The claimant was a Lichtenstein foundation which had been established to hold and manage certain residential properties on the founder’s behalf. One of the claimant’s board members, who claimed to be acting on instructions that had been given by the late founder, transferred the registered estate of one of the claimant’s properties for nil consideration to the defendant, the founder’s widow. The claimant brought proceedings, claiming that the transfer was void because the board member had acted in excess of any available authority since the transfer was outside the claimant’s purpose and/or he had lacked authority because he was not constitutionally able to act alone in effecting dispositions of the claimant’s assets. The defendant contended that by virtue of section 26(1) of the Land Registration Act 2002 if there was any limitation on the claimant’s right to exercise the usual “owner’s powers” to make a disposition of the registered estate, she took legal title free of it, unless the limitation appeared on the register.
On the claim—
Held, claim dismissed. Section 26 of the Land Registration Act 2002 was concerned with some aspect of the registered disponer’s constitutional make-up which operated to limit its ability to exercise the usual range of powers to make a disposition of the registered estate. It was not concerned with limitations on the power of disposition arising solely because of an agent’s lack of authority. However, a disponor could not escape the effects of an otherwise valid disposition by saying that its agent was not authorised, if the lack of authority arose solely from some feature of the disponor’s own constitutional make-up which meant it had no capacity in the circumstances to exercise the usual range of “owner’s powers”. No constitutional limitation on the claimant’s purpose having been registered, the claimant was to be taken as having had available to it the full range of “owner’s powers” usually available to an owner of a registered estate in freehold land in England, free of any limitation. Any lack of authority stemming from the board member acting inconsistently with the claimant’s purpose was irrelevant, since it was entirely a function of a lack of capacity by the claimant which operated to limit the scope of its usual powers as owner of the registered estate. The board member had acted within the internally specified competencies in effecting the transfer. Accordingly, the transfer of the property to the defendant was valid (paras 159–165, 167, 271, 307).
David Mumford KC and James Kinman (instructed by Bryan Case Leighton Paisner LLP) for the claimant.
Rupert Reed KC and Simon Atkinson (instructed by Simmons & Simmons LLP) for the defendant.