Hughes v Metropolitan Railway

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The leading case on waiver by estoppel and promissory estoppel, seized on by the late, great Lord Denning in the celebrated Central London Property Trust Ltd v High Trees House Ltd.

Mr Hughes owned a property on the Euston Road. He let it to the Metropolitan Railway. the lease had a covenant requiring the leaseholder to repair on six months notice. Hughes served a notice to repair in October.

In late November the Railway wrote to Hughes, saying "listen there is not much time left on the lease: do you want to buy the remainder out? Importantly, they proposed deferring repairs pending completion of the negotiaiton:

“It occurs to us that the freeholder may be desirous of obtaining possession of the company's interest, which, as you know, is but a short one, and so we propose to defer commencing the repairs until we hear from you as to the probability of an arrangement such as we suggest.”

A period of faffing around ensued. They offered what Hughes clearly considered the outrageous sum of £3,000 for the balance of the leasehold. In late December, Hughes rejected their offer and told them to get on with the repairs. They did finish the repairs within 6 months of 31 December, but not 28 April, being the original deadline.

Hughes sued. The question arose: did they still have to finish that within 6 months of October, or did the 6 months run from the 31st December?

Lord Cairns:

There had been a notice in October to repair in six months. The effect of the letter of November, as it seems to me, was to propose to the Appellant, and the farther letter of the Appellant had the effect of an assent by the Appellant, to suspend the operation of that notice in order to enter upon a negotiation for the purchase and sale of the lease. That negotiation was entered upon, and, as I have assumed, came to an end on the 31st of December. My Lords, it appears to me that in the eye of a Court of Equity, or in the eye of any Court dealing upon principles of Equity, it must be taken that all the time which had elapsed between the giving of the notice in October and the letter of the 28th of November was waived as a part of the six months during which the repairs were to be executed, and that all the time from the 28th of November until the conclusion of the negotiation, which I have assumed to be on the 31st of December, was also waived - that it was impossible that any part of that time should afterwards be counted as against the tenant in a six months' notice to repair. The result would be, that it would be on the 31st of December, as the first time, that time would begin to run, for the purpose of repairs, as against the tenant.

[...]

My Lords, I repeat that I attribute to the Appellant no intention here to take advantage of, to lay a trap for, or to lull into false security those with whom he was dealing; but it appears to me that both parties by entering upon the negotiation which they entered upon, made it an inequitable thing that the exact period of six months dating from the month of October should afterwards be measured out as against the Respondents as the period during which the repairs must be executed.

See also

Waiver by estoppel