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Question
On 1 June 2018 Brian obtained a judgment against Fred for £20,000. Fred, being short of money, asked for time to pay. On 2 June 2018 Brian agreed that if Fred would pay £5,000 at once and the remaining £15,000 in five half-yearly instalments of £3000 (commencing on 1st December 2018 and ending on 1 December 2020) he would take no steps to enforce the judgment or claim interest. (By statute, interest runs on judgment debts from the date of the judgment.) After paying the £5,000 and the first instalment, Fred inherited a fortune on 1 January 2019. Brian wishes to know whether he may: (a) enforce the outstanding portion of the judgment debt forthwith, and (b) recover interest on the sum unpaid between 1 June 2018 and the present. Advise him.
Answer guidance
Remember you are advising Brian, the creditor (it is much more common to be asked to advise the debtor). He reached an agreement with Fred that the full debt need not be paid at once, allowing Fred to pay by instalments and letting him dispense with paying interest. Now Brian needs to know whether this agreement is enforceable or whether he can ignore it with impunity. Always deal first with consideration. Although the orthodox position is that Fred has not provided any consideration for this agreement, even if Brian obtained some practical benefit from the arrangement (Foakes v Beer traditionally regarded as unaffected by Williams v Roffey), you need to consider the Court of Appeal’s ground of distinguishing Foakes in MWB v Rock Advertising. If that is followed (and remember the Supreme Court’s decision in MWB didn’t deal with the issue, as they allowed the appeal on a different ground) then the agreement would be enforceable and Brian could not claim the balance and interest. If not, the answer will depend on whether Fred might be able to establish promissory estoppel as a defence, if sued by Brian for the balance. There is certainly an unequivocal promise which Fred has ‘relied on’ in the sense of paying the portion required and forbearing to pay the full amount immediately, but is this sufficient? Does Collier help here, again as interpreted in MWB in the Court of Appeal? And would Fred’s recent inheritance be relevant to whether it is inequitable for Brian to claim the balance?