Crazy John’s sues Telstra for $82.3 million

By Sarah Falson

MELBOURNE: Crazy John’s and Telstra went to court yesterday in an $82.3 million law suit against the telco over a dealership agreement in which the retailer receives commissions every time it connects a customer to Telstra’s network.

According to an article today by The Australian Financial Review, Crazy John’s — Testra’s second largest mobile phone retailer — alleges that a former senior Telstra executive, Ted Pretty, at a 2002 meeting promised that Telstra would not enforce a cap on the commissions being paid to Crazy John’s, so long as the retailer expanded its store-base in Sydney.

According to the same article, Crazy John’s alleges that the computer systems used by Telstra to calculate the commissions are inaccurate.

Crazy John’s entrepreneur founder and owner, John Ilhan, yesterday told the court that he doesn’t remember being briefed before the 2002 meeting adjourned, that his company had agreed to accept the cut in commissions — as Telstra claims — and said that he had promised to sign the agreement only if the cap would not be enforced.

However he did remember certain, less significant details about the day, such as the fact that he was wearing a new suit bought in Noosa and that Pretty was dressed in a shirt and tie, even though the latter usually wore skivvies, said the article.

The newspaper reported that Crazy John’s didn’t push for the dealership agreement, as Telstra claims it did, but instead that it was Telstra that pushed the agreement.

It was later revealed that Ilhan’s statement contradicted a letter sent by Crazy John’s director, Brendan Fleiter, which stated that the retailer required the deal to be finalised by Christmas.

According to the report in The Australian Financial Review, Ilhan “became hazy on the details” when the letter was broached, and said: “I just didn’t get involved in these sorts of negotiations.”

Ilhan then admitted that he did not read the dealership agreement, even though he signed it.

According to the article, Ilhan told the judge yesterday, “I’m a salesman, your honour.”

The court case continues today.

 

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