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Purchasers of high-value art at auction may wish to take careful note of a reported High Court hearing which took place in September 2020.

In March 2012 Linda Hickox, a US collector, entered into a sales agreement with a company run by Timothy Sammons concerning a valuable painting Hickox owned titled Calanque de Canoubier (Pointe de Bamer), painted by the Impressionist Paul Signac in 1896. Sammons is a former art dealer.

In July 2013 Hickox was told by Sammons that the painting had been sold for $4.85m. Over the next months she continually attempted to chase payment and locate the painting, without success.

In December 2014 Hickox filed a complaint of criminal activity in the New York County District attorney’s office.

On April 8, 2015, Hickox entered into a settlement agreement with Sammons and his company, under which they agreed to pay her $4.85m, but no money was paid.

On April 16, 2015, Sammons made a sworn confession of judgment that the painting was sold on July 22, 2013, for $4.85m.

Deal negotitation

In May 2015 a Mr Dalziel, who appeared to be a director of Sammons’ Swiss business, reported that he understood that the painting had in fact been sold on October 25, 2012, for $4.85m, that the price had been transferred to an account controlled by Sammons, and that the dealership that negotiated the purchase was Simon Dickinson Ltd.

Evidence at the later court hearing from Simon Dickinson Ltd, a well-known art dealership in London, confirmed that it did indeed act as agent for the purchaser of the painting and successfully negotiated the sale for $4.85m. It advised that it had duly paid the sale proceeds over to Sammons within two days of arranging the deal. Sammons, however, apparently never paid Hickox a penny, somewhat true to form it appears.

The criminal proceedings in New York continued, and Sammons was indicted in June 2016 on 15 counts.

Sammons was made bankrupt in England in January 2017 and was also extradited to the US, where he was arraigned in October 2017.

Convicted and sentenced

On July 2, 2019, Sammons pleaded guilty in New York on all 15 counts. He was convicted and sentenced to 4-12 years in prison, according to the website of the Manhattan District Attorney, which published a picture of the painting and referred to it by name. It stated that:

“Between 2010 and 2015, Sammons brokered the sale of multiple pieces of art on behalf of his clients at auctions and private sales, but failed to turn over the corresponding proceeds of those sales to the owners. In many cases, Sammons misled his victims about the timing of the sales or failed entirely to inform them that their artwork had been purchased.

“When victims inquired about the status of their artwork, the defendant responded by asking them to be patient or ignored them entirely. In some instances, Sammons used the proceeds from the sale of artwork owned by one victim to pay debts owed to other victims. The defendant also used victims’ artwork as collateral to obtain personal loans from a financing company based in New York, and when Sammons failed to repay these debts, many of the works were sold at discounted prices.”

The conviction was for grand larceny and fraud.

Hickox claimed that Sammons stole the painting from her, due basically to his flagrant disregard of the terms of the sales agreement. For example, it turned out that the Sammons company with which she originally contracted in 2012 had been dissolved in 2011, but she was unaware of that at the time.

On July 23, 2020, Hickox issued her claim in the English court.

The purpose of the application, against Simon Dickinson and his company, was to seek information and documentation relating to the sale which Dickinson had negotiated. One of the requests by Hickox was for the identity of the ultimate purchaser to whom the sale of the painting had been successfully made. This would for example be vital information to have, for the purposes of recovery, should she be able to prove the painting stolen.

On behalf of Simon Dickinson it was argued that “confidentiality remained a paramount reason against disclosure”. It was claimed that it is a “well-known custom and practice in the art world … that the identity of a private buyer or owner of a painting is not revealed”.

Among other reasons in support of this practice it was said that it was of paramount importance to Dickinson’s reputation within the industry that he be seen to be able to protect client confidentiality.

This argument was what the case was all about and, as you may imagine, there were many submissions from both sides in justification of their position. On behalf of Hickox it was stated among other things that disclosure should be ordered “in the interests of preserving the integrity of the art market in London”.

There was an interesting argument in the English Court as to whether Hickox was entitled to chase the painting or just the proceeds of sale. This depended on whether there had been a valid sale of the painting. She claimed not, that it still belonged to her and that it was effectively stolen.

‘Not absolute obligation’

The judge, Ms Clare Ambrose, carefully balanced all that she heard. She commented that the “general custom of confidentiality relied upon has not been shown to be an absolute obligation. It appears to be a market custom adopted by art dealers regarding voluntary disclosure.”

She concluded on the essential point: “I am not satisfied that confidentiality is good reason why this order should not be made.”

Critical to the judge’s decision was that she decided that there was a “good arguable case” that Hickox did not authorise Sammons to sell the picture under a secret and fraudulent sale and that therefore Sammons stole it (the full text of the judgment, Crown copyright, is available via bailii.org). If the judge had decided that she could chase only the proceeds of sale, not the painting, then she would not have made an order for disclosure of the identity of the purchaser as this would not have been relevant to Hickox’s claim. This was a highly arguable point.

At the time of writing what success Hickox has had in retrieving the painting, given that she presumably knows the name of the purchaser now, is not public knowledge.

The fundamental lesson for those in the trade is that, if a good case is made out and various technical hurdles are crossed, and justice requires it, the court will order disclosure of the identity of a purchaser, even though the day-to-day practice in the art world may be that this is kept strictly confidential.

Milton Silverman is senior commercial dispute resolution partner at Streathers Solicitors LLP, London.