Good news for experts and valuers

An interesting case has just been reported.  Ian W Spencer v S Franses Limited [2011] EWHC 1269 (QB)  provides a fascinating story, court room drama and some new law which will be welcomed by art and antiques experts and valuers.  You can read the reported judgment at http://bit.ly/lv9W6C

It concerned some valuable embroideries found by Ian Spencer, the claimant, in a house clearance, and valued by the well-known expert valuer and dealer, Simon Franses, whose company was the defendant.  What had previously been considered to be Victorian stage props turned out to be medieval and “national treasures”.

In her reported judgment, Mrs Justice Thirlwall paints a colourful picture of the two protagonists, having watched them give evidence.  Mr Spencer was “highly plausible, determined to make a good impression and confident of his ability to do so.  He was often straightforward and engaging.  On occasions he was vague and evasive and sometimes did not tell the truth … He was cooperative and polite when he approved of the questions and overbearing to the point of rudeness when he did not.”

On the other hand, Mr Franses was said to be “very garrulous” and “extremely discursive.  He did not avoid questions, but took a long time to answer them … That said … he was endeavouring to give … a conscientious and honest account of his involvement”.

The embroideries were bought to court, and we are told that the white-gloved Mr Franses “physically started” when Mr Spencer treated them carelessly.

The judge sets out the story of how Mr Spencer had come by the embroideries and the affairs of the estate of the deceased American lady, in whose Mayfair property they were found. It’s a good read, as art cases often are.

When Mr Spencer first gave the embroideries to Mr Franses, there was an unclear understanding that Mr Franses would sell them and take 30% of the proceeds, but the judge found that there was no definite agreement as to all the terms, and therefore no contract was formed.  Mr Spencer had gone to court for the return of the embroidery and, if there was no  contract, S Franses Limited alternatively counterclaimed for payment for the costs and expenses incurred in researching and valuing the embroideries.

The interesting legal point is whether the defendant could exercise a “lien”.  That is the legal right that, for example, a garage might use if you asked it to return your car without your paying for the repairs it had done.  It is generally the right to retain someone else’s goods until he pays for your work.  The previous cases and textbooks provide that the work must improve the condition of the goods and that the work done and the goods must be indivisible.  That’s fine for the car repairer, but what about a valuer who does not physically work on and improve the goods?  On the other hand, his work, certainly in the case of Mr Franses, improved the value of the goods, subject of course to the meaning of “value”.  In one sense, the embroideries were always valuable, even if that was unknown, but a report and valuation from a respected expert would certainly improve the market value.

The judge held that the embroideries and what is known about them are indivisible.  That helps to arrive at a common sense solution, although it would trouble philosophers.  Mr Franses had increased the value and was entitled to £79,305 plus VAT, based on an hourly rate and his expenses.

So what should valuers do?  Certainly keep a record of all time spent, including how it was spent, and expenses.  Even if some other basis of payment has been agreed, it could be useful.  Secondly, if the research or valuation would increase the value, compared to previous understanding, make it clear, and don’t release the goods until the bill’s been paid.