Appeal Panel Upholds Decision in Ownership of $100M Art Collection

The Beaverbrook Art Gallery in Fredericton, New Brunswick has defeated an appeal from a decision awarding it ownership of an art collection of international stature worth approximately $100 million. On September 9, 2009, an eminent panel of retired Canadian appellate judges, Edward Bayda, QC, Coulter Osborne, QC, and Thomas Braidwood, QC, dismissed the Beaverbrook (UK) Foundation's appeal, upholding in its entirety the arbitration award of retired Supreme Court of Canada Justice Peter Cory, QC. This decision came just days before September 16, 2009, when the gallery celebrated the 50th anniversary of its opening ceremonies.

For the gallery, a provincial institution, this marked the successful conclusion to its five-year ownership battle with the Beaverbrook Foundation, a UK charity established in 1954 by the first Lord Beaverbrook. The Beaverbrook Foundation is seeking leave to appeal the arbitral award to the New Brunswick Court of Queen's Bench. The gallery is contesting the Beaverbrook Foundation's leave application.

The gallery maintained that the valuable works of art in dispute, including J.M.W. Turner's Fountain of Indolence and Lucian Freud's Hotel Bedroom, together worth over $30 million alone, were a gift from the first Lord Beaverbrook in the 1950s. The Beaverbrook Foundation argued that they were only on loan and could be recalled at any time. The disputed art included many other works of English masters such as Hilliard, Reynolds, Gainsborough, Sargent, Hogarth, Sisley, Sickert, Spencer and Sutherland. The appeal panel affirmed Cory's central finding that 85 of the 133 disputed works, including these masters that were in the gallery at its opening in 1959, were intended by the first Lord Beaverbrook to be a gift to his native province of New Brunswick.

In addition, the appeal panel upheld Cory's nearly $4.9-million trial costs award in favour of the gallery, the largest cost award in arbitration proceedings in Canadian history. The panel also upheld Cory's damages award of about $2.5 million for works of art improperly returned to England in the 1970s. The costs of the appeal are to be determined at a future date.

The eight-week trial took place in the fall of 2006, with Cory releasing a decision substantially in favour of the gallery in March 2007. The Beaverbrook Foundation appealed from that trial award.

The Beaverbrook Art Gallery was represented by Larry P. Lowenstein, Jean-Marc Leclerc, Jennifer Fairfax and Denise Sayer of Osler, Hoskin & Harcourt LLP and David Duncan Young and Leanne Murray of McInnes Cooper.

The Beaverbrook (UK) Foundation was represented by Kent Thomson, Matthew Milne-Smith, and Sandra Forbes of Davies Ward Phillips & Vineberg LLP and Terrence J. O'Sullivan and Paul Michell of Lax O'Sullivan Scott LLP (co-counsel solely for the appeal).