THE High Court has dismissed a court application against Old Mutual Life Assurance Company saving the company from paying US$495 593 to a local company that had falsified a hijacking of insured goods destined for Zimbabwe from South Africa
Sebata Investment had sued Old Mutual to recover the half a million US dollars, but High Court judge Justice Sylvia Chirawu Mugomba dismissed the application saying the company wanted to recover the money through fraudulent means.
Sebata Investments had sought payment of the sum of US$495 593 on a contract of marine insurance entered into between the parties on April 5, 2022.
It had sued Minerva Risk Solutions (Pvt) Limited as the second defendant, but after a case management meeting, the claim against Minerva was withdrawn, leaving Old Mutual Life Assurance as the sole respondent. The policy provided for cover against any loss, hijack and theft and in pursuance of the contract, Sebata Investment paid US$5 204 and was issued with a certificate of marine insurance.
On May 4, 2022, Sebata Investments claimed to have suffered loss saying some insured goods, including television sets, sound bars and projectors, were lost due to a hijacking incident in South Africa. They lodged a claim with Old Mutual Life Assurance through Minerva and the defendant engaged three loss assessors to conduct an investigation.
Sebata Investments argued that Old Mutual Life Assurance had since failed, refused and/or neglected to pay the claimed sum seeking specific performance for the insurance contract, interest plus costs of suits on a legal-practitioner to client scale.
Old Mutual Life Assurance contested the assertion that the plaintiff acquired goods had been allegedly hijacked or stolen.
While accepting that the plaintiff had lodged a claim, Old Mutual Life Assurance argued that not all the necessary documents in support of the claim had been submitted.
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Further that after the claim was submitted the services of three loss control adjustors had been secured and that it repudiated the claim after various inconsistencies were unearthed.
At the trial, the evidence of Wayne Farai Chakauya, a director of Sebata Investments, was led to buttress the claim against the defendant and also evidence of assessors Kudakwashe Toto, Hillary Tabva and Michael Patterson from a South Africa firm was led for the defendant. The evidence largely mirrored the summaries already filed on record.
According to an assessor’s report, the hijack seemed to have been staged and potentially fraudulent and hence the recommendation to repudiate pending further investigations.
Suspicions emerged during interviews when the insured indicated that they had not yet started business and yet they had ordered stock of a high value.
Preliminary investigations had indicated that Chakauya owned two companies in South Africa.
Following the report, Old Mutual engaged one Miller based in South Africa to conduct further investigations, but Sebata Investments was not co-operating.
Another investigator, Patterson, was then engaged in South Africa.
Toto also physically visited two places; 25 Japan Crescent in Roodepoort and 82 Capricorn Road in Sandton.
At 25 Japan Crescent in Roodepoort, he found that there was no proof of business activity at the premises as it was a residential area and not a business premise.
This was after it had been indicated that that Reddington, where the goods were bought, was operating from 25 Japan Crescent. But according to the Companies and Intellectual Property, the company was operating from number 82 Capricorn Road in Lonehill, Sandton.
The investigations by South Africa Police Services also revealed that the load may never have existed and that the claim was fraudulent.
“Further that the load may have been obtained by nefarious means and the insured wished to stage a hijacking. That if the load, indeed, existed, the intention perhaps was to offload the goods and sell them on the South African market,” the police report said.
In his ruling, Justice Chirawu-Mugomba said the investigators did not seek to exaggerate while the reports raised redflags, some of which were very similar in nature.
“I find the reports very persuasive and authentic. It is one seeking to induce payment of almost half a million United States dollars through a clearly fraudulent claim. The plaintiff sought not only to mislead the defendant but the court.
“The plaintiff does not deserve a second bite at the cherry as it were. Judgment is granted in favour of the defendant. The plaintiff shall pay costs on a legal practitioner to client scale,” the judge ruled.
