Central London Property Trust Ltd v. High Trees House Ltd
Encyclopedia
Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130 (or the High Trees case) is an English contract law
decision
in the High Court
. It reaffirmed the doctrine of promissory estoppel in contract law in England and Wales
. Denning J held estoppel to be,
, London
, for a rate £2500/year from Central London Property Trust Ltd. Due to the conditions during the beginning of World War II
occupancy rates were drastically lower than normal.
In January 1940, to ameliorate the situation the parties made an agreement in writing to reduce rent by half. However, neither party stipulated the period for which this reduced rental was to apply. Over the next five years, High Trees paid the reduced rate while the flats began to fill, and by 1945, the flats were back at full occupancy. Central London sued for payment of the full rental costs from June 1945 onwards (i.e. for last two quarters of 1945).
.
In Amalgamated Investment Co v Texas Bank [1982] Q.B. 84 it was held that the doctrine could act as a sword and not merely as a shield (that is, it could be used as a cause of action rather than merely providing a defence to an action).
Attempts have been made to utilize the doctrine of promissory estoppel after High Trees to create a new inroad into the rule in Pinnel's case that an agreement to accept part payment of a debt in full satisfaction of it is unenforceable for want of consideration. In the High Trees case Lord Denning commented, obiter, that such an agreement should now be enforceable under the doctrine of promissory estoppel. However, the courts have traditionally been reluctant to overrule cases like Pinnel's case and Foakes v Beer as they have formed part of the common law for so long. Lady Justice Arden in Collier v P & MJ Wright (Holdings) Ltd
[2007] EWCA Civ 1329 accepted in principle that High Trees could be used to extinguish a creditor's right to full payment of a debt in such circumstances.
English contract law
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
decision
Legal opinion
In law, an opinion is usually a written explanation by a judge or group of judges that accompanies an order or ruling in a case, laying out the rationale and legal principles for the ruling....
in the High Court
High Court of Justice
The High Court of Justice is, together with the Court of Appeal and the Crown Court, one of the Senior Courts of England and Wales...
. It reaffirmed the doctrine of promissory estoppel in contract law in England and Wales
England and Wales
England and Wales is a jurisdiction within the United Kingdom. It consists of England and Wales, two of the four countries of the United Kingdom...
. Denning J held estoppel to be,
Facts
In 1937, High Trees House Ltd leased a block of flats in ClaphamClapham
Clapham is a district in south London, England, within the London Borough of Lambeth.Clapham covers the postcodes of SW4 and parts of SW9, SW8 and SW12. Clapham Common is shared with the London Borough of Wandsworth, although Lambeth has responsibility for running the common as a whole. According...
, London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, for a rate £2500/year from Central London Property Trust Ltd. Due to the conditions during the beginning of World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
occupancy rates were drastically lower than normal.
In January 1940, to ameliorate the situation the parties made an agreement in writing to reduce rent by half. However, neither party stipulated the period for which this reduced rental was to apply. Over the next five years, High Trees paid the reduced rate while the flats began to fill, and by 1945, the flats were back at full occupancy. Central London sued for payment of the full rental costs from June 1945 onwards (i.e. for last two quarters of 1945).
Judgment
Based on previous judgments such as Hughes v Metropolitan Railway Co, Denning J held that the full rent was payable from the time that the flats became fully occupied in mid-1945. However, he continued in an obiter statement that if Central London had tried to claim for the full rent from 1940 onwards, they would not have been able to. This was reasoned on the basis that if a party leads another party to believe that he will not enforce his strict legal rights, then the Courts will prevent him from doing so at a later stage. This obiter remark was not actually a binding precedent, yet it essentially created the doctrine of promissory estoppel.Impact
The doctrine of promissory estoppel has had a major impact on English and Irish contract law since the High Trees case. Debates surrounding the expansion and application of the doctrine have included whether or not detrimental reliance is required in order to bring the doctrine into effect, whether the doctrine can create a cause of action or merely provide a defence to a cause of action and whether or not the evolution of the doctrine has abrogated or abolished the rule in Pinnel's casePinnel's Case
Pinnel's Case 5 Co. Rep. 117a, also known as Penny v Cole, is an important case in English contract law, on the doctrine of part performance. In it, Sir Edward Coke opined that a part payment of a debt could not extinguish the obligation to pay the whole.-Facts:The plaintiff sued the defendant for...
.
In Amalgamated Investment Co v Texas Bank [1982] Q.B. 84 it was held that the doctrine could act as a sword and not merely as a shield (that is, it could be used as a cause of action rather than merely providing a defence to an action).
Attempts have been made to utilize the doctrine of promissory estoppel after High Trees to create a new inroad into the rule in Pinnel's case that an agreement to accept part payment of a debt in full satisfaction of it is unenforceable for want of consideration. In the High Trees case Lord Denning commented, obiter, that such an agreement should now be enforceable under the doctrine of promissory estoppel. However, the courts have traditionally been reluctant to overrule cases like Pinnel's case and Foakes v Beer as they have formed part of the common law for so long. Lady Justice Arden in Collier v P & MJ Wright (Holdings) Ltd
Collier v P & MJ Wright (Holdings) Ltd
Collier v P&M J Wright Ltd [2007] is an English contract law case, concerning the doctrine of consideration and promissory estoppel.-Facts:...
[2007] EWCA Civ 1329 accepted in principle that High Trees could be used to extinguish a creditor's right to full payment of a debt in such circumstances.
External links
- Denning's judgment from Justis.com