Central London Property Trust Ltd v High Trees House [1946]
A written agreement that rent was to be reduced while flats were in low occupancy during war time lasted only whilst the flats were in low occupancy.In this case Lord Denning introduced the principle of promissory estoppel, whereby a party who leads another to believe that he will not enforce his strict legal rights should not be allowed to enforce this right at a later stage.
High Trees House Ltd leased a block of flats from Central London Property Trust Ltd in 1937, for a rate of
£2500 per year. Due to the heavy bombing of London during the war, rates of property occupancy were drastically lower than normal. As a result, the parties made a written agreement in January 1940 that the rent would be reduced by half. The agreement, however, did not stipulate the period for which this reduced rent was to apply. High Trees paid the reduced rate while the flats were not fully occupied, but the flats were back at full occupancy by 1945. Central London sued for payment of the full rental costs from this time (the last two quarters of 1945).
HELD: In the High Court, Justice Denning held that the full rent was payable from the time that the flats became fully occupied in mid 1945.
This shows that this an agreement that was intended to create legal relations will be enforced despite strict consideration not being provided, as here where High Trees had not provided consideration for the reduction in rent.
Denning did, however, add that Central London Property Trust would not have been allowed to claim the full rent for the period between 1940 and 1945. This was the introduction of the concept of promissory estoppel; if a party leads another to believe that he will not enforce his strict legal rights, the court will prevent him from enforcing this right at a later stage.
This obiter remark was not actually a binding precedent, yet it essentially created the doctrine of promissory estoppel.
Citation: Central London Property Trust Ltd v High Trees House [1946] KB 130