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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> The Creative Foundation v Dreamland Leisure Ltd & Ors  EWHC 2556 (Ch) (11 September 2015)
Cite as:  Ch 253,  3 WLR 1814,  EWHC 2556 (Ch),  WLR(D) 383
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Fetter Lane, London, EC4A 1NL
B e f o r e :
| THE CREATIVE FOUNDATION
|- and -
|DREAMLAND LEISURE LIMITED
JEREMY MICHAEL GODDEN
JORDAN HARRY GODDEN
Romie Tager QC and Simon McLoughlin (instructed by Brook Martin & Co) for the Defendants
Hearing date: 30 July 2015
Crown Copyright ©
MR JUSTICE ARNOLD :
Relevant provisions of the Lease
"(b) To keep the whole of the demised premises including all glass of the windows locks latches and fasteners all boundary fences (if any) and all fixtures and additions thereto in good and substantial repair and condition.
(d) In every fourth and in the last year of the Term howsoever determined to paint all the outside wood iron and other work now or usually painted with two coats of good quality paint and in a proper and workmanlike manner. And with every outside painting to restore and make good all external rendering wherever necessary.
(h) Not without the consent in writing of the Lessor to cut maim or injure any of the walls or timbers of the demised premises or make any alteration in or addition to the demised premises and not to erect or place on the demised premises or any part thereof any temporary erection or shed of any kind whatsoever and not to dig any sand gravel or earth thereout. And also not to impose or place or allow to be imposed or placed upon any of the floors or to suspend or allow to be suspended from the ceilings or roofs of the demised premises anything which may cause undue stress to the floors or timbers of the building
(p) At the expiration or other sooner determination of the Term peaceably to surrender and yield up to the Lessor the demised premises together with all buildings and erections now or hereafter to be built thereon and all landlords fixtures and all improvements to the demised premises in good and substantial repair and condition as aforesaid."
Summary of the Foundation's claim
i) Freehold title to the demised premises is vested in the Landlord. The bricks and cement of the walls of the Building form part of the land.
ii) Upon being sprayed onto the Building, the paint used to create the Mural became part of the land.
iii) During the term of the Lease, Dreamland, as tenant, has a right to use the demised premises as a building in accordance with the terms of the Lease. A lease gives a tenant a qualified right to possession and a tenant has no right to use parts of demised premises, or fixtures, for other purposes.
iv) Dreamland had no right to cut the walls of the demised premises and to remove, and treat as its own, bricks and cement comprising part of the demised premises. In doing so, Dreamland committed a breach of clause 2(h) of the Lease.
v) Upon being cut from the Demised Premises, the bricks and cement, together with the paint sprayed onto them, regained their character as chattels, and title to those chattels vested in the Landlord.
vi) In cutting the walls of the Demised Premises, removing the bricks and cement, shipping the Mural to the USA and putting it up for sale, Dreamland committed the torts of trespass and conversion.
vii) Ownership of the Mural was vested in the Foundation by the assignment.
viii) The Court has power, which it should exercise, to order the delivery up of the Mural to the Foundation pursuant to section 2 of the Torts (Interference with Goods) Act 1977.
Dreamland's defence to the claim
i) Dreamland was 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 (paragraph 12)
ii) 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 (paragraph 13).
Principles applicable to summary judgment applications
Paragraph 12 of the Defence
i) it could be simply painted over;
ii) it could be removed by chemical or abrasive cleaning (with any necessary making good of the paintwork); or
iii) the underlying section of wall could be removed and replaced.
Paragraph 13 of the Defence
"19. The proposition that the implication of a term is an exercise in the construction of the instrument as a whole is not only a matter of logic (since a court has no power to alter what the instrument means) but also well supported by authority. In Trollope & Colls Ltd v North West Metropolitan Regional Hospital Board  1 WLR 601, 609 Lord Pearson, with whom Lord Guest and Lord Diplock agreed, said:
'[T]he court does not make a contract for the parties. The court will not even improve the contract which the parties have made for themselves, however desirable the improvement might be. The court's function is to interpret and apply the contract which the parties have made for themselves. If the express terms are perfectly clear and free from ambiguity, there is no choice to be made between different possible meanings: the clear terms must be applied even if the court thinks some other terms would have been more suitable. An unexpressed term can be implied if and only if the court finds that the parties must have intended that term to form part of their contract: it is not enough for the court to find that such a term would have been adopted by the parties as reasonable men if it had been suggested to them: it must have been a term that went without saying, a term necessary to give business efficacy to the contract, a term which, though tacit, formed part of the contract which the parties made for themselves.'
20. More recently, in Equitable Life Assurance Society v Hyman  1 AC 408, 459, Lord Steyn said:
'If a term is to be implied, it could only be a term implied from the language of [the instrument] read in its commercial setting.'
21. It follows that in every case in which it is said that some provision ought to be implied in an instrument, the question for the court is whether such a provision would spell out in express words what the instrument, read against the relevant background, would reasonably be understood to mean. It will be noticed from Lord Pearson's speech that this question can be reformulated in various ways which a court may find helpful in providing an answer – the implied term must 'go without saying', it must be 'necessary to give business efficacy to the contract' and so on – but these are not in the Board's opinion to be treated as different or additional tests. There is only one question: is that what the instrument, read as a whole against the relevant background, would reasonably be understood to mean?"
"In the case of a lease of a house, if 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 the materials of which that house was before composed … "
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 not read Holroyd J as meaning that, if the tenant removes the chattel for the purposes of repair, then the chattel will belong to the tenant.
"The 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. As against the lessors the permission ought not to be carried beyond what may be reasonably inferred to have been the intention of the parties. The excavations were to be made to a depth of fifteen feet; obviously it was not the intention of the parties that the soil excavated should be piled up on other parts of the small plot of ground comprised in the lease. The 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. The existence of the boat was unknown and its discovery was not contemplated. In my opinion, then, the license to remove and dispose extended to the clay and ordinary soil likely to be found in pursuing the license to excavate, but it did not extend to what was unknown and not contemplated, and therefore did not comprise the boat."
"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 Halls Tramroad. 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 tramroad, as defined in Clause 1, was clearly the property of the lessor as set out not only in Clause 1 but in the recitals. The judge found that, as contemplated by the parties, from time to time rails and sleepers would need to be replaced due to ordinary wear and tear. The obligation on the lessees in Clause 12 is in my view clear and unequivocal. They have the obligation to keep the tramroad in reasonable repair, working order and condition which, in view of the judge's finding, involved the replacement of rails and sleepers from time to time. I can see no warrant for the suggestion that the parties contemplated that the rails and sleepers would become the property of the lessees when removed… "