Fitaliano Mwila and Anor v Indeni Petroleum Refinery Company Limited (2019/HP/0582) [2025] ZMHC 149 (26 December 2025)

J1 BLICo ·G!STRY. 3 > 50067, LUS · -IN THE HIGH COURT FOR ZAMBIA . A. T THE PRINCIPAL REGISTRY {C!VIi.. JURISDICTION) B~TWEEN: F'ITALIANO MWILA DICKSON CHITAMBO MWILA INDENI P1')'l'ROT~EUM REFINERY COMPANY. LIMITED .. 2019/HP/0582 1 s·r PLAIN'l'IFF 21m PLAIN''I'U'li' DEJ:l'Ell:O. Aii'r Befo?·e the Hon. Ml's. Justice R. Chibbabbuka on the 26th day of December, 2025. Fer the Plaintiffs: Mr. M Chiteba &.,. Mrs. P. M Likande, Messrs Mu1enga Mundashi Legal Practitioners F'or the Defe:r:dant: r.,frs. E. Bupe, In- house Counsel -------------------------------- . JUDGMENT. ' . Cases_n~fcrn:t1 to: .1. Reveille In.depe,~dent LCC us Jlnotech International (UK) Limited [2016] EV/CA Ciu +1-3 2. Zambia Breweries PLC vs Bztternon· Family Limited Selected Judgment No. 18 of.~'016 3. Ridiard. JJ. Chama and 2.13 Others Vs NAP. SA and Others Appeal No. 001 of2018 J.',,egisfo.tion referred to: ThE? Pensi~n Regulations Act No. 28 of .7 996 QJJi,e_r wot·1r.s referred to: fld.lsbury 's Laws of England Edition at pC1.ra 263, page 141 1.0 Introduction ]2 The plaintiffs took out a writ of summons and statement of claim. on 11th April, 2019 for the foliowing reliefs; 1. Damages for delay in payments of the con-ect benefits due to the plaintiffs; 2. Interest accrued on the benefits between the initial payinent Rnd the final payment; 3. Interest at the current commercial bank lending rate. 4, Cost,s of and occasioned by this action; and 5. Further or other relief that the court may deem fit. 2.0 The St,dcment of Claim The plaintiffs' case, according to the statement of claim, is that they are forrrier employees of the defendant.. During their employment with the defendant, thc~y were, in accordance with their individual conditions of service, all members of the lndeni Petroleum Refinery Company Limited Perision Scheme established and regulated under the Pension Regulations Act No. 28 of 1996 (hereinafter referred to as the ("Pension Scheme Regulation Act'') and to that extc.in.t, the defend~nt ~:as the _sponsoring employer of the said pension scheme. The pension scheme ~Na~. managed in accordance with the Trust Deed of 2009 (the "Trust Deed")' and the Pension Fµnd Rules made there under (the "Rules"). The pension scheme had been set up by the defendant as sponsoring employer with the principle objective· of accruing retirement benefits for the plaintiffs and other employees of the defendant whose benefits would be paid out in accordance with the 1ules 1.1pon the plaintiffs reaching retirement age. V/hen the plaintiffs became members of the pension s_cheme, it ~as a define_d benefit pension in nature. In accordance with principles, custom and usage in the pension industry or as ·expressly incorporated in the trust de~d of the pension scheme and the rules, the'! pension benefits are treated as ''defin~d" on the basis of amounts calculated and known in advance irrespective of contribut_ions made by the rpembers and its sponsoring employer. Somehme in September, 201_3, the J3 defendant, through its Managing Director Mr. Maybin Noole, in breach of the trust deed and the rules unilaterally migrated the pension scheme from Ll defined benefit plan to a ddined contribution pension plan. The plaintiffs were not given notice of the said migration nor did they consent to it. In accordance with principles, custom and usage in the pension industry, a "defined contribution" entails that benefits are paid on the basis. of a formula that refers to actual amounts contributed by the members of the scheme and the sponsoring employer. The following factors are taken into consideration; date of birth, pensio:r1 service, the date are joins the scheme, basic salary, com:rnunicatibn factors, retirement date and monthly contributions. Upon the plaintiffs retiring from the defendant company on.13th April and 25th Mny 2014, they were paid amounts which on further inquiry they ce.me to learn had been paid on the basis of the defined benefit plan a:nd pay slips of September, 2013;11:while still in service as opposed to a computation· of the last pay slip on norrna1 separation from. employment. The discrepancy resulted in an under:payrnent and therefore! the plaintiffs received a lower pension than they were ,entitled _to. More than a year after their retirement, the defendant ca.used to be:.,paid out of the pension scheme amounts, collectively referred to as the "Initial Paynients", on the basis of the defined contribution benefits based on September, 2013 calculated as follows: 1. In respect of the 1st plaintiff the sum of K278,36 l. O4 instead of K441_,310.61 thereby leaving a shortfall of K162,949.57; arid ii. In respect of the 2nd plaintiff the sum of K 175,929.40,_ instead of K274,O80.69 thereby leaving a shor1fall of K 98,151.29. In September, 2015 after negotiations between the parties, the defendant caused to be paid to the plaintiffs the difference between the defined benefit and the defin~d contribution, hereinafter referred to as the final payments. As a result of the initial ·wrong payment of their benefits on the basis of the defined benefits calculat~d in September, 2013 as opposed to the defined benefits of the last pay slip which occurrec,:l in 2014, April and May respectively and delay in payments J4 of the correct benefits due to them, the plaintiffs have lost value in respect of the said pension benefits clue to them. The defendant remains indebte4 to th.e plaintiffs who are entitled to and claim damager. and interest at the current commercial hank lending rate from the date when the amounts shou.ld have been paid at the correct retirement formula. 3.0 The Defence· The defendant filed a defence on 3rd . May, 2019 wherein it admits that the plaintiffs ,;,vere members of the pension scheme administered under the Zm:nbia State _ Insurance Corporation Pension Trust - Fund. (ZISC - PTF). That the pens.ion -scheme was managed under a pool and did not have and still has no approved and .executed trust deed and rules: and thus the plaintiffs will be put to strict proof of their claims. The averrnent under paragraph 5 of the statement o.f claim that the defendant set up the pension scheme as a sponsoring employer is admitted save for the averment that the benefits would be paid in accordance vdth tlic rule·s upon the plaintiffs reaching retirement age: The ·ccirrec:~ position is thafth~;e were no such rules and the benefits under tb.e .pension tiust wetc 1;aid on the basis of a-formula that took 1nto consideration inter alia the last sa!ary contributions. The defendant admits the contents of paragraiJh 6 in so fa:: as it states that the pension trust was a defin~d benefit pension plan in nature when the plaintiffs became members. The contents of paragraph 7 of the statement of cla_im that the pension benefits . - are treatP-d as ''defined" on the basis of amounts calculated and lcnmv-9- in advance_irrespective of contributions made by the men1bers and its sponsoring - - - employer are denied. The defendant averE: instead that the defined benefit scheme was designed in such a way that the benefits payabJe are defined using ~ formula that takes into consideration the length of service and final Sfth,uy (contribution into scheme) plus accn1al factor. Further that the benefit~, are calculated based on the formula known in advance that considers the last saJmy contributed wb.ile under the scheme~ which in the plaintiffs•· case \Var~ - 30th Septc1nber, 2013. The aver:inents under paragraph 8 of the statement of cla·i.m - . J5 ::- .,~~- that the defendant in breach of the trust deed and rules unilaterally migrated from the defined benefit plan to the defined contribution pension plan are denied. The defendant avers that the Indeni pension scheme, like all schemes,. is a separate legal entity managed by Trustees. As such, the employer has no contr·ol or1 the management of the scheme. Further, it was the Trustees, acti:11-g on their own volition, who decided that members should migrate from the defined benefit scheme to a definr;d contribution scheme. This was achieved through a resolution b_y_ the Trustees and affirmed by the Professional Insurar.1ce Authority (PIA). There is and was no trust deed a:11-d n.11.es duly executed which ai-e operational. The purporkd alleged breach of the rules is tile figment _of the plaintiffs' imagination: The defendant admits the contents of paragraph 9 of the statement of claim that a "defined contribution" entails that benefits are paid on the basis of a fornn.1.la that refers to actµal amounts contributed by the members of the scheme and the sponsoring employer. The. follo'wing factors are taken into cor'i'sideration; date· of birth, -I · pension service, date bne joined the scheme, basic salary, comm.unication factor, retirement date and monthly cor1tributions. The averrhent under paragraph 11 of the state,rnent of claim that the plaintiffs were underpaid is denied and that the defendant avers instead that after the· migration frori1 defined · benefits to defined contribution, pensions under the defined benefits scheme were paid . . taking into contemplation the last contribution which in this case was September, 2013. There was no underpayment whatsoever. The plaint iffs were paid ilieir benefits within nvo weeks of their retiremerit. With regards to the contribution under the defined benefits scheme, the purported delay was due to the migration from the defined benefit scheme to the d_efined contribution scheme, caused by novelty of the matter and the reluctance by ZSIC to transfer the funds from the defined .benefit_ scheme .t o the defined contributions schem_e. This process was run by the Tn1stees and not the defendant. After deliberation by the Trustees, the correct amounts were duly · paid under the defined benefit scheme using the formula as . oi:iposed to the t. :''; transfer values after actuarial evaluation because the plaintiffs had retired before the transfer was effected. The defendant rec.engaged the 2 nd plaintiff for close to two years_ to avert any challenges arising from the delay in payments from the defined benefit pension scheme. Any claim to damages is therefore denied. That the contents of paragraph 13 of the statement of claim that the de:fendant after negotiations between the parties paid the plaintiffs the difference between the defined benefits and the defined contribution is denied, and the dGfend.ant. av~rs alternatively that there were no purported negotiatiqns between the parties herein as the Tn1stees were fully in-charge of the running of the pension scheme . . and it_ was the said Trustees who finally prevailed ave~ ZSIC and paid out the pension. The averment that the plaintiffs lost value in respect oi the pension benefits d11e to them is denied and the defendant insists that there was no underpayment under _the defined benefit scheme. That the paym.ents were made in ~Q,c.ordance with .the formula devised which took into cbns·idcration the last contrip:ution. The plaintiffs are in no way entitled -to darnRges or interests as there ·was neither · a breach of the trust deed and rules no~ was there a1iy involvement.of the company in the management of the pension scheme. Further, whatever vvas due to the Plaintiffs was duly paid to the,m by the trustees of the pension scheme. Save in so far as is expressly admitted, the defendant denies each and every ?Jlegation in the statement of claim as if the same w~re trm'ersed seriatirn. 4.0 R.eply TbF.: plaintiffs on_ 3rct June~ 2020 filed a reply to the defendant's defence in \. Vhich the plaintiffs joined issue with the defend.ant. 5. 0 The Trial 5.1 '.!'he Plaintiffs' Case The plaintiffs called 1 witness. 5.1.1 PW's Te!iitimony J7 PW was Dickson Chitambo Mwila, the 2 nd plaintiff herein. His testimony was that he joined the defendant company in 1991 as a Clinical Officer, upon conditions of service which contained a condition that he would be under the company's ,._ group life insurance of ZSIC under defined benefits until retirement. The defined benefit scheme has a formula which includes the period a person has served, the age and the annual salary in the year the person is separating from the institutio1:1: which is cardinal. The accrued factor is determined by the fund administrators annually and the age of 55 years is used as a denominator. He only saw the Rules and the Trust Deed at the end of his service. When he retired in May, 2014, he was given the repatriation thereafter he had . . to wait for his retiren1ent package. On the 4 th or 5th November, 2014, his bank account was credited and when he inquired from the bank, they referred him to his employer. PW wrote an email to his employer· requesting a statement of the money credited, which is the initial payment. He requested for the statement so that :he could understand how the credited sum of K 175,000, 00 plus was arrived at. The Human Resource became hostile and failed to gi_ve a convincing reason so that a reconciliation could be done. The fund Administra.tor1 Alexander Forbes, contacted him and informed him that the defendant had received 'his monies in J'une 2014, which amount was lower than what he had expected·. PW referred to the document at page 183 of the plaintiffs' bundle of documents as the document that shows payn~ents of pension. The amount indic;ated 1s K 548,161.38 and he was supposed to receive 50% of that arnount which is K 274,080,69.00 but he did not. In November, 2014 he recei\:ed only K 175,000.00 which is what prornpted him to inquire. It took over a year for him to be p ai_d the balance, which was paid in September, 2015. The sum of K 27~J.,089.69 is not the total amount he was entitled to because defined benefit under ZSTC t ook the view that calculations needed to be made based on the iast. pay slip, which was not the case. In the plaintiffs' case, calculations were based. on the September, 2013 pay slips. He retired on the 31 st May, 2014. The September, 2013 pay slip J8 was used because the defendant stopped contributing to the Indeni Pension Scheme in September, 2013 without his knowledge or conse11t. There vvas an incren1ei:it to his salary in January, 2014, although he could not remember the percentage. In the year 2013, he was getting paid K9,000.00 while in 2014 he started getting Kl0,000.00. The input on the last pay slip he received was different. Alexander Forbes relied on the 2013 pay slip. The document o.:n page · 175 is his pay slip for September, 2013 irhich has a basic pay of K 9,583,.20. On page 181. is his last pay slip under the permanent pension agreement of 2014 with a basic pay of Kl0,926.02. The defendant's Human Resource was informed of the discrepancy but notb)ng was ~one about it. He arrived at a different am?unt as his package because he used the defined.benefits formula which uses the annual basic pay by 12 months then ~he nul.'!1ber of years served, the contribution to the pension scheme on a monthly basis, the accrual factor and denqmination age of · 55 years. Th~ document on page 184 of the plain~ffs' bundle of documents reflects the calculation he used to cornpute how much he was worth based on the last salary ofIVlay, 2014. He was eventually paid the sum ofK274,080.69. He was expecting to be pa1d the sum of K315,407.22 as 50%. He and the 1st plaintiff ,vere each underpaid in the sum of K82,619.69. The defendant's averment tha~ it had no control· over the management ·of the . Pension Sche1ne is not true. The defendant as sponsor took charge as evidenced , . .. ' by the documents sub1nitted before this court . in_ the plaintiffs'. qundle of document:3. The funds from the Fund Administrator "Yere_ transferred. to the defendant's account. It was the defendant's Human Resource v~ho wm, instructing finance to pay. The Trustees comprised of three ,people from . management an.d three people from the Union. The Chairman of the defined benefits wrote a letter dated 15th July, 2015 to the defendant's CEO to complain ab~ut ·the winding up of the defined benefit scheme and that it haci-been hijacked by the defendant's management. He also v1rote to the PIA in September, 2014· compiaining that the process ·had been hijacked by the defendant's managerneat. J9 There was a unilateral change frorh the defined benefit scheme to defined contribution in September, 2013, as no information was given to them of the change. The principal of defined benefit, Mr. Spencer Mwape, also wrote a report around the same time in December, 2015. The process of winding up of the defined benefit was approved by PIA in July, 2014 after he had lefL PWl prayed for damages for the wrong calculation of the plaintiffs' pension, and in_terest. Cross examination of PW In cross examination, PW replied as follows: The Trust Deed a~d RuJes produced _ in this matter are not signed by the parties but were followed by the qefepdant's management.. . A,lthough not signed, the Trust Deed and Rules were· agreeq to in principle. The e1nployee and trustees were also following the. Rule_s and Trust Deed. The Trustees were ideally supposed to be in charge of the Pension Scheme. The Trustees-have not been sued but the sponsor. The Board of Trustees is an independent entity only on paper. His pension· was calculated by Alexander . . · . ,, . . •.. . . . . . , Forbes as the B'i..md Administrator, whom he engaged when he realised his pension was not to his expectat1on. His pension problem did not arise a.s a result of the· calcul~tions by Alexander Forbes but the def end ant v{ho stopped re;nitting . . . contributions whilst he was still in service as per the 2013 pay slip and a bank staterrient showing th~ refund of K14,000.00 he received in January, 201"3. The · ba.nk statement is n~t exhibited in this matt~r. He was re-:eng;ged on Contract . . . by the defendant for close to two years and was receiving an increased salary compared to the one he had been receiving before. There was an annual increment in salaries every year. Based on the_Sep_ten1b~r, 2013 defined benefit package, he was paid .the sum of K.175,929.40 _instead of K274,080.69, thereby leaving a shortfall of K.98,1.51.29. The foregoing shortfall was_ based. only on the Septe1nber, 2013 calculations but the,re is anotb er calculation under paragraph 11 of the statement of claim. The calculation referred to . under paragravh 11. is the basis of his claim for underpayme1~t or miscalculation of his pension pa.ck_age. The initial sum of Kl 75,929.40 paid to· him was calculated on the defined benefits package as per the September, 2013 no pay slip. The sum of K98, 151.29 was the balance of the defined benefit package calculated based on the Septernber, 2013 pay slip. The mistake was only on the pay slip used to calculated his benefits. It is not true to say that he was never underpaid. At no point was he ever paid under the defined contribution scheme. fie was paid under the defined benefit scheme. It is not correct to say that the migration from the defined benefit scheme to the defined contribl:.1:tion sche1ne never affected him bec;ause even though the sponsor stopped temitting •his contribution, deductions were being made as per his pay slip. That in itself contributed to the fund manager and Administrator to give their calculations at . . the time at which the deferidant stopped contributing which was in September; 2013 which resulted in the miscalculation of his retirement p~ckage. He was not paid ail that was due to him despite him only ciaiming damages and interest as the May, 2014 pay slip was not considered when his package was calculated. While there is no relief relating to the May, 2014 pay slip made, the court ·should not rely on the amounts outlined under paragraph 12 (iii) of·the stater:he.nt of claim as the amounts in issue in this case, as he was not paid all his dues. Re-examinatio11 of PW In re-examination, PW explained as follows: the basis of his clai)n is clearly set out under para.graph 11 · of his statement of claim which states that in September 2013, he was still working and paying to the pen_sion contribution. He ~foes not understand _how his retirement package was contributed 7-8 months be.fore. It was a condition of service that a.n employee was to· retire upon attainment of S.. S years .. His last pay slip is impact£ ul because_ it determines the package a--11. employe~ gets. The difference between the September and May salaries was ' . . ' . . slightly over a Kl 1000.00. The defined benefits packa~e has a fo:cmul.a which has to be applied. Failure to use the last pay slip in calculating his- package. resulted in a difference. This scheme is run by the Trustees on paper. Ideally the Trustees were supposed to manage the. scheme but, on the ground, it was the sponsor who was running the offices as the Trustees did not have the accounts. The input· for payment of packages was being generaICd from the Humari Resource Jll Manage1nent to Accounts. Paragraph 11 of the statement of claim. indicates that he was supposed to have his pension package calculated based on the May, 2014 pay slip. That was the plaintiffs' case. 5.2 The Defendant~s Case The defence called I witness. 5. 2 .. 1 DW's Testimony DW was Chama Peros, the payroll offie;er in the defendant company . . His testimony was that he joined the defendant company in the year 2005, and that r.he plaintiffs are fonner employees of the defendant. There were two pension schemes, the defined benefits and the defined contributions. Employees who joined the defendant company from 2006 belong to the defined contribution scheme while those who joined the company before 2006 belong to the defined }?enefit scherne, which scheme came to an end in Septeniber 2008~ Effective October 2008, tb'.e contributions that were received from employees were being paid to the defined contribution scheme. The plaintiffs belonged to the defined . bei1.efit pension scheme. The Administrator of the .scheme \Vas Alexander Forbes vihile the Managers aie ZSIC. Upon confirmation of employment, the employee must belong to a perision scheme where such an employee will contribute 5%. The total contributions from all the employees is made to the Administrator of . the pension who are the custodians. The defendant recovers from the ~mployee and ·remits to t..li.e Administrator. How the remitted monies are used or interest it . attracts are monitored by the Trustees. He know~ nothing _of the trust deed or its contents. The defend~nes role ends at remitting the e1nployees contribution to the Administrator. When an ernployee i~ retiring, the Administrator informs the defendant through the Human Resource, who \\1.ll in turn writ~ to the Finance department to make the payrn.e:nts. Froln Septen1ber, 2008 when the defined benefit scheme ended, e1nployees start('.d contributing tp one pension scheme which wa$ being managed by AON J12 pension. When the time came for the payment of the plaintiffs' pension benefits, the defendant received the money on the 22nd October, 2014 and the first payment was made on the 5th November, 2014. The balance was paid on 1st September 2015. It was a piyriod of two weeks between the tim~ the money was received and the first payment made to the retirees. The defendant never stopped receiving contributions from employees but continued to do• so and remitting them to a different pension scheme, as the defined benefit scheme closed in September 2008. The defined benefit scheme was closed because it used to be a liability for the defendant. Valuation would reveal pension deficits which was not sustainable for the defendant and so it changed_ to the defined contribution scheme. All contributions from October, 2008 up to the time the plaintiffs were retiring were paid to the plaintif~s as a pension refund. The pension .is not calculated by th~ defendant but by the Administrator according to the last contribution made. The defined benefjt closed in 2008 but the defendant contin1,1ed sending contriputions until September, 2013 because the Trustees and Management were supposed to come up with a date for the agreement that the employees should shift to the other pension scheme. The agreement was to be on the time the defendant was to stop paying Alexander Forbes. The defendant stopped contributing to Alexander Forbes in 2013 and.started remitti:q.g to AON for the employees still in employment. Whatever was contributed by the plaintiffs from October 2013 up to the time they were retiring was p_aid to AON under the new scheme. Those contributions were paid to the plaintiffs as refunds by AON when the plaintiffs retired. He does not k~ow ·what was provided in the contract of service at the time regarding the pension scheme. Employees would contribute 5.% and the defendant would contribute 15%, .and the totaJ remitted to the Administrator to manage the money to be paid to an employee· on retirement. Half of the money is paid by annuities and the other half as a lump sum. . . . . . There was. no loss of the value of the pension paid to the plaintiffs because the money from the Administrator was received on 22nd October, 2014 with instructions on how it was to be distributed through the H. R department. Payment was made to the individuals onSth November, 2014. The payment made '?11. l 3 t September, 2015 was the last instalm.ent. The instructions as to-how the monies were to be paid were issued by the Administrator, Alexa..'1.der Forbes, through Human Resource. The deceased was given an advance while waiting for the money. The 2nd plaintiff was given another contract which entitled him• to a salary and access to the hospital. His conditions were similar to that of a permanent employee except he was not contributing towards a pension fund. The -first payment only took two weeks but the last payment took almost 8 months from the date of the first payment. The value may have gone down but it was not the defendant's fault as it was because of the instructions given by the . . Administrator. The defendant did not calculat~·the plaintiffs' pension. His role at the time of the plaintiffs' retirement was preparation of the payment vouchers in accordance with instructions from Human R~source. The payment voucher would go through the approval process by the Finance Manager then the ,Ca'shier . . would make t.l-ie paymerit to the respective accounts. Cross examination of DW In cross examination,. DW stated that any of the defendant's employees can join the pension scheme upon confirmation as it was a condition of servi~e. According to their pay slips_, the plaintiffs joined the defendant company in the 1980s and so they were rnem bers of the defined benefit scheme. The defendant is not party to the calculation method for the defined benefit sche1ne as it is usually the Administrator who does the calculations. Paragraph 6 of the defence outlines how ~he defined benefit scheme is worked out. The length of service and :final salary are key to this sc;heme. The defendant appointed Alexander Forbes as Administ;ator of the schern.'e. He was seeing the trust deed f~r the first time when it was shown to him in court. He cannot confirm or deny that :there was a trust (ked or ·rules governing the defineil benefit scheme as he· is at th~ .erd. cf the payinent process and may not be privy to the information. To the best of his knowledge, the trustees are elected by the members from ·the defendant's J14 employees. When the Administrator is about to s~nd the money, .he.informs ~he Human Resource. Once the rnoney is rec~ived by the defendant, the Finan.ce department confirms receipt. The defined benefit scheme did not have a separate account, the money was deposited in t}1e defendant's account. ,._ The plaintiffs retired in April and May, 2014 respectively. The first payment to th.em was paid on 5th November, 2014 which was about 6 months aft~r they retired. The sec.mid .instalment was paid to them in Septembei\ 2015. There was a refund of their-p~nsi~:m s_cheme from the time the scheme wa_s changed to t0-e time they retired. It had some_ compound interest based on how much they had - con~il?uted to the sc_herne. There was a salary increment in J anuf;lry, 2? 14· which .. . . . . . . - ' also ben~titted the plaintiffs as their salaries in 2014 were highe-r than in September, 2013. Mr. Spencer Mwape is a former employee of the defendant and was the defined 'benefit scheme Principal Officer. He was the custodian of the scheme. The amount Qf the salary is a huge factor in determining how·much Homeo:ci:e receives on retirement; the higher the ~alary, the highe1' the pension benefit. If the April a_nd May, 2014 salaries would have been applied, the two would have received a higher pe~sion as their salaries were higher in September; 2014. He did not know whether the employees consented to being mc)Ved from the ~efihed benefit to the defined contributions scheme before the ch~nge \Vas made. The document exhibited from pages 9 to 12 of the plaintiff's bundle of docurr1ents ~1as signed by ~pencer Mwape, the custodian_ of the defined ~enefit scheme. . . According to the document exhibited on pag~ 11 of the .plaintiffs' bundle of documents, the employees were not consulted before the _:rri.ove was made .from the defined benefit scheme to the defin,ed benefit contribution. Sorneone \vho was not consulted on the change would be shocked to find that his p~n.sion is lower when such a. one was expecting that the pension was to be ~alculated on the· last salary. The approval to change the scheme was obtained after the"; plaintiffs had left. The plaintiffs retired in April and May, 2014 respectively, and tbe salary used in calculating the formula was a lower 2013 salary which represents a J15 reduction in value. The first payment was made in November, 2014, 6 months after the plaintiffs retired. He is an Accountant so he knows about the time value of rnoney. The loss in the vaiue of money attracts interest. The instalments were paid about ten months apart, from November, 2014 to 1st September, 201.s: 1he delay by 6 months was not the fault of the defendant but the Administrator appointed by the defendant. The 2 nd plaintiff was given a cqntract ~Jt~r retirement which was a separate employment and hence untelatcd to hl.s pensionable employment service. 6.0 The Submissions The parties filed written ·submissions whi~h I will not reproduce. I have however taken them irito considerat,ion in arriving at my decision. 7.0 The Decision of the Court I am indebted to counsel for the submissions and arguments which. I have :take:1f into con~1ideration. Undisputed facts 1 .. The plaintiffs were employees of the defendant and members of the Indeni Pensions Scheme . 2. The plaintiffs' retirement packages were calculated on the September, 2013 • payslip 3. The }st _and 2nd· plaintiffs retired on 1_3th April, 2014 and 25t.:h M_ay, 20.14 respectively. Disp-:.1ted facts 1. Whether the defendant administered the pension scheme 2. Whether the Indeni Pensions Scheme had governing Rules and a T1ust Deed 3. Whether or not the defendant unilaterally varied the pension scheme 4 .. Whetper the plaintiffs are entitled to an award of damages - - - -- - - - - - -- - - - - - - - - - - - - - - - - - - Jl6 Whetber the defendant administered the pension scheme The de.fendant contends in its defence that it should not have been sued, on the basis that it never adm.inistered the Indeni Pension Scheme. According to the· defendant, the scheme is a separate legal entity, under the administration of its ,__ trustees, not under the defendant's control. It is important to address this argument at the outset, because if it is found that the defendant is indeed not the proper party to the suit, the entire action risks dismissal a,s no further adjudication op the 1nerits can proce~d. To ~nswer the question of whether or not the defendant is the proper party to be sued, it is important to look at the claim.· The plaintiffs main daim is the payment of damages for delay in payments of the correct benefits due to them on retirement. It is not disputed in casu that the Ir1deni Pension Scheme was set up by the defendant and that the plaintiffs were l;)eneficiaries of the said scheme. What is in contention at this junct.u·1·e is whether or not the defendant administered the• scheme in ques_tjon to be liable to the plaintiffs.· It is trite law that private peilsions schemes,' such as the one in question. herein, are created as trusts. Section 8 (2) of the . Pension Scheme Regulation. Act No.28 of 1996 as amended by the Pension Scheme Regulation (Amendment) Act No. 27 of 2005 provides that: "Every pension scheme, other than a scheme established by a w,-itten law, .shall be established under an irrevocable trust.'' Sectii:in 3 of the said . Act 'as amended defines a trust as: "the legal entity, separate from the employer, in which the pension scheme _fttnds are ·accumulated and includes a multi-employer tiust ·or a single--employer trust." The law clearly provides that pension funds are to be held in a trust. As regards the management of the trust, Section 8 (3) (a) to (e) of the same Act as amended provides that the rules of the scheme or fund shall rnake provision for: « (a) the manner of appointment ot election of trustees and their term J17 of ofjic:e; (b) the functions, powers and duties of the trustees which shall include the general supernision and a.~ministration of the scheme or fund; (c) (d) (e) the num.ber of trustees of whom one-half shall be appointed or . . elected by the members and the remainder shall be appointed by the sponsoring employer,: the methods of, and groundfor) removalfrom office oftrustees; the election and appointment of a chairperson of the Board of tmstees and the functions, powers and duties of· such chairperson: Provided that the chief executive officer of the sponsonng company shall not be· chairperson of the Board of trustees/ The preceding provisions clearly establish that tru.sts are managed and controlled by an appointed board of trustees. In casu, both parties admit that the scheme in question had a board of trustees. The plaintiffs howev~r contend that the rnere fact that some of the defend~nt's employees were t1·ustees to the scheme~ the defendant_ was managing and controlling the scheme through the said ern_ployees. Section 8 (3) (c) of the Pension Scheme Regulations Act No. 28 of 1996 as an1ended by the Pension Scheme Regulations (Amendment) Act No. 27 of2005 provides that the sponsoring employer shall appoint the remainder of the trustees as one-half shall be appointed or elected by the members, as butlirted above. The said provision clearly shows that the employer has the legal p9wer to appoint trustees. Section 8 (4) of the said Act as. amended provides for · persons who .cannot be appointed as tru.stees of the scheme, and employees of the sponGoring employer are not n1entioned on the said list of persons barred from appointment as a trust~e. \Vhat the foregoing mea~s is that trustees ma~,. be appointecf frcmi among the em.ployees, provided that the said tru.st~es act independently ai::!d in Jl8 the best interest of the members. The mere fact that some of the trustees were employees of the defendant in and of itself, does not substantiate the plaintiffs allegations that the defendant was administering the scheme through its employees. The court i~ cognizant of the fact that this pension scheme for t he defendant was run by trustees and managers who cari sue and be sued and ideally the said truste~s should have been joined as parties to this suit. N-0twithstanding this position, th.e plaintiffs' 11:lEJ.in claim is for q_ar1Jages for .delay in payments of the correct benefits due to them on retirement. There is evidence on record from the defendant's witness, DW, that the plaintiffs were paid through the defendant company. DW also testified further that the delay .in payment to the plaintiffs was not the fault of the defendant, but the Administrato:r appointed by the defendant. This court has the task of determining at what point, in the payment.procedure, the alleged delay occurred. Since the defendant was involved in the payment procedurr,, it cannot be held to be an improper party to this action. In addition, the plaintiffs' evidence has brought out allegiitions. that the. defendant unilaterally varied the plaintiffs' conditions of service. Consequently, . . the ck:fendant cannot extricate itself from this matter and it cannot be held to be an improper party to this action. '\1/hether the Indeni Pensions Scheme had governing Rules and a Trust D.~ed The . plaintiffs have referred and exhibited rules and. a trust deed which the defendant alleges is inapplicable as the same are • unsigned. The defendant "in fac,t alleges that the lndeni Pension Scheme has no rules 01- trust·deed: It is ·trit~ law. that pensions schemes are required· to have governing n.tles on registration. Section 18(1) (b) of the Pensions Scheme Regulations . Part Iii of the Principal Act No. 2 7 of 2005 provides that> «Subject to sub-section (2) the rules of the· scheme or fund !]haU make'· p~ovisi~n fdr'' U1ider lin9 f~r co~rt's emphasis. The abmie shows that it is mandatory· for a -pension scheme to lia~e governing rules. hi casu, there are rules and a trust deed that the plaintiffs seek to rely on . . J19 but the defendant contends is inapplicable as they are unsigned. It is trite law that unsigned do.cuments can be given legal effect where tb,e parties' conduct shows th.2.t they treated the document as binding by acceptance or implied use. In the English case of Reveille Independent LCC vs Anotech International (UK) Limited1 the Court of Appeal upheld a decision of the Commercial Court which found that a party had accepted the terms of an unsigned agreement by its conduct even though that party had not signed the agreement. I:h t..1-ie .case. of Zambia Breweries PLC vs Betternow Family Limited2-, the Supreme_ Court . upheld the holding of the High Court that the conduct of the parties showed that . a coritract existed between the parties despite one of the parties not having· signed the contra~t. While signing a document is the most common way to demonstrate agreen1ent, unsigned documents can be ·valid and. ~-n:fo:rceable depending on the intention of the parties to be bound by the terms of the said dQcuments, anci performance. The authors of th.e Halsbury's Laws of England Edition at para 263, page 141 state the following: ''Where there is an informal agreement which expressly requii:es or envisages the subsequent execution of a formal contrac( the legal ejJect of that prior informal agreement depends on the intention of the parties; they may have entered into a binding provisional agreement whilst envisaging its subsequent replacement by a more Jo;mal one, or· they may evince an intention only to be bound on the execution of the formal contract, the prior infoimal agreement being o / no· ·legal effect. " . The same authors state the following, at para 285, page 163: "Even where the assent of the parties to an agreement is signified in some manner other than a document containing oi- referting to its terms, it is still possible for the terms contained in a document to /wcome part .of the agreement between those pmties. That qocume/z.t may even be. the tenns of anot~r contrac:t between the pcinies, or of a draft agreement between them ..... . All that is required is a clear intention on the part, of all parties to the . T20 agreement that the tenns contained . in that one document be incorporated in their agreement." Frmn the above, it is clear that even draft documents may be binding on the parties if it is established that the parties in.tended to be bound by the draft. h1. casu, a report prepared by Spencer Mwape, appearing at pages 9 to 12 of the plaintiffs' bundle of documents reveals, at page 10 paragraph 2, that the rules and tt1..rnt <ieed though unsigned were being used as a basis· for payment. of pension benefits to the members and they formed part of the basis for actuarial valuations done. It is further revealed that the said rules and trusf deed in fact formed part of the conditions of service for the defendant's employees. In the premises, I find that the exhibited n1les and trust deed wt~re used in the administration of the · pension scheme and hence binding on all stakeholders involved, the defendant included. Whether 01· not the defendant unilaterally varif.d the pension scheme · It is undisputed that whelJ. the plaintiffs were ·employed by the· defendant, they joined the I:ndeni Pension· Scheme which at the time was a defined pension scheme in nature. It was in fact a condition of service for employees of the defendant to be part of the pensions scheme as per clause 18. l of ·the Indeni Petroleurn Refinery Company Limited 2003 conditions of service which provide that: ('All Zambians employees will wherever possible be members of the INDEilI Pension Scheme: .. " Whe~ the· plcin t iffs joined the defendant company, the Incierii Pension· Scheme ,~·as a defined benefit scheme plan as ccmceded by the defendant ~mder . . paragraph 5 of its defence, and by DW in his testirri~ny. The Tndenf Pension Schetne Rules exhibited at page 1.3 of the plaintiffs' bundle of documents .d~fine ~'Scheme" as to mean: "the Indeni -De.fined Benefi.ts Staff Pensions Scheme or F'I,,lnd." Clearly the pension plan was a defined pension plan in nature which, according to DW, changed to the defined contributions plan in '2008. nw· further conceded J21 that the employees, more particularly the plaintiffs herein, were not inforrr..ed of the impending change and hence their consent was not obtained. In f~.ct,,. the report by Spencer Mwape exhibited at page 11 of the plaintiffs' bundle 0f documents states at 3.3.1 that the members of the lndeni Pension Sehem~ were not informed of the conversion of the scheme plan. It is clear from the preceding that the plaintiffs had no knowledge of the conversion and henc·e did not ~onsent to it. The defendant however argues that the conversion wa~ maci~ by tlie trustees who are charged with administration of the pension trust and' hence it can:not be held liable. I have carefully examined the Indeni Pension Scheme Rules. Clause 13 of the said rules provides for amendment. The clause reads as follows: . "The Employer in agreem ent w ith the Trustees may from tirn~ to tim~ hy means of resolution pr9perly passed at a meeting of its Board amend all or any of the rules, provided that no such al"(lendment shall .aitthmize the app.licati.on of any of the moneys held or to be held by the employer ff>r any purpose other than the benefit of the member's pension or their· dependents~ or affect adversely the right or interests already secured by any member or pensioner (save in so far as may be entailed in securing the approval or continued approval of the scheme as an approved scheme under the Income Tax Act , Cap 323 of 1966 by the Commission.er of TQJCes, to whom all members shall be noti_fied) and provided Jurthe11 ·that no amendment shall be made so as to alter the object of the scheme as described in Rule 2." [Und erling for Court's Emp hasis[ While the administration of the pension scheme is in the reserve oft.he trustees, the rules of the pen$ion scheme cannot be changed except in agreement with the employer, the defendant herein. I would like to believe that the reason for this is because the pension scheme forms part of the employees' conditions of se;\rice as espoused .earlier in this judgment, and he11ce the employer would n~ed consent of its e.rnployees to vary their conditions of service. Accordingly, I find that the rules of the Inderi.i Pensions Scheme could not be changed \·vithout the - - - - - - - - - - - - - - - - -~ J22 consent of the defendant. The trustees are mandated to bperc1-te in accordance with the scheme rules and hence they could not change the ·scheme benefit plan without the consent of the defendant and PIA. For the scheme plan to change, the defendant must have agreed with the trustees, which change as testified by DW, was done without the consent of the plaintiffs. In the pre1nises, I find tha.t the defendant did vary the pension scheme plan from a defined hen~fi t to a. defined contribution unilaterally, that i.s, :,;,vithout the consent of the plaintiffs. Wbf!ther the plaintiffs are entitled to ~n award of damages It is trite law that he who alleges_ must prove his or her claims. To be entitled t o general dan1ages, the plaintiffs must prove that the defendant 1s actions caused them to suffer loss. The plaintiffs allege that as a result of the change in the scheme benefit pla:..11., there was a delay in receiving the ·correct pensions due to them which action resulted in loss of value of the pensions due to therrr. According to DlV's .testimony, the plaintiffs retired in April and May, 2014.· The defendant received the plaintiffs' monies on 22nd October, 2014 but only made . t . the first payment to the plaintiffs; accounts on 5th Novembei:, 2014. The second payrnerit was made in September, 2015. Clearly the plaintiffs \Vere not paid tlteir pen;ions irnrnediateiy after they retired but had to wait for ·6 months after retirement· for the first payment and over a year for the second pay.me.rJt. It is also not disputed that the plaintiffs' retirement packages were calculcl.ted on the September, 2013 pay slips·as opposed tothe·April and May, 2014 pay siips. DW also· ccmceded that the plaintiffs' salaries .in .2014 were h.igher tl1an what they were receiving in 2013· as their salaries had been i:ncreased in ,January·, 2014. He· conceded that the · amount of one's salary· is a huge f~ctor in determining the pension beri.efit. While the calculations .were done by. the Administrator of the tn1.st, the delay in aligning the sart1e to two distinct benefit schemes was as a result of the unilateral migration of the plaintiffs' cmi tributions from the defined benefit pension scheme to the -defined contributory pension J23 schem.e. In the case of Richard H. Chama and ·213·· Others v.s NA. PS. A and Others3 cited by counsel far the plaintiff, the Supreme Court held t~at; "Our understanding is that there is a marked distinction between .a · defined benefit scheme and defined contribution scheme It is the appreciation of this distinction that should help detennine the ~f..-,. ·_:es in disp:..de in this case .... We understand- a de.fined pension ·schem:e or plari~ to be a . type· of pension scheme in which an employer promises a sj)~cified -pension payment, lump sum or combination thereof, on retirement. That pension payment is predetermined by a fommla based on the e_mployer's e·amings history, tenure of seroice and age, as opposed to being based directly on individual in.vestment returns ..... . PU,t differently, in a defined benefit plan, the benefit the (~inployee i.$ to m.ceive, is detennined ahead of the employer's retirement_ 'time. It is 'dBfined' in th.e sense ·that the benefit fonnula is set out and known in . advance. This kind of scheme thus provides eligible employees a guaranteed income for life when they ·retire. 1.nat guaranteed retirement lJ'ene.fit amounts for each participant is based • 9n factors such as the employee's tenure and salary . .. , ..... . on' the other hand, the contribution scheme is a scheme u.rtder which no promise for a specific retirement income is made. It i,~ a pension scheme that builds up a pool or pot of money that cnn be used to provide an income in retirement. The pension pot·builds up through the employee arid (where applicable) the employer's contrlhin.'i.on pl-tL5--, investment returns and tax relief. .... ......... what emerges from this is that t~ two pensiori. schemes ctte of a. totally different cha,·acter and the benefit payment from them should logically be differently computed." From the foregoing case, the Supreme Court succinctly explained the difference . . between the two pension schemes and it is clear that in relation trJ the defined benefit plan, cakulating the san1e would not have been ar1 issue as the forn1ula is set out and knm1/l11n advance. In relation to the defined contributory scheme however, the calculation is not so straight forward as lot of factors as elucidated above need to be taken into consideration. To bring this into cont.ex(;, to the cas~ in casu, if the plaintiffs had been consulted by the defendant about the migration of their pension benefits from one scheme to the other and their consent obtained, the problem of the delay would not have arisen as the plaintiffs would have ·beeri. well aware of the implication of having their peiision benefits 1noved frmn the defi.ned benefit plan to the defined contributory ple-11·. 1t has . been established tluit ba:sed o·ri the evidence before this court, the plai!ltiff~ h8:ci n_o idea abo:ut this migration until they received their iriitial instalmellt. This posiiion as such "falls squarely in the lap of the defendant as th,eir uriili:l.teral . . . acti(;m mav.ifestly triggered a course of action in relation to the calculation oft.he pension benefits d:ue past September 2013 that resulted in a delay. The . .· de.fenda.nt canriot ;scape blame, and the plaintiffs are entitled tci daniages for the said delay. Further, the · defendant's feeble argument that the 1st plaintiff had been 1·e ·engaged on contract. for close to two years to avert challer:..ges a:cising from · the · delay in payment of his pension and hence he is not en.titled tc.1 darnages is unacceptable. This is because DW testified that -the 2nd plaintiff ·\,v;a:.:: ~ivcn-a contract wh-ich was unrelated to his pensionable employnient sen·ice. There is no evidence from the defence tbat when re-en.gaging the 2 nd plaintiff, they 1i-citified him that· his re-engagernent was to mitigate any loss from the delay in the payment of his pension. J25 That being said, I agree with counsel for the defendant's argument that the plaintiffs cannot claim that the pension benefits due to the plaintiffs based on their respective final salaries ort retirement as prescribed under the defined benefit scheme (less payments _already made) and accrued interest up to date of final payment be awarded. This is because the same ,v-as not formally pleaded as a claim in the writ of surnmons and ·statement of claim. The net result of this action is: 1. The plai1:tiffs_ are awarded damages for delay in payments ofthe correct benefits _due to the plaintiffs which damages are to be ass.essed qy the Deputy,Registra_r. 2. Interest accrued on the _qenefits be.tv,een the initial payment in. Septeni:ber 2013 and April, 2014 and May, 2014 for the .plaintiffs at the short-term deposit rate from date of commencement of this c2.use of action to date of judgment and the,:-eafter at the current Bank of Zambia lending rate urtti1 fl1ll p;:i.y.ment. 3, Costs are for the 'plaintiffs to be taxed in default of agreement. Leave to appeal is hereby granted.