Winnipeg company Cypher Environmental sued for $10M
A company in the West-African nation of Burkina Faso is suing Winnipeg-based Cypher Environmental for $10 million.
The lawsuit, filed in Manitoba Court of Queen's Bench, said a dust prevention product purchased from the Winnipeg firm by Entreprise de Construction de l'Habitat did not work.
According to the lawsuit, Cypher's representative claimed its product called "Dust Stop" suppressed the spread of dust on unpaved roads. That claim is widely advertised on its website.
In early 2008, the Burkina Faso company did an initial test of the product, saw promising results and ordered more.
Soon after, the product allegedly failed on multiple occasions.
The first alleged failure was in May 2008, in front of a group of prospective customers in Ouagadougou, the capital of Burkina Faso.
The lawsuit said former president of Cypher, Norm Burns, admitted the Dust Stop provided may have contained "sub-standard product." Cypher subsequently shipped out 2,700 kilograms of a new product called "Dust Stop Concentrate."
A test using this new shipment in January 2009 failed to the point that "the product started to peel from the roadway," according to court documents.
Norm Burns then travelled to Burkina Faso in May or June of 2009.
Two of the three tests Burns performed were allegedly "complete failures." The plaintiff said a third test "succeeded only because a heavy rain storm that night seemed to help the product become fully activated."
The lawsuit stated four additional tests after Burns left Burkina Faso were also failures.
Court documents said Cypher breached its contract because it made representations about Dust Stop that it "knew or ought to have known are untrue."
The plaintiff said it suffered damage to its business reputation "as the result of being associated with this failed product."
None of the allegations in the statement of claim have been proven in court.
Current president of Cypher Environmental, Todd Burns, said he is unable to comment on the specifics of the lawsuit.
He took over the company after his father Norm's death in 2010.
"We have good relationships with customers and distributors all over the world," said Todd Burns. "We certainly do not take things like this lightly and we will do our best to get this resolved in a quick and appropriate manner."
He said his company has not been the subject of any lawsuits since he took control.