UK: Coventry V Lawrence: More Flexibility About Awarding Damages Over An Injunction

Summary and implications

Following a benchmark Supreme Court ruling (Coventry v Lawrence [2014] UKSC 13) fewer injunctions can be expected to remedy infringements of property rights. Whilst the case concerned a complaint about noise nuisance, the judgment is relevant to all property rights, and in particular whether the court will award damages instead of an injunction where a developer infringes a neighbour's right of light.

The case strongly criticises the recent tendency to mechanically apply existing principles and award an injunction rather than damages. Instead, the Supreme Court endorsed a more flexible approach when awarding a remedy. If the approach suggested by the Supreme Court is adopted in practice, it is likely that fewer injunctions will be granted and that damages will become a more common alternative remedy. This represents a departure from a severe judicial trend to award injunctions even when the loss suffered is slight and the impact on the wrongdoer is severe (HKRUK II (CHC) Ltd v Heaney [2010] EWHC 2245 Ch).

Background facts

Coventry was the lessee of a stadium near Lawrence's house. Planning permission was granted for "speedway racing and associated facilities" to Coventry's predecessor in title in 1975. Stock-car racing began on Coventry's land in 1984, which was not a permitted action under the 1975 planning permission. It was submitted by Coventry that these actions had become immune from planning control after 10 years of operation, however the operations in the stadium created noise that could be heard by local residents.

Lawrence appealed against the Court of Appeal's decision to overturn an injunction granted because actions on Coventry's land did not constitute a nuisance. The Supreme Court restored the initial court's award of an injunction finding that there was a noise nuisance. In doing so, the court addressed two important points.

Nuisance as an easement

Lord Neuberger held that an action that would otherwise constitute a nuisance is capable of becoming an easement. Such an easement would run with the land and therefore bind successors in title.

In order to gain a prescriptive right to carry out an action that would otherwise be deemed a nuisance, it is necessary to prove that the action has been a nuisance for 20 years and not simply that it has been carried out for 20 years. In this case, the Supreme Court held that the requisite 20-year period had not been satisfied and therefore the right by prescription had not been obtained. However, the principle remains an important one for property advisors to be aware of.

Damages over an injunction

Courts have previously taken a rigid approach to awarding an injunction.

They have worked on the principle that an injunction will be awarded unless there are exceptional reasons not to do so. 

Whether such exceptional reasons exist has traditionally been assessed using the "Shelfer test". The Shelfer test dictates that damages can only be awarded instead of an injunction where:

  1. the injury to the claimant's legal rights is small;
  2. the claimant can be compensated in money;
  3. a small payment would be adequate compensation for the claimant; and
  4. it would be oppressive to the defendant to grant an injunction.

The Supreme Court strongly criticised the rigid use of the Shelfer test, and stated that judges should avoid a "mechanical" application of the "out of date" test for awarding damages. 

The new test for damages

The Supreme Court acknowledged the default position that an injunction should be granted where a right is infringed. However, it confirmed that it is open to a defendant to prove that damages are a suitable alternative. In doing so, the Supreme Court stated that:

  • the Shelfer test should not be applied so rigidly as to fetter the court's discretion; and
  • an injunction will not automatically be granted, even if the four elements of the Shelfer test are not satisfied.

Lord Sumption went so far as to suggest that "damages are ordinarily an adequate remedy for nuisance". 

Implications for landowners

The court has a very wide discretion to award an injunction and/or damages. However, the Shelfer test should not be the sole deciding factor, and the courts should adopt a more flexible approach when using their discretion and deciding on an appropriate remedy. After Coventry v Lawrence, fewer injunctions can be expected, with damages more readily awarded instead.

An overlooked aspect of the case is the ruling that an easement to cause nuisance can be acquired by prescription. Advisors must be alert to this possibility.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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