Easements of recreation: a new species

I t is rare for the consideration of easements to reach the lofty heights of the Supreme Court, but such an occasion arose last year in the case of Regency Villas Title Ltd & others v Diamond Resorts (Europe) Ltd & others [2018] UKSC 57 – resulting in the boundaries of the law being strained and a new species of easement being recognised. This case concerned an estate in Kent which had once been the home of Lord Kitchener. In 1979, the upper floors of the main house were converted into timeshare apartments and a large number of recreational facilities were built, including an outdoor swimming pool, a championship-standard golf course and tennis courts.

A lease was granted of the timeshare units. This was drafted so as to confer upon the owners of the timeshare units the free use of the recreational facilities, with the landlord covenanting to keep them in good repair. The timeshares were a great success prompting the building of more timeshares in the grounds in 1981. The contemporary marketing material promoted the same free use of the recreational facilities. But for reasons that are not altogether clear, rather than a leasehold structure a freehold was granted including the grant of ‘easements’ for the use of the recreational facilities for the latter timeshares. The critical issue was whether the transfer in 1981 successfully granted proprietary rights to the lessees and occupiers of the new timeshares in the form of easements, or whether it merely granted personal rights to the original transferees.

A back-to-basics approach was required and the Supreme Court reminded itself of the four essential characteristics of an easement identified in In re Ellenborough Park [1956] Ch 131, namely:
— There must be a dominant and servient tenement;
— the easement must accommodate the dominant tenement;
— the dominant and servient owners must be different persons; and
— a right over land cannot amount to an easement unless it is capable of forming the subject-matter of a grant.

As is often the case, the focus of attention was on the second and fourth characteristics. The key argument as to whether the easement accommodated the dominant tenement was whether a right to use the recreational facilities was an end in itself, as opposed to a right which benefited the dominant tenement. Could, for example, a round of golf be said to benefit the enjoyment of the timeshare apartment? The Supreme Court had little difficulty in concluding that it could. In re Ellenborough Park was good authority for this proposition. While the central argument in that case had been whether the use of gardens benefited the dominant properties (which it plainly did), Evershed MR also referred to the enjoyment extending to “… parts … set apart for particular recreations such as tennis or bowls”. In the present case it was of importance to the Supreme Court that the dominant properties were timeshare apartments on an estate largely devoted to recreational pursuits. Lord Briggs, with whom the majority agreed, said: “Although in terms of legal memory timeshare is a relatively recent concept, timeshare units of this kind are typically occupied for holidays, by persons seeking recreation, including sporting activities, and it is to my mind plain beyond a doubt … that the grant of rights to use an immediately adjacent leisure development with all its recreational and sporting facilities is of service, utility and benefit to the timeshare apartments …” It may be that this will, in future, prove to be a ground on which to seek to limit Regency Villas to its own facts, or at least distinguish it. In concluding, Lord Briggs commented: “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 will generally be satisfied.” That plainly begs the question of what the position will be if the use of the dominant tenement is not itself recreational but is, for example, residential.

A DISSENTING VOICE

The far more controversial aspect of the decision, however, relates to the catch-all fourth characteristic of an easement and, specifically, the issue of whether the servient owner in this case was merely ‘passive’; or whether the reality of the grant was to facilitate the use of recreational facilities provided and paid for by the servient owners. It is on this point that Lord Carnworth provides a persuasive dissent. It is well established that, subject to irrelevant exceptions, an easement does not require anything more than mere passivity on the part of the servient owner; and if more is required, the right is not an easement. In the present instance, the debate was whether the intended package of rights granted in 1981, most obviously in the case of the golf course and the swimming pool, could actually be enjoyed without active provision, maintenance and management on the part of the servient owner, with consideration of whether the dominant owners could step in and, for example, maintain the golf course or swimming pool if the servient owners failed to do so. The majority concluded there was no problem as the 1981 transfer did not impose any obligation on the servient owner to provide the recreational facilities. There was merely a grant to facilitate the use of such facilities as may exist from time to time, but with no obligation on the servient owner to provide them – such that the dominant owner could, if the need arose, step in and at least maintain and manage the facilities to ensure their continued availability. Lord Briggs said: “There is … nothing inherently incompatible with the recognition of a grant of rights over land as an easement that the parties share an expectation that the servient owner will in fact undertake the requisite management, maintenance and repair of the servient tenement and any structures, fittings or even chattels located thereon.

The only essential requirement … is that the servient owner has undertaken no legal obligation of that kind to the dominant owner.” The Supreme Court was therefore able to recognise what it accepted was a “new species of easement”. In dissenting, however, Lord Carnworth considered there to be a real difference between a limited and clearly defined ancillary right to an easement, such as where the dominant owner can repair a right of way – where the servient owner remains essentially passive – and a scenario where the servient owner’s active participation is an intrinsic part of the intended right. In his view “what is involved is not simply maintenance or repair, as in the case of a right of way … but taking over the organisation and management of a ‘leisure complex’”. Time will tell, but it is easy to contemplate that Regency Villas will come to be confined to its own particular facts. That said, it is an example of the courts never considering that the category of easements is closed. However, as a principle, while the case recognises a new species of easement there must be some unease with passivity being extended to a shared intention the servient owner will, as an inherent part of the right granted, expend potentially considerable sums.