Charles Raymond Blackman v Peter Gant
[2010] VSC 109
•31 MARCH 2010
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 9785 of 2008
| CHARLES RAYMOND BLACKMAN AND ORS | Plaintiffs |
| v | |
| PETER GANT AND ANOR | Defendants |
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JUDGE: | VICKERY J | |
WHERE HELD: | MELBOURNE | |
DATES OF HEARING: | 23, 24, 25, 29, 30 MARCH 2010 | |
DATE OF RULING: | 31 MARCH 2010 | |
CASE MAY BE CITED AS: | CHARLES RAYMOND BLACKMAN AND ORS v PETER GANT AND ANOR | |
MEDIUM NEUTRAL CITATION: | [2010] VSC 109 | |
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PRACTICE AND PROCEDURE — Submission of no case to answer — Approach of judge in ruling upon submission of no case to answer — When determination should be made as to whether party making submission should be put to election— Whether party making submission should be put to election or not — Applicable principles — Determination of the issue on the basis of the case as pleaded — Finding of no case in part, but a case to answer in other respects.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr C. Golvan SC Mr D. Crennan | Heydon & O’Loghlen |
| For the First Defendant | No appearance | No appearance |
| For Second Defendant | Mr A.T. Schlicht | Russell Kennedy |
HIS HONOUR:
In this matter, the Second Defendant has made a no case submission.
The principles to be applied on the making of such a submission were canvassed by the Full Court in Protean (Holdings) Ltd v American Home Assurance Co,[1] and in particular the observations of Tadgell J at 240. I also refer to Oakley & Anor v Insurance Manufacturers of Australia Pty Ltd,[2] a decision of Kaye J, particularly at [3], where his Honour said:
[1][1985] VR 187.
[2][2008] VSC 68.
1.Where a no case submission is made in a trial by jury, the role of the judge is to determine whether, on the view of the evidence most favourable to the party against whom such a submission has been made (“the respondent party”), the jury could (not would) find in favour of the respondent party.
2.The test which is applicable, where a judge is sitting without a jury, is less stringent. In such a case the judge may uphold a no case submission, notwithstanding that the evidence, on the view most favourable to the respondent party, could support a judgment in favour of the respondent party.
3.In such a case the judge may perform an assessment of the quality of the evidence which has been called on behalf of the respondent party. In some cases, such an assessment may involve the judge evaluating the credit of witnesses from whom such evidence has been called.
4.In determining a no case submission, the judge is entitled to draw inferences from the evidence.
5.On a no case submission, the judge cannot draw an inference against the party making the submission (“the moving party”) based upon the absence of evidence from that party.
6.Although the judge, sitting alone, may assess the quality of the evidence in determining a no case submission, nonetheless the test which is to be applied by the judge, at that stage, is different to the test which the judge would apply in determining the ultimate outcome of the case, at the conclusion of a trial. Notwithstanding that the judge, in determining the no case submission, may assess the quality of the evidence, nonetheless the test remains whether, on the evidence so assessed, the judge “could” (not would) find for the respondent party on the evidence so far led. In such a case, the judge would only find against the respondent party if the evidence, so far adduced, is so unsatisfactory or inherently unreliable or equivocal that he were to conclude that he could not be reasonably satisfied of the case made by the respondent party on the evidence thus far adduced.
[Citations omitted]
I will apply these principles in my consideration of this application.
The Plaintiffs are Charles Blackman (“Blackman”) and his trustee, and Robert Dickerson (“Dickerson”). They are Australian artists of high repute. The artworks in issue are two works said to be by Blackman (“Three Schoolgirls” and “Street Scene with Schoolgirl”) and one work said to be by Dickerson (“Pensive Woman”).
The Second Defendant, Peter Gant (“Gant”) is an art dealer trading as Gallery Irascible – Peter Gant Fine Art.
Central to the case advanced by the Plaintiffs is whether the works of art which are attributed to them, are authentic. The Plaintiffs have called a substantial body of evidence that the works are not authentic and are fake. The Second Defendant challenges this allegation. He says that the works are authentic works done under the hand of the artists.
Gant originally supplied the three works to the former First Defendant, Helen Stewart (“Stewart”) who is an art dealer trading as Gretz Gallery. Stewart in turn sold the works to a purchaser, a Mr Robert Blanche (“Blanche”). Stewart has since settled her case in the present proceeding and has to date taken no part in it.
Gant provided two valuations of the works to Stewart, who in turn provided them to Blanche (“the valuations”). The valuations comprised:
(a)a written valuation dated 21 December 2004 in respect of the alleged Dickerson work (“the 21 December 2004 valuation”);
(b)a written valuation of the two alleged Blackman works dated 2 February 2006 (“the 2 February 2006 valuation”).
There was evidence that Blanche relied on the 21 December 2004 valuation in purchasing the alleged Dickerson work on or about 2 May 2005. There was also evidence that the 2 February 2006 valuation was used by Blanche to update the valuations of the alleged Blackman works he had purchased for the purposes of maintaining insurance on the works and for the purpose of maintaining the books of account of his superannuation fund.
The valuations contained no restriction or reservation on their use. It is open to infer that Blanche, had he onsold the works, may have used the valuations in the course of offering the works for sale and disseminated the valuations into the market place, had he retained the works.
However, upon the receipt of professional advice that the works were not authentic, Blanche returned the works to Stewart and got his money back. I infer that Stewart in turn, returned the works to Gant who presently has possession of them.
The Plaintiffs allege that by providing the 21 December 2004 and 2 February 2006 valuations, Gant impliedly represented that the alleged Dickerson work and the alleged Blackman works were authentic. The basis for this allegation is set out in paragraph 27 of the Further Amended Statement of Claim dated 24 March 2010. Particulars of the implied representations are provided. These representations are pleaded to be misleading or deceptive or likely to mislead or deceive in breach of section 9 of the Fair Trading Act 1999 (Vic) (the “Fair Trading Act”).
Counsel for the Second Defendant submitted that even if the facts particularised are made out, they do not give rise to the conclusion that the valuations amounted to certificates of authenticity or were representations as to authenticity. He further submitted that the valuations were merely opinions of market value of the works based upon the assumption they were authentic. He said that the case as pleaded by the Plaintiffs fails because of this.
He submitted further that valuations are opinions of experts and as such even if incorrect, do not give rise to a cause of action for misrepresentation pursuant to the Fair Trading Act.
Counsel for the Second Defendant relied upon what was stated in Elders Trustee v Reeves[3] in relation to the companion section to section 9 of the Fair Trading Act, namely section 52 of the Trade Practices Act 1974 (Cth) (the “Trade Practices Act”).
[3]78 ALR 193 at 242.
Where what is relied on for contravention of Section 52 of the TPA is the statement of opinion it will not be misleading or deceptive or be likely to mislead or deceive merely because it misinforms or is likely to do so; the situation may differ if the evidence shows that the opinion was not held or that it lacked any, or any adequate, foundation (Global Sportsmen Pty Ltd v Mirror Newspapers Pty Ltd, Turner v Jenolan Investments Pty Ltd, particularly if the opinion was expressed as an expert).
and Bateman v Slatyer & Ors,[4] where Burchett J said as follows:
It is of course clear law that a statement of opinion cannot be treated as false or misleading or as misleading or deceptive simply because it turns out to be incorrect, Global Sportsmen Pty Ltd. But such an opinion may convey that there is a basis for it, that is honestly held, and when it is expressed as the opinion of an expert that it is honestly held upon rational grounds involving an application of the relevant expertise.
Reference was also made to Kenny & Good Pty Ltd v MGICA (1992) Ltd.[5]
[4]71 ALR 553 at 539.
[5](1997) 147 ALR 568.
He submitted further that, by definition, a valuation is:
(a)the act of estimating or fixing the monetary value of something by a professional valuator; or
(b)estimated monetary value, worth or price as estimated by a professional valuator – The New Shorter Oxford Dictionary.
Accordingly, it was submitted that the valuations that are referred to in the Further Statement of Claim are merely opinions as to worth. They are not statements of fact and can never be construed as statements of fact. The Plaintiffs' case, it was submitted, is not based on an incorrect opinion but an incorrect representation of fact. The valuations, he said, cannot be said to be anything but the Second Defendant's opinion as to the market value of the paintings and there can be no basis upon which the claim for false and misleading conduct is made out.
However, I am satisfied that there is evidence from which it is open to conclude that the valuations served a dual purpose. True it is that they contained an opinion of value. However it is open to conclude that the valuations also contained an implicit representation of fact that each of the works in contention were authentic works, each having been created by one of the Plaintiffs.
On this issue, therefore, there is a case to answer.
Another principal submission was advanced by counsel for the Second Defendant. He submitted that the sole recipient of the alleged representations was Blanche. The representations were made to him, so it was said, in a private capacity. He is not a Plaintiff in this proceeding, and in any event there is no evidence of him having suffered any loss by reason of reliance on the valuations because he returned the controversial works and got his money back.
The Plaintiffs, the artists, were in effect strangers or third parties to the transactions between Gant, Stewart and Blanche. They did not suffer any proven loss, so it was said, as a result of those transactions or the alleged misrepresentations made in the course of the transactions.
Further, there was no evidence of the valuations being used or circulated in the market place, thereby causing loss and damage to the Plaintiffs by reason of their use in this way, so it was said.
In this respect, paragraph 35 of the Further Amended Statement of Claim becomes important. It pleads as follows:
The Plaintiffs have sustained loss and damage by reason of the said unlawful acts and conduct of the Second Defendant as pleaded and particularised at paragraphs 27, 29, 30 and 32 herein, namely the effect that the valuations of fake works and the attendant untrue representations have on the perception of the value and authenticity of the entirety of the body of artistic works by the First and Second Defendants in the hands of any person or entity, including but not limited to any artistic works by the First and Second Defendants on offer for sale (“the artistic works”) the artistic works in the secondary art market and will, unless such acts and conduct are permanently restrained, continue to suffer loss and damage as a consequence and will, unless such acts are permanently restrained, continued to suffer such loss and damage.
PARTICULARS
The damage to each of the First, Second and Third Plaintiffs include:
a.a stigma on the artist’s reputations in the secondary art market at a substantial level occasioning uncertainty in the market and damage to the financial value of the artistic works owned by each Plaintiff;
b.a blight on the artist’s reputations in the secondary art market at a substantial level occasioning uncertainty in the market and damage to the financial value of the artistic works owned by each Plaintiff;
c. injury to the artist’s feelings.
The heads of relief sought by the Plaintiffs include the following:
THE PLAINTIFFS CLAIM RELIEF AS FOLLOWS:
1.Permanent Injunctions restraining the Second Defendant by himself, his servants, agents or otherwise from selling, or by way of trade offering or exposing for sale or distributing, providing valuations for or otherwise parting with possession (save as otherwise provided in Order 2 herein) of the first and second fake Blackman works and the fake Dickerson work referred to herein (“the Defendant’s artistic works”).
2.Delivery up to the Plaintiffs for destruction the Defendant’s artistic works.
The Plaintiffs also seek a provision of an affidavit by the Second Defendant giving details which include information as to the works purported to have been created by the Plaintiffs in his possession and sales information relating to such works.
The Plaintiffs also seek such further or other orders and relief as the Court considers appropriate.
Paragraph 35 is the foundation for the allegation that the Plaintiffs have suffered loss and damage. However, on close examination, the plea and the relief sought upon it is not confined to the transactions between Gant, Stewart and Blanche. Rather, on a fair reading of the plea, it is alleged that, unless Gant is restrained from providing further valuations of the type he provided in relation to the three controversial works, this will cause loss and damage to the Plaintiffs of the kind which is alleged. It is open on the evidence to accept that such loss would be caused if in fact, valuations of the type sought to be restrained were used, as it is open to infer they could be used, in the course of offering the controversial works for sale in the future.
Thus it is at least open, in my view, on the evidence presented thus far, to accept that the valuations, if used in the course of any future sale of the controversial works, could cause loss and damage to the Plaintiffs, thereby justifying the relief sought in paragraphs 1-3 of the relief claimed in the Further Amended Statement of Claim.
Injunctive relief may be granted under section 149 and section 149A of the Fair Trading Act. These sections are in the following terms:
149 Injunctions to restrain conduct
(1)The Minister, Director or any other person may apply to the Supreme Court, County Court or Magistrates' Court for the grant of an injunction restraining a person from engaging in conduct that constitutes—
(a) a contravention of any provision of this Act; or
(b) attempting or conspiring to contravene such a provision; or
(c)aiding, abetting, counselling or procuring a person to contravene such a provision; or
(d)inducing or attempting to induce a person, whether by threats, promises or otherwise, to contravene such a provision; or
(e)being in any way directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision.
(2)The Court may grant an injunction restraining a person from engaging in conduct of the kind referred to in paragraphs (a) to (e) of subsection (1)—
(a)if the Court is satisfied that the person is engaging in or has been engaging in conduct of that kind, whether or not it appears to the Court that the person intends to engage again or continue to engage in the conduct; or
(b)if it appears to the Court that, in the event that the injunction is not granted, it is likely that the person will engage in conduct of that kind, whether or not that person has previously engaged in conduct of that kind and whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person engages in conduct of that kind; or
(c)if the Court determines it to be appropriate, by consent of all the parties to the proceedings, whether or not the person has engaged in, or is likely to engage in conduct of that kind.
(3)An application for an injunction under this section may be made ex parte.
149A Injunctions to do an act or thing
(1)The Supreme Court or the County Court, on the application of the Minister, the Director or any other person, may grant an injunction requiring a person to do any act or thing if the Court is satisfied that the person is engaging in or has been engaging in conduct that constitutes—
(a) a contravention of any provision of this Act; or
(b) attempting or conspiring to contravene such a provision; or
(c)aiding, abetting, counselling or procuring a person to contravene such a provision; or
(d)inducing or attempting to induce a person, whether by threats, promises or otherwise, to contravene such a provision; or
(e)being in any way directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision.
(2)The power of the Court under this section to grant an injunction requiring a person to do an act or thing may be exercised—
(a)whether or not it appears to the Court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; and
(b)whether or not the person has previously refused or failed to do that act or thing; and
(c)whether or not there is an imminent danger of substantial damage to any person if the first person refuses or fails to do that act or thing.
(3)Without limiting subsection (1), an injunction under this section may require a person—
(a)to institute a training program for the person's employees in relation to compliance with this Act;
(b) to refund money to purchasers;
(c) to transfer property to purchasers;
(d)to disclose information about the person's business activities or business associates;
(e)to honour any promise made in the course of misleading or deceptive conduct or in a false representation;
(f)to destroy or dispose of goods used for the purpose of a contravention of this Act.
(4)Despite subsections (1) and (3), only the Supreme Court may grant an injunction under this section requiring a person to transfer an interest in land.
(5)An application for an injunction under this section may be made ex parte.
These sections of the Fair Trading Act are framed in broad terms. On their face they arguably do not depend upon any person being actually mislead by conduct which contravenes section 9 of the Act. Rather, it is the conduct in breach of section 9 which may give rise to a grant of relief under section 149 and/or section 149A. The relief sought by the Plaintiffs in this case under paragraphs 1-3 of the relief claimed, would appear to fall within the ambit of these statutory provisions.
The equivalent section in the Trade Practices Act to sections 149 and 149A of the Fair Trading Act is section 80. Section 80 has been given a broad application. See Phelps v Western Mining Corp Ltd and Ors.[6]
[6](1978) 20 ALR 183.
I find that relief to the effect of paragraphs 1-3 of the relief which is claimed could be granted to the Plaintiffs on the evidence called thus far. There is therefore a case for the Second Defendant to answer in this respect.
The Plaintiffs also seek damages. They have opened their case seeking compensation of $25,000 each. Section 159 of the Fair Trading Act provides for damages to be recovered by a person who suffers loss and damage because of a contravention of a provision of the Act. Section 159 is in the following terms:
159 Actions for damages
(1)A person who suffers loss, injury or damage because of a contravention of a provision of this Act may recover the amount of the loss or damage or damages in respect of the injury by proceeding against any person who contravened the provision or was involved in the contravention.
(1A)Except in accordance with section 107(3), a person may not recover in the Tribunal an amount for any personal injury suffered.
(2)A proceeding under this section may be brought before the Tribunal or in any court of competent jurisdiction.
(3)A proceeding under subsection (1) must not be commenced more than 6 years after the date on which the cause of action accrued.
Damages under section 159 are founded on a causal link being established between the contravening conduct alleged, and the loss and damage said to have been suffered.
In my opinion, there is no evidence upon which the Plaintiffs could make out a case that the conduct they presently plead, namely the effect of the valuations of the controversial works and the alleged untrue representations contained in them, was the cause of material loss to them.
My attention was also drawn to paragraph 30 of the Further Amended Statement of Claim. By this paragraph the Plaintiffs make the allegation that the sale of the alleged Dickerson work to Blanche in itself constituted misleading and deceptive conduct in breach of s.9 of the Fair Trading Act. However, again, there was no evidence that this particular conduct was a cause of any loss to either of the Plaintiffs.
There was a body of evidence called by the Plaintiffs upon from which it is open to find that the presence of fake artworks in the market place has caused loss and damage to the Plaintiffs of the kind alleged in the particulars of paragraph 35 of the Amended Statement of Claim. However, there was no evidence that the provision of the valuations by Mr Gant, first to Ms Steward and then to Mr Blanche, had this effect on the market for Blackman or Dickerson works generally. Nor was there any evidence that Blanche’s use of the valuations had the effect of causing such loss.
Nevertheless, the Plaintiffs did call a body of evidence from which it could be found that:
·The Plaintiff’s works, namely their authentic artworks, have acquired a reputation in the art market and are well known in that market as works of high standing;
·The presence of the controversial art works in the market has led or is likely to lead to the public to believe that the controversial artworks offered are by the hands of the respective Plaintiffs;
·The Plaintiffs have suffered, or are likely to suffer, damage as a result of any erroneous belief engendered by this conduct.
Indeed, a central thrust of the case presented by the Plaintiffs thus far, has been directed to establishing these matters. Equally, the Second Defendant has also engaged in these issues and has vigorously challenged the evidence put on by the Plaintiffs directed to proving these factual allegations. However, there has been no application made to introduce a plea to give legal effect to this body of evidence and it is by no means certain that even if such an application was made at this point in the proceeding, that it would succeed.
Further, the vast bulk of the evidence adduced to this point in the proceeding has addressed the issue of whether or not the controversial works were authentic works, done in the hand of the artists. The Second Defendant has also vigorously contested these matters.
In spite of this being the central issue in the proceeding to this point, the Plaintiffs have not, expressly at least, sought relief by way of a declaration on the issue of the authenticity of the works.
Accordingly, I must determine this application, not on the basis of causes of action or relief which may be open on the evidence adduced to this point, but on the basis of the pleadings which are presently before me.
On this basis, I find that in relation to the claim for damages, there is no case to answer. However, as I have earlier found, there is a case to answer in respect of the relief sought in paragraphs 1, 2 and 3 of the relief sought in the Further Amended Statement of Claim.
The usual rule is that a Judge will not rule on a submission of no case to answer, unless the applicant party states that it will not call any evidence in the event that the submission is unsuccessful. However, this is not an inflexible rule, and ultimately the question as to whether a party making a no case submission should be put to his election is a matter for the exercise of the discretion of the Judge. The determination as to whether a party should be put to his election in these circumstances depends on matters which go to the just and convenient disposition of the litigation and the interests of justice. See: Kaye J in Oakley and Anor v Insurance Manufactures of Australia Pty Ltd[7] (“Oakley”) at [14].
[7][2008] VSC 68.
In the event that a no case submission is made, the trial Judge may direct the applicant party to advance its argument before the Judge rules on whether the party should be put to his election. Taking this step enables a Judge to better determine whether it is in the interests of justice that the moving party should be put to his election. See: Oakley at [14].
In this case, I deferred ruling on whether the Second Defendant should be put to his election until after I heard the submissions of his counsel. One factor which lead me to this conclusion was the fact that allegations have been made in this proceeding, for the Second Defendant, are serious. It is alleged, in essence, that he has represented that the controversial artworks are authentic, when this is not the case. Further, it is alleged that he sold art works which are fake. Such matters are particularly serious for an art dealer conducting business in the art market. Further, I cannot ignore the measure of publicity that this case has attracted.
In these circumstances, I am of the view that I should exercise my discretion to permit the Second Defendant to proceed with his case and call evidence in support of it, should he be so advised. It is in the interests of justice that the Second Defendant should be placed in the position where he has the opportunity to present evidence to explain his position and advance a case against that which the Plaintiffs have presented.
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