Absa Bank Limited v De Beer and Others (26749/2011) [2015] ZAGPPHC 903; 2016 (3) SA 432 (GP) (18 December 2015)

Absa Bank Limited v De Beer and Others (26749/2011) [2015] ZAGPPHC 903; 2016 (3) SA 432 (GP) (18 December 2015)

The court found that the plaintiff's assessment of the defendants' creditworthiness was irrational and did not comply with the requirements of section 81(2) of the National Credit Act. The bank improperly included the surety's income in its assessment and failed to obtain proper proof of income and expenditure from the principal debtors. The evidence showed that the defendants, elderly and without reliable income, were granted substantial loans based solely on the value of their property, disregarding their actual ability to repay. The court concluded that the credit agreement was reckless and exercised its discretion under section 83(2) to set aside all rights and obligations of the...

Citation
[2015] ZAGPPHC 903
Parties
Plaintiff: Absa Bank Limited; Defendant: Hermanus De Beer; Defendant: Jacoba Johanna De Beer; Defendant: Juani Labuschagne
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
18 December 2015
Case Number
26749/2011
Procedural Posture
Civil Trial / Judgment After Trial
Outcome
Plaintiff's claim dismissed; mortgage loan agreement set aside as reckless credit; bonds to be cancelled; costs awarded against plaintiff.
Judges
A.A. Louw
Legal Topics
Reckless Credit, National Credit Act, Mortgage Bond Enforcement, Suretyship Liability, Special Executability
Banking and Finance Civil Procedure Reckless Credit National Credit Act Mortgage Bond Enforcement Suretyship Liability Special Executability

Case Brief

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Parties

Absa Bank Limited

Plaintiff

Hermanus De Beer

Defendant

Jacoba Johanna De Beer

Defendant

Juani Labuschagne

Defendant

Procedural Posture

Civil Trial / Judgment After Trial

Legal Issues

  1. 1 Whether the plaintiff complied with section 129 of the National Credit Act.
  2. 2 Whether the credit granted to the defendants was reckless in terms of the National Credit Act.
  3. 3 What remedy is appropriate if the credit agreement is found to be reckless.

Ratio Decidendi

The court found that the plaintiff's assessment of the defendants' creditworthiness was irrational and did not comply with the requirements of section 81(2) of the National Credit Act. The bank improperly included the surety's income in its assessment and failed to obtain proper proof of income and expenditure from the principal debtors. The evidence showed that the defendants, elderly and without reliable income, were granted substantial loans based solely on the value of their property, disregarding their actual ability to repay. The court concluded that the credit agreement was reckless and exercised its discretion under section 83(2) to set aside all rights and obligations of the...

Court Disposition

Plaintiff's claim dismissed; mortgage loan agreement set aside as reckless credit; bonds to be cancelled; costs awarded against plaintiff.

Orders

  • The plaintiff's claim against all defendants is dismissed.
  • All rights and obligations of the first and second defendants under the mortgage loan agreement are set aside.