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

An easement may confer a right to use sporting or recreational facilities where the right benefits the dominant land and is sufficiently certain. Modern physical activities are not excluded merely because they involve games or recreation. The grant must concern land, rather than services, equipment or chattels, and must not impose a positive obligation on the servient owner or amount to joint occupation. The dominant owner may maintain the facility at its own expense. Construction is facility-specific. A grant of existing facilities ordinarily covers replacements of the same kind on the same land, subject to minor extensions, but not substantial extensions, relocated facilities or entirely new facilities without clear words. Indoor service facilities, such as restaurants or gyms, may fail because they depend on chattels and services rather than use of land.

The claimants owned timeshare properties at Elham House and asserted rights under a 1981 transfer to use sporting and recreational facilities on the adjoining Broome Park Estate. The defendants, the estate owners, disputed whether those rights were easements, arguing that the facilities required continuing expenditure, included future facilities, and comprised a mixture of proprietary and personal rights.

HH Judge Purle QC, sitting as a deputy High Court judge in the Chancery Division, held that the rights were easements, granted declarations regulating their use, awarded nuisance damages, and dismissed the defendants’ counterclaim concerning a dishonoured cheque. The defendants appealed. The central issues were the construction of the grant, the validity of each claimed easement, the effect of replacement or relocated facilities, and the counterclaim.

The Court of Appeal allowed the appeal only to the limited extent stated below and otherwise dismissed it.

1. Construction. The grant was intended to create easements, but it was not a free-ranging right to use any recreational facility later provided on the estate. It covered the existing facilities and replacement or improved facilities of the same kind on the same land, subject to minor or de minimis extensions. It did not cover substantial extensions, relocated facilities or entirely new facilities without sufficiently specific words. The court relied on the approach to easement construction in Ellenborough Park, [1956] Ch. 131, and the authorities concerning future rights and changes to routes or supporting structures.
2. General principles. The servient owner had no obligation to construct, maintain or repair the facilities. If necessary, the dominant owners could carry out reasonable maintenance at their own expense. The absence of a maintenance obligation did not cause a valid easement to lapse. An easement could not impose a positive obligation on the servient owner, but it was not invalid merely because positive work might be needed for continued enjoyment.
3. Recreational use. The requirement that an easement confer utility or benefit was crucial. Modern physical exercise could provide such benefit. The court declined to follow the obiter dictum in Mounsey v Ismay, (1865) 3 H. & C. 486, insofar as it suggested that recreational physical activities could not be easements merely because they involved sport or games. Rights had to be assessed facility by facility, and could not amount to joint occupation or relate merely to services, equipment or chattels.
4. Facilities. Valid easements existed over the Italianate gardens, tennis courts, squash courts, putting green, croquet lawn, golf course and, in principle, the original outdoor swimming pool. No easement existed over the reception, billiard and television rooms, or the restaurant, bar, gym, sunbed and sauna facilities, because those rights concerned services and chattels and would require possession of the premises. The later indoor swimming pool was not covered, either as a facility on the basement or as a substitute for the outdoor pool.
5. Counterclaim and orders. The cheque for £26,308.26 lacked consideration because there was no agreement concerning 2012 contributions. Williams v Roffey Bros Ltd, [1991] 1 Q.B. 1, concerned contractual obligations and did not assist in relation to proprietary rights. The declarations were narrowed. Further consequential argument concerning the outdoor pool was left to the Birmingham District Registry under the liberty to apply. Nuisance damages were limited to facilities over which easements existed.

• Court of Appeal (Civil Division): In [2017] EWCA Civ 238, the appeal was allowed only to the limited extent indicated. The declarations were narrowed and the appeal was otherwise dismissed.
• High Court of Justice, Chancery Division, Birmingham District Registry: HH Judge Purle QC held that the claimed recreational rights were easements, granted declarations and nuisance damages, and dismissed the counterclaim concerning the dishonoured cheque.