D1 contracted to give D2 a lease for 3 years and on a week-by week basis thereafter. The lease wasn’t registered. D1 gave a mortgage on the property to P, who claimed possession against D1 and D2 after D1 defaulted on payments. CA held that P could take possession. Under LRA 1925, for a lease to be an overriding interest, it had to be “a lease ... for any term or interest not exceeding twenty-one years, granted at a rent”. “Granted” means the actual creation of a lease by an agreement for a set no. years/ using a deed etc, and does NOT include mere agreements with simply a contractual effect. Therefore D2 had not shown that she had an interest that took priority.
Evershed MR: D2 never got a lease but a mere contractual right to obtain a lease from D1.
Jenkins LJ: Agreements to lease are not overriding interests in the way that actual leases are. Here, a lease could have been created by deed and therefore this agreement could not have been a lease.