The Daily Telegraph said in a joint statement on Monday it was sorry for causing distress to staff at Cairo Takeaway in Sydney's inner west when it orchestrated a scenario to test whether staff would react negatively to an openly Jewish customer.
In February 2025, Ofir Birenbaum entered the shop wearing a Star of David cap and pendant and ordered a drink as senior Telegraph reporter Danielle Gusmaroli waited outside.
Gusmaroli then entered with a photographer and allegedly asked a staff member whether they had a problem with Mr Birenbaum.
After he and the Daily Telegraph staff left, a female staff member followed them out on to the street.
"That is out and out intimidation," the staff member can be heard telling Gusmaroli in a video on social media.
Afterwards, the stunt quickly escalated with multiple lawsuits filed between the parties.
Mr Birenbaum sued the store for defamation after its social media accounts attacked him.
However, the store filed a cross-claim in the Federal Court which the parties attempted to resolve through mediation.
The joint statement says all legal disputes in the matter have been resolved on confidential terms.
The statement acknowledges Mr Birenbaum entered the store without notice to see if he would be treated differently "for the purposes of a news article".
Cairo Takeaway apologised unreservedly to Mr Birenbaum for the false and defamatory statements made about him.
The shop also acknowledged Mr Birenbaum was polite when he entered to buy a drink.
The Daily Telegraph, the flagship metro tabloid in News Corp, admitted its stunt caused distress to the staff and owner of the store and apologised to them for the distress.
Cairo Takeaway, which has repeatedly expressed support for Palestine online, has made several political statements on their social media accounts.
The store's Instagram account has posts referring to mainstream media as "propaganda" and commenting multiple times on the US war with Iran.
"All Australians should be able to safely express their racial or religious affiliation as well as debate issues in a respectful and dignified fashion," the statement reads.
"The parties hope that the fact of a resolution can be a positive example for others."
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