In our insight article on 11 June 2018 (available here) we set out the legal requirements to qualify the existence of an easement. The Supreme Court’s decision in Regency Villas Title Ltd and other v Diamond Resorts (Europe) Ltd and others [2018] UKSC 57 on 14 November 2018, has affirmed these legal requirements and acknowledged that the scope of freehold covenants can be extended to include recreational easements.
The issue considered here was whether comprehensive rights granted to timeshare owners to use and enjoy recreational and sporting facilities in an adjacent leisure park both satisfied the characteristics of easements and could be enforced by the timeshare owners against owners of the leisure park.
Potted History of Regency Villas
Regency Villas once formed part of a substantial country estate that had been sold off in part in 1967. The retained part of the estate and mansion house, being the land allegedly burdened by the easement, was developed into a leisure park including a golf course, outdoor heated swimming pool, tennis and other facilities in the mansion house. The transferred part of the estate, now called Regency Villas, was eventually reacquired and converted into 26 timeshare apartments. When Regency Villas was sold off again in 1981, the transfer purported to grant rights to its purchaser to freely use the facilities of the neighbouring leisure park.
At the time of the transfer most of the relevant sporting and recreational facilities at the leisure park had been constructed, however, over a number of years some of the facilities, including the outdoor swimming pool and riding stables were closed and demolished and a new indoor swimming pool was built.
The owner of Regency Villas and the timeshare owners claimed (amongst other relief) a declaration that they were entitled under the easement to use all of the facilities in the leisure park as they existed from time to time.
At first instance, the High Court ruled in favour of Regency Villas, granting it an easement in respect of all the facilities. The Court of Appeal followed suit but took a more narrow view, limiting the declaration to only those facilities which existed at the time of the grant. It refused to include any facilities which were located in the mansion house because such areas could not provide a use and benefit without the chattels being provided. The owner of the leisure park, Diamond Resorts, appealed to the Supreme Court and Regency Villas cross-appealed on the decision to limit the rights in respect of the indoor facilities.
Decision
In considering the construction of the grant and the characteristics of easements, the Supreme Court agreed with the High Court and ruled in favour of Regency Villas to include all the facilities in the grant of an easement, including the indoor facilities.
Construction of the grant
In considering the true construction of the grant and the contextual background, the Supreme Court decided that the parties’ common intention was to grant an easement rather than a purely personal right. However, whilst the Court of Appeal treated each facility separately and limited the rights granted only to the existing facilities, the Supreme Court decided that the grant consisted of “a single immediately effective grant” to use all existing and future, additional or replacement facilities from time to time. The Court of Appeal was therefore wrong to treat each facility as the subject of a separate grant of rights and to limit the easement to only those facilities in use at the time of the transfer. The facilities were bound to change over time and therefore should also extend to the new indoor swimming pool.
Characteristics of easements
The Supreme Court examined the following four characteristics as laid down in In re Ellenborough Park [1956] Ch 131 to see if an easement existed:
(1) There must be a dominant and a servient tenement;
(2) The easement must accommodate the dominant tenement;
(3) The dominant and servient owners must be different persons; and
(4) A right over land cannot amount to an easement unless it is capable of forming the subject-matter of a grant.
The question in this case turned on whether the second and fourth characteristics were satisfied.
(2) The easement must accommodate the dominant tenement
It is a question of fact as to whether the right is connected to the enjoyment of the benefiting land. In this case, the Supreme Court held that the recreational nature of timeshare developments meant that the grant of rights to use adjacent facilities was of service, utility and benefit to Regency Villas. Accordingly, the second condition was deemed satisfied.
(4) Right must be capable of forming the subject-matter of a grant
The Supreme Court held that the timeshare owners were able to use the facilities without taking control of the leisure park and therefore did not deprive Diamond Resorts of lawful possession or control. Also, it was not relevant whether Diamond Resorts did or did not maintain or operate any of the facilities. For example, the timeshare owners could provide their own nets for the tennis courts if Diamond Resorts fail to do so. As such, the fourth condition was deemed satisfied.
New species of easement?
Whilst this case has not altered our understanding of the way in which easements are characterised, the Supreme Court has extended the law to recognise recreation as new species of easement. According to Lord Briggs, “the common law should…accommodate itself to new types of property ownership… The timeshare development which is quintessentially for holiday and recreational use is just such a new type…”
However, not all Lord Justices agreed. In the only dissenting judgment, Lord Carnwath did not agree to extend the established legal principles of easements to extend to a leisure park where the facilities cannot be enjoyed without the active participation of the owners.
As always with easements, each case will depend on their own facts so owners of land looking to interfere with or enforce any such rights should always seek legal advice before doing so.
The information contained in this guide is intended to be a general introductory summary of the subject matters covered only. It does not purport to be exhaustive, or to provide legal advice, and should not be used as a substitute for such advice.
Markus Klempa