Collier v P & M J Wright (Holdings) Ltd

Collier v P & M J Wright (Holdings) Ltd

An agreement by a creditor to accept part payment of a joint debt from one debtor, without further consideration, is not binding under the rule in Pinnel’s case and Foakes v Beer. However, where a debtor relies on a creditor’s promise to accept a lesser sum in full satisfaction and acts upon it, there is a triable issue as to whether promissory estoppel applies to prevent the creditor from enforcing the balance, making it inequitable to do so.

Parties
Appellant: David Anthony Collier; Respondent: P & M. J. Wright (Holdings) Ltd
Jurisdiction
England and Wales
Judgment Date
14 December 2007
Procedural Posture
Civil Appeal / Appeal From Order Dismissing Application to Set Aside Statutory Demand
Outcome
appeal allowed
Legal Topics
Consideration, Promissory Estoppel, Statutory Demand, Joint and Several Liability
Contract Law Insolvency Law Consideration Promissory Estoppel Statutory Demand Joint and Several Liability

Case Brief

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Parties

David Anthony Collier

Appellant

P & M. J. Wright (Holdings) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From Order Dismissing Application to Set Aside Statutory Demand

Legal Issues

  1. 1 Whether an agreement to accept part payment of a joint debt constitutes a binding agreement discharging the debtor from the balance under the rule in Pinnel’s case
  2. 2 Whether promissory estoppel applies to prevent the creditor from enforcing the balance of the debt

Ratio Decidendi

An agreement by a creditor to accept part payment of a joint debt from one debtor, without further consideration, is not binding under the rule in Pinnel’s case and Foakes v Beer. However, where a debtor relies on a creditor’s promise to accept a lesser sum in full satisfaction and acts upon it, there is a triable issue as to whether promissory estoppel applies to prevent the creditor from enforcing the balance, making it inequitable to do so.

Court Disposition

appeal allowed

Orders

  • Statutory demand set aside
  • Matter to proceed to substantive hearing if pursued