[2006] UKSSCSC CIS_3875_2005 (01 September 2006)
CIS/3875/2005

DECISION OF THE SOCIAL SECURITY COMMISSIONER
  
1.	I allow the Secretary of State’s appeal.  I set aside the decision of the Fox Court appeal tribunal dated 12 July 2005 and substitute my own decision.  The claimant is not entitled to income support from 4 November 2004.

REASONS

2.	The claimant has lost touch with his former solicitors, who have consequently withdrawn from these proceedings, and with the Commissioners’ office.  The Secretary of state has no new address for him.  In these circumstances, the oral hearing of this appeal has been abandoned and I have decided the case on the papers.  However, I have had the advantage of detailed submissions in the papers from Pierce Glynn, solicitors, and Mr Jason Coppel of counsel (who drafted a submission for the tribunal) on behalf of the claimant and from Ms Anne Myers, assisted by the Office of the Solicitor to the Department of Health and the Department for Work and Pensions, on behalf of the Secretary of State.

3.	The claimant is a French national.  He was born in France in 1969.  As a child, he moved to Algeria where he subsequently performed national service in the army.  While in the army, he developed mental health problems.  He has been diagnosed as suffering from paranoid schizophrenia.  In about 1989, he returned to France.  He worked periodically and also received treatment from a psychiatrist..  He had his own flat for a while but from 1996 he lived in hostels, first in Lyon and then in Paris.  In about 1998, he moved to Germany, initially living on the streets and then staying with a friend.  For some of the time he supported himself by working in various jobs but he also received support from his friend.  After being dismissed from a job in 2000, he applied for benefit, which was paid for about three months.  When payment of benefit ceased, he came to the United Kingdom.

4.	The claimant arrived in the United Kingdom in the latter part of 2000.  He at first stayed at the Finsbury Park mosque but he was asked to leave after two months and lived on the streets for about eight months, sometimes sleeping in a night shelter attached to a church.  He ate food provided by charities.  He was unable to find work, which he attributed to his lack of English.  He was then fortunate enough to be spoken to by an outreach worker who persuaded him to go to a hostel.  Eventually he moved to a hostel run by St Mungo’s Community Housing Association in Clapham.  There he received support from caseworkers.  He claimed, and was awarded, income support, housing benefit and disability living allowance.  He was referred to the local mental health services and received treatment from a psychiatrist and was allocated a mental health worker.  He enrolled in a college to improve his English, although he dropped out due to his mental health problems.  Nonetheless, with all that support, his mental health did improve.  After living in the hostel for about a year, the claimant decided to return to France for a month or so to visit his family.  He stayed longer and after staying with his brother and sister went to stay with a cousin.  The cousin eventually asked him to leave and he ended up living on the streets again.  In about April 2004, he was detained in a hospital, having suffered a relapse.  He was discharged to a flat after about three months.

5.	In October 2004, the claimant returned to the United Kingdom.  In the unsigned witness statement prepared for the hearing before the tribunal, from which much of the above history is taken, he explained that he believed that his brother thought he was a rich man and consequently wanted to hurt him.  He was frightened for his safety and came to the United Kingdom where he had felt safer before.  Initially he lived on the streets, sleeping at St Martin-in-the-Fields church in Trafalgar Square, but after nearly a month he approached the St Mungo’s hostel in Clapham again.  He was allowed to move back in and was once again put in touch with mental health services.  He also claimed benefits.  His claim for disability living allowance was allowed but his claims for income support and housing benefit were disallowed on 26 November 2004.  In June 2005, arrangements were made for the claimant to start a work placement, for nominal pay, so that he could gain experience and confidence in working.  The claimant’s appeal against the disallowance of his claim for income support was heard on 12 July 2005.  The hostel had indicated that the claimant would have to leave shortly after that date if he was unable to pay his rent.  I do not know either whether a separate appeal was made in respect of the housing benefit decision (although I am told that housing benefit was paid for part of the period in issue) or whether payment of income support was suspended to await the outcome of this appeal and therefore I do not know whether the claimant’s subsequent departure from the hostel was caused by lack of benefit.

6.	By paragraph 17 of Schedule 7 to the Income Support (General) Regulations 1987 (SI 1987/1967, a “person from abroad” has an “applicable amount” of nil, which has the practical effect that he is not entitled to any income support (see section 124(4) of the Social Security Contributions and Benefits Act 1992).  Regulation 21(3) provides –

“Subject to paragraphs (3F) and (3G), in Schedule 7 –
‘person from abroad’ means a claimant who is not habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland, but for this purpose no claimant shall be treated as not habitually resident in the United Kingdom who is –
    (a)	… a person with a right to reside in the United Kingdom pursuant to Council Directive No. 68/360/EEC or No. 73/148/EEC …”

Paragraph (3F) has no bearing on this case but paragraph (3G), which was inserted in 2004 when the claimant was in France, provides –

“In paragraph (3), for the purposes of the definition of a person form abroad no person shall be treated as habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland if he does not have a right to reside in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland.”

7.	In the present case, the claimant’s claim for income support, treated as made on 4 November 2004, was rejected on the ground that he had no right to reside in the United Kingdom and, therefore, by virtue of regulation 21(3G), he could not be treated as habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland, with the consequence that he was a “person from abroad”.  The claimant appealed on the ground that he did have a right to reside in the United Kingdom, by virtue of the Immigration (European Economic Area) Regulations 2000 (SI 2000/2326).

8.	Regulation 14(1) of the 2000 Regulations provides –

“A qualified person is entitled to reside in the United Kingdom without the requirement for leave to remain under the 1971 Act [i.e., the Immigration Act 1971], for as long as he remains a qualified person.”

Regulation 5(1)(d) provides –

“In these Regulations, ‘qualified person’ means a person who is an EEA national and in the United Kingdom as – 
	…
    (d)	a recipient of services;
	…”

Regulation 3(1)(d) defines a “recipient of services” for the purposes of the Regulations as –

“a person who receives, or seeks to receive, services within the meaning of Article 50 of the EC Treaty”.

9.	The tribunal found that the claimant had a right to reside in the United Kingdom because he was a recipient of services “in that he receives accommodation for which he pays rent”.  It also found him to have been habitually resident in the United Kingdom at the date of his claim for benefit and accordingly decided that he was entitled to income support.

10.	The Secretary of State now appeals, with the leave of a full-time tribunal chairman.  He argues that the claimant was not a recipient of services within the meaning of Article 50 of the EC treaty because housing is not a service and the other services the claimant received were free and he further argues that the claimant did not come to the United Kingdom in order to receive the services.  The submissions made on behalf of the claimant accept that, for an activity to constitute a service, it must normally be provided for remuneration but argue that the fact that the claimant made a financial contribution towards his rent was sufficient to mean that the provision of accommodation was the provision of a service.  Moreover, it is argued that the claimant also received support services from St Mungo’s, partly in return for his contribution although St Mungo’s also received grants from central and local government and donations from individuals.  It is also argued that the claimant received services within the scope of Article 50 from his general practitioner, because a general practitioner is an independent contractor remunerated for his services by the local primary care trust.

11.	Article 50 falls within chapter 3 of Title III of the EC Treaty.  Title III is concerned with the free movement of persons, services and capital within the European Community.  Chapter 3 broadly guarantees the right to free movement of those wishing to provide services and those wishing to gain access to services.  In particular, articles 49 and 50 provide –

“49.	Within the framework of the provisions set out below, restrictions on freedom to provide services within the Community shall be prohibited in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended. 

The Council may, acting by a qualified majority on a proposal from the Commission, extend the provisions of the Chapter to nationals of a third country who provide services and who are established within the Community. 

“50.	Services shall be considered to be ‘services’ within the meaning of this Treaty where they are normally provided for remuneration, insofar as they are not governed by the provisions relating to freedom of movement for goods, capital and persons. 

‘Services’ shall in particular include: 
(a) activities of an industrial character; 
(b) activities of a commercial character; 
(c) activities of craftsmen; 
(d) activities of the professions. 

Without prejudice to the provisions of the Chapter relating to the right of establishment, the person providing a service may, in order to do so, temporarily pursue his activity in the State where the service is provided, under the same conditions as are imposed by that State on its own nationals.”

12.	In Luisa and Carbone v. Ministerio del Tesoro (Joined Cases 286/82 and 26/83) [1984] E.C.R. 377, it was held that “the freedom to provide services includes the freedom, for the recipients of services, to go to another Member State in order to receive a service there … and that tourists, persons receiving medical treatment and persons travelling for the purposes of education or business are to be regarded as recipients of services”.

13.	I do not accept the Secretary of State’s submission that the provision of housing cannot be a “service” within the scope of Article 50.  In my judgment, the provision of accommodation, social services and medical services are all capable of falling within the scope of Article 50.  However, there are two important limiting factors.

14.	Firstly, as has been conceded in the arguments advanced on behalf of the claimant, services fall within the scope of Article 50 only if “they are normally provided for remuneration”.  That is clear from the wording of the Article itself.  

15.	Secondly, in Steymann v. Staatssecretaris van Justitie (Case 196/87) [1988] E.C.R. 6159 and Sodemare S.A. v, Regione Lombardia (Case C-70/95) [1997] E.C.R. 3395 (both considered in CIS/4727/1999 to which the tribunal was referred), it has been held that Articles 49 and 50 do not apply where a national of a Member State goes to the territory of another Member State and establishes his principal residence there in order to provide or receive services there for an indefinite period.  The practical consequence is that the provision of accommodation can be a service within the scope of Articles 49 and 50 only in very limited circumstances.  In particular, while a person has the freedom to go to another Member State in order to receive social services or medical services for a temporary period, Article 49 does not guarantee him the freedom to move his principal home to another Member State for the purposes of receiving such services for an indefinite period.  Moreover, I have some doubt as to whether Article 49 guarantees the freedom to move one’s principal home to another Member State even for a temporary period, unless one does so for the purpose of receiving services that are not the necessary consequence of living in that Member State.

16.	It seems fairly clear that the point of the provisions of the 2000 Regulations to which I have referred is to give effect in domestic law to the rights to free movement conferred by the Treaty.  In particular, the use of the word “as” in regulation 5(1) has the effect that a person is a “qualified person” by virtue of sub-paragraph (d) only if he is in the United Kingdom for the purpose of receiving services.  It is only such a person who is exercising the rights conferred by the Treaty.  

17.	On behalf of the claimant it has been argued that a person has a right of residence by virtue of regulation 5(1)(d) if he travelled to another Member State in circumstances where it was likely that he would receive services even if that was not the purpose of the journey.  That proposition is based on Bickel and Franz (Case 274/96) [1998] E.C.R. I-7637, where the European Court of Justice said–

“The Court has consistently held that [the right laid down in what is now Article 49] includes the freedom for the recipients of services to go to another Member State in order to receive a service there (Cowan, paragraph 15).  Article [49] therefore covers all nationals of Member States who, independently of other freedoms guaranteed by the Treaty, visit another Member State where they intend or are likely to receive services.  Such persons – and they include both Mr Bickel and Mr Franz – are free to visit and move around within the host State.”

18.	Cowan v. Trésor public (Case 186/87) [1989] E.C.R. 195 was a case involving a British tourist who was assaulted in Paris and denied the right to compensation that he would have had had he been a French national.  The Court applied Luisa and Carbone, using the same language, and held that “in respect of persons whose freedom to travel to a Member State, in particular as recipients of services, is guaranteed by Community law that State may not make the award of State compensation for harm caused in that State to the victim of an assault resulting in physical injury subject to the condition that he hold a residence permit or be a national of a country which has entered into a reciprocal agreement with that Member State”.  It seems to me that the use of the word “therefore” shows that in Bickel and Franz the Court did not intend to extend the scope of Article 49 further than required in Luisa and Carbone and Cowan, where it was clearly only held that it applied where the recipient went to another Member State “in order to” receive services there.  It was unnecessary for the court to extend the scope of Article 49 because Mr Bickel was a lorry driver, presumably travelling on business, and Mr Franz was a tourist and it seems likely that the Court used the words “or are likely” because the services that will be received by a person travelling on business or as a tourist cannot always be identified in advance and it appears generally just to be assumed that they will receive services.  The position of such travellers is to be contrasted with the situation more obviously within the contemplation of Article 49 where, for instance, a person travels to another Member State for the purpose of undergoing a particular medical operation.  More importantly, it is also to be contrasted with the position of a person whose movement from one Member State to another has no commercial motive at all and therefore is wholly outside the scope of Article 49.

19.	I am therefore satisfied that the tribunal erred in law because it failed to consider whether the claimant had come to the United Kingdom for the purpose of receiving services, despite having before it the submission made by the Secretary of State’s representative that raised the issue.  Insofar as the tribunal did consider the purpose of the claimant coming to the United Kingdom, it found that he did so “because of the supposed threat to his life”.  There was no evidence before the tribunal that the claimant had come to the United Kingdom for the purpose of receiving services.  That was fatal to his claim to fall within the scope of regulation 5(1)(d) of the 2000 Regulations.

20.	It is now asserted that he did come to the United Kingdom for the purpose of receiving services through the hostel and the National Health Service.  That assertion is undermined by the fact that the claimant spent some time in the United Kingdom before approaching the hostel but, if it nonetheless accepted, the claimant falls foul of Steymann and Sodemare because the tribunal found that he had a settled intention to remain in the United Kingdom and it was unlikely that he would return to France so that the acceptance of the claimant’s assertion merely makes it clear that he moved his principal home to the United Kingdom for the purpose of receiving services indefinitely.  

21.	On any view the claimant therefore fails to show that he was exercising the rights guaranteed by Article 49 of the Treaty and so fails to show that he had a right to reside in the United Kingdom by virtue of regulation 5(1)(d) of the 2000 Regulations.  That makes it unnecessary for me to consider the arguments raised to the effect that services provided through the National Health Service may, in some circumstances, fall within the scope of Article 50 of the Treaty.

22.	It has also been argued on behalf of the claimant that, while European Community law recognises that a Member State is entitled to restrict the right of nationals of other Member State’s to reside there, it is unlawful to impose a blanket policy without regard to the question whether it is proportionate in any particular case.  A further argument to the effect that he has been the victim of unlawful discrimination under Article 12 of the Treaty has also been advanced. The arguments are similar.  A submission under Article 12 of the Treaty was rejected by a Tribunal of Commissioners in CIS/3573/2005.  A single Commissioner ought to follow a decision of a Tribunal of Commissioners (see R(I) 12/75), just as a single High Court judge will follow a decision of a divisional court of the High Court (Regina v. Greater Manchester Coroner, ex parte Tal [1985] Q.B. 67).  The Tribunal of Commissioners’ reasoning does not admit to the possibility that the 2000 Regulations might not be in conformity with European Community law where the particular circumstances of a claimant who is not economically active are different from those of the claimant whose case was before them.  Even if there are cases where the application of the 2000 Regulations might be regarded as a disproportionate way of implementing the legitimate social policy identified by the Tribunal of Commissioners, I do not consider that such distinctions as there are between the present case and the case before the Tribunal of Commissioners could justify me not applying the same approach as it did.  Like the claimant in CIS/3573/2005, the claimant in the present case had not been economically active in the United Kingdom and so was not present in the exercise of a right under Community law and he had also been resident here for only a short time.  Although he might be regarded as having been particularly vulnerable when his claim for income support was determined, it was always open to him to return to France, which is presumably how the legislation was expected to achieve its purpose.  Accordingly, I must reject these additional arguments and need not consider them further.

23.	I therefore find that the claimant had no right to reside in the United Kingdom when he claimed income support and accordingly he could not be regarded as habitually resident here and so was not entitled to benefit.  I must allow the Secretary of State’s appeal.  

24.	I reach this conclusion without a great deal of enthusiasm.  It does not seem very satisfactory that one consequence of this legislation can be that a person who is mentally ill and whose ability to take rational decisions is impaired for that reason may be left to roam the streets of London relying on charity to keep body and soul together when he might otherwise be making good progress in a hostel.  On the other hand, the Secretary of State is entitled to look at the bigger picture, it is to be hoped that those who support the mentally ill have been given advice by the Department of Health as to the guidance and assistance they can offer to a destitute foreign national suffering from mental illness and it is possible that the claimant in this case has returned to France where he has family and may claim benefits.

	(signed on the original)	MARK ROWLAND
		Commissioner
		1 September 2006