Executive Summary: Key Legal and Evidentiary Issues

• Dispute over unpaid professional fees for website development and related services under a service contract

• Whether the plaintiff sufficiently proved the services performed to support the amounts claimed

• Assessment of a 36% annual late payment penalty as potentially abusive under article 1623 C.c.Q.

• Application of legal interest and additional indemnity in line with the Code civil du Québec

• Court’s reduction of the claim to reflect only services properly documented and authorized

• Judgment partially allowed the claim with reduced amount and adjusted interest rate

Facts of the case
Thierry Lavallée, operating as 8P-Design, entered into a service contract with Xenopus inc. on August 21, 2017, for the development, programming, and maintenance of Xenopus’s website and other related services. Between January 22, 2018, and July 13, 2021, 8P-Design provided various services under this agreement. The website was completed on February 5, 2019. In August 2021, after the termination of the service contract, 8P-Design issued an invoice for $14,708.18 for unpaid work during the service period, plus a $1,500 management fee. The total claim was reduced to $15,000 for the purposes of the Small Claims Division.

Defence by Xenopus inc.
Xenopus acknowledged that it had paid for authorized maintenance services between 2018 and 2021. It disputed the remaining fees, particularly amounts invoiced for work allegedly performed after the website’s launch and invoiced late, as well as the additional management fee and the 36% annual interest rate claimed.

Court’s analysis
The Court reviewed the evidence and found that 8P-Design had not fully substantiated its entire claim. Some of the hours claimed were for work done before the website launch or were insufficiently documented. The Court excluded 48.65 hours of such work, reducing the claim to 89.25 hours at $85 per hour, totaling $7,586.25. The Court also found no proof to support the claimed $1,500 management fee.

Regarding interest, the service contract included a clause stipulating a 36% annual penalty for late payments. The Court ruled this rate abusive under article 1623 C.c.Q. and reduced it to a reasonable annual rate of 15% from April 14, 2023 (the date of formal notice).

Outcome
The Court partially upheld the plaintiff’s claim. Xenopus inc. was ordered to pay $7,586.25 to 8P-Design, with interest at an annual rate of 15% from April 14, 2023, and legal costs of $223. The remainder of the claim, including the management fee and any higher interest, was denied.