Court rejects gambler’s defence as R2.6 million bank error debt leads to sequestration

A six-day gambling spree.
A banking system glitch.
A R2.6 million debt.

And now, a provisional sequestration order.

The Cape Town High Court has ruled in favour of Investec Bank Ltd, placing the estate of Western Cape resident Izak Petrus van Zyl under provisional sequestration after finding him factually insolvent.

Van Zyl had argued that the debt arose from a bank systems failure and that the bank should not be allowed to rely on its own mistake to bankrupt him.

The court disagreed.

How a system error spiralled into millions

In February 2025, Investec experienced an internal systems error that disabled balance checks for certain tokenised transactions. As a result, payments were processed even when accounts lacked sufficient funds.

Between 5 and 11 February 2025, more than R2.6 million in online gambling transactions flowed through Van Zyl’s private banking account.

His approved credit limit? R150,000.

The sheer scale of the overspend raised eyebrows and legal questions.

Van Zyl argued that the bank had effectively extended him credit beyond his approved limit without conducting affordability checks required under the National Credit Act. He claimed this amounted to reckless credit.

He also maintained that he had not personally incurred the gambling debt, stating that his wife had used the account while the credit limit safeguard was not functioning.

According to him, he believed it was impossible for the account to exceed the R150,000 cap.

The court wasn’t convinced

Acting Judge S Yake took a closer look at the timeline.

On 1 February 2025, just days before the system error, Van Zyl had applied for an increase in his credit limit. Investec declined the request.

The judge found it illogical to suggest that the bank would refuse a formal application and then quietly grant unlimited credit days later.

Crucially, every processed transaction triggered SMS notifications to Van Zyl. The court viewed this as undermining his claim that the excess spending occurred without his knowledge.

In addition, the court made a key legal distinction: sequestration proceedings are not debt enforcement proceedings. That meant sections of the National Credit Act dealing with reckless credit did not apply in this context.

In simple terms, this was about insolvency not about whether the bank had followed standard credit approval procedures.

The turning point: repayment proposals

Perhaps the most damaging evidence against Van Zyl was not the system error, but what happened afterwards.

When Investec demanded payment, he did not immediately deny liability. Instead, he submitted written proposals offering to repay the debt in instalments stretching to 2028.

The court interpreted those proposals as acts of insolvency under the Insolvency Act effectively an admission that he could not pay his debts as they fell due.

Judge Yake described Van Zyl’s later attempt to dispute liability as “dilatory tactics,” suggesting it was an effort to delay the inevitable.

The numbers didn’t add up

Investec presented evidence showing that Van Zyl’s liabilities of R2.6 million far exceeded his declared assets of under R500,000.

Even after selling immovable property, the proceeds were insufficient to settle the debt. The court noted that Van Zyl failed to provide a clear explanation of how those proceeds were used and did not demonstrate a genuine effort to extinguish the outstanding amount.

Ultimately, the court found that:

• Investec had a liquidated claim above the statutory threshold.

• Van Zyl was factually insolvent.

• He had committed acts of insolvency.

• There was reason to believe sequestration would benefit creditors.

A return date of 25 March 2026 has been set for interested parties to show cause why the provisional order should not be made final.

A cautionary tale in the age of digital gambling

This case lands at a time when online gambling in South Africa is under intense scrutiny. With betting apps just a tap away, six days is more than enough time for debt to spiral.

On social media, public reaction has been sharply divided. Some argue that banks must bear responsibility for system failures. Others say account holders cannot ignore transaction alerts and then disown the consequences.

The fresh angle here is this: technology glitches may trigger chaos, but personal accountability remains central in insolvency law.

The court’s reasoning sends a clear message, a technical banking error does not automatically transform overspending into legally sanctioned credit.

The bigger legal takeaway

The ruling also clarifies something many consumers misunderstand: sequestration is not about punishing someone for debt. It’s about managing insolvency in a structured way for the benefit of creditors.

By separating the reckless credit argument from insolvency law, the court reinforced that different legal frameworks apply to different disputes.

For professionals in banking, credit and legal circles, the case will likely become a reference point in future disputes involving fintech errors and digital transactions.

For everyday South Africans, it’s a stark reminder: when gambling, technology and credit intersect, the financial fallout can be devastating and the courts may not accept “system error” as a shield against insolvency.