Regency Villas Title Ltd v Diamond Resorts (Europe) Ltd

Michaelmas Term

[2018] UKSC 57

On appeals from: [2017] EWCA Civ 238 and [2015] EWHC 3564 (Ch)

Regency Villas Title Ltd and others (Respondents/Cross-Appellants) v Diamond Resorts (Europe) Ltd and others (Appellants/Cross-Respondents)

before

Lady Hale, President

Lord Kerr
Lord Sumption
Lord Carnwath
Lord Briggs

JUDGMENT GIVEN ON

14 November 2018

Heard on 4 and 5 July 2018

Appellants/Cross	Respondents/Cross-
Respondents	Appellants
Tim Morshead QC	John Randall QC
Toby Watkin	Marc Brown
Andrew Latimer	Katie Longstaff

(Instructed by Pannone

(Instructed by Shakespeare

Corporate LLP

Martineau LLP

(Manchester) and Osborne

(Birmingham))

Clarke LLP)

Appellants/Cross Respondents:-

(1) Diamond Resorts (Europe) Limited
(2) Diamond Resorts Broome Park Golf Limited

(3) Summit Developments Ltd

Respondents/Cross Appellants:-

(1) Regency Villas Title Limited
(2) George Edwards
(3) Victor Roberts
(4) The Estate of William Malcolm Ratcliffe Deceased
(5) Brian Andrews

LORD BRIGGS: (with whom Lady Hale, Lord Kerr and Lord Sumption agree)

1. This appeal offers an opportunity for this court to consider, for the first time, the extent to which the right to the free use of sporting and recreational facilities provided in a country club environment may be conferred upon the owners and occupiers of an adjacent timeshare complex by the use of freehold easements. In the well-known leading case of In re Ellenborough Park [1956] Ch 131 the Court of Appeal decided that the shared recreational use of a communal private garden could be conferred upon the owners of townhouses built around and near it by means of easements. The use of the same conveyancing technique in the present case in relation to a much wider range of activities was, if not misguided, at least a more ambitious undertaking. The essential question, if that case was rightly decided, is whether the same underlying principles work in the present context (as the trial judge and the Court of Appeal both held) or whether the attempt to do so falls foul of the necessary limitations upon the scope of easements in English law, most of which, as recently as 2011, the Law Commission has advised should not lightly be put aside.

2. The essence of an easement is that it is a species of property right, appurtenant to land, which confers rights over neighbouring land. The two parcels of land are traditionally, and helpfully, called the dominant tenement and the servient tenement.

The effect of the rights being proprietary in nature is that they “run with the land”

both for the benefit of the successive owners of the dominant tenement, and by way of burden upon the successive owners of the servient tenement. By contrast merely personal rights do not generally have those characteristics. Although owing much to the Roman law doctrine of servitudes, easements have in English law acquired an independent jurisprudence of their own, the essentials of which have been settled for many years, even if the uses of land during the same period have not stood still. Since the question whether a particular grant of, or claim to, rights is capable of having the enduring proprietary quality of an easement is usually (as here) fact intensive, it is convenient to begin with a summary of them.

The Facts

3. Broome Park, formerly the home of Field Marshal Lord Kitchener of Khartoum, is a substantial country estate near Canterbury, with a large 17th century

Grade I listed house (“the Mansion House”) at its heart, and a much smaller house,

Elham House, nearby. Prior to 1967 Broome Park had been in common ownership. In early 1967 Elham House together with land around it lying entirely within the Park was conveyed off and its separate title was first registered on 30 March 1967.

I shall call the house and its surrounding land “Elham House”. It is the alleged

dominant tenement in relation to the disputed easement. I will refer to the rest of

Broome Park, retained by the vendor in 1967, including the Mansion House, as “the

Park”. It is the alleged servient tenement in relation to the disputed easement.

4. In or before 1979 the Park was acquired by Gulf Investments Ltd (“Gulf Investments”), a subsidiary of Gulf Shipping Lines Ltd (“Gulf Shipping”), for the

purposes of developing a timeshare and leisure complex. The essential features of the development scheme included, first, the creation of 18 timeshare apartments on the upper two floors of the Mansion House; secondly, the creation of a communal club house for the timeshare owners and other paying members of the public on the ground floor and basement of the Mansion House including restaurant, TV, billiards and gymnasium facilities; and thirdly, the construction and laying out within the surrounding grounds of the Park of sporting and recreational facilities including an 18 hole golf course, an outdoor heated swimming pool, tennis and squash courts, and formal gardens. Individual purchasers of timeshare units within the apartments on the upper floors of the Mansion House formed themselves into the Broome Park

Owners Club (“the BPOC”).

5. On 13 August 1980, Gulf Investments granted a 35-year lease of the first and second floors of the Mansion House to Gulf Leisure Developments Ltd, which was to hold the residential accommodation within the Mansion House on behalf of the

BPOC. I will call it “the BPOC Lease”. It was drafted so as to confer upon owners

of the timeshare units within the Mansion House the free use of the communal and leisure facilities within the lower part of the Mansion House and its surrounding grounds, including the golf course and other sporting and recreational facilities, for

the full 35 year of the term, and Gulf Investments covenanted as landlord “to keep properly maintained repaired constructed and reconstructed” the ground floor and

basement of the Mansion House and the sporting and recreational facilities provided within the Park, including the swimming pool, golf course, squash courts, tennis courts and formal gardens. The solicitor responsible for the conveyancing in connection with the development gave evidence at trial that a leasehold structure was chosen for this purpose because of the need to make appropriate provision for what might prove to be the large repairing and maintenance obligations arising from the status of the Mansion House as a Grade I listed building of some antiquity.

6. The early success of this development, centred on the Mansion House timeshare apartments, led Gulf Investments to plan a second timeshare development, this time centred upon Elham House. For that purpose, Elham House was re- acquired so as to be integrated within Broome Park in November 1980, and planning permission was obtained for the conversion of the house into two timeshare apartments, and for the building of 24 further timeshare apartments in its grounds, the whole to be re-named Regency Villas. It is evident from contemporary marketing materials that a main attraction held out to prospective buyers of timeshare units within the Regency Villas development was the same free use of the sporting and recreational facilities within the ground floor and basement of the Mansion House and within the Park, as had been afforded to the owners of timeshare units on the upper two floors of the Mansion House.

7. On this occasion however, it was decided to use a freehold rather than leasehold structure for Regency Villas, apparently because it was not anticipated that Elham House or the newly-built apartments in its grounds would give rise to the potentially onerous repairing obligations associated with the Mansion House. Thus,

by a transfer dated 11 November 1981 (“the 1981 Transfer”) Gulf Investments

transferred Elham House to Elham House Developments Ltd, another member of the Gulf Group headed by Gulf Shipping. On the following day, and as part of a pre- planned series of transactions, Elham House Developments Ltd transferred Elham House to Barclays Bank Trust Co Ltd, to be held for the benefit in due course of the

members of the Regency Villas Owners Club (“RVOC”) to be constituted by the

purchasers of timeshare units within the Regency Villas development.

8. The 1981 Transfer included the grant of rights which is the subject of the present dispute. I shall refer to that grant of rights as “the Facilities Grant”. The

transfer itself has been lost, but the relevant terms of the Facilities Grant were duly recorded at HM Land Registry, on the Property Register in respect of the title to Elham House, and on the Charges Register against each of the two registered titles together constituting the Park. The words of the Facilities Grant appear in the last of three paragraphs, all of which it is appropriate to set out in full, so that the last paragraph appears in its context:

“TOGETHER WITH firstly the right of way for the Transferee

its successors 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 drive ways 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

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 the Broome Park Mansion House, gardens and any other sporting or recreational

facilities (hereafter called ‘the facilities’) on the Transferor’s

adjoining estate.”

9. The 1981 Transfer also contained a covenant by Gulf Investments to maintain the sporting and recreational facilities within the Park, but it is common ground that the burden of this covenant, being positive in nature and unsupported by a leasehold structure, did not bind successors in title to the Park, including the appellants.

10. By the time of the 1981 Transfer, there had already been constructed within the Park most of the relevant sporting and recreational facilities, including the golf course, the outdoor heated swimming pool, three squash courts, two tennis courts, a restaurant, billiard/snooker room and TV room on the ground floor of the Mansion House and a gymnasium, including sauna and solarium, in the basement. There were also Italianate gardens, a putting green, a croquet lawn, an outdoor jacuzzi/spa pool, an ice/roller skating rink, platform tennis courts, a soft ball court and riding stables. These facilities did not cover the whole of the Park, as defined. There remained about 90 acres of undeveloped farmland, which remain undeveloped to this day.

11. An officious bystander in 1981 might well have been prompted to ask how it was envisaged by the promoters of these two timeshare schemes that the extensive sporting and recreational facilities of which the timeshare owners were to be afforded the free use were to be managed, maintained and when necessary renewed by the owners of the Park, to the high standards promised in the contemporary promotional materials, without any contribution from them. Although nowhere clearly stated in the evidence, the answer appears to be that the promoters envisaged that the operation of the leisure complex within the Park as a golf course and county club would attract sufficient paying members of the public (other than timeshare owners in either of the two timeshare developments) to fund its ongoing operating costs. If that was the expectation, it does not appear to have been fulfilled.

12. Correspondence in and after 1998 between the RVOC and Broome Park Golf & Country Club, then owning or at least managing the Park, describes a reduction in the number of available facilities, a lack of investment in the Park, and a perception that, without some significant contribution to running costs by the RVOC members, whether or not under legal obligation, the facilities offered at the Park would be likely to deteriorate further.

13.       The outdoor swimming pool became disused and was filled in by 2000. The

failure to maintain a swimming pool within the Park was a breach of the landlord’s

covenants in the BPOC lease and, pursuant to an order of HHJ Pelling QC in proceedings brought by the BPOC, a new pool was constructed in part of the basement of the Mansion House, where the gymnasium had previously been situated. Some other facilities, such as the putting green, croquet lawn, jacuzzi/spa pool and roller skating rink had been closed and the riding stables were demolished. Apart from the major change constituted by the erection of the indoor swimming pool, other minor changes occurred to the facilities within the ground floor and basement of the Mansion House.

14. Meanwhile, a third timeshare development was constructed within the Park in about 2003, bringing the total number of timeshare apartments within the Park (including the Regency Villas development) to some 58. Finally, the BPOC lease expired by effluxion of time, shortly after the trial, in 2015. The Mansion House was then temporarily closed for refurbishment and reopened as an hotel.

15. From time to time, beginning in about 1983, RVOC made voluntary payments on behalf of timeshare owners within the Regency Villas development to the owners and operators of the Park towards the cost, including upkeep, of the facilities. While made under a reservation of rights, these payments were usually in agreed amounts, at least until the end of 2011. Thereafter, and in the absence of any agreement to amounts, individual timeshare owners were charged fees from time to time for the use of specific facilities, which they paid notwithstanding their case that they were entitled to the use of those facilities free of charge.

The Litigation

16. The first claimant (and first respondent in this court) is the freehold owner of Elham House. The remaining claimants are individual timeshare members of the RVOC. They sue upon their own behalf and on behalf of all other members. They claimed a declaration that they were entitled, by way of easement, to the free use of all the sporting or recreational facilities from time to time provided within the Park, and an injunction restraining interference with them by the defendants (and appellants in this court) who are the current freehold and leasehold owners of the Park and parts thereof. In addition the claimants sought the return of sums paid by them or on their behalf by the RVOC for the use of those facilities since 2008, as damages for interference with their easement, or by way of restitution.

17. The defendants denied that the claimants had the benefit of any easement in relation to the facilities, and counterclaimed for a quantum meruit in respect of the provision of those facilities in and after 2012, to the extent not paid for, or not paid for in full.

18. At the trial before the late Judge Purle QC sitting as a High Court judge in 2015 the claimants succeeded in all their claims, save only for the recovery of payments made for the use of facilities before 2012, which the judge found had been made by agreement rather than under protest, in circumstances giving rise to no restitutionary claim: [2016] 4 WLR 61. That monetary claim has not been further pursued by the claimants.

19. In the Court of Appeal (Sir Geoffrey Vos C, Kitchin and Floyd LJJ) [2017] Ch 516 the claimants were again successful on the main issue about whether the rights over the facilities granted by the 1981 Transfer constituted an easement or

easements, but the judge’s decision was reversed on matters of detail. In particular,

the claimants were held to have no rights in relation to the new swimming pool

constructed in the basement of the Mansion House. The Court of Appeal’s

declaration confirmed their rights to specific existing facilities, namely the golf course, squash courts, tennis courts, croquet lawn, putting green and Italianate gardens, but excluded rights in relation to anything provided on the ground floor and

basement of the Mansion House. The claimants’ monetary entitlement in relation to

payments in and after 2012 was correspondingly reduced, and the defendants obtained judgment for a quantum meruit in respect of those facilities provided in

and after 2012 to which the claimants’ rights did not extend, of which the most

important was the swimming pool.

20. In this court the appellant defendants pursue their contention that the 1981 Transfer granted no enduring rights in the nature of easements in relation to any of the facilities within the Park, while the claimants by respondents cross-appeal seek

to restore the judge’s conclusion as to the full extent of their rights in relation to the

facilities, including the new swimming pool, and accordingly seek to have dismissed

the Court of Appeal’s order for a quantum meruit in favour of the defendants.

The Issues

21. Much the most important group of issues (which have given rise to almost all the oral argument on this appeal) are those which govern the question whether the Facilities Grant is capable in law of amounting to one or more easements. Those are the issues which justified the grant of permission to appeal. The subordinate issues,

relating to the claimants’ rights if any in relation to the ground floor and basement

of the Mansion House, and in particular to use of the new swimming pool, give rise to no general issues of law of public importance, but all the issues turn to a greater or lesser extent upon the true construction of the Facilities Grant, to which I now turn.

Construction of the Facilities Grant

22. The main features of the matrix of fact against which the 1981 Transfer has to be construed are, in my view, as follows. First, the 1981 Transfer was part and parcel of a collaborative exercise undertaken by two associated companies within the same Gulf Group for a common purpose, namely the development of timeshare apartments and the profitable sale of timeshare units on land immediately adjacent to an already up-and-running leisure complex, containing sporting and recreational facilities in a clubhouse and associated parkland adjacent to and entirely surrounding the subject matter of the 1981 Transfer.

23. Secondly, not least because they shared a common conveyancing solicitor, both parties to the 1981 Transfer may be taken to have known about the leasehold structure underpinning the development of the timeshare units within Mansion House itself, including the obligation, binding on Gulf Investments as landlord, and upon its successors in title as owners of the Park, to maintain, repair, construct and (where necessary) reconstruct all the sporting or recreational facilities provided within the Park (including within the Mansion House), for the full period of 35 years provided for in the BPOC Lease, which expressly contemplated that the rights of the BPOC timeshare owners would extend to all those facilities provided within the Park at any time during that term (see Schedule 3, paragraph 8). Gulf Investments had therefore committed both itself and its successors in title to the provision, operation and maintenance of those facilities by binding obligations which, if necessary, could be enforced against them by a large number of timeshare owners, constituting the BPOC.

24. Thirdly both parties also knew, by their common conveyancing solicitor, of the planned structure under which, only one day after the 1981 Transfer, the interest of the grantee was to be transferred on to a successor in title, for the benefit of the future timeshare owners within the Regency Villas scheme whom both parties wished to attract as purchasers.

25. Construed against that contextual background, the following points emerge as aspects of the true construction of the Facilities Grant in the 1981 Transfer. First, it is abundantly plain that, whether successfully or not, the parties intended to confer upon the Facilities Grant the status of a property right in the nature of an easement, rather than a purely personal right. It was expressed to be conferred not merely upon the Transferee, but upon its successors in title, lessees and occupiers of what was to become a timeshare development in multiple occupation. That being the manifest

common intention, the court should apply the validation principle (“ut res magis

valeat quam pereat”) to give effect to it, if it properly can.

26. Secondly, and although reference is made to a number of different specific facilities within the Park, the Facilities Grant is in my view in substance the grant of a single comprehensive right to use a complex of facilities, and comprehends not only those constructed and in use at the time of the 1981 Transfer, but all those additional or replacement facilities thereafter constructed and put into operation within the Park as part of the leisure complex during the expected useful life of the Regency Villas timeshare development for which the 1981 Transfer was intended to pave the way. It is, in short, a right to use such recreational and sporting facilities as exist within the leisure complex in the Park from time to time. In that respect I agree

with the judge’s analysis of this point (at para 44 of his judgment) and disagree with

the approach of the Court of Appeal, which treats each facility as the subject of a separate grant of rights, referable only to the separate locus in quo of each relevant facility at the time of the grant. I shall explain my full reasoning for this conclusion when dealing with the cross-appeal, below, but the main point is this. The Court of Appeal regarded the absence of words of futurity in the language of the Facilities Grant (in contrast with the grant relating to the passage of services in the immediately preceding paragraph) as a strong pointer to a construction which limited the rights granted only to those facilities already in existence. This was also a main plank in the written submissions of the appellants on this point. In my view the absence of express words of futurity is amply compensated by the inherent nature of the subject matter of the third paragraph, namely the combination of sporting and recreational facilities in a leisure complex which would be bound to be subjected to significant alterations and changes during its business life.

27.       It may be that in this respect the Court of Appeal was encouraged to depart

from the judge’s more coherent analysis because of a fear on the part of those

advising the claimants that to construe the Facilities Grant as extending to the provision of additional or different facilities in the future might give rise to a risk of the grant being held to be void for perpetuity. In written submissions delivered at

the court’s invitation following the hearing, the appellants submit that this would indeed be the consequence of the judge’s construction. Although by 1981 the

Perpetuities and Accumulations Act 1964 had intervened to provide a period of

“wait and see”, the new swimming pool was in fact erected more than 21 years after

the 1981 Transfer. In my judgment that concern of the claimants and submission of the appellants is misplaced, in relation to what appears to me to be a single grant of rights over a leisure complex comprising sporting and recreational facilities, which may be changed and adjusted from time to time to suit customer demand without giving rise to separate and distinct grants of rights taking effect only in the future.

28. The main authorities relied upon by the appellants in support of their submission on perpetuity are Dunn v Blackdown Properties Ltd [1961] Ch 433 and Adam v Shrewsbury [2006] 1 P & CR 27. They show that where (in the case of a pre-2010 instrument) there is a grant of a future easement, or (which is in substance the same thing) a present easement which can only be enjoyed if and when, in the future, something is done on the servient land to make the easement useable, then the rule against perpetuities applies. In the Dunn case the grant was of sewerage rights, but no sewers existed at all at the time of the grant. In the Adam case the grant was the use of a garage yet to be constructed, on ground to be excavated by the grantor, accessible only from a roadway which was only partly constructed, at the time of the grant. In both cases the grants failed for perpetuity.

29. In the present case, by contrast, the 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. The fact that the precise nature and precise location of those facilities within the Park might change thereafter, but the grant still apply to the complex as a whole, does not bring the grant within the rule. If by analogy there had already been a sewerage system on the servient land at the time of the grant in the Dunn case, the drainage easement would not have been defeated or rendered subject to perpetuity merely because, thereafter, the dominant owner made a change to the routeing of the pipework.

30. Thirdly, there is no express provision requiring the grantee or its successors or timeshare owners to contribute to the cost of operating, maintaining, renewing

and replacing facilities, and there has been no challenge to the judge’s conclusion

that an attempt to discover them by way of implied term would fall foul of the necessity test. Nor is there, in the Facilities Grant itself, any such obligation imposed upon the grantor, although there is a separate, purely personal, covenant to that effect elsewhere in the 1981 Transfer.

31.       Much has been made of this personal covenant by the appellants in their

written submissions on the judge’s construction. They say that it shows that the

Facilities Grant was really intended only to be a grant of personal rights to the free use of a serviced sporting and leisure complex, and that the drafter wrongly assumed that the grantor could impose the servicing obligation on its successors in title as owners of the Park. This meant that the Facilities Grant would in law be of utility for as long (only) as the grantor should remain the owner of the Park, and dependent upon the purely personal covenant of the grantor, the benefit of which could be assigned to successors in title of the grantee as owners of Elham House. If this meant that the Facilities Grant was vulnerable to an early demise (for example on an early sale of the Park or its transfer to an associated company of the grantor) that was just the result of a conveyancing mistake which the court should do nothing to correct, and certainly not by the use of the validating principle of construction.

32.       I do not accept that submission. The personal covenant commits the

Transferor to the maintenance, repair and cleansing of “the roadways and the

facilities”. The roadways were plainly the subject of a conventional easement in the

first of the three paragraphs (quoted above) the last of which contains the Facilities Grant. It cannot therefore be said that the existence of the personal covenant somehow reduces the Facilities Grant to a purely personal obligation, if it does not (and cannot) do so in relation to the right of way over the roadways. Although it is not clear, it may be that the conveyancer thought that the burden of a positive maintenance covenant ran with the land, but this does not impact upon the clear intention, manifest in relation to both the roadways and the facilities, that proprietary rights were being granted over them. I have sought to explain above how, in commercial terms, the parties to the 1981 Transfer may have anticipated that the leisure complex would be self-financing (from the contributions of paying members of the public) without need to have recourse to contributions from the two groups of timeshare owners. In my judgment the common intention to be inferred from the absence of any provision in the Facilities Grant itself for such maintenance or funding obligations is that the parties to the 1981 Transfer (both of which were timeshare experts) were content to leave that as a matter of commercial risk, while seeking to maximise the capital receipts expected to be derived from the sale of timeshare units in connection with the Regency Villas apartments shortly thereafter to be constructed. Plainly, the imposition of a payment obligation on the timeshare owners would have had a dampening effect on the purchase prices likely to be obtained.

The Appeal

33. Mr Tim Morshead QC for the appellants described the Facilities Grant as one which conferred the right of free access for the Regency Villas timeshare owners to a high-class leisure complex providing recreational and sporting attractions otherwise being provided by the appellants within the Park for paying members of the public. He submitted that such a grant of rights was incapable of amounting to an easement or easements for three main reasons:

i)          The rights did not accommodate Elham House, the dominant

tenement;

ii) Their exercise by the RVOC timeshare owners would amount to an ouster of the appellants as owners of the Park;

iii) The enjoyment of the rights by the RVOC timeshare owners depended upon substantial expenditure by the appellants in managing and maintaining the facilities.

34. Recognising that the decision in In re Ellenborough Park would be likely to constitute the sheet anchor in any case for treating the Facilities Grant as an easement (as it had been in both the courts below), the appellants in their printed case submitted that the decision was contrary to principle, in so far as it suggested that rights conferred for the pure (or mere) enjoyment of their exercise, rather than the better enjoyment of the dominant tenement as such, could satisfy the requirement that they accommodate the dominant tenement. In his oral submissions in this court, Mr Morshead preferred to focus on the private nature of the use of the communal garden in that case as that which, in sharp contrast with the Facilities Grant in this case, made it (just) legitimate to describe the rights conferred as accommodating the townhouses surrounding the garden.

35. Before addressing the Ellenborough Park case directly, it is convenient first to summarise what, by the 1950s, were the well-established conditions for the recognition of a right as an easement. Writing in 1954, Dr Cheshire described the four essential characteristics as follows:

i)          There must be a dominant and a servient tenement;

ii)        The easement must accommodate the dominant tenement;

iii)       The dominant and servient owners must be different persons;

iv) A right over land cannot amount to an easement, unless it is capable of forming the subject-matter of a grant.

Aspects of these requirements are better understood when it is appreciated that easements may be created, not only by express grant, but also by implied grant, upon the transfer of part of land formerly in single ownership under the rule in Wheeldon v Burrows (1879) 12 Ch D 31, under section 62 of the Law of Property Act 1925 and by prescription. In the present case, as in In re Ellenborough Park, it is the second and fourth of those requirements with which the court is concerned.

The Second Requirement

36. The requirement that the right, if it is to be an easement, should accommodate the dominant tenement has been explained by judges, textbook writers and others in various ways. In his Modern Law of Real Property, 7th ed (1954) at p 457, Dr Cheshire expressed it in this way:

“One of the fundamental principles concerning easements is

that they must be not only appurtenant to a dominant tenement but also connected with the normal enjoyment of the dominant

tenement.”

Citing from Bailey v Stephens (1862) 12 CB(NS) 91, at 115, he continued:

“It must … have some natural connection with the estate as

being for its benefit ...”

37.       In its report “Making Land Work: Easements, Covenants and Profits à

Prendre” (2011) Law Com No 327 (HC 1067) at para 2.25 the Law Commission

advised:

“The easement must accommodate, or accommodate and serve,

the dominant land. The requirement is that the right must be of some practical importance to the benefited land, rather than just

to the right-holder as an individual: it must be ‘reasonably
necessary for the better enjoyment’ of that land.”

38.       In the present case, the Court of Appeal described this requirement, at para

56, as follows:

“In our view, the requirement that an easement must be a ‘right

of utility and benefit’ is the crucial requirement. The essence of

an easement is to give the dominant tenement a benefit or utility as such. Thus, an easement properly so called will improve the general utility of the dominant tenement. It may benefit the trade carried on upon the dominant tenement or the utility of

living there.”

39. Save only for easements of support (which may be said to benefit the land itself), easements generally serve or accommodate the use and enjoyment of the dominant tenement by human beings. Thus, a right of way makes the dominant tenement more accessible. Service easements enable the occupiers of the dominant tenement to receive water, gas and electricity. A drainage easement enables rainwater and sewage to be removed from land, in circumstances where its use would otherwise be inhibited by flooding.

40. The following general points may be noted. First, it is not enough that the right is merely appurtenant or annexed to the dominant tenement, if the enjoyment of it has nothing to do with the normal use of it. Nor is it sufficient that the right in question adds to the value of the dominant tenement. Thus for example, a right granted to the owners and occupiers of a house in Kennington to have free access to the Oval cricket ground on test match days might be annexed to the ownership of that house, and add significantly to its value. But it would have nothing to do with the normal use of the property as a home.

41. Secondly, the “normal use” of the dominant tenement may be a residential use or a business use. Further, since easements are often granted to facilitate a development of the dominant tenement, the relevant use may be not merely an actual use, but a contemplated use: see for example Moncrieff v Jamieson [2007] 1 WLR 2620, per Lord Neuberger of Abbotsbury, at paras 132-133.

42. Thirdly, it is not an objection to qualification as an easement that the right consists of or involves the use of some chattel on the servient tenement. Examples include a pump (Pomfret v Ricroft (1668) 1 Saund 321), a lock and a sluice gate (Simpson v Godmanchester Corpn [1897] AC 696), and even a lavatory (Miller v Emcer Products Ltd [1956] Ch 304).

43. Fourthly, although accommodation is in one sense a legal concept, the question whether a particular grant of rights accommodates a dominant tenement is primarily a question of fact: see per Evershed MR in In re Ellenborough Park at p 173.

Recreational rights

44. The main controversy in the present case arises because the Facilities Grant conferred recreational and sporting rights, the enjoyment of which may fairly be described as an end in itself, rather than a means to an end (ie to the more enjoyable or full use of the dominant tenement). The origin of the controversy lies in the Roman law doctrine that a ius spatiandi cannot constitute a servitude: see per Evershed MR giving the judgment of the Court of Appeal in In re Ellenborough Park, at p 163. For present purposes that Latin phrase may simply be translated as

meaning a recreational right to wander over someone else’s land. The difficulty

arises as an aspect of the requirement that the right must accommodate the dominant tenement precisely because, generally speaking, the sporting or recreational right will be enjoyed for its own sake, on the servient tenement where it is undertaken, rather than as a means to some end consisting directly of the beneficial use of the dominant tenement.

45. Prior to Ellenborough Park, there were inconclusive dicta for and against the recognition of recreational rights as easements. Duncan v Louch (1845) 6 QB 904 was about the alleged obstruction of a right of way granted in 1675 over a close called the Terrace Walk. Lord Denman CJ said this, at p 913:

“I think there is no doubt in this case. Taking the right, as Mr

Peacock suggests, to be like the right of the inhabitants of a square to walk in the square for their pleasure, they paying the necessary rates for keeping it in order, I cannot doubt that, if a stranger were to put a padlock on the gate and exclude one of the inhabitants, he might complain of the obstruction, and a

stranger would not be permitted to say that the plaintiff’s right

was only conditional.”

46. By contrast, in Mounsey v Ismay (1865) 3 H & C 486, it was decided that a customary public right to hold horse races was not an easement within the meaning of section 2 of the Prescription Act 1832 (2 & 3 Will 4, c 71). Baron Martin, delivering the judgment of the court, said, at p 498:

“… we are of opinion that to bring the right within the term

‘easement’ in the second section it must be one analogous to

that of a right of way which precedes it and a right of watercourse which follows it, and must be a right of utility and

benefit, and not one of mere recreation and amusement.”

47. On opposite sides of the same debate may be found Keith v 20th Century Club Ltd (1904) 73 LJ Ch 545 (in favour); International Tea Stores Co v Hobbs [1903] 2 Ch 165 at 172, and Attorney General v Antrobus [1905] 2 Ch 188 at 198 (Farwell J in both cases, against).

48. I consider that In re Ellenborough Park should be taken to have been dipositive of this issue for the purposes of English common law, to this extent, namely that it is not fatal to the recognition of a right as an easement that it is granted for recreational (including sporting) use, to be enjoyed for its own sake on the servient tenement. The question in every such case is whether the particular recreational or sporting rights granted accommodate the dominant tenement.

49. In In re Ellenborough Park the right was to the full use of a garden square (surrounded on three sides by houses and on the fourth by the sea), and the dominant tenements were all the houses surrounding the garden together with a small number of additional houses nearby which did not front onto the square. The rights granted did not accommodate those additional houses on the basis that the garden could be seen by persons from the dominant tenement. It was only by the permitted use of the garden that the requisite accommodation could be established. Evershed MR

described the enjoyment contemplated by the “full enjoyment” of the pleasure

ground as follows, at p 168:

“The enjoyment contemplated was the enjoyment of the

vendors’ ornamental garden in its physical state as such - the

right, that is to say, of walking on or over those parts provided for such purpose, that is, pathways and (subject to restrictions in the ordinary course in the interest of the grass) the lawns; to rest in or upon seats or other places provided; and, if certain parts were set apart for particular recreations such as tennis or bowls, to use those parts for those purposes, subject again, in the ordinary course, to the provisions made for their regulation: but not to trample at will all over the park, to cut or pluck the flowers or shrubs, or to interfere in the laying out or upkeep of

the park.”

50.       He continued:

“Such use or enjoyment is, we think, a common and clearly

understood conception, analogous to the use and enjoyment conferred upon members of the public, when they are open to

the public, of parks or gardens such as St James’s Park, Kew

Gardens or the Gardens of Lincoln’s Inn Fields.”

51. Turning to the question of accommodation, he continued, at p 174, by contrasting the right granted to the purchaser of a house to use the Zoological

Gardens free of charge or to attend Lord’s cricket ground without payment, with a

sale of part of the freehold of a house and garden with a right to the purchaser to use

the garden in common with the vendor. He said, at pp 174-175:

“In such a case, the test of connection, or accommodation,

would be amply satisfied; for just as the use of a garden undoubtedly enhances, and is connected with, the normal enjoyment of the house to which it belongs, so also would the right granted, in the case supposed, be closely connected with the use and enjoyment of the part of the premises sold. Such, we think, is in substance the position in the present case. The park became a communal garden for the benefit and enjoyment of those whose houses adjoined it or were in its close

proximity. … It is the collective garden of the neighbouring

houses, to whose use it was dedicated by the owners of the estate and as such amply satisfied in our judgment, the requirement of connection with the dominant tenements to which it is appurtenant. The result is not affected by the circumstance that the right to the park is in this case enjoyed by some few houses which are not immediately fronting on the park. The test for present purposes, no doubt, is that the park should constitute in a real and intelligible sense the garden (albeit the communal garden) of the houses to which its

enjoyment is annexed.”

52. This careful and compelling judgment of the court repays reading in full. I have cited the above passages because they demonstrate the following points. First, and contrary to the main submission for the appellants in the present case, the Court

of Appeal’s conclusion did not depend upon the rights granted being essentially

private in nature. On the contrary, they were described as broadly similar to those enjoyed by the public over well-known parks and gardens in London. Secondly, the rights granted were essentially recreational, although they included limited sporting elements. Thirdly, the reason why the accommodation requirement was satisfied was not because the rights were recreational in nature, but because the package of rights afforded the use of communal gardens to each of the townhouses to which the rights were annexed. They provided those houses with gardens, albeit on a communal basis, and gardens were a typical feature serving and benefiting townhouses as dominant tenements.

53. In the present case the dominant tenement was to be used for the development, not of homes, still less townhouses, but of timeshare apartments. 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 (as it was to the judge) 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 as such, just as (although for different reasons) the grant of rights over a communal garden is of service, utility and benefit to a townhouse.

54. The appellants submitted that the grant of such extensive recreational and sporting rights (including the use of a fully serviced and maintained 18-hole championship golf course) could not be regarded as accessory to the timeshare apartment, in the same way that a garden is accessory to a house. Rather, Mr Morshead submitted, use of the timeshare apartment was an accessory to the enjoyment of the recreational and sporting rights, so that to treat the rights as an easement for the benefit of the timeshare unit was to allow the tail to wag the dog. Reliance for that purpose was placed on Hill v Tupper (1863) 2 H & C 121, in which the owner of the Basingstoke Canal granted the exclusive right to operate a pleasure- boating business on the whole canal, annexed to a small strip of land on the canal- side near Aldershot, upon which the grantee intended to erect a boathouse. Giving the leading judgment Pollock CB said:

“I do not think it necessary to assign any other reason for our

decision, than that the case of Ackroyd v Smith (1850) 10 CB 164 expressly decided that it is not competent to create rights unconnected with the use and enjoyment of land, and annex

them to it so as to constitute a property in the grantee.”

55. The case had been argued on the basis that the exclusive right to operate a pleasure-boat business on the canal was in the nature of a profit rather than an easement, by way of analogy with a several fishery or a right of turbary. Unlike easements, there is no invariable requirement that a profit accommodate neighbouring land: see Gale on Easements, 20th ed (2017), at para 1-149. It appears from the full report of the submissions of counsel, and the judicial interventions

therein, that it was not argued that the right granted accommodated the plaintiff’s

land on the canal-side. The members of the court appear to have assumed that it did not, although, following In re Ellenborough Park, at least one commentator has suggested that the same facts might now give rise to an easement on that basis: see R N Gooderson, writing in the Cambridge Law Journal [1956] CLJ 24, 25.

56. In my view Hill v Tupper was decided on the basis that the grant of a monopoly to carry on a pleasure boat business on the whole length of a canal (which ran from Chertsey to Basingstoke) was by its very nature incapable of constituting a proprietary right, merely by being annexed to the lease of a tiny section of the canal bank, regardless whether it did or did not accommodate the supposed dominant tenement. It was held to have been a perfectly valid grant of a personal right, as between the canal owner and the plaintiff lessee. But to sue for an infringement of it by another pleasure boat operator would have required the plaintiff to sue in his

landlord’s name as the owner of the canal.

57. Hill v Tupper is not therefore authority for the proposition that the grant of rights which accommodate land cannot be an easement unless their enjoyment is capable of being described (in proportionate terms) as subordinate or ancillary to the enjoyment of the dominant tenement. Providing that the rights are for the benefit or utility of the dominant tenement as such, it matters not that their enjoyment may be a primary reason why persons are attracted to acquire rights (such as timeshare units) in the dominant tenement.

The Fourth Condition

58. At first sight, the condition that the rights must be capable of forming the subject-matter of a grant appears more apposite for testing the validity, as easements, of rights said to have been acquired otherwise than by grant, for example by prescription. In In re Ellenborough Park the exact significance of this fourth

condition was described, at p 164, as “at first sight perhaps, not entirely clear”. But

it has come to be a repository for a series of miscellaneous requirements which have been held to be essential characteristics of an easement. They include the requirements that the right is defined in sufficiently clear terms, that it is not purely precarious, so as liable to be taken away at the whim of the servient owner, that the right is not so extensive or invasive as to oust the servient owner from the enjoyment or control of the servient tenement, and that the right should not impose upon the servient owner obligations to expend money or do anything beyond mere passivity.

59.       It used to be said that this fourth condition included the proposition that a

“mere right of recreation and amusement” which conferred no quality of utility or

benefit, could not be an easement. I have dealt with this supposed condition by reference to the question whether the grant accommodates the dominant tenement. If, as here, the accommodation test is satisfied, then the fact that it may be a right to use recreational or sporting facilities does not, as the Ellenborough Park case makes clear, 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 to human beings that the pejorative expression “mere right of

recreation and amusement, possessing no quality of utility or benefit” has become a

contradiction in terms, viewed separately from the issues as to accommodation of the dominant tenement. Recreation, including sport, and the amusement which comes with it, does confer utility and benefit on those who undertake it.

60. Returning to the other aspects of this fourth condition, there is no doubt in this case that the Facilities Grant was in sufficiently clear and precise terms, and it

is not said to have been merely precarious. The appellant’s objections have been

formulated under the headings of ouster and mere passivity. These requirements serve a common public policy purpose, namely to prevent freehold land being permanently encumbered by proprietary restrictions and obligations which inhibit its utility to an unacceptable degree.

61. The precise extent of the ouster principle is a matter of some controversy, which it is unnecessary to resolve on this occasion. The view of the Law

Commission, in its 2011 paper “Making Land Work: Easements, Covenants and

Profits à Prendre” at paras 3.207-3.211, is that the scope for litigation created by its

uncertainties sufficiently outweighs its utility that it should be abolished. The controversy usually causes difficulty in the context of parking rights, and its extent is sufficiently summarised (for present purposes) in the speech of Lord Scott in Moncrieff v Jamieson (supra) at paras 54 to 61 (in which he treated the Scottish law of servitudes as for all relevant purposes the same as the English law of easements). Leaving aside cases where the grant confers exclusive possession, which cannot by definition be an easement, 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.

62.       In the present case the appellants’ ouster argument focused upon possession

and control rather than reasonable beneficial use. It may be summarised as follows. The grant of the facilities rights, particularly in relation to the golf course, must be

assumed to carry with it a “step-in” right of the dominant owner to manage and

maintain the relevant recreational and sporting facilities in the event that, being under no obligation to the dominant owner to do so, the appellants as servient owners ceased to do so themselves. A championship golf course requires not merely occasional maintenance but day to day management and supervision, to an extent that would require the dominant owners to take control of the golf course, and other facilities such as tennis and squash courts, if only to regulate their use in accordance with a booking system. Thus, the exercise of those step-in rights would deprive the appellants of possession or control of the Park, or substantial parts of it, thereby amounting to ouster.

63. The judge and the Court of Appeal rejected these submissions, on the basis of a concurrent factual analysis. Even the golf course could have been kept in a playable condition (although not as an immaculate championship course) by the exercise of those step-in rights, without the dominant owners taking possession or control: see in particular paras 77 and 78 of the judgment of the Court of Appeal, and the analogy drawn with Dowty Boulton Paul Ltd v Wolverhampton Corpn (No 2) [1976] Ch 13, where the right to take-off and land airplanes on an airfield enabled the dominant owners to step in and mow the field sufficient to create and maintain runways when the servient owners discontinued its use as an airfield. This was held not to amount to an ouster.

64.       No basis was shown in the appellants’ submissions to justify this court taking

a different view of that essentially factual question. But I would go further. In my view it is wrong in principle to test the issue whether a grant of rights amounts to an ouster of the servient owner by reference to what the dominant owner may do by way of step-in rights if the servient owner ceases to carry out the necessary management and maintenance of the servient tenement. This is for two reasons. The first is that the ouster question should be addressed by reference to what may be supposed to have been the ordinary expectations of the parties, at the time of the grant, as to who, as between dominant and servient owners, was expected to undertake the management, control and maintenance of the servient tenement. In the present case, as the judge held, the plain expectation was that the relevant part of the Park would be managed, controlled and maintained as a leisure complex by its owners, rather than by the owners of Elham House or by the timeshare owners as members of the RVOC. The exercise of step-in rights by the dominant owners would arise only in the event that the owners of the Park gave up the management, control and maintenance of the recreational and sporting facilities. Nothing in the terms of the Facilities Grant impinged upon those rights of management and control in any way.

65. The second reason is that 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: see Gale on Easements, 20th ed, at para 1-93 and Carter v Cole [2006] EWCA Civ 398; [2006] NPC 46 per

Longmore LJ at para 8(6). The dominant owner’s right is “to enter the servient owner’s land for the purpose, but only to do necessary work in a reasonable manner

…”. Provided that, as the courts below have held, the recreational and sporting

facilities in the Park could be used by the RVOC timeshare owners without taking

control of the Park, then no question of ouster arises.

Mere Passivity

66. It is well settled that (subject to irrelevant exceptions) an easement does not require anything more than mere passivity on the part of the servient owner: see Gale (op cit) at para 1-96 and Jones v Price [1965] 2 QB 618 at 631, per Willmer LJ:

“… properly speaking, an easement requires no more than

sufferance on the part of the occupier of the servient tenement,

…”

In Moncrieff v Jamieson (supra) at para 47, Lord Scott of Foscote said:

“the grant of a right that required some positive action to be

undertaken by the owner of the servient land in order to enable the right to be enjoyed by the grantee could not, in my opinion,

be a servitude.”

He then referred to a right to use a neighbour’s swimming pool as an example of

such a right.

67. This does not mean that easements cannot be granted if they involve the use of structures, fixtures or chattels on the servient tenement, which, in the ordinary course, the parties to the grant expect that the servient owner will manage and maintain. All it means is that the grant of the easement does not impose upon the servient owner an obligation to the dominant owner to carry out any such management or maintenance. The servient owner may do so because he wishes to use the structures, fixtures or chattels for the same purpose as the dominant owner, and has both the possession and control of the servient tenement and more resources than the dominant owner with which to do so. The grantor may or may not choose to make enjoyment of the easement conditional upon the dominant owner making a contribution towards the cost of management and maintenance, but no such contribution obligation will lightly be implied. There may, as in the present case, be a commercial expectation that the servient owner will undertake the cost and other burdens of management and maintenance, but the fact that the shared commercial expectation may have been (as in the present case) built upon sand rather than rock, so that those burdens prove uneconomic for the servient owner, will not affect the question whether the grant of the relevant rights constitutes an easement.

68. I have already mentioned examples of easements calling for the use of fixtures or chattels, such as the lock gates and sluices in Simpson v Godmanchester Corpn, the pump in Pomfret v Ricroft and the humble lavatory in Miller v Emcer. Perhaps the most telling example is the grant of a right of way over a route which includes a substantial bridge: see Jones v Pritchard [1908] 1 Ch 630 at 637. This may require significant regular maintenance, and (in connection with a freehold easement) the large expense of occasional reconstruction. If granted by the owners of a substantial landed estate in favour of the owners of a cottage to which the right of way is the only means of access, it may be inconceivable in the real world that the maintenance, repair and replacement of the bridge will in fact be undertaken by anyone other than the servient owners. Nonetheless the grant of the easement carries with it no obligation on the part of the servient owners to carry out maintenance, repair or replacement, even if the bridge were, in the absence of it, to become unusable.

69. There is therefore 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 of any structures, fittings or even chattels located thereon. The only essential requirement (imposed to prevent land being burdened to an extent contrary to the public interest) is that the servient owner has undertaken no legal obligation of that kind to the dominant owner.

70. There plainly was in the present case a common understanding between the respective grantor and grantee of the rights over the recreational and sporting facilities in the Park that the significant cost of the management, maintenance, repair and replacement of the structures, fixtures and, if necessary, chattels, requisite for the enjoyment of those rights would be undertaken by the successive owners of the Park. That was the express basis upon which the Regency Villas timeshare units were offered for sale to the public in the promotional materials put in evidence at the trial. But the concurrent analysis of the judge and of the Court of Appeal that the Facilities Grant did not of itself impose such obligations on the servient owners of the Park cannot in my view be faulted. True it is that, in the same document, the original grantor undertook a personal maintenance obligation to the original grantee, but this was (or should have been) known at the time of the conveyancing to have a one-day limited life, because of the intention that there should be an immediate further transfer of Elham House. This personal covenant did not form part of the Facilities Grant.

71. The appellants submitted nonetheless that the Facilities Grant was no more than illusory as a grant of rights of practical utility for an unlimited period unless the owners for the time being of the Park undertook responsibility to the dominant owners for the substantial cost of management, maintenance, repair and renewal.

but there seems to have been some doubt as to how far it went. In their submission, as understood by the court, the grant would not extend to wholly new facilities on a part of the estate where none had previously existed, but would include, for example, an extension onto new land of the golf-course (para 36). The court took a more limited view:

“The question of whether a minor or de minimis extension to

the land used by the existing or replacement facilities does not arise on the facts of this case. But we would be inclined to accept that such an incremental increase in the land used by the golf course or, say, a small extension to the existing land used by the swimming pool or to the run back used by the tennis courts, would be covered on the proper construction of the grant. A completely new facility on new ground would not be covered, but a replacement facility, even one that had been slightly extended beyond the ground used by the original

facility, would be.” (para 44)

113.     The appellants’ submissions support this limited view. I note three points in

particular. Firstly, they rely on the ordinary construction of the words of the grant which are expressed in the present tense, and say nothing about future facilities.

They contrast para 2 which refers in terms to pipes and drains now in the land “or constructed within 80 years of the date hereof”. Secondly, they point out that the

“Transferor’s adjoining estate” (the expression used in the grant) extends to a large

area (some 90 acres) of mainly agricultural land. It cannot sensibly have been intended that this large area would be burdened for ever with rights to future recreational facilities created anywhere at any time in the future. Thirdly, such a construction would come into direct conflict with the rule against perpetuities. As they point out, there is authority for the proposition that the rule is not offended by a right which may allow for future substitutions (see eg Dunn v Blackdown Properties Ltd [1961] Ch 433, 440 per Cross J), but none for a right over wholly new facilities which may be created anywhere over an area of this size.

114. I see considerable force in all these points. Although it is not necessary for the purposes of this appeal to reach a definitive view on the future extent of the grant, the Court of Appeal were right in my view to construe it narrowly. Lord

Briggs seeks to avoid the problem by treating the grant as limited to the “leisure

complex”. However, that is not what the document says, nor indeed is it clear

precisely what physical area would be so defined.

115.     For these reasons, in respectful disagreement with the majority, I would have

allowed the appeal.