D had a sub-lease for over 21 years and which ought to have been registered but was not, and therefore was void unless it was an overriding interest. He did not live there himself but let X live there rent-free. When the main lease was sold to P, P claimed to have bought without being subject to D’s lease (even though they had been given notice of it). CA held that D was not in actual possession and therefore did not have an overriding interest.
Lord Denning MR: If there is an overriding interest and the purchaser knows/ought to know through reasonable investigation of the occupier’s rights, then the actual occupier/person in receipt of rents or profits is protected. D was not in actual occupation (since neither he nor his agents were physically there) while he was not in receipt of rents, since X lived there for free. He acknowledges oddness of conclusion.