Marcq v Christie Manson and Woods Ltd (t/a Christie's)
| Jurisdiction | England & Wales |
| Judge | Lord Justice TUCKEY,Lord Justice Keene,Lord Justice Peter Gibson |
| Judgment Date | 23 May 2003 |
| Neutral Citation | [2003] EWCA Civ 731 |
| Docket Number | Case No: A3/2002/2371 |
| Court | Court of Appeal (Civil Division) |
| Date | 23 May 2003 |
[2003] EWCA Civ 731
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MR. JUSTICE JACK
and HIS HONOUR JUDGE HALLGARTEN Q.C.
CENTRAL LONDON COUNTY COURT
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Peter Gibson
Lord Justice Tuckey and
Lord Justice Keene
Case No: A3/2002/2371
Norman PALMER and A. PIPER (instructed by Ralph Davis) for the Appellant
John McCAUGHRAN Q.C. (instructed by Stephenson Harwood) for the Respondent
If a painting is unsold at auction and returned to the prospective seller who is not in fact its true owner, is the auctioneer, who has acted in good faith and without notice, liable in conversion or bailment to its owner? This question arises on appeal from Jack J. who upheld a decision by Judge Hallgarten Q.C. made in the Central London County Court that the auctioneer was not liable.
The facts
Judge Hallgarten Q.C.'s decision was made on an application to strike out the claimant's statement of case because it disclosed no reasonable grounds for bringing the claim. Conventionally such applications are decided on the assumption that the facts alleged by the claimant are true. In his judgment Jack J. refers to a few additional facts which were not pleaded by the claimant. We were told that this information was given to the judge orally at his request without objection from the claimant. However Mr Palmer, who appeared for the claimant below, complains that the judge should not have taken this additional information into account, although this is not one of the grounds of appeal. To avoid further controversy about this, the facts I set out below are only those which appear in the draft amended particulars of claim which were before Jack J.
The claimant is now and has at all material times been the owner of an oil painting known as The Backgammon Players painted by the Dutch master Jan Steen in or about 1667. The painting was stolen from the claimant's London house over Easter 1979. Its theft was reported to the police and it was registered as stolen on the Art Loss Register before 1997. In or about July 1997 the defendants, Christies, obtained possession of the painting from a Mr Schuenemann for the purposes of selling it at auction on the terms of their conditions of business. Under this contract Christies catalogued and advertised the painting and offered it for sale at a public auction of old masters on 4 th July 1997. The painting was unsold and "thereafter Christies caused and/or procured and/or permitted" the removal of the painting from their London premises and its return to Mr Schuenemann.
Before Judge Hallgarten Q.C. and Jack J. the claimant was able to keep open the possibility of being able to allege want of good faith and notice against Christies although no such case had been pleaded. Both judges held that irrespective of where the burden of proof lay, the claimant had to plead any case he had on these issues. He was given a final chance to do this by Jack J's. order which said:
The claimant shall by 19 th November 2002 make an application to the Central London County Court business list for permission to serve a reply out of time for the purpose of pleading want of good faith and notice annexing a draft reply to that application, failing which this action shall stand dismissed.
No such application was made and on 28th November 2002 the claim was dismissed. Mr Palmer maintains that it is still open to the claimant to contend that Christies had notice of the theft of the picture in answer to Christies' assertion that they did not. I do not agree. The claimant has had disclosure of all Christies' documents and more than ample opportunity to state his case about notice and has not done so. We must proceed therefore on the basis that Christies acted in good faith and without notice.
Christies' terms of business cover their contractual relationship with prospective sellers and buyers. Those relating to sellers include:.
Christie's role as agent.
Our sales at public auction are undertaken as agent, on behalf of the Seller….
4. Expenses
The Seller will bear all costs relating to:
(a) packing and shipping the Lot to us for sale;
…..
(c) packing and shipping the Lot if it is returned to the Seller
(d) insurance under Christie's Fine Arts Policy (explained below);
…..
(f) catalogue illustration;
…..
(k) a contribution to our general expenses if the Lot is not sold equal to 5% of the Insured Value
5A. Where Insurance is arranged by us
(a) Unless we agree otherwise, the Lot will be automatically insured under Christie's Fine Arts Policy for the amount that we from time to time consider to be its appropriate value.
(b) We shall charge the Seller a sum to cover insurance, at the rate of 1% of …if the Lot is unsold, its insured value….
6. The Seller's undertakings regarding the Lot
We shall handle the Lot, and the Buyer will purchase, on the basis of the Seller's undertakings that;
(a) the Seller is the sole owner of the Lot with an unrestricted right to transfer title to the buyer free from all third party rights or claims….
(c) the Seller has notified us in writing … of any concerns expressed by third parties in relation to the ownership …. of the Lot.
7. Sale Arrangements
…..
(c) The Seller may not withdraw the Lot from sale without our consent….
(d) If either we or the Seller withdraw the Lot, we shall charge the Seller a fee equal to 10% of the Insured Value, plus an amount equal to our commission if the Lot had been sold at the Insured Value, together with any applicable VAT and insurance and other expenses…..
9. After the Sale
(a) Accounting
………
If for any reason we make payment to the Seller of the amount due before payment by the Buyer, we shall acquire complete ownership of and title in the Lot …
(d) Unsold Lot
If any Lot is unsold, or is not included in a sale, or is withdrawn from sale for any reason, it must be collected from us within 35 days after we send the Seller a notice requiring the Seller to collect it. If any such Lot remains uncollected for a period exceeding 35 days, a storage charge of £1 per item per day will apply and an additional charge will be made for insurance. The Seller will not be entitled to collect the Lot until all outstanding charges are met.
If any such Lot is not collected within 90 days after the date of the sale or the date of the notice referred to above (whichever occurs first) it may be disposed of by us as we see fit, which may involve its removal to a third party warehouse at the Seller's expense and its sale by public auction on such terms as we consider appropriate, including those relating to estimates and reserves. We shall then account to the Seller for the proceeds of sale, having deducted all amounts due.
If any Lot is bought in or otherwise unsold by auction, we are authorised as the exclusive agent for the Seller for a period of two months following the auction to sell such Lot privately for a price that will result in a payment to the Seller of not less than the net amount – i.e. after deduction of all charges due from the Seller – to which the Seller would have been entitled had the Lot been sold at a price equal to the Reserve, or for such lesser amount as we and the Seller shall agree. In such event the Seller's obligations to us with respect to such a Lot are the same as if it had been sold at auction…..
The Judgments below
I should start by paying tribute to both judges' judgments. They are models of industry and clarity.
Mr Palmer argued that Christies were strictly liable in conversion having regard to the extent of their encroachment on the claimant's rights as owner of the picture. Jack J. correctly noted that there was no reported case in which a court has had to consider the liability of an auctioneer who had simply put goods up for auction and then returned them unsold to the would-be seller. After an extensive review of the authorities he concluded (para. 41):
I deduce that there is a strong line of authority in the Court of Appeal that, for an auctioneer to be liable where he receives in good faith and without notice goods for auction from a non-owner, there must be a sale in which he is sufficiently involved followed by delivery to the purchaser. I am therefore so far against Professor Palmer's submission. So I would uphold the similar conclusion reached by Judge Hallgarten …
He then went on to consider whether Christies' terms of business, particularly clause 7(c), which prevents the seller from withdrawing the Lot, and 9(d), which gives Christies a lien, made any difference. Firstly he pointed out that auctioneers had always had a lien at common law and then said:
44. Secondly it is clear that the lien here was never exercised against anyone, let alone against [the claimant]. Nor did a right to exercise the lien arise. For the right would only arise after a notice had been sent requiring collection. No such notice was sent by Christies here. Even if a right of lien had been exercised by Christies against Mr Schuenemann, I think it doubtful whether that would amount to a conversion as against [the claimant]….
I do not consider that the fact that Christies took a right as against Mr Schuenemann to refuse to permit the picture to be withdrawn prior to auction can by itself, or if added to the other circumstances, convert what would not otherwise be a conversion, into one.
46. It was the view of Judge Hallgarten … that what matters in conversion is not the taking of powers by a bailee against his consignor but their exercise. I agree.
Mr Palmer had...
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