Richard Green vs. Gary Klesch

February 18 2019

Image of Richard Green vs. Gary Klesch

Picture: via The Times

The art dealer Richard Green is being sued by a US collector, Gary Klesch, over the sale in 2018 of two paintings at TEFAF in Maastricht. Klesch says that because the gallery did not list the most recent provenance of the painting in the cataloguing, he did not know that they had been recently acquired at auction. The Times has the details:

Mr Klesch, whose UK investments include a big stake in the AA breakdown company, claims that he and his wife attended the European Fine Art Foundation’s international art fair in Maastricht in the Netherlands last March, where Richard Green offered art for sale at a stand.

The defendant agreed to sell two paintings, River Landscape with Fishers and a Cart by Jan Brueghel the Elder [above], and Winter Landscape with Figures Skating and Sleigh-Riding Outside a Town, with the Utrecht Dom and Huis Groenwoude at Right by Salomon van Ruysdael, for €3 million and €2 million respectively.

In the particulars claim, dated last November, Klesch alleges that it became aware last May that the latter had been bought for $882,500 at a Sotheby’s auction in New York in June 2017 and the former had been purchased for almost €1.5 million at an auction at Lempertz Auction House in Cologne five months later.

Klesch alleges Richard Green knew each painting had been sold at auction in 2017 but assumes that it deliberately omitted this from the “provenance listings” in order “to minimise the likelihood of a potential buyer ascertaining the price at which the defendant’s [Richard Green] related companies had recently acquired the paintings and then using such information to negotiate a reduced purchase price”.

Mr Klesch wants to cancel the sale and get a refund. Richard Green has decided to defend the case in the High Court. I would expect Green to win. Although one can understand Mr Klesch's sense of surprise at finding out the pictures had recently sold at auction for considerably less than he had paid.

But the question is, should Mr Klesch have been surprised? It takes less than three seconds to find out that the Breughel had sold at Lempertz in Cologne in 2017. You just need to highlight the artist name and title with your mouse, then right click and select 'search Google for...'. The first page that comes up is a link to the Lempertz sale, with the price there for all to see. 

It is this ease with which collectors can look up art prices that has done so much to change the Old Master art market over the last two decades. It is almost impossible to be a retailer of Old Masters. As a priceable commodity, Old Masters (indeed art in general) are extremely easy to find, because there are a number of identifiable attributes; artist, title and nowadays even by reverse searching the image. Anyone with a smartphone can now visit a gallery, or a stand at TEFAF, and know within seconds of leaving it what the dealer paid for their stock. (Hence, dealers now spend most of their time trying to buy works privately, or make discoveries of mis0catalogued pictures at auction, which potential collectors cannot Google). 

I suspect that the Greens would have assumed that this is what Mr Klesch would have done. I can also understand the Greens' reasoning; that as retailers, they are not bound to disclose where they bought their stock, and at what price. After all, when we go to buy milk, the supermarket doesn't tell us how much they paid the farmer. No one likes to feel they're over-paying for things.

And yet, the auction price for the Breughel at Lempertz is not necessarily an indication of what the picture is 'worth'. An auction price depends on so many variable circumstances: was it a well publicised sale; did the auction house do a good job with the cataloguing; did even one possible bidder forget to register in time, thus meaning the picture was sold cheaply?

But, there is a danger in the Greens' case, from the art trade's point of view. It's possible the High Court will rule that 'the provenance' should in fact include a complete, recent sale history. That is to say, dealers must always disclose where they bought something, and how much they paid for it. Such a ruling would change the way many dealers operate, and even auction houses (for example, if a lot has failed to sell, and is then re-offered in a subsequent sale, auction houses don't tend to advertise that fact in the provenance listing). As ever in this business, caveat emptor

Update - a reader writes:

What a lovely picture! If I had €3 million I’d buy this, enjoy it, and shut up.

Another reader says:

To comment generally on provenance, suppose an auctioneer or dealer gave a complete provenance from the artist’s studio up till just before a recent auction sale, ending with say, ‘Scottish Private Collection’ and left out the sale, might a buyer not reasonably conclude that the picture was fresh to the market? As we know a recent auction sale can substantially reduce the value of a picture.

Auctioneers’ terms usually provide that they  ‘accept [no] liability for the correctness of [our] opinions ... whether relating to description, condition or quality of lots... representations to....provenance.. involve matters of opinion’. This may protect auctioneers. Do dealers have similar terms I wonder, and should they do so? One might in innocence expect that paying the higher price a retailer of goods asks gives a guarantee not available at auction, which is why one might go to a dealer rather than bid ones-self?

Update II - another readers adds, on the auction point:

'Provenance' is principally a record of previous ownership; auctioneers are generally not the owners of the stuff they sell, so it would be misleading to list them as part of the 'provenance', except to emphasise a continous history of an item.

Update III - Alex Parish writes:

“Caveat Emptor” doesn’t begin to describe the challenges to art sellers and buyers. To protest (after inspection and purchase) paintings (bought prior at auction and) sold for what a client later feels is inappropriate shows a profound naiveté of the “food chain” that supplies the painting market, particularly Old Masters. Those familiar to “equities” or “orange juice futures” see art connoisseurship like alchemy. Mr. Klesh apparently bought himself exceptional paintings despite the obvious lack of understanding of market forces which brought him to his choices. I am proud to sign my name to this note, knowing the gallery in question does extraordinary diligence, and work tirelessly to acquire the very finest examples available.


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