Crazy John’s and Telstra settle out-of-court

By Craig Zammit

SYDNEY: Crazy John’s has settled its $70 million law suit against Telstra and has dropped all claims made against the telco in return for $2 million, which will be paid in relation to a dispute over advertising expenditure.

The out-of-court settlement appears to be a poor result for retail chain, Crazy John’s, which had initially sued Telstra for a significantly larger sum.

Crazy John’s had alleged that Telstra breached its contract by enforcing a cap on the commissions paid to Crazy John’s for each customer the retailer signed-up to the telco. Crazy Johns founder and director, John Ilhan, claimed he had not been aware of the cap.

“This is a great outcome for Telstra and it vindicates our decision to defend these claims, which we have always believed to be without merit,” Telstra general counsel, Will Irving, told The Australian Financial Review yesterday.

Ilhan claims the $2 million settlement remained a positive one for Telstra mobile phone dealers, and mentioned improvements were needed to Telstra’s IT systems.

Included in the settlement, Crazy John’s will reimburse half of the $6 million Telstra spent dealing with dealer payment irregularities.

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