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Ownership of street art.

The recent case of The Creative Foundation v. Dreamland Leisure Ltd and Others (1) concerned a dispute over the ownership of a mural entitled Art Buff by the street artist known as Banksy. The case revolved around the issue of who owned the physical mural, in terms of the part of the wall on which it was painted, rather than on intellectual property rights. This article sets out the background to the case, the issues before the Court in the summary judgment application, and the Judge's decision.

BACKGROUND

ART BUFF APPEARS

Art Buff appeared on the back of an amusement arcade in Folkestone in late September 2014. The stencilled, spray-painted image depicts an elderly woman seen from behind, with her hands clasped behind her back, looking at an empty plinth, and listening to an audio guide. The area above the plinth has been 'buffed out' with grey paint.

Art Buff appeared during the Folkestone Triennial, which is an arts festival organised every three years by a charity called The Creative Foundation. Artists are invited to use the town as their canvas, using public spaces to create striking new art works.

Following the creation of Art Buff photographs appeared on Banksy's website showing the wall both before and after it was painted, which is commonly considered to confirm authenticity. This method is used because Banksy's agent, Pest Control, does not formally authenticate his street art. When it first appeared on Banksy's website, the photograph of Art Buffhad the caption 'Part of the Folkestone Triennial. Kind of. '

Art Buff quickly became very popular locally, attracting a great many visitors but also some unwanted attention, being vandalised twice in a matter of weeks.

ART BUFF DISAPPEARS

In early November 2014, Art Buff and the bricks on which it was painted were cut out of the wall of the amusement arcade and removed from the building, with the involvement of an art dealer. The removal provoked a widespread public protest, a media campaign, and was even raised in the House of Commons.

Art Buff was then flown to the United States where it was offered for sale at Art Basel Miami with a reported price tag of around 500,000 [pounds sterling]. It failed to sell and then appeared on the website of the Keszler Gallery in New York.

THE CLAIM

Enquiries revealed that the amusement arcade on which Art Buff had appeared was subject to a lease. The leaseholder, Dreamland Leisure Ltd ('Dreamland'), had arranged for Art Buff to be removed from the building. The landlord and freeholder was unaware of the appearance of Art Buff and had not been informed or consulted as to its removal.

The Creative Foundation, who wished to secure the return of Art Buff to Folkestone to be placed on public display, agreed with the landlord that it would take an assignment of the landlord's interest in Art Buff along with any causes of action associated with it.

The Creative Foundation then obtained an injunction preventing Dreamland or those associated with it from dealing with Art Buff and a claim for delivery up was issued shortly afterwards. The Particulars of Claim included the following claims:

* In causing Art Buff to be severed from the amusement arcade, Dreamland was in breach of a covenant in the lease: "Not without the consent in writing of the Lessor to cut maim or injure any of the walls or timbers of the demised premises...".

* Upon the removal of Art Buff title to the cemented bricks and render which had fonned part of the exterior wall of the building, reverted to the landlord.

* Further or alternatively, by causing Art Buff to be severed from the building, by retaining it, and by procuring that it be taken to the United States for sale, Dreamland converted the mural to its own use.

Other related alternative claims against individuals associated with Dreamland were also pleaded.

THE DEFENCE

In its Defence, Dreamland responded that in the lease, it covenanted
   to keep the whole of the demised premises... in good and
   substantial repair and condition" and "in every fourth and in the
   last year of the term... to paint all the outside wood iron and
   other work now or usually painted.... and to restore and make good
   all external rendering wherever necessary".


Dreamland further argued that it was also obliged to avoid and/or remedy any waste, in particular any damage to or defacing of the demised premises. It was said that these covenants and obligations required Dreamland to remove Art Buff because it amounted to disrepair or defacing of the wall, and that Dreamland was entitled to comply with its covenants in the manner it saw fit, provided that in doing so the works it carried out were reasonable.

* Removing Art Buff, and making good the wall, was an effective means, alternatively a reasonable means, of complying with its covenants and obligations because it was a necessary and/or effective means to remedy the disrepair.

* Had Dreamland instead arranged for the wall to be repainted, it was said that street artists and others would have painted or graffitied the wall by reason of the known existence of Art beneath.

* Simply repainting the wall would have been futile, and it would have been an act of vandalism or barbaric to paint over graffiti acknowledged to represent an important work of art. As Dreamland was complying with its covenants and obligations, it was acting with the Landlord's authority.

* In complying with its covenants and its obligation to remedy and/or avoid waste, Dreamland, as tenant, was and is liable to dispose of those parts of the fabric of the building that it was and is reasonable for it to remove in the course of remedying disrepair to the building. Further, under the lease, Dreamland is obliged:
   At the expiration or sooner determination of the Term peaceably to
   surrender and yield up to the Lessor the demised premises together
   with all buildings... in good and substantial repair and condition
   as aforesaid.


* Such parts of the fabric of the building when removed in compliance with Dreamland's obligations as tenant would become Dreamland's property once removed, which it was required to remove from the demised premises at its expense.

* It was implicit in the tenant's covenants and necessary in order for Dreamland to properly comply with its covenants and obligation to remedy and/avoid waste that on the removal of Art Buff by Dreamland in compliance with its covenants, Art Buff vested in Dreamland, and/or the covenants contained an implied term or terms to that effect.

* If and to the extent that the Second and Third Defendants were involved in causing Art Buff to be removed from the building, they were acting in good faith and only in their capacity as agents of Dreamland, and were therefore not liable individually.

SUMMARY JUDGMENT

The Creative Foundation applied for summary judgment on its claim for delivery up, and for early determination of the point of law as to who owned Art Buff once it was removed from the premises. Pending the determination of the summary judgment application, court orders were made continuing the injunction, and it was agreed that Art Buff would be placed in a specialist safe storage facility in New York.

The usual test for summary judgment applied in that the Creative Foundation had to show that Dreamland had no real prospect of succeeding in its Defence and there was no other compelling reason for the case to be disposed of at trial. The application was heard at the end of July 2015.

CREATIVE FOUNDATION'S POSITION

At the summary judgment hearing, Creative Foundation's position was that:

1. When the paint was sprayed on to the building to create Art Buff the paint became part of the land, which in the first instance belonged to the landlord.

2. During the term of the lease the tenant has a right to use the premises according to the lease. This gives the tenant a qualified right to possession but no right to use part of the demised premises for other purposes.

3. Neither the tenant nor any other third party had a right to use the premises so as to remove and treat as its own the bricks and render (or Art Buff which was painted on those bricks and render) forming part of the premises. As explained above, the lease contained an express prohibition against this which read "not without the consent in writing of the Lessor to cut maim or injure any of the walls or timbers of the demised premises...."

4. Upon being cut from the premises the bricks and render (and therefore Art Buff) regained their character as chattels and title to them vested in the landlord.

5. Therefore in cutting the walls of the premises and removing Art Buff the tenant committed the torts of trespass and conversion.

DREAMLAND'S POSITION

In response to the application, Dreamland's position was that:

1. Art Buff should be treated in the same way as any other graffiti: as disrepair requiring remedial action.

2. A term should be implied into the lease that if the tenant is cutting the walls in compliance with its repairing covenants under the lease, then the parts removed become vested in the tenant on removal, and the tenant is therefore entitled to any value attaching to those parts. The tenant pointed to its covenants in the lease which required it to keep the premises in good repair and condition, and to repaint the exterior of the property every four years.

3. The tenant had taken legal advice and separate advice from an art dealer. The latter advised that there was a risk that the wall could become a 'shrine' attracting further graffiti owing to the presence of Art Buffif it was not removed in an appropriate way. On the basis of that advice, the tenant argued that removing Art Buff by physically cutting it out of the wall was a reasonable way for it to comply with its repairing covenant, in comparison to other methods such as cleaning it off or painting over it.

ISSUES FOR THE COURT TO DECIDE AT THE SUMMARY JUDGMENT HEARING

There were essentially three issues for the Court to decide at the summary judgment hearing:

1. Was Dreamland obliged to remove Art Buff in order to comply with its repairing covenants in the lease?

2. If so, was physically cutting Art BuffouX of the wall (rather than cleaning it off or overpainting it) a reasonable method for Dreamland to comply with its repairing covenant under the lease?

3. Who owned Art Buff once it had been removed from the building?

JUDGMENT

Arnold J. considered the parties' positions and in September 2015 gave judgment on the following basis.

WAS THE WALL IN DISREPAIR?

The first issue for the Court to decide was whether the wall was in 'disrepair' owing to the presence of Art Buff, such that the tenant's repairing covenant would be engaged: was Dreamland obliged to remove Art Buff 'm order to comply with its repairing covenants in the lease?

The Creative Foundation submitted that the wall was not in disrepair for two reasons:

1. The addition of a work of art did not adversely affect the wall.

2. Even if it did, the lease only required Dreamland to repaint the exterior of the property every four years.

Dreamland argued that Art Buff was graffiti, and was likely to attract other graffiti. As such, it was disrepair requiring remedial action.

At summary judgment, Dreamland had to show only that it had a real prospect of success at trial. The Judge found that he was 'narrowly persuaded' by Dreamland on this point, that Art Buff was 'disrepair' that needed to be dealt with. Accordingly the tenant's repairing covenant was engaged.

REASONABLE METHOD OF COMPLYING WITH REPAIRING COVENANT

Having decided that Art Buff was 'disrepair', the next issue for the Court was what a reasonable person would have done to 'repair' the wall (i.e. to remove Art Buff), viewed objectively. Was physically cutting Art Buff out of the wall (rather than cleaning it off or overpainting it) a reasonable method for Dreamland to comply with its repairing covenant under the lease? If there was more than one reasonable means of compliance, it was for Dreamland to choose which method it wished to employ.

The Court considered the different options for removing Art Buff, painting over, removal by chemical or abrasive cleaning, or cutting out and replacing part of the wall. The Judge observed that although removing and replacing the wall was the most drastic method, it may be acceptable if Dreamland could show it was an objectively reasonable means of complying with its repairing covenant.

To try to show this, Dreamland relied on advice given by the art dealer (referred to above) that owing to the presence of Art Buff, even if it were painted over, the site would become a 'shrine' for Banksy followers and other graffiti artists, and would therefore attract further graffiti. Only removing and replacing the wall would prevent it from becoming a shrine, and as such, was the only reasonable means of remedying the wall once and for all, in compliance with the tenant's repairing covenant.

The Judge did not accept Dreamland's argument, and concluded that Dreamland had no reasonable prospect of showing it was entitled, let alone obliged, to remove Art Buff to comply with its obligations under the lease.

WHO OWNED ART BUFF ONCE IT HAD BEEN REMOVED FROM THE BUILDING?

The Judge then went on to consider who owned 'Art Buff once removed, in terms of it being a valuable part of the demised premises that was removed by a tenant in the course of carrying out its repairing obligations (notwithstanding the Judge's decision that Dreamland was not entitled to remove Art Buffin order to comply with its repairing obligations).

It was common ground that when a tenant replaces or removes part of a building in compliance with its repairing covenant, these parts revert to the status of chattels.

It was also common ground that it was necessary to imply a term into the lease to determine who owned these chattels, and what should happen to them. The implied term had to be appropriate for any part of a building removed by the tenant in this way, whether structural (such as bricks, joists and tiles), decorative (such as ceiling roses and fireplace surrounds) or everyday fixtures (such as baths and boilers).

The Creative Foundation argued that:

1. Such chattels belong to the freeholder (and in the case of Art Buff it belonged by assignment, to the Creative Foundation).

2. When the chattels are of no value, or de minimis value, the tenant is obliged and permitted to dispose of them.

3. But if the chattels are of more than de minimis value the tenant must deliver them up to the landlord.

Dreamland on the other hand contended that:

1. Such chattels belong to the tenant and the tenant is responsible for removing and disposing of them;

2. If the chattels have scrap/salvage value then the tenant can recover it.

3. If the chattels have more than scrap/salvage value the tenant is entitled to that too.

In the absence of any precedent dealing directly with these points, the Judge considered three cases which shed light on the issue as follows:

Farrunt v. Thompson (2)

This case concerned a mill and mill machinery which had been demised to a tenant. Without the landlord's permission, the tenant had removed some of the machinery from the mill. The landlord sought to recover it. The Court unanimously held that, when severed from the mill, the machinery became the property of the landlord, and upheld the claim. It was not suggested, however, that the tenant was acting in accordance with its obligations under the lease.

Counsel for Dreamland highlighted that the Judge in that case, Holroyd J., said that if a house is let to a tenant, and the tenant pulls down any part of it wrongfully, and not for the purpose of repair, so as to constitute waste, the person who has the first estate of inheritance has a right to an immediate possession of those materials. Arnold J. said that:
   this indicates that the chattel will belong to the landlord if it
   is removed by the tenant in an act which amounts to (unlawful)
   waste rather than (lawful) repair. But I do not read Holyroyd J. as
   meaning that, if the tenant removes the chattel for the purposes of
   repair, then the chattel will belong to the tenant [as submitted by
   Counsel for Dreamland],


Elwes v. Brigg Gas Co. (3)

In that case the landlord demised land to a tenant to erect a gas holder and other buildings in accordance with approved plans, which specified that the land would be excavated to a certain depth. During the excavations, a 2,000-year-old wooden boat was discovered embedded in the ground. The landlord demanded that the tenant deliver up the boat, but the tenant refused, claiming that it owned it.

Chitty, the Judge in the case, held that at the date of the lease, the boat was the property of the landlord. Therefore the question of whether the boat was treated as a chattel or part of the soil depended on the lease. Chitty said that:
   [T]he plans, however, are silent as to what is to be done with the
   soil excavated. In the circumstances some permission ought to be
   implied as to the removal and disposal of what might be excavated.
   The question is as to the extent of this implied permission...
   [T]he implied permission to remove and dispose ought then to extend
   to what the parties might fairly be deemed to have contemplated
   would be found in making the excavations; but beyond this point it
   ought not to be carried... In my opinion then the licence to remove
   and dispose extended to the clay and the ordinary soil likely to be
   found in pursuing the licence to excavate, but it did not extend to
   what was unknown, and not contemplated, and therefore did not
   comprise the boat.


The boat was therefore held to belong to the landlord, not the tenant.

Counsel for Dreamland argued that the excavated soil could have value, and accordingly the reasoning in Elwes supported its case. However Counsel forthe Creative Foundation contended that there is nothing in the judgment to suggest that the soil had value, and proceeded on the basis that it was to be disposed of. This was consistent with the Creative Foundation's proposition that a tenant has implied permission to dispose of parts of land which become chattels of no or de minimis value, but did not mean that the tenant acquired title to a chattel (or part of the land which became a chattel) of substantial value, because this could not be implied into the lease.

Herbert v. British Railways Board (4)

This case concerned a railway line which the landlord had demised to the tenant, including the rails and sleepers. The lease included a tenant's covenant to keep the track in reasonable repair and working order. Over the years the tenant periodically repaired the track, replacing rails and sleepers where necessary. In due course the railway line was closed. The then current tenant removed all the rails and sleepers and used them to repair tracks elsewhere. The landlord claimed that the rails and sleepers were landlord's fixtures and that the tenant had converted them. The tenant contended that the rails and sleepers were tenant's fixtures, and thus the tenant was entitled to remove them.

The Court of Appeal said in that case that on a true construction of the lease the rails and sleepers belonged to the landlord. The Judge, Beldam L.J., with whom Aldous and Tuckey L.JJ. agreed, stated that:
   I am satisfied that no intention could be inferred from the terms
   of this lease that at the end or earlier determination of the term
   the lessees should be able to remove the rails and sleepers which
   made up, were an integral part of and were incorporated in [the
   railway]. On the contrary, I am convinced that it was the intention
   that they should remain attached to the demised land, that during
   the term any rails and sleepers which were part of the tramroad or
   of the alterations or extensions to it permitted by the terms of
   the lease should be kept in repair by the lessees and left in place
   at the end of the term... [The tenant has] the obligation to keep
   the tramroad in reasonable repair, working order and condition
   which... involved the replacement of rails and sleepers from time
   to time. 1 can see no warrant for the suggestion that the parties
   contemplated that the rails and sleepers would become the property
   of the lessees once removed...


Counsel for the Creative Foundation accepted that some of the reasoning was strictly obiter in so far as it went beyond the case before the Court. Nevertheless, Arnold J. agreed that it provided further support for the Creative Foundation's case.

WHO WAS ENTITLED TO ART BUFF?

Having considered these three cases, the Judge concluded that a term should be implied into the lease that a part of the demised premises which is justifiably removed by the tenant from the premises, and becomes a chattel, in accordance with the tenant's covenant to repair the premises, and which has substantial value, becomes the property of the landlord. Once removed. Art Buff therefore became the property of the freeholder, and by assignment, the Creative Foundation.

The Judge gave four reasons for his decision:

1. The default position is that every part of the property belongs to the landlord/freeholder. The tenant has the burden of showing that it is proper to imply a term into the Lease which leads to a different result.

2. The fact that the tenant is discharging its repairing obligation does not justify an implied term transferring ownership, but only that the tenant has permission to remove, and possibly dispose of, that part of the property.

3. Even if a term may be implied with respect to ownership of waste or chattels with no more than scrap or salvage value, it does not follow that the same tenu should be implied for chattels of substantial value.

4. Finally, where the value is attributable to the spontaneous acts of a third party the freeholder had a better right to that windfall than the tenant.

The Judge therefore granted summary judgment and ordered Dreamland to deliver up Art Buff to the Creative Foundation.

POST SCRIPT

Art Buff has now been returned from the United States and the Creative Foundation is making arrangements for it to be put on public display in Folkestone.

In October 2015, another Banksy-esque work appeared on the same wall. It depicts a rat, a common image in Banksy's work, holding a sign which reads 'Missing... Old Lady. If found, please contact Alastair referring to Art Buff (which depicted an elderly lady) and Alastair Upton, the chief executive of the Creative Foundation. The new piece was vandalised shortly after it first appeared and it was subsequently confirmed that it was created by a local artist and not by Banksy

(1) [2015] EWHC 2556 (Ch). The authors acted for the Creative Foundation, and instructed John Machell Q.C. (Serle Court) and Adam Rosenthal (Falcon Chambers) as Counsel.

(2) (1822) 5B and Aid 825.

(3) (1886) 33 ChD 562.

(4) Court of Appeal, unreported, 15 Oct. 1999.

Tim Maxwell * and Becky Shaw ([dagger])

* Partner, Art Law Team, Boodle Hatfield LLP.

([dagger]) Solicitor, Art Law Team, Boodle Hatfield LLP.
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Title Annotation:The Creative Foundation v. Dreamland Leisure Ltd and Others; Banksy's "Art Bluff" mural
Author:Maxwell, Tim; Shaw, Becky
Publication:Art Antiquity & Law
Geographic Code:4EUUK
Date:Apr 1, 2016
Words:3955
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