Melbourne socialite Susan Renouf could have wrecked a Deutscher-Menzies auction in September 2002 when she withdrew the catalogue cover painting – Sidney Nolan’s 1955 painting of Ned Kelly called Outlaw – on the eve of the sale.

Renouf, former wife of British racing tycoon Robert Sangster and of one-time Foreign Minister Andrew Peacock, was alarmed by the apparent collapse of the art market at a Christie’s sale the previous evening. She feared her painting would fetch far less than the $1 million she hoped for. Purchased by Sangster in London during the 1980s, the Nolan is believed to have been part of Renouf’s divorce settlement.

The reserve had been set at $700,000 but Renouf wanted it raised to the top estimate of $900,000 and when the firm’s executive director Chris Deutscher said this could not be done, she pulled the painting from the sale. While catalogue cover pictures have failed to sell in the past – usually with a calamitous impact on the bidding for subsequent works – to withdraw the top painting just before an auction was unprecedented.

By rights, Deutscher-Menzies could have charged Renouf a withdrawal fee of up to 5% of the mid-estimate – which might have cost her $40,000 – but as she was also on the firm’s advisory board, along with her son-in-law Michael Kroger, the charge was dropped. Relations between the saleroom and the vendor were somewhat tense as a result and Renouf quit the board.

Now the same picture is to go under the hammer again next month and this time it seems certain to generate more than $1 million for Renouf when auctioneer Paul Sumner offers it as a separate lot at the start of a one-owner sale of the estate of the late Clifford Hocking. Sumner, a former managing director of Sotheby’s Australia, established his Mossgreen Auctions two years ago and, to the amazement of dealers who were convinced he’d be broke within the year, is going from strength to strength.

He is handling the Renouf Kelly as he did a painting by John Olsen last October – marketing it around Australia with a brochure separate to the Hocking catalogue. The plan worked wonderfully well with the Olsen which sold for $1.09 million last October – the highest price received at auction for the work of a living artist.

At next month’s sale, Sumner will offer the Kelly first and then go on with the Hocking lots as effectively a separate auction. He said this morning he already had expressions of interest in the Nolan for more than $1 million – the current upper estimate.