Melbourne art dealer Robert Gould, already locked in a legal fight with his ex-partner over millions of dollars worth of artwork, is now being sued by the niece of one of Australia’s most celebrated artists.

Alice Rouse, related by marriage to the late Russell Drysdale, is suing Gould Galleries in the Victorian Supreme Court over the sale of a portrait that the artist painted of Rouse when she was a young girl. She alleges that Gould, who was supposed to be acting as an agent to sell the painting on her behalf, purchased it himself through his South Yarra gallery and subsequently sold it for a 60% profit.

Gould’s name figures prominently in the so-called “curatorgate” affair that has rocked the National Gallery of Victoria. His ex-partner Geoffrey Smith was stood down from his job as curator of Australian art at the NGV last month after an internal investigation found he had a case to answer over admissions he made about his involvement in Gould’s commercial gallery business. Smith’s claims about his contribution to the success of Gould Galleries were made in an affidavit in a Supreme Court action in which the curator is seeking a share of assets the couple acquired during their 14-year relationship.

The NGV has been forced to suspend the investigation pending mediation after Smith took action against his employer in the Federal Court.

Alice Rouse, the niece of Russell Drysdale’s first wife, sat for the portrait as a five-year-old in 1948. Now a retired real estate agent living at Tabletop, outside Albury, Rouse filed a statement of claim in the Supreme Court on July 21 alleging that Gould Galleries breached its duty as her agent by failing to avoid a conflict of interest in handling the sale of the picture.

According to her statement, Rouse entered into an agreement with Gould Galleries in May last year to sell the portrait entitled “Alice”. Under the terms of the agreement, the painting was “to be sold at a price that will result in a net minimum of $250,000 payable to (Alice Rouse)”. Gould Galleries would be entitled to an 18% commission.

According to Rouse’s statement, Robert Gould’s assistant advised Rouse on August 5 last year that the painting had been sold for a total price of $250,000 but failed to inform her at the time that Gould Galleries had, in fact, sold the painting to itself. It is alleged that Gould then sold the painting in February this year for around $400,000 to an unknown buyer.

The statement of claim accuses Gould Galleries of acting “in breach of its duty of care to avoid conflicts of interest” between “its own interest in acquiring the painting for the lowest achievable price” and the client’s interest “in selling the painting for the highest achievable price”.

The statement claims Gould Galleries acted “in breach of its duty not to profit from its position as agent without the informed consent of the plaintiff”.

Robert Gould was in Sydney today preparing for an art fair. Crikey tried to contact him by phone and email but we had received no response before our deadline.

Gould Galleries, as one of the leading dealers in the secondary market for mid 20th century Australian art, is a major buyer and seller of Drysdale’s work. There are three major Drysdales currently listed for sale on the gallery’s website, including two that featured in the NGV’s retrospective curated by Geoffrey Smith in late 1997.