Art has long been used to enliven the civic realm and to stimulate and intrigue residents and visitors. But the installation of art in urban spaces can pose difficult legal issues.

This summer saw two local authorities in London tussling over Henry Moore’s Draped Seated Woman(commonly known as Old Flo) as one of them looked at raising £20 million by selling the sculpture. Now, an attempt to regenerate Folkestone on the South East coast of England by the promotion of creativity and the arts has ended up in the High Court.

Art Buff comes … and goes

The independent arts charity, Creative Foundation, initiated and manages the Folkestone Triennial, an arts project dedicated to exhibiting newly commissioned artworks in Folkestone. As part of the 2014 event, the external flank wall of an amusement arcade in the town was spray-painted with the mural, Art Buff. The work was attributed to the famous street artist known only as Banksy. Neither the owner of the arcade nor its tenant, Dreamland, consented to Art Buff being painted on the wall. There was huge media interest in the piece, which experts estimate to be worth over £300,000. Local graffiti artists also added their contributions to Art Buff before the local authority stepped in and covered the mural with Perspex.

Later, Dreamland severed and removed Art Buff from the wall of its arcade. The story moved on quickly: the mural was shipped to New York for sale and exhibited in Miami; the widow of the owner of Dreamland contended that the net proceeds from the sale of Art Buff would be given to a local organization providing care to the terminally ill; and the UK Culture Minister demanded that Art Buffshould be returned to Folkestone.

Art Buff to come back …

The Foundation took an assignment of the landlord’s rights to Art Buff as a first step towards its goal of having the work returned to Folkestone and displayed there again. Art Buff is presently in New York for safe-keeping pending the resolution of all legal issues. But now the Foundation has obtained a High Court judgment against Dreamland for the return of Art Buff.

Dreamland’s lease was fairly standard. It obliged the tenant to repair the arcade and to paint the exterior parts, making good all external rendering where necessary, every four years. The judge felt that the presence of Art Buff on the arcade’s wall could put the arcade out of repair: there is appeal court authority, Post Office v Aquarius Properties Limited [1987] 1 All ER 1055, CA, which makes it clear that an obligation on a tenant in a lease to repair the leased property only operates once the leased property is out of repair. A tenant may decide how it wishes to perform its repairing obligations but it would need to show that the use of a significantly invasive method was as objectively reasonable as other appropriate methods. Against this background, Dreamland failed to show that it was either obliged or entitled to remove Art Buff from the arcade in order to comply with its repairing obligations under its lease.

Dreamland also contended that, once Art Buff had been removed from the arcade in compliance with its repairing obligations under its lease, it became its property by virtue of an implied term in the lease. Such term would address the issue of what happens to parts of the arcade which Dreamland had to replace or remove in order to comply with those obligations. The parties agreed that such parts, once removed, were personal property, not real property. In most cases (though not this one), such personal property would have little or no value. The judge ruled that a term stating that any such personal property of substantial value belonged to the landlord should be implied into Dreamland’s lease on the basis that:

  • the landlord owned the property but Dreamland only had a tenancy of it; 
  • the fact that Dreamland had, it contended, removed Art Buff from the arcade whilst performing its repairing obligations in the lease did not confer ownership of Art Buff; and
  • the arrival of Art Buff on the arcade’s flank wall would lead to one party being enriched purely by good fortune—but here that party should be the landlord (the judge relied on a nineteenth century case in which a tenant building a gas works uncovered a valuable 2,000-year-old wooden boat under the surface of the land—the boat was ruled to be the landlord’s property). 

Probably …

The decision was a summary judgment and did not follow a full trial of the issues. The Foundation showed that Dreamland had no realistic prospect of success at trial which is all it needed to do. However, it is possible that Dreamland may appeal on a point of law.