A boutique Geelong real estate agent at the centre of a bitter multimillion-dollar advertising war signed a deal with a News Corporation publisher just one month before shifting his vendors’ ads away from the part-Fairfax owned Weekly Review to the News-owned Geelong Advertiser.

A defence and counter claim lodged in the Victorian County Court on behalf of Hayeswinckle managing director Danny Hayes — obtained by Crikey — admits for the first time that on November 28 last year a “Sponsorship Agreement” was reached between the Advertiser and Hayes.

Metro Media Publishing, publisher of the Weekly Review, is suing Hayeswinckle and related entity Team 3216 for at least $1.4 million in losses and damages, alleging it reneged on the terms of an annual $500,000 advertising agreement with the Weekly Review and moved its ads to the Addy.

In its revised statement of claim lodged in May, MMP alleged Hayes received $215,000 in rebates, free ads and cash from the Addy in exchange for shifting ads to News. Both News and Hayes have repeatedly denied the allegations.

Hayes hit back again this morning, telling Crikey the deal is “the standard one signed by all agents”.

“Most of the MMP shareholders are on the same deal,” he said. “In fact, I signed one when I was working at Ray White. [MMP CEO Antony] Catalano is bullying me so the other agents don’t return to the Geelong Advertiser.”

Crikey understands the text of the Hayes-News agreement is explicitly worded so that it does not relate to vendor spend. Such an arrangement, if the inducements were not returned to house sellers, would fall foul of Victorian law.

Hayes says he’s “very confident” of his legal position and is continuing to sue Catalano for defamation. He said MMP had welched on previous suggestions of criminal illegality. “I’m a straight shooter. No one’s looking forward to their day in court more than me,” he said. Hayeswinckle is now seeking its own damages and costs.

Crikey revealed in May that News real estate tsar Tom Panos had secretly promised to spend up to $100,000 in shareholders’ money to cover Hayes’ legal fees. In the “strictly confidential” email, Panos wrote that the “private and confidential” arrangement will cease to apply if Hayes discloses the arrangement to any person.

At the centre of the stoush is a meeting between MMP and Hayes last September when Hayeswinckle’s potential shareholding in MMP was discussed. The counter claim says that contrary to MMP’s suggestions, a minimum advertising spend was never agreed. When Hayes discovered the Weekly Review was not being delivered to some Geelong addresses, he decided to move to the Addy. The claim admits that Team 3216 had not placed any print ads with The Weekly Review this year.

An email sent yesterday by Catalano to Geelong agents, also obtained by Crikey, says that the “truth is out”:

“We are delighted to report that, after five months of denials, the truth is out: Hayeswinckle has finally admitted that it did do a deal with the Geelong Advertiser on November 28, 2012, and then moved all its advertising to the Advertiser from January 1, 2013.

“Interestingly, the damning about-face by Hayeswinckle revealing the existence of his dealings with the Geelong Advertiser and News Limited comes in the same week it has been revealed that Rupert Murdoch knew all about illegal payments to police in the UK — despite his comments to the UK Parliamentary enquiry that this was ‘the most humble day of my life’.

“It is a terribly embarrassing admission for Danny Hayes, Hayeswinckle, the Geelong Advertiser and News Limited, and should cause considerable damage to the reputations of all parties.”

The brawl in Geelong mirrors the situation up the Princes Highway in Melbourne where Catalano and News continue to trade blows over the brutal market for house ads. Catalano accused News of duchessing agents with illegal “kickbacks” on ABC News last month when he was forced to shut seven suburban titles because they couldn’t compete with News’ Leader stable.

The News Corp response has been sustained and high profile. In May both the Geelong Advertiser and The Australian ran stories saying MMP’s statement of claim admitted The Weekly Review Greater Geelong was “losing $30,000 a month”. In fact, the $30,000 figure was the monthly loss claimed by MMP through Hayeswinckle’s decision to advertise with the Advertiser.

In an extraordinary intervention on June 8, Leader editor-in-chief John Trevorrow penned an opinion piece that appeared on page two of the mass-circulation Saturday Herald Sun, claiming Catalano had “made a number of outrageous, untrue and damaging comments about News, which he went on to repeat in an interview on ABC television on Wednesday”.

News Corp Australia declined to comment this morning.