2011 QCCQ 1098, 2011 QCCQ 1098

Pergat (Sphyr Communications) c. Jeffcott 2011 QCCQ 1098 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF LAVAL TOWN OF LAVAL Civil Division No: 540-32-020932-081 DATE: January 25, 2011 ______________________________________________________________________ BY THE HONOURABLE JEAN PIERRE ARCHAMBAULT, J.C.Q. ______________________________________________________________________ NICHOLAS PERGAT doing business under the name SPHYR COMMUNICATIONS Plaintiff Vs ROBERT JEFFCOTT And TROPOTEL INC.

Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Plaintiff, Nicholas Pergat, doing business under the name Sphyr Communications (hereinafter called “Pergat”), a business specialized in the updating and development of Web sites, is claiming an amount of 6 783,79 $, jointly and severally, from Defendants TropoTEL Inc. (hereinafter called “TropoTEL”) and Robert Jeffcott, for work done for “TropoTEL” Inc. for the updating and development of a new Web site for the corporation; [ 2 ] Defendants are contesting this claim.

For his part, Defendant Jeffcott claims that there is no legal relationship or contract between himself personally and Plaintiff and that he was at all times, pertinent to this case, acting solely as President of Defendant “TropoTEL”. [ 3 ] He asks that the Court rely on the corporation’s Defence against Plaintiff’s allegations; [ 4 ] “ProtoTEL” also contests this claim.

It indicates that Exhibit P-1, which Plaintiff refers to as an invoice, is not an invoice but rather an estimate of services, conditional upon the payment of a deposit which was never paid; [ 5 ] It adds that there was never any formal agreement entered between the parties; THE FACTS [ 6 ] The facts accepted by the Court as proven by preponderance of proof notwithstanding the contradictory proof presented by both parties can be resumed as follows; [ 7 ] “TropoTEL” is a communication corporation specialized in fax and email distribution solutions.

In July 2008, it hired Steve Baker to act as the company’s Sales Manager for the development of the company’s business; [ 8 ] Plaintiff Nicholas Pergat, who had previously worked with Baker, was subsequently contacted by Baker to work on a new Website for the corporation; [ 9 ] It is admitted that Steve Baker did not like “TropoTEL’s” Web site and that he wanted a new Web site for the company in order to properly develop the corporation’s business. In his email to Pergat, dated July 31 2008, he states: “I just need to get something up quick so I can call customers.

The current site is so untypical that it does not help close the sales after I talk to them”

(our underlining) [ 10 ] It is admitted that there was a meeting between Pergat, Baker, Jeffcott and Sandit Patel, “TropoTEL’s” Information Technology Manager to discuss the mandate given to Pergat for the conception and development of a new Website for “TropoTEL” ; [ 11 ] M.

Jeffcott gave the “OK” for the project and Steve Baker was the respondent for the company that was dealing with Pergat for the development of the Website, as more fully appears from the important exchange of emails between Baker and Pergat, between July 18 and October 3, 2008, produced as exhibit D-2-1 to D-2-25; [ 12 ] It is also admitted that a general meeting of the shareholders of “TropoTEL” was scheduled for August 12, 2008 and that Baker and Jeffcott wanted to show as much as possible of the new projected Website to the other shareholders of “TropoTEL”, in order to get more investments for the company; [ 13 ] On July 23, 2008, Pergat sent Baker “a sample rough draft of an idea for the new Website” (D-2.3); [ 14 ] The same day, Baker wrote back to Pergat : “Hi Nick, I got your phone message.

We are OK with the 3-4 K budget since you will be handing things off to us once the look and basic structure is done. “ [ 15 ] On July 31, 2008, he adds: “… I am ok with these charges but I want to stick to a 4K budget.

The staff here can do work you can hand off to them. …The staff here has a lot of knowledge- you’ll see tomorrow” [ 16 ] This confirms that the agreement between the parties was for a budget between $ 3 000. and $ 4 000. for said work and that some of the work would be made by “TropoTEL’s” own employees; [ 17 ] It was agreed that a deposit of $ 1 500. would be paid to Plaintiff and that a cheque would be sent to him; [ 18 ] On August 4, 2008, Plaintiff drafted invoice no. 2008-245 (P-1) for an amount of $ 3 500. plus options, plus taxes, mentioning said $ 1 500. deposit; [ 19 ] On August 5, 2008, Plaintiff wrote to Steve Baker: .

Hi Steve … we discussed most of this on the phone … except that I attached an invoice and would like to get a the deposit paid since the work has already started” [ 20 ] It is admitted that this deposit was never sent to Plaintiff who, nevertheless had already proceeded with the work; [ 21 ] It is also admitted that Plaintiff did, in fact, deliver a link to his server in order for Baker and Jeffcott to give a presentation of the new Website for the shareholders meeting of August 12, 2008; [ 22 ] The next day, Pergat sent an email (D-2-15) to Baker asking: “Ps…. is the check in the mail ?” [ 23 ] On August 14, Pergat sent an email (D-2-17) to Baker stating: “I think I prefer sticking to the plan that we discussed this morning on the phone.

In that, next week we will hand over the “keys” to the website and you can post all the content.. and once that is all done and we will look at finalizing the website. And decide what elements need to be added.” [ 24 ] Plaintiff claims that on August 21, 2008 the project was 90 % finished; [ 25 ] He adds that “TropoTEL” then proceeded in creating a clone of the Website and accessed his servers; [ 26 ] He says that he called Baker to ask how this was done but got no explanation. He claims, this caused him damages because he claims that, within 3 weeks, his servers were attacked by “ackers”.

He adds that these attacks were related to “TropoTEL” ; [ 27 ] He adds, that he had to move all of the IP addresses and make various searches and security modifications to his servers; [ 28 ] This necessitated overtime work by his employees and he claims the following damages: - $ 250. plus taxes for suspension of Web account fees due to the unauthorized Web server access by “TropoTEL” ; - $ 700. plus taxes for blocking of Wed and DNS redirection from “TropoTEL” for blocking said unauthorized access to his Web server; - $ 1,000. plus taxes for illegal use and unauthorized transmission of Website using his servers which where never the target of any such attack before. [ 29 ] Robert Jeffcott states, that he was not aware of any illegal use of said servers.

He adds, that neither the new Website, nor the link was used by “TropoTEL” for any commercial purposes;

[ 30 ] Sandit Patel, “TropoTEL’s” , I.I. Manager, confirms that the Website was used for internal purposes only and that Plaintiff provided “TropoTEL” with links to access said Website; [ 31 ] Plaintiff indicates that he noticed that “TropoTEL’s” email address was a public email address and that “TropoTEL” had, in fact, created a page on their server which was public; [ 32 ] In his email, dated September 10, 2008 to Pergat (D-2-24), Baker states: “ We all agree you worked on the site and we owe you money .

I think you need to forgive us for us using the site before it was finished because it was not done with malice of bad intent. We stopped doing that as soon as you asked us . We need to clear the air and be sure of what the next step is with the site- ie turn it over to us as is or finish the work- and if it is the latter we need to define what “finish” means. (our underlining) [ 33 ] On September 29, 2008, Baker again wrote to Pergat, admitting that “TropoTEL” owed Plaintiff money for the work done (D-2-25): “Nick, Sorry I was out of the office Friday.

We are having a meeting with the investors wednesday to discuss financing. Bob is confident a new plan will be approved this week. I appreciate your patience. We owe you money and I personally feel bad that you have not been paid yet . Bob also feels bad but he is no longer the major shareholder so things have gotten more complicated. I will have more news later this week.” (our underlining) RULES OF LAW [ 34 ]

Article 2803 of the C.C.Q. states: "A person wishing to assert a right shall prove the facts on which his claim is based. A person who alleges the nullity, modification or extinction of a right shall prove the facts on which he bases his allegation." [ 35 ] This

article imposes on Plaintiff's shoulders the burden to prove the allegations contained in his claim by preponderance of proof; [ 36 ]

Article 2804 of the CC.Q. adds: "Evidence is sufficient if it renders the existence of a fact more probable than its non-existence, unless the law requires more convincing proof." [ 37 ] The contract entered into by the parties is a contract for services pursuant to

article 2098 of the Civil Code of Quebec , which reads as follows: " A contract of enterprise or for services is a contract by which a person, the contractor or the provider of services, as the case may be, undertakes to carry out physical or intellectual work for another person, the client or to provide a service, for a price which the client binds himself to pay." [ 38 ]

Article 2100 of the Civil Code of Quebec imposes to the provider of services the obligation to act in the best interest of his client, with prudence and diligence: “ 2100. The contractor and the provider of services are bound to act in the best interests of their client, with prudence and diligence. Depending on the nature of the work to be carried out or the service to be provided, they are also bound to act in accordance with usual practice and the rules of art, and, where applicable, to ensure that the work done or service provided is in conformity with the contract. Where they are bound to produce results, they may not be relieved from liability except by proving superior force.” [ 39 ]

Article 2102 of the Civil Code of Quebec adds the obligation for the provider of services to provide the client with any useful information concerning the nature of the task and the property and the time required for that task: « 2102. Before the contract is entered into, the contractor or the provider of services is bound to provide the client, as far as circumstances permit, with any useful information concerning the nature of the task which he undertakes to perform and the property and time required for that task." [ 40 ]

Article 2126 of the Civil Code of Quebec allows the client or the provider of services to resiliate the contract for a serious reason:

“ 2126. The contractor or the provider of services may not resiliate the contract unilaterally except for a serious reason, and never at an inopportune moment; otherwise, he is liable for any injury caused to the client as a result of the resiliation. Where the contractor or the provider of services resiliates the contract, he is bound to do all that is immediately necessary to prevent any loss” [ 41 ] Finally,

Article 2129 of the Civil Code of Quebec , stipulates the principles applicable to the calculation of the various amounts owed between the parties in the event of such a resiliation: “ 2129. Upon resiliation of the contract, the client is bound to pay to the contractor or the provider of services, in proportion to the agreed price, the actual costs and expenses, the value of the work performed before the end of the contract or before the notice of resiliation and, as the case may be, the value of the property furnished, where it can be returned to him and used by him.

For his part, the contractor or the provider of services is bound to repay any advances he has received in excess of what he has earned.

In either case, each party is liable for any other injury that the other party may have suffered.” ANALYSIS and DECISION [ 42 ] Considering the testimonial and documentary proof presented by both parties; [ 43 ] The Court is of the opinion that there was a verbal contract entered into by Plaintiff and Defendant “TropoTEL” for the update and development of a new Website for the purposes of Defendant’s “TropoTEL’s” business on Internet; [ 44 ] The chosen representative of “TropoTEL” for this purpose was Steve Barker, acting as Sales Manager for “TropoTEL”.

This is quite clear from the numerous emails exchanged between Baker and Plaintiff Pergat; [ 45 ] It is also clear that the price agreed upon by the parties was to be between $ 3,000. and $ 4 ,000. ; [ 46 ] Plaintiff subsequently sent invoice P-1 with the mention that a deposit of $ 1,500. was to be sent to Plaintiff; [ 47 ] The proof shows that said deposit was never paid, notwithstanding the fact that Plaintiff started to work and met “TropoTEL’s” demand for the 12 th of August 2008 deadline for “TropoTEL” shareholders meeting; [ 48 ] The preponderant proof is also that a demand was made by Baker for overtime work to be performed on the weekend of August 9-10 to meet said deadline.

Plaintiff is claiming $ 560. for said overtime, but did not produce any detailed description of said work; [ 49 ] Consequently, the Court arbitrates this amount and sets it at $ 300. plus taxes, that is $ 338.63; [ 50 ] The preponderant proof is that as of August 21, 2008, Plaintiff had executed 90 % of the mandate that it was given, but that it was never paid; [ 51 ] The Court applying this 90 % percentage to the amount claimed, namely $ 3,950. plus taxes) declares that an amount of $ 3,555.57 is owed to Plaintiff for the development of “TropoTEL’s” s new Website; [ 52 ] Concerning Plaintiff’s claim for damages relating to: - Suspension of Web account fees due to unauthorized Web server access $ 250.00 plus taxes - Blocking of Web and DNS redirection from “TropoTEL” blocking unauthorized access of Plaintiff’s Web server $ 700.00 plus taxes - Illegal use and unauthorized transmission of Website using our servers $ 1,000.00 plus taxes TOTAL $ 1,950.00 plus taxes. [ 53 ] The Court notes the admission made by Baker in his email dated September 10, 2008, to the effect that “TropoTEL” did, in fact, use the site without Plaintiff’s authorization; [ 54 ] The Court notices that Plaintiff’s claim totalling $ 1,950. plus taxes is not substantiated by any detailed invoice for the alleged overtime that he is claiming;

[ 55 ] Furthermore, the proof presented by Plaintiff to support his allegations, that it is “TropoTEL’s” unauthorized use of its servers that caused the attacks, his servers sustained 3 weeks later, is not sufficient proof that these attacks were, in fact, caused by “TropoTEL’s” actions; [ 56 ] Notwithstanding this, the Court condemns “TropoTEL” to pay Plaintiff $ 500. for the unauthorized use of its servers, while it had not even paid Plaintiff for his services; [ 57 ] The claim against Robert Jeffcott personally is rejected, as not founded in fact and in law, because Defendant Jeffcott was not acting personally, but as a Director for “TropoTEL” and that he never gave any personal guarantee for the obligations of “TropoTEL”; FOR THESE REASONS, the Court: DISMISSES Plaintiff’s claim against Robert Jeffcott personally, without costs; PARTIALLY GRANTS Plaintiff’s claim against TropoTEL Inc. ; CONDEMNS Defendant, TropoTEL Inc. to pay Plaintiff, the amount of $ 4,394,20 ( $338,63 plus taxes, $ 3,555,57 and $ 500.) plus interests at the rate of 5 % plus the additional indemnity of

Article 1619 C.c.Q. as of December 29, 2008. CONDEMNS Defendant TropoTel to pay Plaintiff’s judicial costs in the amount of $155. __________________________________ JEAN PIERRE ARCHAMBAULT, J.C.Q. Date of hearing: January 7, 2011