Solicitor’s £4.25m claim against Duke of Buccleuch over return of da Vinci painting dismissed

Marshall Ronald sued the Duke of Buccleuch for payment of the fee said to be due in terms of a “contract” which was said to be “agreed” by a third party purportedly acting on behalf of the Duke.

However, Lord Brailsford ruled that there was no “consensual agreement” granting “actual authority” for the third party, an undercover police officer, to act as the Duke’s agent.

“On the contrary the arrangements were no more than a scheme designed and controlled by the police in an attempt to obtain the return of the stolen property,” the judge said.

The court heard that the Da Vinci painting, known as “The Madonna with the Yarnwinder”, was stolen from Drumlanrig Castle, Thornhill, a property owned by the defender’s family, in August 2003.

Efforts were made by the police to recover the masterpiece and two letters were drafted in an to attempt to enhance the credibility of a “legend” they had created for the undercover agent John Craig, who was posing as a loss adjuster.

The first letter, purporting to come from the “Earl of Dalkeith”, as the Duke was then known, was addressed to a loss adjuster Mark Dalrymple and stated that it would be possible for a deal to be bartered between the Duke and those holding the painting without the involvement of underwriters.

The second letter, which was signed by the defender, was an open letter written on the Earl of Dalkeith’s notepaper addressed “to whom it may concern” purporting to come from the Earl and granting authority to John Craig to act as his agent in the recovery of the painting.

It was then that the pursuer, an English lawyer, became involved when, in August 2007, he wrote a letter on “Marshalls” solicitors headed notepaper to Mr Dalrymple purporting to act on behalf of unnamed clients “who can assist in the recovery of the Da Vinci painting Madonna of the Yarnwinder”.

The letter went on to state that their concern was “to negotiate the safe repatriation of the painting and negotiate the reward/finder’s fee on behalf of our clients”.

Mr Dalrymple contacted police on receipt of the letter and following various discussions an arrangement was made whereby it was agreed that the painting would be handed over to Mr Craig in return for certain payments to Mr Ronald totalling £4.25m.

A meeting between was arranged to take place in the Glasgow offices of the solicitors’ firm HBJ Gateley Wareing on 4 October 2007, where the painting was handed to Mr Craig.

Shortly thereafter other police officers entered the premises and arrested the pursuer and a number of other persons, but until then the pursuer was proceeding in the belief that John Craig was a loss adjuster acting as the agent of the defender.

Following a trial Mr Ronald and the other individuals were cleared of conspiracy to extort money after the jury found the charge against him “not proven”, but he raised an action in the Court of Session seeking payment of the money said to be due in terms of the “contract between the parties”.

The pursuer’s case was based upon the proposition that there was an “express contract of agency” between the defender and John Craig in terms of which Mr Craig was granted “actual authority” to negotiate the recovery of the painting on behalf of the defender.

The submission for the defender was that the essentials for the creation of a principal and agent relationship were as stated by Diplock LJ in the 1964 case of Freeman & Lockyer v Buckhurst Properties (Mancal) Ltd, in which it was held that “actual authority is a legal arrangement between principal and agent created by a consensual agreement to which they alone are parties”.

It was argued that the document which on its face appeared to evidence a relationship of principal and agent between the defender and John Craig did not, on the facts, represent consensus between the defender and John Craig to the creation of a relationship of agency.

On the contrary, the documents were, as all the witnesses stated, “no more than a sham” designed to support a police operation attempting to recover the stolen painting, it was submitted.

But the pursuer’s position, set out in a written submission, was essentially that he had not been convicted of any crime in relation to his dealings with the painting and had acted throughout as an “honest intermediary” or broker “seeking only to achieve the return of the painting to its lawful owner”, the defender.

However, the judge observed that the pursuer’s submission “entirely failed” to address the central point of how a case of express or actual authority could be maintained in a position where the unchallenged evidence of all witnesses was that no such contract existed.

In a written opinion, Lord Brailsford said: “In my opinion the submissions made by senior counsel for the defender were correct. The only case pled by the pursuer was that there was actual authority granted by the defender to John Craig…

“That position, the pursuer’s only case, was entirely inconsistent with the evidence I heard in this case. That evidence was clear and, significantly, entirely unchallenged by the pursuer.

“On the basis of that evidence there was no consensual agreement between the person known as John Craig and the defender of the type desiderated by the pursuer. On the contrary the arrangements were no more than a scheme designed and controlled by the police in an attempt to obtain the return of the stolen property.”

Therefore, the legal test for the creation of authority between a principal and his agent was “not met”.

Lord Brailsford added: “In the result I will uphold the defender’s second plea-in-law and assoilzie him from the conclusions of the summons.”