Ah, you haven't given us enough information.  How was the overlap established?

Regardless, it is not a case of one rule 'over ruling' another.

The overlap was established by WB sailing over LB who then proceeded to head up but surely LB should have started his defence before WB sailed over him instead of waiting until WB was half a boat length ahead?

Rule 17 answers your question in the first sentence.

To be a bit more expansive than Matt.  :-)  rule 17 does not apply.  There are no proper course restrictions in this circumstance.

Let's assume for the sake of argument that LB is bound by rule 17 and that sailing straight ahead, LB would not have gone astern of WB. Here is my take on the rules that apply:

LB breaks rule 17
Both boats break rule 14
WB breaks rule 11

Both boats are penalized, LB for 17, WB for 11, and possibly both boats for 14 unless the conditions for exoneration are met. 

The way I explain this in rules talks is:

WB is always bound to keep clear of LB, but can protest LB for her breach of 17. 
WB doesn't have the option to sail straight when LB turns up. 
When you think this through, this is for safety. If LB sees an imminent collision, it would cause a safety issue if WB refused to head up because she didn't perceive the turn up to be proper course.
Furthermore, this rule refers to LB's proper course. The breach of 17 can be argued in a protest room, but there is no reasonably way for WB to judge what LB is thinking. 

Without more facts on how the overlap was established, there are two answers:

1.  If by coming together from outside 2 boat lengths or jibing into the overlap, then 17 is off and windward is to keep clear, ping windward on 11
2.  If by coming from astern inside of 2 boat lengths, then 17 is on and ping windward for failing to keep clear on 11, and ping leeward for 17.

Per Steve's update, rule 17 is not on so L is entitled to luff up to HTW. W did not keep clear (contact occurred). So W broke 11. Both broke 14 but absent damage or injury L ROW boat is exonerated by 14(b).

This also assumes that in luffing L met her rule 16 obligation to allow W room to keep clear.

L could and perhaps should have taken action while still clear ahead to discourage W from rolling her to windward, but once W established the overlap she made herself vulnerable to a luff from L, and should have known that L was not bound by proper course. And in any case W should have continued to respond to the luff, kept clear and protested if she thought L was breaking a rule. 

John and Steve S,
I think you are missing a step in your analysis- if rule 17 applies, you need to determine whether L actually sailed above proper course before you can say L broke rule 17. From the description, this is most likely the case but there is not enough information to be sure. There are multiple reasons why L's proper course could be to head up in the absence of W.

Initially, WB was clear astern and rule 12 applied. WB was keep clear boat.

Once overlap began, WB was still keep clear boat and rule 11 began to apply. WB breaks rule 11 by failing to keep clear.

Rule 17 is not activated as WB established the overlap to windward and not leeward of LB. Therefore, 17 is still off.

LB has no obligation of proper course and can luff up to HTW as stated by Tim. Only Rule 16 limits the action of LB in this case.

Rule 14 is broken by both. LB being ROW and no damage is exonerated under 14(b). WB failed to keep clear and broke 14 and is not exonerated.

WB breaks 11 and 14 and to be penalised for the same.

As a highly  experienced IJ/IU explained it to me many years ago, he would never declare a straight line between two marks to be a Proper Course.  The RRS do not and should not assume that a boat is required to sail the shortest distance between two marks.  LB has rights to take WB to windward, provided she gives notice and room to do so.  
Causing a collision is never permissible - but the dialog doesn't state which boat was a fault - its entirely possible that LB goes Up to fast, also entirely possible that WB, after heading Up, decides to aggressively bear away and causes the contact.  Same Rule, different question . . . 

In this instance on a small lake in 3 knots with the next mark 50 metres away 2 assymetric boats on a broad reach it was pretty conclusive they were both heading well above their proper course

In this case, because of how the overlap was established, rule 17 was not on so L's proper course isn't relevant. Rule 11 gives L the right to luff to HTW as long as she does so in a way that allows W room to keep clear.

If rule 17 is on, as Warren noted, it doesn't "overrule" 11. L still has ROW and may luff under rule 11. Rule 17 can be on at the same time as 11 and restricts L's right to luff - only up to her proper course and no further. But depending on the wind, current & size of the boats, even at 50 meters it's not necessarily given that proper course would be to point at or even near the mark.

And as I think we've covered, if 17 is on and L luffs above her proper course, the correct response for W is to respond to the luff, keep clear and protest. If W refuses to come up she breaks 11 and if she allows avoidable contact she breaks 14, and is probably not exonerated for either breach.

Just what did the W expected to happen? That the L is going to let W roll her? One rule that was not mentioned that also applies is 15. There is very little initial room protection under 16 for W. L obtained her RoW by W action. The only caution for L would be 14. Downwind jail for W.

Ok guys thanks for all your input. I think we can put this to bed. It appears that W overlapping L brings rule 11 in. 

Kim, can you explain how LB gained ROW by WB's action?  Surely, LB initially would be ROW boat when WB is clear astern, and continues to be ROW boat when WB establishes the overlap to windward and rule 15 would not apply.

Murray,
Sure. The first instance is rule 12. Nothing here about initial room. When W turns on 11, 15 turns on and should expect the second part of 15 reaction from L.
Kim

Kim, I will have to disagree with you regarding rule 15.  The first sentence of the preamble to Part A states "A boat has right of way over another boat when the other boat is required to keep clear of her."
When W is clear astern of L, W is required by rule 12 to keep clear of L.  Therefore, L has right of way over W.  
When W gains an overlap to windward of L, W is required by rule 11 to keep clear of L.  Therefore L has right of way over W.
At some time prior to the overlap, L acquired right of way over W.  L never loses ROW over W from that moment and therefore does not acquire ROW (something she already has) when the overlap begins.  
Rule 15, therefore is not relevant.  But rule 16 is.
Murray

Murray,

Yes. you are correct. My bad!.
Kim

Couple of points that may help people out.

If rule 17 applies, rule 11 necessarily applies because boats are overlapped on the same tack, and rule 11 and rule 17 operate independently, that is a breach of rule 17 does not cause a breach of rule 11 and L can break rule 17 and W can break rule 11, and both can be penalised in the same incident.

While we often identify a boat by whose actions a boat acquires right of way, that is not necessary to apply rule 15.  Consider a close leeward hook-up.
It is not necessary to decide whether L's superior speed or other action were the actions by which she gained right of way:  it suffices for rule 15 that there were no actions of W by which L acquired right of way (rule 15 '... because of the other boat's actions.')

But consider the rather odd semantics in Match Race Call B18

John,
With regards your last two sentences, say if A and B are sailing at the same speed with A clear ahead, A sails into a lull and slows slightly.  B, sailing at the same speed she was before A slowed, almost immediately gains a leeward overlap. Because  the action of A slowing was the reason B acquired ROW, would you say that A is not entitled to room to keep clear?

Firstly, my apologies to all for the wrong citation in my previous post (now fixed).  Should have been

Match Race Call B18

An increase or decrease in speed is not in itself an 'action' within the meaning of the second part of rule 15.

The headnote quoted above answers Murray's question:  there was no 'action' by A.

The oddity in the the Call is about when there actually was an identifiable action by A, but the Call says rule 15 does not apply.

Probably the reason for this is, it's a Call, designed to provide consistent umpire decisions:  it may be difficult or impossible for umpires to determine with certainty whether A slowing was caused by an action of A, or, as in Murray's case, external factors, or acceleration by B, so Call B18 provides a standard outcome covering all cases.

(Diff John, not Allen)
In this scenario I would say that B is first and foremost an overtaking boat and has obligation to steer clear of A.
Once the overlap is firmly established, perhaps both sailing no fewer than two boat lengths, giving A proper notice and provision for time and space to maneuver, B may then take A to weather.  

Once the overlap is firmly established, perhaps both sailing no fewer than two boat lengths, giving A proper notice and provision for time and space to maneuver, B may then take A to weather.

John Sweeney, isn't this exactly what Rule 17 covers? B got overlap to leeward within two hull lengths and now cannot sail above her proper course. What am I missing?