Gingi v Secretary of State for Work and Pensions [2001] UKSSCSC CIS_5647_1999 (14 November 2001)
R(IS)5/02
(Gingi v Secretary of State for Work and Pensions [2001] EWCA Civ 1685)
CA (Buxton, Arden and Schiemann LJJ) CIS/5647/1999
14.11.01
Applicable amount person from abroad - habitual residence British citizen originally resident in Cyprus coming to the United Kingdom whether completion of an appreciable period of residence is required - whether ECJ judgment in Swaddling applicable to a domestic law case
The claimant, a British citizen, came to the United Kingdom for the first time on 16 September 1998. She claimed income support on 5 October 1998 which was refused on the basis that by 12 October 1998, the date of the decision, she was not habitually resident in the United Kingdom under regulation 21(3) of the Income Support (General) Regulations 1987. She was to be treated as a "person from abroad" whose entitlement was nil. The Commissioner applied the reasoning in Nessa v Chief Adjudication Officer [1999] 1WLR 1937 now reported as R(IS)2/00 and decided that the tribunal had not erred in law by finding that the claimant had not become habitually resident four weeks after her arrival in the United Kingdom. The claimant appealed to the Court of Appeal. It was agreed that in purely domestic law terms, Nessa necessarily concluded the case. However, it was contended that as words in a statute could only have one meaning which could not change according to the facts of the case, the Community meaning (Swaddling v Adjudication Officer [1999] ECR I-1075 now reported as R(IS)6/99), which excluded a waiting period as a requirement of habitual residence, must be applied to every case to which it was sought to apply regulation 21(3).
Held, dismissing the appeal, that:
- (per Buxton LJ) Community law applies only to cases falling within the Community legal order. In deciding an issue concerning a situation which lies outside the scope of Community law, there is no Community law obligation on national courts to interpret a domestic legal provision in a way that conforms to Community law or to disapply that legislation (ICI v Colmer [1998] ECR I-4695);
- (per Buxton LJ) there is no rule of Community law determining the meaning of, as opposed to the relevant criteria for adjudicating upon, habitual residence. The European Court of Justice in Swaddling proceeded by identifying the criteria of what a court had to apply when determining whether a particular case was one of habitual residence. There is therefore no meaning that has necessarily to be transposed into domestic law just because the latter uses the words "habitual residence";
- (per Buxton LJ) there is no legal or logical reason why the criteria used should be the same for adjudicating upon the case of a Community migrant worker and a person coming into the United Kingdom from a third country. The Community case has to be determined in the light of Community principles of freedom of movement and of establishment, considerations that do not apply in the case of a third country;
- this is not a case where the Community definition binds the national courts (distinguishing Massam Dzodi v Belgian State [1990] ECR I-3763 and Leur Bloem v Belastingdienst [1998] QB 182: in the latter case, the domestic concept of "merger by the exchange of shares" was deliberately made the same as the Community concept in Directive 90/434/EEC in the interests of internal harmonisation). There was no intention by using the concept of habitual residence for Regulation 21(3) to create a unified system which applied to both Community and domestic cases. Regulation 1408/71 was not intended to alter or amend the internal social security systems of member states but provided only for arrangements to protect migrant workers.
- (per Arden LJ) domestic law does not require the "spillover" issue to be decided in the appellant's favour (Imperial Chemical v Colmer (no 2) [1999] 1 WLR 2035 and Equal Opportunities Commission v Secretary of State for Employment [1995] 1 AC 1 considered).
DECISION OF THE COURT OF APPEAL
Mr. John Howell QC and Mr. Ben Jaffey (instructed by Leigh Day & Co) appeared for the Appellant.
Mr. Tim Ward (instructed by the Office of the Solicitor, Department for Work and Pensions) appeared for the Respondent.
Judgment (reserved)
LORD JUSTICE BUXTON:
Introduction
- These proceedings are a gallant attempt to extend the protection of Community law to a case containing no Community element, and which does not fall within the reach of the Community legal order.
- Miss Gingi is a British citizen, originally resident in Cyprus, outside the Community. She came to the United Kingdom for the first time on 16 September 1998. She made a claim for income support under the Income Support (General) Regulations 1987 on 5 October 1998. That was refused on the basis that by the date of refusal, 12 October 1998, she was not "habitually resident" in the United Kingdom as regulation 21(3) requires if an applicant is not to be treated as a "person from abroad" whose entitlement is nil. In Nessa v Chief Adjudication Officer [1999] 1 WLR 1937 [Nessa] [now reported as R(IS) 2/00] the House of Lords held, in a judgment delivered by Lord Slynn of Hadley, at p 1942D-G, that
"as a matter of ordinary language a person is not habitually resident in any country unless he has taken up residence and lived there for a period
[a person coming to the United Kingdom]
must show residence in fact for a period which shows that the residence has become 'habitual'"
It was this analysis that Mr. Commissioner Jacobs applied in holding that the tribunal from which he was hearing an appeal had not erred in law by finding that Miss Gingi had not become habitually resident in the United Kingdom by 12 October 1998, some four weeks after her arrival here.
- An appeal lying to this court only on a point of law, and the Commissioner having applied a clear decision of the House of Lords, that might be thought to be the end of the matter: and it is indeed agreed that in purely domestic law terms the case is necessarily concluded by Nessa. Miss Gingi however appeals to Regulation 1408/71 EEC, on the application of social security schemes to persons moving within the Community. That provides, by article 10a.1, that
"persons to whom this Regulation applies shall be granted the special non-contributory benefits referred to in Article 4(2a) [which it is agreed include income support] exclusively in the territory of the Member State in which they reside, in accordance with the legislation of that State
Such benefits shall be granted by and at the expense of the institution of the place of residence"
- Miss Gingi's interest in this provision stems from the fact that by article 1h "residence" means "habitual residence"; and that in case C-90/97 [1999] ECR I-1075 (Swaddling) [now reported as R(IS) 6/99] the Court of Justice held, at paragraph 30 of its judgment, that
"the length of residence in the Member State in which payment of the benefit in issue is sought cannot be regarded as an intrinsic element of the concept of residence within the meaning of Article 10a of Regulation No 1408/71"
The concept of "intrinsic" element is no doubt to be explained in the context of the Court having followed the view of Mr. Advocate General Saggio who said, at paragraph 19 of his Opinion, [1999] ECR I-1085, that
"although the length of the person's stay in the territory of a State may be used to gauge his intention to make that State the principal and permanent centre of his interests, it cannot be treated as a constituent element-that is to say, a conditio sine qua non-of residence"
- That view as to the application of the concept of habitual residence in Regulation 1408/71 plainly contradicts the English view of the application of the concept of habitual residence in regulation 21(3): since the House of Lords in Nessa did regard some length of stay as a sine qua non of habitual residence. The problem for Miss Gingi is to devise a way in which that Community approach to "habitual residence" can be applied to her case in the United Kingdom.
Miss Gingi's Community law argument
- Mr. Howell QC was admirably frank as to the respects in which Miss Gingi could not benefit from the approach to habitual residence adopted in Swaddling. First, he fully accepted the admittedly banal principle of the Community legal order that rules of Community law, and in particular rules in relation to freedom of movement such as those contained in Regulation 1408/71, cannot be applied to activities that, so far as their connexion with the Community is concerned, are confined in all respects within a single member state. A convenient statement of that principle, if such were needed, is to be found in Case C-153/91 [1992] ECR I-4973 [8] (Petit). Miss Gingi's only connexion with the Community was within the United Kingdom. Second, Regulation 1408/71 addresses free movement within the Community of workers, conveniently called migrant workers, and their families. Miss Gingi had not moved or sought to move within the Community; and even if she had done so it was not established that she was a worker in terms of the Regulation.
- The argument therefore had to run as follows. If a case arose of a migrant worker from another member state, the English courts would be obliged to apply to him or her the Community law as laid down in Swaddling. The correct way for the national court to achieve that end was to interpret the national provision, in this case regulation 21(3), to accord with Community law. Only if such interpretation was impossible should the court achieve the same end by holding the domestic law to be inapplicable to the Community case: see Case 157/86 [1988] ECR 673 [11] (Murphy). Therefore, faced with, say, a French worker the English court would have to interpret "habitual residence" in the terms required by the Court of Justice in Swaddling, rather than in the terms required by the House of Lords in Nessa. That therefore became the "meaning" of those words in regulation 21(3). Words in a statutory provision could only have one meaning: the meaning could not change according to the facts of the case. Accordingly, the Swaddling, Community, meaning, which excluded a waiting period as a necessary requirement of habitual residence, must be applied in every case to which it was sought to apply regulation 21(3). That was therefore the meaning that had to be applied to the case of Miss Gingi, as to the case suggested in the appellant's written submissions of an American citizen coming to the United Kingdom on a five-year fixed term work contract.
- Mr. Howell did not shrink from the wider implications of this argument. The argument would have to be applied wherever an expression was used both in domestic legislation and also in Community legislation to address a case that differed in the two instances only because of a difference in Community connexions. Further, the argument would apply to any such domestic legislation that did or might apply in the case of any person entitled to the protection of Community law, however few in number the latter might be. Although Mr. Howell stressed, and was right to stress, that this was not the present case, he nonetheless agreed that the principle on which his argument was based would apply even if only one person with Community rights might be affected by the domestic legislation. However short the Community tail, it must still wag the national dog. And as to authority, his argument entailed that Nessa had been decided per incuriam of the Community dimension; and that Lord Slynn of Hadley, and the specialist leading counsel who addressed the House presided over by him, had not appreciated the conclusive relevance of Community law to their task of interpretation.
- Such inconveniences have of course to be borne as best we may if overriding principles of Community law require that we should suffer them. I am however satisfied that we are not driven to that conclusion.
The argument analysed
- Miss Gingi's argument fails for two, interrelated, reasons. It does not sufficiently respect the distinction between the scope of the domestic and of the Community legal orders; and it depends for its logical force upon an approach that categorises the court's task in terms of determining the meaning of particular words used in legislation, as opposed to determining the factual situations to which that legislation is intended to apply.
- I have already mentioned the well-accepted principle that Community law applies only to cases falling within the Community legal order. Community law requires a member state, when faced with such a case, to apply to it the conclusions of Community, not of domestic, law. How in administrative or structural terms that is achieved is a matter for the national legal order. But the Community legal order requires no more than that. In respect of cases not falling within the Community legal order it has nothing to say.
- That is strikingly illustrated by a case shown to us by Mr. Ward for the Secretary of State, Case C-264/96 [1998] ECR I-4695 (ICI v Colmer). British tax legislation made consortium relief available only to companies whose subsidiaries were located in the national territory. The Court of Justice held that that rule, when applied in the case of subsidiaries established in other member states, was inconsistent with Community principles of freedom of establishment. The Court was however also asked whether that meant that the legislation must also be disapplied, or interpreted so as to conform with Community law, in cases of subsidiaries having their seats in third countries. The Court replied, in paragraphs 32 and 34 of its Judgment:
"[32] It must be emphasised that the difference of treatment applied according to whether or not the business of the holding company belonging to the consortium consists wholly or mainly in holding shares in subsidiaries having their seat in non-member countries lies outside the scope of Community law
[34] Accordingly, when deciding an issue concerning a situation which lies outside the scope of Community law the national court is not required, under Community law, either to interpret its legislation in a way conforming with Community law or to disapply that legislation."
This case therefore decides that there is no Community law obligation to interpret a national legal provision that applies in its terms to cases within and to cases without the Community legal order in a way that conforms to Community law even when the legislation is applied to a non-Community case. To the extent, therefore, that Miss Gingi's argument seeks to appeal directly to Community law it infringes that principle.
- Mr. Howell, however, said that that was not his argument. His response to this point can, I think, be fairly put as follows. When the court was faced with a Community case under regulation 21(3) its first obligation under Community law, as demonstrated by Murphy, referred to in paragraph 7 above, was not to disapply that regulation, but to interpret it in accordance with the requirements of Community law. That interpretation thereby passed into national law, and by a simple process of the application of the regulation in its true meaning within the national legal order that interpretation had thereafter to be applied to all cases falling within that legal order. The issue was therefore one of domestic, not of Community, law.
- I am content for present purposes to accept that the Court of Justice in Murphy intended to express itself with the generality here relied on, though I am not certain that it would have recognised the implication of its observations that founds the basis of the present argument. I am also content to assume that the Court of Justice in ICI v Colmer was not seeking to lay down a rule for interpretation within the national legal order, however much it is difficult to think that if the Court had been confronted with our present case it would have thought that the House of Lords in Nessa had gone wrong because it had not done what the Court of Justice in ICI v Colmer had said that it need not do. However, even making all of those assumptions, Miss Gingi's argument still fails.
- Once it is accepted that there is no obligation in Community law for a domestic court to interpret regulation 21(3), when applied to a non-Community case, in the terms adopted in Swaddling, then Miss Gingi's argument, and her ability to leap the gap between the Community legal order and the domestic legal order, depends on contending that Swaddling has determined a "meaning" of the words "habitual residence" which, because the English court has to apply it to a Community case under regulation 21(3), must by logical necessity be the meaning of that expression also in a case under regulation 21(3) that arises solely within the domestic legal order. The question is therefore a simple one of interpretation for the English court, concluded however by its obligation in some cases to follow Swaddling.
- This argument certainly has an attractive simplicity, but reflection indicates that the disputed element of a required period of presence in the United Kingdom could not be introduced into, or witheld from, the criteria for determining a decision on habitual residence by recourse only to the meaning of the words "habitual residence"; and inspection indicates that the Court of Justice in Swaddling did not proceed by so doing, or otherwise as Miss Gingi's argument requires.
- When a claim is made, at least in terms like those adopted in the present argument, that an expression x means y, then it must be possible to substitute the verbal formula y for every use of the expression x. But what is the verbal formula excluding a requirement of a period of presence that can be substituted for the words "habitual residence" in regulation 21(3)? The wording of the regulation would have to be translated as something like:
"'person from abroad' means a claimant who is not a person whose centre of interests, taking all relevant factors into account, is to be found in the United Kingdom, provided that no person shall be excluded from the category of such claimant on the ground alone that he has not completed a particular period of residence in the United Kingdom"
- The inappropriate nature of this formulation illustrates the reality of the process of interpretation of an expression such as "habitually resident". The court does not, and in realistic terms cannot, attribute a single verbal meaning to that expression, from which the solution to every case follows by definition. Rather, the court requires the expression to be applied to particular factual situations by reference to a list of criteria that convey the end that the legislature has sought by the use of that expression. The process thus is not one of identifying a verbal meaning from which all else logically follows; rather it is one of identifying what criteria the statutory words require to be used in determining the legal status of any particular claimant to whom regulation 21(3) potentially applies.
- That is how the Court of Justice proceeded in Swaddling. It set out its reasoning in paragraphs 29-30 of its judgment:
"The phrase 'the Member State in which they reside' in Article 10a of Regulation No 1408/71 refers to the State in which the persons concerned habitually reside and where the habitual centre of their interests is to be found. In that context, account should be taken in particular of the employed person's family situation; the reasons which have led him to move; the length and continuity of his residence; the fact (where this is the case) that he is in stable employment; and his intention as it appears from all the circumstances
.For the purposes of that assessment, however, the length of residence in the Member State in which payment of the benefit at issue is sought cannot be regarded as an intrinsic element of the concept of residence within the meaning of Article 10a of Regulation No 1408/71".
- This passage, I would venture to suggest, clearly shows that the Court of Justice proceeded by identifying the criteria that a court had to apply when determining whether a particular case was one of habitual residence. Two things follow from that. First, the premise of Miss Gingi's logical argument disappears: because there is no rule of Community law determining the meaning of, as opposed to the relevant criteria for adjudicating upon, habitual residence; and thus no such meaning that has necessarily to be transposed into English domestic law just because the latter uses the words "habitual residence". Second, there is no legal or logical reason why the criteria for adjudicating upon habitual residence in the case of a Community migrant worker should be the same as those used to adjudicate upon the case of a person coming into the United Kingdom from a third country, and indeed many reasons why that should not be so: not least because the Community case has to be determined in the light of Community principles of freedom of movement and of establishment, considerations that do not apply in the case of a third country.
- Mr. Commissioner Jacobs was, therefore, right to follow Nessa, the authority of which is not undermined either directly or indirectly by anything said in or to be inferred from Swaddling.
- Quite apart from these general, and in my view fatal, objections to Miss Gingi's argument, it is further vulnerable to objections springing from the narrow construction of regulation 21(3) and from the scope and purpose of Regulation 1408/71. I deal with those objections in turn.
The construction of regulation 21(3)
- Having, as described in paragraph 2 above, defined "person from abroad" as someone who is not habitually resident in the United Kingdom, regulation 21(3) continues:
"for this purpose, no claimant shall be treated as not habitually resident in the United Kingdom who is-
(a) a worker for the purposes of Council Regulation EEC No 1612/68 or EEC No 1251/70 or a person with a right to reside in the United Kingdom pursuant to Council Directive No 68/360 or No 73/148"
Reg 1612/68, put shortly, forbids discrimination against migrant workers in relation to terms and conditions of employment and the education of their children. Regulation 1251/70, again put shortly, gives rights of residence to retired migrant workers. It may be noted that Regulation 1408/71 is not included in this list. That is because, as will be explained in the next section, its scope and purpose does not extend to altering the domestic law of member states.
- These exceptions were plainly introduced because the persons referred to, being migrant workers, are entitled to the protection of Community and not just of domestic law. But according to Miss Gingi's argument they have that protection already, because regulation 21(3)'s use of the term "habitual residence" attracts Community law for everyone, whether migrant worker or not. The specific statutory saving for migrant workers therefore beats the air. The only answer that Mr. Howell could give to this objection was that, like the House of Lords in Nessa, the draftsman of regulation 21(3) had simply made a mistake. He had not realised that the system that he was applying was Community, and not domestic, law. I agree that, granted the premise, that conclusion, however surprising it might seem, does follow. The oddity of the conclusion may, however, be thought to throw some light on the accuracy of the premise.
The scope and purpose of Regulation 1408/71 .
- As Mr. Howell readily accepted, Regulation 1408/71 is what might be called a co-ordinating provision, rather than an attempt at any sort of harmonisation. Its mission, as is plain from its recitals, is to promote freedom of movement of workers within the Community by providing for aggregation of periods qualifying for benefits in various member states, and a regime to ensure that when workers migrate such benefits are paid in one member state or another: the objectives of article 51 (as it then was) of the EEC Treaty from which Regulation 1408/71 draws its vires. The latter objective, of deciding which state shall pay the benefits to which a migrant worker is entitled, is determined in the case of non-contributory benefits by article 10a of the Regulation, as its terms quoted in paragraph 3 above clearly indicate. Article 10a does not, therefore, say anything about national conditions for the payment of benefit, but only determines in which member state the benefit should be paid. That is reinforced by the consistent jurisprudence of the Court of Justice that, although member states must of course respect Community law, the Regulation itself leaves national social security systems intact. As the Court of Justice put it when commenting on Regulation 1408/71 in Case 110/79 [1980] ECR 1445 [12] (Coonan):
"it is for the legislature of each Member State to lay down the conditions creating the right or the obligation to become affiliated to a social security scheme or to a particular branch under such a scheme provided always that in this connexion there is no discrimination between nationals of the host State and nationals of other Member States"
- That Regulation 1408/71 has this limited, albeit important, objective makes it an unpromising basis on which to seek to alter the rules of a purely domestic social security system. Indeed, were Miss Gingi right, Regulation 1408/71 would have the paradoxical effect in this case of in practice achieving an end that the Court of Justice has said it cannot in law aspire to. And there would be a further paradox created by the application of the argument in Miss Gingi's particular case. We have seen that it is accepted that even if Miss Gingi came from another member state she would not, or at least might not, fulfil the further requirement of being a migrant worker that is a pre-condition of the application of Regulation 1408/71. But if her argument is right the United Kingdom, simply by using the same words as are to be found in Regulation 1408/71, has extended the protection of that Regulation to cases that it deliberately excludes: community transients who are not migrant workers.
- I do not determine the appeal by reference to these considerations, because they were only very lightly if at all explored before us, and in any event they do not arise in view of my conclusion as to the validity of Miss Gingi's argument on other grounds. This aspect of the case is nonetheless worth mentioning because in my view it reinforces the feeling that I have had throughout this appeal that Community law was being made to do work for which it is simply not intended.
The "long-arm" jurisdiction of the Court of Justice
- The arguments so far addressed were not put before the Commissioner, or certainly not put in anything like the form or detail that they assumed before us; and they did not appear either in Miss Gingi's Notice of Appeal or in the skeleton argument supporting it. Rather, the argument before the Commissioner concentrated on what was called (I will not take time in saying why I think inaccurately) the "long-arm" jurisdiction of the Court of Justice. Mr. Howell did not stress this argument before us, and he was right to be diffident about it; but since it was not formally abandoned, and in any event out of courtesy to the Commissioner, who delivered a reasoned judgment about it which is said to have been wrong, I should briefly address the argument.
- The argument was expressed as follows in the appellant's skeleton:
"Relatively recently the ECJ has extended its jurisdiction over cases where national legislation uses a concept taken from Community law for purely domestic purposes. In such cases the ECJ has now repeatedly held that it has jurisdiction to decide on the meaning of that term, and that the EC definition binds national courts"
The cases relied on are Cases C-297/99 and C-197/89 [1990] ECR I-3763 (Dzodi) and Case C-28/95 Leur-Bloem v Belastingdienst [1998] QB 182. The nature of the jurisdiction can be collected from paragraphs 31 and 32 of the judgment in the latter case, [1998] QB at p 209c:
"The national court considers that the concept of 'merger by the exchange of shares', taken in its Community context, needs to be interpreted in order to resolve the dispute before it; that that concept is contained in the Directive; that it has been incorporated in the domestic Law transposing it, and that it has been extended to similar, purely internal, situations. In those circumstances, where in regulating internal situations, domestic legislation adopts the same solutions as those adopted in Community law so as to provide for one single procedure in comparable situations, it is clearly in the Community interest that, in order to forestall future differences of interpretation, provisions or concepts taken from Community law should be interpreted uniformly, irrespective of the circumstances in which they are to apply"
- This quotation alone suffices to demonstrate how inappropriate this jurisprudence is to our case. The Netherlands government was obliged to adopt the concept of "merger by exchange of shares" for cases involving companies in other member states because Directive 90/434/EEC so required, and it decided, in the interests of what was effectively internal harmonisation, to adopt the same concept for dealing with cases internal to the Netherlands: see the formal explanatory memorandum quoted in the opinion of Mr. Advocate General Jacobs at [1998] QB p 187d. The domestic and the Community concepts were therefore deliberately made the same; and it was thought sensible by the Court of Justice that it should answer a question from the national court asking for an explanation of the concept, even where it was in fact going to be applied in a domestic case. It was that element of deliberate harmonisation in the provisions of the national legislature that founded, and set the limits of, the Court's jurisdiction.
- It was claimed before the Commissioner that Regulation 21(3), by using the concept of habitual residence, had intended similarly to create a unified system applying to Community and domestic cases alike, and we were shown extracts from the Secretary of State's report to the Social Security Advisory Committee before Regulation 21(3) was introduced that referred to the concept of habitual residence in terms of its use in Community law. I do not go through these references in any detail, because on any view they fall far short of what would be required to base an application of the Leur-Bloem principle. Even leaving aside the fact, pointed out by the Commissioner, that the paragraph relied on also refers to the use of the concept in areas of domestic law, such as child support and unemployment benefit law, it would require far stronger evidence than that of a merely general discussion of the type relied on here to establish the harmonising aim on which the present jurisprudence depends.
- Even if there were not these severe evidential problems about this argument, it would still be very difficult to apply it to the present case. We have seen that Regulation 1408/71 does not seek to alter or amend the internal social security systems of member states, but provides only for arrangements to protect migrant workers. Accordingly, it and the concepts that it contains have a quite different purpose from that of the Directive on which the legislation in Leur-Bloem was founded. It is therefore inherently unlikely that a concept to be found in Regulation 1408/71 would, or indeed could, be transposed without more into a national legal order. And insofar as it is relevant, such parts of the Secretary of State's report relied on by Miss Gingi as do address the intentions of the legislation bear out this distinction. Paragraph 4 of the report, referring to the habitual residence test, says
"The test seeks to place the conditions of entitlement to these benefits on a similar footing to the eligibility conditions for state benefits of other EEA Member States"
and goes on to give examples of those other domestic regimes. This is an appeal to the domestic law of other member states, about which, as we have seen, Regulation 1408/71 has nothing to say. It is quite different from what Miss Gingi would have to establish in this case, an adoption of the system applying to Community migrant workers in every case arising in domestic law.
Conclusion
- Miss Gingi's case accordingly fails, both on the case as put to the Commissioner and on the case as put before us. I would dismiss her appeal.
LADY JUSTICE ARDEN:
- I agree that this appeal should be dismissed. I gratefully adopt the description in Buxton LJ's judgment of the facts and issues in this case.
- In my judgment, the European Court of Justice in the Swaddling case has provided an interpretation of the Community concept of habitual residence for the purposes of article 10a of EC Regulation No. 1408/71. (Article 10a uses the words "resides" and under article 1(h) of the regulation "residence" means "habitual residence".) This conclusion is supported by paragraph 29 of the judgment of the European Court of Justice which Buxton LJ has already set out, and by the following further passages:
"30. For the purposes of that assessment, however, the length of residence in the Member State in which payment of the benefit at issue is sought cannot be regarded as an intrinsic element of the concept of residence within the meaning of Article 10a of Regulation No. 1408/71. In particular, when, as in the present case, an employed person, on returning to his State of origin after exercising his right to freedom of movement, has made it clear at the time of applying for income support that he intends to remain in his State of origin, where his close relatives live whilst expressing his readiness, should the need arise in the context of some future employment, to travel from time to time to other Member States he cannot be deemed not to satisfy the condition concerning residence within the meaning of Articles 10a merely because the period of residence completed in his State of origin is too short.
33. Consequently, without there being any need to consider the implications of Article 48 of the Treaty for the outcome of the case before the national court, the answer to the question referred must be that Article 10a of Regulation No. 1408/71, read together with Article 1(h) thereof, precludes the Member State of origin in the case of a person who has exercised his right to freedom of movement in order to establish himself in another Member State, in which he has worked and set up his habitual residence, and who has returned to his Member State of origin, where his family lives, in order to seek work from making entitlement to one of the benefits referred to in Article 10a of Regulation No. 1408/71 conditional upon habitual residence in that State, which presupposes not only an intention to reside there, but also completion of an appreciable period of residence there." (Italics added.)
- The European Court of Justice then answered the question posed by the National Court in these terms:
"Article 10a of the Council Regulation (EEC) No. 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, as amended and updated by Council Regulation (EEC) No. 2001/83 of 2 June 1983, as amended by Council Regulation (EEC) No. 1247/92 of 30 April 1992, read together with Article l(h) thereof, precludes the Member State of origin in the case of a person who has exercised his right to freedom of movement in order to establish himself in another Member State, in which he has worked and set up his habitual residence, and who has returned to his Member State of origin, where his family lives, in order to seek work from making entitlement to one of the benefits referred to in Article 10a of Regulation No. 1408/71 conditional upon habitual residence in that State, which presupposes not only an intention to reside there, but also completion of an appreciable period of residence there." (Italics added.)
- I have had the benefit of reading Buxton LJ's reasons for dismissing this appeal. For my own part, I do not find it possible to reach the conclusion that the European Court of Justice was performing a different exercise from that of interpretation, namely that of identifying criteria for the adjudicating upon habitual residence for the purposes of article 10a. Residence and habitual residence are not words having a precise dictionary meaning. They reflect abstract concepts requiring analysis and explanation.
- I agree, however, that the decision in Swaddling would render English law incompatible with Community law to the extent that, for the purposes of determining rights to which article 10a applies, a requirement is automatically imposed that the applicant shall have lived in the United Kingdom for an appreciable period. The decision of the House of Lords in Nessa v Chief Adjudication Officer [1999] lWLR 1937, however, is concerned with the meaning of "habitual residence" in a context wholly outside the Community legal order.
- Mr. Commissioner Jacobs in his detailed decision in this case took the view that in many cases there is no significant difference between the meaning of "habitual residence" as determined by the House of Lords in the Nessa case and the meaning given to that phrase by the European Court of Justice in the Swaddling case. This may be so. It is not, however, necessary for the purposes of this case to reach a conclusion on that point.
- I agree with what Buxton LJ has said about the Leur-Bloem principle, on which heavy reliance was placed before the Commissioner.
- As I see it, the crucial point in this appeal is whether the appellant is right on the "spillover" issue: i.e. if the European Court of Justice has held that for particular purpose habitual residence has a particular meaning and if in order to give effect to Community law the court must apply that meaning of "habitual residence" for that purpose in regulation 21(3) of the Income Support (General) Regulations 1997, does it follow that "habitual residence" must be so construed in that regulation for all purposes? Unless the appellant succeeds on this issue, the appeal fails.
- I agree with Buxton LJ that, as Mr. Timothy Ward, for the Secretary of State, convincingly demonstrated, Community law did not mandate this result: see Imperial Chemical Industries v Colmer [1999] 1 WLR 108. Buxton LJ has already set out the relevant passages from paragraphs 32 and 34 of the judgment in the European Court of Justice, and so I will not repeat them. (I refer below to the subsequent history of the case in the English courts).
- Does our national law require the "spillover" issue to be decided in the appellant's favour? The House of Lords has held, in a manner binding on this Court, that "habitual residence" in regulation 21(3) requires the applicant to show that he or she has lived in the United Kingdom for an appreciable period. The obligation on this Court under Community law to interpret that regulation in accordance with the meaning of "habitual residence" in Community legislation arises only in cases involving Community rights. This Community law principle is not, then, inconsistent with the proposition that words may have one meaning in an enactment for the purposes of national law, and another for the purposes of Community rights. If that proposition is right, the "spillover" issue must be answered in the negative.
- No authority has been cited to this Court on the correct approach as a matter of interpretation to an enactment as respects which the "spillover" issue has arisen. However, it is clear from the decision of the House of Lords in Imperial Chemical Industries v Colmer (No 2) [1999] 1 WLR 2035 (following the judgment of the European Court of Justice referred to above) that when our national legislation is rendered ineffective because of a provision of Community law it is not rendered ineffective in its application to non-EEC nationals. In that case Lord Nolan, with whom the other members of the House of Lords agreed, first rejected the proposition that the conflict between domestic legislation in that case and Community law could be resolved either as a matter of construction of the relevant statute or by severing the provision in question (which on its face affected both Community and non-Community rights). It was not a case where the content of the word differed in Community law from the content of the same word in national law, and thus it was not a case where the "spillover" issue arose. Lord Nolan then turned to the question of disapplying the provision in question, and crucially he held as follows:-
"It remains to consider the question of disapplication in accordance with the provisions of s 2(1) and (4) of the European Communities Act 1972. Explaining the effect of the section in Factortame Ltd v Secretary of State for Transport [1989] 2 All ER 692 at 700-701, [1990] 2 AC 85 at 140, Lord Bridge of Harwich said:
'By virtue of s 2(4) of the 1972 Act Pt II of the 1988 Act [the Merchant Shipping Act] is to be construed and take effect subject to directly enforceable Community rights and those rights are by s 2(1) of the 1972 Act, to be "recognised and available in law, and
enforced, allowed and followed accordingly
." This has precisely the same effect as if a section were incorporated in Pt II of the 1988 Act which in terms enacted that the provisions with respect to registration of British fishing vessels were to be without prejudice to the directly enforceable Community rights of nationals of any member state of the EEC.'
So, in the present case, the effect of s 2 of the 1972 Act is the same as if a subsection were incorporated in s258 of the Act of 1970 which in terms enacted that the definition of 'holding company' was to be without prejudice to the directly enforceable Community rights of companies established in the Community. As the concluding paragraphs of the judgment of the Court of Justice make plain, this in no way affects the application of the definition to companies established outside the Community: cf. in this connection the comments of Lord Keith of Kinkel on the effect of the Factortame decision in Equal Opportunities Commission v Secretary of State for Employment [1994] 1 All ER 910 at 920, [1995] 1 AC 1 at 27D-E."
- The passage which Lord Nolan cites from Lord Keith's speech in the Equal Opportunities Commission case [1995] 1 AC 1, contained in the following extract is to the same effect:
"
in the Factortame series of cases (Factortame Ltd v Secretary of State for Transport [1989] 2 All ER 692, [1990] 2 AC 85, Factortame Ltd v Secretary of State for Transport (No. 2) Case C213/89 [1991] All ER 70, [1991] 1 AC 603, R v Secretary of State for Transport, ex p Factortame Ltd Case C-221/89 [1991] 3 All ER 769, [1992] QB 680) the applicants for judicial review sought a declaration that the provisions of Pt II of the Merchant Shipping Act 1988 should not apply to them on the ground that such application would be contrary to Community law, in particular arts 7 and 52 of the EEC Treaty (principle of non-discrimination on the ground of nationality and right of establishment). The applicants were companies incorporated in England which were controlled by Spanish nationals and owned fishing vessels which on account of such control were denied registration in the register of British vessels by virtue of the restrictive conditions contained in Pt II of the 1988 Act. The Divisional Court (R v Secretary of State for Transport, ex p Factortame Ltd [1989] 2 CMLR 353, under art 177 of the Treaty, referred to the Court of Justice of the European Communities a number of questions, including the question whether these restrictive conditions were compatible with arts 7 and 52 of the Treaty. The European Court (R v Secretary of State for Transport, ex p Factortame Ltd Case C-221/89 [1991] 3 All ER 769 [1992] QB 680) answered that question in the negative, and although the final result is not reported, no doubt the Divisional Court in due course granted a declaration accordingly. The effect was that certain provisions of United Kingdom primary legislation were held to be invalid in their purported application to nationals of member states of the European Community, but without any prerogative order being available to strike down the legislation in question, which of course remained valid as regards nationals of non-member states. At no stage in the course of the litigation, which included two visits to this House, was it suggested that judicial review was not available for the purpose of obtaining an adjudication upon the validity of the legislation in so far as it affected the applicants." (page 26H 27E) (Italics added.)
- While the Colmer case and the Equal Opportunities Commission case concern the disapplication of national legislation rather than its interpretation, I for my part see no reason why the same result should not apply to a case of interpretation. In my judgment such an approach is right in principle since it more closely gives effect to the legislator's intention, than would be the case if the appellant succeeds, and it has the merit of consistency with the case of disapplication.
- The foregoing proposition also receives some support in Bennion, Statutory Interpretation (3rd ed) (1997) page 1009, although no authority is cited for the relevant passage:
"
the legal position is a strange one. The universal rule has been that a provision in a British Act must be construed by seeking and applying the intention of the legislature which enacted it. Now we find in relation to a later Community law not having direct effect that it is the supervening intention of a wholly different body that, within limits, is to prevail in construing the Act. Perhaps the most difficult problem is to define those limits. Cited above are dicta indicating that effect must be given to the Community law 'so far as possible', but that nevertheless the meaning given to the national law must be one to which it is 'open' and which does not 'distort' it. Such prescriptions do not take us very far. The following more precise criteria are suggested as guides which conform to the present law as outlined above
(iii) It is legitimate for the national court to give an enactment of the national law an updating construction where the promulgation or interpretation of the Community law has changed the situation. It is established that it is legitimate for the court to give an enactment of the national law an updating construction where supervening circumstances render this necessary. The subsequent promulgation of a conflicting Community directive constitutes a change in the relevant law which ought to be taken into account in construing the national enactment thereafter.
(iv) It is legitimate for the national court, in relation to a particular enactment of the national law, to give it a meaning in cases covered by the Community law which is inconsistent with the meaning it has in cases not covered by the Community law. While it is at first sight odd that the same words should have different meaning in different cases, we are dealing with a situation which is odd in juristic terms. If for example the updating factors just mentioned relate to some aspects only of the relevant national law it would not be appropriate to take them into account in relation to other aspects." (Italics added.)
- For all these reasons, I would dismiss this appeal. Moreoever I do not consider that a reference to the European Court of Justice is possible or appropriate in this case. The issue is purely one of domestic law.
LORD JUSTICE SCHIEMANN :
- The argument in this case concerns the concept of habitual residence as used in a United Kingdom Statutory Instrument and as used in an EEC Regulation. Must a given set of facts always yield the same answer to the question "Is this person habitually resident in the United Kingdom?" whether that question is posed in the context of applying the Statutory Instrument or whether it is posed in the context of applying the EEC Regulation?
- There is no a priori reason for insisting that a word must have the same meaning in whatever context it is used. The twenty year old's reference to a "young girl" will not include anyone over thirty; if an eighty year old uses the phrase it might well include a 35 year old.
- There can be reasons for construing a term in a Statutory Instrument as having the same meaning as that term in a Community Regulation. The question which faces us is whether there are any such reasons in the present case.
- Swaddling is concerned with the concept of habitual residence within the meaning of Article 10a of Regulation No 1408/71 EEC. For present purposes I accept that judgment as deciding that it is possible to be habitually resident in a state without having stayed in that territory for any period of time and thus giving the phrase what I shall refer to as a broad meaning.
- Nessa is concerned with the concept of habitual residence in Regulation 21(3) of the Income Support (General) Regulations 1987. I accept it as deciding that in order to qualify for support under that Statutory Instrument a person coming to the United Kingdom must show residence in fact for a period which shows that the residence has become habitual - thus giving the phrase what I shall refer to as a narrow meaning.
- For the purposes of exposition it is useful to refer to those covered by Community legislation as "insiders" and those who are not so covered as "outsiders". It is common ground that the appellant is an outsider. This country is under is no obligation arising by reason of our membership of the Community to treat her or any other outsider in any particular way so far as social security is concerned. Parliament was at liberty to enact two sets of Regulations in relation to income support - one applying to insiders and one applying to outsiders.
- That said, if Parliament had enacted at the same time one Statutory Instrument which only applied to outsiders and another Statutory Instrument which only applied to insiders and had used the concept of habitual residence in each without any further definition or other contrary indication, one would have expected Parliament to intend the phrase to have the same meaning in each.
- It can be said that this argument in favour of constancy of meaning is the greater when Parliament has not enacted two Statutory Instrument but only one which deals both with insiders and outsiders.
- The argument however has less force in a situation such as the present for a number of reasons which I shall identify in the following paragraphs.
- The phrase used is one capable of either the broad or the narrow meaning. At the time of the enactment of the phrase, there was no court decision either here or in the ECJ which indicated which was to be adopted.
- The argument has less force in a situation such as the present when the relevant subparagraph of the Statutory Instrument makes special provision in relation to the concept of habitual residence when applied to insiders.
- The argument has less force when the Community regulation is not a harmonising measure.
- I agree with what Buxton LJ says in relation to the "long arm" jurisdiction of the ECJ.
- In those circumstances I consider that the fact that the ECJ has applied the broad meaning in an insider context did not compel the House of Lords also to adopt the broad meaning when applying the phrase in an outsider context. I certainly do not regard the decision of the House of Lords in Nessa as having been reached per incuriam. This court is therefore bound by it.
- I agree that this appeal must be dismissed.
Order: Appeal dismissed with costs; such costs to be subject to detailed assessment by a costs judge; Application for permission to appeal to the House of Lords refused.
(Order does not form part of the approved judgment)
