The High Court has recently had to decide who owns a mural which has been painted on the side of a leasehold property, in the case of The Creative Foundation Limited v. Dreamland Limited and others [2015] EWHC 2556 (Ch).

The street artist Banksy had painted a mural on the wall of 44-46 Rendezvous Street Folkestone. The tenant had the mural removed with a view to sale. The landlord assigned title in the mural and cause of action to the Claimant, which is a foundation for the promotion of art in Folkestone. The Claimant sought delivery up of the mural and applied for summary judgment.
The lease is a twenty year lease. The demise included the structure and exterior. It included covenants to keep the demised remises in repair, a covenant to paint and make good the render every four years, a covenant against alterations and a covenant to yield up in repair.

The Claimant argued that the mural became part of the land which belonged to the landlord subject to the lease. The tenant had no right to remove it by virtue of the covenant against alteration. On severing the bricks with the mural on they became chattels which reverted to the landlord.

The tenant argued that it had to remove the mural in order to comply with its obligations to keep the exterior in repair and to decorate.

The Court held that there was no reasonable prospect of the tenant establishing that what it had done was in compliance with its general repairing obligations.

The Court went on to consider what term should be implied into the lease in respect of chattels which had been severed. The Claimant argues that where the value of such chattels were de minimis, the tenant had the right to dispose of them, otherwise they had to be delivered up to the landlord. The tenant argued that in all cases it could dispose of them and, if they had any value, realise such value.

The Court held, relying on three nineteenth century authorities and an unreported case of 1999 concerning railway sleepers and rails, held that the default position was that severed chattels belonged to the landlord. It was also unnecessary to imply any term altering ownership even if the removal was caused by lawful works of repair, and alternatively, no such term would be implied where such chattels had substantial value. The fact that there was a windfall to the landlord did not matter: either way there would be a windfall to someone.

The application for summary judgment succeeded and delivery up was ordered.

The case is of interest because first, there would have been no litigation if the mural had been ordinary graffiti. Second because it shows that the benefit of third party improvements which become part of the land will go to the landlord.

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