Sotheby's v Mark Weiss Ltd & Ors

An undisclosed co-owner may become directly bound by a contract made by an agent where the evidence shows that the agent was authorised to contract on behalf of both owners. The sub-agency rule does not apply where the alleged agent was a co-owner entering detailed contractual arrangements for the owners themselves.

Whether a partnership exists under the Partnership Act 1890 depends on the substance of the relationship, but an appellate court need not decide the issue where the result follows on another ground. A contractual reference to generally accepted views of scholars and experts requires a consensus, not a mechanical headcount or majority. A newly discovered work may lack such a consensus. A guarantee given personally to the original buyer remains available to that buyer after a temporary transfer and re-transfer.

Fairlight Art Ventures LLP appealed against a Commercial Court judgment following a trial concerning the sale and subsequent rescission of a painting attributed to Frans Hals. Fairlight and Mark Weiss Limited had acquired the painting jointly and later consigned it to Sotheby’s for private sale to EPC Nevada LLC. After expert evidence raised doubts about authenticity, Sotheby’s determined that the painting was counterfeit and reimbursed Nevada.

The judge held that Fairlight was privy to the consignment contract, alternatively that Fairlight and Mark Weiss Limited were partners, and that Nevada was entitled to rescind under the buyer’s guarantee. Fairlight challenged those findings on sub-agency and privity, partnership, construction of the generally accepted views proviso, the expert evidence, and Nevada’s status as a subsequent owner.

1. Appeal dismissed. The contribution order in favour of Mark Weiss Limited was upheld.
2. Fairlight was bound by Contract A. The 17 May 2011 email did not create an overarching agency agreement; it merely authorised a possible sale at a stated price and required further consultation before consignment. The later agreement on 21 June 2011 authorised the consignment at the eventual price. The sub-agency authorities, including Prentis Donegan & Partners Ltd v Leeds & Leeds Co Inc [1998] 2 Lloyds LR 326, were not engaged. Fairlight and Mark Weiss Limited were co-owners entering detailed arrangements for the owners, and the evidence provided the necessary proof of direct contractual relations. The absence of Fairlight’s name did not prevent privity. This conclusion was consistent with ordinary agency principles as explained in Siu yin Kwan v Eastern Insurance Co Ltd [1994] 2 AC 199.
3. The partnership issue did not need determination because privity was sufficient. The court nevertheless stated that partnership depends on the statutory requirements and on the substance of the relationship, not the parties’ labels, citing the Partnership Act 1890 and Mann v D’Arcy [1968] 1 WLR 893. The judge’s finding was factual, and there was no demonstrable misdirection. If a partnership existed, binding it to Contract A was within a partner’s authority.
4. The generally accepted views proviso appeared in Contract B but not Contract A, and therefore did not restrict Sotheby’s right under Contract A. In any event, the proviso required a consensus or generally held view, not unanimity, a headcount or a majority. The relevant assessment required consideration of the number and eminence of the scholars and experts and the degree of consideration given to their views. It could not be reduced to a mechanical process. The painting was newly discovered and lacked a sufficiently formed consensus by 27 June 2011, so the proviso did not apply.
5. The judge was entitled to reject challenges to the expert evidence and to decline to draw an adverse inference from Sotheby’s failure to call a witness. The narrow approach to such inferences identified in Magdeev v Tsvetkov [2020] EWHC 887 (Comm) was not satisfied.
6. Nevada remained the original buyer for the purposes of the personal, non-assignable guarantee. Its transfer of the painting to its beneficial owner and subsequent re-transfer did not make Nevada a subsequent owner. The guarantee therefore remained available when Nevada sought rescission.

• Court of Appeal (Civil Division): Fairlight appealed against the judgment and order following the Commercial Court trial. The appeal was dismissed.
• Commercial Court (QBD): Following an eight-day trial, the judge ordered Fairlight to pay Sotheby’s and made consequential contribution, delivery-up, interest and costs orders.