Central London Property Trust Ltd v High Trees House Ltd
High Court
Citations: [1947] KB 130; [1947] LJR 77; [1947-51] CLY 838.
Facts
The claimant let by deed a block a flats to the defendant for a term of 99 years in 1937. The rent was £2,500 a year. The subsequent chaos of WW2 meant that the defendant could only sublease some of the flats to tenants. This put them in danger of defaulting on the rent. The claimant told the defendant that they would reduce the rent to £1,250 a year to avoid this.
In 1945, the claimant wrote to the defendant stating that rent would now be payable at the original rate. They also asked for back-payments covering the difference during the war period. The parties sought a declaration from the court as to what the defendant’s legal position was.
Issue(s)
- Could the claimant insist on the defendant paying the full rent?
- Was the claimant entitled to back-payments?
Decision
The High Court stated that the claimant could demand the full rent going forward, but not any back-payments. The claimant had made a statement which the defendant relied on. The claimant was therefore estopped from claiming the full rent for the duration of the war. However, they could revive their right to the full rent going forwards once the war was over. This was because the conditions which underpinned the claimant’s promise had ceased.
This Case is Authority For…
This case establishes the defence of promissory estoppel against contract claims. Denning LJ stated that the requirements are:
- The claimant makes an unequivocal promise that they will not rely on their strict legal rights;
- The claimant intended to be legally bound by this promise;
- The defendant changes their position in reliance on this promise.
There is no need for the defendant to have provided consideration for the promise.
Other
This case demonstrates that the effect of promissory estoppel is usually to suspend the claimant’s legal rights, not extinguish them completely.
