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Menzies’ Lack of Disclosure Draws Auctioneers’ Ire

Bonhams & Goodman, the Australian affiliate of London-based auctioneer Bonhams, has filed a complaint with the Australian Competition and Consumer Commission (ACCC), Australia’s competition watchdog agency, against Menzies Art Brands (MAB), which has claimed market leadership in the unregulated Australian art-auction industry.

SYDNEY—Bonhams & Goodman, the Australian affiliate of London-based auctioneer Bonhams, has filed a complaint with the Australian Competition and Consumer Commission (ACCC), Australia’s competition watchdog agency, against Menzies Art Brands (MAB), which has claimed market leadership in the unregulated Australian art-auction industry. Other Australian auction houses also reportedly took part in the complaint though Bonhams and Goodman declined to identify them.

The complaint relates to the sale by two MAB companies—Deutscher-Menzies and Lawson-Menzies—of paintings fully or partly owned by Australian collector and auction-house owner Rod Menzies, who did not disclose that the works were his property.

MAB subsequently promised amendments to its cataloguing. However, Tim Goodman, CEO of Bonhams & Goodman, who has become the spokesman for the group that filed the complaint, says that they are not withdrawing it. Goodman told ARTnewsletter he was advised by his lawyers that the changes do not adequately address the problem.

The complaint followed a series of media reports that Menzies had consigned paintings in which he held a financial interest to his own auction rooms, and then bought them back in whole or in part. The transactions were reported as sales.

These sales of works reappearing in Menzies’ two different auction rooms—Deutscher-Menzies and Lawson-Menzies—have helped Deutscher-Menzies overtake Sotheby’s as the leader in the Australian auction industry. (Sotheby’s is not taking part in the complaint.)

MAB reported half-yearly sales through June 30, of A$26.7 million ($25.5 million), which it boasts put it A$18 million ahead of Sotheby’s. Bonhams & Goodman’s sales for the same period were A$5.2 million ($5 million), for one sale.

The MAB total included Picasso’s Sylvette, 1954, which sold last June for A$6.9 million ($6.5 million), a record for an artwork at auction in Australia (estimate: A$5 million/7 million). It was widely known among observers that the painting belonged to Menzies, though it was not stated in the catalogue.

The ACCC has declined to comment on the complaint. The top penalty for breaches of the Trade Practices Act, which the commission is charged with enforcing, is a fine of A$10 million ($8.3 million).

Menzies promised to make amendments to his cataloguing to address what he described as the “perceived inconsistencies.” He pointed out that previously the required disclosure under the binding conditions of sale in the catalogues indicated that a red triangular symbol would appear if the auction house—not the owner of the auction house—had any financial interest in the work.

The sale conditions would now disclose that “some works in the catalogue” might be “owned wholly or in part” by Menzies Art Brands or the principal of Menzies Art Brands.

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