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who owns this Banksy? High Court decides

3 November 2015
A recent High Court judgment The Creative Foundation v Dreamland Leisure Limited [2015] EWHC 2556 (Ch) has provided one of the first-known authorities on the ownership of a graffiti mural and raises important points for landlords and tenants in respect of repairing covenants and the removal and ownership of parts of a property.

Dreamland Leisure Limited (‘Dreamland’) was the tenant of a building in Folkestone, which operated an amusement arcade. The building was let to them by Stonefield Estates Limited (the landlord) pursuant to a lease granted for 20 years from June 2002. During a public art event, which was organised by The Creative Foundation (‘Foundation’) in September 2014, a graffiti mural was painted on the external wall the amusement arcade. The graffiti mural entitled ‘Art Buff’ (pictured) was attributed to the notorious Banksy and therefore attracted considerable attention and had been valued around £470,000. However a month after it appeared, Dreamland removed the section of the wall with the mural and sent it to America where it was to be offered for sale. Dreamland made good the part of the wall it removed, although it continued to attract graffiti. The Foundation, upset by the removal, was assigned any interest in the mural from the landlord and took legal action against Dreamland to retrieve the graffiti mural.

There were two key issues for the High Court to decide. The first issue was whether Dreamland was entitled to remove the graffiti mural from the building in order to comply with its repairing covenants under the lease and whether this removal was reasonable. The second and more significant issue was who actually owned the graffiti mural.

Removing valuable graffiti – is it necessary and is it reasonable?

On the first issue, the High Court reaffirmed the principle that the obligation to repair pursuant to a repairing covenant only arises if that part of the building is actually out of repair. Dreamland argued that as a consequence of the graffiti mural the wall was in disrepair and that the presence of it was likely to attract yet more graffiti. Therefore, Dreamland said they were obliged pursuant to the lease to remedy that disrepair. On this point the High Court was narrowly persuaded. With the repairing covenant engaged the next step was for the court to assess whether the method of removal was reasonable. The court held that Dreamland could have used alternative solutions to remove the graffiti mural such as chemical cleaning or painting over it and therefore to remove the section of the wall containing the mural was not reasonable in complying with the repairing covenant.

Ownership of the graffiti mural

On the second and more important issue, the court dealt with the ownership of the graffiti mural. It is worth noting that the court was not concerned with the copyright in the graffiti mural, which prima facie still belongs to the artist (which it appears to be accepted was indeed Banksy), but the actual ownership of the physical object upon which the artistic work which affixed. The court said it was necessary to imply a term into the lease to address what happened to parts of a building that had been removed or replaced by the tenant under the repair covenant, and those parts revert to being chattels once removed. The court held that were such a term to be implied into the lease then the graffiti mural, which was a chattel with substantial value, which had been removed from the building, remained the landlord’s property. The court set out four reasons for coming to this conclusion:

  1. The default position is that every part of the property belongs to a landlord.
  2. The mere fact that the tenant was discharging its repairing covenant did not imply that it then acquires ownership of such a chattel. The covenant only justified the implication of a term dealing with permission to remove and (where appropriate) dispose of such items.
  3. Even if a term may be implied with respect to ownership of waste or chattels with limited value, it does not follow that it should be implied with respect to the ownership of a chattel with substantial value.
  4. It made no difference that the value was attributable to the spontaneous actions of a third party. It was the landlord who had the better right to that windfall than the tenant.
Therefore the court held that the Foundation was entitled to summary judgment on its claim against Dreamland for delivery up of the graffiti mural. 

This is an interesting and useful case that clarifies both landlords and tenants position as to their rights in respect of both the repairing obligations and the removal of parts of a building. It also serves as a warning to tenants in that they will not be allowed to take advantage of their obligation to repair the property in order that they are able to consequently sell-off chattels of substantial value.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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