Louise McBride’s lawyers got a lot of attention yesterday claiming that 30% of the art on Australia’s secondary market is fake. But what’s more striking about the Australian art market is the prevalence of using art as an investment asset for self-administered retirement funds. That fact brings us to the more interesting aspects of McBride’s case which include her having sold work to her retirement fund to gain access to much-needed cash:

Christie’s is fighting the claim on the basis that Ms McBride was not the owner of the artwork and therefore not the plaintiff, but rather it was either her husband’s company Laurentine, which made some of the payments on the loan, or the superannuation fund. No one had yet contended the artwork was in fact genuine.

Ms McBride was also questioned about a transaction in 2009 involving another artwork raised in the case, a Bronwyn Oliver sculpture, titled Tracery, estimated to be worth between $350,000 and $450,000, which she sold into her personal superannuation fund.

The Superannuation Industry (Supervision) Act prevents related party transactions. As the beneficiary of the superannuation fund, Ms McBride was restricted from transferring assets she owned to the super fund.

Ms McBride admitted that, at that time, she and her former husband Greg Daniel, an advertising executive, were facing financial pressures. In email correspondence tendered in court, Westpac told Ms McBride her application for credit  “would not be looked at favourably” as her overdraft and credit cards were close to their limits.

Ms McBride wrote back that, in the worst-case scenario, she could sell down shares in her superannuation fund and use the cash to buy some of her art.

Christie’s questions ownership of painting and financing (Sydney Morning Herald)