On 26 February 2014 the UK Supreme Court gave its judgment in the case of Coventry v Lawrence. The case is significant not only because it affects the practice of the law of private nuisance but more importantly because the decision effectively overrules the test outlined in the earlier Shelfer case which, in recent times, has been almost invariably applied by the courts when deciding whether to make an order to prevent a party taking a particular step (known as an “injunction”) to protect property rights or instead to award damages to compensate for an infringement.

Injunction or damages

The grant of an injunction is a discretionary remedy, however, in claims brought to protect property rights, the courts had begun to regard an injunction as the normal and proper remedy. In Shelfer v City of London Electric Lighting Company (1895), the Court of Appeal upheld the grant of an injunction stating

“[a] person committing a wrongful act … is not thereby entitled to ask the court to sanction his doing so by purchasing his neighbours rights, by assessing damages … leaving his neighbour with the nuisance or his lights dimmed …”.

All four of the following Shelfer tests had to be satisfied if a developer was to escape an injunction:

  • the injury to the adjoining owner’s legal rights must be small;
  • the injury must be capable of being estimated in money;
  • the injury can be adequately compensated by a small money payment; and
  • the case must be one in which it would be oppressive to grant an injunction.

Where the test had been applied in later decisions it led to some surprising results. In Regan v Paul Properties (2007) and HKRUK II (CHC) Ltd v Heaney (2010), injunctions were granted or upheld on the basis that any one of the four elements of the Shelfer test was missing, notwithstanding the surrounding circumstances. Heaney concerned a building which had been completed and occupied by tenants. The injunction required its partial demolition.

In the Lawrence case the president of the Supreme Court, Lord Neuberger, who was one of the country’s foremost advocates in real- estate related matters before he became a judge, put forward a more flexible approach:

“It seems to me that (i) an almost mechanical application of the … four tests, and (ii) an approach which involves damages being awarded only in ‘very exceptional circumstances’, are each simply wrong in principle, and give rise to a serious risk of going wrong in practice.”

He went on in his judgment to outline the proper approach which can be summed up as follows:

  • The starting position for the court will be that the claimant is entitled to an injunction.
  • The burden is then on the defendant to persuade the court to exercise its discretion and award damages instead of an injunction.
  • The court can have regard to all the relevant circumstances including the public interest, planning permissions, financial implications for the parties and particular harm to one or other of the parties.

Nuisance

A cause of action in private nuisance will arise where the defendant carries out an unreasonable activity on its own land, which is not otherwise permitted, and which interferes with the claimant’s reasonable enjoyment of its land. If the defendant can show that the use of its own land is reasonable then no cause of action arises.

In determining whether a nuisance has in fact occurred the court will consider all the factual circumstances. The established character of the area is relevant to that assessment. As stated by Thesinger LJ in the nineteenth century case, Sturges v Bridgman (1879), “what would be a nuisance in Belgrave Square would not necessarily be so in Bermondsey”. At the time Belgrave Square was (as it remains) a part of London inhabited by the wealthy and the aristocracy while Bermondsey was an industrial area south of the River Thames where the working classes lived.

The dispute in the Lawrence case

The defendants were the operators of the Mildenhall Stadium in Cambridgeshire which hosts the Fen Tigers speedway racing team. The stadium had been operating since 1975 with the benefit of planning permission for speedway racing. In fact the stadium had been used at various times for speedway and stock-car/ banger racing and for motocross events. In 1997 a certificate of lawful existing use (CLEUD) was issued pursuant to section 191 of the Town and Country Planning Act 1990.

In January 2006 Ms Lawrence and her partner bought a bungalow called “Fenland” which was about 560 metres from the stadium. Fenland was otherwise surrounded by open agricultural land with the nearest other residential property being around one mile from the stadium. Fenland had been built in the 1950s. Ms Lawrence claimed to have had no knowledge of the racing use of the stadium at the time she bought Fenland. After initial complaints Ms Lawrence issued proceedings seeking an injunction to prevent the activities at the stadium causing a private noise nuisance.

The decision

The Supreme Court considered the following issues.

Could the stadium properly argue that it had acquired a right to emit noise over Fenland by prescription (ie by reason of the long established noisy use at the stadium without complaint)?

  • The court found that it is possible to acquire a right to emit noise over land which would otherwise have been a nuisance. In so finding the court effectively created a new category of easement.
  • Such an easement can be acquired by prescription (deemed grant arising from at least 20 years’ use). Proving 20 years’ use above the “nuisance” threshold will however pose a practical and costly problem for any defendant seeking to run this defence.

Was it relevant that Ms Lawrence had “moved to the nuisance” by purchasing Fenland in 2006?

  • The court upheld the longstanding principle that it is no defence to say that the claimant has “come to the nuisance”. A claimant who buys a property can complain of a nuisance and seek an injunction even if they purchased with full knowledge of the issue.
  • However Lord Neuberger’s judgment made clear that it is open to a defendant to argue that the nuisance has only come about because the claimant has built upon or changed the use of its land. In those circumstances, the claimant has effectively created a nuisance from a pre-existing lawful activity and the claim will fail.

Did the court have to consider the stadium’s own noisy use as part of the “character of the locality”? The court said the proper approach was to include the defendant’s use as part of the “character of the area” unless either:

  • it is impossible for the defendant to carry out the activity without creating a nuisance; or
  • the defendant does not have planning permission for the activity.

Does the grant of planning permission for a particular activity create a defence or alter the “character of the locality”?

  • The decision of what constitutes a nuisance is to be made by the court not the planning authorities. The grant of planning permission or its conditions are not relevant to the issue of whether an activity constitutes a nuisance.
  • However where a planning permission stipulates limits as to frequency or intensity (eg hours of operation or decibel levels), then such conditions may be considered by the court in deciding whether the claimant’s nuisance claim succeeds on the facts.

Conclusion

Following the decision in Lawrence, the court may now be much less willing to order an injunction in any claim where such an order is sought to stop a particular use of land, and instead, be more open to an award of damages. The effect of the Supreme Court decision will therefore be wide ranging and will be particularly welcomed by property developers dealing with neighbour and rights of light disputes.

Developers operating schemes in England and Wales can take some comfort that the Supreme Court has stressed the courts’ discretion to refuse an injunction even where substantial infringement of property rights has been established. Whilst this might not mean the end of substantial payments being made to neighbours to allow a development to proceed, the likelihood of a neighbour being able to halt the development completely by injunction will be much diminished.