Coleridge v Sotheby's

In assessing negligent professional advice, the question is whether the advice fell below the standard of a reasonably competent practitioner in the relevant professional setting, having regard to the material reasonably available at the time. The existence of a respectable body of practitioners who would have reached the same conclusion defeats breach, even if other practitioners would have taken a different view.

For valuation advice, the adviser must address the transaction actually contemplated and give clear advice about the appropriate price. An adviser cannot silently adjust advice to protect another transaction or client interest. Where the auction estimate is not itself proved negligent, damages may nevertheless reflect the difference between the proper private-sale value and the price advised.

The claimant alleged that Sotheby’s negligently advised him to sell a judicial Collar of Ss privately for £35,000. He contended that the collar was probably a Tudor artefact, or at least should have been treated as possibly Tudor, and that it should have received a substantially higher auction estimate and private-sale valuation.

Sotheby’s maintained that a reasonably competent auction-house appraiser could attribute the collar to the late seventeenth century and value it at £25,000–£35,000. The claimant also disputed the applicability of Sotheby’s standard contractual terms.

The issues were whether the terms governed the advice, whether the appraisal breached the Hedley Byrne duty, and what private-sale advice should have been given.

1. Contract. Sotheby’s failed to establish a contract made before October 2006. In any event, the draft terms concerned an auction sale. Their valuation and liability provisions did not apply to advice about a private treaty sale of the collar.
2. Standard of appraisal. Applying the approach in Bolam v Friern Hospital Management Committee [1957] 1 WLR 582, as applied to auction-house valuations in Luxmoore–May v Messenger May Baverstock [1990] 1 WLR 1009 and Thomson v Christie Manson & Woods Ltd [2005] PNLR 38, the question was whether no reasonably competent appraiser in Mrs Mitchell’s position could have reached the advice given on the material reasonably available at the time. A respectable body of practitioners reaching the same conclusion would defeat breach.
3. The evidence did not establish that a competent appraiser had to obtain an assay before expressing a concluded view about the collar’s age. The 20-carat gold did not establish pre-1576 manufacture because the statutory standard was regularly departed from after 1576, including in relation to important and finely made objects. Manufacturing technique, portraiture, historical context and literature did not compel a Tudor attribution. Sotheby’s late-seventeenth-century attribution was therefore within the range of reasonable professional opinion.
4. The valuation advice was different. Lord Dalmeny should have advised on the proper private-treaty price for the collar, rather than silently adopting an approach influenced by the proposed house sale. On the evidence, the appropriate private-sale valuation was £50,000, calculated by doubling the lower end of Sotheby’s auction estimate. Advising a sale at £35,000 was negligent.
5. The claimant’s primary Tudor-valuation claim failed. Judgment was entered for the claimant for £15,000, representing the difference between £50,000 and £35,000. Interest and costs were left for further determination or agreement.