Hi Gethsemane, sorry to revive this thread but I am practising past questions and (suspiciously!) the exact situation came up as in the original post, but I think the original poster has missed out on something important; I'll reiterate the facts for you:
If it's a leaseOne argument could be that B has acquired a lease, if the requirements for a lease are satisfied. It could be a lease because we know that under s.149(6) leases for life take effect as leases for 90 years i.e. for a term certain. Non-payment of rent we know is immaterial (
Ashburn Anstalt v Arnold). But we don't know if she has exclusive possession. Assuming all the requirements for a valid lease are met, we can proceed to see if B is protected. Leases are legal estates in land (s.1(2) and (3) LPA) and legal interests need to be made by deed S.52. Only a written agreement; s.2LP(MP)A 1989 + doctrine of Walsh v Lonsdale will give B an equitable lease. As it's an equitable interest in registered land, it needs to be entered as a notice under S.32 LRA 2002; B hasn't done this. The equitable lease won't bind BUT because B has a proprietary right in the land this means that B could rely on actual occupation to assert priority against C.
If it's a licenceBUT we don't know whether there is exclusive possession and B and A are cousins so you could argue there is no intention to create legal relations, so this cannot be a lease; it must be a licence.
Binions v Evans tells us that even if B has a contractual licence to be on the premises, if A transfers the freehold to C and C takes the freehold subject to B's rights and the purchase price is reduced to reflect that, then C cannot evict B and B takes priority despite the fact that B's rights are purely personal as a licence.
This is how I would interpret it anyway... to summarise:
(1) If it's an equitable lease - it won't bind anyway because B hasn't entered it as a notice. But if B is in actual occupation, as you pointed out, she could take priority over C.
(2) If it's a licence -
Binions v Evans tells us that C will still be bound by B's mere contractual licence.
I hope that make sense!
Basically, I think this part of the question turns more on the lease/licence distinction.