Zimco Limited (In Liquidation) and Anor v Michael Malisawa & 17 Ors (SCZ APPEAL NO. 139/2002) [2004] ZMSC 140 (9 March 2004)

, ,·, ' . • • IN THE SUPREME COURT OF ZAMBIA HOLDEN AT KABWE AND LUSAKA {Civil Jurisdiction) SCZ APPEAL NO.139/2002 ZIMCO LIMITED {IN LIQUIDATION) ZAMBIA PRIVATIZATION AGENCY 1 ST APPELLANT 2ND APPELLANT AND MICHAEL MALISAWA & 17 OTHERS RESPONDENTS Coram: Sakala, CJ., Mambilima and Silomba JJS on 5th August, 2003 and 9th March, 2004 For the Appellants: Mr. M. M. Mundashi of Mulenga Mundashi and Company. For the Respondents: Ms. J. W. Nyirongo of Aquar Chambers and Mrs. N. Mutti of Lukona Chambers. JUDGMENT Sakala, CJ., delivered the Judgment of the Court. This is an app~91 against a Judgment of the full bench of the Industrial Relations Court in which the parties were each partially successful in that the Respondents succeeded on the award of interest although the period was reduced on their claims, while they were unsuccessful on the claim for a Social Tour and Club subscriptions to be incorporated into the salary. There was also a cross-appeal by the Respondents to have certain parts of the Judgment varied. • I • This appeal has a long protracted history of the matter having been heard before different courts starting with three different Registrars of the Industrial Relations Court, two different single Judges of the Industrial Relations Court, then before two full benches of the Industrial Relations Court. The case had also been before this Court. This is a second time that it is before this Court. The case has also a history of payments of monies having been made to the Respondents first by a private agreement and subsequently through three consent • orders made on different dates. One such consent order leading to the present appeal was made in this court on the 2ih of April 2000, in which by consent, this court, among others, ordered that the matter be remitted to the Registrar at the Industrial Relations Court for assessment of the outstanding terminal benefits. Following upon that order, the matter came up for hearing before the Acting Registrar. The Acting Registrar considered evidence from three witnesses called by the Appellants and from three witnesses called by the Respondents. She also considered e the detailed submissions on behalf of the parties. The learned Registrar observed, from the evidence of the parties, that the complaints related to allowances which the Appellants thought were not payable and that the letter from the Hon. Minister of Finance did not indicate which allowances were to be incorporated into the salary and what were benefits. The Court also observed that both the Appellants and the Respondents agreed that the allowances or benefits not taken into account were • housing allowances, Club Membership and Social Tour. The Registrar found that these allowances or benefits were incentives or fringe benefits which the Appellants should have taken into account to arrive at what the Respondents were due. Thus, the learned Acting Registrar directed that the Appellants should pay the Respondents housing allowances, Club Membership subscriptions and Social Tour allowances . On interest, the Acting Registrar accepted the Respondents' assertion that interest was agreed at 45 percent. There was no counter argument by the Appellants to the Respondents' assertion on interest. Accordingly, the Acting Registrar ordered that the Appellants should pay the Complainants 45 percent interest as agreed on amounts paid on the allowances claimed . The Appellants appealed to the full court against this • judgment of the Acting Registrar. The ground of appeal against the judgment of the Acting Registrar to the full court were; that the acting Registrar erred in law and in fact by holding that Club Membership and Social Tour benefits be incorporated into salaries for purposes of calculating terminal benefits without due regard to conditions of service which were applicable; that the acting Registrar erred when she held that interest of 45% be paid on amounts • that had been previously paid under consent orders; and that the acting Registrar erred in law and fact when she held and or assumed that the consent Judgment of the Supreme Court did not entail a full hearing de nova on the assessment but only intended to consider why the balance should not be paid and as a result of the • approach taken by the Acting Registrar, the evidence of the Appellants on assessment was totally and or by large ignored. The last full bench of the Industrial Relations Court considered each of the grounds. Before dealing with the specific grounds of appeal, the full bench accepted that the other full bench had determined the principal sum to be Kl,032,136,733=00. The full bench refused to overturn this decision of the other full bench. • On the first ground attacking the inclusion of Club Membership and Social Tour benefits into salaries for purposes of calculating terminal benefits; the full bench held that the Appellants were on firm ground because, according to the court, you cannot incorporate a one-off payment into allowances allowable for calculating terminal benefits. On this ground, the appeal was allowed. • On the ground of awarding 45% interest, the court ordered that all monies attracted interest from date of complaint until payment. The Appellants appealed to this court against the judgment of the full bench of the Industrial Relations Court. The appeal was based on three grounds, namely; that the full bench of the Industrial Relations Court, sitting as an appellate court on a judgment on assessment of the learned Registrar of the Industrial Relations Court erred in law and in fact by holding that the full bench had determined that Kl,032,136,733:00 was ., the principal sum and that there was a consent order to that effect when there were no facts or circumstances to warrant such a holding as there was no such determination by any full bench and there was no consent order to that effect signed by the parties; that the full bench erred in law and fact by ordering that all the monies attracted interest from the date of complaint until payment and that the sum of K391,934,800 would attract interest at 45 percent until payment is made when the question before the full bench was whether the learned Deputy Registrar had not erred when she held that interest of 45 percent be paid on amounts that had been previously paid without consent order despite the fact that the consent order had no such provisions; and that the full bench erred in law and fact by not determining the issues raised in the two • other grounds of the appeal before it. On behalf of the Appellants, Mr. Mundashi relied on written heads of argument which he supplemented with oral submissions. According to both written and oral submissions, the three grounds of appeal appear to us to have been combined and argued as one with no direct arguments on ground three. We shall therefore treat the • arguments and the submissions in the manner they were presented before us. We note, however, that the thrust of the submissions is on the principal sum and interest. The summary of the written and oral submissions as we understand them is that the backwards and forwards movements of this case from court to court resulting in the numerous consent orders made, clearly demonstrate the confusion that led to the present appeal. It was argued that there was never a consent Judgment for the sum of Kl,032,136,733 which was upheld by a Judge in chambers. It was pointed out that Judge Lengalenga, in open court, rejected the Consent Order and held that there was an assessed figure of Kl,032,136,733. It was further pointed out that the Supreme Court did not uphold any Consent Judgment of Kl,032,136,733; and that it upset the Judgment of Judge Lengalenga and ordered an assessment. The Appellants contended in this court that the Registrar, without any reason, • disregarded the evidence of the Appellants and without giving any reason accepted the approach of the Respondents and simply added 45% interest on the Respondents' figures and also added Club Membership and Social Tour Allowances. It was submitted that the approach adopted by the Registrar in the assessment was strange and contradictory in that in one breath, the court took the view that its mandate from the Supreme Court was simply to determine whether the K391 Million or so was due; while in the other breath, the court went ahead and accepted the figures presented by the complainants as amounts due to them and simply to confirm an assessment that had • been disputed. According to the written submissions, what should have been done in the assessment was to recognize allowances that had not been taken into account and calculate them giving credit to amounts already paid. It was submitted that if this approach had been followed; it could have shown that the Respondents had been overpaid. But according to the Appellants, the Registrar refused to adopt this approach. And as a result and in contradiction and disregard of the Appellant's evidence, merely confirmed the alleged earlier assessment of Kl,032,136,733 and added Housing allowances, Club Membership and Social Tour Allowances. It was submitted that this was totally the wrong approach and in effect; the Registrar did not carry out any assessment at all. Mrs. Nyirongo on behalf of the Respondents also relied on written heads of argument which she supplemented with short oral submissions. In her short oral submissions, e she pointed out that the Respondents claimed the sum of Kl billion plus in the first assessment, but that although not given in one consent judgment was made up of three consent Judgments plus one private agreement. According to her, the fact of three consent Judgments and one private agreement is what adds to Kl billion Kwacha plus. She explained that during the first appeal to this court, the two consent Judgments had already been processed and settled and on account of the parties being in disagreement on the remainder of the claims, this court sent the matter back to the Industrial Relations Court; but while the assessment was in progress, the Appllents paid • on the third consent Judgment. She submitted that this was an admission of the assessment. She further explained that the total claim of Kl billion plus was paid before the assessment was completed and that interest formed part of the final assessment. ' 8 In the written heads of argument, it was submitted that the sum of Kl,032,136,773 was claimed as total sum due to the Respondents. It was also submitted that contrary to the arguments by the Appellants, the Respondents have been paid by the Appellants a total sum of Kl,032,136,773 through three consent orders and by a private agreement. She pointed out that the consent orders and the private agreement are all on record and make the total sum claimed and paid as Kl,032,136,773:00. The Respondents further argued that the consent order on which most of the Kl,032,136,733 was settled by the Appellants have not been challenged by either party. On the issue of interest, the Respondents argued that even the Appellants themselves conceded at various times that interest was payable on all amounts paid late. The Respondents concluded their written heads by pointing out that they had difficulties in following arguments on ground three as it was not clear to which grounds it referred. They urged the court to dismiss the appeal on all the grounds. e We have examined the Judgment of the full court of the Industrial Relations court and the full protracted history of this case. We have also addressed our minds to the detailed arguments and submissions by learned counsel. A careful examination of the arguments and submissions reveals that both parties were to a greater extent, re opening their cases as argued before the Registrar with minimum reference to the case ., 9 as argued before the full court. Despite the voluminous record and submissions, the issues can be very much narrowed down. In our considered opinion, whether the full bench determined that Kl,032,136,733 was the principal sum or not is of no consequence. Indeed, we agree with the Appellants that there was no Court order that that amount was the principal sum. But we are satisfied from the documentary evidence on record that the Respondents had all along been claiming Kl,032,136,733. There is also evidence on record that through three consent orders and a private agreement, all made at different dates, the Appellants settled the whole amount claimed totaling Kl,032,136,733. Although we agree that there was no determination by the full court that Kl,032,136,733 was a principal sum and that there was no consent order to that effect signed by the parties, the amount was the principal sum, settled through three consent orders and a private agreement. Ground one of appeal therefore must fail. • On ground two, the complaint is that the full court erred in law and fact by ordering that all monies attracted interest from date of complaint till payment and that the sum of K391, 934, 800 would attract interest at 45% until payment is made when the question before the full bench was whether the Registrar had not erred when she held that interest of 45% be paid on amounts that had been previously paid under consent orders when infact the consent orders had no such provisions. In dealing with the issue of interest the full bench had this to say:- "The second ground of appeal dealt with awarding 45 per cent interest on a global figure despite there having been payments on diverse dates. The philosophy underlying the payment of interest is that the Judgment creditor has been deprived the use of the money when it is in the hands of the Judgment debtor. Where money has moved from the Judgment debtor to Judgment creditor it ceases to earn interest. We therefore order that all monies attracted interest from the date of complaint till payment. Following this reasoning the K391,934,B00=00 will attract 45 per cent interest until payment is made." We cannot fault the full bench in its analysis of the philosophy underlying the payment of interest. However, the gist of the complaint was that the full bench was called upon to determine whether the Registrar had not erred to order interest on amounts previously paid under consent orders when the consent orders had no provisions for interest. Before dealing with the complaint in ground two, we wish to observe that according to • the record, most of the consent orders were made while the assessment was in progress. Infact, the Respondents' contention is that the full amount was settled before the assessment was completed. Thus, going by the analysis of the philosophy underlying payment of interest, the Respondents were still entitled to payment of interest, consent or no consent orders. The Registrar was here on firm ground to order interest on amounts paid because they were so paid earlier than the completion of the assessment, hence the order that interest be from date of complaint to date of payment. Ground two must also fail. There were no arguments on ground three. In any event, the ground is vague as it does not state the issues not resolved. This ground cannot also succeed. In the end the whole appeal is dismissed with costs to be taxed in default of agreement. We now turn to the cross-appeal. The cross appeal arises from dissatisfaction by the Respondents with some areas of the Judgment which the Respondents contend ought to be varied upon four grounds. These grounds are: that the Court misdirected itself on a point of fact when it made a finding that the learned Registrar worked out and the balance came to K391,934,800; that the court misdirected itself in law and in fact when it made a finding that the affidavit of Mwila Lumbwe was quoted out of context; that the court misdirected itself both in law and in fact when it held that "you cannot incorporate a one off payment into allowances for calculating benefits." and that the court failed to address itself to the issue of housing allowances as raised in and assessed in the court below, duly submitted by the Respondents. • • For the cross appeal, Mrs. Mutti relied on the written heads of argument filed with the court, supplemented by brief oral arguments. On ground one, she contended that it was the parties who calculated the amount of K391,934,800 based on the consent orders, in particular consent order of 9th June, 1999 and consent order of 2nd March a 2001. There was no re~ponse to this argument on behalf of the Respondents. We have considered the arguments on ground one of the cross-appeal. In the first place, the ground does not raise a point of law and hence no appeal lies to this court. Secondly, even if we agree with the Respondents that the calculations were made by the parties through the consent orders, the issue does not go to the route of the appeal but if the ground is raised merely to ask it to vary the Judgment to read as suggested, then the Judgment is varied accordingly. • On ground two, the complaint relates to the interpretation by the court of a passage of the affidavit of the liquidator which reads:- ''After arriving at the gross figure as above, deductions were to be made from total figure to take into account payments made in 1995, 1996 through consent orders in 1998 and 1991 and interest at 45% to be paid on a reducing balance. " According to the Respondents, as understood by the court below, interest was payable • on the global figure but according to the full bench, the passage did not support the Respondent in the appeal and was quoted out of context of their case as it meant interest was chargeable on the unpaid balance, that is what 'a reducing balance' means. The submission and argument on this ground was that there was no evidence that Mr. Mwila Lumbwe was quoted out of context. In our view, the issue was not one of evidence but of what Mr. Lumbwe said in his affidavit. If the Respondents understood Mr. Lumbwe to be saying interest was payable on the global figure by the cited passage, then the full court was on firm ground on its observation that he was quoted out of context. The passage cited, we agree, meant that interest was chargeable on the unpaid balance. We agree that, that is what was meant by 'a reducing balance'. Ground two of the cross-appeal cannot therefore succeed. Ground three attacks the full bench's holding that "you cannot incorporate a one off payment into allowances for calculating terminal benefits". This holding was made in support of rejecting the Respondents' claim for Club Membership and Social Tour benefits which had been included by the Registrar into salaries for the purpose of calculating terminal benefits. This ground of cross appeal in our view was well taken. In our considered opinion, if the Respondents were entitled to Club Membership and a Social Tour, whether a one-off payment or not, they were still benefits which had to be incorporated into a salary for purposes of calculating terminal benefits. This is so because these fringe benefits have a value. Thus, when computing the true earnings or true loss of earnings, they have to be taken into account. Ground three of the Cross Appeal must succeed. The Club Membership and Social Tour benefits ought to be incorporated into salaries for purposes of computing the Respondent's terminal benefits. The complaint in ground four is that the full bench did not address the issue of housing allowance as raised and assessed before the Registrar. We have some difficulties in understanding this ground of Cross-Appeal. The Respondents concede that they did not contest the housing allowance issue before the full court. The full court did not I -, 4 . ' • deal with the issue of housing allowances because it was not one of the grounds of appeal. It cannot be raised before us now. This ground of cross appeal cannot succeed. By their cross appeal, the Respondents were asking us to vary certain parts of the Judgment based on the grounds of the Cross-Appeal. There were no arguments in response to the cross-appeal. The cross-appeal has, in reality, been successful only on one ground based on Club Membership allowances and Social Tour benefits. The full ~ court's Judgment is amended to read that the Respondents are also entitled to have the Club Membership allowances and Social Tour benefits included into salaries when computing the terminal benefits. In the net result, the appeal is dismissed with costs to be taxed in default of agreement, while the cross appeal succeeds on one ground and Judgment is amended accordingly . • ~ ...................................................................... E. L. Sakala CHIEF JUSTICE .... 1 ........... = I. C. Mambilima SUPREME COURT JUDGE ··· ·····~······ ··· ····· ··· ·· ··· ·· ··-- S. S. Silomba SUPREME COURT JUDGE