Were trustees liable for $10m commission on sale of Gauguin painting to Emir of Qatar?
We welcome James McCreath of Wilberforce who will talk through this attempt by trustees to argue that right to a commission on a $210,000,000 sale of a Gauguin painting to the Emir of Qatar had either never accrued, or had been forfeited by the agent's breach of fiduciary duty. Until the trial, the painting had been widely believed to be the most expensive ever sold.
The case in brief
Rudolf Staechelin, a Swiss art collector, bought the Gauguin in 1917. Along with other works of art the Gauguin passed into a Swiss based, New York law, family trust. At the time of the dispute the three trustees were Rudolf's grandson Ruedi Staechelin, an English solicitor and a New York attorney.
The claimants were Mr and Mrs Dde Pury and associated companies. They specialise in art consultancy, advising on sales and purchases of art, and act as brokers. Mr de Pury has been described as 'the Mick Jagger' of art auctions.
Mr De Pury had been at school with Ruedi and from about 2012 onwards was engaged in discussions about a potential sale of the Gauguin to the Emir. Shortly before the sale completed, Ruedi became convinced that Mr De Pury had misled him about a previous offer, and the three trustees denied there was any liability to pay commission. Morgan J, however, held that there was a liability on the Trustees to pay commission, and it had not been forfeited.
The litigation itself involved a variety of allegations including tax evasion.
It also throws up interesting substantive questions of law including when and how trustee decisions are formally made and the extent of a trustee's personal liability when acting unilaterally, as well as the circumstances in which a commission agent can be deprived of the right to commission for breach of fiduciary duty.
Mr McCreath will consider relevance of the decision for trustees generally, and address the factors which led the Court to find in favour of the claimants.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.