Central London Property Trust Ltd v. High Trees House Ltd

Overview

High Trees ([1947] KB 130) established the modern doctrine of Promissory Estoppel in contract law, preventing parties from going back on promises made during contractual performance even in the absence of formal consideration.

Facts

In 1937, Central London Property Trust leased a block of flats to High Trees House Ltd for £2,500 per year. Due to WWII air raids, occupancy dropped, and in 1940 the landlord agreed in writing to reduce rent to £1,250 per year. By 1945, the flats were fully occupied again, and the landlord sued to recover full rent for the last two quarters of 1945 and assert full rent for the future.

Legal Issue

Equitable Promissory Estoppel

Evidence

1937 ground lease deed, 1940 rent reduction agreement letters, occupancy logs, and financial accounting ledgers.

Arguments

The landlord argued that the 1940 rent reduction was unenforceable for lack of consideration under common law rules (Foakes v Beer). High Trees argued the landlord was bound by its representation not to demand full rent during wartime conditions.

Judgment

Lord Denning held that the landlord was entitled to restore full rent for the future (post-1945), but was equitable stopped from claiming back-rent for the wartime years (1940–1945).

Court's Reasoning

Justice Denning invoked equity to formulate Promissory Estoppel: where one party makes a clear promise intended to create legal relations, knowing it will be relied upon, and the other party acts upon it, equity will prevent the promisor from asserting strict legal rights inconsistent with that promise.

Rule / Principle Established

Established modern Promissory Estoppel in English contract law as an equitable defense against strict common law contractual enforcement.

Significance

Established modern Promissory Estoppel in English contract law as an equitable defense against strict common law contractual enforcement.

Beyond borders

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Sources & references

• Central London Property Trust Ltd v. High Trees House Ltd, High Court of Justice (King's Bench Division) (1947)