Coventry v Lawrence (No 2) [2014] UKSC 46 (23 July 2014)

Following a successful nuisance claim regarding noise from a motorsport stadium and track, consequential issues arose concerning suspension of the injunction, landlord liability for tenant's nuisance, and whether costs orders including success fees and ATE premiums infringed Convention rights. The Court addressed landlord participation in nuisance and flagged serious concerns about litigation costs.

Facts

This judgment addressed consequential issues arising from the Supreme Court’s earlier decision in Coventry v Lawrence [2014] UKSC 13, which held that occupiers of a Stadium and Track were liable in nuisance to the owners of a nearby residential bungalow, Fenland, some 850 yards away. The nuisance arose from speedway racing, stock car racing, and motocross activities. The trial judge had granted an injunction limiting noise levels, awarded damages of approximately £10,350 against each respondent, and ordered the respondents to pay 60% of the appellants’ costs.

The Property

Fenland had been damaged by fire and remained uninhabitable. Four issues arose: (1) whether the injunction should be suspended until Fenland was rebuilt; (2) when parties could apply to vary the injunction; (3) whether landlords Terence and James Waters were also liable in nuisance; and (4) whether the costs order infringed Article 6 of the European Convention on Human Rights.

Issues

Suspension of Injunction

Whether the injunction should take effect before Fenland was restored to habitable condition.

Landlord Liability

Whether landlords could be held liable for their tenant’s nuisance through authorisation by letting or through direct participation in the nuisance.

Costs and Convention Rights

Whether requiring respondents to pay success fees and ATE premiums under the costs regime introduced by the Access to Justice Act 1999 infringed their Convention rights.

Judgment

Injunction Suspension

Lord Neuberger held that the injunction should be suspended until Fenland was fit for residential occupation. The purpose of the injunction was to prevent interference with ordinary residential use and enjoyment of Fenland. While the property remained unoccupiable, maintaining the injunction would cause damage to the respondents with no concomitant benefit to the appellants.

Landlord Liability

The Court unanimously held that the landlords were not liable in nuisance. Lord Neuberger explained the applicable test, citing Lord Millett in Southwark London Borough Council v Mills [2001] 1 AC 1, that landlords must either participate directly in the commission of the nuisance or be taken to have authorised it by letting the property. For authorisation by letting, there must be virtual certainty or a very high degree of probability that the letting will result in nuisance.

The Court found that nuisance was not an inevitable consequence of the lettings, as the activities could be carried on without causing nuisance. Regarding participation, while Mr Waters had taken a leading role in fighting noise abatement measures and coordinating responses to complaints, this fell short of active participation in the nuisance. Lord Carnwath dissented on this issue, finding the landlords’ involvement sufficient to constitute participation.

Costs

Lord Neuberger expressed grave concern about the level of costs, noting the appellants’ base costs amounted to £398,000, with success fees of approximately £319,000 and ATE premiums of about £350,000. He described the figures as disturbing and the system introduced by the 1999 Act as having a malign influence.

The Court adjourned consideration of whether the costs regime infringed Convention rights, directing that the Attorney-General and Secretary of State for Justice be notified and given opportunity to address the Court before any determination was made.

Implications

This judgment clarifies the test for landlord liability in nuisance, confirming that mere knowledge of tenant’s nuisance combined with failure to act is insufficient to establish liability. Landlords must actively or directly participate in the nuisance-creating activities to be held jointly liable.

The case also highlights serious concerns about the costs regime under the Access to Justice Act 1999, particularly regarding the recoverability of success fees and ATE premiums from unsuccessful defendants. The Court’s decision to seek government submissions before ruling on Convention compatibility signalled potential constitutional implications for the legal aid funding system.

The judgment reinforces that courts will take a practical approach to the timing of injunctive relief, ensuring remedies serve their intended purpose rather than operating in a vacuum where the protected interest cannot currently be enjoyed.

Verdict: The appeal was disposed of as follows: (a) the injunction was suspended until Fenland was fit for residential occupation; (b) parties were given liberty to apply at any time to vary or discharge the injunction; (c) the claim in nuisance against the landlords was dismissed with no order for costs; (d) consideration of whether the costs order infringed Convention rights was adjourned pending notification to the Attorney-General and Secretary of State for Justice.

Source: Coventry v Lawrence (No 2) [2014] UKSC 46 (23 July 2014)