Gabriella Coslovich

When Melbourne art dealer Chris Deutscher quit the auction house that bore his name, it sent shockwaves through the art world that have yet to subside, writes Gabriella Coslovich.

On the third-floor balcony of Ken Fehily's Toorak manor is a huge black finger, pointing to the heavens. It's not an index finger; it's not even a human finger - it's a chimp's - but the message is clear: the folk who live here are not your typically stuffy neo¿Georgian Toorak dwellers.

"It's a bit of a statement, it could get taken in the wrong way," says Fehily's softly spoken wife, Lisa. "Truthfully, I think Ken wanted it to be taken in the wrong way."

The chimp's finger is a sculpture by the young and collectible Melbourne artist Lisa Roet, and when Fehily takes you up to the balcony to see it, he encourages you to give it a cuddle. He demonstrates, wrapping his plump arms around the giant digit, cooing like a baby as he soaks in the heat from the sun-warmed bronze. "It's nice and warm and it's rough, see the broken fingernail and everything? And you can give it a big hug!"

Ken Fehily is a rotund, gentle and cheery man with a lingering American accent (he moved to Australia 37 years ago) and an enthusiasm that is contagious. He has the most conservative of jobs - he's an accountant with PricewaterhouseCoopers - and a most unconservative obsession. Five years ago, he caught the art-collecting bug, a development he would never have predicted. The thought of being seen in an art gallery was as appalling as being spotted in a health food store. Now the names of super-hip contemporary art spaces such as Neon Parc and Gertrude Street drop as easily from his lips as might the words "balancing the books" or
"bottom line".

In five years, he and Lisa have amassed 175 works, and their taste has changed dramatically, moving from easy-on-the-eye, light-hearted and somewhat saccharine, to challenging and confronting. They have entrusted auction house director Chris Deutscher with the delicate job of culling their collection and choosing 75 core works that they will keep for the next 15 years, with the option of auctioning off the other 100. "Chris knows what we've got and what we're prepared to sell. We trust Chris and that's a really important element of it," says Fehily.

Chris Deutscher has spent most of his adult life immersed in the business of art.

In 1975, aged 27, he opened his first gallery, in Armadale, and in May this year, aged 58, he launched his second auction house - deutscher and hackett - after a spectacular and impromptu departure from Deutscher-Menzies, which he set up with Melbourne businessman Rod Menzies nine years ago.

The Deutscher-Menzies split and the emergence of the new auction house are the most significant of several tremors to have rocked Melbourne's art market over the past year. Industry observers are hedging their bets on how the dust might settle - and who the casualties will be.

That millionaire Menzies is still chafing about Deutscher's exit is an understatement. A cleaning-business tycoon and auctioneer used to getting his way, Menzies has reason to be sore about the loss. "It's like David Beckham leaving a soccer team," says former Sotheby's managing director Mark Fraser. Rubbing salt into the wound, Deutscher took with him some of Deutscher-Menzies' most talented people - Damian Hackett, now co-director of deutscher and hackett, Veronica Angelatos (senior art specialist), Anita Archer (auctioneer) and Ivy Boardman (administrative officer).

With Chris Deutscher and Damian Hackett also went a healthy list of contacts cultivated over the years, which prompted a furious Menzies to launch legal action in the Federal Court in relation to confidential client information, as well as naming rights.

Auctioneers are only as good as the product they have to sell. Above all, they need stock - high-quality artworks - which means they must earn the confidence of major collectors, the source of that potential stock. For an auctioneer, strong relationships with collectors such as Ken Fehily are gold.

The Federal Court case was settled in May, with the court ruling that Deutscher and Hackett could not use any confidential information from the Deutscher-Menzies database but were free to use the business name Deutscher and Hackett, on condition that, for the next six months, all company correspondence, websites, catalogues and promotional material had a notice stating that the company was in no way associated or affiliated with
Deutscher-Menzies.

To understand the current situation, it helps to know some history. Chris Deutscher joined Rod Menzies in 1998 with a legendary $500,000 debt, which Menzies wrote off for him. Deutscher doesn't shirk questions about the debt, or about his privileged family background. "Rod Menzies and my family funded me out of the hole

I was in and I started my new life and I have repaid all my debts. I could have declared myself bankrupt - the Alan Bond strategy, which was in vogue then - but I didn't," he says.



Deutscher's late father, Raymond, was an engineer and manufacturer of fasteners. The young Christopher was a shareholder in his father's company, and when it was bought by a multinational, he reaped the benefits - and used them to launch Deutscher Galleries in 1975. Ten years later, Deutscher became the first Australian dealer to sell a painting for more than $1 million - Arthur Streeton's Golden Summer, to West Australian wool baron (and Alan Bond's brother-in-law) Bill Hughes, for $1.1 million.

In 1989, Deutscher opened a second gallery in Gertrude Street, Fitzroy, specialising in contemporary art. The following year, the property market crashed and with it went the art market. Deutscher's fortunes weren't helped by the fact that he represented artists at the cutting edge. They may be stars now, but back in the early 1990s, names such as Peter Booth, Bill Henson, Tim Maguire, John Olsen and even John Brack were hard to sell. "The market was just dreadful, it was so hard to be viable. You'd have a Maguire show and you'd be lucky to sell one work," says Deutscher. "You'd do a Peter Booth show and no institutions would buy."

These days, Chris Deutscher has a new challenge: making deutscher and hackett a force to be reckoned with. As far as he is concerned, it's not Deutscher-Menzies he's competing with but nothing less than the country's number one, Sotheby's. That aim is going to see him go head-to-head with his former business partner.

Tough decisions have been the making of Rodney William Menzies. By all accounts, he is a formidable businessman: driven, strong-willed and aggressive. He has investments in horse racing and real estate and owns the Menzies Group of Companies, which includes Australia's third-largest contract cleaning business. Menzies International is one of Australia's top 500 companies: with a revenue of $202 million, it was ranked number 211 last year by BRW.