‘Uh oh! We didn’t pay our web developers’: B.C. court rules on website redirect case

An image of the redirect page included in the court decision is shown. (bccourts.ca)

A web developer who redirected his client’s website to a page that called the company out for failing to pay an invoice has been ordered to compensate the company for his wrongdoing.

Though he denied he had done it, Nicholas Gust was found in B.C. Supreme Court to have redirected Clex Solutions Ltd.’s website to a page that read: “Uh Oh! We didn’t pay our web developers. The site will be offline until we pay them.”

In a decision published Friday, Justice Palbinder Kaur Shergill ruled that Gust had breached his fiduciary duty to Clex and committed the tort of “conversion” – wrongfully interfering with another person’s right of possession of goods.

However, she also found that Clex had breached its contract with Gust by failing to pay a $660 invoice.

The judge dismissed most of the claims and counterclaims the parties brought against each other, ultimately ordering that Gust must pay Clex $7,000 in damages, plus interest, to be offset by the $660, plus interest, that it owes to Gust for completing his obligations under the contract.

The contract and the claims

Clex did not sign a written contract with Gust. Rather, it hired Andrew Buckley as a project manager and “scrum master” for the development of its web-based software for student note-taking and studying.

Buckley hired Gust as a subcontractor and tasked him – along with another web developer – with building a “proof of concept” version of the software, according to the court decision.

Gust submitted invoices to Buckley, and when two of them went unpaid in February and March of 2020, the decision indicates he stopped working on the project.

Clex paid the February invoice at the end of March, but never paid the March invoice, according to the decision.

The website redirect happened “sometime in 2020,” and was discovered in late April or early May. Shergill’s decision indicates it took about two weeks for Clex to restore the site to its proper homepage.

The company sued both Gust and Buckley over the incident, but only Gust filed a response to the claim. Buckley did not participate in the court proceedings, and a default judgment was ordered against him.

Shergill found Buckley owed Clex a duty of care and was negligent in fulfilling his role for the company. She awarded Clex $25,000 from Buckley for the loss of the website and the cost of restoring it, $15,000 for the loss of opportunity and $8,600 in special damages.

However, the judge ruled Gust could not be held liable for Buckley’s damages. The damages she awarded against Gust stemmed from her analysis of the various allegations Clex brought against him.

Specifically, according to the decision, Clex alleged Gust had breached his contract, committed “conversion and detinue,” breached a fiduciary duty, was negligent, intentionally interfered with economic relations and committed libel.

As mentioned, Shergill found only the conversion and breach of fiduciary duty allegations had been proven on a balance of probabilities.

No breach of contract

Gust argued that because he had not signed a written contract with Clex, no contract existed for him to breach.

Shergill rejected this argument, ruling that the parties “acted as though there were a binding contract” between them, and therefore an oral contract existed.

Clex alleged a variety of different breaches of this oral contract, starting with the suggestion that Gust had failed to uphold his contractual obligations by delivering a “non-functional” website.

The company argued Gust’s demo version of the site had bugs, and that his refusal to fix them before being paid was a breach of the contract.

“There was no contractual requirement that the demo version of the software be bug-free,” the decision reads. “Having that requirement would undermine the very purpose of a demo version.”

“The plaintiff has failed to establish the existence of an express or implied term that Mr. Gust was required to fix the bugs in the website prior to his account being paid, or that his billing or payment was tied to functional deliverables,” the document later adds.

Similarly, Shergill found Gust was under no contractual obligation to help Clex restore access to its website after it was redirected.

The redirection itself was outside the scope of the contract, and therefore could not constitute a breach, though it did amount to other “actionable wrongs,” according to the decision.

Clex also alleged Gust had “sabotaged” the website, because certain functions stopped working after the redirect was reversed.

Shergill found the company had provided insufficient evidence to prove there had been sabotage, though there was evidence Gust had accessed the site’s back-end without authorization six times between December 2020 and February 2021, well after he had ceased work under the contract.

Like the redirect, this unauthorized access fell outside the scope of the contract and could not be considered a breach, according to the judge’s decision.

“Even though accessing the back-end of the website was not a breach on contract, that does not mean that Mr. Gust escapes liability for his actions,” the decision reads. “Rather, I find that accessing the back-end code is better addressed through the law on breach of fiduciary duty.”

Conversion and detinue

The torts of conversion and detinue are closely related. According to Shergill’s decision, conversion occurs when someone wrongfully interferes with another person’s right to possession of property and detinue occurs when the person who committed conversion refuses to return the wrongfully retained goods on demand.

In this case, the judge’s finding that Gust had redirected the website – despite his claim he had not – amounted to a finding that he had committed conversion.

Shergill reached a different conclusion on detinue, however, ruling that Clex had the necessary passwords and information to reverse the redirect without Gust’s help and, indeed, had done so before the matter went to trial.

Because detinue must be ongoing, the judge found, the restoration of the Clex website meant its claim for that tort must fail.

“When Mr. Gust re-directed the Clex website to the ‘uh oh!’ page, he did so intentionally and without permission from Clex,” Shergill’s decision reads.

“Mr. Gust knew that taking the Clex website offline meant that existing users of the Clex software would be prevented from accessing the Clex website. The message posted on the ‘uh oh!’ page makes it clear that Mr. Gust’s intention was to take the Clex website offline until such time as he was paid. The fact that Clex had the passwords and login information to redirect the website back to its home page does not absolve Mr. Gust from his wrongful action of conversion.”

Breach of fiduciary duty

In a similar vein, the judge found Gust’s redirecting of the Clex website and his unauthorized accessing of its back-end after his contract had ended amounted to a breach of fiduciary duty.

Gust’s role as a web developer meant Clex was uniquely vulnerable to his actions and created an obligation not to use his access to cause the company harm or otherwise act against its interests, according to Shergill.

“Mr. Gust had, effectively, the virtual keys to Clex’s online kingdom,” the decision reads. “The fact that Clex’s kingdom was small does not negate his fiduciary obligations to ensure that he did not take steps to cause harm to Clex. With those keys came an implied undertaking that Mr. Gust would act in the best interest of Clex when he accessed the website.”

Clex’s other claims

The remaining claims against Gust in the lawsuit – negligence, intentional interference with economic relations and libel – were all “poorly (pleaded) and barely argued,” according to the decision.

On the question of negligence, Shergill found Gust had met the “standard of care” required of a web developer when completing the work he was contracted to do.

“There is no evidence that Mr. Gust’s back-end web development services fell below the standard of care while he was performing his duties for Clex,” the decision reads. “Nor is there any indication that Mr. Gust was incapable of fixing any issues that arose throughout the back-end code development process.”

Regarding interference with economic relations, the judge found Clex’s argument failed the first part of the test for that tort.

Intentional interference with economic relations involves unlawful actions committed by a defendant against a third party but intended to harm the plaintiff, according to the decision. In this case, Gust’s unlawful actions – redirecting the website and accessing the back-end without authorization – were taken against Clex directly.

Finally, Clex argued the content of the ‘uh oh!’ page was defamatory, because its assertion that the company did not pay its web developers would tend to lower Clex’s reputation in the eyes of a reasonable person.

While Shergill agreed that the page’s content was defamatory, she found Gust had successfully proven the defamatory words were true.

“There is uncontroverted evidence that Clex indeed failed to pay Mr. Gust,” the decision reads. “Mr. Gust issued a valid invoice, the invoice remained outstanding when the website was redirected to the uh oh! page, and the invoice was long overdue. (Clex’s co-founder) himself testified that he had not paid the March Invoice to Mr. Gust and that, after the website was redirected, he did not intend to ever pay the outstanding $660.”

“The impugned statement was truthful. This is a full defence to the allegation.”

Damages and counterclaim

Clex sought more than $300,000 in damages against Gust, but Shergill found its justification for requesting that amount to be lacking.

“It is difficult to quantify the harm suffered by Clex due to Mr. Gust redirecting the Clex website to the ‘uh oh!’ page,” the decision reads.

“I lack any evidence of how many students were directed away from the website, or the value of the investor that (Clex) says left as a result of the website redirection. To the extent that people were turned away from Clex because they thought it was a company that did not pay its web developers, that is not a loss that Mr. Gust is responsible for. As I have noted, truth is a full defence to libel.”

The judge concluded $7,000 was the appropriate amount to award, noting that – of the torts she had found he committed – only the conversion resulted in harm to Clex, and that harm “was minimal.”

For his part, Gust filed a counterclaim seeking payment of his unpaid invoice, which Shergill granted. He also sought aggravated damages and argued Clex’s lawsuit was brought in bad faith and an abuse of process.

Shergill dismissed these claims, awarding only the $660, plus interest, to Gust.