When reckless credit is actually proved

A recent example of the significant remedies that can follow a properly established reckless-credit case.

Reckless credit and section 166

Selected recent authorities and practical implications for debt-review practice.

9. Ulyate NO and Another v Classens and Another

Citation: (19793/2015) [2026] ZAWCHC 32 (30 January 2026)

Authority level: High Court — Western Cape Division

Why this development matters

Ulyate is a strong recent example of the court granting substantial relief where the evidence established that the credit assessment did not responsibly engage with the borrower’s actual financial position.

Background

• The dispute concerned credit secured by property and whether the lending decision was reckless under the NCA.

• The credit evaluation relied materially on anticipated future financing/financial events rather than an adequate assessment of actual existing means and obligations.

• The court examined the consumer’s financial position at the time the credit was granted.

What the court decided

• The court declared the credit agreement reckless and granted relief under section 83(2)(a).

• The claim based on the agreement was dismissed and consequential relief included cancellation of the bond on the facts of the case.

• The judgment demonstrates that reckless-credit remedies can have significant proprietary consequences where the statutory case is actually proved.

Practical implications

• A reckless-credit allegation needs a transaction-specific evidential foundation: the position at inception, not simply later distress.

• Debt Counsellors should identify the statutory category under section 80 and request the documents relevant to that enquiry rather than making a generic “reckless lending” allegation.

• Where the evidence genuinely supports the case, section 83 can provide meaningful relief; where it does not, the allegation should not be used as a negotiation slogan.

Key statutory provisions: NCA ss 80–83 and 86(6)(b); applicable affordability-assessment requirements at the date of the agreement.

Related authority: Nedbank Ltd v Lehasa [2026] ZAFSHC 75; SB Guarantee Co (RF) v De Waal [2026] ZAFSHC 337.

Primary source: https://www.saflii.org/za/cases/ZAWCHC/2026/32.html