In a recent decision (Hickox v Dickinson[1]), the London High Court called into question the sanctity of the art market’s long-standing tradition of confidentiality. The judgment is a reminder that some of the art world’s customs, as far-reaching and historic as they may be, can be a fragile basis for legal argument.
The case pertains to a dispute between Ms Hickox, a private collector, and Timothy Sammons, the former art dealer convicted of grand larceny and fraud in New York in July 2019. In 2012, Ms Hickox consigned a painting known as Calanque de Canoubier (Pointe de Bamer) by Paul Signac to Timothy Sammons Inc, a company owned by Mr Sammons (TSI). The evidence was that Mr Sammons arranged the sale of the painting through Simon C Dickinson Ltd acting as agent for the buyer. According to Dickinson, they transferred the purchase price (USD$4.85m) to “the agent for the claimant” within 2 days of the sale being agreed. The identity of the buyer was not disclosed. This was not challenged until Mr Sammons failed to turn over the sale price to Ms Hickox.
Having exhausted her means of recourse against Mr Sammons, Ms Hickox sought from Dickinson disclosure of information relating to the location of the painting and any transactions involving it, including the identity of the buyer. She argued that Mr Sammons (acting alone or through his companies) had stolen the painting and when Mr Sammons (or anyone taking from him) purported to sell the painting this was a conversion and any subsequent purchaser or person holding the painting was liable to her for the wrong of conversion.
Dickinson resisted the request for disclosure by arguing that the general art market custom of not revealing the identity of private buyers prevented it from disclosing the buyer’s details. In a witness statement, Dickinson’s managing director emphasised the value placed on discretion by their clients. The court accepted that “the privacy of the purchaser, and their concern to avoid publicity as to the extent of their wealth and possessions” was a relevant consideration. However, it did not suffice to tip the balance in their favour.
The High Court granted a Norwich Pharmacal Order (‘NPO’) in favour of Ms Hickox. An NPO is a form of disclosure order made under the equitable jurisdiction of the court. It can be sought by a party who knows that wrongdoing has taken place but does not know the identity of the wrongdoer, yet he or she can identify a third party who has the relevant information to make such an identification. To be successful in their application for an NPO, the applicant must satisfy a four-pronged test. They must prove (1) a good arguable case that a legally recognised wrong had been committed against them; (2) that the defendants were ‘mixed up’ in the wrongdoing so as to have facilitated it; (3) that the defendants likely have the relevant information; and (4) that requiring disclosure is appropriate and proportionate in the circumstances.[2] The Court found that Ms Hickox had a good arguable case that the buyer was liable for conversion because the painting had been stolen, sold dishonestly and/or without authority by Mr Sammons and Dickinson was involved in the wrongdoing by facilitating the transaction (there was no suggestion that Dickinson themselves had done anything wrong). The Court also found that the information needed by Ms Hickox could likely only be supplied by the dealership and an order was necessary in the circumstances to enable her to pursue her claim in conversion.
Most notable was the Court’s approach to the balance of justice under the fourth limb of the test. The court emphasised that the duty of confidentiality “has not been shown to be an absolute obligation”, and there is “no basis to suggest that it could preclude compliance with a court order made for the purpose of pursuing a wrong” and “any general custom or obligation of confidentiality is significantly more fluid than is asserted.”. Here the genuine interest in preserving the buyer’s identity did not outweigh the interest of justice. The claimant was a victim of theft and fraud by an individual who had “exploited the market custom of confidentiality to carry out serial fraud in the international art market” and the Court found that it would be “unfair if such market custom prevented her pursuing any further legal recourse”. In compliance with the Court order, Simon C Dickinson Ltd disclosed documents revealing the identity of the buyer.
We would make two observations:
First, in order to succeed in her application for disclosure against Dickinson, Ms Hickox was required to show that there was a good arguable case of the tort of conversion by a person other than Mr Sammons. It was accepted that Mr Sammons had committed a wrong because he had absconded with the sale proceeds. As we have seen, Mrs Hickox contended that the painting had been stolen from her by Mr Sammons. Accordingly, she could establish the tort of conversion on the part of anyone who took actual or constructive possession of the painting.
The judgment quotes parts only of the agreement between Hickox and Sammons. The agreement, apparently signed by Ms Hickox on 9 March 2012, appears to have provided that Sammons was appointed as her exclusive agent for sale and included the following: “Once the decision for sale has been taken and the method determined, we will ensure that you get the best possible result… If the sale is by private treaty we will identify the buyer and negotiate the best possible price.” (Para 12 of the judgment). It is also suggested that it was agreed by the parties that that the Claimant would receive a net price of USD4.5 million. We are told that in July 2013, Sammons wrote to the Claimant that the painting had been sold for USD4.85 million. Finally, we are told that the Claimant unsuccessfully attempted to chase payment and locate the painting (Para 15 of the judgment). This fact matrix seemed to support Dickinson’s position that Ms Hickox had failed to adduce evidence that anyone other than Mr Sammons had done anything wrong and this meant that she did not meet the first condition (Para 43 of the judgment).
Indeed, the fact matrix as presented in the judgment is somewhat difficult to reconcile with the judge’s finding that “here there is strong evidence of a theft” (Para 61 of the judgment). Whilst Mr Sammons clearly absconded with the sale proceeds, the “strong evidence” of theft of the painting itself seems to be lacking from the information recorded in the judgment. Mrs Hickox seems to have consigned the painting for sale to Sammons who sold it for a price that allowed for the agreed return price to her. The judge pointed out that there were issues of authority since TSI had been dissolved when it contracted with Ms Hickox and Mr Sammons seems to have lacked authority to sell, however that is a separate issue that, in our opinion, does not allow one to conclude that he stole the painting. The judge seems to have been heavily influenced by the fact that Sammons had been convicted of fraud and theft. Unfortunately, once the judge found that there was evidence of theft by Sammons, he could not but conclude that there was a good arguable case of conversion by others.
The second observation is that it is perhaps regrettable that Dickinson sought to rely on the market custom of confidentiality amongst art dealers. That seemed a rather weak argument with few chances of success in the context of Ms Hickox’s claim for disclosure, especially as she had agreed to give undertakings of confidentiality. The unfortunate consequence of the decision is that it creates a precedent that further erodes confidentiality in the art market at a time when confidentiality is being seriously curtailed, notably following the introduction of the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 imposing rather onerous disclosure obligations on art market professionals.
By Pierre Valentin and Mona Yapova
[1] Linda Hickox v Simon Dickinson, Simon C Dickinson Ltd [2020] EWHC 2520 (Ch)
[2] As formulated by Saini J in (1) David Collier (2) Rachel Riley (3) Tracy Ann Oberman v Daniel Bennett [2020] EWHC 1884 (QB) (” Collier v Bennett “)