3Sixty Life has petitioned the Supreme Court of Appeal (SCA) for leave to appeal against the High Court’s decision to place the life insurer under final curatorship.
The petition was filed on 8 November, a day after the High Court in Johannesburg dismissed 3Sixty Life application for leave to appeal against the court’s judgment and order of 30 September.
In terms of that order, Judge Fiona Dippenaar placed 3Sixty Life under final curatorship, dismissed an application by the National Union of Metalworkers of South Africa to intervene in the case, and cancelled Yashoda Ram’s appointment as provisional curator and appointed Tinashe Mashoko as the final curator.
3Sixty’s petition to the SCA means the High Court’s order of 30 September remains suspended.
In a statement on Friday, the Prudential Authority (PA) said it will oppose 3Sixty’s application for leave to appeal to the SCA.
Read: High Court judgment is not the end of the dispute over 3Sixty Life’s curatorship
3Sixty Life sought leave to appeal to the SCA or the full court of the High Court. The application was opposed by the Prudential Authority (PA).
In its application, 3Sixty Life raised various grounds in support of its contention that there were reasonable prospects that its appeal would succeed and that another court would grant a different order.
According to the judgment, 3Sixty Life said its proposed internal recapitalisation plan (IRP), which it said would restore the life insurer to solvency, had not been placed before the court, nor had the PA dealt fairly with it.
It said there was no good cause for the provisional curatorship in the first place, and because Ram had found that curatorship was not appropriate, it was not desirable to confirm the appointment of a curator.
3Sixty Life also argued that, apart from the solvency capital requirement (SCR) issues, the remaining grounds relied on by the PA were not serious enough to justify the appointment of a curator, as other appropriate remedies were available. These other grounds were the absence of audited financial statements for the 2020 year, the high turnover of executive staff, the fraudulent activities of the former chief executive, and policyholders’ complaints about unpaid claims.
Court’s finding
In her decision on the appeal application, Judge Dippenaar said the grounds advanced by the PA in its ex parte application to place 3Sixty Life under curatorship pertaining to insolvency, the SCR and minimum capital requirement issues, the various transgressions of the Insurance Act, and the embezzlement of funds by the former chief executive were common cause.
She said it was also undisputed that there were no audited financial statements for 2020 and that the reliability of 3Sixty’s management accounts were in doubt.
No countervailing evidence was presented to the PA’s evidence that 3Sixty’s management constructed evidence to address queries raised by its auditors and frustrated the audit process. Ram’s curator’s report confirmed that the 2020 financial statements would have to be reconstructed, Judge Dippenaar said.
She said the lack of reliable financial information and the absence of audited financial statements also impact on the proposed IRP and the accuracy of the figures reflected therein.
These undisputed facts constituted “very cogent practical reasons” not to set aside the ex parte provisional order, Judge Dippenaar said.
She was not persuaded that 3Sixty has illustrated reasonable prospects that another court would set aside the provisional order based on a non-disclosure of material facts.
Judge Dippenaar dismissed the application with costs, including the costs of two counsel.
