The POPI Act and how it applies to you as an Estate Agent

A lot has been said in recent years about the Protection of Personal Information Act 23 of 2013 (Hereinafter referred to as the “POPI Act”) and the uncertainty surrounding the official date of assenting and implementation thereof. Hopefully this article will put your mind at ease and provide some much needed information regarding the various aspects of this Act.

POPI has its foundations set firmly on the Constitutional right to privacy and as such protects and promotes the personal information of individuals. The POPI act applies to anyone (including attorneys, public entities, private companies and estate agents etc.) who collects and processes personal information of clients. Personal information includes identity numbers, names and surnames, physical-, postal- and electronic addresses, telephone numbers, personal banking information and salary advises, just to name a few. The term processing relates to the collection, storage, usage, modification and destruction of personal information.

In terms of POPI, it is required that anyone who processes personal information, do so in accordance with the Act without infringing a client’s right to privacy, failing which the party responsible for the personal information may be imprisoned or be held liable for a fine or penalty.

It will therefore be necessary for anyone responsible for processing personal information to appoint or assign obligations to a specific person, also known as the Information Officers, who must ensure that every employee complies with POPI. The Information Officer, will also need to be familiar with the different ways in which the company processes its personal information in order to implement compliance structures aligned with POPI.

Some compliance structures, specifically relating to estate agencies may include the following:

  1. Safeguarding the office space

Every office, file, computer and data base which contain personal information of clients will need to be safeguarded to ensure that the personal information remains secure and confidential. These safeguard regulations can include encrypting emails, password/fingerprint protected computers, securing workspaces, preventing unauthorized personnel from entering offices or handling files. These are merely suggestions as to what may be considered for implementation, but more certainty surrounding this aspect may come to light once the Regulations and Guidelines for POPI are released. The Information Officer will play an important role pertaining to the education and training of personnel with regards to the above.

  1. Direct marketing and consent

Direct marketing includes sending listings or advertisements to clients on your company’s database and / or calling them with information regarding new listings or developments. Once POPI comes into effect, direct marketing will be strictly monitored whether it is done by way of fax, email or electronic newsletters. All of these direct marketing initiatives will be prohibited unless consent is given by a client and is subject to the person being a client or new client of the company. The company may only approach the client for consent once and if it is denied, the client may not be asked again unless the client voluntarily consents thereto.

It is unclear as to whether or not sharing personal information with conveyancers, bond originators or other third parties without the specific consent of the client may be deemed as an infringement in terms of POPI. It is therefore recommended that pre-authorization be obtained from a client when an offer to purchase or sale agreement is signed by the client. The conditions thereto may and should include consent to share the client’s personal information with other parties who has a direct interest in the matter and will be necessary to give effect to the terms of the offer to purchaser of sale agreement.

How long will you need to safeguard your client’s personal information and how will it be destroyed?

The Act makes provision that personal information should not be retained any longer than what is specifically necessary. In other words once the transaction has been dealt with, one should either hand over the records to your client or destroy it upon instruction of the client. Destruction of records may include shredding, but the manner of destruction as well as retention of records will be specified once the Regulations is published.

The recent Constitutional Court case of Black Sash Trust v Minister of Social Development [2017] ZACC 8, provides the benchmark for a new era in processing of personal information. The Court held that the use of a data subject’s personal information may only be used for the purpose of the matter, in this case the payment of grants, and may not be shared with third parties to “opt-in” or with the purpose of direct marketing, for instance.


Once POPI gets fully assented, the parties to whom it applies, will have a 1 year compliance grace period, which may be extended to 3 years depending on each unique situation. During this period companies/agencies will need to implement the necessary changes in order to ensure compliance with the Act. With reference to the above it is very important to appoint an Information Officer who will have the responsibility of educating personnel and ensure that all personal information being processed on a daily basis is done with the utmost care and accountability towards clients and the Act. Practical implementation guidelines will assist companies/agencies to comply and safeguard their client’s personal information.

It is quite evident that the implementation of POPI may come with administrative issues. In this regard, the Information Regulator also will play an important role in ensuring that the implementation process runs smoothly and education surrounding POPI will be of utmost importance.

by Landie Saaiman

Is it permitted for a Bank to unilaterally close accounts of a client?

The Gupta family has been in the media for meddling with the South African Government through their close relationship with President Jacob Zuma, they are being accused of allegedly trying to capture the state. Between December 2015 and April 2016, four major banks in South Africa namely: Standard Bank, Nedbank, Barclays Africa and FirstRand Bank, terminated the accounts of companies controlled by the Gupta family without making their reasons public. The Gupta family requested the then Finance Minister Pravin Gordhan to intervene with the decision of the banks to close their bank accounts. The Minister filed an application to court asking a court to declare that he could not interfere with the decisions by the banks. FirstRand’s court filing is in support of the application by Finance Minister Pravin Gordhan and Barclays and Nedbank followed with filing legal applications similar to FirstRand’s application.

The four banks gave the Gupta family more than a month’s notice and citing the need to comply with international banking rules when dealing with customers and concern over their reputations as the reasons for the closure of their accounts. In his court application Pravin Gordhan included a document from South Africa’s Financial Intelligence Centre listing 72 reports of suspicious transactions totaling R6.8 billion that implicated members of the Gupta family and their companies. This seems to be the basis of the allegations of the Gupta families’ money laundering accusations and the need for the four banks to comply with international regulations.

Considering the type of relationship between a bank and its customer establishes the bases of when termination may occur, the relationship is based on contract, the types of contracts that a bank may enter into with its customer is one of a mandate, loan for use, deppositum and deposit taking. I will give an example through the case of Bredekamp v Standard Bank 2009 (6) SA 277 (GSJ) that will be discussed below. The customer held a number of current accounts with Standard Bank, It is trite that the type of contract which underlies a current account, is that of mandate. In terms of this contract of mandate, the customer lends money to the bank on current account, the bank undertakes to repay it on demand by honoring cheques drawn on it, and to perform certain other services for the customer, such as the collection of cheques, the payment of stop and debit orders, and the keeping and accounting of the customer’s accounts with the bank (Schulze (2011) 32 Obiter 211-223 Page 218)

One of the requirements for a contract is consensus, therefor the bank and the customer need to reach consensus with regards to the contract. Therefore the contract may be terminated in the same way as any other consensual contract. No contract can continue perpetually against the will of either of the parties. This will also be the case where the bank – customer contract is one of mandate. A mandate is dissolved by renunciation on the part of the mandatary (in the case below: Standard Bank). The mandatory (in the case below: Bredenkamp) also has no claim if the mandatary had good reason to terminate the mandate.

A bank is required to give notice to its customer before terminating the contract, the bank or customer may terminate the contract unilaterally, but cannot necessarily be terminated without serving prior notice to the other party. In the light of the fact that the common-law principles of the law of contract apply to the bank-customer relationship, a bank may, in the absence of a cancellation clause (ie, a lex commissoria) only resile from the contract if the breach of contract by the customer is serious (Schulze (2011) 32 Obiter 211-223 Page 220)

Schulze explains terminating a contract between a bank and customer as follows:

   I have already pointed out that the underlying contract between a bank and the holder of a current account is that of mandate. The duties of a party to the contract of mandate include the duty not to cause damage to the other party. I believe that where a customer of a bank conducts his business in a way which poses operational and business risks to the bank, the latter can validly argue that the mandatory (ie, the customer) acts in conflict with this duty (Joubert Die Suid-Afrikaanse Verteenwoordigingsreg (1979) 190 et seq). Such conduct would probably satisfy the test of seriousness and will allow the bank to cancel the contract unilaterally, also in the absence of a lex commissoria.”

In this regard it is safe to argue that a bank may terminate its contract with a customer based on the contract or common law. The customer may breach the contract in any other way or cause disrepute to the bank and that would be a valid reason to terminate the contract unilaterally by the bank. The bank may also terminate the contract due to compliance of national or international regulations, an example is the Bredenkamp case discussed below.

The main question of whether a bank has the right to cancel a contract between it and its customer unilaterally? Was put before the court in the matter of Bredenkamp v Standard Bank South Africa Ltd (2010) 4 SA 468 (SCA); 2010 4 ALL SA 113. Before the matter was heard at the SCA, two lower courts also had to make a decision based on the same question.

The SCA dismissed the appeal by Bredenkamp and others against a judgment of the highcourt. The appellants had sought an order preventing the Standard bank of closing their accounts with the Bank. The high court had dismissed the application. It was accepted that the Bank had, in terms of its contract with the appellants and in terms of the common law the right to close the accounts with reasonable notice. However, the appellants contended that the closing was unfair because it was unlikely that they would be able to obtain other banking facilities. They relied on a Constitutional Court (CC) judgment of the case of Barkhuizen v Napier 2007 5 SA 323 (CC) for the proposition that a party is not entitled to use its contractual rights if it would be unfair to the other party. The court held that the appellants had misconstrued the CC judgment and, in any event, the closing of the accounts was not unfair under the circumstances of the case.

The banks were correct in closing their accounts with the Gupta family, as we can establish from the Bredenkamp case the banks can unilaterally terminate their contracts with a customer. The said banks are merely complying with the national and international regulations of which, if they decide to neglect will amount to be illegal action by the banks. The Gupta family failed to prove that the closing of their accounts by the banks will result in them being unbanked, as that would be a strong reason for the banks not to terminate their contract with the said family.

Further the banks need to maintain their reputation in society, the other reason for the banks decision to terminate their contract with the Gupta family was to maintain their reputation, and manage to keep the existing clients they had, despite the saga occurring around the Gupta family.

Considering recent events The National Assembly’s standing committee of finance has endorsed a National Council of Provinces amendment to the Financial Sector Regulation Bill to require banks and other financial institutions to give reasons for termination of products such as the closure of bank accounts. The Financial Sector Regulation Bill will give effect to the twin-peaks system of financial regulation, leading to the separation of prudential regulation of financial institutions from regulation of market conduct.

In terms of the amendment adopted by the National Council of Provinces select committee, the Financial Sector Conduct Authority will be able at its discretion to lay down rules for financial institutions to follow in refusing, withdrawing or closing financial products or financial services.

These new developments are said to be promulgated in order to protect the consumer, as some customers do not enter into these contracts in an equal footing with the bank, and the bank might use its power to unilaterally cancel the contracts with no reason given to the customer. The banks have a fiduciary duty to the customer and in so doing must always act in good faith.

By Konanani Tshivase

Can Years Of Erroneous Payments Form Part Of Employment Terms And Conditions?

This dispute pertains to an alleged unilateral change to the Applicants terms and conditions of employment and in the alternative, they alleged that the withdrawal of erroneous payments amounted to a breach of contract.


Mr Cele and 3 others were employed by Eskom as principal clerks in the Billing Department. In 1999, Eskom introduced a two-shift system in its processing centre arranged from 6am – 2pm and another from 2pm – 10 pm. Employees were paid a shift allowance which was later reflected in their payslips as “fixed monthly payments”. Eskom had continued to pay the fixed monthly payments from 2002 until August 2012 despite shifts having been stopped in 2002. This anomaly was pick up during an audit that was done during 2011. On the 6th of February 2012, Eskom held a shift allowance meeting with the employees and advised them that the shift allowance will be phased out over time. On the 1st of March 2012, Eskom followed up by issuing letters to the employees advising them that the shift allowance will be discontinued in the next six months. On the 29th March 2012 NUMSA referred the dispute to CCMA for conciliation but later withdrew the application. On 25 July 2012 NUMSA wrote a letter to Eskom requesting it to cancel the withdrawal of the employees’ fixed monthly payments as the employees had tailored their lifestyles around the payments and further that they had long term financial commitments. Eskom did not respond to the letter and also to NUMSA’s attorneys’ letter. The allowance was discontinued by end of August 2012. On the 2nd of October 2012 NUMSA referred the dispute to the CCMA. At a conciliation held on the 29th October 2012, the dispute could not be resolved. The union referred the matter to the Labour Court under Section 77 of the Basic Conditions of Employment.


  • No meaningful consultation but they were just informed;
  • Eskom could have picked up the error as early as the 2002 audit;
  • Payments could not have been an error as it was paid over a lengthy period;
  • Eskom did not have unilateral rights to tamper with the individual employee’s terms and conditions of employment without a proper and meaningful consultation;
  • The fixed monthly payment form part of their terms and conditions of services;
  • Payment was seen as a “quid pro quo” for their being willing to work shifts.


  • Eskom was not obliged to consult but had done so individually and collectively and that the termination of the payments was not unilateral;
  • Consultations were meaningful in that, the employees were afforded an opportunity to adjust their lifestyles;
  • The error did not create a legal obligation to continue paying when none existed and were the employees unjustly enriched as a result of the error;
  • Continued payment did not in law gave rise to an obligation to continue paying;
  • Erroneous payment did not give rise to a legal obligation.


The Labour Court had to determine whether the withdrawal of monthly fixed payment by Eskom to the employees was justifiable; whether these payments had become part of their terms and conditions and whether or not erroneous payments created a legal duty to continue paying even in the absence of shifts.


Courts have determined that there is a distinction between terms and conditions of service and mere work practices. In Pick it up Johannesburg (SOC) v South Africa Municipal Workers Union and others and Precision Tools V NUMSA the court held that:

A term or condition of employment emanates from an employment contract or collective agreement’

‘Work practices’ are the employer’s prerogative.

The ‘test’ to determine whether a particular aspect constitute a condition of service or work practice thus requires an examination of:

  • the employees contracts of employment;
  • any other document regulating the relationship such a collective agreements.
  • any additional terms that can be implied from the parties’ conduct or from custom and practice.


The court, after citing several cases, determined that what was put in place with the two shift system amounted to a new work practice which was accordingly compensated. A charge to the shift system is not in itself a unilateral charge to an employee’s terms and conditions of employment but merely a change to the employer’s work practice.


The Court accordingly concluded that there was no unilateral change to the terms and conditions of employment and was satisfied that the applicants were timeously and properly consulted and given a further six months warning that the payments would be stopped. This time afforded the employees enough time to adjust their lifestyles accordingly.

By Abi Matjila