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

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KB 130 is a famous

English contract law English contract law is the body of law that regulates legally binding agreements 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 countrie ...

decision Decision may refer to: Law and politics * Judgment (law), as the outcome of a legal case *Landmark decision, the outcome of a case that sets a legal precedent * ''Per curiam'' decision, by a court with multiple judges Books * ''Decision'' (nove ...

in the High Court. 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 ...

contract law A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to ...

England and Wales England and Wales () is one of the 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. The substantive law of the jurisdiction is ...

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

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

'' as it relates to hypothetical facts; that is, the landlord did ''not'' seek repayment of the full wartime rent.

Denning J Alfred Thompson "Tom" Denning, Baron Denning (23 January 1899 – 5 March 1999) was an English lawyer and judge. He was called to the bar of England and Wales in 1923 and became a King's Counsel in 1938. Denning became a judge in 1944 when ...

held estoppel to be applicable if

Facts

High Trees House Ltd leased a block of flats in

Clapham Clapham () is a suburb in south west London, England, lying mostly within the London Borough of Lambeth, but with some areas (most notably Clapham Common) extending into the neighbouring London Borough of Wandsworth. History Early history T ...

London London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...

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 o ...

of £2,500. The outbreak of

World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the World War II by country, vast majority of the world's countries—including all of the great power ...

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 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. The court in '' Currie v Misa'' declar ...

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

'' 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 ''

'' 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 ''Pinnel's Case'' 6025 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 obligat ...

'' 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 is an English contract law case, which applied the controversial pre-existing duty rule in the context of part payments of debts. It is a leading case from the House of Lords on the legal concept of consideration. It established the rule that pr ...

'' 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