Gingi v Secretary of State for Work and Pensions  UKSSCSC CIS_5647_1999 (14 November 2001)
(Gingi v Secretary of State for Work and Pensions  EWCA Civ 1685)
CA (Buxton, Arden and Schiemann LJJ) CIS/5647/1999
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  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  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  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  ECR I-3763 and Leur Bloem v Belastingdienst  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)  1 WLR 2035 and Equal Opportunities Commission v Secretary of State for Employment  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.
LORD JUSTICE BUXTON:
"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.
"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"
"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,  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"
Miss Gingi's Community law argument
The argument analysed
" 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  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.
"'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 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".
The construction of regulation 21(3)
"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.
The scope and purpose of Regulation 1408/71 .
"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"
The "long-arm" jurisdiction of the Court of Justice
"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  ECR I-3763 (Dzodi) and Case C-28/95 Leur-Bloem v Belastingdienst  QB 182. The nature of the jurisdiction can be collected from paragraphs 31 and 32 of the judgment in the latter case,  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"
"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.
LADY JUSTICE ARDEN:
"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.)
"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.)
"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  2 All ER 692 at 700-701,  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  1 All ER 910 at 920,  1 AC 1 at 27D-E."
" in the Factortame series of cases (Factortame Ltd v Secretary of State for Transport  2 All ER 692,  2 AC 85, Factortame Ltd v Secretary of State for Transport (No. 2) Case C213/89  All ER 70,  1 AC 603, R v Secretary of State for Transport, ex p Factortame Ltd Case C-221/89  3 All ER 769,  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  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  3 All ER 769  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.)
" 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.)
LORD JUSTICE SCHIEMANN :
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)