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Fidelis Munyoro Chief Court Reporter

A POLICY holder’s bid to bring a claim for a special insurance annuity policy of more than US$30 000 against Old Mutual has been thrown out after the Supreme Court agreed with the High Court that he could not even bring the case to court because the deadline imposed by law for civil suits had expired.

Mr Thomas Kanjere had invested the proceeds of his former pension fund in 1989 in an annuity scheme to give himself a guaranteed income in old age, and insurance cover before that time.

Hyperinflation wiped out the value and Mr Kanjere was trying to have the trivial resulting value significantly upgraded.

A three-judge appeal bench ruled that the claim should have been brought up within the stipulated time frame of three years in terms of the Prescription Act, which lays down the deadline for starting a civil suit.

The ruling comes after Mr Kanjere appealed against a High Court ruling upholding a special plea of prescription raised by the Old Mutual, one of the leading insurance companies in the country and internationally.

Mr Kanjere may or may not have had a case against Old Mutual if he had initiated his civil suit in time, since others have not been able to prevail, but he never had the chance to present his arguments before a judge, and to counter any replies from Old Mutual, since his case was dead before it even started.

In 1989, when the then Zimbabwe dollar was worth roughly 50US cents, Mr Kanjere and Old Mutual agreed to an insurance policy known as the Independence Maker Insurance Policy and Mr Kanjere used his Air Zimbabwe Pension Fund exit proceeds to make a single payment for the insurance policy.

In terms of the insurance policy, Mr Kanjere was entitled to a basic benefit of $35 521 (equivalent then to US$17 138,88) plus profit on July 1 2013, which was 24 years later, with similar cover if he died in the interim. There was a formula for monthly payments for each $1 000 insured, but Old Mutual wroked out that if Mr Kanjere made a single premium of $9 914,24 he would get his $35 521 plus profits in 24 years. There was an implied benefit, in Mr Kanjere’s understanding and in what he saw as a promise, that he would be able to at least maintain the spending power of his premium over the years.

Those 24 years saw the collapse of the Zimbabwe dollar in hyperinflation and the dollarisation of the economy. In 2010, Old Mutual, unsolicited, offered to pay Mr Kanjere US$227,58 as the full value of the policy, which he rejected and went to seek advice from the Zimbabwe Pensions and Insurance Rights Trust, on the computation of the rightful maturity and pension due from this policy and hence the actual value of the policy.

He was advised that he was owed benefits that 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 percent throughout the maturity term.

The amount represented a total that would buy Mr Kanjere’s annuity, which resulted from the maturation of his Independence Maker Retirement annuity contract, issued by Old Mutual on 1 July 1989.

Mr Kanjere, who was being represented by Mr Tendai Biti, found himself fixed in a legal dilemma with the insurance firm over the annuities payable to him, prompting the legal battle at the High Court.

He filed a claim against Old Mutual on April 15 2016, at the High Court, seeking to recoup the US$34 856,75 he argued he was owed, being the cumulative benefits from the maturation of the insurance policy.

The summons was served on July 18 2016 and Old Mutual raised a special plea of prescription, arguing that the claim was based on the contract entered into in 1989 which matured on 1 July 2013.

Thus, according to Old Mutual lawyer, Advocate Thabani Mpofu, instructed by Kantor and Immerman, the cause of action arose on July 1 2013 and in terms of the Prescription Act, the failure to act when the cause of action arose rendered Mr Kanjere’s claim prescribed.

Mr Kanjere lost the case and appealed to the Supreme Court, arguing that prescription had been interrupted by the issuance of summons on February 9 2016 under HC1218/16.

The sole issue for determination in this case was whether or not the lower court erred by holding that the appellant’s claim had been prescribed.

In their ruling, Justice Tendai Uchena, Justice Felistus Chatukuta and Justice Hlekani Mwayera unanimously agreed that the lower court correctly found that Old Mutual had discharged the required onus in so far as proving that the claim had prescribed.

“The appeal has no merit, it must fail. Accordingly, it is ordered that the appeal be and is hereby dismissed with costs,” said Justice Mawayera finding that the lower court’s decision was unassailable.

Justice Mwayera noted that Old Mutual raised a special plea in bar of prescription to which the Kanjere legal counsel did not raise any recognisable defence in the pleadings.

Justice Mwayera ruled that Kanjere’s pension became due as at July1 2013, but the claim was only served on July 18 2016 which was outside the three years as provided for by the Act.

Mr Biti argued that Mr Kanjere’s insurance policy was of a continuous nature that could not be extinguished by prescription as the terms of the policy gave rise to a continuous obligation which was payable on monthly basis from the date of maturity.

Adv Mpofu submitted that the fact that Mr Kanjere claimed a lump sum before the court a quo four years after the maturity date of the policy rendered the claim prescribed.

To this end, Adv Mpofu said the claim was subject to prescription law and thus the claim, being outside the permissible time, had extinguished.