Real property – Easement – Recreational facilities – Respondent timeshare owners seeking declaration of right to use leisure facilities on appellants’ adjacent estate free of charge – Judge granting declarations that easements existing – Court of Appeal allowing appeal in part – Appellants appealing – Respondents cross-appealing – Whether transfer granting easements or personal rights incapable of being transferred to third party – Appeal dismissed – Cross-appeal allowed
The first respondent was the freehold owner of Elham House, Canterbury. The house was split into two flats with 24 timeshare villas built in the grounds. Each respondent owner had the exclusive right to occupy a particular unit at specified times and was obliged to pay charges for the upkeep and maintenance of the timeshare land.
The first appellant was the freehold owner of the Broom Park Estate on which the timeshare land was situated and which included a mansion house. There were sporting and leisure facilities on the estate, including an outdoor swimming pool, gardens and a golf course. The swimming pool was later filled in and replaced by an indoor pool in the mansion house. The second appellant was the operator and leasehold proprietor of the golf course.
The respondents asserted that they were entitled to use the sporting and recreational facilities free of charge, by virtue of a grant contained in a 1981 transfer (the facilities grant), by which the then owner of both the estate and the timeshare land had transferred the latter to the first respondent’s predecessor. They sought a declaration that the rights they claimed were easements created by the 1981 transfer in favour of the timeshare units.
The judge found that the 1981 transfer created easements to use (free of charge) the gardens and sporting and recreational facilities on the appellants’ land, even where those had not been built or contemplated at the time of the transfer: [2015] EWHC 3564 (Ch); [2015] PLSCS 354. The Court of Appeal upheld the majority of the easements but found that, on the proper interpretation of the grant, facilities built after the 1981 transfer were not included: [2017] EWCA Civ 238; [2017] EGLR 24.
The appellants appealed. The respondents cross-appealed.
Held: (by a majority) The appeal was dismissed. The cross-appeal allowed.
(1) It was 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. In substance the grant was of a single comprehensive right to use a complex of facilities, and comprehended not only those constructed and in use at the time of the 1981 transfer, but additional or replacement facilities thereafter constructed and operated as part of the leisure complex. There was no express provision requiring the grantee or its successors or timeshare owners to contribute to the cost of operating, maintaining, renewing and replacing facilities.
(2) It was not fatal to the recognition of a right as an easement that it was granted for recreational (including sporting) use, to be enjoyed for its own sake on the servient tenement. The question was whether the particular recreational or sporting rights granted accommodated the dominant tenement. In the present case, the dominant tenement was to be used for the development of timeshare apartments. Timeshare units of this kind were typically occupied for holidays, by persons seeking recreation, including sporting activities, and it was plain that the grant of rights to use an immediately adjacent leisure development with all its recreational and sporting facilities was of service, utility and benefit to the timeshare apartments as such. Recreation, including sport, and the amusement which came with it, conferred utility and benefit on those who undertook it: In re Ellenborough Park [1956] Ch 131 applied.
(3) The grant of purely recreational (including sporting) rights over land which genuinely accommodated adjacent land might be the subject matter of an easement, provided that they satisfied the four well-settled conditions for easements. Two of the four conditions for an easement were met. There was a dominant and servient tenement and the dominant and servient owners were different persons. Whether the easement accommodated and served the dominant tenement was primarily a question of fact. Where the actual or intended use of the dominant tenement was itself recreational, as would generally be the case for holiday timeshare developments, the accommodation condition would generally be satisfied by a recreational easement. Recreational and sporting activity of the type exemplified by the facilities at Broome Park was so clearly a beneficial part of modern life that the common law should support structures which promoted and encouraged it.
(4) Regarding the fourth condition (the right had to be capable of forming the subject-matter of a grant) the appellants’ objections had been formulated under the headings of ouster (the step-in rights of the dominant owner) and mere passivity (alleged positive duties on the servient owner). Those requirements served a common public policy purpose to prevent freehold land being permanently encumbered by proprietary restrictions and obligations which inhibited its utility to an unacceptable degree. Those objections were not accepted because of the concurrent factual analysis of the courts below.
(5) On the cross-appeal, the grant of rights was not limited to the facilities in existence at the time of the 1981 grant. The respondents’ recreational easement extended to the new indoor swimming pool from the moment of its completion.
(6) (per Lord Carnwath dissenting) The intended enjoyment of the rights granted, most obviously in the case of the golf course and swimming pool, could not be achieved without the active participation of the owner of those facilities in their provision, maintenance and management. The Ellenborough Park principle should not be extended to a full leisure complex to create a wholly new form of property right.
Tim Morshead QC, Toby Watkin and Andrew Latimer (instructed by Pannone Corporate LLP, of Manchester and Osborne Clark LLP) appeared for the appellants; John Randall QC, Marc Brown and Katie Longstaff (instructed by Shakespeare Martineau LLP, of Birmingham) appeared for the respondents.
Eileen O’Grady, barrister
