JUDGMENT OF 30. 11. 1967 — CASE 22/67 SÉCURITÉ SOCIALE DU NORD-EST v GOFFART

In Case 22/67 Reference to the Court under Article 177 of the EEC Treaty by the Second Civil Chamber of the French Cour de Cassation for a preliminary ruling in the action pending before that court between

THE COURT composed of: R. Lecourt, President, A. M. Donner, President of Chamber, A. Trabucchi, R. Monaco (Rapporteur) and J. Mertens de Wilmars, Judges, Advocate-General: J. Gand Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Summary of the facts and procedure

On 11 May 1962 Mr Robert Goffart, born on 30 March 1897, claimed from the Caisse Régionale de Sécurité Sociale du Nord-Est (France) the payment of his old-age pension.

He had made regular and valid payments to French social security from 1 April 1931 to 31 March 1962 and had thus acquired a total of 124 insurance quarters (31 years).

As he had also been affiliated to the Belgian system from 1 April 1926 to 31 December 1931, he had completed 24 insurance quarters (6 years) in Belgium.

The French social security institution calculated for accounting purposes a total pension based on 120 quarters and 40 % of the average annual wage in accordance with the social security law. Since Mr Goffart's average annual wage amounted to 8735.85 French francs the amount of this pension was 3494.34 French francs per year.

Moreover the French institution, in accordance with the provisions of Article 28 (1) (to) of Regulation No 3 of the EEC made a pro rata determination of the fraction of his pension payable by it on the basis of 124/148.

The French traction thus emerges at 3262.44 French francs. Following the same principles, the Belgian institution for its part calculated its fraction of the pension corresponding to six insurance years, that is 8889 Belgian francs on 1 June 1962, brought up to 9111 Belgian francs on 1 August 1962.

However, it suspended payment, in pursuance of the Belgian legislation which prohibits payment of a pension when the recipient continues in gainful employment authorized by the King'.

Because of this latter circumstance Mr Goffart considered that his French pension should be calculated only in terms of the insurance periods completed in France, on the basis of Article 28 (1) (f) of Regulation No 3.

As this claim was not accepted by the Caisse Régionale de Sécurité Sociale du Nord-Est, the question was brought before the Commission de Première Instance du Contentieux de la Sécurité Sociale de Nancy, which, by a decision of 11 March 1964, gave a ruling in favour of Mr Goffart's application. When the Caisse Régionale appealed, the Cour d'Appel, Nancy, by a judgment of 5 November 1964 confirmed all the points of the decision of the Commission de Première Instance.

The Caisse Régionale de Sécurité sociale du Nord-Est appealed to the French Cour de Cassation against this decision by the Cour d'Appel, Nancy.

By a judgment of 27 April 1967 the Second Civil Chamber of the French Cour de Cassation decided to suspend judgment and before giving a ruling to request the Court of Justice of the European Communities to give a preliminary ruling whether:

‘the interpretation to be given to the provisions of Article 28 (1) (b) and (f) of Chapter 3 of Head III of Regulation No 3 of the European Economic Community concerning social security for migrant workers has the effect of stating whether a migrant worker whose rights to an old-age pension have been calculated in accordance with the legislation of two Member States under the provisions of Article 27 (1) (a) and (b) of the above-mentioned Regulation No 3 but to whom payment of the fraction of the pension payable by one of them is suspended is entitled to obtain from the social security institution of the other State an amount of pension calculated solely in accordance with the legislation of that State and taking account of the insurance periods completed under its rules.’

A copy of this judgment was received at the Court Registry on 15 June 1967. It follows from the wording of Articles 27 and 28 (1) that the reference to Article 27 (1) (a) and (b) contained in the question thus put should foe read as a reference to Article 28 (1) (a) and (b).

In accordance with Article 20 of the Protocol on the Statute of the Court annexed to the EEC Treaty, the parties to the main action, the Council of the EEC, the Commission of the EEC and the Member States were requested to submit their observations within the period of time indicated in the second paragraph of that Article.

The Commission of the EEC and the Caisse Régionale de Sécurité Sociale du Nord-Est submitted their observations on 16 and 25 August 1967 respectively.

On hearing the report of the Judge-Rapporteur and the views of the Advocate-General, the Court decided to open the oral procedure without any preparatory inquiry.

The Commission of the EEC and the Caisse Régionale de Sécurité Sociale du Nord-Est presented oral argument at the hearing on 17 October 1967.

The Advocate-General delivered his opinion on 8 November 1967.

II — Observations submitted under Article 20 of the Statute of the Court

A —. The Commission states first of all in its written observations that the basic question to be resolved is whether the word ‘conditions’ appearing in Article 28 (1) (f) must be interpreted as covering only the conditions conferring the right to a pension, or as applicable to the conditions conferring this right and to the conditions of payment of the pension. It maintains that in the first case as a right to a pension in Belgium had been conferred on the person concerned the provisions of the said subparagraph (f) are not applicable to him and therefore the French institutions are not entided to leave out of account the Belgian insurance periods, despite the fact that it has not been possible to pay the Belgian pension; in the second case, since the person concerned does not satisfy the conditions required for payment of his pension in Belgium, even though he satisfies the conditions laid down by Belgian legislation for conferment of the right he might claim the benefit of subparagraph (f) to have the French pension calculated solely in terms of the periods completed in France. The Commission next recalls that it has already expressed, in Cases 2/67 and 11/67, the opinion that non-payment of the pension in one Member State must involve in another State the calculation of the fraction of pension in terms solely of the periods completed in the latter State, and that the subde distinctions between ‘conferment’ and ‘suspension of the right to benefits’ are irrelevant. In support of its argument it points out that: in considering the ‘conditions’ with which Article 28 (1) (f) is concerned, account must be taken of the provisions of sub-paragraph (a) of the same paragraph, in terms of which the institution of each of the Member States (in accordance with whose legislation the insured person has completed the insurance periods) shall, in accordance with its own legislation, determine whether the person concerned satisfies ‘the conditions for entidement to the benefits prescribed in that legislation’; because of its general nature this latter expression does not imply any distinction between ‘conferment of the right’ and ‘payment of benefit’; like the other provisions of Article 28 those of paragraph (1) (f) should be interpreted in terms of the objectives prescribed by Article 51 of the Treaty, as defined by the Court; it emerges from the case-law of the Court (Judgment in Case 100/63) that the provisions of Article 28 are only applicable if the Community regulations do not permit compensation of a loss of rights already acquired by at least equivalent benefits; in the present case Mr Goffart sufers, by virtue of Belgian legislation, a lawful reduction in the total of his pension but on the other hand he would suffer an unjustified loss if, owing to the same circumstance, his French fraction were to be decreased by taking into consideration the periods of employment completed in Belgium, for which a corresponding pension is not being paid to him; for these reasons it is of little importance for the purposes of Article 28 (1) (f) to seek the reasons why the person concerned does not receive benefit under the legislation of another Member State; it is sufficient to note that in this case he does not satisfy all the ‘conditions’ prescribed by that legislation. Consequently the Commission expresses the opinion that an affirmative reply should be given to the question put.

B —. The Caisse Régionale de Sécurité Sociale du Nord-Est observes that the question to be resolved in this case is whether Mr Goffart's position with regard to old-age insurance is to be governed by Article 28 (1) (b) of Regulation No 3 of the EEC or by paragraph 1 (f) of the said Article. In this connexion it maintains that: Article 27 of Regulation No 3 puts forward the principle of compulsory aggregation of insurance periods — in so far as they do not overlap — completed by an insured person who was successively or alternatively subject to the legislation of two or more Member States; thus, at the time of the entry into force of Regulations Nos 3 and 4 the right of option provided for by the Franco-Belgian bilateral conventions, which allowed the insured person to choose between separate calculation by the contracting States and calculation by aggregation of the insurance periods with apportionment ‘pro rata temporis’, was abrogated. The principle put forward by Article 27 is confirmed and developed by Article 28 (1) (a) and (b) from which it emerges that insurance periods completed under each Member State's own legislation shall foe aggregated in order to determine, for accounting purposes, a total pension the amount of which shall consequently be reduced ‘pro rata temporis’ by each of the institutions concerned; in the present case the French institution merely conformed to those provisions; Mr Goffart is therefore wrong in claiming, on the basis of Article 28 (1) (f), a right to receive a complete French pension, since the aim of this provision is to alow an insured person whose rights have only been conferred in a single Member State to take advantage of the legislation of that State and since this advantage is reviewed in accordance with Community rules to the extent to which the rights of the person concerned are conferred in one or more States; this is not the case with Mr Goffart, whose pension rights were conferred both in Belgium and in France, and the payment of whose Belgian pension has been suspended: for the purposes of Article 28 (1) (f) it is of little importance to ascertain whether the payment of the pension is suspended under legislation peculiar to one of the Member . States; for this provision to apply, the pension right must not have been conferred in one of the States, for in no circumstances can the conditions for payment foe assimilated to the conditions for conferring the right; in the present case Mr Goffart's right to a Belgian pension has been recognized by the Belgian institution which has in fact calculated his fraction of pension for accounting purposes; as Mr Goffart satisfies the conditions necessary for conferring the right to a Belgian pension, Article 28 (1) (f) is not applicable to him and it is largely irrelevant whether the said pension is or is not paid. The Caisse Régionale de Sécurité Sociale du Nord-Est thus claims that the Court should ‘rule that only Article 28 (1) (b) of Regulation No 3 of the EEC is applicable’.

Grounds of judgment

By judgment of 27 April 1967, received at the Registry of the Court of Justice on 15 June 1967, the Second Civil Chamber of the French Cour de Cassation requested the Court, under Article 177 of the Treaty establishing the EEC, to give a preliminary ruling on the interpretation to be given to the provisions of Article 28 (1) (b) and (f) of Chapter 3 of Head III of Regulation No 3 of the European Economic Community concerning social security for migrant workers.

The French Cour de Cassation requested the Court to rule whether a migrant worker whose rights to an old-age pension have been calculated in accordance with the legislation of two Member States under the provisions of Article 28 (1) (a) and (b) of the above-mentioned Regulation No 3, ‘but to whom payment of the fraction of the pension payable by one of them is suspended, is entided to obtain from the social security institution of the other State an amount of pension calculated solely in accordance with the legislation of that State and taking account of the insurance periods completed under its rules’.

The question put to the Court turns essentially on the interpretation to be given to Article 28 (1) (f) of Regulation No 3 of the EEC taken in conjunction with paragraph (1) (a) of the same Article.

More precisely, it bears on the actual meaning, within the system set up by those provisions, of the phrase: ‘If the person concerned does not … satisfy the conditions required by all the legislative systems applicable to him’, appearing in the above-mentioned Article 28 (1) (f).

In its observations the Caisse Régionale de Sécurité Sociale du Nord-Est has expressed the view that the words ‘conditions required’ cover only the conditions for conferring the right to benefits, so that any suspension of the payment of the benefits in one of the Member States concerned could not by itself justify the application of paragraph (1) (f) and thus involve derogation from the provisions of Article 28 (1) (b) regarding pro rata calculation.

The Commission of the EEC on the other has maintained that the words ‘conditions required’ relate to the conditions for conferring the right as well as the conditions regarding payment of the benefits.

The wording of Article 28 (1) (f) does not distinguish between conferment of the right and payment of the benefits, but merely employs the general concept of ‘conditions required’.

In the absence of any indications in the text, the actual meaning of Article 28 (1) (f), as well as that of Regulation No 3 considered as a whole, must be sought in the light of the objectives set forth in Articles 48 to 51 of the Treaty. Article 51 of the Treaty essentially refers to a case in which the legislation of a Member State does not by itself confer the right to benefit on the person concerned owing to an insufficient number of periods completed under its legislation.

To that end it provides, on behalf of the migrant worker who has been successively or alternatively subject to the legislation of several Member States, for the aggregation of insurance periods completed under the legislation of each of those States.

The pro rata calculation provided for in Article 28 (1) of Regulation No 3 presumes without exception a prior aggregation.

Aggregation and pro rata calculation are thus poindess in a case where the person concerned may claim benefit under the legislation of one Member State on the basis of the insurance periods completed under its legislation alone.

It is clear from the foregoing that Article 51 is intended to confer on the migrant worker the benefit arising from Community regulations without however diminishing the rights which he would have had if those regulations had not been applied.

This objective would be disregarded if the worker were obliged, in order to avail himself of the freedom of movement which is guaranteed to him, as a result of the entry into force of the Community regulations, to suffer the loss of rights already acquired in one of the Member States under that State's own legislation.

Article 28 (1) (f) of Regulation No 3 of the EEC must thus be interpreted as applying to cases in which the person concerned does not satisfy the conditions required for the payment of benefit.

Costs

The costs incurred by the Commission of the EEC, which submitted observations, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the French Cour de Cassation the decision on costs is a matter for that court.

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the observations of the Commission of the EEC and of the Caisse Régionale de Sécurité Sociale du Nord-Est; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the EEC, especially Articles 48 to 51 and 177; Having regard to the Protocol on the Statute of the Court of Justice of the EEC, especially Article 20; Having regard to Regulation No 3 of the Council of the EEC concerning social security for migrant workers, especially Articles 27 and 28; Having regard to the Rules of Procedure of the Court of Justice of the European Communities; THE COURT in answer to the question referred to it by the Second Civil Chamber of the French Cour de Cassation by judgment of that court of 27 April 1967, hereby rules:

I A migrant worker whose rights to an old-age pension have been calculated in accordance with the legislation of two Member States under the provisions of Article 28 (1) (a) and (b) of Regulation No 3 of the Council of the EEC concerning social security for migrant workers but to whom payment of the fraction of the pension payable by one of them is suspended, is entitled to obtain from the social security institution of the other Member State an amount of pension calculated solely in accordance with the legislation of that State and taking account of the insurance periods completed under its legislation;

2 The decision on costs in the present proceedings is a matter for the Second Civil Chamber of the French Cour de Cassation.