Case Summary - Re Selectmove Ltd (1993) CA
Except in rare circumstances, silence on the side of the offeree does not constitute acceptance, as stated in Re Selectmove Ltd (1993) CA. In contrast to these cases, see the dicta of Lord Steyn in Vitol v Norelf Facts Under Pay As You Earn, the company owed the Inland Revenue almost £20,000 in taxes. The company promised to pay the debts in £1,000 monthly payments commencing on February 1, 1992, during a meeting. The Tax Collector stated that he would need to get approval from his superiors, but that if the offer was not acceptable, he would return to the corporation. He did not do so, and on March 3, 1992, the corporation paid the first and second instalments. The business had reached a decision. When the Inland Revenue launched winding-up proceedings based on the remaining arrears in September 1992, there were seven such payments. The corporation fought the insolvency on the basis of its payment-by-instalment plan. Decision The Court of Appeal ruled that the company had no substantive grounds to challenge the winding up. (I) The offer to pay in instalments was not accepted. (i)The Inland Revenue's silence did not rule out the prospect of acceptance. After referring to the dicta of Robert Goff LJ in Allied Marine Transport Ltd v Vale do Rio Doce Navegacao SA (above), Peter Gibson LJ, with whom Stuart-Smith and Balcombe LJJ agreed, said: ‘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) However, because the Collector of Taxes lacked the authority to oblige his superiors to accept the offer, they were not obligated to do so until they did so themselves, which they never did. (II) If the offer had been accepted, the Inland Revenue's acceptance of instalments would not have been sufficient consideration. Williams v Roffey Bros and Nicholls (Contractors) Ltd, is the case where the company asserted, should be applied in this case. Per 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 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 apply because: (I) the Inland Revenue did not make the promise to accept instalments because the Collector of Taxes did not have or claim the authority to do so; and (ii) the Inland Revenue's enforcement of the debt was not unfair or inequitable because the company made some of the payments late.
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