Judge rules against collector in $50K watch lawsuit

It’s a watch collector’s worst nightmare.

A German collector is stuck with a $50,000 dud after a Canadian Supreme Court judge ruled against him in a case he brought against the West Vancouver family who sold it to him on ebay.

Advertised in April 2008 as a “Patek Philippe rare-model rose pink gold vintage 1950s” wristwatch of a prototype design that had never retailed,owned by the family for 40 years, and listed for sale at $65,000, the entry included photos of the watch and a Certificate of Origin. Oliver Hartmann, a watch collector of three decades standing who owns 20 Pateks, put in a bid at $45,000 for what he believed to be a rare Ref.3413.

The defendants Christopher Fulton and his mother Wendy McKerness told Hartmann that they had received offers of $50,000 but preferred to sell to a collector like Hartmann than to a dealer due to the watch's "sentimental value."

He increased his offer to $50,000, which was accepted on April 8.

Hartmann told the court that he couldn’t get a certificate of authenticity from Patek Philippe because the movement belonged to an entirely different watch, and that Patek had never built the watch case. He claimed damages for breach of contract on the basis that he was "induced" to pay $50,000 for a watch that was not a genuine Patek Philippe.

When Hartmann had approached the sellers for a refund, they refused, arguing they acted in good faith and sold exactly what they offered. B.C. Supreme Court Justice Robert Johnston agreed. "This watch sufficiently corresponded to the description the defendants gave it that I do not find that it could not be used for any purpose related to its description, nor that it lacked merchantable quality." "I do not find on the evidence that it was a condition of this sale that an abstract or other confirmation of authenticity could be obtained from Patek Philippe," said Johnston in his decision.

The Judge stated that Hartmann could not rely on the expertise of the sellers, who were simply selling a family heirloom and were not experts. He also ruled that were several other things that should have tipped off Hartmann : that the watch had never been sold retail, that it was advertised as a prototype, and that the seller’s ebay description said it was made for, and not by, Patek Philippe.

Expert Stefan Muser examined the watch and found a number of discrepancies, including that the case was the wrong size, not manually assembled, and lacked the correct markings. Further, the dial had also been altered to fit the movement. Muser described the watch to the court as "without any doubt a forgery" with a resale value "only that of the used raw materials."

The ebay description was as follows :

"PATEK PHILIPPE RARE MODEL ROSE PINK GOLD VINTAGE 1950'S

Patek Philippe man’s rare model wristwatch in 18 carat rose/pink gold. Came from family members 40 year collection of finest mid-Century art, furniture, and automobiles. According note, a prototype test made for Patek Philippe in the late 1950’s and was never retailed. The watch is in beautiful condition and comes with box and paper. I had very close-up pictures taken to show every detail. The watch looks perfect to the regular eye, in other words, it looks better in person than it does in these close-up photos. If you want something truly special I believe this is it. A watch maker took apart the watch for pictures and assured me - me the watch is in fine running condition and that the dial is original and not being restored. Case, dial, movement signed. He also informed me that the winding wheel is worn and should be replaced. Please note this. If anyone has a winding wheel for this model I would like to hear from you. I will consider serious offers. Questions please email before bidding. I will accept payment by bank wire with an email confirmation within 24 hours of close of auction. If you cannot complete in this way please do not bid. The watch will not be shipped until we receive clear funds in our family account. No exceptions. The watch will be lovingly sent via Fed X or UPS overnight fully insured and the tracking number will be provided immediately after shipment. Our hope is to make a new owner very happy. If confirmation of wired funds is not received in 24 hours of close I retain the right to void the transaction. Thank you"

The full judgement of Hartmann v McKerness [2011 BCSC 927], can be read here, and it arguably raises more questions than it answers.

The following paragraphs in the judgement are particularly interesting :

[34] 3. There is absolutely no difference between the markings of a prototype test watch made for Patek Philippe and a production model. The prototype watches were just produced in very limited numbers. They were signed, numbered and registered at the Patek Philippe archive, exactly like the regular production models.

[36] Whether the watch is an authentic Patek Philippe is an interesting question, the answer to which, depending on the depth of analysis, might approach the philosophical. It appears from the evidence that Patek Philippe manufactured all of the components except the case, although the Patek Philippe components were not necessarily intended to be assembled together. What is relevant for these parties, however, is whether what was delivered corresponded to the representations made.

[37] Dr. Hartmann says he was told there was a certificate of origin with the watch, based on the words “… the watch comes with … paper” and the photograph of a document entitled “CERTIFICATE D’ORIGINE ET DE GARANTIE” that formed part of the eBay offering. Dr. Hartmann received the paper he saw in the photograph, and having agreed to withdraw that portion of Mr. Muser’s opinion questioning the authenticity of that document, he has no complaint that he did not get what was represented as to the paper.

The paragraphs raise numerous questions, not least of all :

1. Surely whether a watch is a Patek Philippe or not is not a "philosophical question"?

2. If there was a Certificate of Origin, does it specify a Ref. 3413. If so, it is rather curious that they have an “authentic Certificate of Origin” for this Reference, which they have matched up with a frankenwatch. Or did the Certificate of Origin need further investigation? Details about the Certificate are somewhat frustratingly sparse in the judgement, and paragraph 37 is just a bit puzzling regarding the authenticity of the document.

Then we have these two paragraphs concerning the expert, Mr Muser :

[61] In considering Mr. Muser’s opinion as a whole, both written and oral, it appears that his dismissal of this watch is heavily influenced by what he has been told, and what he understands from experience, about the position taken by the Patek Philippe archives concerning this particular watch. He said that if one cannot obtain from Patek Philippe a certificate or abstract concerning a particular watch, he and others consider the watch a fraud and a forgery.

[65] Even if there were direct evidence from Patek Philippe that it disowned this watch, that would not be determinative, as the description clearly stated that it was not just a prototype, but a test watch, that had never been sold at retail. Further, the description stated that the watch had been made for Patek Philippe, not by Patek Philippe.

This is curious.

There don’t seem to be any photos online of this offending piece, but here are the details of a Ref. 3413 that was auctioned by Christies in November 2010. It realised CHF68,750. Only eight examples of a Reference 3413 are publicly known to exist, including this other one that was auctioned by Christies in 2008.

The vendor "Stillwater891" no longer appears to be active on ebay Canada.

Caveat emptor. Especially in Canada.

[AP]