Coventry and others v. Lawrence and another (No. 2)  UKSC 46
Coventry v. Lawrence first appeared before the Supreme Court in February 2014. The Supreme Court handed down a seminal judgment on issues of nuisance and public policy. The Supreme Court has now determined a separate issue arising from the same dispute, namely the liability of a landlord for a nuisance caused by the landlord's tenant. In summary, a landlord will not be liable for a nuisance caused by its tenant except where the landlord authorises or directly participates in the tenant's nuisance.
The background is straightforward. The landlord let its moto-cross track and speedway facility to a tenant. The activities of the tenant amounted to a nuisance for which the tenant was liable to the appellants. The landlord had previously used the facilities for motorsport. Further, the landlord:
- did nothing to persuade the tenant to stop or reduce the nuisance;
- erected a hay-bale wall on the boundary of the facility and the appellants' property;
- liaised with the local authority in respect of noise issues;
- appealed against a noise abatement notice; and
- co-ordinated responses to noise complaints.
However, the landlord had no involvement in the motorsport activities, had no remaining property interest at the facility and did not receive any profits arising from the activities carried out at the facility.
The Supreme Court had to ascertain if the landlord should be liable to the appellants for the nuisance caused by the tenant.
In summarising the law, in order for landlord to be liable for its tenant's nuisance, it must be an inevitable or close to inevitable consequence of the grant of the lease that a nuisance will be caused for the landlord to be liable. Whilst a person carrying out the nuisance will be liable, a person who authorises the nuisance will also be liable.
However, "it is not enough for [the landlord] to be aware of the nuisance and take no steps to prevent it". In order to be liable, the landlord "must either participate directly in the commission of the nuisance, or they must be taken to have authorised it by letting the property" (Southwark London Borough Council v. Mills ).
In Smith v. Scott  it was held that there had to be a "virtual certainty or a very high degree of probability that a letting would result in a nuisance". Malzy v. Eichholz  clarified that "authority to conduct a business is not an authority to conduct it as to create a nuisance unless the business cannot be conducted without a nuisance". Therefore, the mere fact that a letting could result in a nuisance is insufficient. In order for a landlord to be liable the nuisance must be an inevitable or near certain consequence of the letting.
Whether a landlord is liable is a question of fact. On the limited facts before the Supreme Court, the Court concluded that the landlord was not liable. Despite the landlord's awareness of the tenant's intended activities, it was not inevitable that the tenant would create a nuisance. It was possible that the activities could have been carried out without a nuisance being caused.
Whilst the landlord did nothing to persuade the tenant to stop the nuisance or reduce the noise caused, this did not amount to participating in the nuisance. The Court also rejected the applicants' argument that the erection of the hay-bale wall amounted to participation in the nuisance – the bales were measures aimed at mitigation and could not be seen as an authorisation of the nuisance itself.
In respect of the landlord's dealings with the local authority, the appeal of the abatement notice and the noise complaints, the Court held that the landlord had an interest in ensuring that the tenant's activities occurred. Seeking to persuade the local authority on noise issues was not akin to authorising or participating in the nuisance. A member of the public could lobby a local authority and this could not be construed as permitting the nuisance. In this sense, the landlord was no different. Similarly on the appeal, the landlord was served with notice of the appeal. Responding to it could not amount to authorising or participating in the nuisance. Finally, in addressing complaints, the landlord had a legitimate interest in doing this in order to protect its interest in having a viable tenant operating from the demised premises.
Conversely, there was clear evidence that the landlord had no involvement in the tenant's operations, did not retain land where the nuisance emanated from and, further, did not profit from the nuisance carried out.
In summary, on the facts, the nuisance was not an inevitable or near certain consequence of the letting. Further, the actions of the landlord could not be seen as authorising or participating in the nuisance. Landlords should always carefully consider what their tenants are proposing to do with the demised premises to ensure there is no risk of an unintended authorisation of a tenant's nuisance.
Finally, the Supreme Court noted that in the event that the landlord had authorised the nuisance, a 'no nuisance' covenant in the lease would have been unlikely to have assisted the landlord in avoiding liability. Therefore, the effectiveness of such is limited in circumstances where there is an inevitability or near inevitability of the letting creating a nuisance.