Originally published in Hunters. See original version here.
What art market professionals, buyers and sellers can learn from the de Pury’s successful claim for commission payment
Last week saw the handing down of the judgment in a claim brought by Simon and Michaela de Pury and their associated companies over the payment of commission following the private sale of Paul Gauguin’s painting, dated 1892, of two Tahitian women, Nafea faa ipoipo (translated as “When will you marry?”).
The case is fascinating for the way in which it exposes the private deals and private lives of the individuals involved as well as art market practice in general. The fact that details of the sale which are usually kept private, such as the date of sale, September 2014, as well as the identities of the sellers, buyer and various intermediaries and the sale price of $210 million are all revealed is unusual.
For lawyers, the most salient aspect of the case is the importance of recording the terms of an agreement clearly and precisely in writing, in order to avoid such disagreement down the line, and potentially time consuming, costly and embarrassing litigation.
There is no doubt that both the sellers of the painting, the trustees of a Swiss family trust, and the buyer of the painting, the Emir of Qatar, intended to keep the matter of the sale out of the public eye. In fact, Mr Justice Morgan refers to the desire for confidentiality and privacy between the two parties at several points in the judgment.
Unfortunately for them, the sellers and the buyer were not the only parties claiming an interest in the transaction. The initial introduction between Mr Staechelin, one of the sellers, and the buyer’s art advisor which eventually led to the successful sale of the painting, was made by the well-known art world personality, Mr de Pury, and his wife, who rightfully claimed payment of commission for their services. The fact that a commission was owed to the de Purys and the level of the commission was discussed verbally between Mr de Pury and Mr Staechelin on more than one occasion. It was also noted briefly in writing, following a meeting between Mr Staechelin and one of his co-trustees. However, this was never formally set out in a written agreement.
As events leading up to the sale unfolded, the judgment sets out how various misunderstandings and doubts about the sale price meant that Mr Staechelin lost trust in Mr de Pury and, following completion of the transaction, denied the de Purys their commission which had been agreed at $10 million. The de Purys issued High Court proceedings in September 2014 to recover that sum and interest and costs. Now, over four years later, they have finally been awarded a judgment in their favour. The question must be raised whether mediation would have better served the parties in preserving confidentiality and saving time and costs.
For more information, please contact the partner having responsibility for your affairs or any partner in the private client department here.
Petra Warrington, Senior Associate