Secretary of State for Work and Pensions v Dias [2009] EWCA Civ 807

[2009] EWCA Civ 807Case No C3/2009/0072
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE SOCIAL SECURITY COMMISSION
SOCIAL SECURITY COMMISSIONER ROWLAND
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 31/07/2009
Before
LORD JUSTICE WALLER VICE PRESIDENT OF THE COURT OF APPEAL, CIVIL DIVISIONLORD JUSTICE HUGHESLORD JUSTICE RIMER
Between
Secretary of State for Work and PensionsAppellantMaria DiasRespondent
Ms Deok Joo Rhee (instructed by Department for Work and PensionsLitigation Department ) for AppellantMr Adrian Berry (instructed by Hansen Palomares) for RespondentHearing Hearing dates : Wednesday 1st and Thursday 2nd July 2009
Judgment
[1]The issue in this case is whether the claimant, Maria Dias, is entitled to income support. She is a Portuguese national and thus a citizen of the EU. The relevant legislation is part European and part national. In very broad terms it seeks to reconcile two objectives which are potentially in tension with one another. One is to promote freedom of movement within the EU. The other is to preserve the principle that migration should not unreasonably burden the social security system of the destination country.[2]Ms Dias is a Portuguese citizen and a single lady. She came to the UK in January 1998 with her two children. She got a job immediately. Those children are now grown up and have left home. She was in continuous employment, without significant gaps until the Summer of 2002. She was then pregnant and took maternity leave. Her youngest child was born on 7 October 2002. Her maternity leave expired on 17 April 2003. She opted not to go back to work and remained unemployed (receiving income support under the then prevailing rules) until 26 April 2004. She worked again for the same employer from 26 April 2004 until 23 March 2007, but on that latter day she gave up work because she wanted to be able to give more time to her youngest child. Accordingly her employment history divides into 5 periods: i) January 1998 (arrival in UK) to Summer 2002: in work ii) Summer 2002 to 17 April 2003: maternity leave iii) 18 April 2003 to 25 April 2004: not working iv) 26 April 2004 to 23 March 2007: in work v) 23 March 2007 onwards: not working.[3]It is her entitlement to income support from March 2007 which is in issue. The Social Security Commissioner has held that Ms Dias is entitled to income support. The Secretary of State contends that he was wrong.[4]On 13 May 2000 (during period (i)) the Home Office issued Ms Dias with a permit. Its exact meaning and status is very much at the centre of the argument in this case and it will be necessary to look carefully at the legislation under which it was issued. But what it actually said was this:
“Residence Permit for a national of a member State of the EEC. This permit is issued pursuant to Regulation (EEC) No 1612/68 of the Council for the European Communities of 15 October 1968 and to the measures taken on the implementation of the Council Directive of 15 October 1968. In accordance with the provisions of the above mentioned Regulation, the holder of this permit has the right to take up and hold employment in the UK under the same conditions as UK workers. You are advised to produce this permit to the Immigration Officer whenever you enter or leave the United Kingdom.”
(emphasis added)[5]The document was stated to be valid from issue (13 May 2000) until 13 May 2005. Notes printed on it told the holder that the permit had to be surrendered to the Immigration Officer if leaving the country permanently and also that:
“The validity of this permit is the time limit on your stay in the UK. This time limit will apply, unless superseded, to any subsequent leave to enter you may obtain after an absence from the UK within the period of the validity of this permit.”
[6]The legislation applicable to Ms Dias is a formidable web of European and domestic provisions. The domestic provisions are expressly designed, so far as they affect EU citizens, to give effect to the EU rules. Chief among the latter is (now) Directive 2004/38, which came into force on 30 April 2006. That Directive was not by any means the first piece of European legislation on the subject but is in some respects couched in terms different from its predecessors. One of the complications of the present case is that the relevant history spans the entry into force of this Directive. It is important to note at the outset, however, that for many years, and certainly at all times relevant to this case, European Community law has recognised the principle that those who migrate ought not to become an unreasonable burden on the benefit systems of host countries; thus it has at all times permitted restrictions on the payment of benefits to those who migrate under the principle of freedom of movement but who are not, in broad terms, either economically active or otherwise self-supporting.[7]As a matter of history, UK rules relating to income support did not, until 2004, take advantage of such provisions of EU law. Until 2004 income support was payable to anyone who was habitually resident in this country. That meant that it was payable to any migrant from another EU country who established himself indefinitely here, whether or not he was, or ever had been, self-supporting. The same applied of course to nationals of non-EU States, but in their case there existed immigration controls and restrictions on access to benefits which are not applicable to EU citizens. Since 2004 English law has sought to limit the payment of benefit in the case of EU citizens in accordance with the limitations permitted by EU law. The Income Support (General) Regulations 1987, SI 1987 No 1967 have been amended to achieve this.[8]In the UK a claimant’s entitlement to income support derives from the Social Security Contributions and Benefits Act 1992. The scheme of the Act is to provide for income support to be paid if a claimant’s income falls below a floor, set according to rules. In the case of a “person from abroad” the floor (or “applicable amount”) is nil; thus such a person receives no income support: see s 124(1)(b) and Regulations 21 and 21AA Income Support (General) Regulations 1987.[9]The expression “person from abroad” is defined by Regulation 21AA(1) as “ a claimant who is not habitually resident in the UK, the Channel Islands, the Isle of Man or the Republic of Ireland….” As to the expression “habitually resident”, Regulation 21AA(2) provides: “No claimant shall be treated as habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland unless he has a right to reside in (as the case may be) the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland, other than a right to reside which falls within paragraph (3).” (i). those relying on the entitlement of a EU citizen to reside in a State other than his own for an initial period of three months: Regulation 21AA (3)(a) and (c); (ii). those relying on the entitlement of a EU citizen to reside after that period but who are jobseekers or members of their family: Regulation 21AA(3)(b) and (d). The purpose of those exclusions from the critical concept of a “right to reside” is clearly to preserve the general European rule that economic migrants who have not supported themselves here should not become an unreasonable burden on the UK social assistance system. Those two groups of exclusions are foreshadowed in the Directive. The Regulation also provides by 21AA(4) that certain persons are to be included in the entitlement to income support. This it achieves by stipulating that those persons shall not be counted as ‘persons from abroad’. Such persons included in entitlement to income support are a mixed collection, but they include various categories of EU citizens who, broadly, are workers or otherwise self supporting. Thus by these means Regulation 21AA clearly seeks to give effect to the European principles that freedom of movement should be available to those who are self-supporting, but that migrants should not become an unreasonable burden on the social security systems of host States.[10]Therefore, for a claimant such as Ms Dias who relies upon her status as a citizen of the EU, it is necessary, in order to see what constitutes a “right to reside” for the purpose of Regulation 21AA(2), to travel to the European legislation. There is no dispute about this. The present rules are to be found in Directive 2004/38.[11]Directive 2004/38 provides for graded types of right of an EU citizen in relation to presence in another EU State. By Article 5, every EU citizen is to be given automatic leave to enter the territory of each Member State on production of no more than an identity card or passport: no separate discretionary grant of leave to enter is called for. There are then three ascending types of right to reside. i) First, by Article 6, every EU citizen has the right of residence in any other EU State for up to three months without any conditions or formalities beyond the same identity card or passport. ii) Second, after that period, Article 7 (which is within Chapter III) limits the right of residence to those who, broadly, are workers or otherwise self-sufficient, or who should be treated as analogous. iii) Third, Article 16 bestows a permanent right of residence on those who have achieved a continuous period of five years of legal residence.[12]The present case depends on the correct meaning of Article 16. Its exact terms, so far as relevant, are as follows:
“16 (1) Union citizens who have resided legally for a continuous period of five years in the host Member State shall have the right of permanent residence there. This right shall not be subject to the conditions provided for in Chapter III. … (4) Once acquired, the right of permanent residence shall be lost only through absence from the host Member State for a period exceeding two consecutive years.”
The Article 7 right for a worker or self-sufficient person was not new. But the Article 16 right of permanent residence was.[13]Ms Dias made her claim for income support in March 2007. It is common ground that at that time, since she was not working, she could not fulfil the conditions of Article 7. It is agreed that her claim depends on whether, by one route or another, she can demonstrate that she had by then acquired the right of permanent residence bestowed by Article 16(1).

The Commissioner’s decisions

[14]The Commissioner decided that: i) Although Ms Dias had five years as a worker as a result of periods (i) and (ii), from January 1998 to April 2003, she could not rely on this because at that time Directive 2004/38 had not been in force. She could rely only on a period of five years ending when that Directive was in force, viz on or after 30 April 2006. Ms Dias challenges this decision. ii) Ms Dias had not been a ‘worker’ in period (iii) (see paragraph 2 above) between April 2003 and April 2004; accordingly she did not have five years’ residence as a worker ending at a time when Directive 2004/38 was in force, viz on or after 30 April 2006. Ms Dias challenges this decision. iii) But in period (iii), the permit to reside (see paragraph 4 above) gave her a right to reside, notwithstanding that during that period she was not working or self-sufficient. Once there was a right to reside in period (iii), she had five years which qualified because it ended after the introduction of Directive 2004/38. The Secretary of State challenges this decision. iv) She also had a right to reside in period (iii) deriving directly from Article 18 of the EC Treaty, which enshrines the right of EU citizens to move freely within the territory of Member States, subject to the limitations and conditions laid down in the Treaty and measures adopted to give it effect. That right to reside could be derived from Article 18 either without reference to Directive 2004/38, or at least once its subsequent enactment was considered. For this reason also she could therefore show five years’ legal residence ending after the introduction of the Directive, and thus a right of permanent residence. The Secretary of State challenges this decision.

Decision (i)

[15]The question of law involved in the first point is whether the effect of Article 16(1) of Directive 2004/38 is to confer the right of permanent residence on all who have resided legally in another Member State for a continuous period of five years, or only upon those whose five year period ends after the coming into force of the Directive. Since the proceedings before the Commissioner took place, this question has now been referred to the European Court of Justice by this court in Secretary of State for Work and Pensions v Lassal [2009] EWCA Civ 157. After a preamble reciting the relevant facts, the question was framed as follows:
“Is Article 16(1) of Directive 2004/38 of the European Parliament and the Council of 29 April 2004 to be interpreted as entitling that EU citizen to a right of permanent residence by virtue of the fact that she had been legally resident, in accordance with earlier community law instruments conferring rights of residence on workers, for a continuous period of five years which ended prior to 30 April 2006 (the date by which member States had to transpose the Directive) ?”
[16]It is common ground that Ms Dias’ residence in periods (i) and (ii) was qua worker and complied with the conditions for residence laid down by European law prior to Directive 2004/38. Like this court in Lassal, we take the provisional view that both Articles 16(1) and 16(4) apply to those whose residence prior to 30 April 2006 was in conformity with the then current European legislation relating to the residence of migrant workers, and that that interpretation furthers the objects of European law as they have been for some years before, as well as after, Directive 2004/38. If that is right, Ms Dias has acquired a right of permanent residence here which will be lost only if she leaves for two years or more. However, as this court held in Lassal, that interpretation is not acte clair.[17]It follows that our decision upon the first point must, like our decision in Lassal, await the determination by the ECJ of the question referred in that case. We do not need to refer the same question again, but would ask that the facts of the present case should be drawn to the attention of the European Court when it comes to consider Lassal.

Decision (ii)

[18]For Ms Dias, Mr Berry contends that during period (iii) Ms Dias maintained a sufficient link with her previous employment to remain a ‘worker’, just as it is agreed that she did when on maternity leave (and thus still in employment) in period (ii). He says that the court should proceed by analogy with Lair v Universität Hannover, Case 39/86 [1988] ECR 3161, to reach this conclusion. He accepts that there was no contract of employment in period (iii). Ms Dias maintained a sufficient link with her employment, he contends, because(a) she would have returned to the job but for the twin facts of a child to care for, who moreover for some of the time was not very well, and a measure of domestic violence, and(b) her erstwhile employers remained willing to have her back. And he contends that it is necessary to hold that she retained the status of ‘worker’ in order to avoid any discrimination against her as a woman, the factors which led to her being out of work being ones which are, he asserts, particularly likely to affect women.[19]Prior to Directive 2004/38 the general rule was that once the employment relationship had ended the person concerned lost his or her status as a worker, but there were a limited number of situations in which that status was retained, for example when the person had lost his job and was genuinely seeking another: Martinez Sala v Freistaat Bayern Case C-85/96 [1998] ECR 1-2691 at paragraph 32. Once Directive 2004/38 came into force the conditions for retention of worker status were codified in Article 7(3): broadly, temporary incapacity to work, involuntary unemployment after a qualifying period and vocational training. Mr Berry accepts that Ms Dias could not bring herself within any decision prior to Directive 2004/38 or within the conditions codified in Article 7(3). But he says that these rules are not exhaustive and should be supplemented by a ruling that a person in the position of Ms Dias who voluntarily gives up employment to care for her child but who contemplates a return in the future is similarly still to be regarded as a worker, at least where subsequently she does in fact return.[20]The facts are not entirely certain but some things seem clear. Ms Dias’ statement does say that she had had to take time off work because her child was ill, but this must have been in period (iv); it has no bearing on period (iii) which is what is in question. Her decision not to work in period (iii) was made, she says, because her son was small (six months) and she did not want to leave him. Thus she made a perfectly comprehensible but voluntary decision to care for her child herself rather than to work. The “problems with my son’s father” were, she says, sometime after she decided not to go back to work; these did not cause the decision not to return after maternity leave, nor were they the cause of her remaining unemployed throughout period (iii); what they perhaps did was somewhat to delay the re-start at work (period (iv)).[21]Mr Berry’s proposition would be an impermissible judicial extension of rules carefully formulated in Europe, first by the courts and latterly by Article 7(3) of Directive 2004/38. The circumstances of a parent, of either sex, who gives up employment to care for a child but anticipates a return after some as yet unknown time are very common. The breadth of the concept of ‘worker’ has to recognise a balancing of the interests of migrants and of host States and their taxpayers. The codification of the concept which has been accomplished by Article 7(3) of Directive 2004/38 demonstrates where that balance has been struck. The circumstances under consideration are not analogous to those which are set out in that Article, but would represent a significant departure from them.[22]There is, moreover, no true analogy with Lair. Ms Lair was held to be entitled to a student maintenance grant if but only if there was “some continuity between her previous occupational activity and the course of study” (see paragraph 37 of the judgment). Ms Dias left employment for reasons which are perfectly understandable socially but which had nothing whatever to do with her occupational activity: indeed precisely the reverse.[23]The Commissioner was accordingly right in his decision (ii). Ms Dias did not retain the status of worker during period (iii) and it follows that period (iii) cannot count, on this basis, towards a cumulative total of five years’ continuous legal residence.

Decision (iii)

[24]The Commissioner’s decision (iii) was grounded on the permit set out at paragraph 4 above taken with Article 16(1) of Directive 2004/38. In essence the argument for Ms Dias is very simple. It is that Article 16(1) gives her a right of permanent residence if she has resided legally for five years (at any rate if ending on or after 30 April 2006) and that since she was the holder of the permit throughout period (iii) she had the right to reside in that period. The contrary argument is equally simple: that the permit does not betoken or bestow an unqualified right to reside, but simply recognises a right to reside so long as the holder is a ‘worker’, which she was not in period (iii).[25]Simple as the issue in the end is, it is necessary to travel through several pieces of European and domestic legislation in order to arrive at a conclusion upon it.[26]The origin of this permit is European rather than domestic. It was issued pursuant to Article 5 of the Immigration (European Economic Area) Order 1994, SI 1994 No 1895 (“the 1994 Order”). That Order, however, was specifically designed to transpose the provisions of the then prevailing European legislation. That European legislation was then to be found principally in Directive 68/360, which created the residence permit. It did so in the following way. i) By Article 4(1) this Directive required States to grant the right of residence in their territory “to the persons referred to in Article 1”. ii) Those referred to in Article 1 were those “to whom Regulation (EEC) 1612/68 applies”. iii) Those to whom Regulation 1612/68 applied were “workers”, viz those who were “exercising the right to take up an activity as an employed person.” iv) By Article 4(2) this Directive required in relation to those granted an Article 4(1) right of residence that: “As proof of the right of residence, a document entitled ‘Residence Permit for a national of a Member State of the EEC’ shall be issued.….” v) This Directive went on to prescribe the principal contents of the ‘residence permit’ thus required. vi) This Directive also provided by Article 6 that the ‘residence permit’ thus issued must be valid initially for five years and be automatically renewable. vii) By Article 7 this Directive somewhat extended the concept of ‘worker’ by providing that the ‘residence permit’ was not to be withdrawn if the holder became temporarily incapacitated from work or involuntarily unemployed.[27]Meanwhile, and before the making of the 1994 Order, similar provision for rights of residence and associated residence permits had been made in Europe for persons who, although not workers, were broadly self-sufficient. That was done by Directive 90/364.[28]As a result, the 1994 Order was designed to make provision for both categories of person (workers and the self-sufficient), and also for certain others who had by then been recognised by the Court as within the concept of ‘worker’ or in positions analogous to the self-sufficient. The Order did so by providing that the right to reside should be enjoyed by “a qualified person” and by providing a definition of ‘qualified person’ as a worker, a self-employed person, a provider of services, a recipient of services, a self-employed person who has ceased economic activity in the United Kingdom, a self-sufficient person, a retired person or a student. Having done this, the Order provided that those qualified persons should be issued with a ‘residence permit’ in the terms required by Directive 68/360.[29]The 1994 Order explicitly limited the right to reside to a person who was for the time being a qualified person. Article 4(1) said:
“4. —(1) A qualified person shall be entitled to reside in the United Kingdom, without the requirement for leave to remain under the 1971 Act, for as long as he remains a qualified person.”
[30]Subsequently the 1994 Order was replaced by the Immigration (European Economic Area) Regulations 2000, SI 2000 No 2326. The latter regulations were slightly differently ordered and contained some minor alterations, but made no change which affects the present case. The concept of ‘qualified person’ was reproduced and regulation 14(1) was in terms identical to those of article 4(1) set out above at paragraph 28.[31]It should be said Directive 2004/38 has now replaced(i) Directive 68/360,(ii) Regulation 1612/68 on this topic, and(iii) Directive 90/364, as well as other Community rules. To give effect to the new expression of European law in Directive 2004/38, there are new UK regulations, namely the Immigration (European Economic Area) Regulations 2006, SI 2006 No 1003.[32]It follows that Ms Dias’ permit was issued at a time when the prevailing European law was Directive 68/360 and Regulation 1612/68. What is now in question is its effect during period (iii), viz in 2003/2004, when likewise the prevailing European law was contained in those two instruments. However, the critical issue in the case relates to the meaning of article 16(1) of Directive 2004/38 and in particular of the expression ‘resided legally’. We are not here concerned with the self-sufficient non-worker and can confine ourselves to workers. Does the permit by itself mean that Ms Dias was residing legally in the UK for the purposes of Article 16(1) during period (iii) even though she was no longer a ‘worker’ or did the permit do no more than recognise that she had a right to reside while she was a worker ?[33]It was accepted before us that European law, at the material time in Directive 68/360, gives the EU worker a right to reside in another member State whether or not the required residence permit has been issued: Royer, Case 48/75, [1976] ECR 497, see especially paragraphs 31-33. But Mr Berry, for Ms Dias, contends that once the permit is granted the right exists through the permit. He says that Article 4(2) of Directive 68/360 (quoted above at paragraph 26(iv)), in speaking of the permit as proof of the right to reside, in effect means that the permit is conclusive proof of that right, at least unless and until it is revoked. The contrary contention of the Secretary of State is that the permit is proof only of the right which underlies it, and that that right is one which avails only a worker and not someone who no longer is.[34]It is clear that for many years the right of residence which European law has provided for migrant citizens is a right for the worker (and those retaining that status) only. That is apparent from all the European legislation which we have set out, and remains the case today with the addition of a permanent right once five years’ legal residence has been achieved. The terms of the permit which we have emphasised in paragraph 4 refer expressly to this. In the directly analogous field of rights of residence for the self-sufficient, article 3 of Directive 90/368 specifically provided:
“The right of residence shall remain for as long as the beneficiaries of that right fulfil the conditions laid down in article 1.”
Although it is true that Directive 68/360 does not contain a similar provision, it is extremely difficult to believe that it was the legislative intention to discriminate on this point between workers and self-sufficient persons.[35]Mr Berry pointed out to us the somewhat different language in article 24 of Directive 2004/38, when compared with article 16(1). Whereas the latter refers to those who have ‘resided legally’, the former refers to Union citizens “residing on the basis of this Directive.” Whether there is a reason for that distinction is not clear to us. It is not easy to see any reason why article 24, which protects EU citizens against discrimination, should be any less extensive than article 16. But in addition, the qualification that residence should be on the basis of the Directive is explicit in relation to article 16 also. That is because of recital 17 to the Directive, which explains why article 16 is there. Recital 17 says:
“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)[36]To hold that article 16 requires five years’ residence complying with the Directive, thus excluding residence when Ms Dias was not a worker within article 7, despite the existence of the permit, would not deprive the permit of any significance. It needs to be remembered that the provisions which successive Directives have made for the issue of residence permits have been designed to be suitable to the varying rules and regulations applying in the disparate Member States. Some Member States require persons within their borders to carry identification documents demonstrating their status. That the UK does not do so does not mean that the permit will not be an important document elsewhere. Nor is it without significance in the UK. Although it is true that the UK does not now require EU citizens to pass through immigration controls beyond a passport check, that was not always so; the notes on the permit issued seem to be a remnant from earlier times. But even without immigration control or identity card use, the document clearly has utility as enabling the holder to demonstrate to any official or unofficial enquirer in what capacity he or she is present in the UK. In particular it enables the holder to demonstrate, for example to an employer, the right to be employed, which many other persons present, such as visitors and asylum seekers, do not have. A permit which says, in effect: “The holder has the right to be here to work” is by no means useless. And if official enquiry should, for some reason, be made into the legality of the presence of the holder in the UK, it is not useless to be able to demonstrate from the permit that there is the right to be here if working, and by reference to the employer that the condition of employment is met.[37]It is no doubt true that a permit can be revoked or withdrawn if the holder no longer meets the conditions of article 7 of Directive 2004/38, and that this one had not been. There was in fact no reason to consider revocation in 2003 because at that stage nothing of significance turned in the UK on the EU citizen’s right to reside; it was only in 2004 that entitlement to income support began to turn on it. But in any event, to hold that the permit remained conclusive evidence of a right to reside unless revoked would impose a disproportionate burden of enquiry upon any host State, which would have to make constant intrusions into the life of the holder to see whether the conditions of article 7 were still being satisfied. Such enquiries of EU citizens, which would not be made of UK nationals, might well be considered discriminatory.[38]For these reasons our provisional view is that Ms Dias did not ‘reside legally’ for the purposes of article 16(1) of Directive 2004/38 during period (iii) and accordingly does not demonstrate five years such residence on the basis solely of her permit.[39]In McCarthy v Secretary of State for the Home Department [2008] EWCA Civ 641, this court held, on different facts, that the proper meaning of article 16 was as recital 17 to Directive 2004/38 suggests, and that accordingly in order to give rise to the permanent right of residence the five years’ legal residence relied upon have to be years of residence “in compliance with the conditions laid down in this Directive”. That led this court to hold that a British citizen, with an unqualified right of abode in this country, could not rely on five years’ residence here in that capacity to create a permanent right of residence for her non-British husband. On further appeal to the House of Lords, however, that court has referred questions on the proper meaning of article 16 to the European Court of Justice. The questions referred by the House are:
“(1) Is a person of dual Irish and UK nationality who has resided in the UK for her entire life a ‘beneficiary’ within the meaning of article 3 of Directive 2004/38….? (2) Has such a person ‘resided legally’ within the host Member State for the purpose of article 16 of the Directive in circumstances where she was unable to satisfy the requirement of article 7 of Directive 2004/38 ? ”
[40]Since the authoritative responses of the European Court to those questions may inform our decision upon the present issue in this case, we take the view that we ought not to determine the second decision until they have been answered. However, the answers to those referred questions will not necessarily resolve our case, because of the very different facts of McCarthy. If the European Court were to determine that Mrs McCarthy was not a beneficiary within article 3, or if Mrs McCarthy’s status as a UK citizen, which does not apply to Ms Dias, were to turn out to be determinative, that case might not conclude ours. For those reasons we take the view that we ought to refer a further question ourselves in the present case, and request the ECJ, if possible, to consider it at the same time as it considers the questions referred in both Lassal and McCarthy. Having sought and received counsel’s submissions, the question we refer is as follows:
“If a European Union citizen, present in a Member State of which she is not a national, was, prior to the transposition of Directive 2004/38/EC, the holder of a residence permit validly issued pursuant to Article 4(2) of Directive 68/360/EEC, but was for a period of time during the currency of the permit voluntarily unemployed, not self-sufficient and outside the qualifications for the issue of such a permit, did that person by reason only of her possession of the permit, remain during that time someone who “resided legally” in the host Member State for the purpose of later acquiring a permanent right of residence under Article 16(1) of Directive 2004/38/EC?”

Decision (iv)

[41]Article 18(1) of the Treaty of the European Union provides as follows:
“Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in this Treaty and by the measures adopted to give it effect.”
[42]We have set out in the foregoing parts of this judgment the relevant measures adopted to give effect to this article so far as concerns workers and self-sufficient migrants. It is clear that those measures provide limitations and conditions, as contemplated by article 18(1), on the right to move and reside.[43]The Commissioner expressed himself in this way:
“…it is clear from Baumbast v Secretary of State for the Home Department, case C-413-99, [2002] ECR I-7091…..that the Directives in force before 30 April 2006 could not be regarded as the sole source of rights of residence and that, once Directive 2004/38 had been adopted, it provided a guide as to the scope of the rights conferred directly by Article 18(1) of the EC Treaty, although not an exhaustive guide, if it was possible to show a lacuna in that Directive…. Although Directive 2004/38 was not adopted until a few days after the claimant in the present case had returned to work in 2004, in my judgment it is still capable of providing a guide to the scope of article 18(1) as at 18 April 2003. Moreover it is particularly appropriate to have regard to it when considering what is, in effect, a transitional case arising under article 16 of the directive itself.”
Thus, the Commissioner decided that because article 16(1) was not expressed to relate back to periods of five years ending before 30 April 2006, there was a lacuna in the legislation entitling him to hold that Ms Dias had a right of residence deriving directly from Article 18(1) of the Treaty on the grounds that she had completed five years as a worker, albeit before the Directive came into force.[44]If we are right in our provisional opinion on decision (i), namely that article 16(1) does apply to periods of five years’ residence as a worker completed before 30 April 2006 (see paragraphs 15-17 above), there is no question of the kind of lacuna to which the Commissioner referred and no occasion for any fourth decision.[45]If we are wrong in our provisional opinion on decision (i), then the question would arise whether Directive 2004/38 deliberately left prior completed periods of five years’ residence as a worker unqualifying, or did so accidentally. If it was deliberate, it is difficult to see how the omission can be described as a lacuna. If it was accidental it may be easier to see it as such. At all events, this alternative approach to the case is so closely related to the question referred in Lassal that we have no doubt that it ought to be referred to the European Court together with that question. Having sought and received counsel’s submissions, that question is as follows:
“If five years’ continuous residence as a worker prior to 30 April 2006 does not qualify to give rise to the permanent right of residence created by Article 16(1) of Directive 2004/38/EC, does such continuous residence as a worker give rise to a permanent right of residence directly pursuant to Article 18(1) of the EU Treaty on the grounds that there is a lacuna in the Directive ?”
Summary[46]For the reasons set out above we: i) reach the provisional conclusion that both Articles 16(1) and 16(4) apply to those whose residence prior to 30 April 2006 was in conformity with the then current European legislation relating to the residence of migrant workers and that in consequence Ms Dias could rely on five years’ such residence in periods (i) and (ii) and had acquired a permanent right of residence by the time of her claim for income support in March 2007; but defer our final decision until the outcome is known of the reference to the ECJ on this point in Lassal (paragraphs 15-17 above); ii) reject the contention that Ms Dias retained the status of ‘worker’ in period (iii) (paragraphs 18-23 above); iii) reach the provisional conclusion that the permit alone did not bring Ms Dias within article 16(1) of Directive 2004/38 in period (iii), but defer our final decision until the outcome is known of the questions here referred to the ECJ (paragraphs 24-40 above); iv) refer to the ECJ the question of whether Ms Dias could in period (iii) derive a right of residence directly from Article 18 of the Treaty (paragraphs 41-45 above).[47]We set out in an annexe to this judgment(i) the facts of this case and(ii) the questions referred by us to the ECJ. Annexe The facts

Annexe

[48]Ms Dias is a Portuguese citizen and a single lady. She came to the UK in January 1998 with her two children. She got a job immediately. Those children are now grown up and have left home. She was in continuous employment, without significant gaps until the Summer of 2002. She was then pregnant and took maternity leave. Her youngest child was born on 7 October 2002. Her maternity leave expired on 17 April 2003. She opted not to go back to work and remained unemployed (receiving income support under the then prevailing rules) until 26 April 2004. She worked again for the same employers from 26 April 2004 until 23 March 2007, but on that latter day she gave up work because she wanted to be able to give more time to her youngest child. Accordingly her employment history divides into 5 periods: i) January 1998 (arrival in UK) to Summer 2002: in work ii) Summer 2002 to 17 April 2003: maternity leave iii) 18 April 2003 to 25 April 2004: not working iv) 26 April 2004 to 23 March 2007: in work v) 23 March 2007 onwards: not working.[49]On 13 May 2000 (during period (i)) the Home Office issued Ms Dias with a residence permit pursuant to domestic legislation transposing Article 4 of Directive 68/360. The permit was expressed to be valid for five years. Ms Dias remained the holder of this permit during period (iii).[50]Periods (i) and (ii) constituted five years’ continuous residence as a worker but lay wholly before 30 April 2006 when Directive 2004/38, and in particular Article 16(1) thereof, came into force.[51]In period (iii) Ms Dias made a voluntary decision not to continue employment at the end of her maternity leave because she preferred to care for her son.

Questions referred to the European Court in this case

[52]“If a European Union citizen, present in a Member State of which she is not a national, was, prior to the transposition of Directive 2004/38/EC, the holder of a residence permit validly issued pursuant to Article 4(2) of Directive 68/360/EEC, but was for a period of time during the currency of the permit voluntarily unemployed, not self-sufficient and outside the qualifications for the issue of such a permit, did that person by reason only of her possession of the permit, remain during that time someone who “resided legally” in the host Member State for the purpose of later acquiring a permanent right of residence under Article 16(1) of Directive 2004/38/EC”[53]“If five years’ continuous residence as a worker prior to 30 April 2006 does not qualify to give rise to the permanent right of residence created by Article 16(1) of Directive 2004/38/EC, does such continuous residence as a worker give rise to a permanent right of residence directly pursuant to Article 18(1) of the EU Treaty on the grounds that there is a lacuna in the Directive ?”

Relevant questions referred to the court in previous cases

[54]In Secretary of State for Work and Pensions v Lassal [2009] EWCA Civ 157:
“Is Article 16(1) of Directive 2004/38 of the European Parliament and the Council of 29 April 2004 to be interpreted as entitling that EU citizen to a right of permanent residence by virtue of the fact that she had been legally resident, in accordance with earlier community law instruments conferring rights of residence on workers, for a continuous period of five years which ended prior to 30 April 2006 (the date by which member States had to transpose the Directive) ?”
[55]In McCarthy v Secretary of State for the Home Department [2008] EWCA Civ 641:
“(1) Is a person of dual Irish and UK nationality who has resided in the UK for her entire life a ‘beneficiary’ within the meaning of article 3 of Directive 2004/38….? (2) Has such a person ‘resided legally’ within the host member State for the purpose of article 16 of the Directive in circumstances where she was unable to satisfy the requirement of article 7 of Directive 2004/38 ? ”

Cited in 9 later judgments