The Creative Foundation v Dreamland Leisure Limited, Jeremy Michael Godden and Jordan Harry Godden [2015] EWHC 2556 (Ch)

Summary

  • A Banksy mural appeared on the wall of the tenants premises;
  • The tenant removed the section of wall containing the mural and put it up for sale;
  • The court held that although valuable, the existence of the Banksy mural may be considered disrepair;
  • However, the tenants method of remedying the disrepair was not appropriate;
  • The court held that, once removed, it became the property of the landlord given its substantial value and ordered the tenant to return it.

The facts

  • Dreamland Leisure Limited (Dreamland), the Defendant in this case, operated an amusement arcade from premises in Folkestone. The premises were let to Dreamland pursuant to a lease granted for 20 years from 24 June 2002.
  • During the course of an art project organised by the Claimant, The Creative Foundation (the Foundation), a mural was painted on the external wall of Dreamlands premises. The mural was attributed to Banksy and, therefore, it attracted a considerable amount of attention. In fact, according to the press, the value of the mural was between £300,000 and £470,000.
  • Soon after the mural appeared, Dreamland removed the section of the wall containing the mural and sent it to America where it was exhibited for sale. Dreamland made good the wall, although pretty soon afterwards further graffiti appeared as the building had effectively become a Banksy shrine.
  • The landlord assigned any interest that it may have had in the mural to The Foundation, who brought proceedings against Dreamland for delivery of the mural.
  • The key question was who had title to the mural once it had been removed from the premises?

The arguments

  • The Foundation argued that the mural was part of the land that had been demised and that although Dreamland had a right to use the premises in accordance with the terms of the lease, it had no right to remove any part of the premises for other purposes. Furthermore, they also argued that Dreamland committed a breach of the lease by carrying out an alteration without consent and that the brickwork that was removed became a chattel which now belonged to the landlord.
  • Dreamland claimed that the mural caused the premises to be in disrepair, that it was therefore obliged pursuant to the terms of the lease to remedy that disrepair and that the method adopted was down to their choice.

Summary Judgement

This was an application for a Summary Judgment brought by the Foundation on the ground that Dreamland had no real prospect of success if the matter reached trial. Consequently, the Foundation had a fairly high hurdle to persuade the Court that the claim should be dismissed at that stage.

The Decision

  • The Judge held that it was common ground between the parties that the covenant to keep the premises in good repair and condition was only breached if the premises was out of repair and condition.
  • Although the Foundation argued that there was no disrepair given the value of the Banksy, the Judge accepted Dreamlands submission that the mural might give rise to an obligation on Dreamlands part to do something pursuant to its lease obligations.
  • However, the Court went on to consider the different methods of repair that could be adopted as follows:
    • it could be painted over;
    • it could be removed by chemical or abrasive cleaning;
    • the wall could be removed and replaced, as carried out by Dreamland.
  • Dreamland claimed that they had removed the section of the wall on the advice of a local art dealer as there was concern that other graffiti artists would consider it as a shrine and it would therefore attract more graffiti. For that reason it was a reasonable method of repair.
  • The Judge held that the removal of the mural would not prevent (and indeed on the facts did not prevent) the appearance of further graffiti and, therefore, the method adopted by Dreamland did not justify their chosen remedy. Consequently, Dreamland was not entitled to remove the mural in order to comply with its repairing obligation.
  • The Court then went on to consider what terms should be implied into the lease in these circumstances. The Court held that where part of a demised premises is lawfully removed by a tenant, it then becomes a chattel. If it is a chattel of substantial value, then that chattel becomes the property of the landlord.

Advice

This is an unusual case which perhaps turned on its own facts. However, the principles may equally apply to landlords fixtures which are removed from the premises as part of any alterations. Naturally, it would be more usual in such circumstances to obtain the landlords consent and then the matter is much clearer. However, this case is a good reminder that tenants will not be allowed to take advantage of property which is let to them for a limited period of time.