Rachmaninoff& Ors v Sotheby`s & Anor

On 7 December 2004, Sotheby’s were to hold a sale described as “Music including the autograph manuscript of Rachmaninov’s Second Symphony”. Lot 109 in the sale included what was said to be “the hitherto lost and unrecorded autograph manuscript of the Second Symphony in E minor, Op 27”. The catalogue continued:

“Rachmaninov composed the symphony in Dresden, where he lived between 1906-1909. The lost short score dated from October 1906 to April 1907 and the orchestration was apparently completed by mid-January 1908. The premiere in St. Petersburg on 26 January 1908 and the sequel in Moscow a few days later on 2 February were both conducted by Rachmaninov. While it is possible that he used this manuscript on those occasions, there are very few conductor-like markings in the score. Perhaps he conducted from memory or from a copyist’s score. What seems highly likely is that Rachmaninov revised the orchestration in the light of these performances.

After the premiere, this autograph manuscript was used for the preparation of the first edition, which was published by Gutheil, Moscow, in August 1908. Gutheil sent the manuscript to Leipzig, where it was engraved by the firm of Rőder, expert craftsmen who produced many of the finest contemporary scores in Europe. Rőder’s markings, including the reference no. 7603, are on this manuscript. The engraver probably returned the score to Rachmaninov, who was still resident in Dresden….

Its appearance …, is one of the most extraordinary discoveries in recent times and is of tremendous importance for Rachmaninov research.

The Second Symphony is one of Rachmaninov`s orchestral masterpieces.”

A figure in the range of £300,000 to £500,000 is indicated. Acknowledgements are made to three experts, including Mr Norris, and to a Mr Jean-Pierre Cap, for their assistance in the cataloguing of this manuscript.

The Claimants are the composer’s grandson, and three of his great grandchildren, the children of his granddaughter. They claim title to the manuscript as his heirs.

There are two applications before me. One is by Sotheby’s to dismiss the action as having no realistic prospect of success. The other is by the Claimants for continuation of the injunction until trial. I have heard argument only on Sotheby’s application. My decision on that is likely to resolve most, if not all, of the issues on the Claimants’ application.

The discovery was also announced in more sensational terms in the Daily Telegraph for 27 October 2004 “The £1/2m lost score hidden in a Co-op carrier bag”. The article sets out the account given by Mr Norris, who is also that newspaper’s chief music critic, of how he learnt of the existence of the manuscript in an e-mail written to him at the paper some six weeks earlier from Mr Cap. The Co-op bag was what the manuscript was in when shown to Mr Norris after he had alighted from a train at a Swiss railway station. That was where he had his meeting with Mr Cap.

The Claimants first approached Mr Norris on 3 November 2004. They made their claim in a letter of 29 November 2004, through their solicitors, Davenport Lyons (“DL”), to Sotheby’s. The claim is simplicity itself, as advanced then, and subsequently in their Particulars of Claim. They say that the manuscript was owned by the composer when he created it. That is not disputed. They go on to say that there is no record or evidence of the composer having given away or sold the manuscript during his lifetime, nor of anyone else having acquired lawful title to it by any other means. Accordingly, they say, it formed part of his estate upon his death in 1943. The Claimants claim a declaration that they are the owners of the manuscript, and delivery up.

Sotheby’s agree that there is no evidence as to how title to (that is ownership of) the manuscript may have passed from the composer (and his heirs) to anyone else. In the catalogue they suggested a possibility that “he may well have given it away”. They refer to source material from which they infer that “it would appear to have left the composer’s possession between 1908 and 1917”. December 1917 is the date on which the composer left Russia. According to a biography of the composer, he left on 23 December through the sound of gunfire in a grim escape from what became Petrograd through Finland, carrying one small suitcase. That contained a few items of music, but not, so far as is known, the manuscript.

In their pleaded Defence Sotheby’s say that the only available evidence indicates that the manuscript was disposed of voluntarily by the composer. They rely on matters said to be evident from the academic literature and archives relating to the composer which they say are, so far as they are aware, undisputed by the Claimants. These are six in number, namely that:

Sotheby’s Defence then pleads the provisions of the English Limitation Act 1980 to the effect that this claim is barred by the lapse of time.

DL’s letter of 29 November quotes from the catalogue, and asks Sotheby’s to confirm the identity of the vendor who claimed ownership, and the exact provenance by which ownership is claimed. Sotheby’s reply referred to the literature, but it gave no answer to these questions, other than to say that “the manuscript formed part of the Estate of a private Swiss collector who died in 2003”. No answer has ever been given on the question of provenance.

On 1 December DL threatened proceedings if no evidence of the vendor’s title was given. On 6 December the Claimants obtained an injunction without notice to Sotheby’s. They feared that the manuscript might be withdrawn from Sotheby’s by the principal if notice were given. That injunction ordered Sotheby’s not to part with possession of the manuscript or offer it for sale.

On 10 December Sotheby’s solicitors wrote that their principal consented to her identity being revealed and to further information being provided as to the circumstances of the discovery of the manuscript. They explained their practice (in common with that of other major auction houses) not to reveal the identity of their principals: “To do so can, amongst other things, expose bona fide sellers to harassment by entirely unwarranted claims”.

The information that Sotheby’s gave is the result of interviews that Dr Roe, the Head of their Printed Book and Manuscript Division, was given by Eva Terenyi (now the Second Defendant), Mr Maillard and Mr Cap. The Manuscript is said to have been found in the house of a Mr Molnar following his death in 2003. The Second Defendant is described as his grand niece in his Will. She is the heir under the will. Mr Molnar is said to have been born in Hungary in 1907, and to have moved from Budapest to Switzerland in 1956, where he died aged 96. It appears that Mr Cap is the son-in-law of Mr Maillard, and Mr Maillard was a neighbour of Mr Molnar who befriended him in 1990 and after his close family members had died (the last of them in 2001), including his sister and only son, both of whom were musical. It is Mr Maillard who, so it is said, found the manuscript in a trunk in the cellar of Mr Molnar`s house. In the trunk it is said that there were other manuscripts, including one of Sibelius. Neither Mr Maillard nor the Second Defendant, nor anyone else so it is said, is aware of how Mr Molnar came into possession of any of the manuscripts in the trunk.

Having given that information, Sotheby’s also asked for security for the cross undertaking which the Claimants had to give to obtain the injunction. Sotheby’s obtained security for the commission that they might eventually turn out to have lost. There are provisions in the Sale Conditions as to what is to happen on lots being withdrawn, but Sotheby’s argue that those provisions would not protect their entitlement to commission where, as here, a sale is prevented from proceeding by an injunction.

On 5 January 2005 the Claimants gave notice to Sotheby’s of their intention to join the Second Defendant to the action. There could be no objection to that.

On 7 January Sotheby’s served their Defence. On the same date, Dr Roe made a witness statement to which documents are exhibited. It sets out in more detail the matters relied on in Sotheby’s Defence, other information about the composer, and the information about how the manuscript came to Sotheby’s. The other information includes that the composer returned to Moscow in 1909 and spent the following years travelling between Russia and the rest of Europe until 1914. In November 1918, after nearly a year in Scandinavia, the composer and his family moved to the United States where they remained until his death in 1943. It was his widow who gave to the Library of Congress the few manuscripts that he brought out of Russia and the compositions written by him after 1917. Dr Roe explains that the manuscripts left in Russia were impounded by the Soviet authorities, along with his other possessions, and later housed in the Glinka Museum in Moscow. There is some discussion of textual differences between the manuscript of the Second Symphony and other versions of it, and of records, and the absence of them. Inferences might be drawn from such a critical analysis.

The documents disclosed by Sotheby’s in the exhibit of Dr Roe show that it was on 15 October 2004 that the Agreement for sale was signed between them and Mr Maillard, he being described in the letter as “Sole Executor of the Estate of the late Mr Laszlo Molnar c/o Mr Jean Pierre Cap”. The executor named in the copy of Mr Molnar’s will which has been produced is a Swiss lawyer, Mr Olivier Golay, notary in Montreux. There is also a document written in German and dated Budapest, 2 December 2004, addressed to Sotheby’s by the Second Defendant by which she authorises Sotheby’s to auction the manuscript.

On 11 January 2005 Sotheby’s made their application for an order that the claim be struck out or dismissed. On 12 January Sotheby’s suggested that the need to join the Second Defendant would be obviated if their own application to have the action dismissed were to succeed.

On 2 February the Claimants obtained from the Court permission to join the Second Defendant. She was served with the proceedings on 14 February. The time for her to serve a Defence has not yet expired, and it is not known what stance she will adopt in this case.

The sums already incurred in lawyers’ fees on this litigation are said by the solicitors for each party to be in excess of £80,000 on the Claimants’ side and £108,000 on Sotheby’s side. The Claimants’ estimate of the costs of a trial might bring them up to £250,000 or even to three times that figure.

The law which I have to apply to this application is as follows. Civil Procedure Rules r 24.2 provides:

“The court may give summary judgment against a claimant … on the whole of a claim … if--(a) it considers that--(i) that claimant has no real prospect of succeeding on the claim …; or (ii) ….; and (b) there is no other reason why the case or issue should be disposed of at a trial”.

What these words mean was stated in Swain v Hillman [2001] 1 All ER 91, 92 and 94-5, where Lord Woolf MR said:

"Under r 24.2, the court now has a very salutary power, both to be exercised in a claimant's favour or, where appropriate, in a defendant's favour. It enables the court to dispose summarily of both claims or defences which have no real prospect of being successful. The words 'no real prospect of being successful or succeeding' do not need any amplification, they speak for themselves. The word 'real' distinguishes fanciful prospects of success or, …, they direct the court to the need to see whether there is a 'realistic' as opposed to a 'fanciful' prospect of success….

It is important that a judge in appropriate cases should make use of the powers contained in Part 24. In doing so he or she gives effect to the overriding objectives contained in Part 1. It saves expense; it achieves expedition; it avoids the court's resources being used up on cases where this serves no purpose, and, I would add, generally, that it is in the interests of justice. If a claimant has a case which is bound to fail, then it is in the claimant's interests to know as soon as possible that that is the position. Likewise, if a claim is bound to succeed, a claimant should know this as soon as possible ... Useful though the power is under Part 24, it is important that it is kept to its proper role. It is not meant to dispense with the need for a trial where there are issues which should be investigated at the trial. …, the proper disposal of an issue under Part 24 does not involve the judge conducting a mini trial, that is not the object of the provisions; it is to enable cases, where there is no real prospect of success either way, to be disposed of summarily." "

In Three Rivers DC vBank of England (No 3) [2003] 2 AC 1 at p260 Lord Hope of Craighead explained further (with the agreement of the majority):

“94 For the reasons which I have just given, I think that the question is whether the claim has no real prospect of succeeding at trial and that it has to be answered having regard to the overriding objective of dealing with the case justly. But the point which is of crucial importance lies in the answer to the further question that then needs to be asked, which is--what is to be the scope of that inquiry?

95 I would approach that further question in this way. The method by which issues of fact are tried in our courts is well settled. After the normal processes of discovery and interrogatories have been completed, the parties are allowed to lead their evidence so that the trial judge can determine where the truth lies in the light of that evidence. To that rule there are some well-recognised exceptions. For example, it may be clear as a matter of law at the outset that even if a party were to succeed in proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks. In that event a trial of the facts would be a waste of time and money, and it is proper that the action should be taken out of court as soon as possible. In other cases it may be possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance. It may be clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based. The simpler the case the easier it is likely to be to take that view and resort to what is properly called summary judgment. But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini-trial on the documents without discovery and without oral evidence. As Lord Woolf said in Swain v Hillman, at p 95, that is not the object of the rule. It is designed to deal with cases that are not fit for trial at all.

96 In Wenlock v Moloney [1965] 1 WLR 1238 the plaintiff's claim of damages for conspiracy was struck out after a four day hearing on affidavits and documents. Danckwerts LJ said of the inherent power of the court to strike out, at p 1244B-C:

"this summary jurisdiction of the court was never intended to be exercised by a minute and protracted examination of the documents and facts of the case, in order to see whether the plaintiff really has a cause of action. To do that is to usurp the position of the trial judge, and to produce a trial of the case in chambers, on affidavits only, without discovery and without oral evidence tested by cross-examination in the ordinary way. This seems to me to be an abuse of the inherent power of the court and not a proper exercise of that power."

On the other hand, Mr Otty for Sotheby’s reminds me of the words of Lord Hobhouse in that case at 283 (para 160):

“Where an allegation of dishonesty is being made as part of the cause of action of the plaintiff, there is no reason why the rule should not apply that the plaintiff must have a proper basis for making an allegation of dishonesty in his pleading. The hope that something may turn up during the cross-examination of a witness at the trial does not suffice. It is of course different if the admissible material available discloses a reasonable prima facie case which the other party will have to answer at the trial.”

Theft of the manuscript is one possible explanation which is consistent with the Claimants still retaining title to it. But, as appears from the way they have framed their claim, that is not the only, or even the primary, basis for it. It is possible that the manuscript was left in Russia or Germany and came into the possession of Sotheby’s principal through a person who had originally received it for safekeeping and who intended that it should be returned to the composer one day. There is evidence from the composer’s sister in law, in the form of a letter, that the manuscript of the First Symphony was left in his desk in Russia and entrusted to a housekeeper.

Doing justice in this case is not easy, and may not be possible at this stage. The best that a court can sometimes achieve when asked to make important decisions at such an early stage of proceedings is to take whatever course seems likely to result in the least injustice, or at any rate the least injustice that cannot be remedied at a later stage, if the decision turns out to be different from the one that would be taken if all the evidence were available.

In his witness statement Dr Roe expresses the opinion that, in the light of the matters which also appear in Sotheby’s Defence as set out above, “It seems to me to be very difficult to see how the manuscript would have belonged to his estate when he died in 1943”. He states the opinion that “the only available evidence points heavily to the conclusion that Rachmaninoff gifted, sold or abandoned the manuscript prior to 1917”. It is not clear what evidence he is referring to for any sale or abandonment. The only evidence for a gift is the other gifts, which are documented. Having met the Second Defendant, Mr Cap and Mr Maillard, Dr Roe believes the claim to ownership of the manuscript is credible.

However, Dr Roe is not qualified as a lawyer. Nor is it clear at this stage what sort of legal advice would be needed before a view could be formed as to who owns the manuscript. The states already mentioned, where the document has been seen, include Germany and Switzerland, and there is speculation that it might have gone to Russia. Mr Molnar came from Budapest, which is no further from Dresden than Dresden is from Switzerland. The laws of Germany and Switzerland, together with English law, and perhaps that of some other states, might possibly be relevant to the question of who now owns the manuscript. And there is little information given by Dr Roe as to the questions he asked, and the terms of the answers given. In any event, Dr Roe had little means of challenging any answers he may have been given, and no means of requiring production of documents to support any claims made. A court does have such powers.

During the argument a number of lines of enquiry have been canvassed, which may not have been exhausted. The Claimants are sceptical of the account of events given to Dr Roe. To them it seems too good to be true that the only person who might have been able to say where he obtained the manuscript has died, and no one independent can even witness to his ever having had the manuscript in his possession.

There are means well known to English lawyers whereby tests can be applied to accounts of events which to some non lawyers might appear to be incapable of further examination. I cannot exclude that that will be the position in relation to the claim against the Second Defendant. There is no real prospect, as far as I can see at present, that Sotheby’s themselves could reveal further first hand information on the provenance of the manuscript. But the Second Defendant is also a party. And I cannot exclude the possibility that, if they are willing, she, Mr Maillard and Mr Cap might be able to answer questions, or provide documents, that would or might assist. If they are willing to do so, there is a real prospect that that might give a trial judge material which is not available to me, upon which to make his or her decision. Such information may assist either the Claimants or the Defendants. If the Second Defendant, Mr Maillard and Mr Cap are not willing, then that too might be a factor to be taken into consideration.

Having taken that view, I do not need to address the arguments put before me on time bar points under English and Swiss law. Time bar points can only be sensibly considered by a court that is confident that it has to hand all the relevant factual information as to where and when this manuscript might have been. The complexity of such points in cases of works of art that have gone missing in Central Europe during the twentieth century can be seen from the judgment of Moses J in City of Gotha v Sotheby’s The Times 8^th October 1998. That case is a vivid reminder of what happened in the troubled period 1914 to 1989.

Accordingly, if the matter were to be looked at solely from the position of the Claimants and the Second Defendant, justice in my judgment requires that the Claimants be allowed to pursue their claim. The justice of the case also requires me to have regard to wider considerations.

One consideration is the “other things” referred to in Sotheby’s letter of 10 December. These include the fact that information as to the identity of an auctioneer’s principal may enable prospective bidders or purchasers to deal directly with the principal before the auction, or, by a lawsuit, to frighten the principals off altogether.

It seems to me that Sotheby’s concern on this point is not just to protect their own entitlement to earn commission. A threat of legal proceedings such as the present may have very severe consequences. Whatever the resources and circumstances of the principal in this case (about which I say nothing), there are many who consign works of art to auction, particularly trustees and other personal representatives, who would not have the resources to defend a claim of this kind. And the threat of such a claim is, of itself, if it becomes known, likely to deter prospective purchasers. In the case of a lot as important as this one, that can affect not just the lot in question but, I infer, the whole sale. If that is right, a claim such as this one can impact severely not just on the business of Sotheby’s, but also on everyone else who has a consigned a lot for sale on the same occasion. The business of Sotheby’s is important, not just to themselves, but also to the owners and prospective owners of manuscripts and works of art throughout the world. These are factors which should make a court approach with caution a claim for an injunction which will stop or seriously delay the sale of an important object.

Another consideration goes the other way. There is a dark side to the confidentiality surrounding the identity of an auctioneer’s principal. The public and the law have increasingly come to recognise the potential for abuse by criminals of works of art, and of those who deal in them (consciously or unconsciously), for money laundering, and for disposing of the proceeds of crime. The less the legal risks involved in committing a work for auction, the more attractive the market in works of art and manuscripts becomes for criminals. The policy of the law, both in this jurisdiction and elsewhere, is to look more sceptically than would have been thought proper in the past upon those who have very valuable property for which they give no provenance.

The Claimants and Sotheby’s have reached a stage where each has some mistrust of the other. I would not wish anything that I say in this judgment to be understood as endorsing either view.

In my judgment this claim has a realistic prospect of success, and so too does the defence. Nothing I say in this judgment should be understood as indicating a preference for either view on my part on the information available to me at present. The justice of the case requires that the claim be allowed to proceed, and the application will be dismissed.