Legal blow for investors in Hideaways compensation battle

Members of a holiday home group must continue to pay the costs even if they do not use the villas, a court has ruled.

A court in Gibraltar ruled that The Hideaways Club can continue to charge members even if they have not used the properties.

The company is facing a separate lawsuit from investors who claim they are facing demands for tens of thousands of pounds in annual fees, despite some saying they have not been able to stay in a Hideaways property of their choice for years.

The club, founded in 2007, 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 Gibraltar High Court decision, handed down on December 20, concerned the case of Peter Kabel, a German entrepreneur, and thirteen other Hideaways investors.

They are being pursued by the company for stopping payment of membership fees.

The group offers investors the chance to buy part of a property portfolio consisting of villas, chalets and luxury apartments, which they can book for holidays if they pay an additional annual membership fee to cover maintenance costs.

But the defendant in the case claimed he had become 'dissatisfied' with the quality of service and decided to stop paying membership fees, claiming he could remain an investor in the portfolio without using the properties themselves.

Hideaways argued that this was not possible and pursued the investors and several others for unpaid fees. In the ruling, Supreme Court Justice John Restano said the payment of dues was a “continuing and increasing obligation” and that the club was not obliged to terminate membership if people did not pay their dues.

He also concluded that under the club's rules, share ownership was 'indivisible' from membership. It is not yet known whether the investors will appeal the decision.

Hideaways Club boss Robert Swartling said after the decision: 'We welcome the decision of the High Court of Gibraltar as it upholds the club's multiple legal contracts with each member and the obligations associated with membership of The Hideaways Club. The judge firmly rejected the investor's attempt to avoid his personal debts and legal responsibilities.”

Cable's attorneys did not respond to a request for comment.

The High Court's decision could be a hurdle for another group of self-styled 'rebel' Hideaways Club members who are preparing to file a class action lawsuit against the company in Gibraltar, the first time such a motion has been heard in the territory is being tried.