Central London Property Trust Limited v. High Trees House Ltd

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This[1] is the prominent High Trees case, in which Lord Denning reinvigorated the old doctrine of promissory estoppel, which was first formulated in Hughes v Metropolitan Railway[2].

Topics Covered in this article

Facts

  • In September 1937, the appellant firm, Central London Property Trust ltd, leased a block of flats to the defendant company, High Trees Ltd, for a period of ninety-nine years, beginning in 1937, at a ground rent of 2,500 per year. 
  • Due to the wartime conditions in 1939, High Trees ran out of money, and in January 1940, the directors of the two companies reached an agreement to decrease the rent to £ 1,250 a month from the start of the year. However, the written deal made no mention of how long this would continue, and the defendants did not pay any compensation for the cut, rendering it only a pledge rather than a contract. 
  • Following that, the defendants billed the following rentals at a lower rate. The war had ended by the beginning of 1945, and the defendant’s earnings had increased. The claimants filed a suit in September 1945 for the full rent of £2,500 per year and £7,916 in arrears for the previous five years. 
  • They then lodged a case to recoup the rent difference from September 29 and December 25, 1945. 

Issues

  1. Was the rent-reduction arrangement valid for the whole ninety-nine year period? 
  2. Were the claimants barred from claiming the higher rent because they waived their right to assert the arrears or the rent difference? 

Held: 

PANEL: Denning, J. 

  • In terms of the extent of the promise in question, the court found that both sides understood the reduction to be merely a transient expedient due to war times that were not operable for the whole ninety-nine years. 
  • As a result, the reduction ceases to exist in early 1945, and the defendants are now obligated to pay the entire lease rent as per the initial arrangement after the plaintiffs’ notice in September 1945. 
  • Court referring to the then recent developments[2] based on a combination of law and justice, holding that a party cannot be able to behave inconsistently on a pledge that was supposed to be binding on the promisor even though it was made without thought. 
  • Despite the fact that the present case was not simply an estoppel case, the Court dismissed the plaintiff’s argument for back rent. 

IN THE JUDGMENT, THE FOLLOWING CASES WERE DISCUSSED: 

  1. Re William Porter & Co., Ltd[3]
  2. Buttery v. Pickard[4]
  3. Forquet v. Moore[5]
  4. Crowley and Others v. Vitty[6]
  5. Berry v. Berry[7]
  6. Nash v. Armstrong[8]
  7. Fenner v. Blake[9]
  8. re Wickham[10]
  9. Jorden v. Money[11]
  10. Hughes v. Metropolitan Ry. Co[12]
  11. Birmingham and District Land Co. v. London & North Western Ry. Co.[13]
  12. Salisbury (Marquess) v. Gilmore[14]

Importance

  • After the High Trees case, advances in promissory estoppel have been made, allowing a new inroad into the Pinnel’s case[15], which held that when a debtor agrees to receive part payment of a debt in complete fulfilment, the demand for lack of respect is unenforceable. According to Lord Denning, such an arrangement should be enforceable under the doctrine of promissory estoppel. Nonetheless, the courts were originally reluctant to overturn well-known cases such as Peenny v Col and Foakes v Beer[16], which were very part of the common law. 
  • In the case of Collier v P & MJ Wright (Holdings) Ltd (2007)[17] the High Trees’ principle was accepted to extinguish a creditor’s right to full payment of a debt in certain circumstances.
  • In Amalgamated Investment Co v Texas Bank[18] it was decided that proprietary estoppel can be used as a cause of action rather than merely providing a defence to an action unlike it being not merely a shield but also a sword.

[1] Central London Property Trust Limited v. High Trees House Ltd, (1947)  KB 130 360.

[2] Hughes v. Metropolitan Ry. Co Birmingham and District Land Co. v. London & North Western Ry. Co. Salisbury(Marquess) v. Gilmore (1942).

[3] (1937) 2 AH E/R. 361.

[4] (1946) W. N. 25.

[5] (1852) 22 L. J. (Ex.) 35.

[6] (1852) 2i L. J. (Ex.) 135.

[7] (1929) 2 K. B. 316, 319.

[8] (1861) 10 C. B. (N. S.) 259.

[9] (1900) 1 Q. B. 426.

[10] (1917) 34 T. L. R. 158.

[11] (1854) 5 H. L. C. 185

[12](1946) W. N. 25.

[13] (1888) 40 Ch. D. 268, 286.

[14] (1942) 2 K. B. 38, 51.

[15] Penny v Cole (1602) 5 Co Rep 117a.

[16] (1881-85) All ER Rep 106.

[17] (2007) EWCA Civ 1329.

[18] (1982) EWHC 84 (QB).

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