Executive Summary: Key Legal and Evidentiary Issues

• A distributor's contractual discretion to suspend services for alleged artificial streaming must still be exercised in good faith under the Civil Code of Québec.
   
• Repeated requests from the artist for concrete evidence of manipulation went unanswered, undermining the distributor's justification for suspension.
   
• Article 2126 C.C.Q. requires a service provider to have a serious reason before unilaterally terminating a contract, absent which it must compensate the client for resulting harm.
   
• No evidence was presented at the hearing to substantiate the distributor's manipulation allegations against the artist.
   
• Damages claimed by the artist, totalling $15,000 and itemized in Australian dollars, were largely unsupported by evidence and included no proof of a Canadian-dollar conversion rate.
   
• Absent proof of quantifiable financial loss, the court awarded a modest sum for trouble and inconvenience rather than the damages sought.
   

Facts of the case

Raul Herrera Chaparro, a musician who has composed approximately twenty songs, engaged Landr Audio Inc. in April 2023 to distribute his music on streaming platforms. On July 24, 2025, Landr informed him by email that it was suspending distribution of his music, citing information suggesting artificial manipulation of his stream counts — a decision preceded by two similar warning emails sent in November 2023 and April 2024. His music became unavailable on streaming platforms overnight. Chaparro immediately disputed the allegation and requested evidence, later sending Landr a detailed response addressing the claims and describing the harm caused. In subsequent exchanges, Landr maintained that Spotify had flagged the account for patterns consistent with artificial streaming, including looping and low listener engagement, and confirmed that the decision to end distribution was final, though Chaparro could still use Landr's other services and export his assets. After Chaparro filed his claim in Quebec's Small Claims Division, he asked Landr's cooperation in transitioning to a new distributor; Landr responded that his account would remain accessible for downloading assets, but that royalty withdrawals and distribution features would stay disabled, citing two prior strikes on the account. When Chaparro contacted Spotify directly to verify Landr's claims, he received only evasive responses and no conclusive confirmation of any communication between Spotify and Landr regarding manipulation of his listens.

Policy and legislative provisions at issue

Landr's suspension decision relied on a clause in its terms of service granting it sole discretion to remove recordings, withhold net income, and terminate an account where it believes, in its reasonable judgment, that a user is engaged in fraudulent, infringing, or illegal activity. The court weighed this discretion against articles 6, 7, and 1375 of the Civil Code of Québec, which require civil rights to be exercised in good faith and prohibit their exercise in an excessive or unreasonable manner. Article 2126 C.C.Q. was also central: it permits a service provider to unilaterally terminate a contract only for a serious reason, and requires compensation to the client where termination causes harm.

Reasoning and analysis

The court found that while Landr's contract gave it broad discretion to suspend accounts for suspected artificial streaming, that discretion had to be exercised in good faith. Landr repeatedly asserted that Spotify had flagged Chaparro's account for manipulation but never provided specific evidence — not in its correspondence with Chaparro, and not at the hearing itself. Despite Chaparro's explicit requests, Landr failed to demonstrate that manipulation had occurred, that Spotify had actually reported it, or that any manipulation was serious enough to justify suspending distribution. The court characterized this lack of transparency as incompatible with the good faith owed between contracting parties and found Landr's conduct unreasonable, concluding that its refusal to substantiate its decision amounted to an abuse of right. The court also found Landr's position inconsistent with article 2126 C.C.Q., since it never demonstrated a serious reason for terminating the contract. On damages, the court noted that Chaparro's $15,000 claim, itemized in Australian dollars across advertising spend, distribution fees, production costs, estimated lost royalties, and estimated reputational harm, was not accompanied by evidence of a conversion rate to Canadian dollars, and most line items were unsupported by proof. Some invoices were produced for advertising expenses, but without evidence of lost revenue, the court could not determine whether that spending had been wasted. The evidence further showed that Chaparro's total royalties from Landr over the life of the relationship were approximately $3,600 Canadian, all of which had been paid to him.

Ruling and overall outcome

The court granted Chaparro's claim in part. While it found Landr's termination of distribution services to be wrongful and its conduct unreasonable, it held that Chaparro had not proven any quantifiable financial loss flowing from that termination. Landr Audio Inc. was ordered to pay Raul Herrera Chaparro $500, with interest at the legal rate and the additional indemnity from the date of service, plus legal costs, as compensation for the trouble and inconvenience caused by the wrongful suspension — well short of the $15,000 originally claimed.