Walker-Fox v Secretary of State for Work and Pensions

The Deputy Social Security Commissioner Mr Robin White decided on 29^th October 2004 that the respondent, Mr Colin Walker-Fox, was entitled to winter fuel payments of £200 for each of the winters of 2000/01 and 2001/02. The Secretary of State for Work and Pensions appeals that decision with the permission of Clarke L.J. Mr Walker-Fox writes in some bewilderment that “this whole matter is now running out of control and has reached a point of incomprehensible proportions”, saying, “Surely it is hardly necessary for so small a claim to be dealt with by the Royal Courts of Justice”. It is difficult not to have some sympathy for that view but the Secretary of State has persuaded us that an important point of law is involved having wide-ranging consequences for the administration - and payment - of social security benefits.

What is the dispute? In essence the question is whether time limits for claiming benefits are lawful. The issue arises in this way. The Social Fund Winter Fuel Payment Regulations 1998 (“the 1998 Regulations”) came into force with effect from 16^th January 1998 and provided that a winter fuel payment to meet expenses for heating be paid to various categories of persons, one of which was those who were ordinarily resident in Great Britain and who were men aged 65 or over or women aged 60 or over to whom retirement pension was being paid. No time limit was imposed for the making of these claims because payment was automatically linked to the receipt of the prescribed category of benefit.

Mr Walker-Fox was born on 8^th October 1937 and so he was only 60 years old when the 1998 Regulations came into force, and thus seemingly too young to claim the benefit. He was at the time ordinarily resident in Great Britain but he moved to France on 10^th September 1999 and he has been ordinarily resident there ever since.

On 19^th December 1999 the European Court of Justice held in R v Secretary of State for Social Security, ex Parte Taylor [1999] ECR I-8955 that winter fuel payments fell within the scope of Article 3(1) of Directive 79/7/EEC on the progressive implementation of the principle of equal treatment for men and women in matters of Social Security, and that the derogation in Article 7(1)(a) was not applicable to exempt the discrimination between men and women which existed in relation to conditions of entitlement to payments. That discrimination as to the age at which the benefit was payable could not be objectively justified.

The government responded by revoking the 1998 Regulations and introducing the Social Fund Winter Fuel Payment Regulations 2000 (“the 2000 Regulations”) which came into force on 3^rd April 2000. Under regulation 2(1) a winter fuel payment is payable to a person who:-

“(a)

in respect of any day falling within the qualifying week is ordinarily resident in Great Britain; and

(b)

has attained the age of 60 in or before the qualifying week.”

Regulation 3(1) is material to this appeal. It provides that:-

“(1)

Regulation 2 shall not apply in respect of a person who

(a)

…

(b)

subject to paragraph (2), has not made a claim for a winter fuel payment before the 31^st March following the qualifying week in respect of the winter following that week.”

The qualifying week is the week beginning on the third Monday in the September of that year: Regulation 1(2).

The effect of paragraph (2) read with Regulation 4(1) and (2) is to permit a winter fuel payment to be made without a claim once it appears from official records that the person is entitled to payment, that is to say, once an old-age pensioner has received the benefit he will continue to receive it automatically.

Since the judgment in Taylor principally affected men aged between 60 and 65 for the winters 1997/98, 1998/99 and 1999/2000, the Secretary of State permitted them to claim their winter fuel payments retrospectively, there being no time limit in the 1998 Regulations which would have barred those claims.

The next development in what the Deputy Commissioner described as “the winter fuel payments saga” concerned Council Regulation No. 1408/71 (“Regulation 1408/71”) on the application of Social Security schemes to employed persons, self-employed persons and members of their families who are or were subject to the legislation of a Member State (Article 2). Among the several benefits covered are old-age benefits (Article 4(1) (c)). Article 10 is material for our purpose:-

“1.

Save as otherwise provided in this Regulation … old age … benefits … acquired under the legislation of one or more member states shall not be subject to any reduction, modification, suspension, withdrawal or confiscation by reason of the fact that the recipient resides in the territory of a member state other than that in which the institution responsible for payment is situated.”

Notwithstanding Regulation 1408/71 the Secretary of State steadfastly maintained that the residence condition in regulation 2(1)(a) of the 2000 regulations (the need to be ordinarily resident in Great Britain) barred any application for winter fuel payments by those who had not acquired their benefits before moving to that other state. Claims were also rejected from those who asserted that a winter fuel payment was a supplement to their state retirement pension and payable as such.

The European Commission rejected the government’s stance and protracted discussion ensued. The government eventually capitulated, finally acknowledging that winter fuel payments constituted old-age benefits within Article 4 of Regulation 1408/71 and were accordingly “exportable” from the U.K. to other Member States under Article 10 of the Regulations in the case of individuals who had become entitled to winter fuel payments before ceasing to be ordinarily resident in the U.K.. That was announced to the House of Commons on 19^th July 2002 when the Minister gave a written answer to a question enquiring about the progress made in discussions with the European Commission. Mr McCartney said this:-

“We have now concluded our discussions with the European Commission with regard to the extent of the U.K. government’s responsibilities under European law. As a result, generally EEA nationals who first qualify for a winter fuel payment in the U.K. and currently reside in another EEA country may now be entitled to winter fuel payments. We will publicise the change and give details of the claims procedure.”

Apparently there was some publicity in foreign embassies and in newspapers.

In response to a further question, a written answer given on 6^th November 2002 stated that:-

“Eligible people, generally EEA nationals (which includes U.K. nationals) who qualify for a payment in Great Britain before moving to another EEA country will be able to continue receiving winter fuel payments whilst they are ordinarily resident in another EEA country or Switzerland, provided that they continue to satisfy the eligibility criteria.”

On 2^nd July 2003 the agreement between the United Kingdom and the European Commission was reported in a written answer to the European Parliament relevant parts of which read as follows:-

“Following lengthy discussions between the British authorities and the Commission, the United Kingdom has agreed to pay winter fuel payments to people living in other Member States as long as they were in receipt of such a payment before they left the United Kingdom. It is important to recall that the Community legislation on social security, Regulation (EEC) No. 1408/71, only covers the “co-ordination” of social security schemes for people who move around the Union. In no way does it replace the national social security schemes, and it is entirely a matter for the Member States to organise and finance their social security schemes as they see fit. Regulation (EEC) No. 1408/71 aims to protect the social security rights of those who move, but in itself does not give rights to benefits under the national social security schemes. Entitlement to benefits is a matter for national law. In doing so the Member States must of course abide by the basic principles of Community law, such as non-discrimination on grounds of nationality, but there is no suggestion in this case that any such discrimination exists.

Now that the United Kingdom accepts that winter fuel payments do come within the scope of Regulation (EEC) No. 1408/71, for those who are entitled to it under British law, and those who themselves come within the personal scope of the Regulation, the payment will be “exportable” to another Member State. However, for those who were not entitled to it under national law, Regulation (EEC) No. 1408/71 cannot be used to retroactively create an entitlement in respect of people who left the United Kingdom before the scheme was set up in 1998. …”

Mr Walker-Fox read about these developments in a newspaper and on 6^th November 2002 claimed winter fuel payments for the winters of 2000/01 and 2001/02. On 31^st December 2002 he applied for payments for the preceding years, namely 1997/98, 1998/99 and 1999/2000.

His claims for the winters of 1997/98 to 1999/2000 have been met because, as I have indicated, there was no time bar prescribed in the 1998 Regulations. Claims for benefits for the winters of 2002/03 and those that have followed have been paid automatically because he now appears on the official records as being entitled to payment. His claims for payment for 2000/01 and 2001/02 have not been met. The Secretary of State refuses to pay for those years on the ground that the claims were not made within the time prescribed by regulation 3(1)(b) of the 2000 Regulations, namely before 31^st March 2001 and 31^st March 2002 respectively. It is acknowledged that he has met the age and residence conditions as they must now be understood.

His case is simple: it is unfair to insist on a time bar which had passed before the government admitted in July 2002 that claimants in his position were entitled to the payments. He should not be prejudiced by relying on the letter of the law. He, the little man, should not be expected to have taken on the mighty state in judicial review proceedings over the legality of the 2000 Regulations whilst the real battle was being waged in Brussels. That, however, is exactly what the Secretary of State says he should have done.

The Secretary of State’s response, as set out in Mr de la Mare’s skeleton is this:-

“The Secretary of State has sought to apply the Claim Rule [making the claim before 31^st March] to those cases covered by the 2000 Regulations in which the individual has sought to export WFPs to another EEA State. The provisions of Regulation 1408/71, and the entitlement to export which it creates, are long standing and have led to a substantial body of case-law. The Secretary of State therefore considers that it was at all times open to individuals who had acquired an initial entitlement to WFPs to challenge any proposed reliance on the residence condition to refuse export of WFPs by using the directly applicable provisions of Regulation 1408/71.”

I well understand why Mr Walker-Fox does not find it a particularly attractive argument. There the Secretary of State was fighting for all he was worth to deny the expatriates their entitlement, yet now he says to them, “Well you could of course have taken me to court to have my residence qualification disapplied”. I shall return to this difference of view later.

Whatever the merits, or lack of them, the legal argument has to be addressed by us. Unfortunately neither Mr Walker-Fox, who has been unable to travel from France, nor anyone else is present to address any counter-argument. It is right, however, to acknowledge that in the best traditions of the Bar, Mr Thomas de la Mare has given us all assistance he can and has genuinely tried to argue both sides of the case. We are grateful to him.

Shorn of detail the legal question is whether principles of law enunciated by the Court of Justice in Emmott v Minister of Social Welfare [1991] ECR I – 5475 retain their authority or whether they have been gradually so whittled away that the case is now to be seen as based narrowly upon its own facts.

We must, therefore, start with the facts of Emmott. Mrs Emmott was a married woman with two dependent children who had been in receipt of Irish disability benefit since 1983 paid at the reduced rate which was then applicable to all married women. From May 1986 until November 1986 she was paid the benefit at the rate applicable to a man or woman who did not have any child dependants. Thereafter she was paid at the rate applicable to a man or woman with increases for her children. In March 1987 the Court of Justice handed down its decision in Case 286/85 in the matter of McDermott and Cotter v The Minister for Social Welfare and Attorney General (1987) ECR 1453 whereby the Court of Justice held that the Irish measures failed properly to implement Article 4(1) of Directive 79/7/EEC in that married women were not receiving equal treatment. On learning of that decision Mrs Emmott entered into correspondence with the Irish welfare authorities. Her letters received the reply that judgment was still pending in the Irish High Court in the case of McDermott and Cotter and that until the question of payments retrospective to December 1984 (the date by which the Directive had to have been implemented) was resolved in that case nothing could be decided in relation to her. She instructed solicitors and in July 1988 she sought permission to bring proceedings for judicial review of the decisions of the Irish authorities in relation to her social welfare entitlement. The Minister for Social Welfare then asserted that she was out of time having failed to seek judicial review within the three month time limit. The Irish Court sought a preliminary ruling on the following question:

“Is the ruling of the Court of Justice of 24 March 1987 in case 286/85 [McDermott and Cotter] … to be understood as meaning that in a claim before a national court or tribunal made in purported reliance on Article 4(1) of … Directive [79/7/EEC] by a married woman for equal treatment and for compensatory payments in respect of discrimination alleged to have been suffered by reason of the failure to apply to her the rules applicable to men in the same situation, it is contrary to the general principles of Community law for the relevant authorities of a Member State to rely upon national procedural rules, in particular rules relating to time limits, in bringing claims in defence of that claim such as to restrict or refuse such compensation?”

It is necessary to cite much of the judgment of the court:-

“16.

As the Court has consistently held (see, in particular, the judgments in Case 33/76 Rewe-Zentralfinanz eG and Rewe-Zentral AG v Landwirtschaftskammer fur das Saarland [1976] ECR 1989 and Case 199/82 Amministrazione delle Finanze dello Stato v San Giorgio SpA [1983] ECR 3595), in the absence of Community rules on the subject, it is for the domestic legal system of each Member State to determine the procedural conditions governing actions at law intended to ensure the protection of the rights which individuals derive from the direct effect of Community law, provided that such conditions are not less favourable than those relating to similar actions of a domestic nature nor framed so as to render virtually impossible the exercise of rights conferred by Community law.

17.

Whilst the laying down of reasonable time-limits which, if unobserved, bar proceedings, in principle satisfies the two conditions mentioned above, account must nevertheless be taken of the particular nature of directives.

18.

According to the third paragraph of Article 189 of the EEC Treaty, a Directive is to be binding, as to the result to be achieved, upon each Member State to which it is addressed, but is to leave to the national authorities the choice of form and methods. Although that provision leaves Member States free to choose the ways and means of ensuring that a directive is implemented that freedom does not affect the obligation, imposed on all Member States to which the directive is addressed, to adopt, within the framework of their national legal systems, all measures necessary to ensure that the directive is fully effective, in accordance with the objective which it pursues …

19.

In this regard it must be borne in mind that the Member States are required to ensure the full application of directives in a sufficiently clear and precise manner so that, where directives are intended to create rights for individuals, they can ascertain the full extent of those rights and, where necessary, rely on them before the national courts …

20.

Only in specific circumstances, in particular where a Member State has failed to take the implementing measures required or has adopted measures which are not in conformity with a directive, has the Court recognised the right of persons affected thereby to rely, in judicial proceedings, on a directive as against a defaulting Member State. This minimum guarantee, arising from the binding nature of the obligation imposed on the Member States by the effect of directives, cannot justify a Member State absolving itself from taking in due time implementing measures appropriate to the purpose of each directive …

21.

So long as a directive has not been properly transposed into national law, individuals are unable to ascertain the full extent of their rights. That state of uncertainty for individuals subsists even after the Court has delivered a judgment finding that the Member State in question has not fulfilled its obligations under the directive and even if the court has held that a particular provision or provisions of the directive are sufficiently precise and unconditional to be relied upon before a national court.

22.

Only the proper transposition of the directive will bring that state of uncertainty to an end and it is only upon that transposition that the legal certainty which must exist if individuals are to be required to assert their rights is created.

23.

It follows that, until such time as a directive has been properly transposed, a defaulting Member State may not rely on an individual’s delay in initiating proceedings against it in order to protect rights conferred upon him by the provisions of the directive and that a period laid down by national law within which proceedings must be initiated cannot begin to run before that time.

24.

The answer to the question referred to the Court must therefore be that Community law precludes the competent authorities of a Member State from relying, in proceedings brought against them by the individual before the national courts in order to protect rights directly conferred upon him by Article 4(1) of Directive 79/7, on national procedural rules relating to time-limits for bringing proceedings so long as that Member State has not properly transposed that Directive into its domestic legal system.”

It is to be noted that the judgment begins with reference to what Mr de la Mare refers to as the “orthodox” view consistently held by the ECJ in Rewe and San Giorgio. In Rewe the German company paid certain charges for the import of French apples and then applied for a refund as the charges were equivalent to custom duties and were unlawfully levied by virtue of Article 13 of Regulation 159/66 EEC. The German court held that the claims were brought out of time under provisions of the German court’s procedural code. The ECJ held:-

“It is for the domestic legal system of each Member State … to determine the procedural conditions governing actions at law intended to ensure the protection of the rights which citizens have from the direct effect of Community law, it being understood that such conditions cannot be less favourable than those relating to similar actions of a domestic nature. …

The right conferred by Community law must be exercised before the national courts in accordance with the conditions laid down by national rules.

The position would be different only if the conditions and time-limits made it impossible in practice to exercise the rights which the national courts are obliged to protect. … The laying down of such time-limits with regard to actions of a fiscal nature is an application of the fundamental principle of legal certainty protecting both the tax-payer and the administration concerned.”

In San Giorgio the Italian importers sought to recover unlawful customs duties on the importation of dairy products. The Italian law precluded the claim where the charge had been passed on to another person. The court held:-

“12.

… Whilst it is true that repayment may be sought only within the framework of the conditions as to both substance and form, laid down by the various national laws applicable thereto, the fact nevertheless remains, as the Court has consistently held, that those conditions may not be less favourable than those relating to similar claims regarding national charges and they may not be so framed as to render virtually impossible the exercise of rights conferred by Community law.”

Thus, as I understand it, the orthodox position is that in order to comply with the principle of equivalence, the national time limit must apply equally to national claims as to Community-based claims. It must comply with the principle of effectiveness, that is to say, it must not make reliance on Community law virtually impossible or excessively difficult and a reasonable time limit will not fall foul of that principle. The imposition of time-limits is an application of the principle of legal certainty which protects both the individual and the administration. If that orthodoxy applies to this case, Mr Walker-Fox loses.

One notes that Emmott seemed to justify its departure from orthodoxy because of the particular nature of directives so that until the directive has been properly transposed time does not run.

One might be forgiven for thinking that would have been a complete answer in the case of Steenhorst-Neerings v Bestuur van de Bedrijfsvereniging voor Detailhandel Ambachtenen Huisvrouwen [1993] ECR I-5475. There the essence of the question for the court’s decision was whether Community law precluded the application of a national rule of law according to which benefits for incapacity for work were payable not earlier than one year before the date of the claim where the individual relied on rights conferred directly by Article 4(1) of Directive 79/7 in circumstances where, as in Emmott, the Member State had not properly transposed that provision into national law. This time, however, the court held:-

“19.

… the facts in Emmott are clearly distinguishable from those of this case.”

Having given a short summary of the facts in Emmott the court went on:-

“21.

It should be noted first that, unlike the rule of domestic law fixing time-limits for bringing actions, the rule described in the question for a preliminary ruling in this case does not affect the right of individuals to rely on Directive 79/7 in proceedings before the national courts against a defaulting Member State. It merely limits the retroactive effect of claims made for the purpose of obtaining the relevant benefits.”

I confess I find the distinction difficult to grasp. The court says in paragraph 22:-

“The time-bar resulting from the expiry of the time-limit for bringing proceedings serves to ensure that the legality of administrative decisions cannot be challenged indefinitely …

23.

On the other hand, the aim of the rule restricting the retroactive effect of claims … is quite different from that of a rule imposing mandatory time-limits for bringing proceedings. … the first type of rule … serves to ensure sound administration, most importantly so that it may be ascertained whether the claim satisfied the conditions for eligibility so that the degree of incapacity, which may well vary over time, may be fixed. It also reflects the need to preserve financial balance in a scheme in which claims submitted by insured persons in the course of a year must in principle be covered by the contributions collected during that same year.”

So the court held that a rule which precluded backdating beyond a year was permissible.

The next case is Johnson v Chief Adjudication Officer [1994] ECR I 5483. Mrs Johnson was allowed a Severe Disablement Allowance but her claim for arrears was backdated for no more than a year before she made her claim. She relied on Emmott. The court held:-

“26.

However, it is clear from the judgment in Steenhorst-Neerings that the solution adopted in Emmott was justified by the particular circumstances of that case, in which a time-bar had the result of depriving the applicant of any opportunity whatever to rely on her right to equal treatment under the directive.”

The court further explained that in contrast to the rule in Emmott:-

“the rule at issue in Steenhorst-Neerings did not affect the right of individuals to rely on Directive 79/7 in proceedings before the national courts against a defaulting Member State but merely limited to one year the retroactive effect of claims for benefits for incapacity for work. …

30.

In the light of the foregoing the national rule which adversely affects Mrs Johnson’s action before the Court of Appeal is similar to that at issue in Steenhorst-Neerings. Neither rule constitutes a bar to proceedings; they merely limit the period prior to the bringing of the claim in respect of which arrears are payable.”

Next is the important case of Fantask A/S v Industriministeriet [1997] ECR I-6783. The cases before the court concerned claims for repayment of charges paid in connection with applications for company formation or increases in capital. Such charges were levied in breach of Directive 69/335. The claims were subject to a limitation period of five years. There was also a principle of Danish law which precluded a taxpayer from obtaining repayment of overpaid charges if they were levied in accordance with long-standing rules assumed by both the authorities and taxpayer to be lawful. Mr de la Mare submits that it is important to note that questions 6 and 7 are quite different, a difference which he says the Deputy Commissioner failed to observe and in the result fell into error. By its sixth question the Danish court sought to ascertain:-

“Whether Community law precludes actions for the recovery of charges levied in breach of the Directive from being dismissed on the ground that those charges were imposed as a result of excusable error by the authorities of the Member State inasmuch as they were levied over a long period without either those authorities or the persons liable to them having been made aware that they were unlawful.”

By its seventh question, the Danish court essentially asked:-

“Whether Community law prevents a Member State from relying on a limitation period under national law to resist actions for the recovery of charges levied in breach of the Directive as long as that Member State has not properly transposed the Directive.”

What is very interesting is the opinion of Advocate-General Jacobs dealing with questions six and seven. Here is a powerful demolition of Emmott. The contrasting views are set out in paragraph 55 where a number of governments consider the Emmott principle too broad inasmuch as it has the effect of imposing an almost limitless retrospective liability on Member States. On the other hand the Commission argue in a way Mr Walker-Fox would no doubt support that to allow a Member State to rely on time limits would permit it to escape the consequences of its own unlawful conduct and discourage it from taking steps to remedy the defects in its rules.

These powerful criticisms of the Emmott ruling emerge. First, it has the paradoxical result that greater protection is given to rights under Directives than to rights conferred by Regulations and by the Treaty itself. Secondly, an individual should not be considered not to have notice of a Directive merely because it has not been transposed into national law. Thirdly, the suggestion that in the absence of correct implementation an individual can never be sure of the full extent of his rights is difficult to reconcile with conditions for the direct effect of Directives which presupposes that the basic content of the right conferred is sufficiently clear for it to be protected by the national legal system. Fourthly, uncertainty of the rights conferred in the case of an unimplemented Directive is no more likely than in the case of a Treaty provision, often broadly worded and therefore leaving considerable scope for uncertainty. Fifthly, disapplying the time limit would leave the State open to far-reaching claims for back payments and such a result would wholly disregard the balance which must be struck in every legal system between the rights of the individual and the collective interest in providing a degree of legal certainty for the State, especially in matters of taxation and Social Security legislation.

Advocate-General Jacobs summarises this as follows:-

“72.

In short, therefore, my main reservations about a broad view of the Emmott ruling are that it disregards the need, recognised by all legal systems, for a degree of legal certainty for the State, particularly where infringements are comparatively minor or inadvertent; it goes further than is necessary to give effective protection to directives; and it places rights under directives in an unduly privileged position by comparison with other Community rights. Moreover a broad view cannot be reconciled with the court’s subsequent case-law on time-limits.”

He does not flinch from some criticism of the Steenhorst-Neerings and Johnson decisions pointing out that it is doubtful whether it is possible to make a general distinction of the kind mentioned in those cases between a time limit acting as an absolute bar as in Emmott and as merely a limit to the extent of the claim as in those two cases. Moreover the Emmott reasoning that the individual cannot ascertain his rights until the Directive has been properly implemented would preclude reliance by Member States on either type of time limit. He sees the crux of the Emmott ruling to be that it was unjust in the particular circumstances of the case to permit the Irish authorities to rely on the time limit laid down by national law given the way the authorities lulled her into inactivity during which the time limit was running. He suggested that Emmott:-

“can be seen as an application, albeit a new application, of the well-established principles laid down in Rewe and subsequent cases, in particular the principle that the exercise of Community rights must not be rendered excessively or unduly difficult. The ruling can be read as standing for the proposition that a Member State cannot rely on a limitation period where it is in default both in failing to implement a directive and in obstructing the exercise of a judicial remedy in reliance upon it or perhaps where the delay in exercising the remedy is in some other way due to the conduct of the national authorities.” [Emphasis added by me].

So he concluded:-

“It seems to me that so understood the Emmott principle, although confined to very exceptional circumstances, continues to provide an important safeguard notwithstanding the more recent developments in the case law which I have discussed above.”

Turning now to the court’s decision and the answer it gave to the sixth question, the court said this:-

“39.

Accordingly, while the recovery of such charges may, in the absence of Community rules governing the matter, be sought only under the substantive and procedural conditions laid down by the national law of the Member States, those conditions must nevertheless be no less favourable than those governing similar domestic claims nor render virtually impossible or excessively difficult the exercise of rights conferred by Community law (see, for example, Case C-312/93 Peterbroeck …).

40.

A general principle of national law under which the courts of a Member State should dismiss claims for the recovery of charges levied over a long period in breach of Community law without either the authorities of that State or the persons liable to pay the charges having been aware that they were unlawful, does not satisfy the above conditions. Application of such a principle in the circumstances described would make it excessively difficult to obtain recovery of charges which are contrary to Community law. It would, moreover have the effect of encouraging infringements of Community law which have been committed over a long period.”

In giving his decision, the Deputy Commissioner relied on those two paragraphs. He did not refer to the way the court dealt with the seventh question which, being directed to reliance on a limitation period, lies at the heart of Mr Walker-Fox’s claim.

The gist of the judgment on that question is contained in these paragraphs:-

“47.

As the court has pointed out in paragraph 39 of this judgment, it is settled case-law that, in the absence of Community rules governing the matter, it is for the domestic legal system of each Member State to lay down the detailed procedural rules for actions seeking the recovery of sums wrongly paid, provided that those rules are not less favourable than those governing similar domestic actions and do not render virtually impossible or excessively difficult the exercise of rights conferred by Community law.

48.

The court has thus acknowledged, in the interests of legal certainty which protects both the taxpayer and the authority concerned, that the setting of reasonable limitation periods for bringing proceedings is compatible with Community law. Such periods cannot be regarded as rendering virtually impossible or excessively difficult the exercise of rights conferred by Community law, even if the expiry of those periods necessarily entails the dismissal, in whole or in part, of the action brought (see, in particular … Rewe …) …

51.

However, as was confirmed by the judgment in … Johnson … at paragraph 26, it is clear from … Steenhorst-Neerings … that the solution adopted in Emmott was justified by the particular circumstances of that case in which the time bar had the result of depriving the applicant of any opportunity whatever to rely on her right to equal treatment under a Community directive …

52.

The reply to the seventh question must therefore be that Community law, as it now stands, does not prevent a Member State which has not properly transposed the Directive from resisting actions for repayment of charges levied in breach thereof by relying on a limitation period under national law which runs from the date on which the charges in question become payable, provided that such a period is not less favourable for actions based on Community law than for actions based on national law and does not render virtually impossible or excessively difficult the exercise of rights conferred by Community law.”

The Deputy Commissioner carefully set out the background and the facts. It is pertinent to note that all he said about Emmott was this:-

“28.

… the Court of Justice ruled as incompatible with Community law a limitation period operative under national law which had the effect of completely defeating the claimant’s reliance on Community law entitlements. The case arose in the context of failures by the Irish government to implement the requirements of Directive 79/7 on equal treatment of men and women in matters pertaining to social security.

29.

The scope of that decision has been clarified in later case law.”

He then recited several passages from the subsequent Community law case law. The crux of his decision is contained in these paragraphs:-

“34.

My understanding of the requirements of Community law, in relation to remedies and time limits for claiming, is that there is a requirement of equivalence and a requirement of effectiveness. The principle of equivalence requires that the conditions laid down by national law for the pursuit of Community rights are not discriminatory by comparison with those relating to domestic claims. The principle of effectiveness requires that any restrictions imposed must not be such as to render the reliance on Community rights virtually impossible or excessively difficult. …

35.

Though much of the case law relates to the consequences of the failure by a Member State to implement, or to implement fully, the requirements of directives, the principle of equivalence and effectiveness apply regardless of the character of the Community provision which gives the Community right. Here it is a Regulation.

36.

I would also observe that the national rules in issue in this appeal are not ones which limit the ability of the appellant to bring matters before a court or tribunal, but rather a time limit for making a claim for benefit. There is no provision permitting any back-dating. The effect of failing to claim in time extinguishes the entitlement to a winter fuel payment. The benefit in question is a lump sum benefit paid annually. The conditions of entitlement are a simple age and residence requirement. I consider the time limit for claiming in this case to be a national procedural rule which comes within the ambit of the case law on the effective enjoyment of Community rights discussed in the preceding paragraphs.

40.

Since the United Kingdom government did not come to any agreement with the Commission acknowledging that winter fuel payments were old-age benefits within the material scope of Regulation 1408/71, and were exportable under Article 10 of that Regulation, until 19 July 2002, claimants in the appellant’s circumstances were not in a position to make a claim in time for the years 2000/01 and 2001/02 since the deadline for making such claims had expired on 30 March 2001 and 30 March 2002. Any such claim made in time would have been rejected on the grounds that the claimant was not resident in Great Britain as required by reg. 2 of the Winter Fuel Payments Regulations.

41.

The benefit in question is an annual lump sum benefit which must be claimed each year unless the Secretary of State exercises his discretion, prior to the deadline for claiming the benefit in any particular year, to pay the benefit without a claim for it having been made. This seems to me to be an important aspect of the nature of the benefit in this case. The effects of the time limits under the national provisions is to extinguish entitlement altogether if no claim is made by the set deadline for each year. In the circumstances of this case, the United Kingdom did not accept that there was any entitlement to the benefit under Community law by reason of the application of Regulation 1408/71 until 19 July 2000. This is respectively over three and fifteen months after the cut-off date for claims for the benefit for the winters of 2000/01 and 2001/02.

42.

There is the purely theoretical possibility that a claimant might have made a claim in time and asserted his or her rights under Articles 4 and 10 of Regulation 1408/71 before 31 March 2001 and 31 March 2002. The question is whether the position for which the United Kingdom Government had been arguing (namely that winter fuel payments were not within the material scope of Regulation 1408/71) and which was not resolved until July 2002 renders the possibility of a claim in time for the two years in issue in this appeal “virtually impossible or excessively difficult”. I think it does, particularly in the context of this issue following the need to make provision to deal with the effect of the Taylor case relating to the application of Directive 79/7 to the benefit.”

So he disapplied the time limit holding that the government was required to permit a reasonable time for claims to be made following its agreement with the Commission. He had no difficulty in regarding the time within which the applicant made this claim for the years in question as being reasonable. He allowed Mr Walker-Fox’s claim accordingly.

The first ground of appeal is that the Commissioner’s conclusion of virtual impossibility is premised upon reasoning that no claim for winter fuel payments by those living abroad would be possible until the U.K. had brought its practice into line with the requirements of Regulation 1408/71. It is submitted that such an approach effectively but impermissibly resuscitates the wide reading of Emmott which on a proper view of the subsequent authorities has been abandoned.

I am not persuaded that the Commissioner has actually relied on, still less resuscitated, Emmott. In paragraph 28 of the decision he gave a bare outline of the case adding that the scope of the division has been clarified in later case law. This is not the unequivocal language of reliance on the case. Moreover I read paragraph 34 of his decision to be an assertion of the orthodoxy of Rewe, reasserted as the guiding principles by paragraph 48 of Fantask. I do not understand the Deputy Commissioner to be saying, “Emmott disapplied a time limit; this is a time limit; therefore I disapply it”. On the contrary his reasoning is this, “If the claim had been in time, it would have been rejected; it would have continued to have been rejected until the government capitulated in July 2002; therefore it was virtually impossible or excessively difficult to make a claim before then”.

Although I do not accept the full thrust of the Secretary of State’s submission I nonetheless consider that the Deputy Commissioner’s reasoning is fallacious. It confuses the making of a claim with the outcome of the claim. The real question is whether it was virtually impossible or excessively difficult to make the claim.

What in reality stood in the way of a person in another EEA country making a claim in time in the years 2001 and 2002 was the fact that on reading the 2000 Regulations and accepting them to be the letter of the law, he would see no point in applying at all because he did not meet the clear residential qualification in regulation 2(1)(a). A potential claimant is, however, presumed to know the law (a fiction which is increasingly more of a joke in a real world inundated by legislation, primary and secondary, flooding in on us from Westminster, Whitehall and Brussels). However unreal and therefore unfair it may appear to many, I have to conclude that, in the light of that presumption, he must be taken to know the law contained in Regulation 1408/71 better than the Secretary of State seemed to have understood it at the time. He is deemed to know that a winter fuel payment is a form of old age benefit which is exportable. If Advocate-General Jacobs is correct, as I respectfully think he is, to say that an individual cannot be considered not to have notice of a Directive merely because it has not been transposed into law, then the individual’s position is all the weaker when his rights flow from a Regulation which is directly applicable and needs no transposition.

Now I can easily accept that in the real world in which life is lived, it could be said to have been virtually impossible or excessively difficult to make a claim in circumstances where the individual is understandably ignorant in fact of his rights and where his government, whose duty it is to comply with EC Regulations, is steadfastly denying their application. In the legal world it is different. With knowledge of the law the arguments in favour of the exportation of the benefit were not excessively difficult to see or to understand and the making of the claim was thus perfectly possible. For that reason I conclude that the Deputy Commissioner erred in posing the question to be answered to be whether the position for which the government had been arguing, which was not resolved until July 2002, rendered the possibility of a claim in time being virtually impossible or excessively difficult. The proper question is whether a claimant with knowledge of the law (which he is presumed to know) could have applied in time. To that question the answer is sadly “Yes”. The Deputy Commissioner erred in finding that it was virtually impossible or excessively difficult for Mr Walker-Fox to make his claim in time and for that reason the appeal should be allowed.

Although, therefore, it is not strictly necessary to consider what is left of Emmott in the light of the subsequent rulings of the ECJ, I have come to the clear conclusion, if I am permitted to utter it, that, again in agreement with Advocate-General Jacobs, it should be confined to very exceptional circumstances. They are that in some unconscionable way the state has obstructed the exercise of the individual’s judicial remedy or contributed to his failure to exercise it. Such unjust conduct would make it a breach of the principle of effectiveness which underpins this jurisprudence. B.S. Levez v T.J. Jennings (Harlow Pools) Ltd. [1998] ECR I-7835 is a similar example, the conflict in question being that of the employer of the applicant. There Mrs Levez was misled by her employer who maintained that she was being paid at the same salary as her male predecessor. That was blatantly untrue. The court held:-

“32.

In short, to allow an employer to rely on a national rule such as the rule at issue would, in the circumstances of the case before the national court, be manifestly incompatible with the principle of effectiveness referred to above. Application of the rule at issue is likely, in the circumstances of the present case, to make it virtually impossible or excessively difficult to obtain arrears of remuneration in respect of sex discrimination. It is plain that the ultimate effect of this rule would be to facilitate the breach of Community law by an employer whose deceit caused the employee’s delay in bringing proceedings for enforcement of the principle of equal pay.”

The question then arises whether the government has behaved in an inequitable way here which makes it unjust for it to rely on the time bar. This is the matter to which I said in paragraph 18 I would return. For the government genuinely to advance a view of the law and subsequently to acknowledge that the argument cannot prevail, cannot, in my judgment, come close to being the kind of unconscionable conduct which the court should not countenance. This case is on its facts miles away from Emmott. The Secretary of State may have taken a bad point in Brussels but he was in no way actively misleading the applicant or lulling him into a false sense of security. The narrow reading of Emmott to which it has been confined by the subsequent ECJ judgments does not apply in this case. Moreover it is only fair to the government that I should record that the Secretary of State has taken a generous approach to what constitutes a claim for payment of the winter fuel benefits. First, anyone who before the cut-off dates had approached either the United Kingdom authorities or the Commission to complain about the Secretary of State’s refusal to export benefits was treated as having “claimed” the benefits. As a result among others 147 people living in other EEA Member States who had so complained to the Commission have received their benefits. It is not possible for the Secretary of State to quantify how many individuals contacted the Secretary of State in time but it was in the region of 2,000. Secondly, those who had acquired an entitlement to the benefit by being treated as automatic payees because they were receiving state retirement pension and were absolved from making a claim, but who then moved abroad received their payments because the Secretary of State agreed not to enforce the time limit against them. It follows that I cannot see that the Secretary of State has behaved at all unfairly in this case.

The Secretary of State’s second ground is that the time limit should be upheld in this case because it is closer to the provisions limiting claims in Steenhorst-Neering and Johnson than the time limit in Emmott. I find this a most dubious distinction. As Advocate-General Jacobs said in Fantask in paragraph 74:-

“… A five-year time-limit for instituting proceedings, if applied to recurring taxes or benefits, could equally be viewed as a rule limiting to five years the extent to which a claim may relate back. Conversely a rule, such as that in Johnson, which limits entitlement to benefits to a period not exceeding twelve months prior to a claim, could equally be viewed as a time-limit barring claims in respect of a particular period after twelve months; although in most cases the application of such a time-limit will merely reduce the amount of benefit paid, it will lead to complete denial of the claim in all cases in which the entitlement to benefit has ceased twelve months before the claim is made.”

The time limit precluding Mrs Emmott’s advancing her claim for judicial review and thus to recover the payment to which she would otherwise have been entitled was a bar to her proceeding and in consequence a bar to her recovering anything at all. In our case we are dealing with annual payments of £200. To rely on the time limit is to achieve exactly the same effect, namely that Mr Walker-Fox recovers nothing at all for that year. This is a bar to proceedings, not merely a limit on the period prior to the bringing of the claim in respect of which arrears are payable. I reject the Secretary of State’s submission that denying him the payment for the disputed years but allowing him to claim for 2003 makes this case analogous to a limitation of the period for which recovery can be obtained. It is quite wrong to analyse the 2003 claim as a claim for more than that year’s payment. Each year is subject to a separate claim. Thus I am not surprised that the Deputy Commissioner did not address this distinction. He was correct to ignore it.

The third ground of appeal is that the Deputy Commissioner misapplied and misinterpreted the ECJ’s ruling in Fantask because he quoted the passages which answered the sixth question and failed to quote the passages dealing with the relevant seventh question. This is a justified criticism but it is not a material one because had he expressly applied paragraphs 45-52 of that judgment he would have concluded, as paragraph 48 makes clear, that the real test is whether the limitation period rendered it virtually impossible or excessively difficult to exercise the rights conferred by Community law. That is the very question he addressed although, for the reasons I have given, he did not answer it correctly.

The final ground of appeal is that the Deputy Commissioner failed to appreciate that the wide interpretation of the ECJ’s ruling in Emmott had only ever applied to cases based on misimplementation of a Directive and that, accordingly, it had no application to cases based upon alleged breach of a directly effective Treaty Article or directly applicable Regulation. I agree that this case can be distinguished from Emmott on that basis. This court has held in Biggs v Somerset County Council [1996] I.C.R. 364, 377 that:-

“The principle set out in Emmott … has no application to a claim involving Article 119 [of the Treaty]”

By parity of reasoning it would have no application to a Regulation which is fully applicable and effective without transposition into our domestic law. I am, therefore, quite ready to hold that the approach of the ECJ in Emmott which, on one view, can be justified solely by the importance they attach to the fact that they were dealing with a Directive, can have no application before us. But the general principles of Community law still apply. Thus it is for the domestic legal system of each Member State to determine the procedural conditions governing actions at law consistent with the principle of effectiveness. In other words the question comes back to whether or not it was virtually impossible or excessively difficult to bring the claim.

I would add, however, that the criticism is perhaps a little unfair on the Deputy Commissioner. In paragraph 35 he drew attention to the fact that much of the case-law relates to the failure to implement or implement fully the requirements of Directives, but he added that the principles of equivalence and effectiveness apply regardless of the character of the Community provision which gives the Community right. He recognised that the provision here was a Regulation. He focused on its effectiveness and so I do not criticise his approach.

Regrettably I conclude he reached the wrong answer. I would therefore allow the appeal.

I agree.

I also agree.