Interesting property/copyright case from the High Court of England & Wales (chancery trial court). Creative Foundation v. Dreamland Leisure,  EWHC 2556 (Banksy judgment).
Banksy is a pseudonymous British street artist known for satirical and subversive graffiti. In 2014 one of his paintings appeared on the back wall of a game arcade in Folkestone(See image). The building was owned by Stonefield Estates Ltd but the entire building is subject to a 20-year lease to Dreamland Leisure. Seeking to capitalize on the work, Dreamland had the section of wall removed and put up for sale. (The Wall Now) Dreamland justified this move based upon the lease, which included a provision that would arguably require the tenant to remove or paint-over the artwork.
The Landlord (Lessor) transferred its rights to the work in quitclaim form to the Creative Foundation – a registered charity seeking to promote the art scene in Folkestone – who then sued Dreamland for possession.
Question: Who owns the artwork?
Holding: The Court (Justice Arnold) held that, although the tenant was justified in removing the graffiti, the landlord still owns the removed wall and image.
- [I]t is only necessary for me to reach a conclusion as to what term is to be implied into the Lease with respect to the ownership of a part of the demised premises which is justifiably removed by the Lessee from the premises, and becomes a chattel, in accordance with the Lessee’s obligation … to repair the premises, and which has substantial value. In my judgment the term which is to be implied is that the chattel becomes the property of the Lessor. My reasons are as follows.
- First, I consider that the default position is that every part of the property belongs to the Lessor. The Lessee only has a tenancy for a period of time. Thus it is for the Lessee show that it is proper to imply into the Lease a term which leads to a different result.
- Secondly, in my view the mere fact that the Lessee is discharging its repairing obligation does not lead to the implication that it acquires ownership of such a chattel. Dreamland’s argument is based upon the Lessee’s need to be able to remove items generated by the act of repair from the premises. But that would only justify the implication of a term dealing with permission to remove (and, where appropriate, dispose of) such items. It does not justify the implication of a term transferring ownership of the items: see Liverpool City Council v Irwin  AC 239 at 245 (Lord Wilberforce) and compare Ray v Classic FM plc  FSR 622 at 642-643 (Lightman J).
- Thirdly, even if a term may be implied with respect to the ownership of (i) waste or (ii) chattels with no more than scrap or salvage value, it does not follow that it should be implied with respect to the ownership of a chattel with substantial value. Such a term would not be necessary, would not go without saying and would not be one that would satisfy the officious bystander test.
- Fourthly, I do not consider that it makes any difference that the value is attributable to the spontaneous actions of a third party. It is fair to say that, whatever solution is adopted, one party gets a windfall. But who has the better right to that windfall? In my view it is the Lessor. Elwes v Brigg is at least consistent with this assessment.
- Accordingly, I conclude that the Foundation is correct that the defence advanced in paragraph 13 of the Defence is unsustainable as a matter of law.
This decision makes sense in general, although I don’t understand why rights of possession should immediately go back to the Lessor – rather, the lease should seemingly provide possessory rights to the chattel for the next 20 years. (Of course, I have no precedent to cite for this conclusion. DC).
This case makes me think a little about Moore v. Univ. of California where a patient (Moore) sued his doctor who had properly removed Moore’s cancerous spleen but then then made $$$ from the cell line. There, the court came to the opposite conclusion – that Moore had no right to his excised spleen.
But the Copyright: In dicta, the court also wrote that copyright to the work continues to belong to Banksy, which is somewhat interesting to me as well. Banksy owns the copyright even though his/her process of creating the work required commission of a crime and destruction of property.