2020 QCCQ 613, 2020 QCCQ 613

Gilsenan c. Bluehat Marketing Inc. 2020 QCCQ 613 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTRÉAL TOWN OF MONTRÉAL Civil Division No: 500-32-705806-182 DATE: February 19, 2020 ______________________________________________________________________ BY THE HONOURABLE MAGALI LEWIS jcq ______________________________________________________________________ OLIVER GILSENAN and VITALITÉ MAINTENANT INC. Plaintiffs v. BLUEHAT MARKETING INC.

Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Olivier Gilsenan, acting on his behalf and that of his company, Vitalité Maintenant Inc. (“Vitalité”) (jointly the Plaintiffs), is suing BlueHat Marketing Inc. (“BlueHat”), a digital marketing agency, for breach of contractual obligation. [ 2 ] In support of the claim, Mr.

Gilsenan claims that he was justified, on May 16, 2018, to terminate the contract of service which bound the parties because BlueHat failed to provide “30 keywords” as provided in the contract, and thus is justified to claim reimbursement of the $13,494.00 plus interests Plaintiffs paid to BlueHat in consideration of the contract. [ 3 ] Although BlueHat initially took the position that it was doing business with U Master Exam Inc. (“U Master”) as indicated on the contract and not with Vitalité, it did not contest at the hearing that U Master is not a legal entity but a website controlled by Vitalit é, and that it was its mistake that the contract was made out to U Master Inc. [ 4 ] BlueHat still contests Plaintiffs’ claim alleging that it fulfiled its contractual obligations in a satisfactory manner as determined by the contract and that Mr.

Gilsenan’s allegations are unfounded . I. THE ISSUES [ 5 ] To decide this case, the Court will answer the following questions: 1. Did BlueHat fail to fulfil the main obligations set out in the contract, justifying Plaintiffs to terminate the contract and obtain reimbursement of the payments made? 2. What is the value of the services rendered by BlueHat on the date when Plaintiffs terminated the contract? II. THE CONTEXT [ 6 ] Mr.

Gilsenan operates U Master through Vitalité, a website that aims to help people master the Test of English as a Foreign Language (TOEFL). [ 7 ] BlueHat is a digital marketing agency that provides services to companies that seek to achieve better visibility on Google. [ 8 ] On November 2, 2017, the parties signed a 12-month contract which called for a search engine optimization (SEO) for U Master. The purpose of the optimization was to help U Master achieve better visibility on Google when people search for information regarding the TOEFL.

In order to achieve that objective, BlueHat would use keywords to identify U Master in the search engine. The contract indicated that BlueHat would identify 30 key words. [ 9 ] In its explanatory document, BlueHat defines the SEO as follows:

[…] the process of affecting the visibility of a website or a web page in a search engine ’s unpaid results—often referred to as “natural,” “organic,” or “earned” results.

Search engine optimization is an area of website development that seeks to improve the way content is ranked by search engines in organic search results. [1] (Emphasis in the text) [ 10 ] The contract provides that BlueHat services are payable monthly, by instalments of $2,249.00 plus applicable taxes during the term of the contract, but provides that should U Master not make first page on Google within 6 months after the start of the SEO, the monthly payments will be reduced by 50% in the following months until the objective is achieved.

The clause reads as follows: BlueHat Marketing will reduce the monthly billing by 50% for your website if 50% of the mentioned keywords do not reach first page Google.ca after 6 months from the verification of Google places listing or receive logins to the client’s account in writing. After the 6 months’ period BlueHat Marketing will continue the SEO efforts till first page visibility is achieved and only then will the regular billing amount restart.

The time frame is based on the client’s cooperation to provide access to his/her website if any, Google places pin or account passwords and any other information required and asked for in writing from BlueHat Marketing Technical support. [2] [ 11 ] The contract provides that the client may terminate the agreement at any time if there is a considerable lack of effort, contact or reasonable delay in responding to client’s requests/queries. [3] [ 12 ] After the service commenced, Mr.

Gilsenan complained about the speed at which the work was progressing and the working style of the project manager, which he perceived as being inefficient. [ 13 ] Mr. Gilsenan claims that he had to request multiple times for a progress report, to have access to the links created for his website, and to update the approved content on the website. He also claims that the project manager was never able to cut the 229 keywords he approved on December 5, 2017, into a list of 30 keywords which he insisted to obtain. [ 14 ] On February 13, 2018, Mr.

Gilsenan wrote to BlueHat requesting that the project manager assigned to his contract be replaced, but was still not satisfied with the way the new project manager handled his requests or complaints. [ 15 ] Notwithstanding his complaints, Mr. Gilsenan admits that BlueHat was not obligated to create and communicate a communication reports demonstrating the results achieved. [4] BlueHat explained that the reason it did not provide reports was because Mr. Gilsenan had continuous access to an electronic reporting center that allows him to analyse the statistics related to his website. [5] [ 16 ] On May 16, 2018, Mr.

Gilsenan sent a 10 page termination notice to BlueHat, claiming reimbursement of the 6 instalments paid, totalling $13,494.00. [6] [ 17 ] In that letter, Mr. Gilsenan addressed a number of issues which he did not bring up at the hearing. At page 5 he quotes an email that he would have sent on May 1 st 2018 where he wrote to his project manager: “I’ve now officially run out of money, because 6 months into the SEO process, I still haven’t made any money back.” [ 18 ] Mr.

Gilsenan’s position that the SEO process was in its 6 th month on May 1 st , 2018 is inaccurate since the process was activated after December 5, 2017. As for the fact that he ran out of money, he cannot blame BlueHat, as generating revenues for Vitalité was never a consideration of the contract of service. [ 19 ] After having recited his dissatisfactions over 7 pages, Mr. Gilsenan write: “what bothers me the most, and I consider to be a clear breach of contract is the following: I am contracted to have 30 keyword.” [ 20 ] At the hearing, Mr. Gilsenan acknowledged that BlueHat rendered some services.

Plaintiffs do not ask for the reimbursement of the $25 fee they paid between December 2017 and April 2018 ($125 plus applicable taxes) for the Sucuri service, a service that cleans and protects the website. Mr.

Gilsenan did not explain why he is asking for full reimbursement of the moneys paid for BlueHat’s services when the ranking chart he reproduced within his termination letter indicate the exponential progress his website made between November 2017 and May 2018. [ 21 ] In support of its contestation of the claim, BlueHat indicates that it has provided the services that Plaintiffs retained it for and that the value of the services it has rendered is equal to what Plaintiffs paid prior to the cancellation of the contract.

III. the ANALYSIS [ 22 ] A person making a claim must provide the Court with clear and convincing evidence to support the facts that have given rise to the claim, and convince the Court that the occurrence of the events is more likely than not, [7] to satisfy the test of balance of probabilities. [8] [ 23 ] The parties in the present case were bound by a contract for services where BlueHat undertook to provide SEO for Vitalité for a price which it agreed to pay (art. 2098 C.C.Q.) [ 24 ] As a service provider, BlueHat was free to choose the means of performing the contract and, with respect to such performance, no relationship of subordination existed between the provider of services and the client (art. 2099 C.C.Q.), BlueHat being bound to act in the best interests of its client, Vitalité, with prudence and diligence (art. 2100 C.C.Q.) [ 25 ] A client can unilaterally resiliate a contract if he so chooses, even though the provision of services is already in progress and the service provider is not in default of any kind regarding its contractual obligations (art. 2125 C.C.Q.)

[ 26 ] In that event, the client is bound to pay to the provider of services, in proportion to the agreed price, the actual costs and the value of the work performed before the end of the contract or before the notice of resiliation (art. 2129 C.C.Q.) [ 27 ]

Article 1590 C.C.Q. provides that a client has the right to demand that the obligation be performed in full, properly and without delay.

Where the service provider fails to perform his obligation without justification and is in default, the client may, without prejudice to his right to the performance of the obligation in whole or in part by equivalence, obtain the resolution or resiliation of the contract in the case of a contract of successive performance or the reduction of his own correlative obligation. [ 28 ] One, however, is not entitled to the resolution or resiliation of a contract if the default of the counterpart is of minor importance.

In the case of an obligation of successive performance, if the default occurs repeatedly, the client may be entitled to a proportional reduction of his correlative obligation, all the circumstances being taken into consideration in assessing the proportional reduction of the correlative obligation. If the obligation cannot be reduced, the client is entitled to damages only (art. 1604 C.C.Q.) [ 29 ] A contract which is resolved is deemed never to have existed; each party is, in such a case, bound to restore to the other the prestations he has already received.

A contract which is resiliated ceases to exist, but only for the future. (art. 1606 C.C.Q.) 1.

Did BlueHat fail to fulfil the main obligations set out in the contract, justifying Plaintiffs to terminate the contract and obtain reimbursement of the payments made? [ 30 ] According to Plaintiffs, BlueHat has not respected its contractual obligations because it failed to provide “30 keywords” as indicated in the contract and thus is in default or delivering the agreed service within the prescribed time. [ 31 ] Although they admit that BlueHat provided some services, Plaintiffs contends that failure to provide the 30 keywords justified them claiming reimbursement of the monthly payments made between the beginning of the contract and its termination. [ 32 ] Expressed in other words, Plaintiffs contend that it is not relevant whether U Master’s visibility on Google increased or even that it made first page within 6 months of the signature of the contract as the exhibits testified too, because the most important element of the contract was that BlueHat provide Vitalité with 30 keywords. [ 33 ] Plaintiffs’

interpretation of the contract does not correspond to the service they paid for, which was SEO, the number of keywords being just a means to achieve that objective. [ 34 ] In addition, the contract did provide for some flexibility in relation to the execution time and allowed for a longer execution time with no extra charge for the client. Yet Plaintiffs did not allow BlueHat to benefit from that clause. [ 35 ] The top 30 keywords which the parties had chosen were in the top 20 of Google rankings.

From November 2017 to May 2018, U Master experienced an exponential growth in web rankings as it moved up 8330 position compared to where it was prior to contracting with BlueHat. [ 36 ] In that context, the fact that BlueHat did not provide Mr. Gilsenan with a list of 30 keywords cannot be viewed as a serious default that justified resiliation under

article 1604 C.C.Q. [ 37 ] Without expert evidence demonstrating that BlueHat services were not up to industry standards, Plaintiffs failed to establish that they terminated the contract for cause. 2. What is the value of the services rendered by BlueHat on the date when Plaintiffs terminated the contract? [ 38 ] BlueHat’s employees devoted an estimate of ninety (90) hours on the SOE for U Master.

The services included redesigning the website so it complied with Google’s guidelines as to content, structure and usability, and creating keywords to promote visibility on Google and reducing web issues. [ 39 ] Plaintiffs did not establish that BlueHat did not provide the services and thus that they are entitled to a reduction of the price they had agreed to pay. Legal fees [ 40 ]

Article 340 of the Code of Civil Procedure provides that the losing party is entitled to legal costs, $308 in the present case representing the cost for filing the contestation with the Court (art. 339 C.C.P.) FOR THESE REASONS, THE COURT: [ 41 ] DISMISSES the claim ; [ 42 ] CONDEMNS Plaintiffs to pay $308.00 to the Defendant as judicial costs. __________________________________ MAGALI LEWIS, J.C.Q. Date of hearing: January 13, 2020