A dealer has raised an issue of general interest in the trade (Letters, ATG No 2401).
He has several paintings in his storeroom left by artists or owners who have failed to collect them. He has tried to make contact with them over a long period, to no avail. He wants to know how long he must hold on to the paintings before he can legally dispose of them.
First port of call on this is any contractual conditions between the dealer and the forgetful artists/ owners.
For example, specialist shippers in the trade will always have conditions to cover this eventuality, as they will need to sell the works belonging to those who simply disappear, to cover their warehousing costs.
This is definitely the best solution for any gallery/dealer concerned about this situation and where it occurs from time to time.
If there are no such contractual conditions then we have to turn to the law relating to what is known as ‘abandonment’.
Proving abandonment of any property is not straightforward and the courts will be likely to err on the side of caution before inferring abandonment.
In the case of Moffat v Kazana the Judge said “one does not abandon property merely because one has forgotten where one put it”. So, if you cannot contact the owner it will be very difficult to show that the artwork has been ‘abandoned’, rather than simply forgotten.
Moffat v Kazana was a 1969 case concerning an argument about a biscuit tin full of bank notes discovered by a builder while installing a cooker in a bungalow.
The Torts (Interference with Goods) Act 1977 (TIGA) helps to fill the gaps.
Under this Act, leaving goods with a dealer is classed as a ‘bailment’ – with the owner being called what is known as a ‘bailor’ and the dealer being the ‘bailee’.
Section 12 of TIGA provides that the Bailee may sell goods if one of the following applies:-
(a) the Bailor is in breach of an obligation to take delivery of the goods (or provide directions for their delivery “if the terms of the bailment so provide”);
(b) the Bailee could impose such an obligation by giving notice to the bailor, but is unable to trace or communicate with the bailor; or
(c) the Bailee can reasonably expect to be relieved of any duty to safeguard the goods by giving notice to the bailor, but is unable to trace or communicate with the bailor.
If one of these grounds applies, the bailee/dealer has two options in order to sell the goods: firstly, he may obtain permission of the courts to do so; or he may provide notice to the bailor/owner (at his last known address if no up-to-date address can be found) and then sell the goods without reference to the courts.
Section 13 of TIGA states that with permission of the courts, the dealer and onward purchaser will have ‘good title’, ie own the goods, as against the original owner.
If permission is not sought, the risk remains that the original owner could turn up at a later date. In that case, the sale price should be accounted for to the original owner by the dealer, less any debt the owner owes the dealer and any costs the dealer incurs on sale. The original owner may also expect the dealer to have sold the goods at the best price reasonably available.
Rather than go through all of this, get some good terms and conditions drafted to prevent a complicated situation arising, should you ever find yourself with some forgetful customers.
Milton Silverman is senior commercial dispute resolution partner at Streathers Solicitors LLP, London.