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Appeal Court ruling protects auctioneer in good faith claim

A man who had a 17th century Dutch panel painting stolen from his home more than 20 years ago has failed in an Appeal Court to win compensation from Christie’s, who offered the picture for sale in 1997. Key to the test case was Christie’s ability to show they had acted in good faith, adding further legal weight to the importance of due diligence.

The Backgammon Players by Jan Steen, was stolen from Philippe Marcq’s London flat in 1979. The work, posted on the Art Loss Register, disappeared for years but resurfaced in a gallery in Amsterdam in 1994 and then in July 1997 at an Old Masters sale where it was given the title Gentlefolk playing backgammon in an interior, and a detailed provenance giving its three previous appearances at Christie’s before 1974. Because of the change in title, it did not show up on the register when checks were made on behalf of Christie’s.It failed to sell at its £100,000-150,000 estimate and was returned to the vendor.

Mr Marcq wanted compensation from Christie’s for having put the stolen picture up for sale, even though the painting did not sell and Christie’s, who later returned the picture to the consignor, had carried out the usual checks to see whether it had been reported stolen.
At the High Court last October, Mr Justice Jack made some significant rulings in the case. Importantly, he held that where there was known to be dubious title, the burden was upon the auctioneer to prove that they had acted in good faith. Nor was there reason, he said, for an auctioneer to escape liability simply because the lot had failed to sell under such circumstances.

In this case, counsel for Mr Marcq contended that Christie’s had not made appropriate enquiries of the Art Loss Register; the court, however, said they had. The sending of a catalogue to the Art Loss Register was suggested as suitable practice.
While the court would have dismissed the case on the basis of the reply at the High Court, some new points were raised at the trial that saw it move to the Court of Appeals last month.

The issue at stake at the appeal stage was not whether Christie’s had failed to exercise due diligence in offering the picture, but whether the auctioneers were nonetheless – “as a policy reason” – liable to pay compensation to the true owner of the stolen painting by offering it for sale.

Mr Marcq was again represented by Professor Norman Palmer, the specialist in auction law who in May 2000 was appointed chairman of the ministerial Advisory Panel on Illicit Trade in Cultural Objects. Professor Palmer argued that Christie’s should pay damages as they had taken “unauthorised possession” of the painting and (after the painting failed to sell) returned it to the vendor who, however innocent himself, was not the true owner of the painting.

But Lord Justice Tuckey, sitting with Lord Justice Peter Gibson and Lord Justice Keene, said: “The fact that Christie’s catalogued and offered the picture for sale and did so for reward adds nothing to Mr Marcq’s case; that is an auctioneer’s business.” He added: “Generally an auctioneer who acted in good faith and without notice is not liable in conversion if he returns the unsold goods to the prospective seller [as in this case]… I do not think the particular facts of this case make Christie’s liable to Mr Marcq.”

Christie’s had “asserted no personal rights” over the painting, all they had done was to return it to the man from whom they had originally received it, he said.

The judge concluded: “Auctioneers must, of course, take care to avoid dealing with works of doubtful title since they will be strictly liable if they sell on behalf of anyone other than the true owner. But that is not a policy reason for making them liable when they do not sell and simply return the goods to their client in good faith.”