''Central London Property Trust Ltd v High Trees House Ltd''

947 Year 947 (Roman numerals, CMXLVII) was a common year starting on Friday of the Julian calendar. Events By place Europe * Summer – A Principality of Hungary, Hungarian army led by Grand Prince Taksony of Hungary, Taksony campaign ...

KB 130, commonly called ''High Trees'', is a leading opinion in the High Court relating to

contract law A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more Party (law), parties. A contract typically involves consent to transfer of goods, Service (economics), services, money, or pr ...

. It reaffirmed and extended the doctrine of

promissory estoppel A promise is a commitment by someone to do or not do something. As a noun ''promise'' means a declaration assuring that one will or will not do something. As a verb it means to commit oneself by a promise to do or give. It can also mean a capacity ...

in the

England and Wales England and Wales () is one of the Law of the United Kingdom#Legal jurisdictions, three legal jurisdictions of the United Kingdom. It covers the constituent countries England and Wales and was formed by the Laws in Wales Acts 1535 and 1542. Th ...

. However, the most significant part of the judgment is ''

obiter dictum ''Obiter dictum'' (usually used in the plural, ''obiter dicta'') is a Latin phrase meaning "said in passing",'' Black's Law Dictionary'', p. 967 (5th ed. 1979). that is, any remark in a legal opinion that is "said in passing" by a judge or arbitr ...

'' as it relates to hypothetical facts; that is, the landlord did ''not'' seek repayment of the full wartime rent. Denning J held estoppel to be applicable if

Facts

High Trees House Ltd leased a block of flats in Battersea,

London London is the Capital city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...

from Central London Property Trust Ltd. The agreement was made in 1937 and specified an annual

ground rent As a legal term, ground rent specifically refers to regular payments made by a holder of a leasehold property to the freeholder or a superior leaseholder, as required under a lease. In this sense, a ground rent is created when a freehold piece of ...

of £2,500. The outbreak of

World War II World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...

in September 1939 led to a downturn in the rental market. High Trees struggled to find tenants for the property and approached Central London Property Trust in January 1940 to request that the rent be lowered. A reduction to £1,250 per year was agreed in writing, though the duration was not specified and no

consideration Consideration is a concept of English law, English common law and is a necessity for simple contracts but not for special contracts (contracts by deed). The concept has been adopted by other common law jurisdictions. It is commonly referred to a ...

was provided. By 1945, the building was returning to full occupancy. On 21 September 1945, Central London Property wrote to High Trees to request a return to the full rent of £2,500 and claiming arrears of £7,916 for the period since 1940. They then brought a test action to recover part of the debt for the two quarters which had elapsed since June 1945.

Judgment

Based on previous judgments 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. Being ''

obiter dicta ''Obiter dictum'' (usually used in the plural, ''obiter dicta'') is a Latin phrase meaning "said in passing",''Black's Law Dictionary'', p. 967 (5th ed. 1979). that is, any remark in a legal opinion that is "said in passing" by a judge or arbitra ...

'' and in a court of first instance this was doubly not a binding precedent, yet it essentially created the doctrine of

Significance

Advances have been made in promissory estoppel since its inception in ''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. Denning commented that such an agreement should now be enforceable under the doctrine of promissory estoppel, and indeed the plaintiff did not seek the full debt on the basis of what was fair and, perhaps, thought was the law. However, the courts were at first reluctant to overrule or distinguish cases like ''Pinnel's case'' and ''Foakes v Beer'' having formed part of the common law for so long. Lady Justice Arden in '' Collier v P & MJ Wright (Holdings) Ltd'' (2007) accepted in principle that ''High Trees'' could be used to extinguish a creditor's right to full payment of a debt in such circumstances. In ''Amalgamated Investment Co v Texas Bank'' it was decided that proprietary estoppel can act as a sword and not merely as a shield (that is, it can be used as a cause of action rather than merely providing a defence to an action).

References

{{Reflist Lord Denning cases English enforceability case law English estoppel case law 1946 in British law High Court of Justice cases 1946 in case law

Facts

Judgment

Significance

See also

References