No sooner had Chris Deutscher and Damian Hackett posted letters last month informing more than 4000 art collectors around Australia of their new venture than they learned they had to appear in the Federal Court in Melbourne.

The two former directors of arthouse saleroom Deutscher-Menzies had announced last November they were leaving the firm that Deutscher had co-founded with Melbourne cleaning magnate Rod Menzies in 1998 to set up their own auction rooms, Deutscher and Hackett. They subsequently spent more than $40,000 on naming-related material and advertising and were busily setting up new galleries in Melbourne and Sydney.

But Menzies decided to take them to court and on Monday sought an injunction to prevent them trading under the new name and an order requiring them to return all intellectual property contained in Deutscher-Menzies’s databases.

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Justice Sundberg handed down a preliminary judgement on Tuesday dismissing the call for an injunction. He said given the small size of the art market – according to Deutscher, only 200-300 serious collectors bought works worth $100,000 or more – he considered they would be sophisticated enough not to be confused by two auction houses having similar names.

The judge said Menzies had known since last November of the plans for the new art saleroom yet had not taken any action until 28 February. This inaction cast doubt on his claim that collectors were likely to be misled.

But he also issued an order requiring the return of all information in the databases and for the two auctioneers to publish a notice in The Australian, The Age and SMH saying their firm was not associated or affiliated with Deutscher-Menzies. This notice had to be included in all future correspondence, catalogues and promotional material. He reserved costs and ordered that proceedings be referred to the next available judge.

Deutscher told Crikey last night he had brought a database of more than 4000 names with him when he joined Menzies. He said that defectors from his old firm, and from other auction houses, had joined the new saleroom which would hold its first sale of top-shelf art works in Melbourne in May. The firm would also hold exhibitions and act as agents for established major living artists.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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