To be effective, any limitation on the exercise of an owner’s powers which would restrict a disposition of registered land needs to be registered. Failing registration, a disponee takes free of any such restriction under section 26 of the Land Registration Act 2002.
This provision formed the basis of the High Court’s rejection of a claim that a transfer of property was void in Asturion Foundation v Alibrahim [2023] EWHC 3305 (Ch); [2024] PLSCS 3.
The case concerned Kenstead Hall on The Bishops Avenue near Hampstead Heath in north London, one of a number of properties used by members of the Saudi royal family as residences. Asturion was founded by King Fahd in October 1974 under Liechtenstein law to benefit him and his legal heirs. It was a legal personality, without members or shareholders, dedicated to managing its assets and provide its beneficiaries with regular or extraordinary benefits.
The defendant was the widow of King Fahd, who died in August 2005. The defendant claimed that the late king gave instructions to a trusted adviser, Faisal Assaly, in September 2001 to transfer the property, along with three others, in France, Germany and Spain, into her name. Assaly held power of attorney for the claimant and a right of sole signature.
The property was eventually transferred by Assaly to the defendant via a Land Registry form TR1 dated 14 October 2011 for nil consideration. Asturion argued that the transfer was void because it was contrary to its purpose and/or that Assaly lacked authority to execute it.
No relevant limitation having been registered, the court decided that any constitutional limit on Asturion’s purpose could not affect the validity of the disposition under section 26 of the 2002 Act. Nothing in the 2001 instruction contravened Asturion’s purpose under Liechtenstein law and Assaly was acting within his internally specified competencies and was competent to act alone in implementing a direction made by King Fahd. Even if Assaly had lacked actual authority, registration of such limitation would have been required to invalidate the transfer. Asturion’s primary claim failed.
Asturion pursued a series of subsidiary claims: to rescind the transfer because a gratuitous disposition involving breach of fiduciary duty by Assaly meant that Asturion held a continuing equitable interest in the property rendering the transfer voidable; and personal claims against the defendant for recovery of the value of the property. These claims also failed. There was no breach of fiduciary duty or mistake under English law about Assaly’s entitlement or obligation to transfer the property to the defendant, and while the defendant was enriched it was not unjust.
Louise Clark is a property law consultant and mediator
