He left instructions, in person, for a commission bid, and also mentioned that he would be in the saleroom at the time of the auction.
Then, in the reader’s own words: “The next day I received an email informing me that my bid had been cancelled. No explanation. No apology. The lot was withdrawn. I had spent three hours viewing it.
“I immediately went to the auction house asking for an explanation. But they failed to explain it, coming up with complete nonsense, then changed their story and came up with more nonsense.
“Later my concerns were confirmed when I found a witness who affirmed that the lot had been withdrawn because someone had left a big bid on the lot. Since it came from a deceased estate, they wanted to find out what they had mistakenly left in the lot!
“So this raises all sorts of issues. Now I know that auction houses always like to cover themselves and have some leeway to withdraw lots etc, but where does this start and end?
“More importantly, if I leave a bid with them in person surely they have a duty of care to honour and exercise that bid.
“So what are my rights?”
One answer is that auction houses typically have a clause in their terms and conditions along the following lines: ‘The auctioneer has the right at his absolute discretion to refuse any bid, to advance the bidding in such manner as he may decide, to withdraw or divide any lot, to combine any two or more lots and, in the case of error or dispute, to put an item up for bidding again.’
On checking the terms of the auction house where the reader placed his bid, such a clause is indeed present.
Tested in court
As such there is probably nothing to be done here but you may wonder whether auctioneer’s discretion has ever been tested in court.
And the answer is: yes it has.
Richards v Philips and others went to the Court of Appeal in 1968.
A theatre was put up for auction. There was an oral bid by the claimant, and simultaneously a bid for the same amount by another bidder, by lifting his sales card, which was unobserved by the auctioneer but observed by clerks. The property was knocked down to the oral bidder.
Due to the dispute, the auctioneer decided in his discretion - effectively making use of a clause similar to that just mentioned - to put the property up for resale and the original oral bidder was successful, at a higher price.
This original bidder then brought an action for specific performance of an agreement to sell the property to him at the lower price .
The auctioneers contended that there had been no sale at the lower price because there had been a dispute respecting the bid. In the High Court the judge found favour with this view.
The Court of Appeal held that since the second bidder who raised his card thought he had bid and that was corroborated by the auctioneer’s clerks, there was a “dispute… respecting a bid” within the meaning of condition 2 (3) of the National Conditions of Sale, which applied to the auction concerned, “which the auctioneer had rightly determined by putting the property up for resale; and that accordingly, the judge had come to a correct conclusion in the High Court and the appeal must be dismissed.”
Another general consideration to bear in mind - as per my article about onerous terms - is whether the condition has been adequately brought to bidders’ attention.
Most often in these situations, in order to place his commission bid the reader would have had to register with the auction house and in the process of doing so would have agreed to their terms and conditions, which he could have reviewed if he wished to.
Milton Silverman is senior commercial dispute resolution partner at Streathers Solicitors LLP, London
