CGU Insurance Limited v Rumdel Construction (Pty) Limited

Rumdel Construction (Pty) Ltd undertook road and bridge construction works in Mozambique during 1996 and 1997 and was insured by CGU Insurance Limited against storm damage under contract works insurance policies operative during different periods. In September 2000 Rumdel issued summons claiming indemnification for losses caused by storm damage in March 1996 and February 1997, pleading reliance on a single insurance policy. It later sought to amend its particulars of claim to allege that two separate insurance contracts applied: one policy covering the March 1996 loss and another covering the February 1997 loss. CGU opposed the amendment insofar as it introduced the earlier policy, contending that it amounted to a new claim which had prescribed.

The appeal was dismissed with costs, and the amendment to the particulars of claim was allowed.

The case is a leading authority on the interpretation of 'debt' under the Prescription Act 68 of 1969 and clarifies that amendments curing a defective cause of action do not necessarily introduce a new or prescribed debt. It reinforces the distinction between 'debt' and 'cause of action' in South African prescription law and provides guidance on when amendments will interrupt prescription.