Angular 1.2.0 breaks when you try and do ng-controller + ng-include on the one element due to priority changes in the directives. Here's a workaround to monkey patch the priority until this ships in a release. See issue https://github.com/angular/angular.js/issues/4431

angular-controller-priority.js

var app = angular.module('app');

app.config(function($provide) {
    $provide.decorator('ngControllerDirective', ['$delegate', function($delegate) {
        $delegate[0].priority = 900;
        return $delegate;
    }]);
});