Kurtha v Marks

The question I have to decide in this case is the ownership of two paintings (“the Paintings”) by Francis Newton Souza (“Souza”). Souza was born in 1924 in what was then the Portuguese colony of Goa. The first of the Paintings was painted in 1953 and is entitled “Chalice with Host”. The second was painted in 1961 and is entitled “Head of a Portuguese Navigator”. They are both oil paintings on board. The first is 24 inches x 39 inches and the second 30 inches x 24 inches.

The Claimant (“Dr Kurtha”) states that he purchased the Paintings from Souza in or before 1982, and that they were in his possession in 1984 in London. After that he kept them in London, either at his home, or in a warehouse (he is not sure which) together with a large number of other pictures by Souza and by other artists. In 2002 five paintings by Souza were included in a sale of Islamic and Indian art by Bonhams of London. Dr Kurtha claimed they were stolen from his collection. Four of the pictures were removed from the sale, and the fifth was sold. Dr Kurtha sued Bonhams, discovered the names of the consignors, a Mr Mario Demetriou and a Mr Baxter, and joined them as defendants in his action against Bonham’s. They are dealers in second hand furniture who knew one another, but were not known to Dr Kurtha. A settlement was reached, by which Dr Kurtha paid the consignors some money and they returned to him the five unsold pictures.

By 2003 Dr Kurtha came to believe that there were further pictures stolen from his collection, including the Paintings. He became sure of this in 2005 when he was preparing a monograph on Souza which was published in 2006. For that purpose he listed and had photographed all his Souza collection. On 4 May 2005 Dr Kurtha registered the Paintings with the Art Loss Register (“ALR”) in London. During 2005 and on 9 January 2006 Dr Kurtha spoke to Mr Demetriou. On 10 January 2006 the Defendant (“Mr Marks”) telephoned the ALR to enquire about Souza paintings in general, and the Paintings in particular. As a result, Dr Kurtha learnt that Mr Marks had possession of the Paintings. These proceedings ensued, in which Dr Kurtha claims their return.

Mr Marks’s case is that he bought the pictures from Mr Demetriou personally on 10 or 11 January 2006 (his case on the date has varied), once he had received the assurance from ALR that there was no problem with title. He expected to sell them very soon to a client, Mr John Bairstow, for a profit. In an e-mail to the ALR dated 18 January 2006, Mr Marks said that he would have asked Mr Bairstow to pay a figure in the region of £300,000 for both of the Paintings. Mr Marks and Mr Demetriou say that Mr Marks agreed to pay £124,000, and did pay £12,500 in cash in the late evening of 10 January 2006, and that he took possession of the Paintings immediately. Mr Demetriou claimed that he had bought the Paintings on the early evening of the same day 10^th January 2006 from another dealer in second hand furniture, Christopher Martin. He said that he bought them for £25,000, that he paid £10,000 deposit and that he agreed to pay two instalments of £7,500 in monthly instalments in February and March. Mr Martin claims that he bought the Paintings in November 1999 from Ms Jennifer Banarse for £200. Ms Banarse claims that she received the Paintings as a gift from her grandmother sometime before that date. Her grandmother died in 2005 and the evidence as to the earlier provenance of the Paintings stops there. Mr Marks, Mr Demetriou, Mr Martin and Ms Banarse all gave evidence for the defence.

There are a number of notable features of this case which have been the subject of much evidence. First, Dr Kurtha is unable to say when, between 1984 and 2005, the Paintings were stolen (as he says they were), nor whether they were stolen from his home or from a warehouse. Dr Kurtha has been strongly challenged on his case that the Paintings were his, and that they were stolen. But at the end of the case, the main issue on Dr Kurtha’s case was whether the Paintings had been stolen.

On Mr Marks’s side, all the sales he and his witnesses claim took place were sales for cash, and there is no independent or documentary evidence that any cash was paid by, or to, any of those in the chain of sales. There is no contemporaneous document recording the sale by Ms Banarse to Mr Martin. The only document purporting to record the sale by Mr Martin to Mr Demetriou is a single hand written document on plain paper signed by each of them and dated 10 January 2006. The only document purporting to record the sale by Mr Demetriou to Mr Marks is a single document printed by Mr Demetriou on plain paper, dated 11^th January 2006, and signed only by himself. There is no photograph or other document relating to the Paintings produced by Mr Marks, Mr Demetriou, Mr Martin or Ms Banarse evidencing that the Paintings were in their possession at any time before Mr Marks contacted the ALR. The period during which Mr Martin states that he was in possession of the Painting is just over six years, between November 1999 and January 2006. During that time he states that they were for a short initial period in his shop, although not on display or for sale, and from then on in his home, in an attic or a cupboard, or under his bed. It was only by co-incidence, he says, that they happened to be downstairs and visible to Mr Demetriou when Mr Demetriou came to his house to see some chairs in May 2005.

The facts in relation to the five paintings consigned to Bonhams in 2002 are similar. Mr Demetriou and Mr Baxter both claimed to have bought those paintings from a Mr Dobkins, and he claimed to have acquired them in a clearance sale which was not identified. There was no other evidence of provenance.

Six years, as is well known, is the normal period within which an action for the recovery of property, or for damages, must be brought in England. Save in cases of theft, if the claim is not brought within that time, a claimant’s title to the property of which he has lost possession is extinguished. But in cases of theft there are special provisions. A claim by a person from whom a chattel is stolen is not subject to the six year time limit from the date of the theft. In a case of theft the six year period never starts to run in favour of a thief, nor does it run against anyone whose possession of the property is related to the theft. The six year period does not begin to run unless and until someone purchases the chattel in good faith. Any conversion subsequent to the theft is presumed to be related to the theft: so the burden lies on the purchaser to show that the purchase of the goods was in good faith. This is a very brief summary of the effect of the Limitation Act 1980 ss.2-4. These complicated provisions were more fully explained by Arden J in Nicole de Préval v Adrian Alan Ltd (unreported 6 February 1997).

Therefore, if Dr Kurtha can prove that he was the owner of the Paintings, and that they were stolen from him, then his claim must succeed unless Mr Marks can prove that someone purchased the Paintings in good faith not less than six years before this action was commenced. The action was commenced on 26 February 2007. So the good faith purchase, if any, must have been before 26 February 2001, if Mr Marks is to succeed in his defence.

The only purchase of the Paintings before 26 February 2001, of which there is any evidence, is the purchase which Mr Martin and Ms Banarse say Mr Martin made from her in November 1999. The purchases in January 2006 were about a year before the action was commenced, so if they, or either of them, were made in good faith, that would not provide a defence to Mr Marks.

So the main issues in the case are: (1) was Dr Kurtha the owner of the Paintings, and if so, (2) were they stolen from him (the burden of proving these two facts resting on him), and if so, (3) did Mr Martin buy them in good faith from Ms Banarse before 26 February 2001 (the burden of proving this fact resting on Mr Marks)?

As to the first and second issues, it is not Mr Marks’s case that Dr Kurtha brings this case dishonestly. His case is that Dr Kurtha cannot show that the Paintings were ever in his collection, although he accepts that Dr Kurtha believes they were. And Mr Marks’s case is that if the Paintings were once in Dr Kurtha’s possession, they were lost or disposed of in circumstances which Dr Kurtha did not know about, or has forgotten, and that, in any event, Dr Kurtha cannot show that the Paintings were stolen from him.

As to the third issue, which is the only one on which Mr Marks or his witnesses have any direct knowledge, Mr Warwick makes a number of submissions of behalf of Mr Marks. At this stage I emphasise one point. What the law requires is that Mr Martin should have purchased the Paintings in good faith. If he did that, but if after that he did anything else which was not in good faith (for example, if the sale to Mr Demetriou was not in good faith) then that would not deprive Mr Marks of his defence. I accept that submission, so far as it goes. But Mr McCaughran QC for Dr Kurtha submits that what happened after Mr Martin says he bought the Paintings is not irrelevant. Since the issue whether and when Mr Martin bought the Paintings from Ms Banarse depends entirely on whether I accept or reject their oral evidence, all the other circumstances of the case, whether earlier or later, must be taken into account in deciding whether the alleged good faith purchase did indeed occur. That is why much of the evidence in the case related to the events involving Mr Demetriou and Mr Marks.

So I turn to give a more detailed account of the parties, the witnesses, and the circumstances of the case.

Dr Kurtha is a lawyer. He obtained his degrees at the London School of Economics: LLB in 1965, LLM in 1966, and PhD in 1970 in International Law. He was called to the Bar by Lincoln’s Inn in 1966 and practised as a barrister and teacher of Law for a number of years until 1975. In that year he was admitted to practice law in the United Arab Emirates and since that time he has practised mostly in Dubai, specialising in the law of international shipping, property and banking. In 1985 he was admitted to practise as a solicitor of the Supreme Court of England and Wales. He married, and he and his wife have a daughter and a son. They acquired two properties in West London. One is a flat, and the other is a house in Kew. In the early 1970s Dr Kurtha developed an interest in, and collected, contemporary art from the Indian sub-continent. He himself had been born in what was then Bombay, where Souza had studied art. Dr Kurtha first met Souza in London about 1975. Dr Kurtha’s legal practice in Dubai, and his desire to see his family (who at first remained in London), led him to travel extensively, in particular to London and New York.

In 2005 Dr Kurtha wrote a substantial book about Souza “Francis Newton Souza: Bridging Western and Indian Modern Art” Mapin Publishing 2006. Illustrations of the Paintings appear in that book, reproduced from photographs taken in 1984 at pp23 and 148. The Paintings have their titles written on the back. In the case of Chalice with Host, where I have a photograph of the back, both the name and the title are written in very clear large capital letters. The Portuguese Navigator also has the signature “Souza61” in large clear letters on the front by the side of the man’s head.

Mr Marks is a dealer in antiques, in particular 20^th century art and design. He carries on his business as a sole trader. At the time relevant to these proceedings he had a professional address in Essex. The pictures he dealt in were mainly post 1940. He said that they were mostly bought and sold at under £5,000, but there were also higher priced ones. The higher priced ones he bought not for stock but for a client. He had bought and sold from Mr Demetriou since about 2000. In about 2002 he and Mr Demetriou set up a business together manufacturing and selling furniture to their own designs. This was under the name TAB Designs, and they opened a joint bank account for themselves trading under that name.

Mr Demetriou is also a dealer in art and antiques, mainly 20^th century from the 1950s and onwards. He conducted this business through a company, Back in Time Ltd, which in 2005 had a shop in Holloway Road. Mr Marks and Mr Demetriou had also known Mr Martin for a number of years before the events in question, about ten years in the case of Mr Marks. Mr Demetriou had bought things from Mr Martin and they would meet at antiques fairs and pass each other’s shops. Mr Martin lives in Croydon. He conducted business through a company, Overdose on Design Ltd, and from about 1997 to 2006 he had a shop in Brick Lane, London E1. It sold mainly 20^th century furniture, art and lighting.

In addition, I heard evidence from Mr Radcliffe, the Chairman and Founder of the ALR. The ALR was formed in January 1991 with the backing of the art trade (Sotheby’s, Christies and Phillips all being shareholders) and the insurance industry with the aims of deterring art theft and reducing trade in stolen art. An item registered will be included in searches made by dealers, collectors and police officers throughout the world.

There were five other witnesses. Mr Bairstow is an art collector who had expected to buy paintings by Souza from Mr Marks. Mr Vivekanand Banarse is the father of Ms Banarse. He gave evidence identifying the Paintings as ones he had seen ten or fifteen years previously stored at his mother’s house. Mr Plant was a formerly a tenant of Dr Kurtha’s house in Kew, and gave evidence relevant to whether they might have been stolen from there. There was no suggestion that Mr Plant might have been involved in any theft. Mr Paul Meah was an assistant in Mr Demetriou’s shop, and gave evidence about Dr Kurtha’s attempts to contact Mr Demetriou in 2005. Ms Sunila Kurtha is a solicitor and Dr Kurtha’s sister in law and she gave evidence on the same topics as Mr Plant.

Dr Kurtha describes Souza as a lapsed Catholic who throughout his life painted hundreds of images of Catholic subjects such as the crucifixion and the still life Chalice with Host which is the subject of this action. Dr Kurtha came to have numerous dealings with Souza which I shall recount in more detail below, and describes him as a difficult person who battled with his friends and others, including Dr Kurtha. Souza moved from India to London, and from there, in about 1967, to New York where he lived most of the rest of his life. In the mid 1950s Souza achieved considerable success as an artist in London. His paintings were bought by the Tate Gallery and several well known institutions. He was befriended by distinguished figures in the world of the arts.

In 1976 Souza visited Dr Kurtha and stayed with him and his family in Dubai for six weeks. Dr Kurtha had by then started to collect his paintings. He also organised an exhibition for Souza in the Hotel Intercontinental which had recently been established in Dubai. His paintings were offered at around US$200. Out of 34 works exhibited five were sold to the public and Dr Kurtha bought the rest. At that time Souza painted a very large diptych portrait of Dr Kurtha and his family. Dr Kurtha became friends with Souza’s first wife, and partly out of friendship, and partly out of appreciation of the pictures, he continued to buy Souza’s pictures, at first on a modest scale. In due course he bought very large numbers of pictures not only by Souza but by other contemporary Indian artists.

By 1982 Dr Kurtha had purchased about 80 Souza paintings. During a trip to New York in that year, he met Souza, and Souza asked him to buy a bulk lot of pictures, because, he said, he needed a substantial amount of money. By that time Souza’s pictures were selling for about US $25 for small works and US$200 for larger works. The demand for his pictures was lower than it had been in the 1950s.

On 16 December 1982 in New York Dr Kurtha and Souza each signed two documents. By the first document it is recorded:

“I Francis Newton Souza agree to sell to Dr Aziz Kurtha 50 paintings and 100 drawings of his choice for the sum of US$ 25,000 (twenty five thousand dollars) payable by drafts of at least US$800 per month, until full payment is received”.

In the second document of the same date it is recorded that the two parties:

“….. have agreed today that the existing paintings of Souza that I have including separate drawings and for which I have irregularly paid sums of about US$300 over a period of time will be held by me and belong to me except for about 8-10 paintings of my choice that I will return to him (F N Souza)”.

Dr Kurtha could produce only photocopies of these agreements. He explained that he had twice become involved in litigation with Souza after 1982. In 1988 Souza sued him alleging non-payment of the sums due under the agreement for sale, but Dr Kurtha was able to produce copies of the banking documents evidencing that payment had been made, and Souza lost that case. On a later occasion Souza had made some seriously defamatory allegations against Dr Kurtha to art galleries. Dr Kurtha had sued for libel in New York, and again won the action. Souza gave a full apology and retraction. Dr Kurtha stated that he had had to produce the original of the 1982 agreements for one or both of these actions, and had not found them since.

The agreements were made at Souza’s flat at West 67^th Street, but the pictures which Souza wanted to sell were located outside New York in a warehouse in Framlington. They were works which Souza had kept for himself over a period of 25 years. Dr Kurtha wanted to check what it was that he was to buy, and Souza gave him a chit, addressed to the warehouse, authorising Dr Kurtha to open the self storage facility there, in which the paintings were kept. Dr Kurtha was permitted by the warehouse to see the contents of the facility, but only after paying the arrears outstanding for storage charges. Dr Kurtha said he did not look at the entire contents. He looked at only four or five paintings which had to be removed from crates. These satisfied him that he wished to proceed and he had the consignment shipped to London.

The crates arrived in London, although not immediately, and not all at the same time. When they did arrive they were delivered to a storage facility in West London known as Smarts. Dr Kurtha then had the crates unpacked and saw for the first time all the pictures which he had bought. He assembled them with the eighty or so paintings which he had previously bought and prepared an inventory of all of them (“1984 List”). He also had photographs taken.

The 1984 List is typed and is in two sections. The first section, covering six pages, is headed “Francis Newton Souza Paintings”. It refers to two new crates arrived from New York in January 1984. It gives the size of these crates: 65”x 45”x 8” and 38” x 50” x 31”. It also gives the dimensions of three other crates. The paintings are listed under sub-headings of nineteen different film rolls. In this part of the list there are ninety nine pictures. Each has a date, a brief description (e.g. “oil on board” and “a wood frame”) and the dimensions of the picture. The second part of the 1984 List covers three pages and is headed “Photographs Taken at Aziz’s House”. It lists pictures numbered 100-146 with similar information, namely title, date, comment and size. Picture 101 is the portrait of Dr Kurtha’s family already referred to. Picture 106 is “Head of the Portuguese Navigator 1961 Oil on Board 30”x24”. Picture number 137 is “Still Life with Chalice Host 1953 Oil on Board 24” x 39”. These are the Paintings. Picture 123 is another about which I have heard evidence, but which it is not necessary for me to consider further.

On 8 December 1990 a second inventory was made by Dr Kurtha by a selection of paintings by Souza (“the 1990 List”). These were paintings which Dr Kurtha considered might be of most interest to other collectors. The paintings were photographed at this time but Dr Kurtha no longer has these photographs. The Paintings appear as items 1 and 12 of the 1990 List. The entries are the same as in the 1984 List except that in relation to “Still Life with Chalice and Host” there is the additional comment in the description “Paris St. Lazare Sticker”. That referred to a sticker on the back of the painting referring to the St Lazare station in Paris. In the 1950s Souza had been represented by a gallery in Paris, Iris Clert. Dr Kurtha was not sure that he saw all the pictures in the 1990 List at the time that that list was prepared. He states that they were available to be photographed. He says that he did see “Still Life with Chalice and Host” in 1990. He saw the sticker on the back referring to St Lazare at that time. But he accepted that there is at least one inaccuracy in the 1990 List, in that it includes a picture which had been, but which Dr Kurtha accepts was no longer, in his possession, with the title “Emir of Dubai”.

In the early 1990s Dr Kurtha’s family moved to Dubai to join him there. The house in Kew was let to Mr Plant from 1994, and to at least one other tenant before that. Dr Kurtha could not recall an earlier tenant, but Mr Plant gave evidence that there had been at least one whom the neighbours had told him about. Dr Kurtha accepted that that could be so.

It is at or shortly after this time, according to the Defendant’s case, that Ms Banarse first saw the Paintings at her grandmother’s house. Ms Banarse states that the Paintings were stored in a room in her grandmother’s house, and that she tried to sell them at car boot sales, without success.

When the house in Kew was let, Dr Kurtha moved the pictures from the walls, including those by Souza which he kept in that house, together with some items of furniture, into a room in the loft or attic for storage. The room was secured by a padlock attached to the frame by screws.

In August 1995 Dr Kurtha wrote to a collector in Japan with whom he had been in contact. He enclosed some slides of what he referred to as “my paintings”. These were by Souza and another Indian artist. The attached list relating to Souza’s paintings identifies eleven, of which the Paintings are numbered 7 and 9. The purpose of the letter was to suggest a possible exchange of some of Dr Kurtha’s paintings for some of the Japanese collector’s. Nothing came of this. Dr Kurtha cannot recall whether he saw the Paintings at that time. The fact that he sent slides to Japan may explain why he no longer has in his possession the slides referred to in that letter.

In about 1994 to 1995 the pictures which had been stored at Smarts were moved by Dr Kurtha to Pickfords’ facility at Wembley. Dr Kurtha occasionally visited the pictures in storage, but rarely so, while on his visits to England from Dubai. About twenty of the paintings by Souza were kept at the house in Kew, but there is no separate list identifying which pictures were kept at Kew and which at either Smarts or Pickfords.

It is in November 1999 that, according to the Defendant’s case, Ms Banarse sold the paintings to Mr Martin. According to Mr Martin, he did not like the Paintings, but he bought them and put them in his shop in a downstairs area. They were not for sale. But after they had been there for a while, someone told Mr Martin that he recognised the name of the artist, and that he was a contemporary Asian artist. Mr Martin said that he then did some research, and a gallery in India mentioned the figure of £1,000 without having any details of the Paintings. Mr Martin states that the Paintings were in his shop for six to eight months before he took them back to his house, where he stored them until 2006. He said he bought them to sell at a later date. He said he had a very niche shop, selling very specific things, and the Paintings were not things that he would buy for the shop. He said he bought them to resell them, but not straight away. He took a chance on them. He said he bought them personally, not for the shop, and so he did not regard the purchase as part of his business. He explained, with an illustration:

“... We sell specific items from design, modern design kind of thing and post- war items. If someone comes to my shop and offers me, for instance, a Lambretta, a Lambretta's something that's got a value, right? I might look at the bike, I might buy the bike, but I don't buy it for the business because I can't sell it through the shop. It's not what I do.

Q. Do you buy it to ride it?

A.

I might buy it to ride it, but also I might buy it and sell it probably on to someone else.”

For the next six years Mr Martin said he kept the Paintings in his house, for some time in the loft, for some time in a wardrobe, and for sometime under his bed, or in a shed. He had from 12 to 18 pictures stored at his house in that period, coming in and going out.

In August 2001 the letting of the house in Kew to Mr Plant came to an end. It did so in contentious circumstances, but nothing turns on this.

In 2002 Souza died. There were obituaries in the English national press.

On 17^th October 2002 Bonhams were to hold an auction of Islamic and Indian Art. They prepared an illustrated catalogue. Dr Kurtha saw this in about September 2002 and noticed that five of the illustrated paintings were ones that he says he recognised as coming from his own collection. There was also a fifth, which was not illustrated, but only described. He did not recognise that as one his pictures before the sale, but only after the sale.

Dr Kurtha complained to Bonhams. He reported to the police that they were stolen. The five pictures Dr Kurtha recognised were withdrawn from the sale. On 11^th December 2002 Dr Kurtha applied for a without notice injunction against Bonhams in the West London County Court. He was granted an injunction restraining Bonhams from disposing of five pictures. In support of that application he swore an affidavit. The affidavit referred to the report he had made to the Southall Police, giving a reference. He stated that he did not know the identity or whereabouts of the two consignors of the paintings in question. He said the reason for making the without notice application was that Bonhams had notified him the previous day, 10 December, that unless it received a court order restraining disposal of the paintings by 11 December it would hand them over to the consignors.

On the same day, 11 December 2002, by fax bearing the time 16:13 Southall Police station notified Bonhams that their investigation into the matter had concluded. They referred to the withdrawal of certain paintings from the auction as a result of the claim by Dr Kurtha that the paintings had been stolen from his collection at a time unknown. The police also referred to the fact that the lots had been entered by two different consignors, namely Mr Demetriou and Mr Baxter. The fax continues:

“There would now appear to be a dispute over ownership and I have advised all parties to seek legal advice re the current position. I, on behalf of the police, have no further criminal interest in any party or indeed in the paintings themselves. The police investigation is closed and I do not require the paintings to be held further. I hope this assists Bonhams with regard to the items held”.

It was suggested to Dr Kurtha by Mr Warwick that he knew the police investigation had concluded before he filed the affidavit. He denied that. There is no evidence that at the time he filed the affidavit he had received any communication from the police of the kind referred to in the fax. I accept that his affidavit was truthful and frank.

On 13 December 2002 solicitors instructed by Mr Demetriou wrote to Dr Kurtha. They raised the same question, namely whether there had been non-disclosure in Dr Kurtha’s affidavit, and they requested to be served with notice of a forthcoming hearing as an interested party. On 16 December 2002 solicitors on behalf of Mr Baxter wrote asking for notice of any forthcoming hearing, and documentary evidence in support of his claim to be the owner of the paintings submitted by their client. On 19 December 2002 the court continued the injunction granted the previous week. The order was varied to include a cross undertaking in damages by Dr Kurtha in favour of Mr Demetriou and Mr Baxter.

On 24 December 2002 a settlement agreement was reached between Dr Kurtha and Mr Baxter. Mr Baxter relinquished all rights over two paintings in consideration of payment by Dr Kurtha of £3,500, and Dr Kurtha acknowledged he had no further claims against Mr Baxter. That agreement was in respect of lot numbers 552 and 592. In the catalogue Bonhams had given estimates of £1,000 to £1,500 for lot 552 and £1,500 to £2,000 for lot 592. So the settlement could be said to have reflected the higher estimates.

On 2 January 2003 Bonhams wrote to Dr Kurtha informing him that lot 655 (the lot which had not been illustrated and which Dr Kurtha subsequently claimed as his) had been sold for £3,800. In the catalogue it had been estimated at £800 to £1,200. So it had achieved more than three times the higher estimate.

In Particulars of Claim dated 16 January 2003 against Mr Demetriou, Dr Kurtha claimed the return of lots 550 and 553, alternatively their full market value on sale, and the sale proceeds of lot 655 in the sum of £3,800. Under the heading Particulars of Damage he gave a value for the paintings of £10,000 to £15,000. Lot 553 was entitled “Seated Man in Red (after Titian)”. That picture had been listed as number 146 in the 1984 list. The picture is also listed at item 33 in the 1990 List.

On 24 January 2003 Mr Demetriou swore an affidavit in the proceedings in the West London County Court. This was in support of an application that Dr Kurtha’s claim be dismissed on the ground that he had not filed his Particulars of Claim in accordance with a court order, and because he had not provided evidence either as to his ownership, or of any theft. He described his business and gave this account:

“… The majority of our customers are our clients are well known professional people as well as other dealers, based in Islington and across London. …

4.

I have been in this industry for some 25 years and accordingly have a wide circle of contacts who contact me on a periodic basis in respect of any goods which they think that I will be interested in. On 24 June 2002, Jason Dobkin, who trades as “Oak Tree Trading” and is based in Harrow came to my shop in Holloway Road with three paintings for me to look at. He told me that he had picked them up at some clearance sale. I have done business with Jason over a period of over 15 years, and have bought things from him in the past. I told him I would be interested in buying the paintings myself rather than through the shop, and although he was asking the sum of £2,000 for all three, I managed to get him down to £1,500, which I paid in cash.

5.

Originally I thought I would keep the paintings for myself, as I do not tend to deal with paintings at my shop and accordingly could have difficulty selling them, certainly for their true value. After I did some research on the artist after I purchased, I discovered that Mr Souza was quite well known and accordingly the paintings were probably worth more than I had originally thought. Accordingly, I took them along to Bonhams auctioneers….”

Before me Mr Demetriou said he wished to correct para 4 of that affidavit. He said that it was the police, not Mr Dobkins, who had told him that Mr Dobkins claimed to have acquired the pictures at a clearance sale. He also told me that in 2002 he had only met Mr Dobkins twice: the first time when he turned up at Mr Demetriou’s shop and brought two paintings, and the second time when he turned up at the shop again and brought a third painting. He did not explain how he had come to put in his affidavit that he had done business with Mr Dobkins over 15 years. He said in evidence that he had done about eight or nine transactions with Mr Dobkins.

Mr McCaughran asked Mr Demetriou why, if he did not deal with paintings at his shop (as he said in para 5 of his affidavit), Mr Dobkins came to him at his shop to offer him the paintings. Mr Demetriou professed not to know why Mr Dobkins had come to him. He said:

“I have many people coming to my shop and asking me to sell all sorts of things. I’ve had scooters in my shop, 1950s Lambrettas”.

During the negotiations for a settlement in 2002-3 Dr Kurtha produced a Polaroid photograph taken at the house in Kew of himself and his wife and family, showing the picture “Man Seated in Red” on the wall in the background. Mr McCaughran suggested to Mr Demetriou that he must have been impressed by the Polaroid, in that that had gone a long way to showing that what Dr Kurtha was saying about his having had the picture in his possession was correct. Mr Demetriou responded that he had not been at all impressed, and that the Polaroid was nothing whatsoever. I do not believe that that was his reaction to the Polaroid when he saw it in 2002. It must have impressed him. But I infer that what impressed him most was that the police had closed their file.

On 19 February 2003 after some unusually acrimonious correspondence, Dr Kurtha and Mr Demetriou agreed to compromise. After a number of offers from Mr Demetriou at higher figures, Dr Kurtha agreed to pay £8,000 for the three paintings, of which £3,227.77 was to be satisfied by release of the net proceeds of sale of lot 655, and the balance of £4,772.23 to be paid by Dr Kurtha. In the catalogue the estimates given for lot 550 were £2,000 to £3,000, and for 553 were £2,000 to £4,000. So £4,772.23 represented the equivalent of something at the lower end of the range between the lower and the higher estimates.

At about this time Dr Kurtha visited Pickfords. On Tuesday 11 March 2003 he wrote complaining that he had found a number of his paintings lying loose in the warehouse for everyone to see. He wrote that “quite a few have gone missing and I am preparing the documentation on that loss”. On 7 May 2003 Pickfords prepared an Official Inventory and Receipt of the goods of Dr Kurtha. This included a list of forty six pictures under the heading “Loose paintings”, together with lists of other property, and of other pictures referred to as being in six crates marked “Packed by Owner”. The loose pictures are listed by their titles, and these do not include the Paintings.

On 10 May 2003 Dr Kurtha wrote a letter to a person who had an interest in Souza and with whom Dr Kurtha had previously been in communication. In that letter he wrote:

“About ten were stolen from my warehouse including … “Portuguese Sailor”, “Chalice”, … and five which I recovered from Bonhams after striking a deal with the consignors who had bought it from a Jason Dobson…..”

On 1 May 2005 Dr Kurtha wrote from Dubai to the ALR asking to register three paintings which he said had gone missing. These were the Paintings and a third picture. Dr Kurtha paid the necessary fee and filled in the standard form headed “Art Loss and Theft Report Form”. In it he stated against “date of theft” the following: “approx 1998”. Against “circumstances of loss or theft”… he wrote: “probably from warehouse or from home whilst it was rented out”.

Meanwhile in January to March 2005 events occurred which are described by Mr Bairstow, who gave this evidence unchallenged. He said that he had had an interest in art and antiques and had dealt with Mr Marks an antique dealer, who was the father of the defendant. He had dealt with both, and regarded both as extremely knowledgeable about their trade and having an excellent reputation in their specialist field. He said that the defendant moved into his own specialty namely twentieth century design. He then said this:

“My wife and I often used to sit around the table with Alan and his wife and Michael, and talk about what was fashionable in the antique world. On one of these occasions in about January 2005, Michael pointed to some pictures in the Antiques Trade Gazette, by an Indian artist, called Souza, and mentioned that he was very much an “up and coming artist”, and probably the best in terms of investment, and that the pictures were themselves interesting anyway. I responded that he should let me know that if at any time any come up and I would be interested in buying”.

4.

Sometime in about early January 2006, Michael told me that he was buying two paintings by this Indian artist, and that, in his opinion these paintings would be of interest and despite the fact that they were relatively modern works, they would make a good investment”.

According to Mr Marks’s case, it was also at about this time that Mr Demetriou first saw the Paintings which he later purchased from Mr Martin, although this was unknown to Mr Marks at the time. Mr Demetriou describes what happened as follows in his witness statement of 16 October 2007:

“14.

For many years I have done a lot of business with Chris Martin, a dealer in design furniture. In early 2005 I was looking for some Eames chairs for a client. I knew that Eames furniture was one of Chris’s special areas. He told me he had one of these chairs at his home and I arranged to see it. Whilst visiting Chris’s house I saw two oil paintings (“the pictures”) leaning against the wall in his front room. I knew immediately that they were by Souza. I asked Chris if they were for sale, and he said no, he wanted to keep them, I made an offer, to tempt him of £5,000. He still said no, so I left it at that, not wanting to push too much that day”.

He then gave evidence as to how from time to time he increased his offer, until, on 10January 2006, they reached agreement on £25,000. According to Mr Martin, the only reason why the Paintings happened to be downstairs at the time of Mr Demetriou’s visit, and so available to be seen by him, was that Mr Martin was doing some works upstairs in the house, and he had brought the Paintings downstairs to be out of the way. Mr Demetriou had come to see some chairs of a kind that Mr Martin does sell from his shop, but which he was storing at home. Mr Martin said that was “Just pure luck”.

If this evidence is true, there are a number of striking co-incidences. First, it is a co-incidence that two further Souza paintings claimed by Dr Kurtha happened to come to the attention of (and in due course into the possession of) Mr Demetriou, who had also come into possession of three such paintings in 2002. Second, none of the five paintings that came into Mr Demetriou’s possession (nor the further two that were consigned to Bonhams by Mr Baxter at the same time as Mr Demetriou consigned his three) have a provenance of which any part is evidenced in writing, or which can be traced back either to the artist, or to a sale which is the subject of contemporaneous documentation. Third, the time at which Mr Marks was suggesting to Mr Bairstow that works by Souza might be a good thing to buy is about the same time that Mr Demetriou and Mr Martin claim that Mr Demetriou first saw the Paintings entirely by chance on a visit for another purpose to Mr Martin’s house. Although Mr Marks and Mr Demetriou have a long business association buying and selling from each other, and although throughout this time they had a business together in TAB Designs, according to their evidence, they did not discuss their respective interests in Souza paintings in early 2005, nor later in 2005, but only about four days before 10^th January 2006.

There is no dispute that in 2005 Dr Kurtha got in touch again with Mr Demetriou and visited him at his shop. There is a dispute as to when this was, Mr Demetriou putting it in the summer and Dr Kurtha saying it was on 29 December 2005 (he first said it was 9 January 2006). Mr Meah noted Dr Kurtha’s name in the shop diary of Mr Demetriou and that he had called about furniture. The entries are on the pages for 7 and 10 July 2005. But that does not show when Dr Kurtha and Mr Demetriou succeeded in talking to one another. Nothing turns on this dispute as to dates. There is no dispute that Dr Kurtha said to Mr Demetriou in his shop that Dr Kurtha was opening a shop in Dubai and asked Mr Demetriou about furniture to be sold there. Dr Kurtha states that he also asked Mr Demetriou questions related to the Paintings.

Dr Kurtha states that he had no interest at all in dealing with Mr Demetriou in furniture or anything else, but that he adopted the ruse of expressing interest in having Mr Demetriou export furniture to Dubai in order to provide himself with an opportunity to ask questions about Mr Dobkins and the paintings he had allegedly sold to Mr Demetriou in 2002. Dr Kurtha did not expect that Mr Demetriou would be willing to speak to him directly on that topic.

According to Mr Demetriou, he asked Mr Martin about the Paintings on occasions after he had first seen them in early 2005, and that it was around December that Mr Martin changed his mind and became willing to sell. Mr Martin said that he was prompted by Mr Demetriou’s interest in early 2005 to do some more research into Souza. He found out that one picture had sold for over US$100,000, and that pictures like the Paintings were making US$10,000 to 20,000. He said he put them in bubble wrap, not intending to sell them. Over the next few months Mr Demetriou repeatedly asked about the Paintings and Mr Martin said they were not for sale. Mr Martin was tempted to sell when Mr Demetriou’s offers reached £20,000.

Mr Demetriou states that it was about December 2005 that Mr Martin changed his mind and was willing to sell, although they did not strike a deal until January 2006. Mr Demetriou states that it was four or five days before he bought the Paintings that he mentioned to Mr Marks that he was about to buy some Souza paintings. He thinks he may have given Mr Marks an idea of the price he would want, about £150,000. His evidence as to whether he gave any other, and if so what, details of the pictures he was proposing to buy is vague and inconsistent. He said that he and Mr Marks next talked about the Paintings after Mr Demetriou had called him to say that he had just bought the Paintings.

Mr Demetriou said that he offered Mr Martin cash to tempt him to sell. When asked why he thought that that would tempt Mr Martin, Mr Demetriou answered that “Cash always talks. You know that.” He declined to explain further, claiming not to know the reason why people prefer cash. Mr Demetriou accepted that in 2005 he had not forgotten the case Dr Kurtha had brought against him in 2002, but he said that the only question he asked Mr Martin was how long Mr Martin had had the Paintings. He said you cannot ask a dealer too many questions.

It was on 29 December 2005 that Dr Kurtha claims to have had the conversation with Mr Demetriou about a furniture shop in Dubai that Mr Demetriou places earlier in the year.

On 9 January 2006 the bank account of Back in Time Ltd was debited with a sum of £10,000 which was paid against a cheque numbered 38. Mr Demetriou states that he withdrew that sum in cash and recorded it on the cheque stub, and in the company’s books, as a payment of a dividend to himself. He said that he usually took a dividend at that time of year and that the company’s accountant had advised him that he could.

According to Dr Kurtha, other events occurred on 9 January 2006. He gave an account of them in a letter written from Dubai and dated 11 January 2006 to the ALR, after the ALR had informed him that on 10 January 2006 that Mr Marks had contacted the ALR. In that letter Dr Kurtha said, as he said again before me, that he had spoken to Mr Demetriou on 9 January. He gave Mr Demetriou’s details to the ALR, and said that he suspected that Mr Demetriou was Mr Marks, because Mr Demetriou had been one of the consignors of paintings to Bonhams in 2002. He wrote:

“On 9 Jan Mr Mario [Demetriou] became very interested in knowing from me the specifications of paintings that were lost from my Souza collection and which had not yet been recovered. I told him of the two ie the “Portuguese Navigator” and “Chalice and Host” and he asked me repeatedly to supply images of those works. I did not want to but told him they were reported to the Art Loss Register and he said he would try to get the images from the Register” (emphasis original)

In his witness statement Dr Kurtha had stated that he had visited Mr Demetriou’s shop on 9 January. Mr Demetriou challenged that. It is impossible that the visit was on that day, because as Dr Kurtha subsequently established from his travel documents, he was in Dubai on that day. He then said in evidence that they had met on 29 December 2005, and Mr Demetriou challenged that also. In his evidence to me Dr Kurtha gave an account similar to that he had written on 11 Janaury 2006. In addition he said that he had asked Mr Demetriou to give him the number of Mr Dobkins, explaining that Mr Dobkins might know where the Paintings were. Dr Kurtha said in evidence that Mr Demetriou said: “I might know myself”. Dr Kurtha said that in that conversation Mr Demetriou had also appeared to regard Dr Kurtha as a potential buyer of the Paintings.

Mr Demetriou denies that anything of that kind was said on 9 January. In his witness statement he states that he did receive a call from Dr Kurtha about Christmas 2005 in which Dr Kurtha asked for Mr Dobkins’ number. Mr Demetriou states that he told Dr Kurtha that he did not have the number and would ring back. He states that he rang Dr Kurtha back in Dubai to tell him that he did not have the number. He states that the meeting with Dr Kurtha in 2005 and that telephone call were the only contacts that he had with Dr Kurtha since 2002, and at no point were any pictures of any kind mentioned by Dr Kurtha. He said in evidence that the account of events given by Dr Kurtha to the ALR in the letter of 11 January is incorrect. He said that the telephone call from Dr Kurtha asking about Mr Dobkins’ number was 4 January.

Mr McCaughran suggested to Mr Demetriou that when Dr Kurtha asked for Mr Dobkins’ number, he must have realised that Dr Kurtha was interested in the Paintings. Mr Demetriou replied “No. Why should I?” That thought never crossed his mind, in spite of the fact that the only occasion when each of Mr Dobkins, Mr Demetriou and Dr Kurtha had been involved in something together was the litigation over the pictures sent to Bonhams. Mr Demetriou denied that he said that he would get photographs of the Paintings from the ALR.

Given what is common ground (that Dr Kurtha did speak to Mr Demetriou in early January 2006, and did ask about Mr Dobkins, having earlier contacted him about furniture in Dubai), I find Mr Demetriou’s evidence surprising. Dr Kurtha cannot sensibly be thought to have had any interest in contacting Mr Demetriou and asking about Mr Dobkins other than as part of an investigation into the whereabouts of paintings which he thought were his own but which he no longer had in his possession. Mr Demetriou must have realised that, even on his own account of the conversations. I prefer the evidence of Dr Kurtha to that of Mr Demetriou on what was said at the meeting and in the telephone call that both agree took place.

Mr Marks’s account in his witness statement of what happened in early January is materially incomplete. He states that Mr Demetriou contacted him to say that it was likely that he would in the near future be purchasing two paintings by Souza. Mr Marks then states:

“I was particularly interested in these paintings, as I had a client who had asked me to see if I could find him some work by this artist … This came as no great surprise as there had recently been quite a bit of publicity surrounding Souza, … This publicity took the form of many articles in the Antiques Trade Gazette …”

Mr Marks omitted at that stage to say, what he later adduced in evidence, namely that it was he who had suggested in early 2005 to Mr Bairstow that he should be interested in Souza, and that he had done so by reference to the Antiques Trade Gazette. It was not Mr Bairstow who had made an enquiry out of the blue as a result of Mr Bairstow becoming aware of the publicity, independently of Mr Marks.

A number of events occurred on 10 January. Some involved Mr Marks and the ALR. These are well documented, they can be timed, and they are not materially in dispute. Others involved Mr Marks, Mr Demetriou and Mr Martin. These are not well documented and there is confusion over the sequence of events and their timing.

Mr Marks had never contacted the ALR before 10 January 2006. When he did so on 10 January he rang on a number of occasions with some urgency. There were features of his calls which were unusual from the point of view of the ALR, and caused those at the ALR to pay particular attention to his requests. Mr Marks promptly gave correct details about himself when asked. But most of the enquiries received by the ALR come from subscribers, such as the auction houses and dealers who are members of the main trade associations. Mr Radcliffe mentioned as examples British Antique Dealers Association, the Society of London Art Dealers, the LAPADA and CINOA. Where an enquirer is new, and (as in Mr Marks’s case) is not a member of one of the main trade associations, it is difficult for the ALR to be confident as to who they are really dealing with. The ALR is concerned not to give out information which may be used for the purpose of concealing or disposing of stolen or missing works of art.

At 1710 on 10 January 2007 the ALR took from Mr Marks debit card details to process the payment of the search fee of £50 per picture, a total of £117.50. The fee was charged in respect of the Paintings. Mr Marks gave the titles to the ALR. The card that Mr Marks used to make the payment was the card for his joint account with Mr Demetriou. The ALR recorded the names of both men, which can only have been given to them over the phone by Mr Marks.

Mr Marks in his first witness statement dated 27 October 2007 stated that he gave the ALR over the telephone “my debit card details”. He did not mention that his relationship with Mr Demetriou was not simply that of two dealers, but also included the joint business carried on as TAB Designs. When it became apparent that the ALR had recorded payment from an account in both names, Mr Marks made a second witness statement dated 28 January 2008. He said that when the lady at ALR asked for payment over the phone he just took out the first card that came to hand. He said: “At the time I did not focus upon the card that I paid with”. He said that the search was conducted on his own behalf, not on behalf of TAB Design.

This account cannot be complete. While it is possible that he might have taken out the TAB Design debit card by mistake initially, he very soon had to focus upon the fact that that was the card he was using. He had to dictate his own and Mr Demetriou’s names, which ALR recorded on their files.

After Mr Marks had paid the search fee, he spoke to Mr Radcliffe. It is common ground that Mr Radcliffe told Mr Marks that if Mr Marks were to buy the Paintings, he, Mr Radcliffe, had a client who was interested in buying them from Mr Marks. Mr Marks asked Mr Radcliffe whether there was a problem with good title, and Mr Radcliffe said that there was not. It is common ground, and Mr Radcliffe accepts, that he misled Mr Marks. He explained in court his reasons for doing this, but I do not set them out. They are not material to the issues I have to decide.

A sequence of events is given for 10 January 2006 by each of Mr Marks and Mr Demetriou, and it cannot be correct.

According to Mr Demetriou in his witness statement, Mr Demetriou went round to Mr Martin’s house on the evening of 10 January 2006, paid the deposit in cash and signed the handwritten document. It bears the signatures of each of Mr Demetriou, Mr Martin and Mr Martin’s partner (in the domestic sense), together with addresses for each of Mr Demetriou and Mr Martin. It reads:

“10/1/06

SOLD TWO PAINTINGS OIL ON BOARD SOUZA 53/61

PRICE £25,000

£10,000 PAID

£7,500 BY 10/2/06

£7,500 BY 10/3/06”

Mr Demetriou then called Mr Marks the same day, letting him know that he had bought the pictures. He then gives the same account as Mr Marks, which is as follows.

According to Mr Marks, on 10 January 2006 Mr Demetriou called him by telephone and advised him that he, Mr Demetriou “had bought two Souza paintings and that they would be at his home if [Mr Marks] wanted to see them”. They discussed the price, and Mr Demetriou asked for £150,000. Mr Marks said he would have to make some checks to ensure that there was no dispute as to title, and asked Mr Demetriou for the titles to the pictures. He then telephoned the ALR. Then, having received Mr Radcliffe’s assurance that there was no problem, which was after 5pm, he called at Mr Demetriou’s home that evening. He bargained with him, and agreed a price of £124,000, and terms which involved “a substantial deposit, with the balance over month or so”. It was agreed that he could collect the pictures when he paid the deposit, which he did the next day, paying £12,500 in cash.

The document printed by Mr Demetriou and dated 11 January 2006 is headed with the name and personal address of “M Demetriou”. It is signed by him alone. It reads as follows:

“Sold to 20^th Century Mark of

… 2 oil paintings on board by Francis Newton Souza, titled the head of a portuguese navigator, and the chalice and the host, for the sum of £124,000, deposit paid £12,5000 in cash, Balance of £111,500 to be paid” (typing errors as in the original)

Neither Mr Demetriou nor Mr Marks was sure when that document was given to Mr Marks, whether it was on 11 January or later. It purports to acknowledge a debt by Mr Marks of £111,500. The explanation Mr Demetriou gives for it not being signed by him is that Mr Marks was in a rush.

This sequence of events cannot be correct. There is no dispute that Mr Marks received the assurance from Mr Radcliffe that there was no problem as to title sometime after 5pm on 10 January 2006. So there was no time on that day on which Mr Demetriou could have called to tell Mr Marks that he had already bought the Paintings (he and Mr Martin say he bought them at 6-7pm), which would also leave time for Mr Marks to call ALR before himself agreeing to buy the Paintings from Mr Demetriou later that evening. Because Mr Marks was able to give details of the Paintings to the ALR during 10 January, and before about 5pm, it must follow that before that time on 10 January 2006 Mr Marks had been in discussion about the Paintings. The first conversation about the Paintings cannot have been one in which Mr Demetriou told Mr Marks that he had bought the Paintings. I infer that Mr Demetriou knew in advance that Mr Marks was contacting the ALR, and what his call was about.

Nor does the account given by Mr Demetriou and Mr Marks explain why there was the urgency which Mr Marks said there was. He told the ALR that there was urgency, and repeated that in his witness statement. There is no suggestion that there was any urgency attributable either to Mr Bairstow or to Mr Martin. Mr McCaughran suggested to Mr Demetriou that he would have been interested to know before he paid £10,000 to Mr Martin whether or not the Paintings were registered as stolen. Mr Demetriou’s response to that was “Rubbish”. He could not explain why he would not be interested.

Mr McCaughran suggested that the urgency, and true sequence of events, could both be explained as follows. Mr Demetriou and Mr Marks were in communication with another about the Paintings before Mr Demetriou paid the £10,000 to Mr Martin, but what Mr Demetriou said was not that he had bought the Paintings, but that he was proposing to pay £10,000 to Mr Martin for them. Both Mr Marks and Mr Demetriou knew of Mr Radcliffe’s assurance that there was no problem as to title before the £10,000 was paid to Mr Martin. The urgency was that Mr Demetriou knew on 9 January that Dr Kurtha was saying that the Paintings were registered with the ALR. It was that which made it urgent for Mr Demetriou and Mr Marks to find out if there was a problem with title before the £10,000 was paid to Mr Martin. It also became urgent to record any sale between themselves as having taken place before they were told that there was a problem.

Both Mr Marks and Mr Demetriou sought to portray the document dated 11 January as similar to other transactions between them. There were disclosed a number of invoices. These invoices show an entirely different pattern of dealing. In each case the invoice is a form of document which is pre-printed, and completed in handwriting, or printed as a template. The invoices all bear invoice numbers and VAT numbers. The invoices are for the most part marked with words showing that payment was by cheque, and the cheque number is generally given. In the case of Mr Demetriou, the transactions are all through Back in Time Ltd, not in his own name. The sums involved are in the low thousands, none being at all close to £124,000 or even £12,500. They all relate to items of furniture, mostly to chairs, and do not include pictures of any kind.

Mr Marks and Mr Demetriou were unable to give any credible explanation as to why they wanted to use cash and not a cheque on this occasion. Mr Marks produced no document showing where the £12,500 had come from. He said in evidence, for the first time, that the cash had come from his father’s safe, but there was nothing but his own word in support of that. Mr Demetriou produced no bank statement or document (other than his own printed receipt) to show that he had in fact received £12,500. When asked, Mr Marks said there was no reason at all for using cash, other than to show goodwill. He could not explain what he meant by showing goodwill in this way to Mr Demetriou. He said there would have been no problem in writing a cheque, if Mr Demetriou had asked for one.

When Mr Demetriou was asked why he used cash, he said that buying through his company would have meant that he would have to pay capital gains tax at a higher rate. This was not explored in evidence. The meaning that I understood him to be conveying was that if there was anything unusual about these two large transactions in cash, then the purpose was to minimise tax, and not to cover up a trade in what he suspected or knew to be stolen goods. Even on that footing, I did not find this explanation easy to follow. Even those who do not declare their sales and purchases to Her Majesty’s Revenue and Customs (for whatever reason, including that the figures are below the threshold for taxation) need to keep a proper record for themselves of their transactions. HMRC may make enquiries. This would be particularly so where the sums involved are so large. I note that Arden J regarded the absence of records as surprising for similar reasons in de Préval p14.

Mr Marks said there was no record in his books because the problems with the Paintings arose so soon. I do not find that convincing. A person who buys a painting believing it to be sold with good title, and then discovers that there is a dispute about title, will normally wish to be in a position to claim re-imbursement from his seller. For this he will need proof of purchase and payment.

On 11 January 2006 Mr Marks states that he collected the Paintings and paid the cash deposit. A few days later, when he had not received the written confirmation he expected from ALR (that there was no problem with title), he contacted the ALR again. He wanted something in writing to show to Mr Bairstow. Mr Radcliffe then suggested a meeting, at which he informed Mr Marks that there was in fact a dispute as to title, and that Dr Kurtha was claiming the Paintings. Mr Radcliffe told Mr Marks that he should show the provenance of the Paintings to the ALR, and they would consider both claims. Mr Marks agreed to keep the Paintings safe and they have been preserved pending the outcome of these proceedings.

Mr Marks informed Mr Demetriou, and Mr Demetriou agreed to make enquiries from his seller. Mr Marks and Mr Demetriou agree that Mr Marks was not required to pay the balance until the matter was resolved.

Mr Warwick invites me to have regard to the conduct of Mr Marks in relation to the ALR. First he submits that it was the act of an honest dealer to wish to check with the ALR. Second, after Mr Radcliffe had told him that there was a problem with title, Mr Marks wrote a number of e-mails to Mr Radcliffe, which Mr Warwick submits show the reaction of an honest man.

There was a meeting at Mr Marks’s premises which is recorded in an undated File Note L05.303. What Mr Marks is recorded as saying on that occasion does not relate at all to his own title. He is recorded as making an attack on Mr Kurtha’s character, based substantially on the allegation (which I have rejected) that in 2002 Dr Kurtha obtained the injunction against Bonhams by lying to the court. He is also recorded as saying that the police did not pursue charges in 2002 against the man who has elsewhere been identified as Mr Dobkins. I understand this information to be correct.

On 18 January 2006 Mr Marks sent an e-mail to Mr Radcliffe. Again he starts with an attack on Dr Kurtha’s character. As already mentioned he refers to his prospective buyer, to whom he believed he would have sold the Paintings for £300,000. He challenges that Dr Kurtha ever had title, and raises the possibility that Dr Kurtha might have disposed “of the Paintings before he realised their true value, and is now doing all he can to get them back without incurring too much cost”. He states that he would be prepared to accept £250,000 from Dr Kurtha for the Paintings.

Mr Radcliffe replied on 23 February. Mr Marks was not satisfied by what he called this “long awaited letter”. He wrote another e-mail on 24 February 2006. He expressed a strong sense of grievance that Mr Radcliffe had misled him on 10 January 2006. He wrote: “I do have a receipt for these items, as does the person I bought them from, how far back we can go with that I unfortunately do not know, as asking another dealer for his source is not something one does, other than to ask if had obtained them legitimately”. He said he had proof that Dr Kurtha had lied in his affidavit to the court in 2002 to obtain the injunction against Mr Demetriou. He concludes by saying that he is not inclined to buy goods of dubious provenance, although he accepts that he might have been duped. Again he complains that Mr Radcliffe misled him.

On 28 February 2006 Mr Marks replied to Mr Radcliffe saying he still had no proof of Dr Kurtha’s title, and said “Dr Kurtha has already perjured himself in his affidavit in a previous case to obtain similar works, so you can understand my reticence in accepting his word to you that he has a claim on mine”.

On 1 March 2006 Mr Radcliffe replied to Mr Marks. He said Dr Kurtha told the ALR that he had purchased the Paintings from the artist in 1981 or 1982, and that Dr Kurtha had described the frames of the Paintings. He mentioned the possibility that they might have been sold by a storage company when their charges were not paid promptly and comments:

“If that is the case and the right of the storage company to sell was clear I presume that those to whom the items were sold could prove that they purchased in good faith…

In your e-mail of 24/02/06 you state that it would not be normal to be given the full provenance of a piece and therefore you have not asked your counterparty for his sellers details. In our experience if there is any problem such as this, then it is essential to have the full provenance. Please could you let us have a copy of all the relevant papers including the affidavit of Dr Kurtha”.

On 1 March 2006 Mr Marks replied that he had not taken any action with the police over Dr Kurtha’s affidavit, and made further allegations of what he said were misrepresentations made by Dr Kurtha in court in 2002. He then wrote:

“The reason I didn’t seek any further proof of these paintings provenance before buying them was your reply that there wasn’t a problem with title, when I first called you and your assertion that you had a client ‘very interested’ in buying them made me even more sure that I would go ahead with the purchase. Had I known from the beginning that there was a question mark over ownership, I would certainly have thought twice about going through with it.

As I have said before, in normal trading it is, quite obviously, not the done thing to ask another dealer where he bought something, as there are many less ethical dealers who would bypass him next time and go directly to his source, indeed I would not disclose my sources to another dealer for exactly that reason…”

Mr Marks referred to these e-mails in his evidence in chief, but was not cross-examined upon them. I cannot say that they help me in my assessment of Mr Marks’s credibility. I am surprised at Mr Marks’ assertion that it was normal not to ask where the seller had himself bought the disputed items. It cannot be assumed by a dealer that simply checking with the ALR will be considered sufficient to exonerate him from all responsibility if he is alleged to have dealt in stolen goods, whatever the other circumstances of the case may be.

At an unspecified date in February 2006 Mr Demetriou and Mr Martin state that the further sum of £15,000 was paid in cash by Mr Demetriou to Mr Martin.

In the light of the foregoing, I turn to consider the accounts given by Mr Martin and Ms Banarse about their dealings in pictures.

On 21 April 2006 Ms Banarse wrote in her own hand a document which reads as follows (the letters in brackets are added):

“(a)

To whom it may concern

(b)

This is to state that I had ownership of two paintings by FN Souza titled The Portuguese Navigator and The Chalice and The host which I sold to Chris Martin of 182 Brick Lane London E1 for the sum of £200 cash in November 1999

(c)

They were a gift from my Grandma Shante Banarse of … They were given to me approx 1994-5. How long they were in her possession is unknown to me. She died Feb 2005”.

The circumstances in which that document came to be written are material to the weight to be attached to it. Both Mr Martin and Ms Banarse gave evidence about that.

Mr Martin said that he was not paid the first instalment of £7,500 on the due date in February 2006. Instead he was paid the whole £15,000 in cash by Mr Demetriou a short time after that. There is no document of any kind evidencing or recording receipt by him of that sum, or payment of it by Mr Demetriou. Mr Martin and Mr Demetriou agree in saying that Mr Demetriou came to seem Mr Martin in about February 2006 and told him that there was a problem. Mr Demetriou states that he asked Mr Martin to let him know where he had obtained the Paintings from, and Mr Martin said to him that he would try to find out but that it was a long time ago. Mr Demetriou paid the balance of £7,500, but both agree that it was not a condition of payment that Mr Martin should provide the information requested.

Mr Martin said that Ms Banarse was a complete stranger when she had walked into his shop and enquired if he would buy two pictures. He went round to her home, a flat in Hampstead. Those were the only two occasions on which they had met before 21 April 2006. He recalled that Ms Banarse decided to write passage (a) in the document of 21 April 2006. He did not have any photographs of the pictures she had sold to him. She did not remember who the pictures were by, or the signature, or the titles. He said he told her to write passage (b) in the document, except the word November. She decided to write the rest, that is passage (c) in the document. A little later he said “I’m not sure if I told her to write November 1999, but I did probably tell her to write 1999. She may have well written November herself, recollecting more than me when it was. I could not actually tie it down to November”.

Mr Martin was pressed by Mr McCaughran as to how he claimed to be able to recall the date was 1999. He had referred to the large number of people who came into his shop, as Ms Banarse had done, and from whom he had bought things. He could give no explanation as to how he recalled the date of this sale was 1999. At different times he said “I know”, “I strongly believe” and that it was “A good guess, a very good guess it was around 1999”. He said “I know for a fact that they’ve been at my house for five or six years, probably nearly seven years”.

Ms Banarse went to great trouble to come to give evidence. She is now very ill. She was already very ill in April 2006, although her condition has worsened since then. She is now in her forties, and her illness was diagnosed in her thirties. She gave evidence that her illness really started affecting her when she had an emergency operation and blood transfusion almost six years ago, that is in about 2002. She thinks that that caused her some brain damage. She had been working up to that point, making soft furnishings, but had had to stop work then. She states that her memory is now bad. She gave her evidence firmly and clearly (although in very low voice), as best she could. It was not suggested that she was anything other than entirely sincere, and attempting to help the court.

Ms Banarse described the circumstances in which she wrote the document dated 21 April 2006, as follows. Mr Martin visited her flat unannounced and asked her to write a letter saying that he needed it to prove that he had bought from her the pictures that she remembered selling to him. She recognised him. She said there was a long gap between her selling pictures to him, and him coming to her flat.

Ms Banarse said the words in passage (b) were what he told her to write. She did not know the names of the pictures she had sold. She said she could not recall the date. She said “I have got bad memory loss of five and a half years, so I can’t recall… I know it was years before …”. There was nothing to help her to recall the date, other than the fact that at the time of the sale she was still working. She was in Brick Lane to buy materials for her work. So it was some time before about early 2002.

Ms Banarse said she recalled writing on the back of the pictures, but not what it said. She said she had never heard of Souza before, and had not heard the titles before she wrote the letter. She said that to her they were just ugly pictures. Mr Martin did not show her any photographs at that time. When she came into the witness box Ms Banarse was asked to look at reproductions of the Paintings and asked if she recalled seeing them. She looked at the reproductions and answered immediately that they were in a room in her grandmother’s house, stored with a lot of bits and pieces. But she could not remember whether or not anyone had shown her photographs of the Paintings after April 2006 and before she gave evidence. Mr McCaughran suggested to her that she could not remember if these were the two pictures she had sold to Mr Martin. She replied firmly: “I am telling you they were”.

Mr Banarse also gave evidence. It was after his daughter had written the document dated 21 April 2006 that he was first asked what he knew. In a letter to the ALR dated 3 October 2006 he wrote:

“My daughter has contacted me regarding this matter. I am listing what I can recall. When clearing the room with my daughter, I believe I saw these pictures. Possibly 10 to 15 years ago”.

That was the only occasion on which he said he had seen the pictures he was referring to. By the time he gave his evidence Mr Banarse said he was certain the pictures he had seen in his mother’s house were the Paintings. He described himself as having no interest in paintings. In a letter of 10 October 2006 to the ALR Mr Banarse wrote: “… I do remember seeing pictures. One was a man with a beard. There were also pictures of settings of various items on furniture. None of the pictures were of interest to me”. When Mr McCaughran asked how his daughter had contacted him about the pictures he said: “When she described an ugly man and a vase of flowers I remembered them distinctly. I saw them once. I did not particularly want to see them again”.

I have no hesitation in finding that Dr Kurtha acquired title to the Paintings. It is true that his evidence was, on a number of topics, often uncertain, and sometimes contradictory. He has made statements, both in letters and in witness statements, at different times, on some occasions saying that the Paintings were stolen from a warehouse, on others that they were stolen from his house at Kew. I do not find that surprising from a witness who is asked to recall events as far back as 1976, and who has no direct knowledge of when or how the Paintings left his possession. At no point was Dr Kurtha shown to be attempting to mislead the court. He had photographic evidence, together with the 1984 List, and he gave evidence which satisfies me that he owned the Paintings in 1984. I bear in mind that Dr Kurtha’s oral evidence of events is in many respects unreliable, but that it is accepted that it was honest.

I also find that the Paintings were stolen. Mr Warwick put forward a number of possible theories as to how the Paintings might have left the possession of Dr Kurtha without there having been a theft. And he reminded me of the law that the standard of proof is not inflexible. “The more serious the allegation the higher degree of probability that is required”: Hornal v Neuberger Products [1957] 1 QB 247, 258. For example, negligence is generally a more likely explanation for something going wrong than fraud. So generally a higher standard of proof is required when what is alleged is fraud. Theft, he submitted, is a less likely explanation for Dr Kurtha’s loss of the Paintings than other possible explanations.

The explanations canvassed at the trial included loss or sale by either Smarts or Pickfords. It was suggested that there might have been a sale to recover unpaid storage charges. There is no evidence of this, and Pickfords have written a letter in June 2007 to the effect that there was no sale by them (although their records do not go back to 1994). If a sale occurred, then it is Mr Marks’s case either that Dr Kurtha never knew it had occurred, or he has forgotten. Another explanation put forward is a sale by Dr Kurtha which he has since forgotten. In evidence at one point he was confused as to whether he had consigned some of his own collection to Bonhams, which Bonhams included in the 17 October 2002 sale. It was also suggested that a member of Dr Kurtha’s family might have sold the Paintings, perhaps his wife, when he was away.

As Mr McCaughran submits, the Paintings are substantial objects. They are unlikely to be mislaid in the same way that smaller valuable items might be lost, such as a watch or jewellery, and come into the possession of a finder without dishonesty or theft.

It is possible that one, or even a few, of Dr Kurtha’s collection could have been mislaid while in storage, or on the way to or between one or other warehouse. Dr Kurtha accepted that he paid the regular storage charges in irregular lump sums, and so there were modest arrears from time to time. But I think it unlikely that either Smarts or Pickfords would have sold pictures to recover storage charges which were in arrears without Dr Kurtha becoming aware of that. Dr Kurtha was also in arrears with mortgage payments for some months in about 1988, but the suggestion that he might have sold the Paintings for that reason and then forgotten about it is speculation which I do not find plausible.

However, as I have already noted, a striking feature of this case is that three Souzas from Dr Kurtha’s collection were consigned to auction by Mr Demetriou at the same time as another two were consigned by Mr Baxter (all five acquired from Mr Dobkins), and that all of those share with the Paintings a complete absence of a chain of title going back to the artist, or even to any one source (such as a warehouse owner or a single dealer). The chain of title would not have to cover a very long period. It only has to go back to 1990 in the case of Chalice and Host, and 1984 in the case of Portuguese Navigator. If Mr Martin’s dates are correct, then the period that has to be accounted for ends in 1999. In the case of the pictures consigned to Bonhams, the period ends in 2002. If a warehouse, or Dr Kurtha, had sold these eight pictures, I think it unlikely that none of these items would have had a chain of title. If Dr Kurtha had made a sale, as he did in 2002, he would have done so through well established channels with good records, which would evidence a chain of title. He checked whether any of the well known auction houses had any record of the Paintings being sold, and they did not. None of the other possibilities suggested for Mr Marks seem to me to be at all likely.

Moreover, I am not persuaded that Mr Demetriou’s choice of cash for the large payments he says he made is explicable for the reasons he gives. I have found Mr Demetriou’s evidence to be incapable of belief on a number of points, which I have referred to above. He has been unable to give an account of the events which he said occurred on 10 January 2006 which is consistent with Mr Marks contacting ALR as a matter of urgency on a number of occasions, the last of which was sometime after 5pm. Mr Marks has been equally incapable of providing an explanation of what he says occurred on and before that date. His use of the joint debit card to pay ALR was not a mistake in my judgment. He used it because he was calling ALR on behalf of both himself and Mr Demetriou, both of them wanting to know whether Dr Kurtha had indeed registered with ALR that the Paintings were stolen. The urgency on 10 January 2006 is most probably explained by the need that Mr Demetriou saw to try to establish a sale of the Paintings, if possible, at a time before they became devalued by the claim that Dr Kurtha was making. He did not want to have to sell the Paintings back to Dr Kurtha at a low price, as he had had to do in 2002.

The conduct of Mr Marks, Mr Demetriou and Mr Martin is consistent with them at least suspecting that the Paintings were stolen, and is not explained otherwise. In 2005 Mr Demetriou knew that they were worth much more than the £5,000 which he first claims to have offered to Mr Martin, and more than the £25,000 he claims to have paid Mr Martin for them. I do not believe that it was by pure luck that Mr Demetriou saw the Paintings on a visit to Mr Martin’s home to inspect chairs. I do not believe Mr Martin’s account of why he kept the Paintings concealed in his home for what he says was six years, which is the crucial period of time for the purposes of a defence of limitation. I shall return below to his state of mind before he claims that he moved the Paintings to his home. But if the Paintings were not for sale, as he says they were not, until December 2007, then in my judgment that was because at least until that time he and Mr Demetriou did not think it safe to try to sell them.

In the circumstances of this case, I do not think that theft is an improbable explanation for Dr Kurtha’s loss of possession of the Paintings. On the contrary, I find that to be the explanation which I am satisfied, on the balance of probabilities, is what occurred. I cannot make any findings as to where that loss might have occurred. But that does not mean that I unable to make any finding one way or the other. Mr Plant’s evidence makes it improbable that it occurred from the house while he was a tenant. But there was no evidence as to what might have happened while the previous tenants were in occupation. And there is evidence that by 2003 there were a considerable number of pictures at Pickfords which were loose, and not in their crate. There is no evidence of how that state of affairs came about, or when. But I find that that makes theft a probable explanation of the loss at or shortly before that time. I find that all the other suggested possible explanations are improbable.

The first sub-issue is the date when pictures were sold by Ms Banarse to Mr Martin. If I were to consider this in isolation, solely on the evidence of Mr Martin, Ms Banarse and Mr Banarse, I would reach the following conclusions.

First, I would not be satisfied on the balance of probabilities that the sale of pictures by Ms Banarse to Mr Martin occurred before 21 February 2001. The evidence as to the year is too vague, and Mr Martin and Ms Banarse do not agree as to which of them remembered the month was November. I would be unable to make any finding as to the date. Since the burden of proof lies on Mr Marks, his defence would fail on this point alone.

Second, I would find that I was not satisfied on the balance of probabilities that the pictures which Ms Banarse sold to Mr Martin were the Paintings.

The circumstances in which she was asked to write the document of 21 April 2006 were such that she had committed herself to writing that the pictures she had sold to Mr Martin were the Paintings before she had seen a reproduction of them. When she did come to identify the Paintings as her grandmother’s pictures, she was confirming an identification she had already made, at Mr Martin’s request, without any independent means of knowing whether what he had told her was true or not.

Mr Banarse’s evidence adds nothing to his daughter’s. His identification of the Paintings as the pictures of his mother which he had seen only once ten or fifteen years before was very weak. He had been asked to give his account only after he knew that his daughter had committed herself in writing to the identification in the document of 21 April 2006.

So Mr Marks would fail at this point also, independently of his own evidence and that of Mr Demetriou.

But for the reasons I have given, I have found the evidence of Mr Demetriou and Mr Marks to be incapable of belief as to what passed between them (or, as they say, did not pass) during 2005 up to 11 January 2006, and as to what happened on 10 and 11 January. I find that they were acting together. Mr McCaughran suggested that the purported sale for £124,000 was bogus and that the true arrangement was in effect a partnership. I do not need to make any finding as to what the agreement between them really was. What does matter is that I find that they have not told me the truth, and that they were acting at least partly in pursuance of a common design, before doing whatever they were going to do next, to get information from the ALR as to whether there was a claim registered that the Paintings were stolen.

In the light of these findings, I do not need to consider whether Mr Martin was in good faith when he acquired the Paintings. Since I am unable to make a finding either as to the date on which, or as to the person from whom, he acquired the Paintings, I cannot find that he acquired them in good faith. So Mr Marks’s defence fails at this further point.

But I do find that the manner in which he says he stored the Paintings, or more accurately, concealed the Paintings, at his home, without there being any record of when or from whom he acquired them, is probably because he believed or suspected that they were stolen. The reason he told Ms Banarse to put November 1999 in the document dated 21 April 2006 is that that was a date a little over six years before the action had been brought, and that was the only evidence that might provide a defence to this claim (assuming that Dr Kurtha could prove his case, as he has).

Whether or not Mr Marks and/or Mr Demetriou acquired the Paintings in good faith on 10 or 11 January 2006 is not an issue in this action. As already noted, if Mr Marks had proved that, it would not be a defence to the claim, because such a sale would have been less than six years before the action was brought. Nor am I deciding any dispute between Mr Marks and Mr Demetriou. It is also to be borne in mind that Mr Marks was represented by Mr Warwick, whereas Mr Demetriou and Martin, being witnesses, not parties, were not represented and have not been able to defend themselves. There is no claim by Mr Marks against Mr Demetriou before the court, and I do not know what stances he and Mr Demetriou are taking vis à vis one another. So the following remarks are strictly obiter. But in fairness to Mr Marks in particular it seems to me that I ought to make as clear as I can what I have found, and not found, as to his state of mind.

I have found that Mr Marks has not told me the truth about his communications and arrangements with Mr Demetriou in early 2005 and in the days leading up to 11 January 2006. I cannot attribute this to mistake or lapse of memory. He has not been candid with the court. I am unable to accept from him or from Mr Demetriou, and so I am unable to find, that there was a genuine sale by Mr Demetriou to Mr Marks on 10 or 11 January 2006. There was some arrangement between them for the disposal of the Paintings but I do not know what it was.

Whatever the arrangement was, Mr Marks’s state of mind may have been different from that of Mr Demetriou. Mr Demetriou had been a defendant in the 2002 case brought by Dr Kurtha. He knew the nature of Dr Kurtha’s claim to have owned the pictures (including the one of which there was a Polaroid photograph). He could establish no provenance through Mr Dobkins, and he did not in 2002 raise a limitation defence. It is fair to say that he also knew that the police were not proceeding with the investigation of Dr Kurtha’s allegation of theft in 2002 and had no reason to think that they had started a new investigation (they had not). The absence of a police investigation appears to have been the only point available to him in 2002. But the fact that the police were not conducting an investigation does not mean that there was no theft. The issue of whether there was a theft is one of the points on which Mr Marks has fought and lost before me. Nevertheless, I infer that Mr Demetriou knew that the Paintings were being kept hidden by Mr Martin and not offered for sale for a long period was because he suspected or believed that they were stolen and wished to have available a limitation defence before they were sold to an innocent collector. Because of Dr Kurtha’s investigations, such a sale became urgent in early 2006. If he had believed that the absence of a police investigation meant that there had been no theft, then he had no need to deal in cash in his own name, without keeping records, and he had no reason to wait until Dr Kurtha told him that the Paintings were on the ALR. He could have offered Mr Martin a higher sum and bought them openly and sooner.

Mr Marks had not been involved in the 2002 case. Mr Demetriou says that he did not (and it may be true that before 11 January 2006 he did not) tell Mr Marks the whole story, or perhaps any of the story, about 2002, and about Dr Kurtha’s enquiries in 2005 and early January 2006. Mr Demetriou knew of Dr Kurtha’s enquiries to him in 2005 and early January 2006 about Mr Dobkins, and the suggestion that Mr Demetriou contact the ALR. I cannot make any findings as to what Mr Demetriou told Mr Marks about these matters. I infer that Mr Demetriou told Mr Marks to contact the ALR. That is not a kind of enquiry that Mr Marks had ever made before.

Although Mr Marks knew Mr Martin, I have not found that he knew of the dealings between Mr Martin and Mr Demetriou (whatever they may have been). On 24 February 2006 Mr Marks wrote to Mr Radcliffe that he may have been duped. I cannot make any findings as to whether he was or not. I infer that the information that Mr Marks conveyed to Mr Radcliffe about the 2002 case must have come from Mr Demetriou. I am unable to make a finding as to whether Mr Marks believed what he said when he wrote that there was evidence that Dr Kurtha’s claim was fraudulent. That defence was never raised by him after the commencement of proceedings. In the e-mails I have been shown Mr Marks did not set out to Mr Radcliffe the details of the cash transaction by which, as he later said, he acquired the Paintings. And he persisted in the contention that it was not for him to ask questions of Mr Demetriou.

It was on evidence more favourable to him than that that Arden J, in de Préval, found that the defendant dealer in that case had failed to discharge the onus on him to show that he purchased the disputed works of art in good faith. The impossibility of proving a purchase in good faith necessary to establish a limitation defence is not the only risk a dealer may face.

A dealer in valuable works of art who pays in large amounts of cash, keeps no records, and asks no questions as to provenance of his supplier, exposes himself, and those who buy from him, to other very serious risks. These risks include that the dealer will be unable to answer queries relevant to tax from HMRC. But they also include the risks that he may face a prosecution under the Proceeds of Crime Act 2002 ss327 to 332, and that, whether or not there is a prosecution, he may be made subject to a civil recovery order under Part 5 of that Act.

It follows that Dr Kurtha’s claim succeeds.