QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT IN BIRMINGHAM
33 Bull Street, Birmingham, B4 6DS
B e f o r e :
| THE QUEEN on the application of
|- and -
|(1) THE SECRETARY OF STATE FOR
WORK AND PENSIONS
(2) THE COMMISSIONERS FOR HER MAJESTY'S REVENUE AND CUSTOMS
BIRMINGHAM CITY COUNCIL
for the Claimant
Jason Coppel and Julia Smyth (instructed by the Treasury Solicitor) for the Defendants
Jonathan Cowen (instructed by Birmingham City Council Legal Services)
for the Interested Party
Hearing dates: 11-12 March 2013
Further written submissions: 14-15 March 2013
Crown Copyright ©
Mr Justice Hickinbottom:
The Relevant European Law
"41. As the Court has stated several times, citizenship of the European Union is intended to be the fundamental status of nationals of member states…
42. In those circumstances, article 20 [of the TFEU] precludes national measures which have the effect of depriving citizens of the [EU] of the genuine enjoyment of the substance of their rights conferred by virtue of their status as citizens of the [EU]….
43. A refusal to grant a right of residence to a third country national with dependent minor children in the member state where those children are nationals and reside, and also a refusal to grant such a person a work permit, has such an effect.
44. It must be assumed that such a refusal would lead to a situation where those children, citizens of the [EU], would have to leave the territory of the [EU] in order to accompany their parents. Similarly, if a work permit were not granted to such a person, he would risk not having sufficient resources to provide for himself and his family, which would result in the children, citizens of the [EU], having to leave the territory of the [EU]. In those circumstances, those citizens of the [EU] would, as a result, be unable to exercise the substance of the rights conferred on them by virtue of their status as citizens of the [EU].
45. Accordingly, the answer to the question referred is that article 20 [of the TFEU] is to be interpreted as meaning that it precludes a member state from refusing a third country national on whom his minor children, who are [EU] citizens, are dependent, a right of residence, in the member state of residence and nationality of those children, and from refusing to grant a work permit to that third country national, insofar as such decisions deprive those children of the genuine enjoyment of the substance of their rights attaching to the status of [EU] citizen."
"64. …[T]he court has held that article 20 of [the] TFEU precludes national measures which have the effect of depriving Union citizens of the genuine enjoyment of the substance of the rights conferred by virtue of that status (see Ruiz Zambrano, paragraph 42).
65. Indeed, in the case leading to that judgment, the question arose as to whether a refusal to grant a right of residence to a third country national with dependent minor children in the member state where those children are nationals and reside and a refusal to grant such a person a work permit have such an effect. The court considered in particular that such a refusal would lead to a situation where those children, who are citizens of the Union, would have to leave the territory of the Union in order to accompany their parents. In those circumstances, those citizens of the Union would, in fact, be unable to exercise the substance of the rights conferred on them by virtue of their status as citizens of the Union (see Ruiz Zambrano paragraphs 43 and 44)).
66. It follows that the criterion relating to the denial of the genuine enjoyment of the substance of the rights conferred by virtue of European Union citizen status refers to situations in which the Union citizen has, in fact, to leave not only the territory of the member state of which he is a national but also the territory of the Union as a whole.
67. That criterion is specific in character inasmuch as it relates to situations in which, although subordinate legislation on the right of residence of third country nationals is not applicable, a right of residence may not, exceptionally, be refused to a third country national, who is a family member of a member state national, as the effectiveness of Union citizenship enjoyed by that national would otherwise be undermined.
68. Consequently, the mere fact that it might appear desirable to a national of a member state, for economic reasons or in order to keep his family together in the territory of the Union, for the members of his family who do not have the nationality of a member state to be able to reside with him in the territory of the Union, is not sufficient in itself to support the view that the Union citizen will be forced to leave Union territory if such a right is not granted.
69. That finding is, admittedly, without prejudice to the question whether, on the basis of other criteria, inter alia, by virtue of the right to the protection of family life, a right of residence cannot be refused. However, that question must be tackled in the framework of the provisions on the protection of fundamental rights which are applicable in each case.
74. In the light of the foregoing observations the answer to the first question is that European Union law and, in particular, its provisions on citizenship of the Union, must be interpreted as meaning that it does not preclude a member state from refusing to allow a third country national to reside on its territory, where that third country national wishes to reside with a member of his family who is a citizen of the Union residing in the member state of which he has nationality, who has never exercised his right to freedom of movement, provided that such refusal does not lead, for the Union citizen concerned, to the denial of the genuine enjoyment of the substance of the rights conferred by virtue of his status as a citizen of the Union, which is a matter for the referring court to verify."
"63 … [T]here is really no basis for asserting that it is arguable in the light of the authorities that the Zambrano principle extends to cover anything short of a situation where the EU citizen is forced to leave the territory of the EU. If the EU citizen, be it the child or wife, would not in practice be compelled to leave the country if the non-EU family member were to be refused the right of residence, there is in my view nothing in these authorities to suggest that EU law is engaged. Article 8 rights may then come into the picture to protect family life as the court recognised in Dereci, but that is an entirely distinct area of protection.
66. … Even if the non-EU national is not relied upon to provide financial support, typically there will be strong emotional and psychological ties within the family and separation will be likely significantly to rupture those ties, thereby diminishing the enjoyment of life of the family members who remain. Yet it is plainly not the case, as Dereci makes clear and Mr Drabble [Counsel for the appellant] accepts, that this consequence would be sufficient to engage EU law. Furthermore, if Mr Drabble's submission were correct, it would jar with the description of the Zambrano principle as applying only in exceptional circumstances, as the Court in Dereci observed. The principle would regularly be engaged.
67. As to the submission that EU law might develop in that direction, I accept that it is a general principle of EU law that conduct which materially impedes the exercise of an EU law right is in general forbidden by EU law in precisely the same way as deprivation of the right. But in my judgment it is necessary to focus on the nature of the right in issue and to decide what constitutes an impediment. The right of residence is a right to reside in the territory of the EU. It is not a right to any particular quality of life or to any particular standard of living. Accordingly, there is no impediment to exercising the right to reside if residence remains possible as a matter of substance, albeit that the quality of life is diminished. Of course, to the extent that the quality or standard of life will be seriously impaired by excluding the non-EU national, that is likely in practice to infringe the right of residence itself because it will effectively compel the EU citizen to give up residence and travel with the non-EU national. But in such a case the Zambrano principle would apply and the EU citizen's rights would have to be protected (save for the possibility of a proportionate deprivation of rights). Accordingly, to the extent that the focus is on protecting the substance of the right, that formulation of the principle already provides protection from certain interferences with the enjoyment of the right."
Harrison is of course binding on me. However, even if it were not, with much gratitude I would adopt Elias LJ's perceptive and illuminating analysis of the principles derived from Zambrano and Dereci.
i) All nationals of all member states are EU citizens. It is for each member state to determine how nationality of that state may be acquired, but, once it is acquired by an individual, that individual has the right to enjoy the substance of the rights that attach to the status of EU citizen, including the right to reside in the territory of the EU. That applies equally to minors, irrespective of the nationality of their parents, and irrespective of whether one or both parents have EU citizenship.
ii) An EU citizen must have the freedom to enjoy the right to reside in the EU, genuinely and in practice. For a minor, that freedom may be jeopardised if, although legally entitled to reside in the EU, he is compelled to leave EU territory because an ascendant relative upon whom he is dependent is compelled to leave. That relative may be compelled to leave by dint of direct state action (e.g. he is the subject of an order for removal) or by virtue of being driven to leave and reside in a non-EU country by force of economic necessity (e.g. by having insufficient resources to provide for his EU child(ren) because the state refuses him a work permit). The rights of an EU child will not be infringed if he is not compelled to leave. Therefore, even where a non-EU ascendant relative is compelled to leave EU territory, the article 20 rights of an EU child will not be infringed if there is another ascendant relative who has the right of residence in the EU, and who can and will in practice care for the child.
iii) It is for the national courts to determine, as a question of fact on the evidence before it, whether an EU citizen would be compelled to leave the EU to follow a non-EU national upon whom he is dependent.
iv) Nothing less than such compulsion will engage articles 20 and 21 of the TFEU. In particular, EU law will not be engaged where the EU citizen is not compelled to leave the EU, even if the quality or standard of life of the EU citizen is diminished as a result of the non-EU national upon whom he is dependent is (for example) removed or prevented from working; although (a) diminution in the quality of life might engage EU law if (and only if) it is sufficient in practice to compel the a relevant ascendant relative, and hence the EU dependent citizen, to leave, and (b) such actions as removal or prevention of work may result in an interference with some other right, such as the right to respect for family life under article 8 of the European Convention on Human Rights.
v) Although such article 8 rights are similar in scope to the EU rights conferred by article 7 of the Charter of Fundamental Rights of the European Union, the provisions of the Charter are addressed to member states only when they are implementing EU law. If EU law is not engaged, then the domestic courts have to undertake the examination of the right to family life under article 8; but that is an entirely distinct area of protection.
vi) The overriding of the general national right to refuse a non-EU national a right of residence, by reference to the effective enjoyment of the right to reside of a dependent EU citizen, is described in both Dereci (paragraph 67) and Harrison (paragraph 66) as "exceptional", meaning (as explained in the latter), as a principle, it will not be regularly engaged.
The Relevant Domestic Law
"P satisfies the criteria in this paragraph if –
(a) P is the primary carer of a British citizen ('the relevant British citizen');
(b) the relevant British citizen is residing in the United Kingdom; and
(c) the relevant British citizen would be unable to reside in the UK or in another EEA State if P were required to leave";
Those criteria are intended to cover a person with a right of residence on the basis of the principles set out in Zambrano.
Child Tax Credit
"(1) Subject to paragraph (1A), the Secretary of State may, in his discretion, make an interim payment, that is to say a payment on account of any benefit to which it appears to him that a person is or may be entitled…, in the following circumstances –
(b) a claim for that benefit has been so made, but it is impracticable for it or an application or which relates to it to be determined immediately; or
(1A) Paragraph (1) shall not apply pending the determination of an appeal."
"(1A) Paragraph (1) shall not apply pending the determination of an appeal unless the Secretary of State is of opinion that there is entitlement to benefit."
Of this amendment, paragraph 7.14 of the Explanatory Memorandum, prepared by the Department of Work and Pensions and laid before Parliament with the draft Regulations, stated:
"Regulation 10(3)(b)… amends the legislation to confirm the policy intention that 'interim payments' are available where there is a delay in, or disruption to, the normal processes of making a claim, determining an award or making a payment of benefit. They are not a device to circumvent the normal decision-making process where the result is unfavourable to the claimant. Thus a redundant provision which suggests that interim payments may be available when an appeal is outstanding is removed."
Suspension of Benefit Payments
"If suspending payment will result in hardship, a decision to suspend should not be made. If an existing suspension is causing hardship, the payment of benefit must be re-instated immediately…."
The draft letters appended to the guidance invite the claimant to contact the relevant office if he considers hardship will be caused by the suspension. The guidance requires a decision-maker to consider each case carefully on its merits (paragraph 1050), emphasising that:
"In all cases, the final determining factor about whether hardship will or will not occur, must be the particular circumstances of the individual customer" (paragraph 1351).
Paragraph 2051 requires the decision-maker to consider that adverse effects suspension might have upon children of the claimant; but the decision-maker is also required to consider "the actual benefit position" (paragraph 2301).
Local Authority Support for Children and Families
"… [T]he provision of residential accommodation to rehouse a child in need so that he can live with his family is not the principal or primary purpose of this legislation. Housing is the function of the local housing authority, for the acquisition and management of whose housing stock detailed provisions are contained in the Housing Acts. Provisions of that kind are entirely absent from this legislation."
"In all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration."
This has been described as the most important relevant obligation on the state in respect of children (ZH (Tanzania) v Secretary of State for the Home Department  UKSC 4 ("ZH (Tanzania)") per Baroness Hale at ).
The Challenged Decisions
i) 28 July 2011: the refusal to make interim payments pending the Claimant's appeal of the Secretary of State's decision of 12 July 2011 decision to refuse income support to the First-tier Tribunal.
ii) 15 December 2011: the suspension of the award following the Claimant's successful appeal to the First-tier Tribunal, pending the Secretary of State's appeal to the Upper Tribunal.
iii) 12 March 2012: the continued suspension of the award, following reconsideration.
iv) 3 July 2012: the continued suspension of the award, following reconsideration.
v) 29 November 2012: the refusal to make interim payments pending the Claimant's appeal of the Secretary of State's decision of 7 November 2012 to refuse income support to the First-tier Tribunal.
vi) 28 January 2013: the refusal to make interim payments pending the Claimant's appeal from the Upper Tribunal to the Court of Appeal, in respect of the Secretary of State's decision of 12 July 2011 to refuse income support.
i) The Secretary of State's decision of 29 November 2012 to refuse to make interim payments to the Claimant pending her appeal of the Secretary of State's decision of 7 November 2012 to refuse her substantive claim for income support to the First-tier Tribunal.
ii) HMRC's decision of 26 October 2012 to refuse to make interim payments of child tax credit and child benefit to the Claimant, pending her appeal of HMRC's decision of 2 April 2012 to refuse her substantive claim for those benefits to the First-tier Tribunal.
The Parties' Contentions
The Claimant's Contentions
i) the failure of the Defendants to pay the Claimant the three benefits pending the ultimate resolution of her entitlement puts her daughter's rights as an EU citizen to reside in the United Kingdom in jeopardy;
ii) this court has not only the power but an obligation under EU law to protect those rights; and
iii) this court should protect those rights by ordering the Defendants to make the interim payments from now until the ultimate resolution of the Claimant's entitlement to the benefits, which they have refused to make.
"20. The Court of Justice has… held that any provision of a national legal system and any legislative, administrative or judicial practice which might impair the effectiveness of Community law by withholding from the national court having jurisdiction to apply such law the power to do everything necessary at the moment of its application to set aside national legislative provisions which might prevent, even temporarily, Community rules from having full force and effect are incompatible with those requirements, which are the very essence of Community law….
21. It must be added that the full effectiveness of Community law would be just as much impaired if a rule of national law could prevent a court seized of a dispute governed by Community law from granting interim relief in order to ensure the full effectiveness of the judgment to be given on the existence of the rights claimed under Community law. It follows that a court which in those circumstances would grant interim relief, if it were not for a rule of national law, is obliged to set aside that rule."
i) the need to avoid a possible breach of the EU rights,
ii) the resulting hardship to the Claimant and her daughter by virtue of the denial of income support and the other benefits,
iii) the requirement to take account of Awa'a best interests as a primary consideration, and the adverse impact of the poverty resulting from an absence of mainstream benefits on her health, welfare and long-term development, and
iv) the fact that the total cost of not granting the Claimant access to mainstream benefits is arguably higher than granting her access,
the balance lies firmly on the side of granting the Claimant relief in the form of interim payments of the benefits, pending ultimate resolution of her entitlement through the tribunal system and, if necessary, the higher appeal courts.
"I receive support from my local Children's Centre and they have been able to provide me with food parcels. I received one this week as it is the only way that I was able to feed my daughter. I am very concerned about Awa'a welfare. She is simply not warm enough at home at the moment as I do not have the money to heat the house. This is exacerbated by the poor diet she has at the moment which leaves her feeling cold anyway. I worry about her development and what kind of chances and opportunities she is missing out on. I have not been able to catch a bus for her to see friends recently because I have so little money. Awa also continues to miss out on friends' parties, trips into town, dance lessons or other sports for children and other events because I cannot afford it."
The Defendant's Submissions
i) The Claimant's challenge in these proceedings is to a decision of the Secretary of State under regulation 2 of the Payments on Account Regulations (and the parallel provisions relating to child tax credit and child benefit) not to make the Claimant interim payments, pending a challenge, not to those regulations, but to new regulation 21AA(3)(bb) of the IS (General) Regulations (and again the parallel provisions relating to child tax credit and child benefit) introduced on 8 November 2012. In the substantive appeals, the Claimant is challenging the IS (General) Regulations and the parallel provisions for child tax credit and child benefit; but in this claim is seeking relief, not to stay the effect of those Regulations, but by setting aside decisions made under different regulations which are not arguably unlawful. This case is therefore materially different from Factortame.
ii) Factortame concerned (and was limited to) the removal of a national obstacle to ensure that a future judgment as to the existence of the rights claimed under EU law would be fully effective. Neither Factortame nor general principles of EU law created new national rights or remedies to ensure full effectiveness (Unibet). However, even if the prohibition of any interim payments pending an appeal by the claimant in regulation 2(1A) of the Payment on Account Regulations was a bar that could be disapplied, regulation 2(1) contained a precondition for the Secretary of State's discretion arising in respect of interim payments, namely that it appeared to him that the claimant is or may be entitled to the benefit. As, reasonably, it did not appear to the Secretary of State that that was so, the precondition was not satisfied: and the Secretary of State therefore had no power to make interim payments. The same analysis applied to HMRC and child benefit. HMRC had no power at all to make interim payments of child tax credit. In those circumstances, the Claimant could not rely upon Factortame to give her an entirely new remedy; nor could the court grant her something which the Secretary of State/HMRC did not have the right to grant. In short, Factortame did not assist the Claimant in this claim.
"Paragraph 1 shall not apply pending the determination of an appeal unless the Secretary of State is of opinion that there is entitlement to benefit."
"That disposes of the application. I should, however, say that, despite Mr Knafler's reference to Factortame, I do not consider that I would have the power to order the Secretary of State to make a payment outside the statutory scheme. The Secretary of State would have no statutory power to make such a payment, and it would plainly be wrong for me to order her to do so. Indeed, I think Miss Lieven (Counsel for the Secretary of State] is right that it would be wholly inappropriate for me to order the Secretary of State to be of the opinion that the applicant is entitled to benefit (if I indeed had the power to do so, which I doubt). In any event, on the primary conclusion that I have reached, it is not necessary for me to reach a final view on that aspect of the matter."
i) Harrison J clearly considered that he could not go behind a reasonable opinion of the Secretary of State that the applicant was not entitled to benefit, which was a condition of the Secretary of State's discretion to grant interim payments: the same logic arguably applies to whether it appears to the Secretary of State that a person is or may be entitled to benefit under regulation 2(1): and
ii) Harrison J clearly did not consider that he could order the Secretary of State to make a payment outside the statutory scheme which, given the subsequent changes to the relevant regulations, the Claimant in this case now asks me to do.