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In Re Selectmove Ltd (1993) CA
Under Pay As You Earn, the company owed the Inland Revenue almost £20,000 in taxes. During a meeting, the company proposed to settle the arrears by means of £1,000 monthly installments beginning on February 1, 1992. The tax collector stated that he would need to get approval from his superiors but that if the offer was rejected, he would return to the company. He failed to do so, and on March 3, 1992, the business made the first and second installment payments. When the Revenue initiated winding up procedures in September 1992 based on the outstanding arrears, the company had already made seven of these payments. The business attempted to fight winding up by arguing that its installment payment plan was valid.
held that the corporation couldn't dispute the winding up on any meaningful basis. (i) The offer to pay in installments was not accepted, and (ii) the Revenue's silence did not rule out acceptance. Peter Gibson LJ, in agreement with Stuart-Smith and Balcombe LJJ, stated the following after citing Robert Goff LJ's dicta in Allied Marine Transport Ltd v. Vale do Rio Doce Navegacao SA (1.2.4):
When the offeree himself indicates that an offer is to be taken as accepted if he does not indicate to the contrary by an ascertainable time, he is undertaking to speak if he does not want an agreement to be concluded. I see no reason in principle why that should not be an exceptional circumstance such that the offer can be accepted by silence. But, it is unnecessary to express a concluded view on this point.
(ii) Nevertheless, the Collector lacked the power to compel his superiors to accept the offer; as a result, they remained unbound until they did so, which they never did. In the event that the offer had been accepted, the Revenue's acceptance of the installments would not have been justified. The business contended that this issue should be handled in accordance with the ruling in Williams v. Roffey Bros and Nicholls (Contractors) Ltd. According to Peter Gibson LJ:
I see the force of the argument, but the difficulty that I feel with it is that if the principle of the Williams case is to be extended to an obligation to make payment, it would in effect leave the principle in Foakes v Beer [see 3.7.5] without any application. When a creditor and a debtor who are at arm’s length reach agreement on the payment of the debt by instalments to accommodate the debtor, the creditor will no doubt always see a practical benefit to himself in so doing. In the absence of authority, there would be much to be said for the enforceability of such a contract. But, that was a matter expressly considered in Foakes v Beer yet held not to constitute good consideration in law. Foakes v Beer was not even referred to in the Williams case, and it is in my judgment impossible, consistently with the doctrine of precedent, for this court to extend the principle of the Williams case to any circumstances governed by the principle of Foakes v Beer.
III) The doctrine of promissory estoppel could not be applied in this case because: (i) the Revenue did not promise to accept installment payments because the Collector of Taxes did not have the authority to do so; and (ii) the Revenue did not consider it unfair or inequitable to enforce the debt because the company made some of the payments after the due date.
Under Pay As You Earn, the company owed the Inland Revenue almost £20,000 in taxes. During a meeting, the company proposed to settle the arrears by means of £1,000 monthly installments beginning on February 1, 1992. The tax collector stated that he would need to get approval from his superiors but that if the offer was rejected, he would return to the company. He failed to do so, and on March 3, 1992, the business made the first and second installment payments. When the Revenue initiated winding up procedures in September 1992 based on the outstanding arrears, the company had already made seven of these payments. The business attempted to fight winding up by arguing that its installment payment plan was valid.
held that the corporation couldn't dispute the winding up on any meaningful basis. (i) The offer to pay in installments was not accepted, and (ii) the Revenue's silence did not rule out acceptance. Peter Gibson LJ, in agreement with Stuart-Smith and Balcombe LJJ, stated the following after citing Robert Goff LJ's dicta in Allied Marine Transport Ltd v. Vale do Rio Doce Navegacao SA (1.2.4):
When the offeree himself indicates that an offer is to be taken as accepted if he does not indicate to the contrary by an ascertainable time, he is undertaking to speak if he does not want an agreement to be concluded. I see no reason in principle why that should not be an exceptional circumstance such that the offer can be accepted by silence. But, it is unnecessary to express a concluded view on this point.
(ii) Nevertheless, the Collector lacked the power to compel his superiors to accept the offer; as a result, they remained unbound until they did so, which they never did. In the event that the offer had been accepted, the Revenue's acceptance of the installments would not have been justified. The business contended that this issue should be handled in accordance with the ruling in Williams v. Roffey Bros and Nicholls (Contractors) Ltd. According to Peter Gibson LJ:
I see the force of the argument, but the difficulty that I feel with it is that if the principle of the Williams case is to be extended to an obligation to make payment, it would in effect leave the principle in Foakes v Beer [see 3.7.5] without any application. When a creditor and a debtor who are at arm’s length reach agreement on the payment of the debt by instalments to accommodate the debtor, the creditor will no doubt always see a practical benefit to himself in so doing. In the absence of authority, there would be much to be said for the enforceability of such a contract. But, that was a matter expressly considered in Foakes v Beer yet held not to constitute good consideration in law. Foakes v Beer was not even referred to in the Williams case, and it is in my judgment impossible, consistently with the doctrine of precedent, for this court to extend the principle of the Williams case to any circumstances governed by the principle of Foakes v Beer.
III) The doctrine of promissory estoppel could not be applied in this case because: (i) the Revenue did not promise to accept installment payments because the Collector of Taxes did not have the authority to do so; and (ii) the Revenue did not consider it unfair or inequitable to enforce the debt because the company made some of the payments after the due date.
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