THE High Court has ruled that Sotheby’s were not negligent in cataloguing and valuing a judge’s gold chain of office as late 17th century rather than a spectacularly rare survivor from Tudor times.
Sotheby's valued the chain at £35,000 on
that basis for a private treaty sale in 2006, but the new owners
went on to sell it as a Tudor collar at Christie's in 2008 for
£260,000.
The case was brought by Lord Coleridge of
Ottery St Mary, who sought damages based on the difference between
Sotheby's valuation and the later auction price. Though Judge Mark
Pelling QC ruled that Sotheby's had ultimately undervalued the
chain for a private sale, awarding £15,000 to Lord Coleridge, he
said that the claimant had failed to prove that the collar dated
from the Tudor period, or that Sotheby's had given him advice that
"no reasonably competent appraiser or valuer working for an
international auction house at the date the advice was given could
have arrived at".
He also awarded substantial costs to
Sotheby's, amounting to 100 per cent of costs prior to January 2012
(during which time Lord Coleridge's legal team changed the basis of
their claim) and 90 per cent of the cost of subsequent proceedings,
including the six-day hearing held between February 7 and 14.
Together they are thought to run into hundreds of thousands of
pounds at least.
The case centred on the Coleridge Collar, a
20½oz gold judicial chain of office made up of 27 S-links
interspersed with 26 knot-links, with an unenamelled Tudor rose
flanked by portcullises at its centre. Family tradition had it that
the chain had been given to the first Justice of the Common Pleas
in the late 15th or early 16th century and passed from
office-holder to office-holder until it came into the possession of
the last Chief Justice of the Common Pleas, Lord Coleridge CJ, in
1873.
The prospect of the sale of this family
heirloom arose from the huge cost of maintaining Chanter's House,
Ottery St Mary, home of the Coleridge family since the late 18th
century. Sotheby's disappointing valuation of the chain persuaded
trustees to sell the house and contents in 2006. The Coleridge
Collar, along with other items belonging personally to Lord
Coleridge, were sold privately to Mr and Mrs Norris, the new owners
of the house. But their decision to sell the collar two years later
on the advice of silver dealer Duncan Campbell, as the Tudor
artefact that the Coleridge family had always believed it to be,
provoked a legal storm.
Essentially Lord Coleridge's case was that
Sotheby's had taken too little time and care in researching the
chain. His legal team set out to prove this with recourse to
scientific testing, analysis of manufacturing techniques and
prolonged and vigorous cross-examination of witnesses.
But the judge's verdict was that all this
effectively added nothing to the conclusion reached by Sotheby's
expert Elizabeth Mitchell during what he acknowledged was a hurried
visit to the Coleridge family home to inspect the collar: namely
that there was no record of the chain prior to 1714 and that there
was nothing to prove that it was not of post-Restoration
manufacture.
Questions of Purity
In a complex hearing that probed deep into
auction and trade practice, Lord Coleridge's case relied heavily on
the fact that Elizabeth Mitchell had not had the chain assayed.
Subsequent analysis showed that the chain
itself was of 20ct gold, while the central rose was of 22ct and
Lord Coleridge's legal team originally claimed that this firmly
dated it to the period of the Great Debasement (1546-1551) when
Henry VIII deliberately lowered the purity of England's gold
coinage. This claim was later amended to say that the chain had to
date to before 1576, when the minimum purity for the manufacture of
gold objects was raised to 22ct.
It was also argued that no eminent judge
would have commissioned a chain of sub-standard gold in the late
17th century, but Judge Pelling heard sufficient evidence to
conclude that gold of a lower purity (sometimes from the melting of
older pieces) was commonly in use in that period. He took into
account the evidence of sub-standard gold being found among the
excavated stock-in-trade of a 17th century London jeweller, known
as the Cheapside Hoard, as well as other well-documented
sub-standard pieces from the period.
Questions of Technique
It was also claimed that Sotheby's had not
taken sufficient note of the moulding of the chain links. Expert
evidence for the claimants said that indentations in the back of
the links showed that they had been created using the slush-casting
technique which was prevalent from medieval times to the 16th
century.
It was stated that by the late 17th century
this technique had been superseded by sand-casting and lost-wax
casting, but once again the judge heard sufficient contradictory
evidence to find that this was not conclusive evidence in the
dating of the chain.
Questions of Expertise
In his judgment Judge Pelling was critical
of inconsistencies in the evidence of silver historian Wynard
Wilkinson, who appeared as an expert on behalf of Lord Coleridge,
complaining that what was said in court differed from his written
submissions.
He said he had more confidence in Charles
Truman, who appeared as the expert witness for Sotheby's,
particularly with regard to his experience as head of Christie's
silver department from 1984 to 1990 in a case that revolved in part
around auction house practice. He said that he also set great store
by the "disinterested" factual evidence of Philippa Glanville and
of Marian Campbell, both distinguished experts in the field who
cast further doubts on the chain's Tudor credentials.
Questions of
Valuation
In assessing the proper value that Sotheby's
should have put on the collar for private sale, the judge explored
the normal practices of auction houses in such cases. Elizabeth
Mitchell said that, had she been asked, she would have advised a
valuation of double the low end of her auction valuation. Lord
Dalmeny of Sotheby's, who was involved in the negotiations with the
Coleridge family, agreed that this was one common way of arriving
at a value. Charles Truman said that his approach would be to use
the top estimate plus buyer's premium and VAT.
On behalf of Lord Coleridge it was advanced
that Sotheby's should have been far more diligent in ascertaining
the market value of such a chain, and that "a simple phone call" to
London dealers S.J. Phillips would have established that they had
sold the only comparable 17th century collar to Arthur Gilbert for
£300,000 some ten years previously.
However, Judge Pelling rejected the idea
that S.J. Phillips would have revealed the price to Sotheby's, whom
they would consider rivals in the market. He went on to conclude
that, in general terms, contacting retail dealers with regard to
value was unrealistic.
Charles Truman gave evidence that in 2008 he
set an auction value of £100,000 including premium on the Gilbert
Collar when valuing it independently for the V&A, suggesting a
hammer price of £80,000. He went on to say that he considered that
an estimate of £40,000-60,000 would have been correct for the
Coleridge Collar, but he also stated that he did not consider
Sotheby's £25,000-35,000 estimate unreasonable.
In the end, the judge concluded that Lord
Coleridge had not proved that the auction estimate was one that no
reasonable valuer would have arrived at. He went on to apply the
formula suggested by Elizabeth Mitchell and arrived at a figure of
£50,000 for a private treaty sale.
Questions of
Contract
Sotheby's entered a plea that in advising Lord Coleridge they
were governed by the standard terms of a draft contract emailed in
February 2006 which excluded liability or limited it to
£35,000.
The judge said that the terms of such a contract could not refer
to the private treaty sale that was negotiated because it
specifically referred to a sale by auction and that a full contract
was only signed just before the eventual auction in October 2006,
which "suggests that neither party considered there was any
contract in place before that date".
He concluded that no such contract was in place when advice was
given on a private treaty sale in June 2006.
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