Landlord and tenant

Lease – Implied term – Mural attributed to street artist being painted on section of wall – First defendant tenant of building removing mural – Claimant being assignee of title to mural and of cause of action of landlord of building – Claimant applying for summary judgment on claim against first defendant for delivery up of section of wall bearing mural

A mural had been painted on a section of wall (the mural). The mural had been attributed to the street artist known as Banksy. The mural was removed by the first defendant (Dreamland) from the building (the building). Dreamland was the tenant of the building.

The claimant (the Creative Foundation) applied for summary judgment in respect of its claim against Dreamland for the delivery up of the section of wall bearing the mural. It brought the claim as the assignee of title to the mural, and of the cause of action of the landlord and freehold owner of the building.

In its defence, Dreamland contended that, first, it had been obliged, or at least entitled, to remove the mural from the building in order to comply with the lessee’s covenants in clause 2(b) and/or 2(d) of the lease. Dreamland did not, in the end, rely upon clause 2(d) of the lease, but it was common ground that its presence in the lease had to be taken into account when construing clause 2(b) of the lease.

Secondly, once removed from the building in compliance with its covenants under the lease, the mural became the property of Dreamland, rather than the landlord, by virtue of an implied term in the lease. The Foundation submitted that the first contention had no real prospect of success and that, even if the first contention was established, the second contention was wrong as a matter of law.

The application would be allowed.

(1) Dreamland had no reasonable prospect of establishing that it had been entitled, let alone obliged, to remove the mural in compliance with its repairing obligation under clause 2(b) of the lease (see [35] of the judgment).

(2) The Foundation was correct that the second defence advanced was unsustainable as a matter of law. The term which was to be implied was that the chattel became the property of the lessor. First, the default position was that every part of the property belonged to the lessor.

The lessee only had a tenancy for a period of time. Thus, it was for the lessee to show that it was proper to imply into the lease a term which led to a different result. Secondly, the mere fact that the lessee was discharging its repairing obligation did not lead to the implication that it acquired ownership of such a chattel.

Thirdly, even if a term might be implied with respect to the ownership of waste chattels with no more than scrap or salvage value, it did 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, it did not make any difference that the value was attributable to the spontaneous actions of a third party. It was fair to say that, whatever solution was adopted, one party would get a windfall. However, the lessor had the better right to that windfall (see [54]-[59] of the judgment).

Accordingly, the Foundation was entitled to summary judgment on its claim against Dreamland for delivery up of the mural (see [60] of the judgment).

Farrant v Thompson [1814-23] All ER Rep 778 considered; Elwes v Brigg Gas Co [1886-90] All ER Rep 559 considered; Herbert v British Railway Board (Unreported, 15 October 1999) considered.

John Machell QC and Adam Rosenthal (instructed by Boodle Hatfield LLP) for the claimant; Romie Tager QC and Simon McLoughlin (instructed by Brook Martin & Co) for the defendants.