Why art collectors should care about James Stunt and the Cheeke Sisters…

In roughly 1640, Sir Anthony van Dyck painted what is known today as the ‘Double Portrait of the Cheeke Sisters’ (the “Painting"). The Painting depicts two sisters, wearing copper and silver coloured gowns, standing against an English countryside background - and it is currently valued at approximately £4,000,000.

The Painting was purchased in 2013 from Fergus Hall Limited ("FHL") for £600,000 by Mr James Stunt, who had (according to his father, Mr Geoffrey Stunt) identified it as a good investment in 2012.

In 2019, James was declared bankrupt and Trustees in Bankruptcy were appointed. As a result of the bankruptcy order, James’s assets were vested in his Trustees in Bankruptcy. Shortly after, in August 2019, James proposed  an individual voluntary arrangement to his creditors, in which he included the Painting as part of his assets. The individual voluntary arrangement was not accepted by his creditors, and the bankruptcy continued.

In 2020, however, Geoffrey claimed that he was, in fact, the legal and beneficial owner of the Painting and so it should not be considered part of the bankruptcy estate. The court was asked to decide the question of who owned the van Dyck; Geoffrey, or the Trustees in Bankruptcy?

This case is not particularly ground-breaking, neither from an insolvency perspective, nor from an art law one. However, it is a valuable illustration of the danger that art collectors (and, in particular, those for whom acquiring art runs in the family) face if they ever find themselves in a dispute without having taken appropriate precautions.

The Cheeke of it…

Geoffrey argued that James had suggested the Painting as a good investment in 2012 and, that he subsequently visited FHL’s gallery to view the painting and review the provenance. Geoffrey claimed that, James having started to negotiate the sale price with FHL, Geoffrey ended up agreeing the final price himself and paid it by cheque, drawing on his own personal account. The Painting was subsequently loaned to the Huntington Library in California. It is worth noting that James supported his father’s version of events.

On the other hand, the Trustees in Bankruptcy asserted that James had purchased the Painting under a contract between himself and FHL, using his father's money as either a loan or a gift. Evidence for this included the fact that:

1. the invoice was addressed to James, with his address being in Los Angeles, CA;
2. the Painting was never delivered to Geoffrey, and was instead exported directly to the USA;
3. the export licence identified James as the owner;
4. James was held out to be the sole owner whilst the Painting was at the Huntington; and,
5. in 2018, James (according to Geoffrey, without his knowledge) had agreed to sell the Painting at Christie’s auctioneers (holding himself out as the sole owner), and arranging for it to be delivered from the Huntington Library to Christie’s.

After hearing oral evidence, the Court concluded that James was the legal and beneficial owner of the Panting and, consequently, it vested in his bankruptcy estate. While the Court acknowledged Geoffrey paying for the Painting was important evidence, the nature of the father-son relationship supported a presumption of advancement, meaning that Geoffrey was taken to have purchased the Painting as a gift for his son. This conclusion was supported by evidence that Geoffrey had historically allowed James to use his black American Express card for “very substantial sums”, including purchasing a flat.

A cautionary tale

The fundamental issue in this case was the limited amount of documentary evidence.

When a bankruptcy order is made, the bankrupt’s assets will automatically vest in the Trustees in Bankruptcy. The burden of proof will be on the person who asserts an interest in any of the bankrupt’s assets – in this instance, Geoffrey.

We will never know what Geoffrey and James truly intended when the Painting was purchased, but the absence of any documentary evidence to support Geoffrey’s assertions proved fatal to his case. Geoffrey did not initially take steps to assert his ownership, given that he did not seek “any documentation from FHL to evidence that he had bought the Painting. Not even a receipt.” It was only in the summer of 2020 that Geoffrey attempted (via his solicitors) to recover the Painting from Christie’s, asserting his ownership (which Christie’s disputed). This was after James had been charged with various offences in May 2020 (though at the time of this case being heard, James was acquitted of all but one charge, concerning money laundering). 

This case is a cautionary tale, with relevance for art collectors beyond its immediate insolvency context.

When acquiring art, particularly where you are obtaining financial assistance from a family member, it is essential that you properly record your intention as to ownership, supported by contemporaneous (and, as time passes, consistent) documentary evidence. Failure to do so will, in the event of a dispute, result in the Court being forced to draw its own conclusions on the basis of:

1. inferences from the parties' relationship and past dealings;
2. such documentary evidence as does exist, which will invariably not support an interpretation beyond what it says on its face (in this case, suggesting that James was the true owner); and,
3. inferences from what documentation does not, in fact, exist.

Case: Adrian Hyde (As Joint Trustee in Bankruptcy of James Stunt) and Geoffrey Lee Stunt 2024] EWHC 630 (Ch)

A shorter version was first published in eprivateclient on 27^th June 2024. 

Further information

If you have any questions or concerns about the topics raised in this blog, please contact our art and creative media lawyers or our restructuring and insolvency lawyers. Our cross-practice team are recognised experts in their field and have significant experience in advising on matters that impact those in the art world.