When the court has jurisdiction to grant an injunction, it can award damages in lieu of an injunction. Guidance on the exercise of this discretion begins with the “good working rule” provided by AL Smith LJ in Shelfer v City of London Electrical Lighting Co  1 Ch 287; namely, damages in lieu may be awarded if:
- if the injury to the claimant’s legal rights is small;
- and is one which is capable of being estimated in money;
- and is one which can be adequately compensated by a small money payment;
- and the case is one in which it would be oppressive to the defendant to grant an injunction.
In Regan v Paul Properties DPF No 1 Ltd and others  Ch 135 Mummery LJ said:
“Damages in lieu of injunction: the authorities and the general principles
35 Shelfer is the best known case. It is a decision of the Court of Appeal. It has never been overruled and it is binding on this court. The cause of action was nuisance, as in this case, though in the form of noise and vibration rather than interference with a right of light.
36 Shelfer has, for over a century, been the leading case on the power of the court to award damages instead of an injunction. It is authority for the following propositions which I derive from the judgments of Lord Halsbury and Lindley and A L Smith LJJ.
(1) A claimant is prima facie entitled to an injunction against a person committing a wrongful act, such as continuing nuisance, which invades the claimant’s legal right.
(2) The wrongdoer is not entitled to ask the court to sanction his wrongdoing by purchasing the claimant’s rights on payment of damages assessed by the court.
(3) The court has jurisdiction to award damages instead of an injunction, even in cases of a continuing nuisance; but the jurisdiction does not mean that the court is “a tribunal for legalising wrongful acts” by a defendant, who is able and willing to pay damages: per Lindley LJ, at pp 315 and 316.
(4) The judicial discretion to award damages in lieu should pay attention to well settled principles and should not be exercised to deprive a claimant of his prima facie right “except under very exceptional circumstances”: per Lindley LJ, at pp 315 and 316.
(5) Although it is not possible to specify all the circumstances relevant to the exercise of the discretion or to lay down rules for its exercise, the judgments indicated that it was relevant to consider the following factors: whether the injury to the claimant’s legal rights was small; whether the injury could be estimated in money; whether it could be adequately compensated by a small money payment; whether it would be oppressive to the defendant to grant an injunction; whether the claimant had shown that he only wanted money; whether the conduct of the claimant rendered it unjust to give him more than pecuniary relief; and whether there were any other circumstances which justified the refusal of an injunction: see A L Smith LJ, at pp 322 and 323, and Lindley LJ, at p 317.”
The court would usually award damages in lieu where the practical result of an injunction would be to leave the defendant to be held to ransom out of all proportion to the injury suffered by the claimant; but the discretion was likely to be exercised in the opposite direction where a defendant acted with reckless disregard to the claimant’s rights.
In more recent years the courts increasingly adopted a very narrow approach to the grant of damages in lieu of an injunction for infringement of property rights, centred upon the ‘good working rule’. In Coventry v Lawrence  UKSC 13,  2 W.L.R. 433 the Supreme Court deliberately signalled a move away from Shelfer and held that the courts should in future adopt a more open and flexible approach, consistent with what was the exercise of an unfettered discretion, unconstrained by rigid rules, and with no preconceived inclination towards or against awarding damages in lieu of an injunction. The conduct of the defendant could still render it inequitable for the court not to grant an injunction if he has acted in a ‘high-handed manner – if he has endeavoured to steal a march upon the plaintiff or to evade the jurisdiction of the court’. The ‘good working rule’ may remain relevant, though, in that if the four criteria identified by A.L. Smith are satisfied it would normally be right not to award an injunction, in the absence of circumstances pointing the other way.
In Coventry the Supreme Court restored the trial judge’s order based on his finding that C and Moto-Land UK Limited - the respondents - were liable in nuisance to L and Raymond Shields - the appellants. The appellants owned a bungalow 850 yards from a stadium used for various types of noisy motor racing. The trial judge also found that Terence Waters and Anthony Morley and a predecessor landlord (“the Landlords”) were not liable in nuisance.
Lord Neuberger - giving the majority judgement - considered that the law in terms of principle was as stated by Lord Millett in Southwark London Borough Council v Mills  1 AC 1: that “the … persons directly responsible for the activities in question are liable; but so too is anyone who authorised them”. A landlord will not, however, become liable merely by his being aware of the nuisance and taking no steps to prevent it; he must have authorised it by (i) either participating actively or directly in the commission of the nuisance, or (ii) by letting the property.
As to the first limb, Lord Neuberger considered that this was largely a question of fact for the trial judge. In dismissing liability under this limb, his Lordship made the following observations:
- the fact that a landlord takes no steps to stop or discourage a tenant from causing a nuisance cannot itself amount to “participating” in the nuisance;
- even if a person has the power to prevent the nuisance, inaction or failure to act cannot, on its own, amount to authorising the nuisance;
- the fact that a landlord takes steps to mitigate a nuisance can scarcely give rise to the inference that he has authorised it;
- when a landlord sought to avoid or to minimise any restriction on the emission of noise from premises, this did not amount to him participating in or authorising the nuisance; and
- the fact that a landlord seeks to persuade a local authority not to take action in relation to alleged nuisance by his tenant does not involve his authorising or participating in that nuisance.
As to the second limb, simply letting the property, as a result of which a nuisance occurs, will not render the landlord liable unless the nuisance is a ‘virtual certainty’, or there is ‘a very high degree of probability’, that a letting will result in a nuisance.
So the decision in Coventry set the course for damages to be more readily awarded in lieu of an injunction, but in March 2016 judgment was handed down in Peires v Bickerton’s Aerodromes Ltd  EWHC 560 (Ch), which shows that obtaining an injunction is still possible against a noisy neighbour.
P lived in a substantial house with grounds next to the aerodrome. She accepted that there would be a certain level of noise coming from the aerodrome, but argued that the noise of helicopters performing training operations at a point close to the boundary was excessive and unreasonable - the noise from the helicopters was very different to other activities, being extremely loud and continuing for what P argued were unacceptable periods.
The training consisted of taking off and landing on a slope, and B argued that that area was uniquely useful for that purpose and was the only place where it could be done; B argued that the helicopter noise was neither unreasonable nor excessive, and no worse than other operations at the aerodrome. P’s case, however, was that the noise was a nuisance and seriously affected her enjoyment of her property in respect of the garden and the main parts of the house.
The parties did not agree as to the frequency of the training flights: B argued that it took place 1.5 times a week for 15 minutes. P accepted that this would not be an actionable nuisance, but contended that in reality it was far more frequent, and continued for an unreasonable length of time; it was unpredictable, and interfered with her enjoyment of her property.
Following Coventry, Peter Smith J held that the court had to balance P’s right to the undisturbed enjoyment of her property, against B’s right to use its property for its own lawful enjoyment. There had been regular complaints about noise nuisance since 1970. It was impossible to use the gardens when the helicopters were performing their training operations. P’s evidence about the nature and frequency of the noise was compelling and B’s was unconvincing. The court rejected B’s case that the helicopter noise was neither unreasonable nor excessive.
B had argued that that as helicopter activity had commenced at the aerodrome in the early 1960s, it had acquired a prescriptive right to carry on the operations. The court held that the right to make a noise nuisance could not in the circumstances be established by prescription because the operations had been carried out despite protests, and so it would have been established by force; and B provided no evidence about the extent of noise before 2014 and therefore had not shown what would be the defined level of noise that falls within the claimed right. B therefore could not establish a right in the nature of an easement to carry on the interference.
Further, B could not disavow the operations carried on in the aerodrome because it had clearly licensed the complained of activity, and it was therefore liable for all activities carried out by the helicopters on the slope. The activities carried on by B were an unreasonable nuisance and interfered with P’s reasonable use of her property. The court held that two fixed day operations of 15 minutes each would be reasonable and not actionable, and therefore granted an injunction to limit the activity.
The judgment in Peires arguably marks a departure from the approach in Coventry when applying the balancing exercise between the right of a person to the undisturbed enjoyment of his property against the right of another person to use his own property for his own lawful enjoyment. If a party wishes to assert a prescriptive right to cause a noise nuisance, great care will have to be given as to the evidence necessary to establish (i) when the nuisance began and (ii) the precise nature and extent of the easement it seeks to establish. Consideration would also have to be given to whether the nature of the noise has changed over time: Peter Smith J commented that helicopters in the 1960s differ markedly from those in flight today.
As Peter Smith J said, ‘in nuisance cases like this, there must be give and take’; ‘the Claimant’s approach has been one of reasonable restraint; the Defendant’s approach regrettably has not been the same’.