– William Wong, Notes Editor (Private Law)
Case note: Regency Villas Title Ltd v Diamond Resorts (Europe) Ltd [2018] UKSC 57
William Wong
A. Introduction
The law of easement, a seemingly dry and technical aspect of land law, has been rejuvenated in the recent UKSC case of Regency Villas Title Ltd v Diamond Resorts (Europe) Ltd. [1] Much of the confusion surrounding the law is attributed to the archaic language of the Re Ellenborough Park test. The present case turns on whether the right to the free use of sporting and recreational facilities provided in a country club may be conferred upon the owners of an adjacent timeshare complex by easements. In doing so, the Court revisited and shed new lights on the classic four-limb test. This note analyses the majority’s reasoning. While recognising its laudable objectives, it then argues that Lord Carnwath’s orthodox approach is sounder in principle and policy.
B. Background facts
The case concerns Broome Park, a country estate in Canterbury that includes the ‘Mansion House’, ‘Elham House’ and neighbouring lands. In 1967, Elham House was sold and the seller retained the rest of Broome Park. Following subsequent transfers, Elham House was eventually held for the benefit of the Regency Villas Owners Club’s members. A freehold owner of Elham House, Diamond Resorts (Europe) Ltd, sought a declaration for the use of the facilities under an easement on the basis of a Facilities Grant. The alleged servient tenement contains a clubhouse and recreational facilities, including a golf course, swimming pool, and gardens. Before the trial judge, the Respondents successfully established the easement. They were granted an injunction restraining interference with their use of the facilities. The Court of Appeal subsequently upheld the decision. The UKSC again dismissed the appeal (Lord Briggs delivering the judgment) and affirmed the existence of such easement.
C. Analysis of the majority opinion
Any discussion of easement invariably starts with In re Ellenborough Park’s adoption of Dr Cheshire's formulation on the essential conditions: 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. Since then, this framework has stood for the locus classicus. The present case turns on the scope of the second and fourth condition.
The ‘Accommodation’ requirement
Lord Briggs’ discussion on the ‘accommodation’ requirement seems entirely conventional. Some general principles can be teased out. It is trite that the right must not be merely appurtenant or annexed to the dominant tenement, if the enjoyment has nothing to do with its normal use. [2] The ‘normal use’ of the dominant tenement may be residential or business in nature. [3] The Re Ellenborough Park formula focuses on benefits that pertain to the land, rooted in the Roman law doctrine of ius spatiandi. Understandably, this seeks to maintain a clear dividing line between mere rights in personam (e.g. licences) from rights in rem. Difficulties abound for recreational rights since they are invariably enjoyed for one’s own sake. They do not pertain to the beneficial use of the dominant tenement – it is nonsensical to say that the land ‘enjoys’ these entertainment facilities. Lord Briggs considers Re Ellenborough Park as dispositive on the issue that recreational use is not fatal to the recognition of a right as an easement, despite previous conflicting dicta. [4] This is not a controversial statement – the crux of the dispute falls on how far could the notion of ‘recreational use’ be stretched. Lord Briggs skillfully evaded the ‘extent’ question at this stage of analysis, but chose to address it under the fourth condition.
Rights capable of forming the subject-matter of a grant
This requirement is notorious for creating uncertainties with its circular nature. One of its core facets is that the servient owner shall not be obliged to do anything beyond mere passivity. [5] The Law Commission in 2011 opined that the scope for litigation this created sufficiently outweighs its utility – abolition is overdue. [6] It is particularly difficult to delineate precisely when the right is so extensive as to ‘oust’ the servient owner from his enjoyment or control. Here, Lord Briggs was quick to dismiss the Appellant’s ouster argument by deferring to the trial judge and the CA’s factual findings. This decision breaks new ground as it broadens the scope of Ellenborough Park in three dimensions:
1. The nature and extent of the recreational and sporting facilities in Regency Villas requires more intensive management.
2. A wider group of dominant owners (timeshare owners and public members) in present in Regency Villas.
3. The cost of managing and maintaining was shared among servient owners in Regency Villas and dominant owners in Ellenborough Park respectively.
In justifying the extension, Lord Briggs invoked the principle that ‘the common law should, as far as possible, accommodate itself to new types of property ownership and new ways of enjoying the use of land.’ [7] This is arguably in line with the recent judicial attitude. In Coventry v Lawrence, [8] a right to commit a noise nuisance could amount to an easement, despite being framed in dubious terms as ‘the right to transmit sound waves over land.’ [9] However, this optimism shall not be taken too far. The majority is not oblivious to the countervailing factors. Annexation to a freehold is indeterminate in length whilst a timeshare structure is frequently set up for a limited duration. In Lord Briggs’ words, ‘the rights conferred are likely to burden the servient land long after the leisure complex in question has outlived its natural life.’ [10] Furthermore, he even acknowledged that using easement as the conveyancing vehicle for recreational rights as ‘hardly ideal’ in comparison with a leasehold structure. Surprisingly, there was no attempt at all to rebut these arguments. The conclusion was abrupt as he invokes the vague notion that recreational and sporting activity is a beneficial part of modern life that the common law should support.
D. Lord Carnwath’s dissent
A brief yet astute dissent came from the former Law Commissioner. He criticises the majority's reasoning on several grounds. First, doctrinally, the expansion attracts weak support from authorities. The cases cited by Lord Briggs involves nothing more than access to land for the purposes of walking and enjoyment as a garden or park. These, as he rightly observed, are not comparable with the 18-hole golf course. [11] It is submitted that while they support the reasoning of Re Ellenborough Park, it would be far-fetched to say they contemplate the creation of a novel proprietary right. Secondly, he draws on the extensive burden imposed on the alleged servient owner. It involved organisation and management of the entire leisure complex, beyond mere maintenance or repair. [12] This distinction was heavily downplayed by Sir Geoffrey Vos in the Court of Appeal. A third objection is a ‘floodgate concern’. Stretched to its logical limit, the majority decision is problematic. It could theoretically be applied to cases such as those concerning free access to the rides and attractions in amusement parks, where active management and supervision are indispensable. [13]
E. Broader implications
Public policy
The broadly framed fourth condition in Ellenborough Park conveys a policy agenda – to ensure the law of easement evolves with societal realities. However, it is already doubtful whether recognizing the ‘recreational’ value of land bears any novelty whatsoever. More fundamentally, the policy concern surely goes in two directions. Another major objective is to prevent haphazard recognitions that could permanently encumber the land by proprietary restrictions. This in turns inhibits the free alienability of land as a valuable commercial commodity. This must also be viewed in light of the lack of statutory basis for the discharge or modification of easements, contrary to that of restrictive covenants. Finally, the majority’s approach also potentially goes against the spirit of the numerus clausus principle, that rights in rem are confined to a finite subset. It might well be said that no new proprietary rights are created – but numerus clausus is not a matter of form, but substance. Creating a new category of easement without a sound statutory or precedential footing is risky.
Practical implications
The decision would also be of interest to the conveyancing lawyers because the creation of this type of easement could impose onerous obligations on the servient owner. Importantly, it elevates the application of easements from the typical ‘backyard-garden-type’ cases to large-scale property project developments. Caution is therefore advised in drafting the grant documents. Lord Briggs stressed the importance of the following. First, where common intention to confer an easement is manifested, the ‘validation principle’ is applied to give it proper effect. [14] Secondly, whether the grant was intended to be a single comprehensive right to use facilities as they evolved, or if it is fixed in time. [15] Thirdly, the presence of express requirement for contribution to the operational costs. [16] This is particularly so in this case since the construction of the grant was influential and confidence-boosting in the majority’s decision in creating a new type of easement.
Overall, this seemingly technical case encompasses a debate on conflicting policy paradigms. It also epitomizes the confusion arising from the anachronistic formulation of a test that provides scope for disorganized expansion. The sweeping reforms proposed by the Law Commission merit reconsideration to put the law back on principled track.
_________________________________________
[1] [2018] UKSC 57.
[2] ibid [40].
[3] ibid [40]-[41].
[4] ibid [48].
[5] ibid [58].
[6] Law Commission Report, 'Making Land Work: Easements, Covenants and Profits a Prendre' (2011) [3.207]-[3.211].
[7] (n 1) [76].
[8] [2014] UKSC 13.
[9] ibid [33].
[10] (n 1) [79].
[11] (n 1) [96].
[12] (n 1) [98].
[13] (n 1) [107].
[14] (n 1) [25].
[15] (n 1) [26]-[29].
[16] (n 1) [30].
William Wong
A. Introduction
The law of easement, a seemingly dry and technical aspect of land law, has been rejuvenated in the recent UKSC case of Regency Villas Title Ltd v Diamond Resorts (Europe) Ltd. [1] Much of the confusion surrounding the law is attributed to the archaic language of the Re Ellenborough Park test. The present case turns on whether the right to the free use of sporting and recreational facilities provided in a country club may be conferred upon the owners of an adjacent timeshare complex by easements. In doing so, the Court revisited and shed new lights on the classic four-limb test. This note analyses the majority’s reasoning. While recognising its laudable objectives, it then argues that Lord Carnwath’s orthodox approach is sounder in principle and policy.
B. Background facts
The case concerns Broome Park, a country estate in Canterbury that includes the ‘Mansion House’, ‘Elham House’ and neighbouring lands. In 1967, Elham House was sold and the seller retained the rest of Broome Park. Following subsequent transfers, Elham House was eventually held for the benefit of the Regency Villas Owners Club’s members. A freehold owner of Elham House, Diamond Resorts (Europe) Ltd, sought a declaration for the use of the facilities under an easement on the basis of a Facilities Grant. The alleged servient tenement contains a clubhouse and recreational facilities, including a golf course, swimming pool, and gardens. Before the trial judge, the Respondents successfully established the easement. They were granted an injunction restraining interference with their use of the facilities. The Court of Appeal subsequently upheld the decision. The UKSC again dismissed the appeal (Lord Briggs delivering the judgment) and affirmed the existence of such easement.
C. Analysis of the majority opinion
Any discussion of easement invariably starts with In re Ellenborough Park’s adoption of Dr Cheshire's formulation on the essential conditions: 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. Since then, this framework has stood for the locus classicus. The present case turns on the scope of the second and fourth condition.
The ‘Accommodation’ requirement
Lord Briggs’ discussion on the ‘accommodation’ requirement seems entirely conventional. Some general principles can be teased out. It is trite that the right must not be merely appurtenant or annexed to the dominant tenement, if the enjoyment has nothing to do with its normal use. [2] The ‘normal use’ of the dominant tenement may be residential or business in nature. [3] The Re Ellenborough Park formula focuses on benefits that pertain to the land, rooted in the Roman law doctrine of ius spatiandi. Understandably, this seeks to maintain a clear dividing line between mere rights in personam (e.g. licences) from rights in rem. Difficulties abound for recreational rights since they are invariably enjoyed for one’s own sake. They do not pertain to the beneficial use of the dominant tenement – it is nonsensical to say that the land ‘enjoys’ these entertainment facilities. Lord Briggs considers Re Ellenborough Park as dispositive on the issue that recreational use is not fatal to the recognition of a right as an easement, despite previous conflicting dicta. [4] This is not a controversial statement – the crux of the dispute falls on how far could the notion of ‘recreational use’ be stretched. Lord Briggs skillfully evaded the ‘extent’ question at this stage of analysis, but chose to address it under the fourth condition.
Rights capable of forming the subject-matter of a grant
This requirement is notorious for creating uncertainties with its circular nature. One of its core facets is that the servient owner shall not be obliged to do anything beyond mere passivity. [5] The Law Commission in 2011 opined that the scope for litigation this created sufficiently outweighs its utility – abolition is overdue. [6] It is particularly difficult to delineate precisely when the right is so extensive as to ‘oust’ the servient owner from his enjoyment or control. Here, Lord Briggs was quick to dismiss the Appellant’s ouster argument by deferring to the trial judge and the CA’s factual findings. This decision breaks new ground as it broadens the scope of Ellenborough Park in three dimensions:
1. The nature and extent of the recreational and sporting facilities in Regency Villas requires more intensive management.
2. A wider group of dominant owners (timeshare owners and public members) in present in Regency Villas.
3. The cost of managing and maintaining was shared among servient owners in Regency Villas and dominant owners in Ellenborough Park respectively.
In justifying the extension, Lord Briggs invoked the principle that ‘the common law should, as far as possible, accommodate itself to new types of property ownership and new ways of enjoying the use of land.’ [7] This is arguably in line with the recent judicial attitude. In Coventry v Lawrence, [8] a right to commit a noise nuisance could amount to an easement, despite being framed in dubious terms as ‘the right to transmit sound waves over land.’ [9] However, this optimism shall not be taken too far. The majority is not oblivious to the countervailing factors. Annexation to a freehold is indeterminate in length whilst a timeshare structure is frequently set up for a limited duration. In Lord Briggs’ words, ‘the rights conferred are likely to burden the servient land long after the leisure complex in question has outlived its natural life.’ [10] Furthermore, he even acknowledged that using easement as the conveyancing vehicle for recreational rights as ‘hardly ideal’ in comparison with a leasehold structure. Surprisingly, there was no attempt at all to rebut these arguments. The conclusion was abrupt as he invokes the vague notion that recreational and sporting activity is a beneficial part of modern life that the common law should support.
D. Lord Carnwath’s dissent
A brief yet astute dissent came from the former Law Commissioner. He criticises the majority's reasoning on several grounds. First, doctrinally, the expansion attracts weak support from authorities. The cases cited by Lord Briggs involves nothing more than access to land for the purposes of walking and enjoyment as a garden or park. These, as he rightly observed, are not comparable with the 18-hole golf course. [11] It is submitted that while they support the reasoning of Re Ellenborough Park, it would be far-fetched to say they contemplate the creation of a novel proprietary right. Secondly, he draws on the extensive burden imposed on the alleged servient owner. It involved organisation and management of the entire leisure complex, beyond mere maintenance or repair. [12] This distinction was heavily downplayed by Sir Geoffrey Vos in the Court of Appeal. A third objection is a ‘floodgate concern’. Stretched to its logical limit, the majority decision is problematic. It could theoretically be applied to cases such as those concerning free access to the rides and attractions in amusement parks, where active management and supervision are indispensable. [13]
E. Broader implications
Public policy
The broadly framed fourth condition in Ellenborough Park conveys a policy agenda – to ensure the law of easement evolves with societal realities. However, it is already doubtful whether recognizing the ‘recreational’ value of land bears any novelty whatsoever. More fundamentally, the policy concern surely goes in two directions. Another major objective is to prevent haphazard recognitions that could permanently encumber the land by proprietary restrictions. This in turns inhibits the free alienability of land as a valuable commercial commodity. This must also be viewed in light of the lack of statutory basis for the discharge or modification of easements, contrary to that of restrictive covenants. Finally, the majority’s approach also potentially goes against the spirit of the numerus clausus principle, that rights in rem are confined to a finite subset. It might well be said that no new proprietary rights are created – but numerus clausus is not a matter of form, but substance. Creating a new category of easement without a sound statutory or precedential footing is risky.
Practical implications
The decision would also be of interest to the conveyancing lawyers because the creation of this type of easement could impose onerous obligations on the servient owner. Importantly, it elevates the application of easements from the typical ‘backyard-garden-type’ cases to large-scale property project developments. Caution is therefore advised in drafting the grant documents. Lord Briggs stressed the importance of the following. First, where common intention to confer an easement is manifested, the ‘validation principle’ is applied to give it proper effect. [14] Secondly, whether the grant was intended to be a single comprehensive right to use facilities as they evolved, or if it is fixed in time. [15] Thirdly, the presence of express requirement for contribution to the operational costs. [16] This is particularly so in this case since the construction of the grant was influential and confidence-boosting in the majority’s decision in creating a new type of easement.
Overall, this seemingly technical case encompasses a debate on conflicting policy paradigms. It also epitomizes the confusion arising from the anachronistic formulation of a test that provides scope for disorganized expansion. The sweeping reforms proposed by the Law Commission merit reconsideration to put the law back on principled track.
_________________________________________
[1] [2018] UKSC 57.
[2] ibid [40].
[3] ibid [40]-[41].
[4] ibid [48].
[5] ibid [58].
[6] Law Commission Report, 'Making Land Work: Easements, Covenants and Profits a Prendre' (2011) [3.207]-[3.211].
[7] (n 1) [76].
[8] [2014] UKSC 13.
[9] ibid [33].
[10] (n 1) [79].
[11] (n 1) [96].
[12] (n 1) [98].
[13] (n 1) [107].
[14] (n 1) [25].
[15] (n 1) [26]-[29].
[16] (n 1) [30].
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