Deputy Federal Commissioner of Taxation v. Thomson Publications (Australia) Pty. Limited.

Judges:
Waddell J

Court:
Supreme Court of New South Wales

Judgment date: Judgment handed down 28 June 1979.

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Waddell J.: This is a proceeding brought by the Deputy Commissioner of Taxation to recover moneys alleged to be payable by the defendant, Thomson Publications (Australia) Pty. Ltd., for sales tax in accordance with assessments made under sec. 10(1) of the Sales Tax Assessment Act (No. 4) 1930-1973 in respect of three publications purchased by the defendant and applied to its own use during the period 1 November 1972 to 30 June 1975. The publications are Factory Equipment News, Building Product News and Construction Equipment News, known respectively as FEN, BPN and CEN. The total amount claimed is $49,513.32, together with additional tax at 10% per annum on this amount from 13 August 1976 until payment or judgment.

The only issues to be decided are those raised by the defence namely that sales tax is not payable or should not have been paid on the goods in question in that such goods are exempt from sales tax by virtue of sec. 5(1) of the Sales Tax (Exemptions and Classifications) Act 1935-1973 and items 51 and 54 of the First Schedule to that Act or either of them. Item 51 so far as is material reads:

``Books, pamphlets, leaflets, periodicals, magazines and printed music, but not

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ATC 4298

including (unless covered by any other item or sub-item in this Schedule) -

• (e) advertising matter.''

The defendant contends that each of the publications was not ``advertising matter''. Item 54 reads simply:

``Newspapers.''

Accordingly, as no distinction is made between the nature of the defendant's three publications, if they are ``newspapers'' within the meaning of item 54 or periodicals or magazines but not ``advertising matter'' within the meaning of item 51, the plaintiff's claim will fail. Otherwise, the plaintiff is entitled to the amount claimed.

I turn now to describe the publications in question. FEN was first published in June 1966, BPN in about June 1967 and CEN in 1968. Since their initial publication each has been published regularly on a monthly basis except in the case of FEN which, during a period of approximately two and a half years from 1970 until mid-1973, was published on a fortnightly basis. Each of the publications was in the form of a magazine of up to about one hundred pages of a size approximately 28 cm x 28 cm. Taking BPN as an example, the cover was in colour showing one or more photographs of scenes or products of interest to the building industry. Sometimes the products shown were described in the magazine. The magazine was identified on the cover by the BPN logo and the title Building Products News together with the month of publication and the volume and number of the publication. In some of the earlier issues the words ``Building Industry's Guide to New Products, Materials & Equipment'' were added. The lay-out of each of the inside pages was based upon a division of each page into three columns of equal width. On the majority of pages there were advertisements having a width of two columns and one column of what is termed ``editorial matter''. Some advertisements occupied a full page and occasionally there were pages in which two columns were occupied by editorial matter. The editorial matter on the inside cover, generally the inner column, was the name of the publication Building Products News described as ``a business newspaper'', an identification of the issue, and a statement of the publishers, names of principal members of staff, subscription rates, and the addresses of the company or its agents in other States and countries. The inside column of the next page displayed the logo and a description of the cover. If the cover displayed building products there was a description of the products, generally with a reference to the manufacturer. Often there was some other business information relating to the publication. Each of the following pages contained one column devoted to a number of items under the heading ``Product News''. These product items were of varying lengths but averaged about 250 words. Each had a heading identifying the product and approximately half had a photograph of the product. The written material indicated, either expressly or by implication, that the product was new or if not new was put forward for a new use or was being put forward for the first time by a particular manufacturer or distributor. Each of the products would have been of likely interest to persons having a responsible position in the building industry. There was a description of the product in plain terms written in a uniform style, sufficient detail being given to allow a reader to judge whether it would be of interest to him. This description generally included the claims made by the manufacturer or distributor for the product but did not contain any evaluation of the product. The item concluded with a statement of the manufacturer, or distributor, occasionally there was a reference to an inventor or representative who was stated in the body of the item to be seeking enquiries, and occasionally only with a reference to the ``British Information Service'' or some other source of information from abroad. Each item concluded with a code reference, for instance ``Quote BPN Y23 on Reader Service Card page 15''. Each advertisement concluded with a similar reference except that the code number was distinguished by having three figures commencing with the figure 3.

The ``Reader Service Card'' was bound into the magazine. One half of it consisted of explanatory matter and on the reverse side a ``product-finding index'' in alphabetical order which indicated where product items, which were printed in random sequence, might be found. The other half comprised three tear-off reader service cards which

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ATC 4299

might be posted ``business reply post'' to the defendant. The explanatory material indicated that BPN provided a ``free service to readers who have a daily need to specify or purchase equipment, products or services used in the building industry''. The cards provided for the entry of the enquirer's name and status, the name of his firm or government department, and his address. There was provision for filling in the code number at the foot of the product item or advertisement relating to the product in which the enquirer was interested and for requesting, by the use of a numerical code, the type of service required, namely the provision of descriptive literature, technical data sheet, price schedule, or literature including prices, or a representative to call. The explanatory material stated ``Should you not receive service from the source of information within a reasonable time, please contact us and we will investigate the reason for delay. This service is available only to registered readers. If you have not already applied, please complete Reader Registration Card, at the rear of this publication, and post with your enquiry. People, not firms, are registered for the Enquiry Service. Thus, several responsible persons may be registered and will receive their own personal copy of BPN monthly''. A similar statement was made in the explanatory matter and also on each of the reader service cards.

The reader registration card was in a similar form. There were three tear-off cards described as ``Reader Registration Card'', ``Address Correction Card'', and ``Reader Service Card'', the latter being in the form previously described. The ``Reader Registration Card'' provided for the name of the enquirer and his status or profession, the name of his firm or government department, and for the nature of his organisation's business activity to be indicated by a code number taken from a table on the explanatory half of the page. The table stated some fourteen types of activity which would clearly generate interest in building products. The explanatory material made it clear that BPN was personal to the registered reader and that ``more than one copy will be supplied free of charge to organisations which have a number of persons exercising purchasing or specifying influence in regard to building equipment, products or services''. On the reverse side of the explanatory matter was an ``Advertiser's Index'' in alphabetical order. In earlier issues only there was a ``I want to know'' card which enabled an enquirer to state anonymously a problem in which he was interested and to invite assistance from a reader of the publication.

The matter so far described in BPN would have led a reader to understand that if he had a position in an organisation whose business activity indicated an interest in building products and had responsibility for or some influence in relation to the specification or buying of building materials or equipment he might expect to be registered on application to receive BPN regularly free of charge and be eligible for its reader service. If he was a non-registered reader he could obtain the publication at the subscription rates indicated and would not be eligible for its reader service.

In the case of FEN and CEN each of the cards made provision for a statement of the number of employees of the enquirer's organisation by indicating into which of a number of groups it fell. Otherwise the cards were in virtually identical terms.

In some of the issues of each of the publications there were, either following the product items or near the end of those items, articles on a topic of general interest. For instance, in the November 1972 issue of BPN there was an article on a town planning topic the Strategic Plan for the Sydney area. Some of these articles dealt at some length with the use of a particular product such as that in the July 1973 issue of BPN on fibreglass reinforced plastic and these articles have a reference to the manufacturer of the product. There were also some items relating to coming events or recent events and to personalities or appointments in the industry. The back page of each of the publications generally had one column devoted to a statement of recent technical literature.

The defendant's evidence includes summaries of the advertising and editorial content for each of the publications for the period 1 November 1972 to April 1974. The editorial content referred to includes the ``mast-head'' items, indexes, the reader service and registration cards, the outside

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ATC 4300

front cover to the extent that it was not paid for by an advertiser, articles of general interest, other items of general information, statements of recent technical publications, and lastly but principally, the product items. The advertising content includes inserted advertisements whether bound with the publication or loose. The analysis for FEN indicates that during the period mentioned the editorial content occupied an average of 37.38% of the publication, of which 24.49% was devoted to product items. The balance was occupied by advertisements. The corresponding figures for the other two publications do not differ from these to any relevant extent.

It will be apparent from what has already been said that the issues raised depend principally upon the character which should be given to the product items contained in each of the publications. Slightly more than 60% of each of the publications is taken up by advertisements, approximately 23% by the product items and the balance by other editorial matter.

The defendant relies upon evidence as to the collection and publication of the product items as establishing that they should be regarded as ``news''. This evidence is contained in an affidavit by Mr. Lloyd who since March 1978 has been employed as group editor having responsibility for the publication of FEN, BPN and another publication Process and Chemical Engineering (PACE). His evidence relates, of course, to a period outside that covered by the assessments in question. The principal evidence is in an affidavit by Mr. Wing who has been employed by the defendants since November 1964, with the exception of the period October 1970 until December 1971 when he became acting managing director, and who has been the managing director since December 1973. He says that the procedure set out in Mr. Lloyd's affidavit is identical with the editorial steps taken in the publication of each of the publications since their inception. It is not in contest that each of the publications has maintained its original character until the present time.

I turn first to Mr. Lloyd's affidavit. He says that the material contained in the product items is derived in the following ways: by direct approach to manufacturers or producers when information is to hand that they may have a new product; press releases or other information received directly by him as editor from manufacturers or their agents concerning new products and services; other literature received by him and his editor circulated by government departments, building research centres, and other bodies including overseas information services; information received by him and others on his staff from attending to report on seminars, conferences, trade exhibitions and launching of new products; and information supplied to him from editors of other publications produced by the defendant. Items which originate from written material supplied by manufacturers or their agents is, before selection for publication, examined for newsworthiness, accuracy, authenticity as a new product and interest to the readers of the publication. The material is then sub-edited in accordance with the style and policy of the publication. Information located or originated by Mr. Lloyd or his staff is prepared as a news item in a similar style. There is a basic editorial policy as to what an item should contain. There is to be no judgment on the product nor any statements of comparison. All commercial details are to be excluded. The items should normally contain two or three highly specific statements being a brief description of the product, its function and application. The product, processes or services about which items are to be published are selected by him as editor in his sole discretion for their worth as news to the selected categories of readers to whom the publications are provided. Sometimes one of the publications may be the first news media to carry details of a new product, process or service. Sometimes the item is published before there is any sales promotion of it.

To illustrate these principles Mr. Lloyd identified the basic material which after editing was incorporated in the June 1978 issue of FEN and this issue and the material are exhibits. The bulk of the material, 81 out of 99 items, comprises press releases made either by the manufacturer or distributor or by its public relations department or by an advertising agency or public relations office on its behalf or a circular containing new product information. A number of these releases or circulars were sent to the

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ATC 4301

defendant for the attention of the editor or new products editor. Each of the documents received from outside was edited, with varying degrees of severity, to bring it into conformity with the policy adopted by the publication. The edited version gained considerably in clarity and style of language and, in accordance with the policy mentioned, superlatives and laudatory adjectives were generally deleted. Thus, words such as ``unique'', ``special'' were deleted. Words such as ``assured'' were replaced by ``claimed'', ``ideal for'' was replaced by ``suitable for''. The various information documents thus tended to be abbreviated, improved in style of language, and converted into a comparatively bald factual statement of features and claimed advantages.

Mr. Wing annexes to his affidavit a statement of policy adopted for FEN which reads:

``Editorial Policy.

To provide readers with concise information about new products (new material, new processes and new equipment) for use in the manufacturing industries which employ those readers. Products presented in editorial FEN shall be new in that they shall not have been previously treated in this publication; or they will be seen in a new application; or they will have been modified in a significant way so as to substantially new.

For use in the manufacturing industries means - tools, and equipment used in the manufacturing process; parts, additives and items included in the products being manufactured; processes and controls forming part of the manufacture; services, land or buildings housing the manufacture.

Information about products meeting the above criteria shall be sought from industry by our Editorial staff and shall be written to style by them. Style being 200 to 250 words (average) describing the product as concisely as possible including vital technical features sufficient for a reader to form a judgment as to his further interest in such a product.

Non-factual description should be avoided and all claims for performance should be clearly attributable to the manufacturer, not the publication.

Each product item should be accompanied by a good illustration wherever possible. Headlines, not more than two lines of standard setting, should indicate the product's type and use. Each product item will end with the suppliers name, address and post code with an enquiry-item number code.

Product items shall appear in random order throughout the publication, no grouping or typesorting.

Items of news such as reports on new technical literature and new ASA standards shall be confined to the last two pages of the publication...''

The remaining part of the statement deals with a profile of readers. He says that there were documents in general terms describing the editorial policy of BPN and CEN.

Mr. Wing describes the means by which the publications were promoted when each of them was launched and applications for registration as readers and information for publication was invited. He sets out the circulation figures for each of the publications distinguishing between registered readers and extra copies. In the case of each publication the registered readers greatly exceeded the others but the proportion differed, both as between publications and during the period. Thus, for the period October 1974 to March 1975 FEN had 8,466 registered readers, and 2,445 extra copies, making a total circulation of 10,911. Corresponding figures for BPN were 10,200, 846 and 11,046; for CEN, 4,899, 2,847 and 7,746. The analysis also shows that the subscription revenue was an insignificant item of income for each of the publications. For example, the advertisement revenue for BPN for 1975 was $275,218 and the subscription revenue, $986. He also annexes an analysis of the registered readers of each publication by reference to the business activity of their organisation and their status in the organisation. This shows that, in broad terms, the registered readers of the publications are to be found in organisations which would have an interest in the products dealt with by each of the publications and

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ATC 4302

having a supervisory status or higher. The details of the analysis are, I think, not relevant to the issues.

Mr. Wing also annexes an analysis of the enquiries received from registered readers. It is not necessary to describe the details. Part of the analysis shows that during the period April to September 1975 the ratio of enquiries received by CEN in respect of editorial items as compared to advertising items was 2:1 or greater. The corresponding figures for BPN show a ratio of about the same order; those for FEN show a ratio of from less than 2:1 up to about 3:1. It is clear from these figures that the product items generated from two to three times as many enquiries to the publication as did the advertisements.

Mr. Wing goes on to say that his items are selected solely for their news value and that prices are omitted and that items ``are designed to give information needed by those planning, by independent professionals advising and assessing and by others placed in the reader group, to keep up to date. Those in competition read for analysis and comparison''. He says that no payment has ever been received directly or indirectly, including by the placing of advertisements, for the publication of any editorial matter. ``The product news is regarded as the vital ingredient of these newspapers and creates their basic attraction and interest to the reader.'' He says that the form of the items is solely in the control of the publications, that the defendant takes its own special photos and meets all costs of production. He also annexes a statement of style guidelines laid down for the publications. There is no need to comment on this. In late 1971 he arranged for the then editor to select illustrations of editorial work for the publications. These included examples of submissions received and rejected in his editorial discretion. These samples are an exhibit.

The plaintiff relies upon a number of answers given by Mr. Wing in the course of cross-examination and upon the contents of a number of documents of the defendant which it tendered to establish that the real nature of the product items was not ``news'' but rather, free publicity for the products described and hence ``advertising matter''. A circular which Mr. Wing conceded to be typical of the advertising directed to manufacturers which the defendant has issued in respect of each of the publications commenced by saying:

```Building Products News' will give free publicity to your new product. The editorial content of the magazine consists almost entirely of details of new products which are of interest to architect, builders, quantity surveyors, government department and other associated with the building industry. The magazine is supplied free to the top men in the industry - the men in a position to specify and order new products.

How do you get this free editorial publicity?...''

The pilot issue of FEN described its purpose in these terms:

``NEW SALES TOOL FOR INDUSTRIAL MARKETING

FEN... A new concept in high efficiency industrial communication media... Engineered to transmit new product information to the nation's busy factory executives more quickly and more concisely than existing media and to promote a two-way communication link between buyer and seller of factory plant and materials. FEN's graphic design, format and typography introduces a new dimension in communication by print... FEN's focal point is its Buyer Enquiry Service which has been developed to the optimum to promote the highest possible level of buyer enquiry action, providing valuable opportunities for the industrial marketer to concentrate his sales effort upon live already interested prospects... FEN's specialised editorial approach in combination with its sophisticated Buyer Enquiry Service system creates an exciting new tool for marketers of factory plant and supplies.

A FOUR STAGE SALES PLAN

FEN multiplies the effectiveness of an industrial marketer's sales force by producing a continuous supply of prospects already interested in the marketer's product... FEN does this by a complete four stage sales plan.''

The four stages are: attention; interest; desire; and action, under which latter heading it is said:

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ATC 4303

``FEN's Buyer Enquiry Service Bureau swiftly passes on to the industrial marketer requests for information and service and by a unique method indicates the level of buyer interest.''

The pilot issue of BPN (exhibit C) had a statement much to the same effect. Mr. Wing, however, said in cross-examination that he regarded the product items not as free advertising but as publicity: ``It is a spreading of information but it is not free advertising'' (transcript p. 5). Subsequently he stressed, in effect, that the purpose of each product item was to arouse interest and that each item was only ``preliminary information about a product'' and was a plain statement of fact. In explanation he said:

``If I was describing this pair of glasses I would just merely say that they were a frame with two pieces of glass in it. It would be as simple as that and I wouldn't call that advertising.''

(transcript p. 6).

Mr. Wing conceded that the defendant did not subject the information which it obtained from manufacturers to any analysis or criticism. He pointed to the notification at the foot of the ``masthead'' information in each publication to the effect that:

``Utmost care is taken to ensure the accuracy of editorial matter. Product specifications and claims are those of the manufacturers.''

He conceded that in the vast majority of cases the product items were making an announcement which the manufacturer or his public relations or advertising consultant had asked be made and that the process of editing was largely concerned with reducing the size of the item and expressing it in accordance with the formula laid down in statements of editorial policy. But he insisted that quite a lot of items which were not ``germane'' were rejected. He again insisted:

``That part of the business (i.e. selling their product) is up to them after that (the publication of the product item). We give them the preliminary publicity to show the people what products are available and there can be quite a number of competitive products in the same publication. It just shows what is available. It does not take it any further than that.''

(transcript p. 7).

Again he said of the purpose of the publications:

``It is to promote interest in the products which will probably lead to the sale of the products eventually. That is what its prime intention was.''

(transcript p. 10).

Later he gave this evidence:

``Q. And by linking the specialised editorial approach and a buyer inquiry service system it is clear that each of these forms an essential part of that tool for marketing? A. It is a part of it, yes. Q. And an essential part? A. We like to think it is.''

(ibid.)

When asked whether a high proportion of the material for the publications came direct from an advertising agent rather than direct from the manufacturer, Mr. Wing said that this was not so but that the material came from public relations companies and from public relations departments of advertising agencies. Sometimes the material would be circulated to newspapers and other media as well as to the defendant.

It was put to Mr. Wing that the same item had been described in a product item in more than one issue of a publication. He said that if that had happened it had been an error. There is no evidence to substantiate any significant repetition of product items. It was also put to him that a number of product items concerned products such as hack-saws and lavatory seats which could not have any real significance as news to the readers of the publications. There may be some force in this criticism but I do not think that the evidence establishes any significant number of such product items, particularly when it is borne in mind that even items such as those mentioned having new features may be of interest.

The plaintiff tendered two brochures published by the defendant to promote BPN and FEN in about 1970 or 1971. In the BPN brochure it was said:

``Remote areas, where salesman cannot programme regular calls, prove to be very fruitful in pro-rata inquiry response. Advertising and editorial items in BPN

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ATC 4304

are helping to close this information gap between manufacturer and customer.''

Mr. Wing commented that this statement separated the advertising and editorial items which were not the same thing but they were both causing ``an information flow''. In the same brochure no distinction is made about the level of response to advertising items on the one hand and editorial items on the other in stating the response patterns to the material in BPN. Mr. Wing commented that it was not necessary to do so as the object of the statement was to bring to the notice of and prove to the advertiser that the publication had a high level response throughout (transcript p. 17). As to the distinction between the two kinds of item Mr. Wing said:

``The editorial items are for the information or use in the industry of executives to help them in their industrial capacity. The advertisement is purely at the advertiser's prerogative. There is a difference.''

(transcript p. 18).

Speaking of the object of the product items in FEN Mr. Wing said:

``The object... is to start this communication cycle and send out this information which the reader will reply to or not, as he wishes, and we will pass that on to the manufacturer or inventor of this item or equipment, and that is our part in the cycle.''

(transcript p. 19).

Again he said:

``Q. Would it be correct to say as a summary of the product items you contend they contain information which would be found useful by a person having the task of buying products for his company? A. Yes, and incorporation in products. We have a lot of readers who are draftsmen, who incorporate material into the products, production managers and directors, and they specify up to the stage where it finally gets to the buying officer who places the order. The eventual buying action starts a long way back, and up to 12 people can be involved, and everyone has to be informed all the way through.''

(transcript p. 21).

In their submissions both parties referred in detail to the decision of Gibbs J. in
D.F.C. of T. v. Rotary Press Pty. Ltd. 71 ATC 4170.

The question was whether a publication known as The Realtor was exempt from sales tax either under item 51 as being not ``advertising matter'' or under item 54 as being a newspaper. The Realtor was published by a real estate co-operative society. The bulk of the material in the publication comprised advertisements of real estate properties for sale and particulars of properties held by real estate members of the co-operative for sale and which were listed to give effect to the scheme of the co-operative which made it necessary for each member to inform the other members of the properties which he had listed. At p. 4175, 71 ATC, Gibbs J. said this:

``The question remains whether The Realtor is `advertising matter' and within para. (e). The word `advertise' means to make generally or publicly known, or to give public notice of, but the phrase `advertising matter' in the context of item 51 must have a somewhat more limited meaning, and must be restricted to published announcements of a business kind, for example, calling attention to the fact that property is for sale and setting out its qualities, especially the desirable ones. In my opinion, it is clear that the greater part of the material contained in The Realtor is `advertising matter'. It seems to me that all the parts of the publication other than the articles and questions and answers and the `fill ins', indexes, mastheads etc. are advertisements - there is no other word by which they may properly be described. On behalf of the defendant, it was conceded that some of the published material was `advertising matter' but it was said that, in deciding what is `advertising matter' and what is not, it is necessary to have regard to the purpose with which the matter was published and that the evidence showed that the purpose with which some of the material was published was not an advertising purpose.

...

In my opinion, however, the subject purpose of those responsible for the publication is not the test in deciding whether a periodical falls within para. (e). In para. (f) purpose is expressly referred to but para. (e) looks to the nature of the matter itself. The question whether a

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ATC 4305

periodical is `advertising matter' seems to me to depend on whether the periodical, viewed objectively and without regard to the actual intentions of those publishing it, answers that description. In other words, if the periodical on its face appears to be designed to promote the sale of property by means of public announcement that it is for sale, and by giving a description of its qualities and a statement of its price, it is `advertising matter' notwithstanding that its publication was, in fact, promoted not only by the desire to sell the property, but for other purposes as well. Of course, the publication has to be viewed in the light of those surrounding circumstances which are rendered admissible by the ordinary rules governing the admissibility of extrinsic evidence for the purposes of construing a document. It, therefore, would not follow, to take an example touched upon in the course of argument, that a reproduction, for historical purposes, of an advertisement originally published in times past would be `advertising matter'.''

Reference is made below to what was said on the question of whether the publication was a ``newspaper''. The decision of Gibbs J. was upheld by the Full Court of the High Court: 72 ATC 4212. Each of the members of the Court delivered a short judgment. McTiernan J. expressed agreement with the findings of fact made. Menzies J. also agreed and stated that he did not wish to add to the reasons which Gibbs J. gave for his conclusions. Stephen J. said that he agreed and did so for the reasons expressed by the learned trial Judge and then went on to say something on the question of newspapers to which reference is made below. Mason J. said that in his opinion the appeal should be dismissed for the reasons given by Gibbs J.

I turn first to the question of whether the publications, viewed objectively, answer the description of ``advertising matter''. Approximately two-thirds of each of them consists of advertisements in the ordinary sense of that word, that is of a paid announcement in a newspaper or periodical. If the product items are to be regarded as ``news'' or at least as not ``advertising matter'', then it seems to me that the whole of the publications cannot be regarded as ``advertising matter''. On the other hand, if the product items were ``advertising matter'' then the other editorial items were, in my view, so insignificant in relation to the whole of each publication that each of the publications should be regarded as ``advertising matter''. Each of the publications described itself as a news publication, a ``business newspaper''. The product items appeared under a heading ``Product News''. Each of the product items was expressed in terms which indicated that the information in it was about a new product or development. The substance of each of the product items, with perhaps occasional exceptions, was consistent with this. The product items were clearly distinguished in form and character from the advertisements. The free enquiry service provided, although provided also for products advertised in the usual way, was not inconsistent with the product items having been items which had not reached the stage of being advertised. Having regard to these matters it seems to me that, viewed objectively, the product items should be regarded as having the character of ``news'' rather than as ``advertising matter''.

I turn now to the circumstances surrounding the publication of the product items. These are, in my view, admissible on the question of the nature of the product items because evidence may be given of the real nature of any transaction. The evidence may be summarised as follows. It is evident from the nature and purpose of the publication that its success as a commercial product depended on each of the publications having a substantial section of news or purported news about new products to maintain reader interest and thus attract advertisements which provided almost the whole of the income from the publications. To secure a continuous flow of information for product items the defendant went to a great deal of trouble both in its advertisements for the publications and by direct approach to various sources. The steps taken included pointing out to manufacturers the advantages of the free publicity given by the product items and the significance of the information given by product items to the ultimate successful sale of the product. In my opinion these circumstances do not detract from the

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ATC 4306

objective character of the product items as ``news''.

The alternative inference to be drawn from the evidence is that the product items are, in truth, no more than free publicity for the products in question or free business announcements made by the defendant for the manufacturer of the products concerned. It might be said that the evidence indicates that the defendant held itself out as ready to and did publish in terms dictated by its editorial policy, a series of free business announcements on behalf of a variety of manufacturers and distributors. However, in my view this is not the correct inference to be drawn from the evidence. I accept the evidence on behalf of the defendant that it at all times maintained a right to reject material and it is clear that at all times it modified material submitted to accord with strict editorial policy guidelines. The intention of the persons who submitted material was no doubt to obtain free publicity. The submission of press releases on all kinds of events to daily newspapers is no doubt intended to obtain the benefit of free publicity but does not prevent information published as a result being news if it is a new account of a recent occurrence. The intention of the defendant, on the other hand was, I think, to publish an item of information which had the character of news so as to provide a vehicle which would attract paid advertising. The evidence does not justify a conclusion that the real nature of the material published as product items was ``advertising matter''.

As will appear from the evidence summarised above some criticism has been directed to the nature of the products which were on occasion the subject of product items and to the repetition of items. However, I do not think that the evidence indicates that such of these matters as did occur had any material effect upon the nature of the product items.

In my opinion the product items should not be regarded as ``advertising matter'' having regard to their character as viewed objectively and having regard to the evidence relevant to their true nature and to the circumstances in which they came to be published. This conclusion is sufficient to determine the proceedings in favour of the defendant but I should go on, I think, to state my opinion in relation to the claim that each of the publications was a ``newspaper'' within the meaning of item 54.

Gibbs J. in Rotary Offset Press, above, quoted with approval a definition given by Martin B. in
The Attorney-General v. Bradbury & Evans (1851) 7 Ex. 97; 155 E.R. 872 when he said:

``The ordinary understanding of the word `newspaper' is, a publication containing a narrative of recent events and occurrences, published regularly at short intervals from time to time.''

(at p. 103; p. 875 of the E.R.).

Gibbs J. went on to state that the mere proportion of advertising matter cannot determine whether a publication is a newspaper or not and to indicate that a publication which restricted itself to news of interest to particular persons would not necessarily not be a newspaper. He said:

``The variety of form and content of newspapers is great and whether a particular publication is a newspaper or not is `almost entirely a question of fact, to be decided upon an inspection of the document, guided by common knowledge', per Hood J. in In
re Bradshaw's Guide, Ex parte Stillwell, (1903) 29 V.L.R. 415, at p. 417.''

(71 ATC at p. 4176)

In the Full Court of the High Court Stephen J. expressed the view that it might be undesirable to seek to create conclusive definitions of what are or are not newspapers and approved the statement quoted by Gibbs J. from In re Bradshaw's Guide.

Putting aside the circumstances that each of the publications appeared, except for a time in the case of FEN, only monthly it seems to me that none of them could be described as a newspaper in the ordinary sense of that word. One would, I think, expect in a newspaper relating to, say, the building or construction industry, a much greater variety of items of information published in a greater variety of forms than appears in the publications in question. It seems to me that it could not be concluded as a question of fact that any of the publications was a newspaper.

For the foregoing reasons the plaintiff's claim fails and should be dismissed with costs.