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WPC startup wins $6.5 million suit against Futuresoft Technologies

Wood-plastics composite start-up Newlab Plastics Ltd., based in St. John's, Nfld., last week won a $6.5 million law...


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June 5, 2006 by Canadian Plastics

Wood-plastics composite start-up Newlab Plastics Ltd., based in St. John’s, Nfld., last week won a $6.5 million lawsuit against Dr. Weining (Wayne) Song and Mississauga, Ont.-based machinery supplier Futuresoft Technologies Inc., for fraudulent misrepresentation.
The judgement for the full amount was issued in the court of Newfoundland and Labrador.
According to Newlab’s suit, in April 2004 the company received a detailed quote from Dr. Song on behalf of Futuresoft for the supply of a state of the art, small scale, turnkey, wood-plastics composite plant. The quote provided operational and logistical requirements for the plant’s operation, including details of the facility height, electrical, mechanical, fuel, and raw material requirements. In addition, the quote provided technical details of the equipment, dyes, embossers, and other parts.
The suit further stated that between October 2004 and August 2005, Newlab paid Futuresoft $475,998.73 for the material and a further $244,000.00 in mechanical and electrical set up and shipping costs, only to find the equipment unsuitable for the manufacture of wood-plastic composites.
According to suit, Newlab was forced to pay an additional $500,000.00 on material and personnel to render the material suitable and the plant operational, but were ultimately unable to operate the plant. The suit also claimed that the plant’s failure has cost Newlab $300,000.00 in both personnel and leased space.
“It has been a long and frustrating experience but we will be pursuing all legal avenues to collect this award,” Dean Payne, president of Newlab, said.
Futuresoft did not respond to Canadian Plastics’ request for comment.
Newlab launched the suit in St. John’s on March 16, 2006.