In the matter of Cayman Shores Development Ltd v The Proprietors of Strata Plan No. 79 [2025] UKPC 27, the Privy Council issued their judgment confirming that property rights attached to resort facilities remain valid and binding, even where documentation errors occur during registration. The judgement offers key guidance on how courts should treat mislabeled land rights.
Background
The dispute involved the current Britannia residential owners (the "Homeowners") and Cayman Shores Development Ltd (the "Developer"). The Homeowners argued they held long-standing rights to use the resort's recreational facilities, including the beach club, golf course, and tennis courts, based on agreements made and registered in the 1990s during the phased development of the resort. These rights were intended to benefit not only the original purchasers but also future owners. Although the agreements were registered on the Land Register, they were labelled as "restrictive agreements" rather than "easements." After acquiring the land in 2016, the Developers challenged the validity of these rights and instead offered the Homeowners licences to use the facilities.
The primary issues of the dispute were:
- Whether recreational rights were properly registered as binding property rights?
- Whether rights labeled as "restrictive agreements" instead of "easements" invalidated the registration?
- Whether the land register could be corrected if there was a registration mistake?
- Whether recreational facility access rights could legally qualify as easements under Cayman law?
At first instance, the trial court ruled in favour of the Homeowners, finding that the rights met the legal definition of easements and were properly registered in substance, despite being mislabelled as restrictive agreements. The judge ordered the land register to be corrected to reflect that. However, the Court of Appeal ("COA") disagreed, and the first instance judgment was overturned on appeal. While the COA acknowledged that the rights might resemble easements in nature, it held they were not validly registered as such because they were never clearly labelled or intended to be easements. It also denied rectification, noting it was "unfortunate that the proprietors must bear the consequences" of using the wrong legal mechanism.
Privy Council's Decision
The Privy Council reversed that decision, taking a broader, substance-over-form approach and ruled in favour of the Homeowners. It held that the rights were easements all along and had been validly registered, however the mislabelling was a technical defect that did not undermine their legal effect. The Court determined that while the agreements were registered as restrictive agreements, they actually function as easements. The Privy Council focused on what the registered agreements actually promised rather than their technical classification, finding that the agreement attached to registered instrument clearly granted Homeowners ongoing access to the beach, golf course, and tennis courts.
As such, these property rights remain legally binding on the Developers who purchased the land, meaning they cannot simply deny access or demand new licensing agreements from the Homeowners.
Implications for Homeowners and Developers
This decision has important implications for both property owners and developers in that:
- The ruling confirms that recreational rights can be enforceable easements, even if mislabelled during registration.
- While the Court prioritized the intent and substance of the agreements, the case also serves as a reminder of the importance of careful drafting and proper registration of land rights. Using a law firm like HSM can help mitigate any risks.
This case may impact developers of future resorts where there are pre-existing rights in existence.
This is a positive outcome for homeowners who depend on shared facilities in residential developments, and a clear warning to developers and landowners who may seek to disregard or override those established rights.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
