Fakery and deception

Who would have thought there would be dodgy behaviour in the art establishment? ... Barrister Louise McBride bought a dud Albert Tucker and Christie's did nothing about it ... It's raining fakes ... Traditional art market cover-ups exposed ... Kate Lilly reports 

McBride and daughter Unity after the judgmentLouise McBride, tax barrister from ground floor Wentworth Chambers, who bought a forged painting at a Christie's auction 14 years ago, has won a significant misleading or deceptive conduct claim in the NSWSC.  

On Thursday (Dec 4), Patricia Bergin chief judge of the equity division, awarded McBride over $118,000 in damages for the defendants' misleading or deceptive conduct. 

Bergin described Christie's conduct as "commercially reprehensible" and ordered the auction house to foot 85 percent of the damages bill.  

The vendor, Holland Fine Arts & Cars Pty Ltd (HFA), and McBride's art consultant, Vivienne Sharpe, are required to cough-up the rest.  

Christie's grew concerned with the painting's authenticity in the weeks following the auction, but never shared these concerns with McBride.  

Sharpe was held to have represented the painting was a good investment for McBride – in fact, it was worthless. She was also found to have breached her fiduciary duty in relation to the sale of another work in 2010. 

During the trial Francis Douglas, for McBride, told the court that up to 30 percent of Australia's secondary art market comprised forgeries. 

Background

A fake - on the balance of probabilitiesMcBride is famous in the eastern zones of Sydney for her vast collection of designer gowns, shoes and artworks.

In May 2000, she paid $75,000 for Faun and Parrot - supposedly signed by Albert Tucker in 1967.    

Shortly after the auction, Fiona Hayward (a Christie's staff member) contacted Tucker expert, Lauraine Diggins, with concerns the painting had come from a "questionable source."  

In August 2000, Diggins met with a group of art experts to discuss the materials and techniques employed by Albert Tucker. After the meeting, Diggins called Hayward with some troubling news.  

"Fiona, the group has met and we have real concerns, not only about Lot 70 [Faun and Parrot] which sold in May, but lot 76 for the August auction which we believe should be withdrawn from sale. I could not support either of these paintings as works by Tucker in light of what we have seen. You will need to make some further investigations." 

Despite the warning, Christie's went ahead with the auction of 'Lot 76', another Tucker piece acquired from the same source as the painting purchased by McBride.  

The art collecting lawyer remained ignorant of Faun and Parrot's questionable provenance for almost a decade. 

In early 2010, she met with Sharpe to discuss the sale of the Tucker painting and two other pieces in her art collection. In the course of her enquiries, Sharpe got in touch Geoffrey Smith, the vice chairman Sotheby's in Melbourne. She found out the painting was considered "problematic". Smith told her: 

"As you know I am now the Tucker expert and I have done a lot of research with Barbara (Tucker) and we can't find the documentation or provenance for this painting. There have been a few like this that appeared on the market after Bert died in 1999 that we have problems finding provenance for. I am pretty sure this is one of them." 

In February 2010, Sharpe met with McBride at a restaurant at Potts Point in order to deliver "some bad news". Fawn and Parrot was subsequently withdrawn from the proposed auction of McBride's artworks.  

In the NSWSC, Bergin CJ in Eq was satisfied the painting is a forgery on the balance of probabilities. Although the purchase was made in 2000, HH held McBride's cause of action under the TPA did not accrue until 2010, when the forgery was discovered and the painting was withdrawn from McBride's auction.  As such, her claim fell within the limitation period.

McBride's claims

Proceedings commenced in February last year, with four defendants in the firing line: Christie's, HFA, Mr Alex Holland (HFA's sole director at the time) and Vivienne Sharpe. 

Not one to leave a stone unturned, McBride launched a number of claims in contract, tort, and misleading or deceptive conduct. Equitable relief for unconscionable conduct and breach of fiduciary duty was also on the menu.  

HFA and Alex Holland

By representing to Christie's that the painting was a genuine Tucker, HFA was found have engaged in misleading or deceptive conduct contrary to the TPA. 

Bergin noted it was not necessary for McBride to prove that HFA knew the representations were false at the time.  

McBride claimed Holland "was knowingly concerned in HFA's misleading or deceptive conduct". It was Holland who signed the receipt and forwarded an unsigned letter to Christie's, purportedly outlining the provenance ofFawn and Parrot. 

In cross-examination, it was suggested Holland wished to conceal the fact that the painting had been purchased from a questionable art dealer called Peter Gant.  

Q. Did you have an awareness at 2000 that Mr Gant had been involved in a dispute over a bunch of Blackmans which the painter Charles Blackman said he didn't make?

A. There could have been those allegations, yes.

Q. You were aware of them as at 2000, weren't you Mr Holland?

A. I suppose so.

Q. You were aware at 2000, Mr Holland, that the name Peter Gant was poison within the art market, weren't you?

A. That may be other people's ideas.

Gant: accused of having a poisonous name in the art market Bergin held that Holland made a "conscious decision not to disclose that HFA purchased the painting from ... Peter Gant" with a mind to Gant's poor reputation in the art market.  

Despite this, she found McBride had failed to prove Holland knew the painting was a forgery "or that he knew of facts demonstrating the falsity of the representations". As the individual claim against Holland required him to know or suspect the representation was false, the claim was dismissed.

Christie's Australia 

McBride made claims against Christie's for misleading or deceptive conduct, deceit and unconscionable conduct. Unfortunately for the auction house, they all stuck.

Bergin held that Christie's was "no mere conduit" for the information provided by HFA. HH found the auction house made its own representations about the painting - in particular, that there was doubt the painting was a genuine Tucker.  

She held: 

"Christie's held real concerns about the authenticity of the painting very soon after the auction. Ms Hayward's expression of concern to Ms Diggins probably occurred prior to the time that Christie's invoiced Capital Finance [McBride's financier] for the Hammer Price of $75,000. 

Christie's chose to remain silent and not alert HFA, Capital Finance, Ms Sharpe or the plaintiff to the possibility that the painting was a forgery or at the very least that there were real difficulties with its provenance. This was particularly disgraceful in circumstances where Christie's, by its expert, Ms Hayward, had advised the plaintiff, through Ms Sharpe, that the Tolarno Gallery provenance was 'correct'."

Vivienne Sharpe

McBride sued Sharpe for misleading or deceptive conduct, breach of contract, breach of fiduciary duty, and negligence.  

In 2000, on her own evidence, Sharpe told McBride that there were "similar Tuckers from this series hanging in major art museums and featured in books on Tucker," that the painting was 'from a good period, the 1960s,' and that it was "probably worth $75,000". 

HH concluded this was misleading or deceptive conduct under the TPA.  

McBride claimed it was Sharpe who introduced her to the idea of purchasing a Tucker painting.  She went on to suggest that their winning bid (at $75, 000) was higher than what she had authorised.    

On that point, she gave the following evidence:  

Q. Did you authorise [Sharpe] to bid to 55, ever?

A. Yes.

Q. When?

A. When she said she believed - the day after she rang - the day of the auction when she rang me to tell me the painting had been passed in, she thought she could buy it for $40,000.

Q. Yes, and?

A. I told her she couldn't buy it for more than the reserve.

Q. Did you say a figure for what the reserve was?

A. I don't remember.

Q. According to your evidence ten minutes ago you thought the reserve was 75,000?

A. That's correct.

Q. Well, according to you she told you the reserve was 75,000?

A. That's correct.

Sharpe: no breach of contractDespite McBride's efforts, the judge dismissed her claims against Sharpe for breach of contract and breach of fiduciary. HH said:

"[Francis] Douglas [for McBride] conceded that this evidence was 'somewhat confused' ... I am of the view that in light of this evidence it is rather extraordinary that the plaintiff maintained her claim that Ms Sharpe exceeded her authority or acted inconsistently with her instructions." 

Further, the judge said:

"The plaintiff's suggestion that it was Ms Sharpe who introduced the topic of the 'Tucker' to her cannot be accepted. During her cross-examination the plaintiff admitted that she said to Ms Sharpe, 'I would like to own a Tucker as I like him as an artist' ..."  

HH was of the opinion that Sharpe "took the steps that a reasonably competent and diligent art dealer would be expected to take in the circumstance" and dismissed the negligence claim.  

She explained:

"Ms Sharpe was duped by the forgery and recommended to the plaintiff that the painting was probably worth $75,000. However she relied upon Christie's as a reputable auction house with a reputation for reliability. She too was kept in the dark in relation to any of the concerns harboured by Christie's about the painting. At the very time that she forwarded the plaintiff's payment of the buyer's premium, Christie's knew that the representation that there was no doubt that it was Albert Tucker's signature on the painting was false."

Despite escaping these claims, Sharpe was found to have received a secret commission in relation to the sale of another piece in McBride's art collection.

Albert Tucker: self-portraitIn 2010, Sharpe was negotiating with Menzies Art Brands on McBride's behalf. In February, Menzies sent Sharpe a separate "side-letter" with the following offer:

"I have much pleasure in confirming our offer of 50/50 share in vendor commission (inclusive of any applicable GST) of the actual knockdown hammer price for your client's works in our March 2010 Fine Art Auction.

--- 

We thank you for your enormous efforts in securing this major collection and look forward to achieving a successful outcome for all parties concerned."

Sharpe never shared the side-letter with McBride. Despite this, Bergin gave a generous assessment of the situation.  

Ordering an account of profits, she said: 

"I do not believe that Ms Sharpe requested the side letter. It appears that this may be a practice in the industry ...  

Ms Sharpe was dealing with Mr Smith and others at the very time that the side letter was sent to her. The discussions with the plaintiff in relation to the problems with the painting occurred at around the same time. I have no doubt that these discussions were very intense and caused both Ms Sharpe and the plaintiff serious anxiety ... 

I am of the view that if Ms Sharpe had turned her mind properly to the position in the absence of the excoriating events relating to the forged painting she would have offered her share of the hammer upside to the plaintiff."  

McBride v Christie's Australia Pty Ltd judgment summary

McBride v Christie's Australia Pty Ltd judgment