Regency Villas Title Ltd and Others v Diamond Resorts (Europe) Ltd and Another
| Jurisdiction | England & Wales |
| Judge | Sir Geoffrey Vos |
| Judgment Date | 04 April 2017 |
| Neutral Citation | [2017] EWCA Civ 238 |
| Docket Number | Case No: A3/2016/0172 |
| Court | Court of Appeal (Civil Division) |
| Date | 04 April 2017 |
[2017] EWCA Civ 238
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
HH JUDGE PURLE QC, SITTING AS A DEPUTY JUDGE OF THE HIGH COURT
CASE No: A30BM219
Royal Courts of Justice
Strand, London, WC2A 2LL
THE CHANCELLOR OF THE HIGH COURT
Lord Justice Kitchin
and
Lord Justice Floyd
Case No: A3/2016/0172
Mr Andrew Latimer (instructed by Pannone Corporate LLP) for the Defendants/Appellants
Mr John Randall QC and Mr Marc Brown (instructed by Shakespeare Martineau LLP) for the Claimants/Respondents
Hearing dates: 7 th and 8 th March 2017
Approved Judgment
Sir Geoffrey Vos, Chancellor of the High Court (delivering the judgment of the Court):
Introduction
This is the first time that the Court of Appeal has had the opportunity to consider the validity of easements of various kinds of recreational facilities. The last case that raised similar questions was the well-known decision in In Re Ellenborough Park [1956] Ch. 131 (" Ellenborough Park"), now more than 60 years ago. Since then, the culture and expectations of the population of England & Wales have radically changed. This case has to be considered in the light of those changes.
The question raised by the appeal is whether the right granted by a transfer dated 11 th November 1981 (the "1981 transfer") "for the Transferee its successors in title its lessees and the occupiers from time to time of the property to use the swimming pool, golf course, squash courts, tennis courts, the ground and basement floor of Broome Park Mansion House [the "Mansion House"], gardens and any other sporting or recreational facilities … on the Transferor's adjoining estate" (the "grant") amounts to one or more easements. HH Judge Purle QC decided that it did, but gave permission to appeal. The defendants, who are the freehold and leasehold owners of the Broome Park Estate, Barham, Canterbury (the "Broome Park Estate"), challenge that decision on the basis that the rights granted (a) could not amount to easements because the facilities could only be maintained at considerable expense, (b) extended to facilities which were not even contemplated at the time of the 1981 transfer, and (c) comprised at best a bundle of easements and personal rights which the judge failed to unpack.
The 1 st claimant is the freehold owner of Elham House, Canterbury ("Elham House") that lies in the middle of the Broome Park Estate. Elham House is split into two flats and there are 24 villas built in its grounds. Each is let on timeshares and accommodates 6 persons. The 2 nd to 5 th claimants represent those timeshare owners who are members of the so-called Regency Villas Owners Club ("RVOC"). The 1 st claimant, in effect, holds Elham House on trust for the members of RVOC. The claimants support the judge's reasoning and also advance a respondents' notice arguing in the alternative that the rights granted extend to a substitute swimming pool in the basement of the Mansion House that the defendants built to replace the one that existed in 1981, and to any other substitute facilities built since 1981.
It is common ground that the facilities at Broome Park Estate included on 11 th November 1981 formal Italianate gardens, an outdoor heated swimming pool (which was removed and filled in in about 2000, but replaced as we have said by an indoor swimming pool in the basement of the Mansion House), an 18-hole golf course, 3 squash courts, 2 outdoor hard-surfaced tennis courts, a putting green and a croquet lawn, a reception, a billiard room and a TV room on the ground floor of the Mansion House, and a restaurant, bar, gym, sunbed and sauna area in the basement of the Mansion House (the latter facilities were later converted into the indoor swimming pool). The Broome Park Estate also comprised a number of other facilities in 1981 and down the years, but those we have mentioned are the only important ones for the purposes of this appeal.
The layout is most easily understood from a series of plans, but in simple terms the Broome Park Estate comprised two titles. The smaller boot shaped title (K496390) included the Mansion House itself (which comprised some 18 timeshare units on the 1 st and 2 nd floors) and all the relevant leisure facilities except the golf course itself, which covered just over half of the larger adjoining title (K496391). Elham House, which became Regency Villas (title No. K854001), was entirely enclosed by the smaller title of the Broome Park Estate and was, therefore, close to all the facilities in question, including the 1 st tee of the golf course. Moreover, the Broome Park Estate has, since 2003, had a further 14 timeshare villas built on its own smaller title close to the golf course and close to Elham House. The entirety of the property in question was, therefore, laid out as a leisure complex with numerous available sporting and recreational facilities close at hand. Access was gained from the A260 Folkestone to Canterbury Road.
Before dealing in detail with the arguments that the parties advanced, it is useful to summarise the judge's judgment, including some of the more important background facts that he outlined.
HHJ Purle QC's judgment
The relevant dominant tenement (Elham House) and the relevant servient tenement (Broome Park Estate) were in the common ownership of Gulf Investments Limited ("Gulf"), between November 1980 and November 1981. The larger Broome Park Estate was bought first by Gulf in November 1979. The Mansion House was refurbished between January 1980 and April 1981. The 1 st defendant is now the freehold owner of both the Broome Park Estate titles and the 2 nd defendant holds a 25-year lease of the golf course expiring in 2024. The defendants are in the same group of companies.
The 1981 transfer was between Gulf, as owner of both Elham House and the Broome Park Estate, and the 1 st claimant's predecessor in title, Elham House Developments Ltd. It has, however, been lost. Nonetheless, the property register for the 1 st claimant's title includes the following entries:-
"The land has the benefit of the following rights granted by a Transfer of the land in this title dated 11 November 1981 made between (1) [Gulf] (Transferor) and (2) Elham House Developments Limited (Transferee):-
"TOGETHER WITH firstly the right of way for the Transferee its successor in title its lessees and the occupiers from time to time of the property at all times with or without vehicles for all purposes in connection with the use and enjoyment of the property over and along the driveways and roadways (hereafter called "the roadways") shown coloured blue on the plan attached hereto.
AND Secondly all the right to the full and free passage of gas water soil electricity and any other services from and to the property in and through any pipes drains wires cables or other conducting media now in under or over the Transferee's [sic] adjoining land or constructed within 80 years of the date hereof.
AND thirdly the right for the Transferee its successors in title its lessees and the occupiers from time to time of the property to use the swimming pool, golf course, squash courts, tennis courts, the ground and basement floor of Broome Park Mansion House, gardens and any other sporting or recreational facilities (hereafter called "the facilities") on the Transferor's adjoining estate".
The judge found that the construction of the Regency Villas at Elham House was intended, but not started, at the time of the 1981 transfer.
At paragraph 29 of his judgment, the judge recorded that the defendants had argued that the rights to use the facilities were personal rights incapable of running with the land so as to bind successors in title. Accordingly, they argued that the rights fell away 24 hours after the 1981 transfer when, as intended before the 1981 transfer, Elham House was transferred from Elham House Developments Ltd. to Barclays Bank Trust Company Ltd. ("Barclays"). The judge thought it was impossible to attribute, on any rational basis, any intention to the parties to the 1981 transfer that the rights granted would be so short-lived.
The judge recited some of the evidence about who had said what after 1981 about the claimants' rights to use the facilities, but concluded that none of it was relevant to any issue of construction or of whether the rights took effect as easements. He recorded, however, that the claimants did not suggest that the defendants were obliged to spend any money on providing or maintaining the facilities. The past contributions that were, however, undoubtedly made, were simply a means of ensuring that the facilities were kept up to a high standard, not an acknowledgment that their use was chargeable. The judge concluded at paragraph 36 of his judgment that, if the right to use the facilities took effect as an easement, they were available free of charge. He rejected the need to imply any term requiring payment of a financial contribution by the claimants.
The judge's starting point on the law of easements was understandably Ellenborough Park, where the owners of a park conveyed plots on the edge of it for building purposes granting each purchaser: "the full enjoyment … at all times hereafter in common with others to whom such easements may be granted of the pleasure ground … but subject to payment …". Both Danckwerts J and the Court of Appeal held that the easement was valid. The judge...
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