The recent case of The Creative Foundation -v- Dreamland Leisure Limited & Ors [2015] EWHC 2556 (Ch) is one of the first cases dealing with ownership of street art and more particularly Banksy. Tim Maxwell and Becky Shaw, who acted for the Creative Foundation, discuss the case and explain its implications.

The growing focus on the issue of ownership of street art arises out of the public renown and accompanying financial recognition of artists such as Banksy. The nature of its appearance means that there is potentially a considerable windfall for whoever can assert title to it.

This case concerned the law of property as opposed to intellectual property. In common with other street artists, due to the risk of opening himself up to liability for criminal damage, neither Banksy nor his agent will formally authenticate his street art. Therefore, no issues of copyright and, in particular, moral rights - such as to prevent the destruction, alteration or possibly removal of the artwork - arose.

Facts

The Creative Foundation, a charity dedicated to the regeneration of Folkestone through creativity and the arts, organises a three yearly event showcasing Folkestone through public displays of artworks. During the third Triennial, in September 2014, the Banksy known as 'Art Buff' appeared on the back wall of an amusement arcade overnight. Great excitement ensued when it appeared on Banksy's website with the strapline "part of the Folkestone Triennial, kind of". Art Buff quickly became popular locally, attracted numerous visitors and received attention in the local and national press. Then just over a month after it first appeared, Dreamland, the tenant of the amusement arcade, arranged for the mural to be cut out of the wall, without the landlord's knowledge or permission. It was sent to the US where it was offered for sale, first at Art Basel Miami and then in a gallery in New York. This provoked a number of public protests seeking its return and a social media storm.

The wall on which the Banksy appeared was part of a property where Dreamland were the tenant under a 20-year lease. Dreamland had the benefit of a demise including the external and structural walls of the premises. The owner of the freehold was a separate company whose only role in the proceedings was to provide an assignment of their rights to the Banksy and any accompanying causes of action to the Creative Foundation.

The Case

The Creative Foundation in response to the public backlash began legal proceedings with the aim of securing the return of the Banksy to Folkestone. The first step was to obtain an injunction preventing Dreamland, and those involved with it, from selling or having further dealings with the Banksy. This was followed by a further Court order placing the Banksy in specialist safe storage in New York pending the outcome of the proceedings.

Once the Banksy was secured the Creative Foundation applied for summary judgment on the question of ownership of the Banksy and for delivery up.

The Creative Foundation's position can be summarised as:

  • once the paint was sprayed onto the building it became part of the land;
  • during the term of the lease the tenant has a right to use the premises according to the lease, which gives it a qualified right to possession but no right to use part of the demised premises for other purposes;
  • neither the tenant nor anyone else has a right to cut the walls of the premises to remove and treat as its own bricks and cement forming part of the premises, and the lease contained an express prohibition against this;
  • upon being cut from the premises the bricks and cement (along with the paint sprayed on them) regained their character as chattels and title to them is vested in the landlord;
  • therefore in cutting the walls of the premises and removing the Banksy the tenant committed the torts of trespass and conversion.

Dreamland's position can be summarised as:

  • that an artwork by Banksy should be treated the same as any other graffiti;
  • that a term should be implied into the lease that if the tenant is cutting the walls in compliance with its repairing obligations then the parts removed become vested in the tenant and they are therefore entitled to any value;
  • that the tenant had taken appropriate advice and that its chosen method of compliance (removal) was reasonable when viewed against the other means open to it (e.g. cleaning and/or overpainting).

The case, essentially, turned on two points: firstly, whether Dreamland was obliged to remove the Banksy to comply with its obligations under the lease and, secondly, whether its method of repair / removal, was a reasonable means of compliance.

Judgment

In giving his judgment, Arnold J was 'narrowly persuaded', based on the evidence before him, that the mural (as graffiti) needed to be removed to avoid the wall attracting further graffiti. With the repairing obligation engaged, Arnold J went on to consider whether Dreamland's method of removal was reasonable and assessed objectively. Dreamland argued that it was advised, not by a surveyor/cleaning contractor but by an art dealer experienced in Banksy's works, that unless the mural was cut out of the wall, rather than being painted over or cleaned off, the wall would become a 'shrine' for Banksy followers and would attract further graffiti. Removal, therefore, was not only reasonable but an advisable means of complying with the covenant.

The judge was not persuaded by this argument and concluded that 'Dreamland had no reasonable prospect of establishing that it was entitled, let alone obliged, to remove the mural in compliance with its repairing obligation'.

The second and more important issue concerned the ownership of the mural, being a valuable part of the demised premises (having become affixed when sprayed into the wall) that was removed by a tenant in the course of carrying out its repairing obligations (notwithstanding Arnold J's decision that Dreamland was not entitled to remove the mural to comply with its repairing obligations).

It was common ground that it was necessary to imply a term into the lease to determine what should happen to parts of the building, whether structural, decorative or everyday fixtures, which have to be removed by a tenant in complying with its repairing obligations. It was also common ground that such parts revert to the status of chattels once removed from the building. The issue was what term should be implied in this particular scenario?

Perhaps surprisingly, there was no authority directly dealing with the point, although Arnold J considered what authority there was in concluding that the term that should be implied was that the mural became the property of the landlord.

Four reasons were given for the decision:

  1. The default position is that every part of the property belongs to the landlord, and the tenant has the burden of showing that an implied term should transfer ownership of part of the building to it instead.
  2. The fact that the tenant is discharging its repairing obligation does not justify an implied term that it acquires ownership of such a chattel, but only that it has permission to remove and possibly dispose of it.
  3. Even if a term may be implied with respect to the ownership of waste or chattels with minimal value, it does not follow that the same term should be implied for chattels with substantial value.
  4. Arnold J held that where the value is attributable to the spontaneous actions of a third party, the landlord had the better right to that windfall than the tenant.

Arnold J therefore granted summary judgment on the Creative Foundation's claim for delivery up of Art Buff.

Implications

The case provides a useful precedent in an area where this is strangely lacking and will obviously have application to other situations involving street art. Existing artwork on the premises is likely to be dealt with under the specific terms of the particular lease. However, the case will have wider application in the field of landlord and tenant law concerning the extent of the implied permission for the tenant to remove items from premises during the conduct of repairs.

Subsequent events

Banksy's Art Buff has now been returned to Folkestone and is being restored prior to being returned to public display. Recently, another suspected Banksy appeared on the same wall playing on the theme of Art Buff. It is not clear whether this was Banksy's work but it was swiftly vandalised.

This article originally appeared in the RICS Journal in March 2016.