Central London Property Trust, Ltd. v. High Trees House, Ltd.

CENTRAL LONDON PROPERTY TRUST, LTD. v. HIGH TREES HOUSE, LTD., [1947] K.B. 130. The facts as stated in the headnote were as follows: "By a lease under seal dated September 24, 1937, the plaintiff company let to the defendant company (a subsidiary of the plaintiffs) a block of flats for a term of ninety-nine years from September 29, 1937, at a ground rent of £2,500 a year. In the early part of 1940, owing to war conditions then prevailing, only a few of the flats in the block were let to tenants and it became apparent that the defendants would be unable to pay the rent reserved by the lease out of the rents of the flats. Discussions took place between the directors of the two compames, which were closely connected, and, as a result, on January 3, 1940, a letter was written by the plaintiffs to the defendants confirming that the ground rent of the premises would be reduced from £2,500 to £1,250 as from the beginning of the term. The defendants thereafter paid the reduced rent. By the beginning of 1945 all the flats were let but the defendants continued to pay only the reduced rent. In September, 1945, the plaintiffs wrote to the defendants claiming that rent was payable at the rate of £2,500 a year and, subsequently, in order to determine the legal position, they initiated friendly proceedings in which they claimed the difference between rent at the rates of £2,500 and £1,250 for the quarters ending September 29 and December 25, 1945. By their defence the defendants pleaded that the agreement for the reduction of the ground rent operated during the whole term of the lease and, as alternative, that the plaintIffs were estopped from demanding rent at the higher rate or had waived their right to do so down to the date of their letter of September 21, 1945."

Denning, J. upheld their claim on the ground that the agreement to accept the lower rent was only meant to cover wartime conditions. But by way of dictum he maintained that the plaintiffs could not have sued for the arrears accrued during the suspensory period covered by the agreement, citing Hughes v. Metropolitan Ry., 2 App. 499 (1877). He emphasized that although the plaintiffs could not have been sued in damages for breach of their promise to accept the lower rent, given the fusion of law and equity, they were nevertheless estopped to act inconsistently with their promise. In this sense they were estopped.