Is there legal validity in ‘the well-known custom and practice in the art world that the identity of a private buyer or owner of a painting is not revealed’? A recent trial held at London’s High Court considered and answered this question, when a gallery dealership argued it should not be ordered to reveal the identity of the buyer-client it had represented as agent to purchase a painting, which had been stolen from its original owner who needed to find its current location. A public court hearing of art-business issues is rare, and merits consideration.
The claimant was Linda Hickox, a US-based collector, whose painting by Paul Signac, Calanque de Canoubier (Pointe de Bamer),1896, was stolen from her by the New York-based gallery dealer to whom she had consigned the work in 2012, Timothy Sammons, who pleaded guilty to grand larceny and fraud (including of the Signac) in the New York State Supreme Court in 2019 and received a 12-year prison sentence.
The defendant was Simon C Dickinson Ltd (Dickinson), private advisers and fine art dealers based in London and New York, who acted as agent for a buyer of the Signac painting. In the criminal proceedings against him, Sammons confessed to having sold the Signac painting via Dickinson, who had paid him $4.85m. Hickox’s request to Dickinson for disclosure of relevant information about that sale was refused on grounds of ‘confidentiality and a lack of obligation to disclose’.
Hence Hickox sought a court order against Dickinson to disclose to her key information, including: if the painting had ever been in Dickinson’s possession or custody or control, the identity of the party that delivered it to Dickinson; the identity of any party who had possession of the painting since 1 January 2012; details of any transaction involving the painting which had occurred since 1 January 2012; the current location and possessor of the painting. In other words, what happened to the painting when it was sold via Dickinson, where is the painting now and/or how might it be found?
Lawyers for both sides accepted that legal criteria for ordering disclosure were whether a court was satisfied on three key matters: a wrong must have been carried out, or arguably carried out, by an ultimate wrongdoer; there must be the need for an order to enable action to be brought against the ultimate wrongdoer; and the person against whom the order is sought must (a) be mixed up so as to have facilitated the wrongdoing and (b) be able or likely to be able to provide the information necessary to enable the ultimate wrongdoer to be sued.
The court decided that, despite its theft by Sammons, Hickox remained the painting’s legal owner, and Hickox therefore had a ‘good arguable case’ of wrongdoing against any person that took possession of it (after the theft); that in order to bring a case against such a potential wrongdoer, Hickox needed Dickinson to identify its buyer-client; that Dickinson facilitated the sale of Hickox’s painting to its buyer-client and was therefore ‘mixed up in the transaction’, and that a court order was necessary ‘to provide the information required to pursue any claim’ (by Hickox against Dickinson’s buyer-client).
All that decided, the court was then bound to consider a final matter: whether actually ordering disclosure by Dickinson would be ‘appropriate and proportionate in all the circumstances of the case’. It was in relation to this so-called ‘overall justice condition’ that Dickinson’s defence team advanced its chief contention to the court: that client ‘confidentiality remained a paramount reason against disclosure’. Key explanations and arguments to support this contention included the following: ‘the well-known custom and practice in the art world is that the identity of a private buyer or owner of a painting is not revealed. This is because fine art is readily moveable and highly valuable. There is a black market in these artworks and a key security protection (particularly for private owners) is the simple confidentiality of the fact of ownership.’
Further, the defence argued that ‘wealthy individuals may wish the fact of buying a high-value artwork to remain confidential since it can be embarrassing among peers or employees [and] it can reveal the degree of wealth of an individual and have an impact on their security’ (this was, apparently, a particular concern for the client-buyer of the Signac painting). Moreover, it was said to be ‘of paramount importance to [Dickinson’s] reputation within the industry that it be seen to be able to protect client confidentiality’. In response, Hickox’s team contended that disclosure should be ordered ‘in the interests of preserving the integrity of the art market in London’.
The court rejected the client confidentiality explanations and arguments, for reasons including the following: ‘The general custom of confidentiality relied upon has not been shown to be an absolute obligation. It appears to be a market custom adopted by art dealers regarding voluntary disclosure. There was no basis to suggest that it could preclude compliance with a court order made for the purpose of pursuing a wrong. Accordingly, [Dickinson’s] concern that its market reputation would be damaged lacked weight in relation to complying with a court order. [Dickinson] chose to give some information in this hearing without a court order, primarily with a view to resisting a court order. This suggests that any general custom or obligation of confidentiality is significantly more fluid than is asserted.’ Accordingly, the court was ‘not satisfied that confidentiality is good reason why this order should not be made … arguments on confidentiality do not outweigh the interests of justice in allowing the Claimant to make a good arguable case.’
Forensic scrutiny of art-market client confidentiality explanations and arguments is as significant as it is rare. Equally significant and rare is the court’s judicially reasoned rejection of such contentions, from which key take-aways perhaps include the following: art-market client confidentiality is not an absolute obligation, but a voluntary custom and practice; where a legitimate need for disclosure of information about a private sale is requested, art-market practitioners would be wise to cooperate rather than to refuse unless and until a court orders compliance.
It remains to be seen whether the art world will take notice of this powerful judicial rejection of its longstanding and ‘well-known custom and practice … that the identity of a private buyer or owner of a painting is not revealed’. And perhaps art-market practitioners will re-think and adjust their ways of working to be more open and transparent and helpful to all parties in a sales transaction ‘in the interests of preserving the integrity of the art market’.
© Henry Lydiate 2019