Selling Banksy street art

The Banksy “street art” hacked off a wall in Wood Green, North London is back in the press.  The piece, now known as "Slave Labour", depicts a Third World child working over a sewing machine making Union Jack bunting.

 

A few months ago it surfaced in Miami, where it was due to be auctioned. In the face of furore and protests from the bereft street art loving people of Wood Green, the piece was withdrawn from the auction.  Now it has returned to London, to be displayed, not far from my office, at the Film Museum in the old flower cellars in Covent Garden, where it is due to be auctioned on 2 June.

 

The brave organisers are a concierge business called The Sincura Group.  A statement on their website says:

 

“The Sincura Group do not condone any acts of wanton vandalism or other illegal activity, however after carrying out extensive due diligence with regard the works provenance and ownership we are entirely satisfied that the mural was legally salvaged and that its current owners and its representative are acting in good faith by consigning the piece to us to act as the centrepiece of our forthcoming art show 'Banksy at the Flower Cellars”.

 

It would be very interesting to have the details of the “provenance and ownership”, but even if the purchaser is also “entirely satisfied”, he will be taking a risk in buying Banksy street art.  I happened to advise a client last week who had bought a piece of street art attributed to Banksy and who had applied for an authentication certificate from Banksy’s certification body, which is called Pest Control.  In response they explained: “We do not authenticate street pieces [as distinct from prints and canvasses] because they were not created as commercial works of art”. According to its website: “Pest Control deals only with legitimate works of art and has no involvement with any kind of illegal activity”.  So clearly Banksy is not going to be helpful in establishing that he created Slave Labour, and he might at any time deny it or cast doubt on it.

 

Painting classed as "plant and machinery"

A judge hearing a tax case has held that Sir Joshua Reynolds’ painting Omai can be categorised as plant and machinery, as defined by the Taxation of Chargeable Gains Act 1992, and so is exempt from capital gains tax.

 

The painting was on display at one of England’s grandest stately homes, Castle Howard, which is open to the public,  and was said to be integral to the running of the house as a business.  It could therefore be treated as “apparatus” and in the circumstances the Act makes it clear that it is “deemed” to be a wasting asset that became worthless after 50 years of its acquisition by the business.  If something is “deemed” in law, then court must pretend it to be true, even if it is obviously not.

 

I’m sure this will be welcome news in the many stately homes that are run as businesses.  On the other hand, it will certainly not be welcome at HM Treasury, and I predict that the Act will be amended.  Until that happens, we might now see more valuable works put on the market, or changing hands to crystallise untaxable gains.

Sheikh Shaken

The reports of the asset-freezing injunction obtained in London against a member of the Qatari royal family, Sheikh Saud Bin Mohammed Bin Ali Al-Thani, for failing to pay for ancient Greek coins, where he had been the successful bidder at a New York auction, has sparked a lot of interest.

The recession and the conduct of the international rich, particularly from China, has caused a serious rise in payment defaults after auctions.  So are asset-freezing orders the answer?

In England you can get such court orders to freeze all assets in England and, if justified the whole world, to support proceedings brought overseas or in England.  They are not granted automatically; the court needs to be satisfied that there is a severe risk of dissipation, that is that the assets might be moved or disposed of to frustrate enforcement of an eventual judgment.  The court can exercise its power over the defendant and third party asset holders, eg banks, that are within the jurisdiction, over assets they control anywhere in the world, and require disclosure of what assets they hold, or what became of assets previously held. 
 

It’s not cheap to get such an order, and it may require more than one hearing. £20,000 would not be untypical.  However, although a freezing order is procedurally just a first step in aid of substantive proceedings, the successful obtaining of such an order usually leads to early settlement.

Back with two updates

I’m sorry it’s been a while since the last post.  My excuse is that I’ve been heavily tied up in a long trial.  My client is a well known Middle Eastern art collector, but the case was about investments other than art, so there’s nothing relevant to post.

Now I’m back, I can restart with two updates on previous posts.

My post Inspiration and Risk Management, on the fire risk of some installations, proved to be prophetic: one of my followers has pointed out this interesting report: Huffington Post.

There has been a happy outcome for the Henry Moore sculpture outside the Houses of Parliament, which was the subject of my post Res Nullius.   The Art Newspaper reports that ownership has now been “taken on by the House of Commons”.  I’m not sure how that can work as a matter of law, but let’s not challenge it.  The important thing is that this badly neglected sculpture is to be restored with money from the Parliamentary Art Collection and the Henry Moore Foundation.

Don't blame the lawyers

Certain vested interests like to blame lawyers, or their clients, for litigation.  As if it's unjust to get redress for wrongs suffered or contracts breached. 

In recent months a number of authentication committees have decided to disband because of the perceived risk of claims arising from their work.  One, the Warhol Foundation, has been through the mill in defending itself from anti-trust claims brought by a collector who claimed that authenticity was being denied to maintain high prices.  More obvious potential claims would be for getting the authenticity wrong, or misdating where the date can affect the value.

But are authenticity certificates that important, at least for someone buying a work?  Having a certificate must be better than not, unless and until it is shown to be wrong or false, when authenticity of the work is then put into question.  Many are not issued by formal committees or foundations associated with the artist’s studio or estate, but by experts and lesser beings. They may or may not be worth having, but a seller should produce the certificate, whilst not warranting its content.

However, if a certificate is issued or refused improperly, or falsely created, or wrongfully produced, and that causes an innocent party to lose money, then someone deserves to be sued, but I suppose we all have our vested interests in this debate.

Judging attribution

As I've remarked before, court judgments in art cases are always a good read for anyone interested in art.  The background in Mr Justice Newey's 43 page judgment, in the much awaited Vekselberg case, is no exception, and it will be a useful source for students of the works of Russian artist Boris Kustodiev. 

The court held that the painting called Odalisque, bought by Victor Vekselberg's company Avrora for £1.7m at Christies, was not attributable to Kustodiev, and so was a fake.  It did so applying the civil law burden of proof, which is "on the balance of probability". That means at least 51% sure.  It has been reported that Avrora alone spent over £1m on lawyers and experts to get that result, and no doubt Christies' costs were similar.  I'm not sure what alternatives there could be, but litigation is a very expensive way to determine attribution, and even then it is only based on a judge's best guess, based on the evidence before him.

What's in a name?

Dream Bags and Jaguar Shoes were adjacent shops in London's Shoreditch, an area that has become a trendy and artistic neighbourhood in recent years.  The two shops were acquired in 2001, knocked into one and turned into a café, bar and art gallery.  The old shop signs were left in place and the venue used the name "Dream Bags Jaguar Shoes", but known as "Jaguar Shoes" to visiting hipsters like Natalie Portman, Amy Winehouse, me and Beyonce, as the entrance is under that sign.