Can a right of way be granted during the "registration gap" and still be binding?

In the recent case of Baker v Craggs [2016] EWHC 3250 (Ch), the High Court held that the grant of a right of way was effective where the owners of the land sold it to a buyer and then “accidentally” granted a right of way over it in favour of a third party.
The right of way was “accidentally” granted because whilst the seller (Mr and Mrs Charltons) sold land to the buyer (Mr Craggs), they also sold other land to another buyer (Mr and Mrs Baker) after the first sale, but before registration; the transfer of the barn on the second sale purported to give rights over the area that included the yard transferred in the first sale.  The problem arose because the Mr Cragg’s application to register the transfer was cancelled (due to an inadequate plan) and so Mr Craggs lost its priority, whilst in the meantime Mr and Mrs Baker’s transfer (including the right of way) was registered.
Mr Craggs was then left trying to argue that it had:

• Been in actual occupation of the land at the time of the disposition to the third party and therefore had an overriding interest that was not overreached by the transfer to the third party.
• An estate contract pursuant to section 2(3)(iv) of the Law of Property Act 1925 (LPA 1925) which was excepted from overreaching under section 2(2) of the LPA 1925.

The court held that, although Mr Craggs was in “actual occupation” of the land, his rights had been overreached and subordinated to the right of way granted in favour of the land sold to the third party.
For advice on land contracts, transfers and rights of way contact our Commercial Property Team