Central London Property Trust v High Trees House [1947]

Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130 stands as a renowned decision in English contract law. This case not only reaffirmed and broadened the application of the doctrine of promissory estoppel in contract law within England and Wales but notably featured obiter dicta, particularly addressing hypothetical scenarios where the landlord chose not to pursue the repayment of the full wartime rent.

High Trees House Ltd leased a property in Battersea, London, from Central London Property Trust Ltd in 1937. The agreement specified an annual ground rent of £2,500. Due to World War II, the rental market declined, and High Trees struggled to find tenants. In 1940, they requested a rent reduction from Central London Property Trust, which was agreed upon in writing but without specifying the duration or providing consideration. The legal issue was whether the full rent, as per the original agreement, could be claimed by Central London Property Trust from 1940 onwards, despite the earlier agreed-upon reduction.

Denning J delivered the judgment. He acknowledged that, traditionally, a lease under seal could only be varied by a deed and not by an agreement in writing or otherwise. However, equity allowed variations of deeds by simple contracts in certain circumstances.

Denning J introduced the doctrine of promissory estoppel, stating that if a promise is made with the intention to create legal relations, and the promisee acts on it, then the promisor is estopped from going back on the promise. Denning noted that this principle had evolved over the years, and promises intended to be binding and acted upon were being recognised, even without formal consideration.

Denning applied this principle to the High Trees case, finding that the promise to reduce the rent was binding during the period when the flats were not fully let due to wartime conditions. Once the conditions changed and the flats were fully occupied in early 1945, the reduction ceased to apply.

The case is significant for introducing the doctrine of promissory estoppel into English contract law. It represented a departure from the traditional requirement of consideration for a contract to be binding. The judgment influenced subsequent developments in contract law, particularly regarding the enforceability of promises even without formal consideration.