England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
THE UPPER TRIBUNAL (IMMIGRATION & ASYLUM
CHAMBER)
IAI74462012

		Royal Courts of Justice Strand, London, WC2A 2LL
		16th July 2014

Lady Justice Arden :

1. An EEA citizen, that is, a national of one of the member states of the EU or of one of the countries in the European Economic Area ("EEA"), has valuable rights under the EU treaties, including the right to move to other states of the EU, and reside there. That right is also granted to his or her family members, including a spouse. The spouse may, if the EEA citizen fulfilled the required conditions, obtain a permanent residence card in the EEA state ("host state") to which she moves. The question in this appeal concerns the required condition that the EEA citizen should have had comprehensive sickness insurance cover ("CSIC").
2. The appellant, Mr Shakil Ahmad, is a Pakistani national who has been living with his wife, Mrs Ahmad, a Danish citizen and therefore an EEA citizen, in the UK since August 2006. Mrs Ahmad entered the UK to exercise her treaty rights as a worker from April 2006. Mr Ahmad lawfully entered the UK to join her. Mrs Ahmad then ceased to be a worker. She was a student from about January 2009 to about July 2012. As such, she was required to have, but did not have, CSIC.
3. This follows from Article 7(1)(d) of the Directive 2004/38/EC ("the Directive"):

"Article 7

1. All Union citizens shall have the right of residence on the territory of another Member State for a period of longer than three months if they:

"….(c) – are enrolled at a private or public establishment, accredited or financed by the host Member State on the basis of its legislation or administrative practice, for the principal purpose of following a course of study, including vocational training; and have comprehensive sickness insurance cover in the host Member State and assure the relevant national authority, by means of a declaration or by such equivalent means as they may choose, that they have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence; or…"

4. The provisions of the Directive have been implemented in the UK by the Immigration (European Economic Area) Regulations 2006 ('the 2006 Regulations'). As the 2006 Regulations have to be interpreted so far as possible in conformity with the Directive (and no-one suggests that that is not possible in this case), the court has to interpret the relevant provisions of the Directive. In the circumstances I put a summary of the relevant provisions of the 2006 Regulations in the Annex to this judgment.
5. Mr Ahmad has worked in the UK. He paid National Insurance for five years. He then applied for a permanent residence card to confirm his right to reside in the UK pursuant to Article 7(2) of the Directive. This provides:

"2. The right of residence provided for in paragraph 1 shall extend to family members who are not nationals of a Member State, accompanying or joining the Union citizen in the host Member State, provided that such Union citizen satisfies the conditions referred to in paragraph 1(a), (b) or (c)."

6. Mr Ahmad contends that Mrs Ahmad satisfied the condition that she should have comprehensive health insurance in the UK because she was entitled to use the National Health Service (NHS) and did not need to have private insurance cover to do so.
7. The answer to this appeal depends on the interpretation of Article 7 of the Directive. The ultimate question of interpretation is the extent to which those conditions are to be interpreted under EU law in a dynamic way, so that it is enough if they are substantially or functionally fulfilled, or whether they are to be strictly interpreted on the basis that the right to a permanent residence card is a privilege which is not conferred unless there is strict and literal compliance with the conditions.
8. In its determination dated 26 April 2013, the Upper Tribunal (Upper Tribunal Judge Perkins and Deputy Upper Tribunal Judge Pickup) rejected Mr Ahmad's contention and upheld the Secretary of State's refusal to grant a permanent residence card to Mr Ahmad.

Summary of conclusion

9. For the reasons amplified below, I conclude that, in the light of the clear and consistent case law of the Court of Justice of the European Union (CJEU), the Upper Tribunal were correct and that this appeal should be dismissed. Before I explain the appellant's submissions and my reasons for rejecting them, I shall describe the relevant Directive provisions, the reasoning of the Upper Tribunal and relevant prior case law concerning the CSIC requirement and support for the appellant's case to be derived from documents issued by the European Commission ("the Commission").
    
   

Conditions for permanent residency: scheme of the Directive

10. The Directive is a consolidation of various earlier measures but it is not necessary to refer to these. Nor is it necessary to refer to the provisions of the EU treaties which give the EU competence in residency matters.
11. The rules governing the ability of EU citizens to exercise the right of residence in another Member State are now laid down in Chapters III to VII of the Directive.
12. The Directive distinguishes residence for more than three months from residence for shorter periods. In the latter case, no conditions apply but in the case of three months + residence must be exercised in accordance with the conditions laid down in the Directive. We are concerned with the right of residence for more than three months ("three months + residence"). Recitals (9) and (17) to the Directive thus provide:

"(9) Union citizens should have the right of residence in the host Member State for a period not exceeding three months without being subject to any conditions or formalities other than the requirement to hold a valid identity card or passport, without prejudice to a more favourable treatment applicable to job-seekers as recognised by the case-law of the Court of Justice.

(17) Enjoyment of permanent residence by Union citizens who have chosen to settle long term in the host Member State would strengthen the feeling of Union citizenship and is a key element in promoting social cohesion, which is one of the fundamental objectives of the Union. A right of permanent residence should therefore be laid down for all Union citizens and their family members who have resided in the host Member State in compliance with the conditions laid down in this Directive during a continuous period of five years without becoming subject to an expulsion measure." (Emphasis added)

13. A key provision is in Recital (10) that persons who had a right of residence should not be an unreasonable burden on the social assistance system of the host state during an initial period. The Directive provides for this to be five years. Thus Recital (10) provides:

"(10) Persons exercising their right of residence should not, however, become an unreasonable burden on the social assistance system of the host Member State during an initial period of residence. Therefore, the right of residence for Union citizens and their family members for periods in excess of three months should be subject to conditions." (Emphasis added)

14. The relevant conditions for lawful three months + residence are contained in Article 7(1) of the Directive. The conditions vary depending on whether the EU citizen is a worker or self-employed person, a self-sufficient person (e.g. a pensioner) or a student. I have set out the relevant condition for students above. Students are not considered to be economically active.
15. Article 7(2) (set out in para 5 above) extends the right of three months + residence to family members who are third country nationals (i.e. not EEA nationals) who are accompanying or joining the EEA citizen in the host state, provided that the EU citizen satisfies the conditions in Article 7(1).
16. Article 14(2) provides that EU citizens and their family members retain the right of residence provided for in Article 7:

"as long as they meet the conditions set out therein...".

17. Article 16 grants a right of permanent residence to EEA citizens who have resided legally in the host state for a continuous period of five years. The CJEU has held that the term 'resided legally':

"should be construed as meaning a period of residence which complies with the conditions laid down in the directive, in particular those set out in Article 7(1)'. (Ziolkowski Joined Cases C-424/10 and C-425/10 [2013] 3 CMLR 37 at [46])."

18. Once an EEA citizen has obtained a right of permanent residence, the conditions in Article 7 cease to apply. Family members who are third country nationals but who have legally resided with the EEA citizen in the host state for a continuous period of five years also have the right to apply for a certificate of permanent residence.

Reasoning of the Upper Tribunal on the requirement for CSIC

19. In its determination dated 26 April 2013 the Upper Tribunal found that an entitlement to free NHS treatment does not satisfy the requirement under the Regulations and the Directive for a student who is an EEA national to have CSIC:

"16…..There must be a material distinction between this requirement and the free entitlement to NHS treatment, otherwise the requirement permitted by the Directive and set out in Regulation 4(1)(d)(ii) would be entirely redundant, as such a person lawfully present in the UK already qualifies for free NHS. It is clear from the context of the Directive and the wording of the Regulations that what is contemplated is more than entitlement to NHS treatment.

17..Further, although neither party relied on it in argument, we have reminded ourselves of the decision of the Court of Appeal in Liu v SSHD [2007] EWCA Civ 1275. There Buxton LJ at paragraphs 11 and 25 noted the requirements of Directive 2004/38 and used those requirements to underpin his reasoning.

18. We are therefore satisfied that both the plain meaning of the rules and the guidance of the Court of Appeal requires a person seeking to rely on article 7 of the Directive to have comprehensive sickness insurance. The fact that the European Commission has raised a doubt is no reason for us to ignore binding authority."

Difficulty for appellant - prior case law of this court and the CJEU

20. The Upper Tribunal referred in their decision to this court's decision in Liu. The appellant rightly recognises that he faces the formidable difficulty that this and other cases binding on this court have held that free NHS treatment does not satisfy the requirement for CSIC and these cases will have to be distinguished or shown to be incompatible with other EU law before this appeal can succeed. It is sufficient to set out the facts of one only of the cases cited to us on this point, namely W(China) v SSHD [2006] EWCA Civ 1494, [2007] 1 WLR 1514.
21. In W(China), this court held that CSIC for the purposes of the Directive did not include the NHS. In this case, the appellants were two third party nationals who sought to enter the UK in right of their child's Irish nationality and right to freedom of movement as an EU citizen. They relied on a provision in one of the Directives (Article 1 of 90/364/ EEC) which was consolidated into the Directive which conferred on nationals of other member states and their family members a right to enter the United Kingdom provided that they complied with the conditions laid down in the Directive. This included having CSIC. The appellants argued that the requirement for CSIC did not apply because healthcare was available free under the NHS.
22. Buxton LJ disposed of the argument in the following terms ([10]-[11]):

"10…That argument overlooks the fundamental reason for the insurance requirement that was identified as the basis of the scheme of the Directive in Chen: to prevent the presence of the EU citizen placing a burden on the host state. Use of free state medical services exactly creates such a burden. And in any event, even if the argument were otherwise valid its factual premise is false: Mr Gill did not demur from the assumption that, as citizens of a third country, W and X would not be entitled to free care under the NHS."

11. It is also because of the nature of the NHS that the social security payments currently being made by W do not count as 'insurance' for these purposes. The NHS scheme is not financed solely out of the social security scheme, but is largely tax-financed. Contribution to the social security fund cannot therefore serve as any sort of proxy for insurance designed to remove from the taxpayer the burden of providing health care.'

23. Buxton LJ concluded, at [13], that:

"Like the IAT, I consider the absence of health insurance to be fatal to the appellants' claim. I would dismiss the appeals on that ground alone."

24. Sedley and Dyson LJJ agreed.
25. There are several other authorities on this point: Liu and ors v SSHD [2007] EWCA Civ 1275, [2008] 1 CMLR 27 at [12]-[14]; Lekpo-Bozua v Hackney LBC [2010] EWCA Civ 909; [2010] HLR at [15]; Kamau (Kenya) [2010] EWCA Civ 1302 at [15]; Abdirahnam v Secretary of State for Work and Pensions [2008] 1 WLR 254; Okafor v SSHD [2011] 1 WLR 3071.
26. As Sullivan LJ held in Kamau (Kenya) at [15],

"The requirement that there be comprehensive sickness insurance cover is not a mere formality… it is an integral part of the concept of self-sufficiency under the Regulations. The Regulations give effect to the United Kingdom's obligations under EU law to facilitate the free movement, not merely of workers and those who are self-employed, but also those who are self-sufficient together in each case with their family members. …A person who has to rely on the United Kingdom's National Health Service is no more self-sufficient than a person whose resources are inadequate so that he may become a burden on the United Kingdom's social assistance system."

27. As I have explained, the matter has also been considered by the CJEU. In Ziolkowlski, the CJEU confirmed that the concept of legal residence meant that the applicant must comply with the conditions in the Directive (see [40], [42], [43], [46] and [47]).
28. In the recent case of Pensionsversicherungsanstalt v Brey (Case C-140/12) [2014] 1 WLR 1080, [70] the CJEU summarised the state of the law in these terms:

"70 Lastly, it should be borne in mind that, since the right to freedom of movement is—as a fundamental principle of EU law—the general rule, the conditions laid down in article 7(1)(b) of Directive 2004/38 must be construed narrowly: see, by analogy, Kamberaj's case [2013] All ER (EC) 125 , para 86 and Chakroun's case [2010] ECR I-1839 , para 43; and in compliance with the limits imposed by EU law and the principle of proportionality see Baumbast's case [2003] ICR 1347 , para 91, Chen's case [2005] QB 325 , para 32 and Commission of the European Communities v Belgium [2006] ECR I-2647 , para 39."

Some support for the appellant's case from documents issued by the Commission

29. On the other hand, the appellant's case receives a measure of encouragement from two announcements from the European Commission. On 2 December 2010, the Administrative Commission for Co-ordination of Social Security Systems at the European Commission ("the Commission") produced a discussion document containing the following passage:

"4.2.2. How to examine "Comprehensive Health Care Coverage"?

Article 7(1) of Directive 2004/38 lays down the requirement of comprehensive sickness insurance cover as a further condition for non-active EU-citizens and their family members seeking to exercise their right to reside. Similarly to the condition of having sufficient financial resource, any entitlement of a non-active person to health care in the host country under Regulation 883/2004 has to be taken into account when evaluating whether this condition is fulfilled under the Directive.

This means in practice that this condition will always be met if the host country has a residence based health care system and a non-active person moves his or her social security residence there."

30. Regulation EC/883/2004 is concerned with the co-ordination of social security benefits and is not therefore relevant in the present case.
31. Furthermore, the Commission in its press release dated 26 April 2012 also expressed the view that by refusing to accept that NHS cover was the same as comprehensive health insurance the UK was in breach of EU law.
32. These statements cannot, however, have any bearing on the true meaning and effect of the Directive. I agree with the statement by Upper Tribunal Judge Ward in VP v Secretary of State for Work and Pensions [2014] UKUT 0032, [104] that the Commission's expression of view in the press release of 26 April 2012 is "incompatible with the legislative purpose of Article 7(1)(b) as that purpose was explained in the authorities most recently reviewed in Brey."

DISCUSSION

33. Mr Sibghat Kadri QC, appeared with Mr Rashid Ahmed and Ms Shaheen Haji for Mr Ahmad. Mr Gerry Facenna appears for the Secretary of State. The submissions covered some eight areas which I will take in turn.

Interpretation of Article 7 (1)( c) of the Directive

34. Mr Kadri QC submits that on its true interpretation the expression "comprehensive sickness insurance cover" used in Article 7(1)(c) of the Directive is not restricted to private systems. The word "private" does not appear. In many cases private health cover is not as comprehensive as that provided by national healthcare systems.
35. Furthermore, Mr Kadri QC relies on the judgment of Sedley LJ at paragraph 26 of the case of W (China):

"As it happens, the child now has health insurance. But I would enter a caveat as to whether the Directive, when it speaks of "sickness insurance in respect of all risks" is necessarily speaking of private health insurance. The National Health Service, although now heavily funded out of general taxation, is in origin and in law based on national insurance. Nothing would have been easier, in the Directive and in the Rules, than to include the word 'private' if that alone was what was meant – especially since, so far as I know, private insurance rarely if ever covers all risks, such as the risk of requiring long-term medical care."

36. But it is not enough for Mr Kadri QC to establish that CSIC can include public healthcare provision. The Secretary of State accepts that it can. However, the Secretary of State does not accept that it can include the public healthcare system of the host state because that would defeat the object of the Directive: it would not relieve that state of the cost of providing healthcare in the first five years. It would also render the Directive meaningless since the burden on the host state can only arise if there is a health service. I agree with the submissions of the Secretary of State on this point. Moreover, the CJEU in Ziolkowski held that a person does not reside lawfully for the purposes of the Directive if he does not comply with the conditions contained in the Directive.
37. Accordingly Mr Kadri QC's submission under this head cannot succeed.

Discrimination

38. Mr Kadri QC submits that that the UK is in breach of a right to equal treatment under Article 24 of the Directive, in breach of the right to equal treatment under Article 4 of Regulation 883/04, discriminating on the grounds of nationality and disproportionately interfering with the exercise of the right of residence.
39. Mr Facenna submits that this argument is misconceived. Article 4 of Regulation 883/2004 provides that EU citizens "shall enjoy the same benefits and be subject to the same obligations under the legislation of any Member State as the nationals thereof". Under the UK's domestic social security legislation EU citizens who are entitled to free NHS treatment are provided with exactly the same access to care, and standard of care, as British nationals. So EU nationals from other Member States are not discriminated against under that Regulation. Article 4 of the Regulation has no bearing on the correct application of the residence requirements in the Directive.
40. Mr Facenna submits that Article 24, ensuring equal treatment with nationals, applies only to EU citizens who are residing in a Member States in accordance with the conditions laid down in the Directive. Article 24 provides:

"Article 24"

Equal treatment

1. Subject to such specific provisions as are expressly provided for in the Treaty and secondary law, all Union citizens residing on the basis of this Directive in the territory of the host Member State shall enjoy equal treatment with the nationals of that Member State within the scope of the Treaty. The benefit of this right shall be extended to family members who are not nationals of a Member State and who have the right of residence or permanent residence.

2. By way of derogation from paragraph 1, the host Member State shall not be obliged to confer entitlement to social assistance during the first three months of residence or, where appropriate, the longer period provided for in Article 14(4)(b), nor shall it be obliged, prior to acquisition of the right of permanent residence, to grant maintenance aid for studies, including vocational training, consisting in student grants or student loans to persons other than workers, self-employed persons, persons who retain such status and members of their families.

41. Article 24(2) makes it clear that this provision cannot be used to disapply Article 7(1)(c). Moreover, submits Mr Facenna, the appellant has not explained why the application of Article 7(1)( c) places the appellant at a particular disadvantage, so as to amount to unlawful discrimination.
42. Mr Facenna submits that the appellant cannot rely on discrimination because he has no right of permanent residence under the Directive. This court so held in Abdirahman at paragraphs 41 to 44. This Court held that Article 12 of the EC Treaty now Article 18 TFEU, which prohibits discrimination on the grounds of nationality within the scope of the treaty, did not apply where the relevant person has no right of residence under EU or domestic law.
43. In the light of the binding authority of Abdirahman, Mr Ahmad's case on discrimination is not made out.

Proportionality

44. The CJEU in Baumbast v Secretary of State for the Home Department [2002] CMLR 23 held that the host state must apply the condition for CSIC in accordance with the general principles of EU law, including in particular the principle of proportionality. Thus, the host state should disregard minor discrepancies. These might arise when the cover was not totally comprehensive. The issue on this appeal is whether that extends to disregarding the requirement for CSIC in the circumstances of this case. Mr Kadri QC submits that to require CSIC in the present case is disproportionate.
45. The facts in Baumbast were exceptional. Mr Baumbast and his family had lived and worked in the UK for many years and had retained a home in the UK when Mr Baumbast began to work abroad. They had CSIC in Germany but it did not cover emergency treatment in the UK. The CJEU held that in the circumstances, a refusal to allow Mr Baumbast to exercise the right of residence under Article 18(1) EC (now Article 21(1) TFEU) solely on the ground that his sickness insurance did not cover emergency treatment in the UK, would be a disproportionate interference with his right of residence.
46. So, Mr Kadri QC submits, in this case Mrs Ahmad was a worker and paying National Insurance and indeed the appellant also paid National Insurance. However, the Ahmads are not in the same factual position as Mr Baumbast. Mr Baumbast did not make any calls on the National Health Service whereas Mrs Ahmad has had two children since she arrived in the UK. Moreover, Mr Baumbast had CSIC in Germany, where he lived for part of the year. These factors would be relevant to the proportionality exercise in the present case. As Sullivan LJ held in Kamau, it is enough that there is a risk of having to rely on the NHS created by residence here and no CSIC. Indeed the risk that the Ahmads would need to rely on the NHS if they became ill is enough to create a burden on the host state.
47. The CJEU applied the doctrine of proportionality:

"91. However, those limitations and conditions must be applied in compliance with the limits imposed by Community law and in accordance with the general principles of that law, in particular the principle of proportionality. That means that national measures adopted on that subject must be necessary and appropriate to attain the objective pursued (see, to that effect, Joined Cases C-259/91, C-331/91 and C-332/91 Alluè and Others [1993] ECR I-4309, paragraph 15). "

92. In respect of the application of the principle of proportionality to the facts of the Baumbast case, it must be recalled, first, that it has not been denied that Mr Baumbast has sufficient resources within the meaning of Directive 90/364; second, that he worked and therefore lawfully resided in the host Member State for several years, initially as an employed person and subsequently as a self-employed person; third, that during that period his family also resided in the host Member State and remained there even after his activities as an employed and self-employed person in that State came to an end; fourth, that neither Mr Baumbast nor the members of his family have become burdens on the public finances of the host Member State and, fifth, that both Mr Baumbast and his family have comprehensive sickness insurance in another Member State of the Union.

93. Under those circumstances, to refuse to allow Mr Baumbast to exercise the right of residence which is conferred on him by Article 18(1) EC by virtue of the application of the provisions of Directive 90/364 on the ground that his sickness insurance does not cover the emergency treatment given in the host Member State would amount to a disproportionate interference with the exercise of that right. "

94. The answer to the first part of the third question must therefore be that a citizen of the European Union who no longer enjoys a right of residence as a migrant worker in the host Member State can, as a citizen of the Union, enjoy there a right of residence by direct application of Article 18(1) EC. The exercise of that right is subject to the limitations and conditions referred to in that provision, but the competent authorities and, where necessary, the national courts must ensure that those limitations and conditions are applied in compliance with the general principles of Community law and, in particular, the principle of proportionality."

48. Mr Kadri QC submits that the Secretary of State's refusal to consider entitlement to NHS treatment as sufficient to satisfy the CSIC requirement is disproportionate because it discourages EEA nationals and their family members from entering the UK in order to exercise treaty rights to reside; and prevents EEA nationals and their family members from acquiring the right to permanent residence after five years' residence in the UK.
49. Mr Facenna responds that CSIC is not a condition of entry but only a condition that has to be fulfilled if a person wishes to stay longer than three months. It is not disproportionate for EEA citizens and their family members to comply with those requirements. Furthermore, in Lekpo-Bozua v Hackney LBC, this court has described Baumbast as "the high watermark of resort to proportionality under Article 18" (referring to Maurice Kay LJ in Kaczmarek v Secretary of State for Work and Pensions [2008] EWCA Civ 1310, [14]). In other words, Baumbast is likely to represent the furthest the host state will have to go to tolerate any divergence from the condition for CSIC in Article 7. As explained above, the facts of this case are materially different.
50. In my judgment, there is nothing in the appellant's case which makes the requirement for CSIC disproportionate. The period of time during which the CSIC must be held is short, and there is no other way in that period of protecting the host state.
51. In its intervention the AIRE Centre suggests that a proportionality assessment is also required in circumstances where a person has enjoyed entitlement to free NHS care but has had no, or no substantial, need to draw on it (submissions, §43). That was not the case here. Mr Facenna submits that in any event such an argument amounts to saying that the conditions of the Directive do not apply if, after the event, a migrant can prove that he has not, as a matter of fact, imposed any financial burden on the host state. Mr Facenna submits that that would leave the host at risk of having to assume the consequences of the absence of insurance. Given that the legitimate aim being pursued by the conditions in Article 7(1) is to ensure that no unreasonable financial burden is imposed on the host state, he submits that it is not disproportionate to require non-workers to hold sickness insurance and have sufficient resources, in order to guard against the possibility of them becoming a financial burden on the host state.
52. I agree with Mr Facenna's submission here. This alternative would throw the whole of the risk of medical care in the five-year period on to the host state, which would mean that the object of the Directive in recital (10) could not be achieved.

Recovery of costs of medical treatment in Denmark?

53. The appellant seeks to rely on the fact (as he contends) that Mrs Ahmad would have a right to obtain healthcare here and the Secretary of State could recover the costs in Denmark. It is common ground that if there were reciprocal arrangements with the EEA national's own state that would be sufficient to constitute comprehensive insurance cover.
54. However, there is no evidence that Mrs Ahmad, who has been in the UK since 2006 and who is therefore no longer habitually resident in Denmark, is still entitled to healthcare in Denmark.
55. Mr Kadri QC submits that the Secretary of State should investigate the matter and should not simply reject the application. Alternatively the court should assume that the Secretary of State knows what the laws of Denmark are. The Scandinavian systems should be treated alike.
56. It would clearly be unprincipled to make that assumption. There is also no basis for imposing an obligation on the Secretary of State to investigate the position in Denmark, which is no doubt an opinion open also to the appellant.
57. In those circumstances, there is no substance in this submission.

Prior case law

58. Mr Kadri QC submits that this court should not follow prior case law because the submissions made on this appeal were not considered and or fully addressed. Since I have rejected his submissions on those points, I must also reject his submission on this point.
59. Mr Facenna submits this court's decisions are in any event supported by the language and purpose of the Directive and by the jurisprudence of the CJEU. It is unnecessary to go through these points as they have already been made under different heads. However, in particular he submits that the purpose of the requirement for CSIC is to prevent EEA citizens who are economically inactive, including students, from imposing an unreasonable burden on the public finances of a host Member State (see, e.g. Ziolkowski at [40]). It is obvious that where an EEA citizen has no CSIC and relies on the availability of free NHS treatment, that inevitably places a financial burden on the UK's public finances. The argument that entitlement to free NHS care could satisfy the requirement for comprehensive sickness insurance is fundamentally inconsistent with the purpose of the relevant condition in Article 7.
60. It follows that the previous and binding decisions of this court cannot be distinguished, and are therefore binding on us.

No charges for NHS treatment for EEA citizens and their family members

61. Mr Kadri QC relies on the NHS (Charging of Overseas Visitors) Regulations 2011 which provides that an EEA nationals and family members have a right to NHS treatment free of charge. Mr Kadri QC submits that to impose a condition of having CSIC on EEA nationals (and their family members) who seek permanent residency treats them differently from UK citizens who reside in the UK. It is therefore discriminatory and disproportionate.
62. I do not consider that there is any substance in this submission. The answer to Mr Kadri QC's point is that the conditions in Article 7(1) are conditions on the obtaining of permanent residence not on the obtaining of treatment.

Parliament has disapplied the requirement for CSIC

63. Mr Kadri QC submits that the Directive cannot prevent a sovereign Parliament from disapplying some condition inserted in an EU measure for domestic benefit. Moreover, Parliament has qualified the Directive by passing the National Health Service Act 2006 which provides for free health care for students. He submits that this is permitted by the Directive. If Parliament intended to qualify NHS eligibility, it should have used clear language.
64. Mr Facenna submits that this argument has been rejected in two cases and therefore should not be accepted in this case unless those cases are incorrect as a matter of EU law.
65. There is, moreover, a difficulty in the basic assumption in this argument that the disapplication of the condition affects only the domestic interest. A person entitled to permanent residency in one member state acquires rights to move to other member states and to build up permanent residency there. In those circumstances it is unlikely that this condition is one which the UK Parliament can unilaterally disapply. Indeed, in Ziolkowski at [47], the CJEU rejected the argument that a period of residence which complied with national law but did not satisfy the conditions in Article 7 (1) could be regarded as a "legal" period of residence within the meaning of Article 16(1) of the Directive.
66. Accordingly I would reject this argument.

Article 35 of the Charter of Fundamental Rights

67. Mr Kadri QC submits that Article 35 of the Charter supports his argument about the availability of NHS healthcare, but he accepts that this is not in itself a ground of appeal. Article 35 provides:

"Health care

Everyone has the right of access to preventive health care and the right to benefit from medical treatment under the conditions established by national laws and practices. A high level of human health protection shall be ensured in the definition and implementation of all Union policies and activities."

68. The word "everyone" cannot mean literally everyone. As Mr Facenna submits, it must be limited to those persons who have the right to healthcare under the EU treaties (compare Abdirahman above). So the appellant needs to establish a right of residence under the Directive before he can rely on Article 35, and Article 35 therefore adds nothing to the arguments in support of his case.

Should this court ask the CJEU for a preliminary ruling on the meaning of Article 7(1) (c)?

69. I do not consider that there is any doubt as to the meaning of the expression "compulsory sickness insurance cover" in Article 7(1) (c) of the Directive. I would not therefore refer the question of the meaning of this expression to the CJEU for a preliminary ruling.

CONCLUSION

70. I would dismiss this appeal. If an EEA national enters the UK and is not involved in an economically active activity, for example because she is a student, her residence and that of her family members will not be lawful unless she has CSIC while she is a student in the five years following her arrival. Accordingly her family members will not be able to qualify for permanent residency in the UK.
71. So Mrs Ahmad had to have CSIC while she was a student. This condition must be strictly complied with. The fact that she would be entitled to treatment under the NHS, and was thus at all times in substantially the same position as she would have been had she had CSIC, is nothing to the point. Her failure to take out CSIC put the host state at risk of having to pay for healthcare at a time when the Ahmads had not then achieved the status of permanent resident and she was not economically active.
72. In paragraph 7 of this judgment, I said that the ultimate issue on this appeal was whether the conditions in Article 7(1) are to be interpreted under EU law in a dynamic way, so that it is enough if they are substantially or functionally fulfilled, or whether they are to be strictly interpreted on the basis that the right to a permanent residence card is a privilege which is not conferred unless there is strict and literal compliance with the conditions. It is clear from the cases discussed in this judgment, culminating in the recent decision of the CJEU in Brey, that they are to be interpreted strictly subject to the general principles of EU law, such as proportionality.

ANNEX to judgment of Arden LJ

Relevant provisions of the Immigration (European Economic Area) Regulations 2006 which implement Directive 2004/38/EC

i) Regulation 13 recognises the rights of EEA citizens and their family members to reside initially in the UK for a period of up to three months.

ii) Regulation 14 relates to the extended right of residence for a period longer than three months. Regulation 14(1) provides that a "qualified person" is entitled to reside in the UK for as long as he remains a 'qualified person'. Regulation 14(2) provides that a family member of a qualified person who is entitled to reside in the UK under regulation 14(1) is also entitled to reside for as long as he remains a family member of that person.

iii) Regulation 6(1) defines "qualified person" as including "a student".

iv) Regulation 4(1)(d) defines "a student" as a person who:

"(i) is enrolled, for the principal purpose of following a course of study (including vocational training), at a public or private establishment which is—

(aa) financed from public funds; or

(bb) otherwise recognised by the Secretary of State as an establishment which has been accredited for the purpose of providing such courses or training within the law or administrative practice of the part of the UK in which the establishment is located;

(ii) has CSIC in the UK; and

(iii) assures the Secretary of State, by means of a declaration, or by such equivalent means as the person may choose, that he has sufficient resources not to become a burden on the social assistance system of the UK during his period of residence."

v) Regulation 15 concerns the right of permanent residence. Under regulation 15(1)(a) an EEA citizen acquires a permanent right of residence if he has "resided in the UK in accordance with these Regulations for a continuous period of five years". A non-EU national family member of an EU citizen acquires the same right if he "has resided in the UK with the EEA national in accordance with these Regulations for a continuous period of five years" (regulation 15(1)(b)).

Reading the Regulations in the light of the Directive, the result is that, in order to obtain a right of permanent residence, Mr Ahmad had to demonstrate that he had resided in the UK with his wife in accordance with the Regulations for a continuous period of five years (regulation 15(1)(b)). This requires that throughout that period he was residing as a family member of a qualified person (regulation 14(2)). That in turn required it to be shown that throughout that period his wife remained a qualified person within the meaning of regulation 6 (see regulation 14(1)). From January 2009 onwards, when she ceased being a worker and became a student, this required Mrs Ahmad to meet the definition of "a student" in regulation 4, which includes the requirement to have CSIC. Under well-established principles, the 2006 Regulations must so far as possible be interpreted in conformity with the Directive.

Lord Justice Beatson

73. I agree.

Lady Justice Sharp

74. I also agree.