Regency Villas Title Diamond Resorts

What was at risk for the parties and for others not directly involved in the litigation? The decision taken by the Supreme Court in the Regency Villas case marks a significant widening of the law in respect of what constitutes an easement. In summary the case involved whether the granting of an easement could extend to cover use of use sporting and recreational facilities by the dominant tenant on the land of servant tenant. The risk faced by Regency Villas (the original claimants) was that if the Supreme Court ruled there was not a valid easement in place they would be denied access and the right to free use of the sporting and recreational facilities situated on the land owned by Diamond Resorts (original defendants). The risk faced by Diamond Resorts was that if the Courts ruled against them and upheld the validity of the easement then they would have to allow the claimants unfettered access to the facilities on their land. Potentially, this would mean the defendants could be placed at a financial disadvantage because such facilities are inevitably going to need maintenance and management. Furthermore, there were risks to individuals and companies not directly involved in the proceedings. For example, builders who were planning to build time share like resorts would cautious of building sport and recreational facilities on adjourning land for fear that time share owners would legally be permitted, via easement, to full and free use of the sporting and recreational facilities. This potentially fear could see building companies unwilling to build such facilities and therefore avoid any risk that of them having to allow owners of timeshares unrestricted access to their facilities. The knock-on effect of this would be that those purchasing timeshare properties would not have any access to sporting or recreational facilities because such facilities would not exist.

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What were the legal issues in the case? In answering, what the legal issues are in this case, it is first important to consider what conditions need to be satisfied for an easement to be deemed valid in law. In the re Ellenborogh Park case the Court set out the conditions needed for there to be a valid easement. These conditions are: There must be a dominant and servient tenement The easement must accommodate that dominant tenement The dominant and servient tenement must have different owners The right must be capable of being the subject matter of grant In the Regency Villa case the purported easement satisfies point 1. And 3. of the test outlined in reEllenborough Park. Therefore, the issues in the regency villas case centre on point 2. And 4. outlined above. In other words, did the rights granted in the 1981 transfer accommodate the dominant tenement? And were those right capable of being the subject matter of grant? In this case the Supreme Court, by way of majority verdict, found in favour of Regency Villas and held that the transfer grant of 1981 was capable of amounting to an easement. This meant the rights to use the sports and recreational facilities at Broome Park were deemed to be a property interest as opposed to merely a personal right.

How were the legal issues resolved by the judges? Lord Briggs gave the leading decision in the Supreme Court and Judge Carnwath gave a dissenting judgment. Lord Briggs construed the transfer grant against its contextual background. The contextual background in this case refers to the fact that the parties should have reasonably known that the leasehold in question, contained certain obligations upon the developers and their successors to the benefit of the timeshare owners. Hence, it was taken to have implied on the Park owners the obligations such as to maintain, construct, repair, and reconstruct the leisure complex. Furthermore, Lord Briggs applied a plain meaning to the words of the transfer grant document. The words in the transfer grant stated: “…for the transferee it successors in title its lessees and the occupiers from time to time of the property to use the swimming pool, golf court , squash court, tennis court , the ground and the basement floor of the broom park mansion house, gardens and any other sporting or recreational facilities on the transferor’s adjoining estate”. Moreover, the court reached a conclusion regarding whether the Facilities Grant could be taken to refer to a single comprehensive right to enjoy all the facilities on offer. On this, Lord Briggs believed the grant ought to be not only construed as granting to the timeshare owners the use of the leisure complex facilities already in existence but also

to any additional improvements and/or replacements introduced into the same Park. (My own words} Lord Briggs construction of the grant, meant he had to consider implications of the Perpetuities Act, which would possibly have mad the easement void for Perpetuity Act.

In summary, the rule against perpetuity provides that in a case where there is a grant of a future easement or a present easement, something must be done on that land to render it useable, failure of which the above rule takes root.

The Court differentiated the present case with case of Adam v Shrewsbury stating that the latter failed for perpetuity since it was for use of a garage that had not been constructed. In contrast to the Adams case the Supreme Court in Regency Villas found that the transfer grant “consisted of an immediately effective grant to use the sporting and leisure facilities in a leisure complex which existed as a complex at the time of the grant.” .

Regarding the requirement for servient land to accommodate the dominant tenement, Lord Briggs relied on the case of Bailey v Stephens. The case illustrates that the easement must have some natural connection with the estate as being for dominant land benefit. In summary, the right granted should not merely be of practical significance to the holder but must also be reasonably essential for the use of the land. Hence, according to Lord Briggs, an easement should be such that it brings or improves the utility of the dominant land.

Relying on Moncrieff v Jameison, Lord Briggs illustrated the elements of normal use of land. A dominant tenement may thus be for either business or residential purposes.

Adopting the opinion of Lord Neuberger in the above case, he argued that that a right of an easement may not necessarily be for actual use by the dominant land but can also refer to a contemplated or future use. This is aligned with the easement granted to timeshare owners, which implied present and future use of the complex facilities

Moving forward, the majority also reached a conclusion finding that the recreational and sporting rights could be considered as easements. Before this decision, or even Re Ellenborough, sporting and leisure rights was not given much significance. Thus, a claim in easement at this time must have been akin to that of a right of way and not one of mere recreation or amusement.

The case of in Moncrieff v Jameison considered what type of rights were capable of being an easement. Lord Scott in this case expressed doubts as to whether swimming pools could form part of an easement. In case of, in Munsey v Ismay it was held that access to sporting and recreation facilities were unsuitable for forming the basis of an easement. Further, it was contended that a customary claim to use an adjoining land for horseracing is not a valid in easement. However, Lord Briggs relied on the decision in Re Ellenborough, which was in support of the right to walk about a park as capable of performing an easement. The Ellenborough case was in a way the beginning of the expansion of the rights under an easement. By recognizing a leisure activity like taking a walk through a park, the decision provided a foundation for the conclusion in Regency Villas. As result, recreation rights were held to be essentially part of the rights enjoyed by the timeshare owners and the recreational rights in question were found to be capable of forming the subject matter of the Facilities grant.

Lord Briggs went ahead to indicate that such an easement was not only conferred upon the transferee but also upon the successors in title, other persons that would later lease and occupy the property. In reaching this conclusion, Lord Briggs applied the legal maxim “ut res magis valeat quam pereat”, meaning it is better for a thing to have effect than be made void

Giving reasons, discuss whether Lord Briggs’ judgment or with Lord Carnwath’s dissenting judgment provides a more satisfactory resolution to the litigation It is argued that the dissenting judgment given by Lord Carnwath gives more satisfactory resolution to the litigation in the regency villas case. While adopting the factual account of Briggs respectfully disagreed with the majority decision on certain issues. In his view the enjoyment of the rights granted to timeshare owners, especially those regarding swimming pool and golf course use has no legal authority. He contends that there is no principle of law that supports the manner of extension of easement law as done in the current case

Additionally, he pointed out that granting of the swimming pool and golf course rights was such that they could not be accomplished without the active participation of the owners of the Park in management, provision, and maintenance. Whereas Lord Carnwarth agreed that Re Ellenborough was precedent in support of an existence of an easement, he differed on the extension of importance of the said case to full leisure

complex. Citing Jones v Pritchard, he emphasized that the grant of a right of way over a driveway cannot place impose on the servient owner the duty to maintain it. Similarly, he considered the swimming pool owner as being under no obligation to maintain the pool in good condition or full of water. He considered the right to enjoy the leisure complex no more than person contractual relationship at most. Again, Lord Carnwath disagreed with the position Lord Briggs took on the question of perpetuities. He was of the view that the extension of enjoyment of leisure facilities to future improvements or replacements by the servient owners was against the rule against perpetuities.

The judges disagreed on two major issues. For one, they had different views as to whether the Court of Appeal was right in holding that the rights to swimming pool and golf course amounted to an easement. Secondly, they are of diverse views when it comes to the issues of extension of the enjoyment of leisure facilities extending to future improvements by the Park owners. Lord Carnwarth felt that this was an arbitrary extension of the principle in other cases that were narrow and not as elastic as stretched by the majority decision. Essentially the judges agreed on the facts of the case and the legal background but differed on the application of case law precedents in the case at hand.

While Lord Carnworth considers Lord Briggs’s decision on the two issues as overstretching the use of case law, his attempt to distinguish the cases used is not elaborate as the majority decision. . Lord Briggs decision is one that supports

progressive development and application of the law. Whereas judicial activism is a different subject, judges do make the law. In Rylands, v Fletcher introduced a new rule into the law of nuisance and in Kleinwort Benson ltd v Lincoln City Council changed two and a half centuries long rule on payments made by mistake. Again, recreational easements have evolved from luxurious proclivities to a basic component of people’s lives just like one may affirm a right to education. It is time that the law also evolved to keep up with the advancements in life.

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Bibliography Cases

  • Adam v Shrewsbury [2006] 1 P & CR 27
  • Bailey v Stephens (1862) 12 CB (NS) 91
  • Carter v Cole [2006] EWCA Civ 398 [2006] NPC 46
  • Ellenborough Park 1956] Ch 131
  • Jones v Pritchard [1908] 1 Ch 630, 637
  • Kleinwort Benson ltd v Lincoln City Council (1998) 3 WLR 1095
  • Moncrieff v Jameison [2007] 1 WLR 2620
  • Munsey v Ismay (1865) 3 H & C 486; 159 ER 621
  • Regency Villas Title Ltd v Diamond Resorts (Europe) Ltd [2018] UKSC 57; [2018] WLR 1603
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  • Ghimire R, Green GT, Poudyal NC, Cordell HK. Do outdoor recreation participants place their lands in conservation easements? (2014)
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