Sale leaves a tangled web

MEDIA group Consolidated Business Media Pty Ltd and its managing director John Webb are at the centre of several legal actions relating to the sale of the company’s events business four years ago.

Exibit Exhibitions and Publishing, which bought the events business in November 1999 for about $2.5 million, has included CBM, Mr Webb or their associates in three separate legal actions relating to deceptive conduct, contract breaches and debts from warranty – the latter amounting to almost $156,000.

The legal action has come to light after inquiries made by WA Business News into the recent sale of CBM’s publishing business, Australian Lifestyle Publishing & Australian Resource Media, which was sold to the Shields Media Group.

WA Business News was investigating concerns voiced by several creditors of the publishing business regarding unpaid debts incurred prior to the sale.

Mr Webb claims to have paid those outstanding creditors of the publishing business, mainly staff and freelance writers, and has denied the allegations made by Exibit.

He said he would be taking legal action against Exibit for defamation.

Exibit, through one of its legal actions, alleges that Mr Webb and his two companies, CBM and The Corporate Events Group Pty Ltd, are in breach of contract because of non-recoverable debts.

Exibit’s statement of claim indicates the amount owing, and the amount it is seeking from Mr Webb and his two companies, is $155,804.70.

That legal claim relates to debtors purchased with the events business, particularly exhibitors at the MIENEX mining and engineering expo. Exibit claims in an amended statement of claim filed in the WA Supreme Court on April 16 this year that it received an indemnity from the vendor for loss and damage “relating to any failure by the first or second defendants to deliver to the plaintiff each Asset on the completion date”.

In a separate legal action before the WA Supreme Court, Exibit claims Mr Webb and CBM re-entered the events business within the agreed exclusion period.

In its statement of claim, Exibit said that Mr Webb and CBM had agreed to refrain from being involved in the WA events industry until November 25 2002.

Apart from MIENEX, the events business acquired by Exibit in November 1999 included the WA Building and Homestyle Expo, the Every Woman Expo, the New Home and Renovation Expo, Perth Computer and Technology Expo and the Innovation Expo.

Exibit alleges that, in contradiction of agreed terms, CBM approached certain suppliers to the expo business it had sold, such as Burswood, and in doing so CBM and Mr Webb were in breach of contract.

“During the [exclusion] period the first defendant [CBM], further or alternatively, the second defendant [Mr Webb] approached the Burswood Resort Casino with a view to establishing a relationship with or obtaining custom of the casino for a computer exhibition to be held at the Burswood Dome,” the statement says.

It also says that Burswood was approached to host a mining exhibition and a home show exhibition.

Other suppliers Exibit alleges Mr Webb and/or CBM approached were the Royal Agricultural Society, 94.5, 92.9, Channel 9, and The West Australian Newspaper.

Exibit is also suing accounting firm Horwath in an action in which Mr Webb, CBM financial manager Greg Millar, CBM and CEG are joined as third parties.

It is understood, Exibit hired Horwath to conduct due diligence prior to the events business purchase.

“In this action the plaintiff claims against the defendant damages for misleading and deceptive conduct under the Fair Trading Act 1987,” the statement says.

According to the statement of claim, Horwath “claims to be indemnified by or entitled to a contribution from the third party in respect to sums it may be held liable to pay.”

Exibit alleges that information provided by Mr Webb and Mr Millar to the accountants showed that, among other things, MIENEX’s future maintainable annual gross profit was not less than $825,000.

Exibit alleges these representations were misleading and deceptive or likely to mislead or deceive it.

“There were no or no reasonable grounds on which [Mr] Webb and or [Mr] Millar were able to conclude that future maintainable annual gross profit for MINEX (sic) was not less than $825,000,” the statement says.

The statement of claim also says Mr Webb and Mr Millar understated expenses and overstated revenue of the 1999 expositions.