Morelle Ltd v Wakeling

The Mortmain and Charitable Uses Acts operate to cause an immediate forfeiture where land is assured to a corporation not authorised to hold land in mortmain, including an unexpired residue of a term of years.

Registration under the Land Registration Act 1925 does not save a transferee from that automatic forfeiture when the forfeiture is occasioned by the registered disposition itself.

The Court of Appeal is bound by its earlier decision in the first Morelle case; the narrow doctrine of per incuriam is confined to rare cases where a binding statutory provision or authority was overlooked.

The appellant claimed to be proprietor of a leasehold interest in London and sued for rent. The defendants relied on a defence that the appellant, a foreign corporation unauthorized to hold land in mortmain, had caused the interest to be forfeited by operation of the Mortmain and Charitable Uses Acts.

The present appeal raised the single important issue whether the Court of Appeal's earlier decision in the first Morelle case remained binding and whether registration of the transferee as registered proprietor under the Land Registration Act 1925 could defeat the operation of the Mortmain Acts.

The Court heard detailed argument including submissions by the Attorney-General as amicus curiae on whether the earlier decision was per incuriam. The common question was whether a registered transfer for value to an unauthorised corporation is relieved from forfeiture by the registration code.

1. Disposition. Appeal dismissed. The Court (per the Master of the Rolls) held that the Court of Appeal's decision in the earlier Morelle case is binding and must be followed.
2. Per incuriam. The Court applied the Young v Bristol Aeroplane Company Limited test and held that a decision should be treated as given per incuriam only in rare cases where a statute or binding authority was overlooked. The Attorney-General's contention that the first Morelle decision was per incuriam was rejected because no manifest omission of a statutory provision or binding authority could be identified (see Young v. Bristol Aeroplane Company Ltd cited in argument).
3. Effect of the Mortmain Acts. The Mortmain and Charitable Uses Acts, properly construed, operate to forfeit land assured to a corporation in mortmain, and that forfeiture may arise on assurance of the unexpired residue of a term of years. The Court affirmed that the 1888 Act must be construed by its language and not by an assumption that it preserved the old feudal limitations unless so stated.
4. Interaction with land registration. Section 80 of the Land Registration Act 1925 preserves the Crown's rights to bona vacantia and forfeiture. Sections 20 and 23 (registration of dispositions for valuable consideration) are intended to protect transferees against defects in the transferor's title and do not extend to relieve a transferee from a forfeiture incurred by the transferee's own incapacity to hold land in mortmain. Registration of a transfer which itself occasions the forfeiture does not prevent that forfeiture taking immediate effect.
5. Timing and trustee argument. The Court preferred the view that the forfeiture arose on completion by registration of the transfer to the unauthorised corporation rather than at the point of antecedent contract or receipt of purchase money. Even if a prior forfeiture had existed in the transferor's hands, section 23 would not save a transferee who himself incurred the forfeiture upon registration.
6. Registry practice and form. Departure by the Registrar from Rule 121 (form) in accepting the transfer did not invalidate the registration. The Registrar's acceptance of a form is conclusive as to its sufficiency in form where the Registrar is permitted wide discretion by the Rules and the Act.
7. Conclusion and order. The appeal was dismissed. Costs were awarded against the appellant in the Court of Appeal as between party and party. Leave to appeal to the House of Lords was granted on the appellant's application.

• England and Wales Court of Appeal (Civil Division) — Appeal heard before a full Court (Master of the Rolls, L.J. Denning, L.J. Jenkins, L.J. Morris and L.J. Romer); appeal dismissed.
• County Court — Judgment below in favour of respondents on the mortmain defence (referred to in the Court of Appeal's account of the proceedings).