Saying Grace – Trustees Claim Against Art Dealer For $8.5million For Wrong Attribution

Trusts will often be made up of various assets. Each asset can offer a different purpose and should be utilised to meet the terms of the Trust. For example, a Trust may have an investment that is set up to produce a regular income whilst other assets, such as property or other investments, are left alone to preserve and increase capital.

One particular asset positioned to preserve and maximise capital may be pieces of art, such as antiques and paintings. When dealing with specific assets trustees should seek expert advice to ensure they are being managed and disposed of properly.

Trustees are not expected to be experts on all assets contained within a trust so consulting an expert is sometimes necessary. When consulting an expert, it goes without saying that the trustees will expect that expert to be providing their advice in accordance with what is in the beneficiaries’ best interests and not the expert’s own interests which in reality is a conflict of interests.

With niche assets however, such as paintings, experts are few and far between and this creates a risk in certain cases that the expert’s trustees rely on may be the same as those wishing to purchase the asset. A conflict arose in the recent case of Fielding and another v Simon C. Dickinson Ltd.

Fielding and another v Simon C. Dickinson Ltd

Case background

This case involved the famous painting by Chardin named “Saying Grace”. The painting dates back to 1744 and there are believed to be several versions, some of which painted by Chardin and some partially painted by him. Those painted solely by Chardin are worth significantly more as a result of the increased prominence in the art world.

In this case, the trustees sold the painting to the Defendant based on the advice provided whilst the painting was with the Defendant for cleaning and assessment, and the Defendant later sold the painting for $8.5million more than he had paid the trustees.

During the initial trial, the trustees argued that the expert should have provided more advice on the painting’s attribution and the possible next steps before it was sold. The trustees’ claim failed at first instance, but the trustees appealed on several grounds including the following:

The Court of Appeal

The Court of Appeal dismissed the appeal on the basis that the arguments raised on appeal were not part of the original claim. The trustees pleaded the claim on the basis the Defendant breached its duty to act with reasonable care and skill to obtain the best price reasonably attainable, not on the basis there was a breach of contract.

Further, the Court held even if the Defendant had taken the steps to “warn” the trustees there was insufficient evidence to suggest this would have led to a further pre-sale discussion which would have led to a different result.

Any advice provided by the Defendant would have been the same without the Defendant taking further steps to clean the painting and as such, the advice provided by the leading expert on Chardin in 1992 would not have altered the Defendant’s position. When assessing the next steps it was clear there was a real risk that the painting’s value could have decreased dramatically.

Comment

Despite the claim being dismissed, the scenario does serve as an interesting yardstick for trustees. The trustees are ultimately liable to the beneficiaries of the trust and at times will be reliant on advice from professionals, and those professionals should be impartial.

Whilst in this case, it appears that there was insufficient evidence to support the cause of action against the valuer, the concern for any trustees in such a situation is that if they have failed to ensure a valuer is impartial, and failed to challenge the findings in such circumstances, it opens them up to a potential negligence claim from beneficiaries.