Promissory Estoppel Created
The plaintiff leased a block a flats to the defendant in 1939, at an annual rental of pounds 2500. High Trees had difficulty in filling the flats because of the war, and the parties agreed in writing in 1940 to reduce the rental to a half. No time period for the reduction was set. High Trees paid the reduced rent for five years and by late 1945, the flats were full. Central London sought to re-instate the full rent from the second half of 1945, as the war ended.
Held: The 1940 agreement was intended to accommodate the peculiar circumstances brought about by war and so lasted only as long as the war. With the flats full by 1945, and now that the war had ended, the variation no longer applied. Central London was now entitled to the full rental. (Obiter) An action for arrears for the years 1940-45 would have failed. The plaintiff was subject to a promissory estoppel. It had made a promise. The defendant had relied upon that promise, and despite the absence of consideration, it would have been unjust to have allowed such a claim. This was an estoppel, a rule of evidence, preventing an ‘unjust departure by a party from an assumption of fact which he has caused another party to adopt or accept for the purpose of their legal relations’.
Denning J said: ‘where parties enter into an arrangement which is intended to create legal relations between them and in pursuance of such arrangement one party makes a promise to the other which he knows will be acted on and which is in fact acted on by the promissee, the court will treat the promise as binding on the promisor to the extent that it will not allow him to act inconsistently with it even although the promise may not be supported by consideration in the strict sense and the effect of the arrangement made is to vary the terms of a contract under seal by one of less value.’
Judges:
Denning J
Citations:
[1947] 1 KB 130, [1956] 1 All ER 256, [1947] LJR 77, [1947] 175 LT 332, [1947] 62 TLR 557, [1946] EWHC KB 1
Links:
Jurisdiction:
England and Wales
Citing:
Applied – Hughes v Metropolitan Railway Co HL 1877
A notice to repair had been served by the landlord on the tenant. The tenant wrote offering to buy the premises and proposed deferring the commencement of repairs until the landlord responded. The landlord replied by letter asking the price. It was . .
Cited – Birmingham and District Land Co v London and North Western Railway CA 1886
The court considered the creation of an estoppel: Cotton LJ: ‘. . what passed did not make a new agreement, but . . what took place . . raised an equity against him.’
Bowen LJ said: ‘The truth is that the proposition is wider than cases of . .
Cited by:
Cited – Dun and Bradstreet Software Services (England) Ltd; Dun and Bradstreet Software Services Ltd v Provident Mutual Life Assurance Association and General Accident Linked Life Assurance CA 9-Jun-1997
Break clauses had been exercised on behalf of the plaintiffs. The defendant landlords appealed a decision upholding the notices. A penalty rent had been sought.
Held: There had been no sufficient agency established to validate the notice. The . .
Explained – Combe v Combe CA 1951
The defendant husband had promised his wife to allow her andpound;100 a year free of tax, without his wife furnishing any consideration for the promise. On his failing to pay, she sued on the promise.
Held: Her claim failed. The court declined . .
Cited – Smith v Lawson CA 5-Jun-1997
. .
Cited – The Prudential Assurance Company Ltd v Ayres and Grew ChD 3-Apr-2007
The defendants argued that they were not liable as guarantors under an Authorised Guarantee Agreement for a lease when the assignee tenant had become insolvent.
Held: The guarantors were liable provided that the extent of the claim did not . .
Cited – Collier v P and M J Wright (Holdings) Ltd CA 14-Dec-2007
Agreement for payment by joint debtor not contract
The claimant appealed against refusal of an order to set aside a statutory demand. He said that he had compromised a claim by the creditors. He argued for an extension to the Rule in Pinnel’s case, so that where a debtor agrees to pay part of a . .
Cited – D and C Builders Ltd v Rees CA 1966
The plaintiff builders had been chasing payment of their undisputed invoice. Knowing that the builders were in financial difficulties, the defendant offered rather less, saying that if it was not accepted, she would pay nothing. She made the payment . .
Cited – Western Fish Products Ltd v Penwith District Council and Another CA 22-May-1978
Estoppel Cannot Oust Statutory Discretion
The plaintiff had been refused planning permission for a factory. The refusals were followed by the issue of Enforcement Notices and Stop Notices. The plaintiff said that they had been given re-assurances upon which they had relied.
Held: The . .
Lists of cited by and citing cases may be incomplete.
Estoppel, Landlord and Tenant, Contract
Leading Case
Updated: 25 September 2022; Ref: scu.188168
