Asturion Foundation v Aljawharah Bint Ibrahim Abdulaziz Alibrahim

A limitation on a registered proprietor’s constitutional capacity to dispose of land cannot affect the disponee’s title under Land Registration Act 2002, section 26, unless reflected in the register. Section 26 does not, however, validate an agent’s act merely because the agent lacked internal authority. A voluntary transfer by gift does not ordinarily attract the doctrine of ostensible authority, since the donee gives no value and there is no relevant transactional reliance. The constitutional powers of a Liechtenstein foundation are construed by reference to the founder’s will. Where its articles permit delegation, a board member may validly receive authority to make distributions alone. An unregistered prior equitable interest may remain effective against a voluntary disponee because sections 28 and 29, rather than section 26, govern priorities.

The claimant, a Liechtenstein foundation, sought declarations and relief concerning the transfer of registered land, Kenstead Hall, to the defendant, the widow of the foundation’s founder. The transfer was executed in 2011 by a foundation board member acting alone, pursuant to a written instruction given by the founder in 2001.

The foundation alleged that the transfer was outside its purpose, exceeded the board member’s internal authority, and gave rise to equitable, restitutionary and knowing-receipt claims. The defendant relied on the foundation’s constitutional documents, the board member’s sole signing right, section 26 of the Land Registration Act 2002, and ostensible authority. The central issues were the validity of the transfer, the scope of the board member’s authority, and the consequences of any equitable interest.

1. Primary claim dismissed. The transfer of Kenstead Hall was effective to transfer legal title to the defendant.
2. Under English conflict-of-laws principles, the validity of the transfer of English land was governed by English law. Section 26 of the Land Registration Act 2002 protected the disponee against an unregistered constitutional limitation on the foundation’s capacity to exercise owner’s powers. The section did not extend to a mere lack of authority in the human agent executing the disposition.
3. The foundation’s purpose was construed by reference to the founder’s will. Articles 6 and 7 of the foundation’s Articles allowed the founder to retain flexibility over beneficiaries and distributions. The 1977 Regulation did not prevent the founder, during his lifetime, from issuing a later binding instruction concerning a particular property. The 2001 Instruction was a regulation within Article 7 and did not contravene the foundation’s purpose.
4. The Articles and the 1988 Power of Attorney permitted the board member to act alone. Article 10(2) concerned internal decision-making as well as external representation, while Article 10(3) permitted delegation of all or part of the board’s powers. Article 181 of the PGR did not prevent such delegation where the Articles specified otherwise. The board member was therefore competent, and in substance obliged, to implement the 2001 Instruction.
5. The Liechtenstein provisions concerning representative authority did not govern the external effectiveness of the transfer. English law applied to that question. Ostensible authority was unavailable because the transfer was a voluntary disposition by way of gift, with no consideration or relevant transactional reliance. The public register nevertheless constituted a representation that the board member could sign individually; that conclusion did not save the transfer under the doctrine of ostensible authority.
6. The secondary and tertiary claims failed. There was no breach of a fiduciary duty, no sufficiently serious mistake, and no unjust factor. There was enrichment, but its retention was not unjust.
7. Had an equitable interest arisen, section 26 would not itself have destroyed it. The transfer was for no consideration, so the priority rules in sections 28 and 29 preserved the prior equitable interest against the voluntary disponee.

The claims were dismissed. The parties were directed to draw up an order reflecting that outcome.