Members of a holiday homes group must continue to pay fees even if they do not use its villas, a court has ruled.
A Gibraltar court ruled that The Hideaways Club could continue to charge members even if they have not been using its properties.
The firm faces a separate lawsuit from investors who claim they face demands for tens of thousands of pounds in annual fees despite some saying they have been unable to stay in a Hideaways property of their choice for years.
Set up in 2007, the club’s backers included tennis stars Tim Henman and Tomas Berdych, who reached the Wimbledon final in 2010, Formula 1 driver Nick Heidfeld and billionaire Mike Balfour, founder of the Fitness First gym chain.
The decision by the Gibraltar Supreme Court, which was handed down on December 20, concerned the case of Peter Kabel, a German entrepreneur, and 13 other Hideaways investors.
Blow: A Gibraltar court ruled that The Hideaways Club could continue to charge members even if they have not been using its properties
They are being pursued by the firm for stopping payments of membership fees.
The group offers investors the chance to purchase a share of a property portfolio comprised of villas, chalets and high-end apartments which they can book for holidays if they pay an additional membership fee each year to cover maintenance costs.
But the defendant in the case alleged that he had become ‘dissatisfied’ with the quality of service and had decided to stop membership fees, claiming he could remain an investor in the portfolio without using the properties themselves.
Hideaways argued this was not possible and chased the investors and several others for unpaid fees. In the ruling, Supreme Court judge John Restano said payment of the fee was an ‘enduring and accumulating obligation’ and the club was not required to terminate membership if people did not pay their dues.
He also concluded that the club’s rules considered share ownership to be ‘indivisible’ from membership. It is not yet known if the investors will appeal the decision.
Hideaways Club boss Robert Swartling said after the decision: ‘We welcome the Gibraltar Supreme Court’s decision as it upholds the club’s multiple legal contracts with each Member and the obligations that come with The Hideaways Club membership. The judge soundly rejected the investor’s attempt to avoid his personal debts and legal responsibilities.’
Kabel’s lawyers did not respond to a request for comment.
The Supreme Court’s decision could be a hurdle for another group of self-described ‘rebel’ Hideaways Club members who are preparing to file a class action lawsuit against the business in Gibraltar, the first time such a motion has been attempted in the territory.
