Regency Villas v Diamond Resorts: A Modern Easement for Modern Times

I suspect that for many, the perception of land law is that it involves hours of delving into musty files and poring over aged documents. Whilst this can sometimes be the case, it is an area of law which will often cast an interesting light on societal change. A recent Supreme Court decision is an example of just such a case and indeed Lord Briggs, in giving the leading judgment, stated that, “The common law should, as far as possible, accommodate itself to new types of property ownership and new ways of enjoying the use of land”.

The case in question, Regency Villas Title Ltd v Diamond Resorts (Europe) Ltd & Others [2018] EKSC 57, represents an important development in the law and confirmed that the right to use sporting facilities can amount to an easement. As Lord Briggs commented, “This appeal offers an opportunity for this court to consider, for the first time, the extent to which the right to the free use of sporting and recreational facilities provided in a country club environment may be conferred upon the owners and occupiers of an adjacent timeshare complex by the use of freehold easements.”

The Background

An easement is a right to use another’s land for a particular purpose, a common example being the right to drive over your neighbour’s driveway (the “servient” land) in order to access your own (the “dominant land”). An easement is a right that “runs with the land”, meaning that it is more than a mere contract: successive owners of both the dominant and servient land will be bound by its terms. In addition, and as set out in the key case of Re Ellenborough Park [1956] Ch 131, an easement will only be created if 4 essential characteristics are met: the easement must “accommodate” (i.e. be of practical benefit or use to) the dominant land; it cannot be too vague; it cannot amount to a right of occupation, and it cannot impose positive obligations on the servient owner.

The case of Regency Villas concerned facilities at the Broome Park Estate, a country estate in Kent with two large houses and extensive grounds. In the late 1970s, Gulf Investments Ltd purchased part of the Estate, including one of the houses, and created a timeshare complex and country club (the “Broome Park Estate” development). Leisure and community facilities were built, and the project was a great success, so much so that within a short period of time the remaining part of the Estate, including the second house, was purchased by Gulf Investments. Additional timeshare units were developed on that land and named “Regency Villas”.

In 1981, Gulf Investments transferred the Regency Villas part of the estate to Regency Villas Title Ltd and granted the Regency Villas timeshare owners the right to use various leisure and recreational facilities on the Broome Park Estate.

The Issue

Things started well but over time many of the facilities fell into disrepair or disuse: the swimming pool was filled in and the riding stables were knocked down. Sometime later, a new swimming pool was built within the original Broome Park Estate development, but the Regency Villas timeshare owners were not permitted to use it. The relationship between Gulf and Regency Villas further deteriorated with the result that the Regency Villa timeshare owners were denied the use of any of the facilities in the original complex.

Understandably dissatisfied with the situation, Regency Villas began legal action to establish the right to use the leisure facilities now denied to its timeshare owners. At first instance, the Judge found that the original 1981 transfer created easements to use the grounds, sporting and recreational facilities on the original Broome Park Estate complex. On appeal to the Court of Appeal it was held that, whilst the right to use the recreational facilities did amount to an easement, the 1981 transfer only granted rights to the facilities that were in existence at that time.

The Defendant’s position, amongst other things, was that the access to and use of the leisure facilities did not satisfy the “accommodation” requirement of the Ellenborough Park test: whilst access might add to the timeshare owners’ enjoyment it was not of practical use or benefit to their land.

The Supreme Court’s Decision

On further appeal to the Supreme Court it was found, in a majority decision (Lord Carnwath dissenting), that the trial judge’s interpretation of the transfer and of the law had been correct.

Despite considering a range of cases, including that of Mounsey v Ismay (1865) 3 H & C 486 which had held that the right to hold horse races did not amount to an easement, the court’s conclusion was (per Lord Briggs) that, “Whatever may have been the attitude in the past to “mere recreation or amusement”, recreational and sporting activity of the type exemplified by the facilities at Broome Park is so clearly a beneficial part of modern life that the common law should support structures which promote and encourage it, rather than treat it as devoid of practical utility or benefit”.

In essence, the Supreme Court found that a single easement had been granted to the Regency Villas timeshare owners that permitted them to use the leisure facilities in the original complex regardless of when those facilities might be built.

Lord Briggs held that, “Where the actual or intended use of the dominant [land] is itself recreational, as will generally be the case for holiday timeshare developments, the accommodation condition [in Ellenborough Park] will generally be satisfied”. He also commented that, “It is to my mind plain beyond a doubt…that the grant of rights to use an immediately adjacent leisure development with all its recreational and sporting facilities is of service, utility and benefit to the timeshare apartments…”.

Comment

Whilst this ruling is of particular interest and importance to developers involved in the construction and maintenance of leisure facilities and complexes, the case is significant for a number of reasons. Firstly, it sees the Supreme Court recognising the importance of sport and recreation in modern life; in addition, it confirms the ongoing relevance of the Ellenborough Park case and the need to satisfy its four requirements, and lastly it demonstrates once again that the common law is able to bend and shape to societal change and development.

Becket Chambers has specialist barristers able to advise on property-related disputes and issues, including those concerning easements and rights of way. Our team also have expertise in boundary disputes, landlord and tenant and planning law.