Commissions – The Best Kept Secret?

It is not uncommon in the art trade for the parties to a sale and purchase to remain anonymous and for there to be a number of agents/art dealers involved in the transaction. Of course, the agents/art dealers expect to receive a commission for their efforts. However, as recent cases show, problems can arise when there is a lack of transparency between the various parties and secret commissions are paid or received.

In the case of Spencer-Churchill v. Faggionato¹, the seller, Lord Edward, instructed Mr Faggionato, an art dealer, to market his painting. Lord Edward specifically told Mr Faggionato that he did not wish to sell the painting to a dealer and, in particular, to a family of New York dealers known as the Mugrabis. In due course, Mr Faggionato informed Lord Edward that he had received an offer for the painting for US$6 million from a Floridian collector, whose identity was not revealed. Lord Edward was uncertain about accepting the offer and asked Mr Faggionato