On 15 March 1990, in the Federal Court of Australia in the Australian Capital Territory, three Judges considered the test which should be applied to decide whether or not bowls are works of art under the Sales Tax Act.1 Many people in the art world are already aware of the case: the Commissioner of Taxation -v- Richard Murray.2 The Federal court was hearing an appeal by the Commissioner of Taxation against a decision of the Administrative Appeals Tribunal in Murray's favour. The decision was appealed against because it concerned an important point of tax law and practice, and the Commissioner agreed to pay the Murrays' reasonable costs of defence. Suddenly the Arts Law Centre found itself involved in its first Federal Court appeal.
Richard Murray, after studying painting, drawing and sculpture, became an art teacher and taught for ten years. He then became a full-time potter, and his work included dinnerware produced in great quantity, with virtually the same design used for all pieces. Although these items were produced individually and by hand, they were produced for a functional purpose and sold as dinnerware. Mr Murray paid sales tax upon them at the rate of 10%, being the appropriate rate for household goods.
The issue which was before the Administrative Appeals Tribunal and the Federal Court was whether certain other articles produced by Mr Murray were works of art. The works in question included bowls, platters and near spherical shapes. Each work was individually created, on a potter's wheel, and fired, after being painted with glaze and pigment using a special technique. Works of art are exempt from sales tax under item 68(2) in Division 10 of the First Schedule to the Sales Tax Act.
This article concentrates on the Judges' discussion of what is and what is not a work of art – and how to tell the difference.
The Judges considered the view of the Tribunal, Deputy President Todd presiding. They also considered tests described by Judges in other cases. During argument, the Commissioner of Taxation challenged the Tribunal's decision on the basis that the Tribunal had applied the wrong test to determine what was a work of art. But what is the right test? Counsel for the Commissioner submitted that the test was whether the aesthetic qualities or character of an article subsumed its utilitarian qualities. On the other hand, counsel for Murray submitted that the test was not purely objective, rather that one must look also to the intention of the artist in creating the work and the circumstances which led to the work being created.
The original purpose of introducing the work of art exemption in the Sales Tax Act was to encourage Australian art. In 1963, in the case of Cuisenaire -v- Reed, 3 Justice Pape described various tests to determine art and 'non-art'. Cuisenaire -v- Reed concerned copyright, specifically whether Cuisenaire rods were works of artistic craftsmanship which could attract copyright. The case was therefore concerned with how one established what was and was not a work of artistic craftsmanship.
The test, in the opinion of Justice Pape, was whether the artist had applied skill and taste to the production of the artwork with the main object of creating something which had an appeal to the aesthetic tastes of others, even if it also had a utilitarian character. He said further, that as a general rule the Court must apply a purely objective test by examining the article. When an objective test may deny that the work is a work of art, it is important to then look at the object of the creator to resolve the question. The best evidence of the creator's intention is naturally the evidence of the creator, although if the artist is dead evidence should be taken from a qualified viewer, for example an art expert, as to the work's aesthetic appeal. (Justice Pape's propositions are outlined more fully below.)
This test was approved in the Murray case, both in the Tribunal and on appeal, and it was decided that Mr Murray's pots passed on both counts. I will now turn to a brief analysis of the separate judgements:
His Honour Justice Hill, sitting in the Federal Court on Commissioner of Taxation -v- Murray, said that taxpayers must be able to determine their own liability for sales tax, and he believed the proper test to be both objective and subjective. First of all, the work must be one which is capable of being a work of art. Further, one should consider the person who produced the work, whether or not that person was an artist, the circumstances in which the work was produced, whether the work was mass produced or unique, and whether the work had originality or was a copy. It would be relevant to look at whether an item is sold as an art piece or is sold for a utilitarian function. Price or value may play a part, and the item must be "capable of being seen as produced to gratify the aesthetic emotions".
Justice Hill felt that in most cases a simple objective test would be enough to determine whether a particular work is a work of art. He felt that the Murray case was such a case and that the Tribunal had applied the objective test and found the items in question to be works of art. The Judge went on to say that in some cases the application of the objective test may leave room for doubt, particularly if the Tribunal or assessor had to apply personal aesthetic values. As His Honour wisely said "aesthetic judgements are not matters for a court (or indeed for a revenue collector)".
Justice Hill felt that where an object is both utilitarian and artistically pleasing, reference to the purpose of the maker in bringing the object into existence will assist to resolve the doubt. This subjective reference (to the purpose of the maker) cannot be the sole test. It is simply a test to use when the objective test is not enough.
His Honour then discussed the guidelines set out by Justice Bright in the Harrington case.4 Not all the guidelines were accepted by the Judge, but the second guideline, of "original work-handdrawn, handwoven, handpainted, handmoulded, handcarved" was acceptable as a general statement. Justice Hill finished by stating that Richard Murray's works satisfied both an objective and subjective test and therefore fell within item 68(2).
Justice Sheppard discussed the House of Lords case of Restawile 5 and I paraphrase part of his quote from Lord Reid as follows:
It is ... of importance that the ... designer ... should have intended ... an artistic appeal... If any substantial section of the public generally admires and values a thing for its appearance ... I would accept that it is artistic ...
He then noted the views of four Judges in the House of Lords, who were considering artistic merit in the context of deciding whether a suite of furniture was a work of artistic craftsmanship.
A) Lord Morris, who thought the aim and purpose of the artist might provide a pointer, and that the object under consideration must have the character of being artistic.
B) Viscount Dillhorne, who felt the question was one of fact, and that in many cases it would be easy to decide. In difficult cases his Lordship did not think that a clear line could be drawn between works which were and works which were not artistic.
C) Lord Simon of Glaisdale, who thought it was easier to question the criteria put forward by others than to put forward one's own. He then attempted to put forward criteria, believing that the artistic merit of a particular work was irrelevant, and that an evaluation of artistic merit was not a task for which Judges have any training or aptitude. Lord Simon believed that the question of whether or not something was a work of art was a matter or evidence, and that the best evidence was likely to be from artists or those involved in the training of artists – in other words expert advice. To paraphrase Sheppard's quote from Lord Simon's judgement (p95):
It is probably enough that common experience tells us that artists have vocationally an aim and impact which differs from those of the ordinary run of human kind ... it is the presence of such aim and impact which will determine that the work is one of artistic craftsmanship.
D) Lord Kilbrandon, who felt differently, said that the words 'artistic craftsmanship' needed no interpretation by experts. It was for the Judge to determine whether or not an object fell within the scope of the common meaning of the words.
Among other things, the Restawile case shows that the days of fine arts being confined to painting and sculpture have long since passed. Justice Sheppard went on to canvas the varied tests put forward by Judges in other cases. He felt that whichever approach is applied, one must conclude that Mr Murray's works were works of art. Judge Sheppard, like Judge Hill, considered the propositions of Justice Pape in the Cuisenaire case. Those were:
(i) The true test is whether the author
(a) had the main object of creating an article which, while utilitarian, would have aesthetic appeal, or
(b) was, in creating the article, cultivating one of the fine arts with the main object of appealing to aesthetic tastes.
(ii) The expression "the fine arts" is to be given a wide meaning of any application of skill and taste to the production of articles which are beautiful in themselves or which have an appeal to aesthetic taste.
(iii) The emphasis is on the object of the author in creating the work ...
After considering Justice Pape's propositions Justice Sheppard felt that the intention of the creator must be all important, although in most cases it would be "the way in which one is struck by a particular object which very often determines whether or not the object is properly regarded as a work of art". In borderline cases one would "inquire of the creator what his or her intention was".
He also agreed with Judge Hill that aesthetic judgements are not matters for a court, saying "I wish to make abundantly clear that one does not reach a conclusion by judging the artistic merit of the work".
He noted that the Tribunal had found as a fact that the articles Richard Murray created were brought into existence for the purpose of making a visual statement, that is to make art, by creating articles which had aesthetic appeal.
Justice Neaves said that in his opinion the emphasis which should be given to the many relevant factors in relation to whether or not a particular article is a work of art will depend upon the circumstances of the particular case. Nevertheless, he agreed with the conclusion reached by the other members of the Court that the Commissioner's appeal should be dismissed. And so the Murrays won their case.
For those of you who may be bemused by so many judges, tests and viewpoints, the tests may be "boiled down" to two important steps:
Step one: look at the bowl. If it seems like art, OK. It if doesn't look like art, or you are doubtful, go to step two.
Step two: Ask an expert, such as the artist, what the intention was in creating the bowl. Was it to create an art piece or not?
This case will have far reaching implications for craftspeople and other artists working in areas which are not covered explicitly by the words "paintings, sculpture, statuary and the like". The Tribunal decision, and that of the Appellate Court, do away with many of the Tax Commissioner's sales tax guidelines, which were based in large part on Justice Bright's judgement in the Harrington case.
Coupled with this improvement in the definition of a work of art, largely brought about by the enormous efforts of Sue and Richard Murray, is the long overdue and most welcome lifting of the 'Small Manufacturer' limit to $50,000 per annum average income. Artists in Australia who are not working within the traditional "fine arts" media can now breathe a sigh of relief as much of the discriminatory bias against them in the Sales Tax Act has been removed.
1 Sales Tax (Exemptions & Classifications) Act
2 F.C. of T -v- Murray 90 ATC 4182
3 Cuisenaire -v- Reed 1963 VR 719
4 Harrington -v- Deputy Federal Commissioner of Taxation 71 ATC 4143. This case concerned heraldic plaques and parchments. The items failed the originality test as they were held to be mere facsimilies.
5 Hensher -v- Restawile Upholstery (Lancs.) Limited  A.C. 64, Lord Reid's quote from p78.
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