Central London Property Trust v High Trees House - 1947

Legal Case Summary

Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130

Summary: This case established the doctrine of promissory estoppel in English law, which prevents a party from backing out of a promise which the other party had relied on, even though the promise wasn't supported by consideration.

Facts

In 1937, Central London Property Trust Ltd (CLPT) leased a block of flats in London to High Trees House Ltd (HTH) at £2,500 per year for 99 years. Due to the impact of World War II, there was a drastic under-occupancy of the flats in 1940. CLPT agreed to reduce the rent to £1,250. This halved rent was paid until the end of 1945. By then, London had largely recovered from the war and the flats were again fully occupied. CLPT then claimed for the full rent for the last 2 quarters of 1945.

Issue(s)

The key question was whether the agreement by CLPT to accept a reduced rent was legally binding, and thus not allowing them to request the full rent once the flats were fully occupied again.

Direction/Outcome

The court held that CLPT could not go back on its promise to accept reduced rent for the period when the flats were not fully occupied. This was held as a clear case of CLPT making a promissory representation that they intended HTH to rely on and thus were estopped from reneging. However, it was also held that once conditions went back to normal, the original agreement could be enforced and therefore the claim for full rent for the last quarters of 1945 was successful.

The High Trees case thus strongly established the principle of promissory estoppel in English law, i.e., once a promise is made and relied upon, it cannot be reneged on without agreement (even if not supported by consideration) if this would be inequitable. However, importantly, it was also stipulated by Lord Denning that the effect of such a promissory estoppel 'is only suspensive' — i.e., it only temporarily varied the rent payable — and does not permanently extinguish rights.

References

'Central London Property Trust Ltd v. High Trees House Ltd,' [1947] KB 130 (King's Bench Division).

Elliot, Catherine & Quinn, Frances. 'English Legal System,' 10th ed. (Pearson Education, 2009) 129-130.