Thomas Hughes v The Directors, &C.

, of the Metropolitan Railway

Company
House of Lords
5 June 1877
(1876-77) L.R. 2 App. Cas. 439
The Lord Chancellor (Lord Cairns), Lord O'Hagan, Lord Selborne, Lord Blackburn and
Lord Gordon.
1877 June 5
FACTS:
A notice to repair, within six months, houses held on lease by the Metropolitan Railway
Company, was given on the 22nd of October, 1874, to expire on the 22nd of April, 1875.
It was answered by a letter of the 28th of November, suggesting that the lessor might
like to purchase the premises. The lessors' solicitors, by letter of the 1st of December,
asked the price demanded, and were told, by letter on the 30th of December, that it was
£3000. The lessors' solicitors on the 31st of December, 1874, wrote to say that,
considering the condition of the premises, “the price is out of all reason. We must
therefore request you to reconsider the question of price, having regard to the previous
observations, and to the fact that the company have already been served with notice to
put the premises in repair, and we shall be glad to receive in due course a modified
proposal from you.” No farther communication on this subject took place till the 19th of
April, 1875, when the agent for the company wrote to say that as “the negotiations had
not resulted in a sale” the company would take in hand the repairs. On the 20th of April
the solicitors for the Appellant wrote, declaring that “the negotiations” had been broken
off in December last, and that there had been ample time since then to complete the
repairs. On the 22nd of April the notice expired, and on the 28th the ejectment was
served. After verdict for the Plaintiff and judgment in the Court below:—
Held, that the company was entitled in Equity to be relieved against the forfeiture, for
that the letters at the end of November and at the beginning of December had the effect
of suspending the notice, and that the suspension did not come to an end till the 31st of
December, till which time the operation of the notice was waived, so that no part of that
time could be counted against the tenant in a six months' notice to repair.
IN this case an action of ejectment had been brought to recover from the Respondents
possession of certain houses, originally demised by a lease, dated the 15th of June,
1787, executed by the *440 then Lord Southampton to Mr. James Haygarth. The
tenancy was for ninety-nine years, to commence as from the 29th of September, 1786.
The Appellant was the freehold reversioner of the property, and the Respondents were
the assignees of the lease. There was the ordinary covenant “as often as need shall
require during the term hereby granted,” to repair,—and the lessor “and the person or
persons for the time being entitled to the freehold or inheritance of the said premises,
and his or their stewards, surveyors, and workmen, twice in every year or oftener “were
to be entitled to enter and view the state and condition of the premises, and to give or
leave notice in writing on the demised premises, for the amendment of all defects, and
want of reparation. And the lessee covenanted within six months after such notice to
repair.
On the 22nd of October, 1874, the Appellant's solicitors left with the Respondents a
formal written notice to repair “within the space of six calendar months from the date
hereof.” On the 28th of November, 1874, the agents of the Respondents wrote
acknowledging the receipt of the notice, and promising that “the repairs required by the
covenants of the leases shall be forthwith commenced.” The letter went on thus: “It
occurs to us that the freeholder may be desirous of obtaining possession of the
company's interest, which, as you know, is but short, 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.” On the 1st of December, 1874, the Appellant's agents wrote that if
the Respondents “are willing to sell these houses, and give immediate possession, our
client will, on hearing from you the price, consider whether it is worth his while to
acquire the company's interest or not.”
On the 30th of December, 1874, the Respondents' agents offered a surrender of the
whole of the leases in consideration of a payment of £3000,” and asked for an answer at
“early convenience.”
On the next day, the 31st of December, the Appellant's solicitors wrote to say that
“having regard to the state of repair in which the houses now are, and to the large
expenditure which will be required to put them in a proper condition, the whole of which
the company is liable to bear under the covenants in the leases, we think the price asked
for is out of all reason. We must therefore request you to reconsider the question of
price, having regard to our previous observations, and to the fact that the company have
already been served with notice to put the premises in repair, and we shall be glad to
receive in due course a modified proposal from you.”
On the 6th of January, 1875, the Appellant's agents wrote to request payment of ground
rent for the various houses which had been the subject of the correspondence, and to
ask “the address of Colonel Penley, to whom you pay a rent of £100 a year” in respect of
one of the houses. As to this house the answer, dated the 7th of January, 1875, was
that the rent was paid to Colonel Penley's solicitors, Messrs. Remnant & Penley, of
Lincoln's Inn Fields.
No other communication passed between the parties till the 19th of April, 1875. On that
day Mr. Bell, the secretary of the Respondents, wrote from the company's offices to the
Appellant's solicitors, “As the negotiations with your client have not resulted in a sale of
the company's interest to him, and the weather is now favourable for the performance of
the necessary works, our repairing staff will immediately take in hand the requisite
repairs to the above premises.”
On the 20th of April, 1875, the Appellant's solicitors wrote to Messrs. Remnant & Penley
“with reference to Mr. Bell's letter to you we beg to say that the negotiations with Mr.
Hughes were broken off in December last, and there has been ample time since then to
have completed the repairs in accordance with the terms of the notice.”
On the 22nd of April, 1875, the notice expired. On the 28th of April (the premises being
alleged to be still out of repair) the writ of ejectment was served. After action brought
the repairs were begun, and were completed somewhere in June.
This appeal was then brought.
REPRESENTATIONS:
For the Appellant:—
There was no pretence for saying that there had been a waiver of the notice to repair,
nor had anything been done by the Appellant to suspend its operation. There had not
been any request by the Respondents that its operative effect should be suspended, nor
any concession of suspension by the Appellant. On the contrary, in the letter of the 31st
of December, when the company's offer to sell for £3000 was rejected, the company's
agent had his attention specially called to “the fact that the company have already been
served with notice to put the premises in repair.” Nothing, therefore, which the Appellant
had done afforded any ground for this application for equitable relief. The delay was
altogether the delay occasioned by the utter neglect of the Respondents to do anything
in the matter.

For the Respondents, were not called on.

JUDGEMENTS:
THE LORD CHANCELLOR Lord Cairns:—
The Appellant was the landlord of certain premises in the Euston Road, the lease of
which, an old and a long lease, was vested in the Respondents. There were in the lease
covenants to repair, and to repair after notice. Notice had been given and served upon
the Respondents by the Appellant on the 22nd of October, 1874; it was a notice to repair
the premises within six months; that six months would therefore expire on the 22nd of
April, 1875. Nothing was done by the Respondents between the 22nd of October and the
28th of November. On the 28th of of November the agents of the Respondents wrote to
the solicitors of the Appellant a very important letter. There can be no doubt that the
letter refers to the premises in question, although it refers also to other premises. It
states that the notice to repair had been received, and that the repairs required by the
covenants of the lease “shall be forthwith commenced,” but then it adds: “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.” Now, if these two parties, the Appellant and the Respondents, were really
minded to treat for the purchase of this lease, of course it was to the interest of both
parties that the doing of these repairs should be suspended, and that the property
should be bought as it then stood, because it might be desired to apply it to purposes for
which the repairs would be useless—and I read this as a definite intimation on the part
of the Respondents that they would not proceed to execute the repairs (although they
stated their readiness to commence them forthwith), if they found that there was a
probability of an arrangement to purchase being come to.
The Appellant, when he received that letter, might have said, I have no intention of
becoming a purchaser; or he might have said, I may become a purchaser; but if a
negotiation is to be commenced you must understand that it is to be without prejudice to
my notice to repair; you must go on and make the repairs as if there was no
negotiation; or he might have said simply, I will adopt what you propose and enter upon
a negotiation, saying nothing farther. That third course is the course which he took, and
it is a course which, as it seems to me, when taken, carried with it the intimation that he
was satisfied with the footing upon which the matter was put by the letter which he was
answering. This is what his solicitors say in their letter of the 1st of December: “If the
company are the owners of” certain other houses, “and are willing to sell them all” (that
is all the houses), “and give immediate possession, our client will, on learning the price,
consider whether it is worth while to acquire the company's interest or not. In
mentioning the price, please to give us particulars of the tenancies and rents paid to the
company.”
Now, that being a letter which, as it appears to me, acceded to the suggestion that the
repairs were to be deferred until it was ascertained whether an agreement could be
made for the purchase, on the 4th of December that letter of the 1st was replied to, and
replied to in this way: “We are in receipt of yours of the 1st instant. The particulars and
terms asked for shall be sent in the course of a few days.” Again, on the 30th of
December, the agents of the Respondents write to the solicitors of the Appellant: “We
send you herewith a statement of the company's receipts and payments in respect of the
houses in Euston Road as requested by you. The company will agree to surrender the
whole of the leases in consideration of a payment of £3000. We shall be glad to hear
from you at your early convenience.” That is followed by the particulars of the
Metropolitan Railway Company's interest in the houses in Euston Road, the property of
Mr. Hughes. There is a somewhat lengthy schedule, and it is obvious that the
preparation of that schedule was a work which would easily account for the lapse of time
between the 4th and the 30th of December. It was a schedule which was required by the
Appellant. Time was required to prepare it, and your Lordships come therefore to the
30th of December with clear proof that no time whatever had been lost between the
28th of November and that day.
The offer, then, standing upon the letter of the 30th of December, that letter is replied to
by the solicitors of the Appellant. My Lords, I think it unnecessary to go beyond that
letter. That is a letter which, a price of £3000 having been proposed, repudiates that
price, refuses to give it, and asks for a modified proposal. No modified proposal, in point
of fact, was made. But I will put the matter in the most favourable way for the
Appellant. I will assume that in place of asking for a modified proposal that had been a
letter which had at once terminated the negotiation. No farther proposal having been
made in substance the negotiation then determined. 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.
Then occurs the question, what time from the 31st of December would be given? My
Lords, what a Court of Equity would have done if it had found that the tenant after the
31st of December had taken no steps to make the repairs, and that a period of six
months had run from the 31st of December without any repairs having been made, it is
not necessary here to consider. In point of fact the repairs were made within six months,
from the 31st of December; and my Lords, I cannot but think that the lease having
prescribed a period of six months, as that which in the eyes of the contracting parties
was a reasonable period, within which to make such repairs as those, a Court of Equity
would hold, and would be bound to hold, that the negotiation having been broken off on
the 31st of December, the repairs were in this case executed within that which according
to the view of the parties was a reasonable time for the execution of such repairs.
My Lords, it is upon those grounds that I am of opinion that the decision of the Court
below is correct. It was not argued at your Lordships' Bar, and it could not be argued,
that there was any right of a Court of Equity, or any practice of a Court of Equity, to give
relief in cases of this kind, by way of mercy, or by way merely of saving property from
forfeiture, but it is the first principle upon which all Courts of Equity proceed, that if
parties who have entered into definite and distinct terms involving certain legal results—
certain penalties or legal forfeiture—afterwards by their own act or with their own
consent enter upon a course of negotiation which has the effect of leading one of the
parties to suppose that the strict rights arising under the contract will not be enforced, or
will be kept in suspense, or held in abeyance, the person who otherwise might have
enforced those rights will not be allowed to enforce them where it would be inequitable
having regard to the dealings which have thus taken place between the parties. 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.
I therefore propose to your Lordships that the decree which is appealed against should
be affirmed, and the present appeal dismissed with costs.
LORD O'HAGAN:—
My Lords, I am of the same opinion. Your Lordships have no power to relieve against the
effect of a forfeiture such as was legally established by the verdict of the jury in this
case, merely on the ground that it has pressed hardly on the Defendants. They entered
into a covenant: and if they have failed to fulfil their undertaking they must abide the
results, however onerous, unless the circumstances excuse their default in the view of a
Court of Equity. But if they acted, or failed to act, through a mistake induced by the
conduct of the Plaintiff: if they were misled by it into the belief that his strict legal right
was abandoned or suspended for the time, he cannot be allowed to take advantage of
the forfeiture which was so accomplished.
I am bound to say, with my noble and learned friend on the woolsack, that I see no
evidence to impeach the Plaintiff of mala fides or misrepresentation or wilful lulling of the
Defendants into a disregard of their legal duty or a compromise of their legal rights. But
this does not affect the question. If there was real misleading and bonâ fide mistake, it
does not matter that the Plaintiff acted honestly and without indirect purpose of any
kind. The facts of the misleading and mistake are enough to prevent the forfeiture,
although they had their origin in no corrupt intention. Now, we have it sworn, on behalf
of the Defendants, that they were put off their guard and induced to postpone the
making of the needful repairs, within the appointed time, by the negotiation which was
pending. The letters and the oral proof put that negotiation beyond controversy. It
continued, at least, from the 28th of November until the 31st of December: and the
learned counsel failed altogether in contending that, during that period, at all events, the
operation of the notice was not suspended. Both parties contemplated, as the issue of it,
a sale of the premises: and, of necessity, the question of repairs was put out of
consideration. No doubt they might have agreed that the negotiation should be without
prejudice to the notice; but they did nothing of the kind. It seems to me quite clear that
time working forfeiture did not run during that negotiation: and I incline to agree with an
observation of my noble and learned friend opposite, (Lord Selborne), in the course of
the discussion that the period which had elapsed before the beginning of it, after the
notice was given, cannot be taken into account and pieced on to that which elapsed after
it had ended, to make up the six months and complete the default. But it is not
necessary to pronounce on this point with a view to our decision.
Well, so the negotiation continued until the 31st of December. Did it then conclude?
Quite the contrary. The Plaintiff expressly dealt with it as still subsisting; and, having
refused the offer already made to him, invited another. To his invitation he *450 got no
reply, and he proceeded to act upon his notice. I quite concur with Lord Justice Mellish
that his proper course would have been to inform the Defendants, within a reasonable
time, that failing to make a new proposal they should understand the negotiation to
have been concluded and the parties relegated to their legal rights. This would have
been a reasonable and equitable course: but it was not taken, and the Plaintiff must bear
the consequences. I think that the judgment should be affirmed, and the appeal
dismissed with costs.
LORD SELBORNE:—
My Lords, I am of the same opinion, and for the same reasons. I agree that there is
nothing at all requiring your Lordships to throw any doubt upon the good faith of the
Plaintiff in this case.
The real point in difference is, what was a reasonable time under the circumstances of
the case? As to the effect of the correspondence down to the 31st of December, and, I
may add, for some not definite time afterwards, there really is an agreement of both
Courts that the first two and a half months of the notice or thereabouts were waived.
Now the question is, whether the conduct of the Plaintiff in the correspondence justified
and naturally led to that impression on the part of the company? In my opinion it clearly
did; and if it did, what is the consequence? I think the consequence is that which Lord
Justice Baggallay derives from it. He says that the circumstances “were of a character to
lead the company to consider that the notice to repair was at any rate suspended for
some period of time,” at least until the 31st of December. What is the meaning, in the
view of a Court of Equity, of suspending a notice to repair? Manifestly that during that
time the notice is not to be operative. What is the reasonable result of that in the
circumstances of this case? Why, when the notice is to become operative, the same will
be a reasonable time for the execution of the repairs which would have been a
reasonable time if the notice had been given at that period, that is, six months from at
least the 31st of December, 1874.
Therefore, my Lords, upon these grounds, I entirely agree that the judgment of the
Court of Appeal is right.

LORD BLACKBURN:—
My Lords, I also entirely agree in the judgment, but I think it right to say that I likewise
completely agree in the opinion that there is no ground for supposing that the Plaintiff or
the Plaintiff's advisers, who were acting for him in writing the letters of November and
December, intended, by acting as they did, to bring the Defendants into a scrape and to
take advantage of it. I think Lord Justice James misapprehended the facts when he said
so, and I think it is right to say that I consider that that was not the case. But I quite
agree that notwithstanding that, there is equity to relieve the Defendants, and instead of
putting it in my own words, I will read those which are given to Lord Justice Mellish,
adopting them as my own because I think they exactly express what I believe to be the
right law7:
“But even if the Plaintiff himself did not intend to abandon the notice, yet if
his conduct was such as to put the Defendants off their guard, and to lead
them to believe that the six months' notice would not be insisted on, there is
a ground for giving relief in Equity. The result of waiver is different, for the
notice is gone at Law, whereas Courts of Equity, though they relieve against
the forfeiture, will still compel the lessee to put the house into substantial
repair, and will give the landlord all that he is really entitled to, only
preventing him from enforcing a forfeiture that would be inequitable.”

My Lords, I apprehend that that correctly states the rule of equity and justice, and that
the only remaining question is, whether in the present case there has been such a
misleading as is there described? I think not at all an intentional misleading, but such an
inducing the Defendants to think that the actual six months would not be insisted upon,
and farther, what period that delay in insisting upon the actual six months would give
them.
Applying that to the present case, when it is once established that the Defendant was
entitled to say that out of the six months shall be taken the time up till the 31st of
December, because I was authorized by the Plaintiff to hold my hand and not begin the
repairs until then, it follows that the time within which he was to do the repairs would be
six months after the 31st of December, and that time would not expire until the 31st of
June, and, in fact, the repairs were all done before that—they were done by the middle
of June. That being so, it appears to me that the judges in the Court of Appeal were
correct in the judgment which they gave. The only point that I can see upon which they
and the Common Pleas differed was whether it was to be six months, or an uncertain but
reasonable time; and it seems to me that it ought to be the conventional time of six
months, whether it was more or less than was actually required for the purpose.
Consequently, my Lords, I think that the judgment of the Court of Appeal was right and
ought to be affirmed, and this appeal dismissed with costs.
LORD GORDON:—
My Lords, I quite agree in the judgment of the Lords Justices, with the exception of that
matter in Lord Justice James's opinion to which reference has been made, with regard to
the intention to mislead on the part of the Plaintiff. There is really no ground and was no
necessity for condemning his conduct in that respect.