OLD Mutual, a giant financial services group in Zimbabwe, has won a Supreme Court case against an appeal by one of its clients challenging a High Court judgement in which it upheld its special plea of prescription, while dismissing the appellant’s claim.
In a judgement dated 19 September 2023 and 15 March 2024, Supreme Court judges Tendai Uchena and Felistus Chatukuta dismissed Thomas Kanjere’s appeal against a High Court order in favour of Old Mutual Life Assurance Company Limited, a life assurance, pensions and employee benefits services subsidiary of Old Mutual Zimbabwe, wholly-owned by Old Mutual Funeral Services (Pvt) Ltd.
The holding company, Old Mutual Zimbabwe Ltd, is a 75%-owned subsidiary of Old Mutual Zimbabwe Holdco Ltd, ultimately a wholly-owned subsidiary of Old Mutual Ltd listed on the JSE Securities Exchange in South Africa.
The judgement said: “The appellant (Kanjere) refrained from taking action within a period of three years hence the prescription plea succeeded. The appellant did not raise or plead a defence to the special plea of prescription. In the circumstances, the court a quo correctly relied on the statement of agreed facts and the pleadings to uphold the special plea of prescription. The judgment of the court a quo is unassailable as the court properly and correctly determined the sole issue placed before it.
“The appeal has no merit, it must fail. Regarding costs, they follow the result. We find no reason to depart from the standard rule. Accordingly, it is ordered that: ‘The appeal be and is hereby dismissed with costs’.”
Tendai Biti represented the appellant — Kanjere — and Thabani Mpofu the respondent — Old Mutual. Kanjere had taken an insurance policy with Old Mutual some years ago.
In terms of the insurance policy, he was entitled to a basic benefit of ZW$35 521 (or US$1 7138.88 plus profit). The maturity date for the policy was 1 July 2013.
The guaranteed minimum annuity rate was set as ZW$65.23 (or US$31.50) per month per ZW$1 000 (or US$4 825) of the capital sum payable monthly in arrears, during the life assured’s lifetime with a minimum of 120 instalments.
A single premium of ZW$9 914 .24 (or US$4 783.62) at issue date was agreed upon in terms of the contract.
Old Mutual promised to pay the appellant ZW$ 35 521 plus profits, on 1 July 2013, which was the date of maturity for this 24-year policy. Alternatively, it promised to pay an amount equivalent to the purchasing power of this promise at the time of the agreement which was US$34 856.75, when adjusted for profits.
The promise of implied benefits was the reason why the appellant signed up for the policy. In 2010, Old Mutual, unsolicited, offered to pay the appellant US$227.58 as the full value of the policy.
Kanjere rejected the offer and proceeded to seek advice from the Zimbabwe Pensions and Insurance Rights Trust, on the computation of the rightful maturity and pension due from this policy, hence the actual value of the policy.
He was advised that he was owed benefits by the respondent and that the benefits cumulatively amounted to a total sum of US$34 856.75, being the sum of the basic benefits of US$17 138.88 and profits of US$17 717.87 at a constant rate of 3% throughout the maturity term.
The amount represented a total that would buy Kanjere’s annuity, which resulted from the maturation of his Independence Maker Retirement annuity contract, issued by Old Mutual on 1 July 1989.
Kanjere filed a claim against Old Mutual on 15 April 2016 demanding US$34 856.75, the cumulative benefits arising from the maturation of the insurance policy.
After service of the summons on 18 July 2016, Old Mutual in defending the claim raised a special plea of prescription since it alleged that the claim was based on the contract entered into in 1989 which matured on 1 July 2013.
Thus, according to the financial giant, the cause of action arose on 1 July 2013 and accordingly in terms of s 14 (1) and s15 (d) of the Prescription Act [Chapter 8:11], the failure to act when the cause of action arose rendered Kanjere’s claim prescribed.
Before the court a quo (appealed case), the parties proceeded by way of a stated case, in respect of which they filed for the determination of the issue of prescription. First, the parties agree that the following facts were common cause:
(1) That in the year 2010 and subsequently in September 2011 defendant was advised of the value of his contractual benefits after conversions the details of the conversions were fully explained and an offer on early pay out was made. Plaintiff rejected the offer made;
(2) That upon maturity of the policy in the year 2013 there was no change in the value of the policy. Defendant maintained its position on the value of the policy which position plaintiff did not agree with;
(3) In February 2016, plaintiff issued summons against the defendant under HC 1218 / 16 claiming that the value assigned to the policy by the defendant was less than what plaintiff considered to be the true value. When summons was served this was less than three years from the maturity date being 1 July 2013;
(4) On the 15 April 2016 the action instituted by the plaintiff under HC 2018 was withdrawn;
(5) The present proceedings were filed on 15 April 2016. The sheriff attempted service on Kantor and Immerman on 22 April 2016 which service was refused;
(6) The summons in the present proceedings were then served on the defendant directly on 18 July 2016; and
(7) The parties desire to argue in favour of their respective contentions on the basis of the agreed facts as set out above.
However, the statement of agreed facts was silent on the defences, but spoke volumes as regards the maturation of the policy and when the cause of action commenced. There was no mention of waiver or interruption of prescription. Further, in the Kanjere’s replication in the court, he gave a bare denial of each and every material allegation of fact and conclusion of law in the defendant’s plea and joins issue therewith.
At the hearing, the parties relied on written submissions to motivate their respective contentions as outlined in the statement of agreed facts in respect of prescription.
Kanjere for the first time argued that the claim had not prescribed because, firstly, the cause of action was not complete, and secondly, that the obligation to pay in this manner was continuous in nature.
Further he asserted that in any event, prescription had been interrupted by the issuance of summons on 9 February 2016 under HC1218/16.
Old Mutual, on the other hand, argued that the cause of action as pleaded by the appellant in his summons was not of a continuous nature.
The debt became due upon maturation of the policy on 1 July 2013. The company also contended that there was no interruption of prescription since the summons under HC1218/16 was withdrawn on 15 April 2016 as the it was not cited in that case.
Further, Old Mutual contended that it was improper for the appellant to raise defences of interruption and waiver which were not in the pleadings and also not part of the statement of agreed facts.
The court upheld the special plea of prescription and held that the policy matured on 1 July 2013 and as such the cause of action arose on that date.
The claim by Kanjere arose from the maturity of the policy, whose benefits were due on 1 July 2013. By failing to take action and only claiming on 18 April 2016 Kanjere sat on his laurels and only lodged a claim when the same had prescribed.
The court further upheld the special plea of prescription on the basis that Kanjere had not in its pleadings raised the defences of interruption and waiver. So on the basis of the agreed facts and pleadings before it, the court dismissed Kanjere’s claim.-STAFF WRITER
