Coventry and others v Lawrence and another

The Supreme Court considered four consequential issues arising from its earlier decision in Coventry v Lawrence [2014] UKSC 13. The court applied established principles of private nuisance, reaffirming that a landlord is liable for nuisance only if he authorised it by letting (which requires the nuisance to be an inevitable or very probable consequence of the letting) or if he participated directly in the nuisance. On the facts the majority held that the landlords had not authorised or actively participated in the nuisance and therefore the claims against them were dismissed, although two members of the court would have reached the opposite conclusion on participation. The court directed that the injunction restraining noise should be suspended until the claimant’s house (Fenland) is again fit for residential occupation and gave both parties liberty to apply to vary or discharge the injunction. The court also adjourned consideration of whether the costs order (notably recovery of a claimant’s success fee and ATE premium) engaged article 6 or A1P1 of the Convention for further argument and possible involvement of the Attorney-General and Secretary of State for Justice.

Background and parties:

• The appeal followed this Court’s earlier decision restoring the trial judge’s finding that occupiers of a Stadium and a Track caused nuisance by noise to the owners of a bungalow called Fenland. The appellants in this procedural appeal were the operators of the Stadium and the Track; the respondents were the owners/occupiers of Fenland. Claims had also been made against two landlords.

Relief sought and procedural posture:

• The trial judge had awarded damages, granted an injunction limiting noise (with a long-stop date), dismissed claims against the landlords and ordered the defendants to pay 60% of the claimants’ costs. This Court’s earlier judgment restored the orders for nuisance against the operators and for damages. The present judgment determined four consequential questions: (1) whether the injunction should be suspended until Fenland is rebuilt, (2) when parties may apply to vary the injunction, (3) whether the landlords were liable in nuisance, and (4) whether the costs order infringed article 6 or A1P1 of the Convention.

Issues framed by the court:

1. Whether an injunction intended to protect residential use should take effect while the protected dwelling is uninhabitable.
2. Whether the parties should be given immediate liberty to apply to vary or discharge the injunction.
3. The legal test for landlords’ liability in nuisance: (a) liability by authorisation in the letting (requiring the nuisance to be an inevitable or highly probable consequence of the letting), and (b) liability by direct participation in the nuisance after letting.
4. Whether the costs recovery regime introduced by Part II of the Access to Justice Act 1999 (notably recoverability of the success fee and ATE premium) is compatible with Convention rights (article 6 and A1P1), and whether the court should grant relief or make a declaration of incompatibility.

Court’s reasoning:

• Injunction: The injunction should be suspended while Fenland remains unfit for occupation because its purpose is to protect residential enjoyment; there was no basis for the trial judge’s long-stop date and both parties should have liberty to apply immediately to vary or discharge the injunction.
• Landlords’ liability: The court reviewed authority (including Malzy v Eichholz, Smith v Scott and Southwark LBC v Mills) and concluded that mere knowledge of a nuisance, failure to prevent it, or actions taken to resist abatement do not amount to authorisation or participation. Authorisation by letting requires the nuisance to be essentially inevitable or a very high probability. Participation requires active involvement after letting. On the factual findings made at trial, the majority concluded the landlords had not authorised or actively participated in the nuisance and dismissed the claim against them; however, two Justices considered the evidence sufficient to find participation and would have held the landlords jointly liable.
• Costs and Convention rights: The court expressed grave concern about the scale and structure of recoverable costs under the 1999 regime (base costs, success fee uplift and ATE premium). It recognised arguable Convention difficulties (notably article 6 and proportionality) but concluded that the Government should be given an opportunity to be heard. The question was therefore adjourned for further hearing with notice to the Attorney-General and Secretary of State for Justice, and possible involvement of interveners.

Subsidiary findings and practical outcome:

• Damages previously awarded at trial remain restored. The court expressed a preliminary view that the landlords should recover no costs from the claimants because the legal basis of their success in this Court was not the basis argued at trial.
• The court flagged the need for care over further litigation costs and indicated potential routes for further procedure.

The Supreme Court (majority) suspended the injunction until Fenland is fit for residential occupation, granted each party immediate liberty to apply to vary or discharge the injunction, dismissed the nuisance claims against the landlords on the majority view that they neither authorised nor actively participated in the nuisance, and adjourned consideration of whether the costs order (including recovery of success fee and ATE premium) infringes article 6 or A1P1 for further hearing with notice to the Attorney‑General and Secretary of State for Justice. The Court’s reasoning emphasised the established tests for landlords’ liability in nuisance: authorisation by letting requires the nuisance to be virtually certain or highly probable, and participation requires active involvement after letting; neither test was satisfied on the majority’s view of the facts.

On appeal from the Court of Appeal ([2012] EWCA Civ 26). This judgment followed and dealt with consequential matters arising from this Court’s earlier decision in Coventry v Lawrence [2014] UKSC 13, which had reversed the Court of Appeal and restored the trial judge’s order finding nuisance by the Stadium and the Track.