Some very familiar names here.... I hope they are not agreeing...

Some very familiar names here.... I hope they are not agreeing to contracts for PEO based on notes on whiteboards which contradict contracts!!!!!

Fools...

The Age 2/11/06

MOBILE phone retailer Crazy John's and Telstra shared a "very unusual relationship" in which the companies signed contracts but did not strictly abide by the terms of the agreements, a court has heard.

David Shavin, QC, made the claim on behalf of Crazy John's at the start of a Federal Court trial in Melbourne involving the companies.

Crazy John's has been a major Telstra dealer for more than a decade but is suing the telco for alleged underpayment of trailing commissions — a percentage of a customer's phone bill that is passed on to the dealer that signed them up. It is also seeking the return of $43.4 million in apparent overpayments that Telstra has clawed back from Crazy John's in the past 2½ years.

Telstra is denying the claim but its defence is yet to be heard.

In 2002, Crazy John's had an agreement with Telstra in which it received 18 per cent of each customer's monthly bill. It then signed a new agreement in 2003 that reduced the commission to 11 per cent — cutting its monthly income by about $1 million — in return for new incentive payments for signing more customers. The major dispute between the parties involves a remuneration limit included in the agreement that Crazy John's claims was never supposed to be enforced.

According to Mr Shavin, Crazy John's senior management team — founder and chief executive John Ilhan, chairman Barry Hamilton and managing director Brendan Fleiter — attended a meeting with Telstra's former consumer and marketing chief, Ted Pretty, and other senior Telstra staff in Sydney in December 2002. At that meeting, Mr Shavin alleged, Mr Pretty assured Crazy John's that the remuneration cap would only be included "for internal purposes" to ensure the telco's finance department approved the deal.

He said details of the deal approved by Mr Pretty were written on a whiteboard at the meeting; a printout was submitted to the court as evidence.

"The true agreement between the parties is a combination of events and understandings, in addition to the contract," Mr Shavin said of the relationship between the companies.

In the year after Crazy John's signed the 2003 deal, Telstra began demanding multimillion-dollar reimbursements for payments that it said exceeded the remuneration cap.

Mr Pretty's successor, David Moffatt — who still holds the position at Telstra — made the first repayment demand, for $21.3 million, in February 2004, with a warning that the contract would be terminated unless the payment was made.

Mr Shavin alleged Mr Moffatt wanted the payment demand to "hang like the sword of Damocles over Crazy John's head", and would persuade it to sign a new, less lucrative agreement in lieu of payment.

The trial, which is expected to run for seven weeks, resumes today before Justice Sue Kenny.