Paramac Printing Co Pty Ltd v Commissioner of Taxation (Cth) [1964] HCA 56

High Court of Australia Owen J. Paramac Printing Co Pty Ltd v Commissioner of Taxation (Cth) [1964] HCA 56

ORDER Appeal No. 1 of 1961 Appeal No. 22 of 1961 Appeal No. 21 of 1962 Appeal No. 19 of 1964 In each of these appeals, the appeal is allowed with costs and the matter remitted to the Commissioner to vary the assessment accordingly. Appeal No. 20 of 1962 Appeal No. 20 of 1964 In each of these appeals, the appeal is allowed with costs and the matter remitted to the Commissioner to vary the assessment accordingly.

Cur. adv. vult.

Oct. 12 Owen J. delivered the following written judgment:—

These six appeals were heard together. In four of them Paramac Printing Company Pty. Limited (the Printing Company) is the appellant. The first of these relates to the year ending 30th June 1958 and comes from the Board of Review. The other three relate to the years ending 30th June 1959, 1960 and 1962 respectively and are appeals from the Commissioner. In the remaining two appeals the appellant is Paramac Promotions Pty. Limited (the Promotions Company), a subsidiary of the Printing Company. They relate to the years ending 30th June 1960 and 1962 respectively and come from the Commissioner.

I will deal later with each individual appeal but it is convenient first to set out a number of matters which bear upon the questions for decision.

For many years a Mr. Bruce McWilliam was employed by Wm. Brooks and Co. Pty. Ltd., well-known printers and stationers in Sydney. In 1950 he left that Company's employ and went into business as a printer and stationer on his own account, trading under the name of Paramac Printing Company. He started the business in a small way and in its early years his only assistants were his wife and, during school holidays and weekends, his two children, a girl named Jan who was born in September 1938 and a boy named Peter who was born in February 1940, both of whom came to know something of the workings of the printing trade at an early age. With the aid of his family, Mr. McWilliam gradually built up the business, concentrating more and more as time went on on fine colour printing and what has come to be known in the printing and advertising world as "Direct Mail" advertising, a method of advertising which has become increasingly popular since the war amongst those who wish to sell their goods or services. It is a form of advertising in which letters, pamphlets, brochures and the like are mailed to "selected" persons. The material is usually produced in colour and contains features such as pictures and drawings, captions and letterpress striking and attractive to the eye and calculated to arouse the interest or curiosity of the recipient. Mr. McWilliam was one of the pioneers in Australia in this field. The printer who undertakes this type of work is required to think out and "create" the design, make-up, colour and so on for the material proposed to be used. If the product is approved by the organization for which the work is proposed to be done, the printer gets the printing order and is usually employed also to address and post the material to the "selected" persons whose names are provided by the customer. In England, on the Continent and in the United States, particularly in the latter country, this form of advertising has assumed very large proportions and it has become increasingly popular in Australia. Printing establishments which aim at succeeding in this line of business employ a team, large or small according to the size of the business, of "creative thinkers" whose task it is, by "group thinking" and "group discussion", to evolve ideas, designs, colours, captions and other distinctive features. Their ideas are then put into more concrete form by commercial artists, usually employed by the printer but sometimes freelances, and if the result is acceptable, the printer gets the order to produce and mail the finished product. The "creative" work done by the "group" is not always entirely original. It is the practice to build up a "library" in which are collected quantities of pamphlets, cards, posters, company annual reports of a modern kind, magazine advertisements and the like gathered from all parts of the world and all fields of commerce, and such a "library" must be kept up to date so that new developments elsewhere in the world may be made known to the "creative thinkers" who use this material to assist them in evolving their own ideas. It often happens that they incorporate in their work or are influenced in forming their ideas by something seen by them in material collected in the "library". I do not say that in any critical or disparaging sense. Those who seek to express their ideas and use their talents as painters or sculptors, as architects or writers, consciously or unconsciously gather inspiration and ideas from the work of others and I have no doubt that this applies also to those whose artistic bent takes them into the advertising and printing world.