Morelle Ltd v Wakeling

The Court of Appeal is bound by its own previous decisions unless one of the recognised exceptions applies. A decision is ordinarily per incuriam only where the court overlooked an inconsistent statutory provision or binding authority, making part of its reasoning demonstrably wrong. Inadequate argument or the absence of an interested party does not suffice.

Registration of a disposition for value protects a transferee against defects affecting the transferor’s title. It does not prevent a forfeiture caused by the transferee’s own incapacity to hold land in mortmain. Where the statutory saving for Crown forfeitures applies, the forfeiture takes immediate effect on registration without rectification of the register.

The appellant, an Irish company without authority to hold land in mortmain, claimed arrears of rent as registered proprietor of a leasehold interest in London premises. The County Court rejected its contention that registration conferred a sufficient title unless and until the register was rectified.

An earlier Court of Appeal decision involving the appellant, Morelle Ltd v Waterworth [1955] 1 QB 1, had held that an assignment of a leasehold term to the company caused immediate forfeiture to the Crown under the mortmain legislation. The Attorney-General, appearing as amicus curiae, argued that this decision had been given per incuriam.

The issues were whether the earlier decision could be reopened and whether registration under the Land Registration Act 1925 prevented or suspended the forfeiture.

1. Appeal dismissed unanimously. The joint judgment of the five-member court held that Morelle Ltd v Waterworth [1955] 1 QB 1 remained binding. The court could not identify any overlooked statutory provision or binding authority, or any manifest error in the earlier reasoning.

2. Under Young v Bristol Aeroplane Co Ltd [1944] 1 KB 718, the Court of Appeal must follow its own decisions. The exceptions permit it to choose between conflicting Court of Appeal decisions, to refuse a decision incompatible with later House of Lords authority, and to disregard a decision given per incuriam. The last exception ordinarily concerns ignorance or forgetfulness of an inconsistent statute or binding authority. Other cases must be of the rarest occurrence.

   A previous decision does not become per incuriam merely because later counsel presents fuller research or better argument. Nor does the absence of a party, including the Crown, establish the exception.

3. Section 80 of the Land Registration Act 1925 preserved Crown rights to forfeiture except where the Act’s express provisions governing first registration or registered dispositions for value provided otherwise. Section 23 protected a purchaser against defects affecting the registered transferor’s title. It did not protect a transferee against a forfeiture arising from its own incapacity to hold land in mortmain.

4. The transfer was completed when the appellant was entered on the register under section 22(1). The better view was that forfeiture arose at that point. Even if an earlier contract, payment or trust had already caused forfeiture, registration would have overreached that earlier defect but simultaneously caused a new forfeiture through the appellant’s incapacity.

5. The forfeiture therefore took immediate and automatic effect on registration. It required no assertion by the Crown and no prior rectification of the register.

6. Failure to use the corporate transfer form prescribed by rule 121(1) of the Land Registration Rules 1925 did not invalidate the registered transfer. Rules 74 and 322(1) gave the Registrar sufficient discretion concerning forms, and acceptance for registration was conclusive as to formal sufficiency.

1. Court of Appeal: The appeal was dismissed unanimously. The County Court’s conclusion that the appellant lacked title to recover the rent was upheld. Leave to appeal to the House of Lords was granted.
2. County Court: The appellant unsuccessfully argued that its registration as proprietor gave it title to sue unless and until the register was rectified. No citation is stated.