The council, considered to have one of the toughest policies against anti-social behaviour of any council, brought evidence at Newcastle Crown Court that the woman had breached an injunction taken out against her in January by continuing with noisy and anti-social behaviour.
But despite accepting evidence from a neighbour that the injunction had been breached on at least 30 occasions, Judge Esmond Faulks said he was not satisfied the woman had intended to create a nuisance when neighbours were disturbed by excessive noise from her flat.
The woman, a young single mother who cannot be named, had an injunction taken out against her in January after complaints from neighbours about constant noise.
He said: 'We work very closely with our tenants and residents to protect their right to the peaceful enjoyment of their homes. This partnership with tenants is absolutely central to the way we work.'
The council takes out approximately 100 possession orders and injunctions every year specifically against nuisance neighbours.
Of those, 90 are resolved through counselling and other methods without further recourse to the courts and 10 result in evictions and repossessions.