The court has given Absa Bank the green light to add a backup claim against a customer whose credit card limit ballooned from R50,000 to R877,500 after he argued the lending was reckless.
The ruling means Absa can ask the court to order Craig Reyneke to repay the money he used if he later succeeds in having the credit agreement set aside. The judgment was recently delivered in the Johannesburg high court.
The case started in January 2018 when Reyneke signed a credit card agreement with Absa. The bank initially gave him a credit limit of R50,000.
Over the next four years, Reyneke asked the bank several times to increase his credit limit. Between November 2018 and July 2022, Absa approved seven increases, taking the limit to R877,500.
When Reyneke fell behind on his payments, the bank took him to court to recover the outstanding debt.
Reyneke admitted he had signed the credit agreement but argued Absa had increased his limit recklessly. He asked the court to declare the agreement reckless under the National Credit Act (NCA) and to cancel his obligations.
Absa asked the court for permission to change its court papers by adding a second, or backup, claim.
The bank said if Reyneke succeeded in having the credit agreement set aside, it should still be allowed to recover the money it had advanced to him. It said it would claim back only the money he used and not the contractual interest.
Reyneke opposed the application. He argued Absa’s proposed claim had no legal basis and was unclear.
But acting judge Themba Khaba disagreed.
“The respondent’s objection is unfounded. The proposed amendment is not excipiable, and the respondent has not demonstrated prejudice that cannot be remedied by costs,” the judge said.
The judge said Absa’s backup claim would apply only if Reyneke won his reckless lending case.
“The amendment does not plead that the enrichment is currently sine causa. It pleads it would become sine causa if the court were to set aside the credit agreement. The amendment is conditional and alternative and will be invoked only if the primary claim fails,” the judge said.
Khaba said Reyneke could not argue the agreement should be cancelled, and said Absa could not rely on another legal claim if that happened.
“The respondent cannot have it both ways. The respondent cannot argue that the agreement should be set aside and then argue the agreement’s existence prevents an enrichment claim,” he said.
The judge also found Absa was not trying to avoid the NCA.
“The applicant’s alternative claim is not an attempt to circumvent the NCA. It is a recognition that if the agreement is set aside, the applicant should be entitled to recover the capital advanced,” the judgment said.
Khaba said the amendment did not add new facts to the case, it only gave Absa another legal way to recover the same money if the credit agreement is set aside.
The court ruled Reyneke had not shown that allowing the amendment would unfairly prejudice him.
As a result, the court granted Absa permission to amend its court papers. The bank has 10 days to file the amended documents, while Reyneke has 15 days to respond.
The judge ordered Reyneke to pay the legal costs of opposing the application, saying his objections should not have prevented the amendment.
Sowetan
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