood in their own contexts. We , therefore , have no hesitation in accepting the trial Court's opinion that the entitlements in clauses 8 and 9 cannot be equated. In the view .. J39 P.1647 that we take, the entitlement in clause 8 is basically paid in appreciation or recognition of an employee's long service while the one in clause 9 is a retirement benefit. In the circumstances, we do not agree with State Counsel that the two clauses create a double payment, notwithstanding that the level of payment happens to be the same. 67. Mr. Nchito , SC also spiritedly argued that to give clause 9(a) (iv) an interpretation which suggests that it provides for additional retirement benefits other than gratuity would create inconsistency with clauses 8 and 9(b) (c) (d) and (e) of the conditions of service. Further, that such a consideration would lead to a very unreasonable result in that the appellant's employees proceeding • on early or normal retirement would be entitled to double the level of gratuity paid to employees who retire on medical grounds or in national interest. 68. We think that this argument is flawed. Our view is that while clause 9(b) , (d), and (e) specifically provide for the payment of gratuity and pension benefits, clause 9 (a) (iv) and (c) rela ting to normal retirement and early retirement respectively, states that an J40 P.1648 employee would be entitled to pension benefits in addition to 3 months' pay for each completed year of service and pro rata for any uncompleted year served. The reference to "3 months' pay ... " in clause 9 (a) (iv), as opposed to "long service gratuity" in the context it is expressly provided for under clause 9 (b), (d) and (e) suggests that the two are separate entitlements. Had the appellant intended the "3 months ' pay'' to refer to the "long service gratuity", then it would have explicitly stated so, as is the case with clause 9 (b), (d) and (e). 69. For the foregoing reasons we opine that the principle in the Wickman Machine Tools 1 case quoted by State Counsel, although good law, is not relevant to the facts of this case . 70. It is apparent to us that the appellant is seeking to add to or vary the express provisions of the conditions of service authored by itself to the detriment of the respondents. In other words, the appellant wants this Court to rewrite its conditions of service, having realized the negative impact of its recklessness in drafting the conditions of service. We must be emphatic in stating that it is not part of the mandate of this Court or any other court for that • J41 P.1649 matter, to 'fix' parties' lapses which are self-inflicted. In the Indo Zambia Bank Limited 7 case, we held as follows: "Moreover, this document on 'terms and conditions of employment' was prepared by the appellant itself. If the insertion of the words 'permanent and pensionable' was as a result of careless drafting, the appellant surely shot themselves in the foot. Under the contra proferentem doctrine, the document has to be construed against them, and in favour of the respondent." 71. Similarly, in the present case, if the insertion of "3 months' pay for each year served" in clause 9 (a) (iv) as opposed to "long service gratuity" was a result of careless drafting, the respondents should not be made to suffer the consequences of such drafting. We also find comfort in the following persuasive opinion of Lord Pearson • (with Lord Guest, Lord Diplock and Lord Cross of Chelsea concurring) in the case of Trollop and Coils Limited v Northwest Metropolitan Regional Hospital Board19 at pages 266 - 267: I prefer the views of Donaldson J and Cairns L J as being more " orthodox and in conformity with the basic principle that the court does not make a contract for the parties. The Court will not even improve the contract which the parties have made for themselves, however desirable the improvement might be. The Court's function is to interpret and apply the contract which the parties have made • J42 P.1650 for themselves. If the express terms are perfectly clear and free from ambiguity, there is no choice to be made between different possible meanings: the clear terms must be applied even if the court thinks some other terms would have been more suitable." 72. In concluding his arguments relating to ground one, Mr. Nchito, SC urged us to sustain the appellant because the respondents were paid their retirement benefits in full in line with clause 9(a) (iv) of the appellant's terms and conditions of employment. 73. We have difficulty appreciating State Counsel's argument that the respondents were paid their benefits pursuant to clause 9 (a) (iv) of the conditions of service. We say so beca use a perusal of the notices of retirement on the record, which were sent to the respondents, do not state that their benefits would be paid under • clause 9 (a) (iv). For instance, the notices to the 2 nd and 3 rd respondents similarly state in the r elevant part as follows: "On retirement you will be entitled to the following benefits: 1. Gratuity payment of three (3) months salary for each completed year of service and pro-rata for the incomplete year. 2. Cash in lieu of leave days. 3. Repatriation allowances of two months salary. • J43 4 . Pension." P.1651 7 4. Our observation in the preceding paragraph is fortified by the fact t h at the level of long service gratuity under clause 8.3 and the payment due to an employee retiring from service under clause 9 (a) (iv) is the same. Absent a specific clause in their notices of termination and since the payment received by the respondents was termed 'Gratuity payment', it can only mean one thing and one thing only - that they were paid under clause 8 and not clause 9 (a) (iv) of the conditions of service. 75. For these reasons, we affirm the lower Court's finding that the respondents are entitled to payment of retirement benefits under clause 9 (a) (iv) of the conditions of service in addition to the long service gratuity they received. Ground one, therefore, has no merit and we accordingly dismiss it. • 76. In ground two, the appellant attacks the finding by the court below that the respondents were entitled to allowances on gratuity and repatriation which were paid to them. The appellant's contention is th at clause 1 of the conditions of service excluded allowances in • J44 its definition of 'salary' and that the respondents were aware of these conditions but never raised any obj ection to them. P. 1652 77. This grou nd has been properly conceded by the respondents on the basis of our recent decision in the Geoffrey Muyamwa 15 case. At the hearing h owever, Mr. Mwitumwa qualified the concession by submitting that if this Court found that the package which was paid to the respondents was made under clause 9, then by virtue only, of the reference to 'monthly pay' as opposed to 'basic salary', the respondents are entitled to a payment of allowances in addition to wh at was paid to them. 78. The appellant's conditions of service define 'basic salary' under • clause 1 (b) as: such annual remuneration that an employee receives as salary " according to salary scales. Such salary e x cludes allowances." (Emphasis added) 79 . Whether it is 'month ly pay' or 'basic salary', this is nothing but an engagement in semantics. Th ey both refer to an employee's monthly r emuneration for providing labour . The appellant's J45 P.1653 conditions of service as defined above are unequivocal that such r emuneration excludes allowances. We , therefore, agree with State Counsel that the respondents' gratuity and repatriation were properly paid without the inclusion of allowances in accordance with the Zamtel conditions of service. We similarly held in the Geoffrey Muyamwa 15 case as follows: "The effect... in the light of the respondents' plight is that upon migration to the ZANACO condition of service, which they did so freely and willingly, they lost the right to the benefit of the "Penza letter" on termination. Their terminal benefits are to be computed in accordance with their conditions of service at the point of exiting which are the ZANACO conditions of service which did not provide for inclusion of allowances in computing terminal benefits." 80. We , therefore, find m erit in this ground of appeal. 81. The gist of ground three is that the lower court misdirected itself by finding that the respondents were entitled to housing allowance from the date of retirement to the date of payment of retirement benefits. 82. The claim for housing allowance is premised on the provisions of clause 9 (h) (v) of the Zarn tel conditions of service which states that .. J46 P.1654 this allowance shall be paid to employees whose benefits have not been paid in full upon retirement. 83 . We earlier held in this judgment when determining the first ground of appeal, that the respondents are also entitled to terminal benefits under clause 9 (a) 84. (iv) of the conditions of service. As these benefits were not paid to the respondents at the time they were retired and have remained outstanding to date, it accordingly follows that they are equally entitled to the payment of housing allowance from the time they were retired until such time that the outstanding retirement benefits are settled in full. Ground three , therefore, lacks merit and it is accordingly dismissed. 85. In ground four, the appellant contends that the court below erred by awarding the respondents interest from the date of cause of action as opposed to the date of writ. On their part, the respondents contend that it was within the lower Court's discretion to award interest from the date of cause of action because that is when the money was due. J47 P.1655 86. In the manner Order 36, rule 8 of the High Court Rules is couched, there can be no doubt that it gives discretion to the court to award interest from the date of action or writ. However, it must be underscored that such discretion must be exercised judiciously. The practice of the courts as is evident from various judgments, has been to award interest from the date of writ. The rationale for this approach is not hard to discern. Awarding interest from the date when the cause of action arose to a litigant who sits on his laurels for years before seeking legal redress would be reckless and an irresponsible exercise of judicial discretion. 87. In this case , the record shows that the 1st respondent, 2 nd respondent and 3 r d respondent retired in 2007, 2008 and 2009 respectively. That was the time their respective causes of action arose. The writ of summons however, shows that the trio commenced this action on 14th June 2011, almost four years from 2007 in respect of the 1st respondent, for instance. In the circumstances, it would be an improper exercise of judicial discretion to award him interest from 2007. J48 P.1656 88. We therefore, have no hesitation in agreeing with the appellant that the lower court fell in error by awarding the respondents interest from the date of cause of action. We accordingly find merit in ground four. Consequent upon this finding, we award simple interest at the average short-term deposit rate from the date of the writ up to the date of this judgment and thereafter, at the average lending rate as determined by the Bank of Zambia up to the date of full payment, on the amounts found due as payable to the respondents. Conclusion 89 . The net result is that the appeal is partially successful to the extent indicated in this judgment. Consequently, we order that the parties shall bear their own costs, h ere and in the court below. ~~--~-~~ l f~ M.8:-Mwanamwambwa DEPUTY CHIEF JUSTICE J49 P.1657 SUPREME COURT JUDGE \ M. Musonda r SUPREME COURT JUDGE