Regency Villas Title Ltd & Ors v Diamond Resorts (Europe) Ltd & Anor

This is the first time that the Court of Appeal has had the opportunity to consider the validity of easements of various kinds of recreational facilities. The last case that raised similar questions was the well-known decision in In Re Ellenborough Park [1956] Ch. 131 (“Ellenborough Park”), now more than 60 years ago. Since then, the culture and expectations of the population of England & Wales have radically changed. This case has to be considered in the light of those changes.

The question raised by the appeal is whether the right granted by a transfer dated 11^th November 1981 (the “1981 transfer”) “for the Transferee its successors in title its lessees and the occupiers from time to time of the property to use the swimming pool, golf course, squash courts, tennis courts, the ground and basement floor of Broome Park Mansion House [the “Mansion House”], gardens and any other sporting or recreational facilities … on the Transferor’s adjoining estate” (the “grant”) amounts to one or more easements. HH Judge Purle QC decided that it did, but gave permission to appeal. The defendants, who are the freehold and leasehold owners of the Broome Park Estate, Barham, Canterbury (the “Broome Park Estate”), challenge that decision on the basis that the rights granted (a) could not amount to easements because the facilities could only be maintained at considerable expense, (b) extended to facilities which were not even contemplated at the time of the 1981 transfer, and (c) comprised at best a bundle of easements and personal rights which the judge failed to unpack.

The 1^st claimant is the freehold owner of Elham House, Canterbury (“Elham House”) that lies in the middle of the Broome Park Estate. Elham House is split into two flats and there are 24 villas built in its grounds. Each is let on timeshares and accommodates 6 persons. The 2^nd to 5^th claimants represent those timeshare owners who are members of the so-called Regency Villas Owners Club (“RVOC”). The 1^st claimant, in effect, holds Elham House on trust for the members of RVOC. The claimants support the judge’s reasoning and also advance a respondents’ notice arguing in the alternative that the rights granted extend to a substitute swimming pool in the basement of the Mansion House that the defendants built to replace the one that existed in 1981, and to any other substitute facilities built since 1981.

It is common ground that the facilities at Broome Park Estate included on 11^th November 1981 formal Italianate gardens, an outdoor heated swimming pool (which was removed and filled in in about 2000, but replaced as we have said by an indoor swimming pool in the basement of the Mansion House), an 18-hole golf course, 3 squash courts, 2 outdoor hard-surfaced tennis courts, a putting green and a croquet lawn, a reception, a billiard room and a TV room on the ground floor of the Mansion House, and a restaurant, bar, gym, sunbed and sauna area in the basement of the Mansion House (the latter facilities were later converted into the indoor swimming pool). The Broome Park Estate also comprised a number of other facilities in 1981 and down the years, but those we have mentioned are the only important ones for the purposes of this appeal.

The layout is most easily understood from a series of plans, but in simple terms the Broome Park Estate comprised two titles. The smaller boot shaped title (K496390) included the Mansion House itself (which comprised some 18 timeshare units on the 1^st and 2^nd floors) and all the relevant leisure facilities except the golf course itself, which covered just over half of the larger adjoining title (K496391). Elham House, which became Regency Villas (title No. K854001), was entirely enclosed by the smaller title of the Broome Park Estate and was, therefore, close to all the facilities in question, including the 1^st tee of the golf course. Moreover, the Broome Park Estate has, since 2003, had a further 14 timeshare villas built on its own smaller title close to the golf course and close to Elham House. The entirety of the property in question was, therefore, laid out as a leisure complex with numerous available sporting and recreational facilities close at hand. Access was gained from the A260 Folkestone to Canterbury Road.

Before dealing in detail with the arguments that the parties advanced, it is useful to summarise the judge’s judgment, including some of the more important background facts that he outlined.

The relevant dominant tenement (Elham House) and the relevant servient tenement (Broome Park Estate) were in the common ownership of Gulf Investments Limited (“Gulf”), between November 1980 and November 1981. The larger Broome Park Estate was bought first by Gulf in November 1979. The Mansion House was refurbished between January 1980 and April 1981. The 1^st defendant is now the freehold owner of both the Broome Park Estate titles and the 2^nd defendant holds a 25-year lease of the golf course expiring in 2024. The defendants are in the same group of companies.

The 1981 transfer was between Gulf, as owner of both Elham House and the Broome Park Estate, and the 1^st claimant’s predecessor in title, Elham House Developments Ltd. It has, however, been lost. Nonetheless, the property register for the 1^st claimant’s title includes the following entries:-

“The land has the benefit of the following rights granted by a Transfer of the land in this title dated 11 November 1981 made between (1) [Gulf] (Transferor) and (2) Elham House Developments Limited (Transferee):-

“TOGETHER WITH firstly the right of way for the Transferee its successor in title its lessees and the occupiers from time to time of the property at all times with or without vehicles for all purposes in connection with the use and enjoyment of the property over and along the driveways and roadways (hereafter called “the roadways”) shown coloured blue on the plan attached hereto.

AND Secondly all the right to the full and free passage of gas water soil electricity and any other services from and to the property in and through any pipes drains wires cables or other conducting media now in under or over the Transferee’s [sic] adjoining land or constructed within 80 years of the date hereof.

AND thirdly the right for the Transferee its successors in title its lessees and the occupiers from time to time of the property to use the swimming pool, golf course, squash courts, tennis courts, the ground and basement floor of Broome Park Mansion House, gardens and any other sporting or recreational facilities (hereafter called “the facilities”) on the Transferor’s adjoining estate”.

The judge found that the construction of the Regency Villas at Elham House was intended, but not started, at the time of the 1981 transfer.

At paragraph 29 of his judgment, the judge recorded that the defendants had argued that the rights to use the facilities were personal rights incapable of running with the land so as to bind successors in title. Accordingly, they argued that the rights fell away 24 hours after the 1981 transfer when, as intended before the 1981 transfer, Elham House was transferred from Elham House Developments Ltd. to Barclays Bank Trust Company Ltd. (“Barclays”). The judge thought it was impossible to attribute, on any rational basis, any intention to the parties to the 1981 transfer that the rights granted would be so short-lived.

The judge recited some of the evidence about who had said what after 1981 about the claimants’ rights to use the facilities, but concluded that none of it was relevant to any issue of construction or of whether the rights took effect as easements. He recorded, however, that the claimants did not suggest that the defendants were obliged to spend any money on providing or maintaining the facilities. The past contributions that were, however, undoubtedly made, were simply a means of ensuring that the facilities were kept up to a high standard, not an acknowledgment that their use was chargeable. The judge concluded at paragraph 36 of his judgment that, if the right to use the facilities took effect as an easement, they were available free of charge. He rejected the need to imply any term requiring payment of a financial contribution by the claimants.

The judge’s starting point on the law of easements was understandably Ellenborough Park, where the owners of a park conveyed plots on the edge of it for building purposes granting each purchaser: “the full enjoyment … at all times hereafter in common with others to whom such easements may be granted of the pleasure ground … but subject to payment …”. Both Danckwerts J and the Court of Appeal held that the easement was valid. The judge referred to the 4 characteristics of an easement taken from the 7^th edition of Cheshire’s Modern Law of Real Property and accepted as common ground at page 163 of the Court of Appeal’s judgment, namely:-

The judge held that there was no difficulty in this case with the first and third characteristics. He also had no doubt that “rights in question accommodate the timeshare land [Elham House] in the sense that the enjoyment of that land, which has been developed into timeshare units for recreational use, is enhanced”, just as the right to the full enjoyment of an ornamental pleasure ground was held to accommodate the surrounding plots in Ellenborough Park.

The judge then identified three further questions from page 164 of the Court of Appeal’s judgment in Ellenborough Park, which were relevant to the fourth characteristic as follows:-

In relation to the first question, the judge held that there was nothing vague or of excessive width in the granted rights. They clearly extended to all recreational and sporting facilities on the estate and to the gardens and included facilities that were neither there nor planned in 1981 or which may have been significantly improved since then. The rights granted were to be construed as entitling the claimants to use the facilities and gardens subject to proper restrictions and regulation made in the ordinary course (as was referred to at page 168 of the Court of Appeal’s judgment in Ellenborough Park), but not payment.

The judge held that there were many easements that could not be enjoyed by all dominant and servient owners at the same time, of which the most prosaic was a toilet (see Miller v. Emcer Products Limited [1956] Ch. 304). Give and take was required between shared users of the rights and the servient owner. The judge rejected an argument based on the fact that 156 persons were entitled to take advantage of the rights every week, saying that that did not amount to joint possession on such a large and well-regulated servient estate, where the defendants determined opening and closing times. The defendants developed further timeshare properties in 2003 and undertook many alterations and additions over the years. Conversely the claimants had no right to develop new facilities or, for example, dig up plants and trees on the defendants’ property that they did not like. The defendants’ ownership and possession was real.

The judge held that the existence of these rights did not require either expenditure or the carrying on of a business by the defendants. The defendants could neglect maintenance and upkeep and allow the estate to fall into disrepair, and cease carrying on business for that or any reason, even if the disrepair required closure of the facilities. The potential liability to occupiers caused by such disrepair was a function of much simpler easements such as a right of way.

It was a relatively small step, according to the judge, to extend the easement allowing recreational walking all over the servient tenement in Ellenborough Park to the enjoyment of sporting and other recreational facilities. The objection that a mere right of recreation could not take effect as an easement was apt to mislead, unless it was understood that the word “mere” connoted a right which either did not benefit the dominant land at all or was wholly extraneous to and independent of the use of the dominant land as such. Despite the absence of English or Scottish authority, there was no legal impediment to the grant of an easement to use a golf course, swimming pool or tennis court, provided that the grant revealed the intention, on its proper construction, to grant an easement as opposed to a personal right.

The judge then relied on a series of Commonwealth cases recognising various kinds of similar easements as supporting the proposition that there was no reason in law why an easement could not be granted for recreational purposes. He referred to the following cases: Dukart v. District of Surrey et al (1978) 86 DLR 609 at page 617 (Supreme Court of Canada: free access to the waters of the bay); Blankstein, Fages and Fages v. Walsh [1989] 1 WWR 277 (Manitoba: a playground as a family recreational area, although rejected on the facts); Grant v. Macdonald [1992] 5 WWR 577 (British Columbia Court of Appeal: the right to build and use a swimming pool and other improvements, where the pool was not, but a gazebo was, built); Riley v. Pentilla [1974] VR 547 (Australia: use of the Outlook Park Reserve “for the purpose of recreation or a garden or a park”); and City Developments v. Registrar General of the Northern Territory (2000) 135 NTR 1 (Supreme Court of the Northern Territory: the use of a lake and natural foreshore within a resort complex).

The judge’s reasoning concluded with a consideration of Lord Scott’s dictum in the Scottish case of Moncrieff v. Jamieson [2007] 1 W.L.R. 2620, where he had doubted at page 2636E whether the grant of a right to use a neighbour’s swimming pool could ever qualify as a servitude (the Scottish equivalent of an easement) as the swimming pool owner would be under no obligation to keep the pool full of water and the grantee would be in no position to fill it if the grantor chose not to do so. The right to use the pool would, he said, be no more than an in personam contractual right at best.

The judge continued as follows:-

“62.

… That would with respect depend upon the terms of the grant, though I can see that in the purely domestic context the court might lean towards a construction that the rights were personal. In any event, the example given by Lord Scott has no application to the present case.

63.

I reject the suggestion that the rights in this case are as a matter of construction to be construed as merely personal to the parties to the 1981 Transfer. They form part of a group of rights the first two of which (rights of way and of passage) are clearly easements. Further, the rights are expressed to benefit successors and occupiers from time to time: compare Ellenborough Park at page 167. Moreover, construing the rights as purely personal would produce the unexpected consequence referred to in paragraph 29 of this judgment [that the rights would have fallen away after 24 hours on the facts of the transaction].

64.

Unlike the example given by Lord Scott in Moncrieff, I am not concerned with neighbours in the purely domestic context but with a grant made by a developer for a number of timeshare owners who are able to act (as was contemplated at the time) collectively through [the Regency Villa Owners’ Club]. Thus, I do not see why the Claimants could not provide their own water supply (adapting Lord Scott’s example) if they needed to fill the pool, if necessary from a tanker. I see no compelling reason to construe these rights as personal, and very good reason for construing them as easements”.

Accordingly, the judge made declarations that allowed the claimants (limited to 6 persons using any one timeshare property at any one time) to:-

“use the golf course, squash courts, tennis courts, all common parts of the ground and basement floors of … Mansion House (including the swimming pool and leisure facilities therein), gardens, and any other sporting or recreational facilities thereon, whenever created, including the putting green and croquet lawn, without payment of any charge or fee for the exercise of those rights (other than for items of a consumable nature) subject to any reasonable provisions made for their regulation in the ordinary course …”

The judge also granted an injunction prohibiting the defendants from interfering with the exercise of the easements he had held existed “by imposing any charge or fee for the exercise of those rights (other than for items of a consumable nature)”. He granted liberty to apply as to the working out of these orders, and gave judgment to the RVOC for damages for nuisance to be quantified in the amount paid for the use of the defendants’ facilities from 1^st January 2012 until judgment, and an inquiry as to the quantification of these damages and as to whether the RVOC could recover damages in respect of such sums paid by their licensed occupiers rather than themselves.

At paragraphs 71-84, the judge dealt with the defendants’ claim for £26,308.26 which was the value of a cheque that RVOC stopped in January 2012, when it appeared that the defendants wished to increase the green fee for the golf course from £7.50 to £10 per round. The judge explained that, from 1983 onwards, RVOC had made voluntary payments to the defendants and their predecessors towards costs including upkeep of the facilities, and had agreed golf green fees. Having heard evidence about the events that led up to the payment in January 2012, he concluded that there was no agreement between the parties as to the contributions that were payable for 2012. The cheque had been sent by the 2^nd claimant, Mr Edwards, in the hope that an early agreement would be reached to continue the financial arrangements as they had been before. On that basis, the judge decided that the cheque was not supported by consideration, so the defendants’ counterclaim for the money represented by it failed.

Mr Andrew Latimer, counsel for the defendants, submitted that the claimants were forced to concede that the defendants were not obliged to spend money maintaining the facilities (see Rance v. Elvin (1985) 50 P&CR 9 at pages 14-15 and Duffy v. Lamb (1997) 75 P& CR 364 at pages 368-369 and 371-372). But the right to withdraw the facilities permanently in the absolute discretion of the owner of the servient tenement is inconsistent with the existence of an easement, and is quite different from the normal give and take associated with the exercise of an easement. The concession, therefore, destroyed the argument that these rights were easements as opposed to personal rights. Mr Latimer placed great emphasis on the judge’s use of the word “closure” in this sentence from paragraph 52 of his judgment: “[The defendants] could cease carrying on business at the estate for that reason [disrepair], or on purely economic grounds, whether or not disrepair required the closure”. It showed, said Mr Latimer, that the judge was envisaging for the first time an easement that could be withdrawn unilaterally, something that was unknown to the law. The right of the owner of a servient tenement to repair a roadway recognised in Carter v. Cole [2006] EWCA Civ. 398 was of a different quality from a suggested right to rebuild or refill a swimming pool. The unintended consequence of the rights falling away 24 hours after the grant was caused by the parties not thinking through the legal consequences of their actions.

The defendants submitted that there are good reasons why none of the authorities referred to go so far as to establish, as easements, rights to use a golf course, tennis courts, swimming pools, or members’ clubs as a whole. Lord Scott’s concern in Moncrieff was the considerable and disproportionate imposition on the servient tenement that filling and using a swimming pool would require. The easement at will that the judge recognised is unknown to English law.

Mr Latimer’s second argument was that the words of the grant do not bear the construction the judge adopted allowing a “free-ranging easement that could expand over the years to cover sports and recreation not contemplated in 1981”. If there is really a right in the owner of the servient tenement to close the facilities at any time, the lack of a future easement would not interfere with the claimants’ existing rights.

Thirdly, the defendants argued that the judge failed to consider each of the various rights separately. Had he done so, he might have held that the right to enjoy the gardens was an easement, whilst the rights to use the swimming pool, the golf course and the tennis and squash courts were not.

Finally, the defendants appeal the judge’s refusal to allow the defendants’ counterclaim based on a dishonoured cheque for £26,308.26 because of a lack of consideration. The resolution of the stand-off between the parties was adequate consideration as was the practical benefit in Williams v. Roffey Bros Ltd [1991] 1 Q.B. 1 at pages 15H-16A, 19D and 23D.

Mr John Randall QC, leading counsel for the claimants, complained in response that the defendants have wrongly elevated the claimants’ concession that the defendants were not “obliged to spend any money on providing or maintaining the facilities” into a supposed concession that “all the facilities could be closed permanently”. If the defendants failed to maintain the golf course, the claimants could do so instead. Replacing the golf course with horse-riding would amount to an actionable disturbance with the easement. In fact, the defendants had, as the judge found, their own compelling commercial reasons for maintaining a high-class golf course.

Otherwise, Mr Randall supports, as we have said, the judge’s reasoning that we have explained in detail.

It is we think useful first to say something more about what precisely Ellenborough Park decided, having stated the principles on which the judge expressly relied and which we have mentioned above. The judge took his approach from Evershed MR’s judgment at page 168 where he said this in relation to the construction of the grant itself:

“Although we are now anticipating to some extent the question which arises under the fourth of Dr Cheshire’s conditions, it seems to us, as a matter of construction, that the use contemplated and granted was the use of the park as a garden, the proprietorship of which (and of the produce of which) remained vested in the vendors and their successors. 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 the 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. 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”.

Evershed MR later turned to deal with Dr Cheshire’s 4^th element and the requirement that an easement should not be “a right of utility and benefit and not one of mere recreation and amusement”. This requirement had emerged from Baron Martin’s judgment of the court in Mounsey v. Ismay (1865) 3 H. & C. 486 at page 498, where the Court of Exchequer had obiter declined to recognise a right to hold horse races on a close as an easement satisfying these requirements. Having explained that case, Evershed MR said this at page 179:-

“In any case, if the proposition be well-founded, we do not think that the right to use a garden of the character with which we are concerned in this case can be called one of mere recreation and amusement, as those words were used by Baron Martin. No doubt a garden is a pleasure - on high authority, it is the purest of pleasures; but, in our judgment, it is not a right having no quality either of utility or benefit as those words should be understood. The right here in suit is, for reasons already given, one appurtenant to the surrounding houses as such, and constitutes a beneficial attribute of residence in a house as ordinarily understood. Its use for the purposes, not only of exercise and rest but also for such normal domestic purposes as were suggested in argument - for example, for taking out small children in prams or otherwise - is not fairly to be described as one of mere recreation or amusement, and is clearly beneficial to the premises to which it is attached. If Baron Martin’s test is applied, the right in suit is, in point of utility, fairly analogous to a right of way passing over fields to, say, the railway station, which would be none the less a good right, even though it provided a longer route to the objective. We think therefore that the statement of Baron Martin must at least be confined to the exclusion of rights to indulge in such recreations as were in question in the case before him, horse racing or perhaps playing games, and has no application to the facts of the present case”.

In our judgment, the first question that needs to be answered concerns the proper construction of the grant contained in the 1981 transfer. Some of the arguments before this court confused the question of the proper construction of the grant with the issue of whether the rights which were granted, on the proper construction of the 1981 transfer, could amount in law to valid easements. We accept, as was discussed in argument, that the question of whether any of the rights purportedly granted is a valid easement could inform the proper construction of the grant. But for the purposes of the discussion which follows under this heading, we shall assume that one or more of the grants may be valid. It was, for example, not much contested that, on the authority of Ellingborough Park, there could be a valid easement of the right to enjoy ornamental gardens.

On that basis, then, the main question was whether the grant was a right only to use the stated and any unstated sporting or recreational facilities existing as at November 1981, or whether the grant extended also to any replacement or substituted facilities provided, and, if so, whether that extended to any such facilities anywhere on the Broome Park Estate or only to any such facilities on the site or sites of facilities that existed as at the date of the grant.

The judge held, as we have said, that the grant “clearly extended” to all sporting and recreational facilities on the Broome Park Estate and to the gardens and facilities that were neither there nor planned in 1981 or which may have been significantly improved since then. The defendants submitted that the grant was properly to be construed as the (personal) right to use any of the sporting and recreational facilities on the estate that existed as at November 1981, but no future facilities, including replacements. Moreover, the defendants had the right to close any of the facilities at any time, as they submit the judge actually held. The claimants submitted that the grant related to all future sporting and recreational facilities provided on the Broome Park Estate if they were by way of replacement or substitution for the ones existing as at November 1981, including, for example, the right to use the ground and first floors for whatever recreational and sporting purposes became available there (including the indoor pool that replaced the previous outdoor one). But Mr Randall expressly disavowed the idea that, if the defendants built, for example, an indoor ‘snow dome’ on a piece of land where there were no previous facilities, the claimants would have an easement over such a new facility. It was his submission that the judge had not gone that far in paragraph 44 of his judgment, though he did suggest ways in which that paragraph might be amended in order better to represent the true construction of the grant as he submitted it to be. We did, however, understand Mr Randall to say that the easement would extend to cover an extension undertaken by the defendants after November 1981 to the area of land covered by the golf course, even if that extension took in an area of the Broome Park Estate that was not previously used for any sporting or recreational facility. Presumably, on the claimants’ construction, that would also apply to any new tennis courts built in substitution or addition to the two existing ones, even on other previously unused areas of land. Certainly, it seems to us that, on a fair reading of the judge’s construction of the grant, such new facilities would be covered.

In our judgment, the proper construction of the grant is not as extensive as the judge held. It is first important to construe the grant in the context of where it was found in the 1981 transfer. The grant is the third of three grants, the first two of which are accepted to be grants of recognised easements. It is, therefore, a reasonable inference, from the words used in the grant, which replicate those in the first of the three grants concerning rights of way, that the third grant also was intended to be the grant of an easement. We do not accept Mr Latimer’s submission that simply because the 1981 transfer itself has been lost, nothing can be assumed about the context of the grant with which we are concerned.

Secondly, we accept that the court will normally lean in favour of the validity of a grant. As Danckwerts J said at page 150 in Ellenborough Park: “I must confess that I have a leaning towards the intentions of the parties to transactions being carried out, if this is legally possible, and a dislike of seeing them defeated by the technicalities of suggested rules of law” (see also Jackson v. Mulvaney [2003] 1 W.L.R. 360 per Latham LJ at page 368G-H).

Thirdly, it is common ground that there can in theory be a grant of an easement which only takes effect at a future time. It is also common ground that there will sometimes in such a situation be perpetuity problems, but those problems do not affect this grant. Nonetheless, in our view, one would expect parties who wished to achieve the grant of a future easement to make clear the extent of what they intended (cf. Dunn v. Blackdown Properties Ltd. [1961] 1 Ch. 433).

In these circumstances, it was necessary for the judge to construe the actual words that the parties had used, namely the grant of the right “to use the [existing sporting and recreational facilities] and the ground and basement floor of [the Mansion House], [the] gardens and any other sporting or recreational facilities … on the [defendants’] adjoining estate”. The most natural meaning of these words, in our judgment, is that what was intended was a grant of the right to use the garden, the existing sporting and recreational facilities, and any sporting or recreational facilities that were to be found at the date of the grant on the ground or basement floors of the Mansion House. It is fairly clear also that the grant is only intended to extend to sporting and recreational facilities, not to other facilities, such as, for example, a restaurant (as to which see below). Moreover, there is no element of futurity in the words used, so we cannot see how they can be construed as including any future sporting or recreational facilities that might later be provided by the defendants on their land. The lack of futurity in the grant itself is in marked contrast to the second grant in the 1981 transfer which was the “right to the full and free passage of gas water [etc.] from and to the property in and through any pipes drains [etc.] now in under or over the [Transferor’s] adjoining land or constructed within 80 years of the date hereof” (emphasis added).

The next question is whether a new or improved facility replacing an existing facility of the same type on the same area of ground would be covered. In our view, it would. An easement which, as we have said this was obviously intended to be, is granted for so long as the dominant and servient tenements exist, so that it would make no sense to grant the right to use the present tennis courts, but not any rebuilt tennis courts later provided on the same ground.

The most difficult question, however, relates to extensions to existing facilities and the situation where facilities are substituted or moved from one piece of land to another. In our judgment, in these cases, the grant is not on its proper construction wide enough to cover any major extensions, substitutions or moved facilities. The grant was to use “the” swimming pool, not any swimming pool anywhere on the servient land. The same must apply to the other facilities.

As far as extensions are concerned, it is perfectly possible that the golf course might be extended on to some acres of new land also forming part of the Broome Park Estate or that further tennis courts might be built adjoining the existing ones. But we do not see how such extensions can, at least in general terms, be covered, because the essence of an easement is the land over which it is granted. Bond v. Norman [1939] 1 Ch. 847 (Simonds J) and Bond v. Nottingham Corporation [1940] 1 Ch. 429 (Court of Appeal) concerned rights of support where, of course, the supporting structure on the servient tenement can be substituted, because the essential effect of the easement – the support - is felt and needs to be felt on the dominant tenement. Lightman J in Greenwich Healthcare NHS Trust v. London and Quadrant Housing Trust [1998] 1 W.L.R. 1749 seems to us correctly to have held that a servient owner had no right to alter the route of a right of way unless the grant included an express or implied right to do so. It follows that a dominant owner has no right to use a right of way other than on the route granted.

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.

The same approach must therefore be adopted in relation to substitutions and moved facilities. The essence of the grant of an easement is to use the land over which the easement is granted in a stated way. The grant must be certain. In the absence of the most specific words, which are conspicuously absent from the 1981 transfer, a grant would not be construed as entitling the dominant owner to use any facility that might be constructed anywhere on the servient tenement. Here the grant is, as we have said, properly construed only as a grant to use the existing facilities as they stood at the date of 1981 transfer, together with any new, improved or replacement facilities of the same kind replacing the existing facilities on the same areas of land, subject only to minor or de minimis extensions, but not any substantial extensions of such facilities on additional areas of land.

We will deal with the argument that the easement over the swimming pool survived the building of a new pool in the basement of the Mansion House, when we come to deal with the validity of the particular specific easements later in this judgment. The claimants’ point there, of course, was that, because there already existed an easement over the whole of the basement of the Mansion House, the building of a pool there in place of the existing facilities cannot affect that easement.

With that introduction to the issues affecting the construction of the grant, we will deal with each of the defendants’ main arguments on the appeal in turn.

The defendants place great reliance on the supposed concession that it was open to them to withdraw the facilities and close their business at any time. We do not see that as the key issue. It is well-established that there is no obligation on the servient owner to construct, maintain or repair a way, any more than there is for any other easement over servient land, with the possible exception of a right of support to which different factors may apply. Longmore LJ summarised the law on this aspect of the matter in Carter supra at paragraph 8 as follows:

“(1)

A grantor of a right of way (“the servient owner”) is under no obligation to construct the way;

(2)

The grantee may enter the grantor’s land for the purpose of making the grant of the right of way effective viz to construct a way which is suitable for the right granted to him (“the dominant owner”); see Newcomen v Coulson (1887) 5 Ch D 133, 143 per Jessel MR;

(3)

Once the way exists, the servient owner is under no obligation to maintain or repair it …

(4)

Similarly, the dominant owner has no obligation to maintain or repair the way, see Duncan v Louch (1845) 6 QB 904;

(5)

The servient owner (who owns the land over which the way passes) can maintain and repair the way, if he chooses;

(6)

The dominant owner (in whose interest it is that the way be kept in good repair) is entitled to maintain and repair the way and, if he wants the way to be kept in repair, must himself bear the cost: Taylor v Whitehead (1781) 2 Doug KB, per Lord Mansfield. He has a right to enter the servient owner’s land for the purpose but only to do necessary work in a reasonable manner, see Liford’s Case (1614) 11 Co Rep 46b, 52a (citing a case in the reign of Edward IV) and Jones v Pritchard [1908] 1 Ch 630, 638 per Parker J.”

In these circumstances, even if the defendants were to go out of business and cease to maintain the facilities, that would be no reason of itself why any valid easements that had been granted should lapse. The claimants, as owners of the dominant tenement, would be at liberty to enter the servient tenement to maintain and repair the facilities at their own expense. We do, however, accept that the nature of the works that might be required in such a situation would have a bearing on whether the easement is a valid one in the first place. But that needs, in our judgment, to be considered when one comes to consider the supposed grant of each easement over each facility in turn. The absence of any obligation on the defendants to keep their business open or to maintain their facilities does not seem to us to be decisive as to the existence of one or more valid easements.

This ground of appeal raises, in effect, the issues of construction that we have already dealt with. For the reasons we have already given, we do not think that the grant was of a free-ranging easement or an easement at will. It was an attempt to grant an easement of various specified sporting and recreational facilities that existed on the defendants’ land at the time of the grant. We shall consider the validity of each of those grants under the heading of the next and most important ground of appeal.

As will already be apparent, we do think that the validity of the purported easements granted by the 1981 transfer depends on an examination of each of the specific facilities over which the grant was made. Thus, we agree in principle that the judge ought to have unpacked the grant and considered each of the purported easements in turn, particularly as some of the grants had never before been specifically recognised by English law. It has, however, long been held that the categories of easements are not closed (see the dictum of Lord St. Leonards in Dyce v. Lady James Hay (1852) 1 Macq. 305 at pages 312-3: “The categories of servitudes and easements must alter and expand with the changes that take place in the circumstances of mankind”).

It is most convenient to consider the agreed facilities as at 11^th November 1981 and the replacement swimming pool in the following 9 categories:-

Before dealing with these 9 facilities in turn, we should, however, attempt to summarise the principles that are applicable to determining whether easements of this kind can exist under English law. It was established by Ellenborough Park that an easement can exist for the use of the park as a garden, including the right to walk over the pathways and (subject to necessary restrictions) the lawns, to rest on the seats or in other places provided, but not to trample at will all over the park, not to cut or pluck the flowers or shrubs, or to interfere in the laying out or upkeep of the park. That easement was not said to be a “mere recreation or amusement”, because the right had the necessary quality of utility and benefit to the dwellings that were the dominant tenements.

Easements in the modern world must, of course, retain their essential legal qualities. But the views of society as to what is mere recreation or amusement may change, even if the exclusion of such rights were authoritative, which we rather doubt. Physical exercise is now regarded by my most people in the United Kingdom as either an essential or at least a desirable part of their daily routines. It is not a mere recreation or amusement. Physical exercise can, moreover, in our modern lives, take many forms, whether it be walking, swimming or playing active games and sports. We cannot see how an easement could either in 1981 or in 2017 be ruled out solely on the grounds that the form of physical exercise it envisaged was a game or a sport rather than purely a walk in a garden. It is also noteworthy that profits à prendre (another incorporeal hereditament, but one that can exist without a dominant tenement) have commonly been held to exist in respect of the right to take game or fish, both of which activities are often (but obviously not solely) undertaken for recreation or sport.

In any event, in our judgment, Baron Martin’s dictum in Mounsey v. Ismay supra, from which the exclusion of rights of “mere recreation or amusement” derived in 1865, was obiter as we have said, since the decision in that case was that there could be no easement to hold horse races in favour of the townspeople generally without the existence of a dominant tenement. What Baron Martin actually said that is relevant was as follows at page 498: “But, however this may be, we are of opinion that to bring the right within the term “easement” in the second section [of the Prescription Act 2&3 Wm. 4, c.71] it must be one analogous to a right of way which precedes it and a watercourse which follows it, and must be a right of utility and benefit, and not one of mere recreation and amusement”. He was construing the Prescription Act, although that is not the central point.

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 a 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. As the treatment of Dr Cheshire’s 2^nd and 4^th conditions in Ellenborough Park demonstrated, they are inter-connected. As we have said, an easement should not in the modern world be held to be invalid on the ground that it was “mere recreation or amusement” because the form of physical exercise it envisaged was a game or a sport. To be clear, we do not regard Baron Martin’s dictum as binding on this court, and we would decline to follow it insofar as it suggests that an easement cannot be held to exist in respect of a right to engage in recreational physical activities on servient land.

There are also other important aspects of the tests adumbrated in Ellenborough Park that are particularly relevant to the correct determination of the validity of the grant in this case.

First, the rights must not be too wide or vague (see page 164 of Lord Evershed MR’s judgment in Ellenborough Park).

Secondly, an easement cannot impose a positive obligation on the owner of the servient tenement. In Rance v. Elvin supra, the Court of Appeal held that an easement could not impose a positive requirement for the servient tenement to pay to maintain a water supply, but only imposed on the servient tenement the negative obligation not to impede the flow of water that did enter the relevant pipes. Lord Scott made the same point in Moncrieff supra, where he said at paragraph 47: “A second necessary qualification to the proposition aforestated would be that 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 [a Scottish easement]”. Rance v. Elvin supra did not, however, decide, as Mr Latimer effectively submitted, that an easement is invalid if it requires positive action by the servient owner in order to allow its continued enjoyment; only that the easement granted did not impose a positive obligation on the servient owner to pay for the water. Likewise, in Duffy v. Lamb [1997] 75 P.&C.R. 364 (CA), the easement was for free passage of electricity through the cables, but did not require the servient owner to pay for the electricity. As Carter v. Cole supra makes clear, if the servient owner wants to maintain a right of way in good repair, he may do so, but there is no obligation on the servient owner to do so. If the servient owner fails to maintain it, the dominant owner may do so.

Thirdly, an easement is unlikely to be valid if it requires the dominant owner to exercise a right to joint occupation or deprives the servient owner of proprietorship or legal possession. This emerges from Lord Evershed MR’s second proposition at page 164 of Ellenborough Park, but has been the subject of much debate in subsequent cases and was doubted by Lords Scott and Neuberger in Moncrieff supra at paragraphs 54-9 and 140-4. This factor is, however, of some importance in the context of sporting facilities that may require much maintenance to remain useable as such, for example a golf course that requires daily mowing to be properly playable. It is here that the right to cease the business that maintains the facilities becomes relevant. If, in such a situation, the owner of the dominant tenement had to take actual occupation or possession of part of the servient tenement in order to give continued effect to the easement, for example, to play golf, that fact might, in our view, at least point against the existence of such an easement in the first place.

Finally, in our judgment, an easement obviously cannot exist over chattels. Neither party suggested it could, although Mr Randall submitted than an easement could exist over the land on which there was a gym, even though it gave no right to use the gym machines kept on that land. An easement is a right over land, and not a right in respect of services, equipment or chattels.

We should say that we are not as impressed as the judge was with the argument that, if the defendants are right, the rights granted were known to have been going to lapse 24 hours after the 1981 transfer because of the transfer of Elham House to Barclays. In our view, the validity of easements of particular facilities is a question of law, and the parties’ intentions cannot ultimately validate an attempt to grant an easement of a facility that cannot in law be the subject of an easement.

With that introduction, we turn to deal with each of the facilities mentioned in the grant in turn.

This need not detain us long. It is quite clear from Ellenborough Park that an easement can exist over formal gardens. The easement here, which the parties agreed related to the existing Italianate gardens, was plainly valid.

We have already made clear that in our opinion the fact that an easement envisages the playing of a game cannot, of itself, invalidate the grant. Lord Evershed MR himself suggested at page 168 that playing tennis in a part of a garden set aside for that purpose “subject again, in the ordinary course, to the provisions made for their regulation” might be an entirely valid part of the easement. The judge reflected the regulatory side of this dictum in the order that he made.

The utility and benefit to a dominant dwelling or timeshare property of the ability to use a next-door tennis court is obvious to any modern owner. Many country homes these days have their own tennis court or courts precisely as a benefit for the occupants. Moreover, there could be no complaint that using a tennis court would give the claimants shared possession or occupation of the land on which it was constructed. It is also unrealistic to suggest that a lack of upkeep by the dominant owner could invalidate the right to use the tennis courts. It is true that tennis normally requires the use of some chattels in the form of a net, at least to make the game most effective. But there is no reason why the claimants could not bring their own net (along with their own balls and racquets) if that was required. The defendants could also, in theory, charge for the use of any chattels provided by them in the course of their business. If they closed that business, the claimants could maintain the surface of the courts themselves. Such maintenance would, as we have said, certainly not involve actual or even shared possession of the courts.

In our judgment, there is no reason why the grant of an easement to use these two existing tennis courts was not entirely valid, as the judge held.

Very much the same arguments apply to the use of the squash courts as apply to the use of the tennis courts. The only difference is that squash courts are located in an enclosed building, rather than on an open hard surfaced area of land. In our judgment, this is a distinction without a difference, because once again, there is no need for any shared or actual possession or occupation for the claimants to be allowed to use the squash courts for games of squash. If the defendants closed their business and allowed the squash courts to fall into disrepair, the claimants could repair them, again without taking shared or actual possession or occupation of the land on which they are constructed. It appears that the electricity required to light the squash courts may be provided through a coin operated meter system, so the user pays. Even if the owner of the servient tenement cannot not be required to provide that electricity, the dominant owners could do so with a generator or by other means.

In our judgment, the grant of an easement to use the three existing squash courts was valid.

It is common ground that these facilities existed at the time of the 1981 transfer, even though they were not mentioned expressly in the grant. In our judgment, however, there could be valid easements over these facilities for the same reasons we have given in respect of the tennis and squash courts. Both putting and croquet require no sophisticated facilities apart from a flat lawn and some flags, putters, hoops, mallets and balls. If the defendants were to cease to maintain them, the claimants could themselves mow the lawn as the dominant owner was able to do to the grass airfield in Dowty Boulton Paul Ltd. v. Wolverhampton Corporation (No. 2) [1976] 1 Ch. 13 (see Russell LJ at page 24B-D).

Once again, the utility and benefit to the dominant tenement of the ability to use a next-door swimming pool is obvious. As with a tennis court, some modern homes have their own pools as a benefit and a utility for the occupants. We are acutely conscious of the obiter dictum of Lord Scott in Moncrieff supra, to which we have already referred. He said this at paragraph 47: “On the other hand I doubt whether the grant of a right to use a neighbour’s swimming pool could ever qualify as a servitude. The grantor, the swimming pool owner, would be under no obligation to keep the pool full of water and the grantee would be in no position to fill it if the grantor chose not to do so. The right to use the pool would be no more than an in personam contractual right at best”.

The oral argument before us centred on a rather academic debate as to whether the water in a swimming pool was a chattel or could be regarded as realty. Both sides ultimately seemed to accept, we think correctly, that the water brought by a tanker or run from tap to fill the pool was personalty. But the right to use an existing outdoor swimming pool does not seem to us to be simply a personal right to use the water in the pool. It would certainly not be so regarded if the right granted were a right to swim in a natural lake existing on the servient tenement. We accept that modern swimming pools will often have sophisticated filtration, heating, chlorination, and water circulation systems. But such systems are not essential to the benefit and utility of using the pool. Water is obviously essential, but that can, as the judge indicated, be provided by the owner of the dominant tenement if the servient owner closes his business or allows the pool to fall into disrepair. The same applies to any desirable filtration or other plant. Simply providing the necessary water or even one’s own filtration plant cannot be regarded as sharing possession of the land on which the pool is constructed.

Once again, as envisaged in Ellenborough Park, there would need to be restrictions “in the ordinary course”, if only on account of safety considerations. The defendants might also properly be able to make a charge for the use of their chattels and services, but that should not, in our view, prevent the grant of a right to use the pool constructed on their land taking effect as a valid easement.

When the defendants filled in the original outdoor pool in 2000, their actions must have amounted to an unwarranted interference with the easement. The defendants could, of course, have agreed an amended grant so as to allow the use of the later constructed basement pool in place of the outdoor one, but they did not do so. Moreover, any limitation period since the original pool was filled in has long since expired. In these circumstances, the only remedy that the claimants can obtain is a declaration that they were granted a valid easement of the outdoor pool. We are not sure that there was any argument below as to whether that easement still subsisted or could have lapsed.

Many of the arguments that apply to the outdoor swimming pool apply by analogy to the golf course. Some may consider golf to be just a game played on an extensive area of grassed over land by making a small hole some many metres away from a starting point using a small ball and one or more clubs with which to hit the ball. Seen in this way, the only chattels required are the balls and clubs (normally provided by the player) and some flags. We recognise, however, that contemporary golf courses have sophisticated networks of landscaped, manicured and irrigated tees, bunkers and greens, punctuated by sheds and shelters, tarmacked paths, sand boxes, pro-shops and club houses.

The difficulty posed by an easement of this modern kind of golf course, which we assume for this purpose was closer to the one that was opened at Broome Park Estate in mid-1981, is the large amount of maintenance required to keep it in what many would regard as a ‘playable’ condition. We are all familiar with the teams of groundsmen and greenkeepers that such courses need to employ to maintain them to the high standard that players frequently desire.

As regards the validity of an easement to use a fully maintained golf course, we take the view that it is necessary to consider what would occur if, as was common ground could happen, the servient owner closed or ceased to maintain it. As with providing the water for the swimming pool, the dominant owners could mow the grass and take any other necessary steps to make the course playable. Such mowing was accepted by the Court of Appeal to be appropriate in relation to a grass airfield in Dowty Boulton Paul Ltd v. Wolverhampton Corporation (No 2) supra.

It could be argued, however, that a championship golf course cannot really be made playable without, in effect, taking possession of it so as to allow the groundsmen to make a proper job of maintaining the necessary manicured appearance. We do not, however, accept that argument. The position in Scotland was more liberal in the early 19^th century, when the Court of Session seems to have assumed, without deciding, in Dempster & others v. Cleghorn & others (1813) II Dow. 40 that there could be a servitude to use a golf course at St. Andrews. Such an assumption has, we fully accept, not previously been made in England & Wales, and might have been less likely to have been accepted in the late 19^th and early 20^th centuries. But in our judgment, there is no principle that prevents the grant of a right to use a piece of land formed into a working golf course from being valid. We do not think it would be necessary for the claimants to take actual or even shared possession of the land upon which the course was laid out in order to mow it and maintain it in playable condition.

The utility and benefit to a dominant dwelling of the ability to use a next-door golf course is as obvious as it is in the case of a tennis court or a swimming pool. Once again, the owners of the servient tenement can regulate the use of its chattels and services in the ordinary course and may be able to make a charge for that purpose, but that does not make the grant of the easement to use the golf course invalid.

It is important to note that the easement granted is, on its proper construction, as we have already said, to use any sporting or recreational facilities that exist on the ground floor of the Mansion House as at the date of the 1981 transfer. On no analysis can the reception area or its inevitable back office comprise such a sporting or recreational facility. Moreover, what we have said about the modern approach to taking physical exercise is not really applicable to recreational indoor games such as snooker or to watching television. Mr Randall urged us to accept that the easement was really no more than a right to use the common parts and common facilities on any part of the ground floor of the Mansion House. We think this submission proves too much. It shows that the right granted is really not in the nature of an easement at all. It is not about the use of any land, but the use of facilities or services that may for the time being exist on the land. As with the case of the restaurant which was in the basement in 1981, we cannot see how there can properly be an easement over such a service area. A restaurant is not like a toilet (over which an easement may exist as we have mentioned). It can only be useful and a benefit if someone cooks the food and sells it to the user. Likewise, a TV room is of no benefit without a TV. The tennis court and golf course are both proper uses of the servient land. The grant of the right to use recreational facilities on the ground floor of the Mansion House was really no more than a personal right to use chattels and services provided by the defendants. If the defendants closed its business, there would be nothing there to use, and nothing for the claimants to maintain without taking full possession of that part of the Mansion House. Unlike the empty swimming pool, an empty billiard room is not a billiard room at all. In our judgment, therefore, there was no valid grant of an easement over the ground floor of the Mansion House.

The same arguments apply to the facilities that existed in the basement of the Mansion House in 1981. We have already dealt with the restaurant. The same factors apply to a bar. The gym, sunbed and sauna are all in the same category as a billiard room. They are services and facilities that cannot exist without the chattels that make them what they are. To operate them if the defendants ceased business, the claimants would need to take possession of them. In our judgment, therefore, there was no valid grant of an easement over the basement of the Mansion House.

We come finally to the newly built indoor swimming pool. Since no valid easement was granted over the basement of the Mansion House in 1981, there can be no valid easement of a swimming pool built after the grant on the same land. Moreover, we do not think there is anything in the argument advanced in the claimants’ respondents’ notice to the effect that the new swimming pool must be regarded as a direct substitute for the one that the defendants filled in in the year 2000. The easement was in respect of the land on which the outdoor pool was constructed in 1981, and there was no valid easement granted over the basement of the Mansion House.

The defendants appeal the judge’s refusal to allow their counterclaim on the dishonoured cheque for £26,308.26 because of a lack of consideration. We cannot see how there can have been any consideration for the cheque in the light of the judge’s clear finding that there had been no agreement as to the contributions that were due in 2012. We can see that some monies may have been due from the claimants to the defendants in exchange for the continued use of the defendants’ services and chattels associated with the valid easements, but the counterclaim below for a quantum meruit has not been pursued on appeal. There is nothing in our judgment in the defendants’ submission that consideration could be found for the cheque on the basis that the defendants would perform their existing obligations under the easements. Williams v. Roffey Bros Ltd supra is a case about contractual obligations, not proprietary rights. In any event, the defendants did not agree to anything before the cheque was delivered, as the judge found.

We have concluded that the judge construed the grant rather too broadly. On its true construction, the grant allowed the claimants the right to use the existing sporting and recreational facilities on the Broome Park Estate (including the Italianate garden) together with any new, improved, or replacement facilities of the same kind replacing the existing facilities on the same areas of land, subject only to minor or de minimis extensions, but not any substantial extensions of such facilities on additional areas of land. This right was an easement insofar as it covered the facilities on the servient tenement existing in 1981 namely the golf course, squash courts, tennis courts, croquet lawn and putting green, and outdoor swimming pool.

Although, the grant purported to provide for an easement of any sporting or recreational facilities that were to be found at the date of the grant on the ground or basement floors of the Mansion House, none of the indoor facilities that existed at the time of the 1981 transfer was the subject of a valid easement.

The declarations that the judge granted were too broad. He ought only to have granted declarations that allowed the claimants (limited to 6 persons using any one timeshare property at any one time) to:-

“use the existing golf course, squash courts, tennis courts, croquet lawn and putting green, and Italianate gardens, without payment of any charge or fee for the exercise of those rights (other than for items of a consumable nature or for services or for the use of any of the defendants’ chattels) subject to any reasonable provisions made for their regulation in the ordinary course …”

There may need to be further argument as to the appropriate order, if any, in relation to the swimming pool. The claimants do not have a valid easement over the indoor swimming pool built in 2005 in the basement of the Mansion House, but the claimants may still have a valid easement to use an outdoor swimming pool on the site of the original one (although that was not a pleaded issue as we understand it). The claimants obviously cannot claim time limited damages in respect of the closure of the original swimming pool in 2000, but the effects of the steps that the defendants then took are still being felt now to prevent the claimants using the benefit of that easement.

We think it would be preferable for any appropriate or necessary further argument as to consequential orders relating to the swimming pool or other matters to be heard by the Birmingham District Registry (hopefully by HH Judge Purle QC) under the liberty to apply that he granted to work out the order. Hopefully the parties will, in any event, be able to agree such orders.

Finally, we would note that the damages that the judge awarded for nuisance will be limited to the facilities in respect of which we have held easements existed.

For the reasons we have given, we will allow the appeal only to the limited extent already indicated, but otherwise dismiss it.