| Tobacco Wholesalers MPA |
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| Date of Funding: | 9 Dec 2001 |
| Plaintiff: | About 8000 tobacco retailers |
| Defendant: | British American Tobacco and Phillip Morris |
| Court: | Supreme Court of New South Wales |
| Cause of Action: | As at 1997, most Australian states had passed tobacco licensing legislation. Under that legislation, license fees were payable to the state governments, by retailers selling tobacco products. The retailers generally paid the license fee to the wholesaler, who then passed it on to the State.
It was considered by some, that the license fee regime involved the imposition by the States of an excise duty, which was beyond the power of the States. In 1997, the High Court ruled that this was in fact the case and struck down the legislation in each State.
After the decision of the High Court, retailers continued to pay license fees for a period of about seven weeks which were collected by the wholesalers and not returned. Demands were made upon British American Tobacco and Phillip Morris to repay those license fees, but payment was not forthcoming. Seven retailers took their claims for repayment all the way to the High Court and won.
IMF agreed to fund the action by about 8,000 tobacco retailers against both British American Tobacco and Phillip Morris to recover outstanding license fees. The trial of the retailers' claims began in early October 2002. |
| Result: | Prior to trial, settlement was reached with Phillip Morris and after trial, but before judgement, settlement was reached with British American Tobacco. Phillip Morris agreed to pay an amount representing 100% of the retailers claims and British American Tobacco agreed to pay 105%.
IMF then had to establish, to the satisfaction of both tobacco companies, the identity of the 8,000 retailers as the appropriate persons to be repaid the license fees and the amount of those license fees. This procedure took place over a period of about one year from the settlements.
In all, the two tobacco companies repaid about $60 million to the 8,000 clients of IMF. IMF received $13.3M on direct outlays of $4.1M. |
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