The buyer is fine with it, so everything is cool, but I find it weird that a lot of people on this thread seem to think that art is exempt from property law. I know this happened in London, but unless British law is very different than that of the US, the buyer could have possibly sought legal action if they weren't okay with it.
That's why the timing was critical. The auction created a contract to buy the painting, which would be finalized with the exchange of money for the painting. When the shredder was triggered, the painting was still the property of the seller and in the custody of the auction house. The buyer at that point had the choice of going through with the sale or backing out (auction houses have procedures for objects damaged in their custody which would have allowed the buyer to back out of the sale since the painting was materially different then at the time the bidding ended). If the seller was Banksy or a proxy, then it was still their property at the time of the shredding.
The only legal exposure would be if (1) Banksy was neither the buyer nor the seller, and neither party wanted the painting in its altered form or (2) the seller or the auction house were to file an insurance claim.
An insurance claim would be interesting in this case, as most people don't file a claim if their property increases in value. Typically, an insurance company either pays the cost of restoration or, in the event of a total loss, they pay the insured value and receive title to the property (in the case of lost or stolen property, that means they are the legal owners if the item is recovered). Insurers would probably be very happy to pay the auction value for the piece and turn around and sell it at the higher value. But that makes the question of criminal charges difficult, since the definition of misdemeanor as opposed to felony vandalism is based on the dollar amount of the damage. How do you charge Banksy for increasing the value of the painting?
