The law of nuisance: are landlords or tenants to blame?

Focus: The law of nuisance in the context of leasing Services: Property & projects Industry Focus: Property The law of nuisance is concerned with balancing the conflicting interests of adjoining owners. In this article, we examine the law of nuisance in the specific context of leasing and consider its impact on the landlord-tenant relationship.

Nuisance caused by the landlord

It is difficult to envisage circumstances in which a tenant might be liable for nuisance caused by a landlord to third parties.

However, it is not uncommon for a tenant to have a claim against a landlord for loss suffered by the tenant itself, arising from the acts of the landlord. This is most likely to occur in connection with a breach of the tenant's right to 'quiet enjoyment'. The covenant for quiet enjoyment is an issue we have covered in previous alerts, most recently in February 2015.

A good example of a tenant's success in bringing this type of claim against a landlord is the case of Lagouvardis v Brett and Janet Cottee Pty Limited [1995] ANZ ConvR 590. There, the tenant's permitted use of the leased premises was for computerised signwriting and automotive windscreen and domestic window tinting. The tenant complained that dust was entering the premises from a car park owned by the landlord, situated immediately behind the tenant's workshop. The dust interfered with the fixing of the window tint film which resulted in considerable rectification costs. The tenant subsequently vacated the premises and the landlord claimed for unpaid rent and outgoings. In response, the tenant cross-claimed seeking damages for nuisance or for breach of the covenant for quiet enjoyment.

The Court held that the tenant was entitled to terminate the lease for repudiation by the landlord and to recover damages, with no liability for rent for the remainder of the lease term after termination. In reaching this conclusion, the Court made the following noteworthy...