Central London Property Trust Ltd v High Trees House Ltd [19...

Facts

• In 1937, Central London Property Trust Ltd (CLPT) leased a block of flats to High Trees House Ltd (HTH) for 99 years at an annual rent of £2,500.
• Due to World War II causing low occupancy in 1940, CLPT agreed to reduce the rent to £1,250 per year.
• HTH paid the reduced rent until the beginning of 1945, after which the flats were fully occupied.
• In 1945, CLPT sought to reclaim the original full rent for the final two quarters of 1945.
• The dispute centered on whether CLPT was legally bound by its promise to accept reduced rent during the war period or could revert to the original lease terms.

Issues

1. Whether a promise to accept reduced rent, unsupported by consideration, was legally enforceable against the landlord when the tenant relied on it.
2. Whether CLPT could recover the full rent for the period during which the promise to accept reduced rent was in operation.
3. Whether promissory estoppel operates as a permanent bar or only suspends strict legal rights.

Decision

• The court held that CLPT was estopped from claiming the original full rent for the period in which the promise to accept reduced rent applied.
• Justice Denning determined that promissory estoppel prevented CLPT from reverting to the original rent during the period of reduced occupancy.
• The right to full rent was suspended, not extinguished, allowing CLPT to return to the original rent terms once conditions normalized (full occupancy).
• CLPT was permitted to charge the full rent again for quarters following the end of the condition (i.e., after the war).

Legal Principles

• Promissory estoppel allows enforcement of a promise even without consideration if the promisee has relied on it and it would be inequitable for the promisor to go back on their word.
• The doctrine requires a clear and unequivocal promise, reliance by the promisee, and inequity if the promisor reverts to strict rights.
• Promissory estoppel generally acts defensively (“a shield, not a sword”); it cannot be used to found a cause of action.
• Its effect is suspensory rather than an outright extinction of the promisor’s rights; the promisor may revert to original rights with reasonable notice when circumstances change.
• The case demonstrated that equitable principles may override the strict doctrine of consideration to prevent unjust outcomes in contract law.

Conclusion

Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130 established the equitable doctrine of promissory estoppel in English law, enabling promises to vary contractual obligations to be enforced where there is reliance and subsequent inequity in retraction, though its operation suspends rather than extinguishes strict legal rights.