Regency Villas Ltd v Diamond Resorts (Europe) Ltd [2018] UKSC 57

Key point

  • Recreational rights can accommodate the land if the dominant land serves a recreational purpose

Facts

  • D, which owned a country club estate sold apartments (known as ‘Regency Villas’) to Cs, granting them the right to use facilities in the leisure complex on the estate
  • The leisure complex fell into disrepair and Cs were denied usage
  • Cs argued that they had their right to use the facilities in the leisure complex amounted to an easement
  • D argued that there was no easement based on the following reasons:
    • The rights did not accommodate the dominant tenement
    • The exercise of rights amounted to an ouster of D as owners
    • The enjoyment of the rights depended upon substantial expenditure by Ds
    • Re Ellenborough Park was wrongly decided to the extent that an easement can provide pure enjoyment rather than better enjoyment of the dominant tenement

Held (Supreme Court)

  • Cs had an easement over the facilities in the leisure complex
  • The right to use the facilities accommodated the villas
  • The right was also a subject matter capable of grant as it did not oust servient owner and did not require anything beyond mere passivity

Lord Briggs

The question is whether the principles in Re Ellenborough Park apply to the present case.

Accommodation

  • An easement can consist of the use of some chattel on the servient tenement: e.g. a lavatory in Miller v Emcer Products
  • D argued that the provision of the facilities including a golf course could not be regarded as accessory to the apartment the same way that a garden could to a house; rather the use of the apartment was accessory to the enjoyment of the recreational and sporting rights
  • However, enjoyment of easement does not have to be subordinate to the enjoyment of the dominant tenement, they can be the primary reason why persons acquire the dominant tenement
  • It used to be that a mere right of recreation could not be an easement, but if the accommodation test is satisfied then the fact that it may be a recreational right does not disable it from being an easement
  • Furthermore the advantages to be gained from recreational and sporting activities are now so universally regarded as being of real utility and benefit
  • Where the actual or intended use of the dominant tenement is itself recreational, as will generally be the case for holiday timeshare developments, the accommodation condition will generally be satisfied

Subject matter capable of grant

  • Includes series of miscellaneous requirements which have been held to be essential to the characteristics of an easements
    1. Right defined in sufficiently clear terms
    2. Not purely precarious so as liable to be taken away at the whim of the servient owner
    3. Not so invasive as to oust the owner
      • Policy reason: to prevent freehold land being permanently encumbered by proprietary restrictions and obligations which inhibit its utility to an unacceptable degree
    4. Right should not impose upon the owner obligations to expend money or do anything beyond mere passivity

Ouster principle

  • The ouster principle rejects as an easement the grant of rights which, on one view, deprive the servient owner of reasonable beneficial use of the servient tenement or, on the other view, deprive the servient owner of lawful possession and control of it
  • D argued that the ‘step-in’ right of Cs to manage and maintain the facilities in the event that Ds cease to do so interfere with the possession or control of the park
  • However, the golf course can be maintained by dominant owner without taking possession or control
  • It is also wrong in principle to test whether there is an ouster of the servient owner on what the dominant owner may do by step in rights, the question should be addressed by reference to the ordinary expectations of the parties
  • In the current case the expectation is that the maintenance was to be done by the servient owner, step in rights would only arise if the servient owner gave up management or control, nothing forced them to do so
  • Also, step-in rights are, by definition, rights to reasonable access for maintenance of the servient tenement, sufficient, but no more than sufficient, to enable the rights granted to be used

No more than mere passivity

  • Mere passivity does not prevent the easements that involve an expectation on the servient owner to manage and maintain structures, as long as it is not a legal obligation
  • In the current case there was no legal obligation
  • However, if meaningful use depended on continuous maintenance which only servient owner was capable it would be invalid as an easement e.g. a ski slope with artificial snow cannot be subject to easement
  • But if the exercise of step in rights by the dominant owner would be sufficient to maintain the structure the easement will be valid