Systems Applications Consultants (Pty) Ltd v Systems Application Products (2008/20378) [2021] ZAGPJHC 792; [2022] 1 All SA 824 (GJ) (7 December 2021)

Systems Applications Consultants (Pty) Ltd v Systems Application Products (2008/20378) [2021] ZAGPJHC 792; [2022] 1 All SA 824 (GJ) (7 December 2021)

The court found, on the balance of probabilities, that SAC was the true contracting party to the SDA, supported by consistent witness testimony and documentary evidence. The SDA was concluded by conduct, with SAP SI's representatives having apparent and tolerated authority to bind SAP SI. SAP intentionally induced SAP SI to breach the SDA for competitive reasons, which under German law (sections 826 and 823(1) BGB) constitutes unlawful and morally reprehensible conduct. The court held that SAP's actions destroyed SAC's established business, amounting to delictual liability. SAP's application to amend its plea and introduce the Cooperation Agreement was found to be mala fide, prejudicial,...

Citation
[2021] ZAGPJHC 792
Parties
Plaintiff: Systems Applications Consultants (Pty) Ltd t/a Secureinfo (SAC); Defendant: Systems Application Products (SAP SE, formerly SAP AG)
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
7 December 2021
Case Number
2008/20378
Procedural Posture
Civil Trial / Merits Separated From Quantum Under Rule 33(4); Judgment on Merits
Outcome
Judgment for the plaintiff (SAC) on the merits; SAP found liable for breach of legal duties under sections 826 and 823(1) BGB; quantum to be determined separately.
Judges
Tsoka
Legal Topics
Breach of Contract, Inducement to Breach, Fiduciary Duties, Unlawful Competition, German Civil Code Bgb, Expert Evidence on Foreign Law
Commercial and Corporate Delict Breach of Contract Inducement to Breach Fiduciary Duties Unlawful Competition German Civil Code Bgb Expert Evidence on Foreign Law

Case Brief

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Parties

Systems Applications Consultants (Pty) Ltd t/a Secureinfo (SAC)

Plaintiff

Systems Application Products (SAP SE, formerly SAP AG)

Defendant

Procedural Posture

Civil Trial / Merits Separated From Quantum Under Rule 33(4); Judgment on Merits

Legal Issues

  1. 1 Whether SAC was the contracting party to the Software Distribution Agreement (SDA).
  2. 2 Whether the SDA was concluded by conduct and whether SAP SI's representatives had authority to bind SAP SI.
  3. 3 Whether SAP, by inducing SAP SI to breach the SDA, committed a delict under sections 826 or 823(1) of the German Civil Code (BGB).

Ratio Decidendi

The court found, on the balance of probabilities, that SAC was the true contracting party to the SDA, supported by consistent witness testimony and documentary evidence. The SDA was concluded by conduct, with SAP SI's representatives having apparent and tolerated authority to bind SAP SI. SAP intentionally induced SAP SI to breach the SDA for competitive reasons, which under German law (sections 826 and 823(1) BGB) constitutes unlawful and morally reprehensible conduct. The court held that SAP's actions destroyed SAC's established business, amounting to delictual liability. SAP's application to amend its plea and introduce the Cooperation Agreement was found to be mala fide, prejudicial,...

Court Disposition

Judgment for the plaintiff (SAC) on the merits; SAP found liable for breach of legal duties under sections 826 and 823(1) BGB; quantum to be determined separately.

Orders

  • It is declared that SAP SE is in breach of its legal duties to SAC as provided for in section 826 alternatively section 823 of the BGB.
  • SAP SE is liable to SAC for such damages as may be shown to have been suffered by SAC as a consequence of such breaches.