Regency Villas Title Limited v Diamond Resorts [2017] EWCA Civ 238

Broome Park is a country club estate near Canterbury. Among its leisure and recreational facilities are tennis courts, squash courts, a swimming pool, golf course, gymnasium, sunbeds, sauna, billiard and television rooms, a restaurant, bar and Italianate formal gardens.

In 1981, the then owners of Broome Park sold off a surplus part of the estate, known as Elham House. In the transfer, as part of the deal, the Elham House buyer was granted the right to use the country club facilities free of charge. Elham House has since changed hands more than once and is currently owned by Regency Villas. It is occupied by tenants of various flats and time-share villas that have since been developed on the Elham House site.

Diamond Resorts, the current owners of Broome Park, claimed that the rights granted in the 1981 transfer did not qualify as bona fide easements. If correct, then the rights would have expired at the moment at which Elham House was sold on by the original buyer. Diamond Resorts would then be able to charge all subsequent owners and occupiers of Elham House for using the club facilities.

If Diamond Resorts’ claim was wrong, then the rights qualified as easements. As such, the rights existed for the permanent benefit of Elham House, permanently burdened Broome Park and were permanently enforceable by all subsequent owners and occupiers of Elham House.

A right to use a garden can exist as an easement (In Re Ellenborough Park (1956)). Unsurprisingly, therefore the Court of Appeal therefore dismissed Diamond Resorts’ claim that the right to use the Broome Park garden was not an easement.

The Court of Appeal also held that the rights over the tennis and squash courts, swimming pool and golf course were bona fide easements. This is a significant clarification by the Court of Appeal of the law of easements over such facilities.

In the absence of an express covenant to the contrary, Diamond Resorts are not obliged to maintain the facilities. But if they fail to do so, the rightholders themselves are entitled (at their own expense) to carry out any necessary maintenance. For instance, they could themselves mow the fairways of the golf course or supply their own lighting to the squash courts or water (and water filtration) to the swimming pool.

Although they don’t have to pay for using the facilities, the rightholders must nevertheless comply with any regulations properly made by Diamond Resorts for their management. Moreover, Diamond Resorts are entitled to charge for the use of any equipment provided, such as tennis racquets, golf clubs and balls. In other words, an easement is a right over real property, not a right to use equipment and other items of personal property. The rightholders may bring their own equipment if they wish.

It follows from this (said the Court of Appeal) that the rights over the gymnasium, sunbeds, sauna, billiard and television rooms, restaurant and bar do NOT qualify as easements. Easements are rights over land and buildings, not rights to use equipment (such as a billiard table or gym machines) or to enjoy services (such as the provision of food and drink by a restaurant or bar). 

But the feeling remains that the Court of Appeal has failed to draw a clear distinction between, on the one hand, easements to use land and buildings and, on the other, mere personal rights to use equipment and services that from time to time exist on the land or in the buildings. Couch potatoes could bring their own screens on which to stream their favourite shows in the television room. Fitness fanatics could bring their own dumbbells to pump in the gym. Sun-worshippers could bring their own sunbeds to the solarium.

The arguments are likely to run and run!