Case No HC 1999 00651
IN THE HIGH COURT OF JUSTICE
CHANCERY  DIVISION

Royal Courts of Justice
The Strand
London WC2A 2LL

Date: Monday  18 October 1999

B e f o r e:

MR  JUSTICE  NEUBERGER

B E T W E E N:

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	HM CUSTOMS & EXCISE	Plaintiff	
	-v-		
	ANCHOR FOODS LIMITED	Defendant	
	(No.4)		

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Tape Transcription by Smith Bernal Ltd
180 Fleet Street, London,
Telephone 0171 404 1400
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MR R McCOMBE QC, MR P GIROLAMI and MISS A TIPPLES (instructed by the Solicitor for Customs & Excise, London SE9 2PG) appeared on behalf of THE CLAIMANT

MR D PANNICK QC, MR A LEWIS and MISS T KYRIAKIDES (instructed by Messrs Dibb Lupton, London EC2Y 5BF) appeared on behalf of THE DEFENDANTS
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J U D G M E N T

MR JUSTICE NEUBERGER:  
Introduction
In these proceedings, the Customs and Excise Commissioners ("Customs") are claiming some £264 million from Anchor Foods Limited ("AFL").  There are two applications before me.  The first is that of Customs under CPR Part 24 for summary judgment in the sum of £125 million.  The second application is made by AFL under CPR Part 23 for a stay of the proceedings.
The proceedings arise out of 23 Post Clearance Demand Notes ("PCDNs") issued by Customs between March 1997 and September 1998 for customs  duties said to be due from AFL in respect of dairy products imported into the United Kingdom between 1994 and 1998.  These PCDNs were issued pursuant to Council Regulation ECC No 92/2913 made on 12 October 1992; this established the Community Customs Code ("the Code"), and claimed a total of £264 million.
AFL strongly denies liability for any of these sums.  It has appealed against the whole sum denied under each of the PCDNs to the VAT and Duties Tribunal ("the Tribunal"), the appeals having been lodged between June 1997 and February 1999.
Over the past two or three years there have been discussions between Customs and AFL as to the extent of AFL's liability for these sums (if any), AFL's ability to pay some or all of these sums, and AFL's ability to provide security in respect of the appeals to the Tribunal ("the appeals").  
So far as the amount claimed is concerned, the position appears to be as follows.  Customs contend that at least £125 million is properly due; hence the amount claimed in its application for summary judgment.  AFL maintains its position that nothing is due.  As to the question of payment during the currency of the appeals, Customs wrote to AFL's solicitors on 15 September 1997 (in connection with the appeals that had been lodged in respect of the first four PCDNs) in the following terms:

"Examination of the Financial Statements provided with your application carried out by our own accountancy services suggests that AFL does not have sufficient resources to fund the payment of the Post Clearance Demand Notes in full.  I do not dispute that it would cause irreparable damage to require AFL to pay the sum in dispute in advance of the outcome of the appeals procedure and I am therefore prepared to consider the suspension of the implementation of the [first four PCDNs]."

The letter went on to indicate that, in those circumstances, Customs were seeking security for the appeals.  There was discussion between the parties as to such security, which culminated in AFL offering £4.85 million.  Customs refused to accept that this was adequate security.  Following a review, AFL applied to the Tribunal.  After a six-day hearing in May 1999, the Tribunal first, ruled that Customs ought not to have refused £4.85 million as being sufficient security; second, determined that therefore the appeal should be entertained by the Tribunal; and third, gave directions in connection with the hearing of the appeals.  Its decision was dated 16 July 1999.
Meanwhile, from about July 1998 AFL was proposing to transfer its business to another company, New Zealand Milk (UK) Limited ("NZM") for £9 million.  In addition to the payment of £9 million it was intended, according to a letter sent to Customs, that NZM would indemnify AFL in respect of all its trade liabilities but not, it should be emphasised, any liability in respect of the PCDNs.  These trade liabilities were estimated to be in the region of £39 million.
Just before this transfer was due to occur, Customs applied for, and obtained, an injunction to restrain it, essentially on the basis that the transfer was or might be at an undervalue.  On the same day that Customs obtained that injunction without notice, 6 February 1999, they issued these proceedings against AFL for immediate payment of the £264 million.  After various hearings at which the injunction was continued, it was eventually continued (or, more accurately, AFL gave an undertaking) on terms on 26 February 1999.  For the history in this connection see Customs and Excise Commissioners v Anchor Foods Ltd [1999] 1 WLR 1139, 1141E-G, and 1151G-1153F. 
Thereafter, Customs and their advisers examined the proposed transfer of AFL's undertaking to NZM in rather more detail.  They came to the conclusion that they could not maintain their objection to the transfer.  Accordingly, on 8 July 1999, the undertaking given on 26 February 1999 was discharged by consent.
Although the undertaking was discharged, Customs maintained its claim for recovery of the £264 million, being the total amount claimed under the PCDNs, and indeed, as I have said, they seek summary judgment in respect of £125 million.  

The Code and the Finance Act 1994
The issues between the parties in these two applications -- indeed the legal basis for some of the events I have mentioned -- can be appreciated by reference to provisions of the Code and of the Finance Act 1994 ("the 1994 Act").  References hereafter to Articles are to Articles of the Code and to sections and Schedules are (in the absence of a statement to the contrary) to sections of and Schedules to the 1994 Act.  I turn first to the Code.
Article 4(5) defines "decision" as meaning:

"any official act by the customs authorities pertaining to customs rules giving a ruling on a particular case, such act having legal effects on one or more specific or identifiable persons ...."

Article 4(12) defines "debtor" as

"any person liable for payment of a customs debt."

Article 7 is in these terms:

"Save in the cases provided for in the second subparagraph of Article 244, decisions adopted shall be immediately enforceable by customs authorities."

Chapter 3 of the Code is concerned with the recovery of the amount of the Customs' debt.  Article 217(1) is in these terms:

"Each and every amount of import duty or export duty resulting from a customs debt, hereinafter called 'amount of duty', shall be calculated by the customs authorities as soon as they have the necessary particulars, and entered by those authorities in the accounting records or on any other equivalent medium ...."

Article 221(1) provides as follows:

"As soon as it has been entered in the accounts, the amount of duty shall be communicated to the debtor in accordance with appropriate procedures."

Article 222(1) is in these terms so far as relevant:

"Amounts of duty communicated in accordance with Article 221 shall be paid by debtors within the following periods --

(a) [subject to certain irrelevant exceptions] payment shall be made within the period prescribed.

Without prejudice to the second paragraph of Article 244, that period shall not exceed ten days following communication to the debtor of the amount of duty owed ...."

Article 232(1) states:

"Where the amount of duty due has not been paid within the prescribed period --

(a) the customs authorities shall avail themselves of all options open to them under the legislation in force, including enforcement, to secure payment of that amount.

...."

Title VIII of the Code is concerned with Appeals.  Article 243(1) has two paragraphs, of which the first is:

"Any person shall have the right to appeal against decisions taken by the Customs authorities which relate to the application of customs legislation, and which concern him directly and individually.

...."

Article 244 reads (and I have added the paragraph numbers for convenience):

"[1.] The lodging of an appeal shall not cause implementation of the disputed decision to be suspended.

[2.] The customs authorities shall, however, suspend implementation of such decision in whole or in part where they have good reason to believe that the disputed decision is inconsistent with customs legislation or that irreparable damage is to be feared for the person concerned.

[3.] Where the disputed decision has the effect of causing import duties or export duties to be charged, suspension of implementation of that decision shall be subject to the existence or lodging of a security.  However, such security need not be required where such a requirement would be likely, owing to the debtor's circumstances, to cause serious economic or social difficulties."

Article 245 is in these terms:

"The provisions for the implementation of the appeals procedure shall be determined by the Member States."

I turn now to the 1994 Act.  Section 14 is headed "Requirement for Review of a Decision".  Subsection (1), so far as relevant is in these terms:

"This section applies to the following decisions, not being decisions under this section or section 15 below, that is to say --

(a) any decision by the Commissioners, in relation to any customs duty or to any agricultural levy of the European Community, as to --

(i) whether or not, and at what time, anything is charged in any case with any such duty or levy; 

....

....

(d) any decision by the Commissioners or any officer which is of a description specified in Schedule 5 to this Act."

Paragraph 1(n) of Schedule 5 refers to 

"any decision as to the time at which or the period within which any obligation to pay any customs duty or agricultural levy of the European Community or to do any other thing required by virtue of the Community Customs Code is to be complied with."

Section 14(2)(a) so far as relevant provides:

"a person whose liability to pay any relevant duty .... is determined by .... any decision to which this section applies;"

Section 14(3) reads:

"The Commissioners shall not be required under this section to review any decision unless the notice requiring the review is given before the end of the period of forty-five days beginning with the day on which written notification of the decision, or of the assessment containing the decision, was first given to the person requiring the review."

Section 15 is concerned with the review procedure and I do not need to set it out.
Section 16 is headed "Appeals to a Tribunal".  Section 16(1) and (2) are in these terms so far as relevant:

"(1)  Subject to the following provisions of this section, an appeal shall lie to an appeal tribunal with respect to any of the following decisions, that is to say --

(a) any decision by the Commissioners on a review under section 15 above (including a deemed confirmation ....);

(2)  An appeal under this section shall not be entertained unless the appellant is the person who required the review in question.

(3)  An appeal which relates to, or to any decision on a review of, any decision falling within any of paragraphs (a) to (c) of section 14(1) above shall not be entertained if any amount is outstanding from the appellant in respect of any liability of the appellant to pay any relevant duty to the Commissioners (including an amount of any such duty which would be so outstanding if the appeal had already been decided in favour of the Commissioners) unless --

(a) the Commissioners have, on the application of the appellant, issued a certificate stating either --

(i)	that such security as appears to them to be adequate has been given to them for the payment of that amount; or

(ii)	that, on the grounds of the hardship that would otherwise be suffered by the appellant, they either do not require the giving of security for the payment of that amount or have accepted such lesser security as they consider appropriate;

or

(b) the tribunal to which the appeal is made decide that the Commissioners should not have refused to issue a certificate under paragraph (a) above and are satisfied that such security (if any) as it would have been reasonable for the Commissioners to accept in the circumstances has been given to the Commissioners."

The Issues

With that background, I turn to the Customs' case.  It involves the following propositions:

(1)  In accordance with Article 221, the amount of duty claimed in the case of each PCDN has been communicated to the debtor, namely AFL, by the PCDN concerned.

(2)  In light of Article 222(1)(a), payment of that duty was due at the most ten days after each PCDN was sent (subject always to Article 244(2)).

(3)  Whatever may have been Customs' position previously (for instance, as is shown by the letter of 15 September 1997), it is open to Customs to revisit any decision as to the applicability of Article 244(2).

(4)  Customs has now resolved to bring these proceedings to claim the debt arising from each PCDN, which debts are prima facie due.

(5)  The Court can, indeed should, enter judgment in favour of Customs against AFL unless satisfied that AFL has a real prospect of defending the claim.

(6)  The only basis AFL has raised for defending the action is Article 244(2).

(7)  On analysis Article 244(2) does not assist AFL.  While execution (or some means of execution) of any judgment may be objected to by AFL on the basis of Article 244(2), AFL cannot show that mere entry of judgment against it would fall foul of Article 244(2).

(8)  If necessary, Customs would submit to terms being included in the judgment, which would ensure that AFL would not fear or suffer execution or enforcement of the judgment in such a way as to fall foul of Article 244(2).

As I understand it, AFL does not challenge propositions (1), (2), (3) or (6).  So far as propositions (4) and (5) are concerned, AFL  contends that the question of whether Customs should be allowed to proceed to judgment should be determined by the Tribunal and not by the Court.  In this connection, AFL relies principally on section 16(3).  Alternatively it relies on section 14(1)(a)(i), or else section 14(1)(d) together with paragraph 1(n) of Schedule 5.  As a further alternative, AFL rely on the Court's power to fill in the gap said to arise from the absence of any appeal procedure under the Act, and, in effect, to confer jurisdiction to entertain an appeal on the Tribunal.
So far as propositions (7) and (8) are concerned, AFL first says that they do not arise for consideration if AFL is right on this first point.  Alternatively, AFL contends either that it would suffer irreparable damage if judgment were entered, or else that it is simply inappropriate that judgment be entered.

Determining the applicability of Article 244(2)
The first question I propose to address is whether an appeal as to the applicability of Article 244(2) is to be determined by the Court or by the Tribunal.  I am not convinced that that is necessarily a determinative question in this case, but it may be.  In any event, it was fully argued.  Consider a simple case: Customs serve a PCDN on a debtor.  Having unsuccessfully applied for a review, in accordance with the time limits set in section 14(3), the debtor appeals under section 16 to the Tribunal, contending that Article 244(2) applies and offer security.  Customs have three options.  Option A is to accept that it is a case for security and to accept the security offered.  Option B is to accept that it is a case for security, but to contend that the security offered is insufficient.  Option C is to conclude that it is not a case for security and therefore to turn down the offer.  Option B involves accepting that Article 244(2) applies.  Option C involves rejecting the contention that Article 244(2) applies.
If option B applies, the parties are agreed that the Tribunal has jurisdiction to consider whether or not Customs should have accepted the security offered.  In the case of option C, AFL argues that the Tribunal has similar jurisdiction.  Customs say it does not.  As a mater of language, it appears to me that either view is defensible.  Section 16(3)(b) could apply to a case such as option C because the Customs could have refused to certify under section 16(3)(a)(i) because they considered that it was not a case for security at all -- ie that Article 244(2) did not apply.  However, it seems to me that, albeit on balance, if one confines oneself to option B and option C as expressed above and to the wording of section 16(3), Customs' interpretation is the more natural meaning.  Nonetheless, I have reached the conclusion that AFL's construction is correct.  
Section 16(3) has to be read together with, and if at all possible in a way which harmonises with, the Code.  In Lister v Forth Dry Dock & Engineering Co Ltd (in Receivership) [1990] 1 AC 546, 559D-F, Lord Oliver of Aylmerton said:

"The approach to the construction of primary and subordinate legislation enacted to give effect to the United Kingdom's obligations under the EEC Treaty have been the subject matter of recent authority in this House (see Pickstone v Freemans Plc [1989] AC 66) and is not in doubt.  If the legislation can reasonably be construed so as to conform with those obligations -- obligations which are to be ascertained not only from the wording of the relevant Directive but from the interpretation placed upon it by the European Court of Justice at Luxembourg -- such a purposive construction will be applied even though, perhaps, it may involve some departure from the strict and literal application of the words which the legislature has elected to use."

Given that, without doing any real violence to them, the words of section 16(3)(b) can be made to apply so as to give a right of appeal in option C to the Tribunal, it seems to me that I should, as it were, stop there.  Section 14(1)(a)(i) does not appear to me to apply.  It is concerned with the "charging" of customs duty, not the "payment" of customs duty, and indeed is the basis upon which the appeals have been brought.  Paragraph 1(n) of Schedule 5 could, as a matter of language, apply.  But it appears to me that if I am faced with electing between the alternatives of paragraph 1(n) and section 16(3), then it is fairly clear that section 16(3) is the appropriate section.
It does not seem to me that the debtor's ability to seek judicial review or to raise Article 244(2) up as a defence is sensibly the sort of appeal which the Code contemplated in Article 243(1).  Indeed, if it were, then it would apply to any objection or point which a debtor wished to take in relation to a decision of Customs.  In that event, one wonders why the legislature bothered to pass section 16 at all.
In those circumstances, I need not deal with the suggestion that, if the legislature has failed to give effect to Article 243(1) and Article 245, the court should fill the gap.  That submission was supported by reference to observations of Lord Hoffmann in R v Secretary of State for Employment, ex parte Seymour-Smith [1997] ICR 371, in particular at 380E-G.  It is an interesting and difficult point, which I initially found unconvincing, but, on further reflection, I may well have been too ready to dismiss it. 
Quite apart from constructing section 16(3) by reference to the Code, it appears to me that it is both sensible and practical to give the same body the power to hear an appeal in relation to what I have called option B and option C.  It could easily happen that Customs might say in a particular case that they refuse the offer of security because Article 244(2) does not apply, but that, even if it did apply, the security offered is insufficient.  In such a case it seems to me little short of absurd that the question of whether Customs' first ground is correct should have to be determined by the Court (or even could be determined by nobody), whereas the question of whether the second ground was correct could only be determined by the Tribunal.  This point is particularly telling as the issues involved are not very different.  Whether Article 244(2) applies turns on whether "irreparable damage" is to be feared for the debtor if he has to pay, whereas Article 244(3) requires the Tribunal finding that payment would "cause serious economic or social difficulties".  Furthermore, if the Tribunal is thought by the legislature to be the appropriate body to determine whether or not serious economic or social difficulties would be caused by a debtor having to pay a particular amount of money, it does not seem to me difficult to accept that the same body should be thought competent to determine whether irreparable damage is to be feared for a debtor.
If the purpose of these proceedings is to obtain and execute a judgment for some or all of the duties, the subject of the appeal, it therefore appears to me to follow that it is for the Tribunal to decide whether or not AFL can claim the benefit of Article 244(2).  On the other hand, if the purpose of these proceedings is merely to obtain a judgment which, it is said, cannot of itself, cause AFL any immediate damage because the judgment will not be fully executed (at least until the appeals are determined), then it may well be that Article 244(2) does not come into play.  Subject to what I say in the next but one part of this judgment, Article 244(2) could be said to be concerned with the exaction of payment rather than the legal steps on the way to, but stopping short of, the exacting of payment.  Even if Article 244(2) does apply to a case where Customs, while bringing an action, are not actually seeking to recover the duty, it may well be that in such a case it is not the Tribunal which decides whether Article 244(2) applies, but the court which decides whether, in all the circumstances, it permits the action to proceed.

Section 14(3)
Mr Richard McCombe QC, who appears for Customs with Mr Paul Girolami and Miss Amanda Tipples, contends that even if the question of the applicability of Article 244(2) is to be raised before the Tribunal, it is not a point available to AFL here.  He says either the current proceedings and the current application are not the subject matter of a "decision" and therefore are not susceptible to appeal under the Code.  Alternatively, he says that, if they are the subject matter of a decision, AFL failed to comply, within the time limit, to refer that decision for review under section 14(3), and therefore no appeal can be brought under section 16(1)(a).  I find it difficult to see how it can be said that Customs have not made a "decision" in this case.  It seems to me that if they have issued proceedings, they have arrived at the decision that Article 244(2) does not prevent them doing so.  To be fair, I did not understand Mr McCombe to press that first point. My view is that there must have been a decision before the present proceedings could have been issued, and if Article 244(2) comes into play at all, that decision must have involved Customs either impliedly or expressly considering the applicability of Article 244(2).
The contention that that decision of Customs was notified within section 14(3) to AFL is based either on the contention that the issue of proceedings themselves on 6 February constituted such notification, or that the issue of Customs' summons under Part 24 constituted such notice.  Whichever of those is correct, says Mr McCombe, it was more than 45 days ago and there has been no application by AFL for a review. 
I do not consider that the issuing of the proceedings or of the application can fairly be said to be written notification of the decision within section 14(3).  They may well be documents, and therefore written notification, which involve the person who receives it deducing that the decision must have been made.  However, particularly bearing in mind the strict time limit involved in section 14(3), and the possibly dire consequences of failing to adhere to that time limit for the debtor, it appears to me that one must construe section 14(3) in such a way as to require Customs to give the debtor a document which can fairly be said to be formal notification of the decision, not merely a document from which the debtor might or indeed would, deduce that the decision had been made.  Furthermore, it appears a little unrealistic to expect AFL to request a review under section 14(3) where the decision has not merely been made, but implemented, by Customs.  It appears to me unattractive and unrealistic for Customs to contend that, by bringing proceedings on the basis of a decision without first giving AFL the opportunity to request a review of the decision, they thereby gave such notice of the decision so as to enable AFL to request a review.

A mere judgment in favour of Customs is permissible
Mr McCombe contends that, even if the requirement that AFL actually pay the amount due under the PCDNs (or indeed the £125 million) may fall foul of Article 244(2), the issue before me is whether or not Article 244(2) prevents judgment being entered in favour of Customs.  It may well be, he says, that initiating or pursuing steps to execute or enforce that judgment would fall foul of Article 244(2), but the mere entry of the judgment would not, and on the evidence cannot, give rise to or cause "irreparable damage" to AFL.  In this connection I was referred to the decision of the European Court of Justice in Giloy v Hauptzollamt Frankfurt am Main-Ost [1997} Case C-130/95.  In relation to the provisions of Article 244, the European Court said this in paragraphs 36 - 39:

"36.  According to the settled case-law of the court the condition of 'irreparable damage' requires the judge hearing an application of interim measures to examine whether the possible annulment of a contested decision by the Court giving judgment in the main action would make it possible to reverse the situation that would have been brought about by its immediate implementation and conversely whether suspension of operation of that decision would be such as to prevent its being fully effective in the event of the main application being dismissed ....

37.  The Court has held that damage of a financial nature is, in principle, not considered to be seriously and irreparable unless, in the event of the applicant's being successful in the main action, it could not be wholly recouped ....

38.  However, if immediate implementation of a contested measure may lead to the winding up of a company or require an individual to sell his flat, the condition concerning the existence of irreparable damage must, in those circumstances, be regarded as being satisfied ....

39.  It is not necessary, in this regard, for it to be established with absolute certainty that harm is imminent.  It is sufficient that the harm in question, particularly when it depends on the occurrence of a number of factors, should be foreseeable with a sufficient degree of probability ...."

At any rate at first sight, Customs' position has an air of unreality and, indeed, it might be said, positive inconsistency about it.  AFL has £9 million cash an no other assets, on the face of it.  Over half that sum has been put up as security for Customs on the common assumption that Article 244(2) applies.  If it does not apply, no claim for security would arise under Article 244(3).  This sum of £4.85 million has been held to be sufficient by the Tribunal.  It is self-evident that if judgment is given in favour of Customs for £125 million or anything like that sum, such a judgment cannot possibly be enforced, therefore, against AFL without putting AFL into liquidation or causing it other difficulties which would fall foul of Article 244(2), as I see it, especially in the light of Giloy.  Mr McCombe's answer to this is that entering judgment for £125 million will not of itself cause AFL difficulties, let alone irreparable damage.  AFL does not trade and no embarrassment would be caused.  Unless and until such a judgment is enforced, no irreparable damage could be suffered.  I must admit to finding this argument a little difficult to grasp.  Ignoring for the moment the fact that I have held that it is a matter for the Tribunal, it seems to me, at the very least to be well arguable that, given the financial position of AFL and the terms of Article 244(2), as explained in Giloy, Customs are effectively precluded from recovering the £125 million from AFL.  Unless and until the appeals are determined (or something else occurs), this sum is simply not payable or recoverable.  In those circumstances, I must admit to considerable doubts as to whether the court could enter judgment for it, always assuming that the Court rather than the Tribunal has jurisdiction to decide whether Customs could proceed in view of Article 244(2).  If there is jurisdiction, I would question the benefit of such a judgment.  Mr McCombe's only answer to that (or at least the only answer which seemed to me to have force) is that, if judgment is entered for £125 million, Customs can present a winding-up petition against AFL.  In light of Article 244(2), Giloy, and the facts of the case, it seems to me that that winding-up petition would be stayed pending the outcome of the appeal.  
Mr David Pannick QC (who appears for AFL with Mr Adam Lewis and Miss Tina Kyriakides) gives two answers in reply.  The first is that even this limited relief would cause unfair prejudice to AFL.  The second is that the course suggested by Customs is pointless and inappropriate.  So far as prejudice to AFL is concerned, AFL is not a trading company, as I have mentioned.  However, it is anxious, for reasons which are clearly arguably good on the evidence I have seen, to maintain its appeals to the Tribunal.  The presentation of a winding-up petition would interfere in its ability to do so in light of section 127 of the Insolvency Act 1986 ("the 1986 Act") which provides: 

"In a winding up by the court, any disposition of the company's property, and any transfer of shares, or alteration in the status of the company's members, made after the commencement of the winding up is, unless the court otherwise orders, void."

Mr McCombe meets that point by saying that, if judgment is entered, then (a) the Court could protect AFL by limiting the form of execution to the presentation of a winding-up petition; (b) the Court could extract an undertaking from Customs not to proceed with the winding-up petition and to agree to it being stayed pending the appeal being heard (no doubt with liberty to apply); and (c) there could be a term specifically entitling AFL to pay out any sums it reasonably wishes to pay out in connection with the appeals, thereby avoiding any problem under section 127.
Mr Pannick accepts that, at least on the face of it, terms of that sort might well make it difficult for AFL to contend that the entry of judgment alone would cause it difficulty.  
As to the argument that the entry of judgment would be inappropriate and pointless, I have already expressed my doubt as to whether it would be open to the Court to give judgment in respect of a sum which cannot, as a matter of law, be recovered, and which will only really become due and owing if circumstances change, either because Article 244(2) no longer applies during the currency of the appeals, or because the appeals fail to a greater or lesser extent.  It seems to me that, even if the Court has power to enter judgment in those circumstances, or it should be very circumspect before doing so.  	    I return to the main reason -- indeed the sole reason which has impressed me -- put forward by Customs for justifying a judgment now.  Customs contend that they want to present a petition as soon as possible because there may have been preferences within the provisions of section 239 of the 1986 Act.  "Preferences" are defined in section 239(4) of the 1986 Act, which provides as follows:

"....[A] company gives a preference to a person if -- 

(a) that person is one of the company's creditors or a surety or guarantor for any of the company's debts or other liabilities, and

(b) the company does anything or suffers anything to be done which (in either case) has the effect of putting that person into a position which, in the event of the company going into insolvent liquidation, will be better than the position he would have been in if that thing had not been done."

Customs' argument in this connection is that it may be -- and they have to do not more, says Mr McCombe than establish the possibility  -- that some or all of the arrangements between AFL and NZM in relation to AFL's trade creditors involve a preference in relation to some or all of those creditors, falling within section 239 of the 1986 Act.  In those circumstances it would be open to a liquidator of AFL in due course to challenge such preferences for the benefit of other creditors -- in this case, particularly, Customs -- provided he does so within the time limited by section 240 of the Insolvency Act 1986.  That time limit is either six months or two years (depending on the circumstances) in effect from the date of the presentation of a petition.  Mr McCombe's argument is that Customs may suffer irreparable damage if they cannot present a petition now and have to wait until the Tribunal reaches its decision on the appeals.  This is because the Tribunal's decision may very well be published after the time limits in section 240 of the 1986 Act.  In this connection Mr McCombe points to the positive obligation imposed on Customs by Article 232(1)(a).  
I see the force and attraction of that argument, but the mere entering of judgment, as I see it, should not, indeed cannot, improve or indeed worsen Customs' ability to present a petition.  It is clear from section 123 of the 1986 Act, and in particular subsection (2), that it is open to someone to present a petition for the winding-up of a company if it is unable to pay its debts, or if its assets are less than the amount of its liabilities "taking into account its contingent and prospective liabilities".
It seems to me that the position with regard to the presentation of a petition is this.  The sums due under the PCDNs are contingent debts, in the sense that they will be payable in whole or in part unless the appeals succeed completely.  Either Customs can present a petition on the basis of these contingent debts, and the petition will be stayed, dismissed or allowed to proceed, or it cannot.  If it can present a petition on the basis of these contingent debts, then it can do so without a judgment.  If it cannot, then I would find it surprising -- indeed more than surprising -- if the mere entry of a judgment could improve the position of Customs with regard to the presentation of the petition.  It seems to me that if there is a right to present a petition, and it is appropriate to present a petition on a particular debt on the basis of a particular of whatever character, then that is the course the creditor can, and, if he wishes, should take.  If it is not appropriate, then it would be wrong for a Court to enter judgment for the debt simply to enable the creditor to present a petition, even if (which I doubt) the entry of judgment would assist the creditor in the presentation in any event. 
Furthermore, if imposing conditions such I have been discussing (in relation to not proceeding with the petition and in relation to section 127 of the 1986 Act) is appropriate, it seems to me rather unsatisfactory to do so at this stage when all I am being asked to do is to enter judgment.  It is far better, I suggest, to formulate and impose such conditions if and when the petition is presented and before the court.

Conclusion
Because at least some of my reasoning may be somewhat different from the way in which the case was argued, I am prepared to entertain further argument either now or in the near future.  At the moment, however, it seems to me inappropriate and wrong to enter judgment as sought, and that the appropriate course to take is to dismiss the application for summary judgment under Part 24 and to grant the application for the stay under Part 23.
I would summarise my reasons as follows:

(1)  If any judgment in favour of Customs is to be executed then:
(a) The applicability of Article 244(2) is a matter for the Tribunal, not the Court, and the action should be stayed while the issue is considered by the Tribunal;

(b) If the applicability of Article 244(2) is a matter for the Court, then, to put it at its lowest, AFL has an arguable case that Article 244(2) applies.

(2)  If any such judgment is not to be executed, or is only to be executed to the extent of presenting a winding-up petition which is stayed, it is in my view either not open to me, or it is simply inappropriate, to enter judgment.

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