Ruedi Staechelin v Aclbdd Holdings Ltd (a company incorporated in the Bailiwick of Jersey)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewison,Lord Justice Lindblom,Lady Justice Rose |
| Judgment Date | 14 May 2019 |
| Neutral Citation | [2019] EWCA Civ 817 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2018/0265 |
| Date | 14 May 2019 |
[2019] EWCA Civ 817
Lord Justice Lewison
Lord Justice Lindblom
and
Lady Justice Rose
Case No: A3/2018/0265
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Mr Justice Morgan
HC-2014-000468
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr John Wardell QC & Mr James McCreath (instructed by Lipman Karas LLP) for the Appellants
Mr Jonathan Cohen QC & Mr Ashley Cukier (instructed by Grosvenor Law) for the Respondents
Hearing dates: 9 th and 10 th April 2019
Approved Judgment
Introduction
In his reserved judgment delivered after a nine-day trial, Morgan J decided that Mr de Pury (or, more accurately, his LLP) was entitled to commission of $10 million for his part in the sale by the trustees of the Rudolf Staechelin Family Trust of a painting by Paul Gauguin entitled Nafea faa ipoipo for $210 million. There were three trustees of the trust: Mr Staechelin, Mr Paisner and Ms McCaffrey. The judge rejected the trustees' case that, in breach of fiduciary duty, Mr de Pury had concealed from them the existence of an earlier offer of $230 million. He also held that although the decision to pay the commission was taken by two only of the three trustees, the trustees were nevertheless bound to pay it.
As Henderson LJ observed in granting permission to appeal, the trustees face obvious difficulties in challenging findings of fact made by a very experienced judge. On the facts of this case, in my judgment those difficulties are insuperable.
The judge's findings
Mr and Mrs de Pury are art dealers. At the time of the events in question they were long-standing friends of Mr Staechelin and his wife. They also had a long-standing association with a Mr Bennett, who acted on behalf of successive Emirs of Qatar in acquiring works of art. Mr and Mrs de Pury both gave evidence, as did Mr Staechelin. Mr Bennett did not.
From the summer of 2012 Mr de Pury had been encouraging Mr Staechelin to sell the painting; but at that stage Mr Staechelin was reluctant to do so. On 26 November 2012, Mr and Mrs de Pury, Mr Staechelin and Mr Bennett met at a restaurant at Zurich airport. Mr Bennett explained to Mr Staechelin that he acted for the Qatari royal family who were interested in the painting and he further explained the intentions of the Qatari royal family if they were to acquire the painting. A couple of months later, the subject was discussed again between Mr and Mrs de Pury and Mr and Mrs Staechelin, at the latter's home in Basel. After an exchange of e-mails, Mr Staechelin said that he would submit Mr de Pury's proposals to the trustees.
Over a period of 7 to 10 days up to 20 March 2013, Mr de Pury negotiated with Mr Bennett as to the sale of the painting. The judge found that no later than 19 March 2013 Mr Bennett “said words to the effect “I am going to make an offer” and then said the offer was of $230 million.” At [43] the judge found:
“Following Mr Bennett's offer of $230 million, Mr de Pury telephoned Mr Staechelin (not later than 19 March 2013) and encouraged him to accept the offer. Mr Staechelin told me that he asked Mr de Pury for his confirmation that there would be no commission deducted from the $230 million. Mr de Pury replied that he was expecting to be paid commission by the sellers. Mr Staechelin told me that he was surprised to be told this as he had thought that Mr de Pury was acting for the Qataris. The matter was not resolved in that conversation. I accept Mr Staechelin's evidence as to the conversation with Mr de Pury about commission.”
The judge then recounted a number of discussions, both orally and by e-mail, in which the subject of Mr de Pury's commission was considered. He found that Mr de Pury and Mr Staechelin agreed in their telephone conversation or conversations after the email of 20 March 2013 that Mr de Pury should propose to Mr Bennett a sale at $260 million and in the event of such a sale Mr de Pury would receive $10 million compensation. However, within a few days, the negotiations with Mr Bennett came to an end without agreement. At [52] the judge found:
“On 23 March 2013, Mr de Pury emailed Mrs Staechelin (but not Mr Staechelin) referring to “the offer of 230”.”
On 11 April 2013 Mr de Pury sent an email to Mr and Mrs Staechelin stating that he wanted to confirm the current situation in writing. He referred to the last offer made by the Qataris as being $230 million and Mr Staechelin's counter-offer as being $260 million. He added that the counter-offer of $260 million involved the payment of commission of $10 million, or 3.85%, so that the sum received by the seller would be $250 million. Mr de Pury added that the Qataris had said that the matter was now closed; and they would never again attempt to acquire the painting even if became available later at auction.
Things went quiet for the remainder of 2013. But in January 2014 Mr Staechelin asked Mr de Pury to contact Mr Bennett again to see whether negotiations could be re-opened. Mr de Pury and Mr Bennett did not meet again until June 2014, when they had lunch together. The judge found that at that meeting Mr Bennett emphasised to Mr de Pury that the purchaser would not offer more than $210 million. Among the reasons were that the market had declined, and that the new Emir was less interested in impressionist works of art.
On 16 June 2014 Mr de Pury and Mr Staechelin spoke on the telephone. The judge heard evidence from both of them about that conversation. But he was not persuaded that either of them could remember the details of it. It is worth noting at this point that Mr Staechelin's evidence about this conversation included this:
“Mr Staechelin gave evidence that Mr de Pury told him over the telephone about the change of Emir and that the purchaser would not offer $230 million again but would only offer $210 million.”
In substance, the judge accepted this part of Mr Staechelin's evidence. He found that Mr de Pury passed on to Mr Staechelin the essential points which Mr Bennett had made to Mr de Pury at their lunch on 16 June 2014. There was no obvious reason why he would not tell Mr Staechelin what had been discussed. The judge concluded at [62]:
“What I consider probably happened is that Mr de Pury emphasised to Mr Staechelin that Mr Bennett would offer $210 million but the price was not negotiable and there was no prospect of getting back to the previous year's offer of $230 million.”
Thus Mr Staechelin had been told both of the previous offer; and also of the fact that there was no prospect of its being repeated.
A meeting took place on the following day, 17 June 2014. Mr de Pury, Mr Bennett, Mr Staechelin, Mrs Staechelin and Martin Staechelin were present. The judge's findings about this meeting are important. He said at [64]:
“It was common ground that, at this meeting, Mr Bennett explained why he was offering $210 million. Mr Bennett referred to the new Emir and his attitude to impressionist art. Mr Bennett also said that the market had fallen. At the time of this meeting, Mr de Pury and Mr Staechelin knew that Mr Bennett had made an offer of $230 million the previous year. Mr Bennett's explanations for the figure of $210 million were entirely consistent with that. That comment particularly applies to Mr Bennett's comment about the market having fallen. I find that Mr de Pury and Mr Staechelin understood Mr Bennett to be explaining to them why he was only offering $210 million when he had offered $230 million the previous year.”
There was some disagreement about whether the figure of $230 million had actually been mentioned. The judge did not find it necessary to resolve that disagreement; because he found at [65] that:
“Even if that specific figure was not mentioned, Mr Staechelin clearly understood from Mr de Pury's earlier statements that Mr Bennett had offered $230 million the previous year and Mr Staechelin also understood that Mr Bennett was saying to him that he was now only offering $210 million and the higher figure of the previous year was no longer available.”
By this stage, then, Mr Staechelin had been told about the offer of $230 million at least three times: once by Mr de Pury in March 2013; again by Mr de Pury on 11 April 2013; and a third time on 16 June 2014, at a meeting at which Mr Bennett was present, and explained his position. The result of all that, as the judge found at [64] and [65], was that Mr Staechelin knew that Mr Bennett had made an offer of $230 million; or at least that he had made an offer higher than $210 million that was no longer available. Mrs Staechelin had also been independently told.
Following that meeting, Mr Staechelin's intention was not to involve Mr de Pury any further in the sale.
However, on 26 June 2014 a meeting took place between Mr de Pury, Mr Staechelin and Mr Paisner (who was another of the three trustees). The judge found that there was a consensus that if the sale went through Mr de Pury would receive $10 million. The judge found that it was not explained to Mr de Pury that there was no commitment to pay commission without the approval of the third trustee. He concluded:
“The words used at the meeting would have simply stated that if the sale went through at $210 million, then Mr de Pury would receive a commission of $10 million.”
This meeting was the foundation of the judge's conclusion that Mr de Pury was contractually entitled to commission.
The critical events all took place within a few days in July 2014. It is during this time that the trustees allege that Mr de Pury concealed from the...
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