AuthorThomas, Rod

Assumptions that successful bidders carry the risk in terms of artwork that is either misdescribed or misrepresented by art auctioneers is challenged, for New Zealand at least. This is because descriptions of works to be auctioned are invariably proffered in sale catalogues as unqualified assertions of fact (or opinion based on fact), inviting reliance. Further, consumer protection legislation in New Zealand overrides privity of contract, enabling courts to give relief where the auction contract terms are found to be unfairly weighted against the successful bidder, as a consumer. For New Zealand, these arguments may be more persuasively made, given a significant number of bidders are members of the general public.


This article discusses, with particular reference to New Zealand, the issue of seller and auctioneer liability when artwork does not match the description given in the published art catalogue, or when a misrepresentation is made by the auctioneer prior to auction. New Zealand catalogue entries invariably identify the author in unqualified terms, as well as representing the work's investment value, provenance and condition. As with overseas practice, New Zealand auctioneers often advise bidders on terms that invite reliance. Nevertheless, standard auction terms in common usage in New Zealand, attempt to impose on the buyer the risk of purchasing in terms of authenticity, condition and investment value. Existing assumptions that caveat emptor (1) principles apply in such situations are challenged, for New Zealand at least.

In Part A, the central role played by the auctioneer and the published catalogue are contextualised. Seller and auctioneer liability is then discussed under three separate headings. Contract liability is discussed in Part B. Auctioneer liability under either contract or tort law principles is discussed in Part C. Finally, Part D summarily identifies consumer protection legislation which will apply to impose liability on the auctioneer and perhaps the seller.

First, the role played by the auctioneer and the auction catalogue.


    The auctioneer is an agent authorised to sell. Therefore, he or she owes fiduciary duties to the seller, and must put that party's interests first. This includes an obligation to set a price that is in the best interests of the seller and in compliance with the seller's instructions. (2) Being an agent for sale, the auctioneer also has ostensible authority to describe the property so as to ensure that a proper price is obtained. (3) This includes implied authority to make representations regarding the character or quality of the goods. (4) Such representations will be binding on the seller, (5) even if they are subsequently found to be incorrect or false. (6)

    The Role of the Auction Catalogue

    The catalogue plays a pivotal role in the sale of artworks. It has been described by a Christie's director as: "the most important marketing tool at the auctioneer's disposal and is designed to impress and encourage potential buyers to bid". (7) Indeed, catalogues published by reputable auction houses are used to guide other auctioneers in determining market value.

    It is standard practice in New Zealand for catalogues to reproduce a visual image of the work to be auctioned. This is accompanied by a written attribution to a named painter, descriptions of the nature and physical dimensions of the work, and an estimate of the expected range of bids. Sometimes assertions of provenance are also given. This is intended to assure potential bidders of the work's bona fides and to add appeal, and this can considerably enhance the sale price achievable for the work. (8)

    Example of Catalogue Entry

    Colin McCahon (1919-1987) is considered one of New Zealand's pre-eminent artists, with auction sales of his work often achieving prices of between NZ$40,000-1.5 million. (9) The following hypothetical example is illustrative of what is often produced in a catalogue.


    Colin McCahon

    Northland Beach

    oil on canvas

    signed and dated 1971

    Provenance: From the Smith Art Collection. Purchased direct from the artist in 1971.

    1000 * 1800mm


    In relative terms, there will be 'good' McCahons and 'bad' McCahons. A work described as having an estimated value for sale purposes of between NZ$860,000-900,000 would be considered to be a 'good' McCahon. The provenance provides an assurance that the work is known to the market place. It shows that the work has previously been accepted as being authentic, and gives a 'back story', attributing the work back to the artist.

    At the back of the auction catalogue, standard terms then invariably place risk on the successful bidder in terms of value, authorship and the described provenance. Examples of standard terms used by major New Zealand art auction houses to this effect, will be discussed below.

    The Issue of Proper Attribution

    Almost all auctioned artworks are sold as part of the secondary art market. (10) Given this, attribution of authorship is a common problem, especially where the artist is deceased. (11)

    The European Market

    Many works sold will be hundreds of years old. We may take Rembrandt as an example. For centuries, apprenticed and established artists have copied Rembrandt by way of better learning their trade. The closer the copy to the original, the better the lesson learned. Indeed, in terms of scientific testing, the exercise of attribution is made harder n respect of artists such as Rembrandt, whose pupils copied his works using similar canvases and paints. (12) Further, artists such as Rubens or Titian would often copy their significant works for further sale. Such copies would be created by their workshop, or by their own hand. (13)

    Case law to date has recognised the importance of correct attribution. Thus, we have the following from Lord Evershed M.R., giving judgment in Leaf v. International Galleries (Leaf):

    The attribution of works of art to particular artists is often a matter of great controversy and increasing difficulty as time goes on ... (14) Then, Nourse L.J. in Harlingdon & Leinster v. Christopher Hull Fine Art Ltd (Harlingdon): (15)

    ... almost any attribution to a recognised artist, especially of a picture whose provenance is unknown, may be arguable. A recent example illustrates the significance of attribution. This involves a rediscovered 'Da Vinci' painting. At first, the work was understood to be a mere copy of a lost original having a modest value in 2005 of some US$10,000. However, in 2017, following general acceptance that the painting was in fact the lost original, its value at auction rose to US$450,312,500. This is not the end of the issue. Doubts have since been raised as to the work's authenticity. (16)

    Given such uncertainties, bidders at significant European auctions are often established art connoisseurs, experienced dealers or collectors. Such persons invariably rely on their own judgment and experience in bidding. (17) Indeed, in Harlingdon, Nourse L.J. commented on evidence given at trial that: "an art dealer's success depended on, and was judged by, his ability to exercise his own judgment". (18) This led to the lower court accepting that many dealers habitually dealt with each other on the principle of caveat emptor.

    The New Zealand Market

    The significance of this issue may not be fully appreciated in terms of the operation of the New Zealand art market. Here, a commercially viable art 'market' is of fairly recent derivation, having been in operation only since the 1970s. (19) This development mirrors, and may have been caused by, an international 'boom' in the trade in art around that time. (20) By way of contrast to the European experience, auctioned paintings in New Zealand are invariably of recent origin. The great majority are attributed to New Zealand artists who commenced practice since the 1970s onwards, and indeed may still be working. Such works are often sold at what, in international terms, would be considered modest prices. (21) Indeed, members of the public make up the majority of bidders, and have an expectation that what is sold will be original works by the described artists.


    Over the last twenty or so years, frauds have increasingly become a feature of the New Zealand art market. Significant sums have been exchanged with the intention of owning a work attributed to an 'in vogue' artist, or one who is otherwise considered to be significant. Indeed, fraudsters have been encouraged by what appear to be unthinking assumptions that artworks submitted for sale on the secondary market will be genuine. This is assisted no doubt by enthusiasm to invest in what may be perceived as a lucrative investment. (22)

    What is Auctioned?

    In legal terms we have to consider what is offered for sale. The issue is central to the discussion that follows. When a work is presented for auction, is it to be sold as an original, or as second-hand goods ('a painting') that may be the work of the named painter.

    An established European market practice accommodates this point of difference. Reverting back to the example of Rembrandt, a work with uncertain attribution may be described as 'school' of Rembrandt, 'follower' of Rembrandt, 'workshop' of Rembrandt, 'style' of Rembrandt or 'attributed' to Rembrandt and so on. Even further gradations are available, as explained by Nourse L.J. in giving judgment in Harlingdon: (23)

    In sales by auction, where the seller does not know who the buyer will be, the completeness with which the artist's name is stated in the catalogue, e.g. "Peter Paul Rubens", "P.P. Rubens" or "Rubens", signifies in a descending scale the degree of confidence with which the attribution is made. The use of such terminology is not established in New Zealand, (24) and, even if used, the various nuances and shades of diminishing certainty of attribution may well escape many bidders, especially those not experienced in art...

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