Re Selectmove Ltd [1995] 1 WLR 474

Selectmove owed the Revenue arrears of PAYE deductions and national insurance contributions. Its managing director proposed paying future liabilities when due and reducing the arrears by instalments. A tax collector said that approval from a superior would be needed and that the company would hear if the proposal was unacceptable. The company argued that the absence of an objection and payments it subsequently made showed an agreement. The Revenue continued seeking payment and petitioned to wind up the company. Selectmove resisted on the basis of the alleged arrangement, raising questions of acceptance, the collector's authority, consideration and estoppel.

Was the Revenue bound by an authorised instalment agreement supported by consideration, or prevented by estoppel from enforcing the existing tax debt?

The Court of Appeal dismissed the company's appeal against the winding-up order. The collector had not been shown to possess authority to bind the Revenue to the proposed instalment arrangement, and no authorised acceptance was established. There was also no fresh consideration in promising payment of tax already due and future liabilities when they became payable. The court declined to extend the practical-benefit reasoning of Williams v Roffey Bros to part-payment of a debt because Foakes v Beer bound it. The absence of an authorised promise also defeated the estoppel argument on these facts. The decision therefore involved formation and authority as well as consideration; it was not a general ruling that silence can never communicate acceptance.

The Court of Appeal cannot use practical benefit to displace Foakes v Beer for an agreement to accept payment of an existing debt by instalments. An alleged arrangement must also be accepted by someone with authority; existing payment obligations do not themselves supply fresh consideration.

Re Selectmove explains why practical benefit has different implications for promises to pay more and promises to accept less. It also prevents the consideration issue from obscuring the earlier question of whether an authorised agreement existed. Rock Advertising later left the status of Foakes unresolved at Supreme Court level because the appeal was decided on another ground. For an application problem, consider authority, communication, consideration and any supported estoppel separately, rather than treating one doctrinal label as an answer to every issue.