Regency Villas Ltd v Diamond Resorts Ltd [2018] UKSC 57

Facts

• Diamond Resorts (Europe) Ltd owned a country club estate featuring various recreational facilities.
• Regency Villas Ltd comprised owners of apartments on the estate who had rights to use these facilities.
• The dispute arose when access to the recreational facilities was restricted due to their deterioration.
• Regency Villas Ltd claimed that their right to use the facilities constituted a legally enforceable easement attached to their apartments.
• Diamond Resorts contested this, arguing that such rights did not accommodate the dominant tenement, amounted to an ouster of ownership, and improperly required them to bear substantial facility maintenance costs.

Issues

1. Whether rights to use recreational facilities could constitute an easement benefiting the dominant land.
2. Whether the rights in question satisfied the requirement of accommodation of the dominant tenement.
3. Whether the rights imposed impermissible obligations on the servient owner, including active maintenance duties.
4. Whether the ‘step-in’ right of the dominant owner to maintain facilities infringed ownership or control of the servient land.

Decision

• The Supreme Court held that rights to use recreational facilities can constitute valid easements if they confer a real benefit to the dominant tenement.
• The Court found that these rights satisfied the requirement of accommodation, as the recreational facilities provided genuine value to the apartments.
• It was determined that the ‘step-in’ right by the dominant owners for maintenance purposes did not amount to an unlawful deprivation or control of the servient owner's property.
• The judgment clarified that easements may include access and maintenance rights without ousting the servient owner, provided there is no legal obligation on the servient owner to maintain the facilities.

Legal Principles

• An easement may exist for recreational purposes if it accommodates the dominant tenement by providing a genuine benefit.
• The “accommodation” test is satisfied even where recreational enjoyment is the primary reason for acquiring the dominant land.
• The rights in question must be sufficiently defined, not precarious, and must not entirely exclude the servient owner from possession or control.
• Easements should not generally impose active obligations on the servient owner beyond passivity; any maintenance rights by the dominant owner must not undermine the servient owner’s property rights.
• Precedents such as Re Ellenborough Park are refined to support the recognition of easements for recreational benefit.

Conclusion

The Supreme Court clarified that recreational rights can constitute valid easements when they benefit the dominant land, refining the accommodation and maintenance tests and providing authoritative guidance for property developments involving shared leisure facilities.