Regency Villas Title Ltd & Ors v Diamond Resorts (Europe) Ltd (Rev 1)

Rights to use sporting and recreational facilities may constitute easements where they accommodate identified dominant land and the grant shows an intention to create rights benefiting successors and occupiers. Such rights are not invalid merely because they concern recreation, provided they are sufficiently certain, do not confer joint occupation, and do not substantially deprive the servient owner of possession or control.

The servient owner may regulate use through proper rules, but may not impose charges where the grant contains no charging provision. A payment obligation will not ordinarily be implied where it is neither necessary for business efficacy nor obvious.

The claimants were the registered proprietor, timeshare owners and representatives of owners of Regency Villas, situated on land adjoining Broome Park Estate. A 1981 transfer granted the timeshare land rights to use the estate’s swimming pool, golf course, squash courts, tennis courts, gardens and other sporting or recreational facilities.

The defendants, successors in title and operators of the estate, disputed that the rights were easements and sought to charge for their use. The principal issues were whether the rights ran with the land, whether they were sufficiently certain and compatible with an easement, whether payment could be required, and what relief and financial consequences followed.

1. The claim succeeded in substance. The claimants were entitled to declaratory and injunctive relief confirming rights to use the facilities without payment. The counterclaim was dismissed. Damages for payments made since 1 January 2012 were recoverable in nuisance, subject to an inquiry if necessary; earlier agreed payments were not recoverable.
2. The four characteristics of an easement stated in In re Ellenborough Park [1956] Ch 131 were satisfied. The timeshare land was the dominant tenement, the estate was the servient tenement, the parties were different, and the rights accommodated the dominant land because the facilities enhanced its ordinary recreational enjoyment.
3. A right to use sporting or recreational facilities can be an easement. The objection based on a mere right of recreation is confined to rights that do not benefit dominant land or are wholly extraneous to its use. The rights here were sufficiently certain, extended to replacement and improved facilities, and did not confer joint possession or oust the defendants, who retained control and could regulate use subject to avoiding substantial interference.
4. The rights were intended to benefit successors and occupiers and were not merely personal. The absence of a charging provision meant that use was free. The defendants were not obliged to maintain the facilities, and the easements could exist even if the defendants ceased operating or maintaining them.
5. No term requiring payment could be implied. Although payment might appear reasonable, it was neither necessary for business efficacy nor obvious: Marks and Spencer v BNP Paribas [2015] UKSC 72.
6. The individual claimants had standing because they possessed, or were entitled to possess, the land during their purchased weeks. Demands for payment substantially interfered with their rights. Payments made from 2012 onwards were recoverable as consequential loss, whereas payments made under the earlier annual arrangements were supported by the defendants’ agreement to continue providing the facilities.