The quality of a painting is in the eye of the beholder, but its value in monetary terms very often depends on its attribution. In a case of interest to anyone involved in the art world, the High Court was tasked with deciding where a multi-million-pound loss should fall after doubts were raised as to the authenticity of a work attributed to Dutch ‘Golden Age’ master Frans Hals.
Following its acquisition by an art dealer and an art investor (the sellers), the painting was sold by Sotheby’s for $10.75 million. On the basis of expert reports concerning its authenticity, however, the buyer later rescinded the sale contract. Sotheby’s determined that the painting was a counterfeit. It was returned to the auction house which in turn repaid the purchase price to the buyer. The auction house launched proceedings to recover its outlay from the sellers.
Sotheby’s reached a compromise with the dealer, but the investor resisted its claim, arguing, amongst other things, that Sotheby’s had acted in its own interests and that its loss was of its own making. It accused the auction house of acting unreasonably, irrationally, arbitrarily, capriciously and without good faith.
Exonerating Sotheby’s, however, the Court found that, as at the date of the sale, there was no generally accepted view amongst art scholars and experts that the painting was authentic. It had not long been ‘discovered’; it had not been subjected to forensic examination and many experts and scholars had yet to view it in person.
There was support for Sotheby’s determination that the painting was a counterfeit, including a peer-reviewed report in which one expert stated that he had detected a pigment in the painting’s base layer which dated from times well after the death of Frans Hals. The determination in any event went against, rather than in favour of, Sotheby’s interests.
The auction house was under no duty to state in the sale contract that there were divergent expert views as to the painting’s authenticity. It had throughout acted in accordance with its contractual obligations and it had not breached any duty it owed to the investor. There was nothing in Sotheby’s conduct that might render it unjust to provide it with a financial remedy.
Although the Court had yet to finalise the precise terms of its order, it noted that Sotheby’s was, on the face of it, entitled to recover half of its loss from the investor. The Court emphasised that it was no part of its role to reach a view on the painting’s authenticity. Whether or not it was by Frans Hals, the Court expressed the hope that it could be enjoyed for what it was – a fine painting.