Attachmate Corporation v Minister of Water and Environmental Affairs (20071/2014) [2015] ZASCA 68 (20 May 2015)

Attachmate Corporation v Minister of Water and Environmental Affairs (20071/2014) [2015] ZASCA 68 (20 May 2015)

The court held that the 'applicable license fee' in clause 11 of the license agreement refers to the fee negotiated between Attachmate and the Department, specifically the Sita discounted rate, not the list price. This interpretation avoids treating clause 11 as a penalty clause and aligns with the contractual context and the contra proferentem rule. The court further found that Attachmate's claim for maintenance fees was properly a claim for damages arising from breach of contract. Had the Department complied with its obligations, it would have paid maintenance fees for all copies, including those that were unlicensed. Therefore, Attachmate is entitled to damages calculated on the basis...

Citation
[2015] ZASCA 68
Parties
Appellant: Attachmate Corporation; Respondent: Minister of Water and Environmental Affairs
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
20 May 2015
Case Number
20071/2014
Procedural Posture
Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria
Outcome
Appeal upheld in respect of the maintenance fee claim; Department ordered to pay Attachmate maintenance fees for unlicensed copies plus interest. Other aspects of the order of the court a quo confirmed.
Judges
Brand, Bosielo, Majiedt, Petse, Mbha
Legal Topics
Software License Agreement, Contractual Damages, Interpretation of Contracts, Maintenance Fees, Contra Proferentem Rule
Commercial and Corporate Software License Agreement Contractual Damages Interpretation of Contracts Maintenance Fees Contra Proferentem Rule

Case Brief

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Parties

Attachmate Corporation

Appellant

Minister of Water and Environmental Affairs

Respondent

Procedural Posture

Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria

Legal Issues

  1. 1 What is the correct interpretation of 'applicable license fee' in clause 11 of the software license agreement?
  2. 2 Is Attachmate entitled to maintenance fees for unlicensed copies of its software under the maintenance agreement?
  3. 3 What is the quantum of damages owed to Attachmate for breach of contract by the Department?

Ratio Decidendi

The court held that the 'applicable license fee' in clause 11 of the license agreement refers to the fee negotiated between Attachmate and the Department, specifically the Sita discounted rate, not the list price. This interpretation avoids treating clause 11 as a penalty clause and aligns with the contractual context and the contra proferentem rule. The court further found that Attachmate's claim for maintenance fees was properly a claim for damages arising from breach of contract. Had the Department complied with its obligations, it would have paid maintenance fees for all copies, including those that were unlicensed. Therefore, Attachmate is entitled to damages calculated on the basis...

Court Disposition

Appeal upheld in respect of the maintenance fee claim; Department ordered to pay Attachmate maintenance fees for unlicensed copies plus interest. Other aspects of the order of the court a quo confirmed.

Orders

  • The appeal is upheld to the extent reflected in paragraph (3) below.
  • The respondent is ordered to pay the appellant’s costs, including the costs of two counsel.