JUDGMENT OF 14. 2. 1980 — CASE 53/79 O.N.P.T.S. v DAMIANI

In Case 53/79 REFERENCE to the Court pursuant to Article 177 of the EEC Treaty by the Belgian Cour de Cassation [Court of Cassation] (Third Chamber) for a preliminary ruling in the action pending before that court between

THE COURT (Third Chamber) composed of: H. Kutscher, President, J. Mertens de Wilmars and Lord Mackenzie Stuart, Judges, Advocate General: G. Reischl Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

I — Facts and procedure

1. Article 45 (1) and (4) of Regulation No 574/72 of the Council of 21 March 1972 is worded as follows:

“1. If the investigating institution establishes that the claimant is entitled to benefits under the legislation which it administers without having recourse to insurance periods or periods of residence completed under the legislation of other Member States, it shall pay such benefits immediately on a provisional basis.

...

4. The institution required to pay benefits under paragraphs (1), (2) or (3) shall forthwith inform the claimant of the fact, drawing his attention explicitly to the provisional nature of the measure taken and to the fact that it is not open to appeal”.

2. On 10 February 1975 Fioravante Damiani, who had been an underground mine worker in Belgium, submitted a claim for a retirement pension to the Office National des Pensions pour Travailleurs Salariés [National Workers' Pensions Office] (hereinafter referred to as “the O.N.P.T.S.”). The latter, having investigated the case and obtained all the information necessary for the purpose of fixing the pension, acknowledged Mr Damiani's entitlement to a full mineworker's pension. It informed him, however, that the pension could be paid to him only subject to the deduction of the Italian invalidity pension which he was receiving and that a decision would be taken as soon as the amount of that pension was known following a request for information sent by the O.N.P.T.S. for that purpose to the Istituto Nazionale della Previdenza Sociale [National Social Welfare Institution].

3. On 25 March 1976, as the O.N.P.T.S. had still not adopted a formal decision concerning him, Mr Damiani brought proceedings before the Tribunal du Travail [Labour Tribunal], Mons, for recognition of his entitlement to a retirement pension. The Tribunal du Travail, Mons, recognized that Mr Damiani was entitled to the pension he requested but held that it could be paid only subject to deduction of the Italian pension and by judgment of 26 November 1976 it rejected the action as being without foundation. On 28 January 1977 Mr Damiani appealed against that judgment to the Cour du Travail [Labour Court], Mons. Following that appeal the O.N.P.T.S. notified Mr Damiani on 16 May 1977 of its decision granting him, on a provisional basis, a pension of Bfr 159420 as from 1 March 1975. In the decision it was stated that as the decision was provisional no appeal could be lodged against it pursuant to Article 45 (4) of the said Regulation No 574/72 of the Council. That decision led Mr Damiani to lodge a subsidiary claim with the Cour du Travail for payment of interest at a rate to be fixed by the court on the sums payable from the date on which his entitlement to a pension was recognized.

4. In its judgment of 13 January 1978 the Cour du Travail, Mons, ruled that the decision of the O.N.P.T.S. of 16 May 1977 granting the benefits on a provisional basis had rendered the applicant's claim for the adoption of that measure purposeless. It nevertheless upheld the subsidiary claim and ordered the O.N.P.T.S. to pay interest at a rate to be fixed by the court, to run from 25 March 1976, the date of the lodging of the application, on the sums payable to Mr Damiani on a provisional basis. The judgment is based on Article 45 (1) of Regulation No 574/72 which requires the investigating institution, if it establishes that the claimant is entitled to benefits under the legislation which it administers without having recourse to insurance periods or periods of residence completed under the legislation of other Member States, to pay such benefits immediately on a provisional basis. According to the judgment that provision requires the authority to take a measure recognizing entitlement, in which matter it has no discretion. Consequently the court may take the place of the administrative authority and the person concerned may lodge an appeal in accordance with Articles 92 and 93 of the Belgian Constitution which entrust the courts with the task of protecting the citizen against arbitrary administrative measures. Although under Article 45 (4) of Regulation No 574/72 the content of the measure is not open to appeal the same does not apply where no measure has been taken. The person concerned may apply to the courts against such a failure to adopt a measure. From that the court deduces the power to deliver a declaratory judgment pursuant to Article 45 (1) of Regulation No 574/72 and, applying rules of Belgian law, to order the payment of interest at a rate to be fixed by the court on the amount of the benefits granted on a provisional basis.

5. The O.N.P.T.S. lodged an appeal on a point of law against that judgment relying on the following three grounds : (1) Article 45 (4) of Regulation No 574/72 provides that the decision taken by the investigating institution to pay immediately social security benefits on. a provisional basis pursuant to Article 45 (1) of the regulation is not open to appeal. Therefore the labour courts cannot order the institution to pay a pension on a provisional basis pursuant to that provision nor, consequently, can they order the institution to pay interest at the legal rate fixed by the court on the amount of such a pension. (2) The O.N.P.T.S. denies that Article 45 (1) of Regulation No 574/72 is applicable to the present facts. Immediate payment on a provisional basis by the investigating institution as laid down by that provision presupposes that the person concerned is entitled to benefits under the legislation administered by the institution. That condition is not satisfied here. In view of the Italian invalidity pension paid to him Mr Damiani is not entitled to benefits under Belgian law. The O.N.P.T.S. refers in this respect to Article 25 of the Belgian Royal Decree No 50 of 24 October 1967, as amended by Article 10 of the Law of 27 July 1971, under which “save in cases and subject to conditions determined by the King, the retirement pension and survivor's pension are payable only if the claimant does not pursue a professional or trade activity and if he is not in receipt of allowances for sickness, invalidity or involuntary unemployment in application of Belgian or foreign social security provisions”. The O.N.P.T.S. agreed on 16 May 1977 to grant, on a provisional basis, a pension equal to the difference between the full mineworker's pension and the Italian invalidity pension only in application of a mere administrative concession which is not stipulated by any legal provision. (3) As the right to retirement pensions and survivors' pensions is a “political right” within the meaning of Article 93 of the Belgian Constitution the provisions of Article 1153 of the Code Civil on the legal interest payable when payment is delayed are not applicable.

6. With regard to the first ground of appeal put forward by the O.N.P.T.S. the Cour de Cassation held that the matter before it raised a question of the interpretation of Community law on which, pursuant to Article 177 of the Treaty, the Court of Justice alone has power to deliver a preliminary ruling. By judgment of 19 March 1979 the Cour de Cassation (Third Chamber) therefore decided to stay the proceedings and to refer the following question to the Court of Justice:

“Where the investigating institution referred to in Article 45 (1) of Regulation (EEC) No 574/72 of the Council of the European Communities of 21 March 1972 fixing the procedure for implementing Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons and their families moving within the Community establishes that the claimant is entitled to benefits under the legislation which it administers without having recourse to insurance periods completed under the legislation of other Member States and where it does not immediately pay such benefits on a provisional basis and where, after the claimant has brought proceedings against it before the national court having jurisdiction in order to obtain an interim decision, the investigating institution decides to grant the benefits on a provisional basis as from a date prior to the date on which legal proceedings were brought, do the provisions of Article 45 (1) and (4) of the abovementioned regulation prevent the court before which the proceedings are brought from granting, at the request of the claimant and in application of national law, interest at a rate to be fixed by the court on the amount of the benefits payable on a provisional basis from the date on which legal proceedings were brought?”

7. The order from the national court was received at the Court Registry on 9 April 1979. Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC written observations were submitted by Mr Damiani, represented by Daniele Rossini, a trade union official, the O.N.P.T.S., represented by its Director, R. Massin, and the Commission of the European Communities, represented by its Legal Adviser, Jean Amphoux, acting as Agent. By order of 19 September 1979 the case was assigned to the Second Chamber. Pursuant to the Transitional Provisions relating to assignment of cases to Chambers adopted by the Court at its meeting on 9 October 1979 (Official Journal C 265, p. 9) the case was assigned to the Third Chamber. On hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court (Third Chamber) decided to open the oral procedure without any preparatory inquiry.

II — Written observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

Mr Damiani observes first that in contrast to, for example, the Italian provisions Belgian legislation does not expressly provide for the possibility of an appeal against the failure of the administration to take a decision. None the less, Articles 92 and 93 of the Belgian Constitution entrust to the judicial authorities the task of protecting individuals against arbitrary administrative measures.

While it is true that the relevant Community regulations contain no provision for penalties against negligent institutions, the fact remains that pursuant to Articles 41 (1) and 50 of Regulation No 574/72 the competent institutions are obliged to take all the necessary steps to accelerate as much as possible the investigation of claims for pensions and the award of benefits.

Whilst Article 45 (4) of Regulation No 574/72 does not make provision for appeal against provisional decisions there is nothing to prevent the claimant of a pension, faced with inertia on the part of the administrative authority, from bringing an action before the courts to enforce his rights.

Interest at a rate to be fixed by the court, in so far as it is intended to compensate the insured person for the loss suffered by him by virtue of the belated payment of the benefits to which he is entitled (resulting in particular from the substantial reduction in the purchasing power of the money from the day on which the benefit applied for should have been paid) and to penalize the delays on the part of the administration, is inseparable from the benefits payable in application of the Community regulations.

In conclusion, Mr Damiani proposes that the following answer should be given to the question asked:

“Article 45 (4) of Regulation No 574/72 does not prevent a migrant worker who is claiming a pension from applying to the judicial authorities to enforce his pension rights if the competent authority fails to apply the provisions of Article 45 (1) That provision does not prevent the court before which the matter is brought from granting interest at a rate to be fixed by it on the amount if the benefits paid on a provisional basis if they are payable in application of national law”.

In the view if the O.N.P.T.S. the question asked by the Cour de Cassation is inopportune. The O.N.P.T.S. recalls that it relied on three arguments before the Cour de Cassation. It takes the view that the reference to the Court of Justice, on the basis of its first argument, will serve no purpose if one or other of the second and third arguments is accepted. The Cour de Cassation has not examined the latter arguments. Furthermore, the question asked is based on a mistaken legal assessment in so far as it appears to suggest that Article 45 (1) of the regulation is of mandatory application in the present case and that pursuant to national law interest at a rate to be fixed by the court is payable, which is not the case.

In any event, Article 45 (1) and (4) of the regulation does not relate to the payment of interest at a rate to be fixed by the court. Article 45 (4) in fact provides that the provisional measure is not open to appeal. In consequence the claimant cannot apply to the courts to change the amount awarded on a provisional basis by the competent institution. That signifies ipso facto that no damages are payable during the course of judicial proceedings and interest at a rate to be fixed by the court cannot be awarded. Furthermore, no provision of Community law or national law lays down the possibility for a claimant to bring proceedings before a court directly against the investigating institution for either a final decision or interim measures.

The O.N.P.T.S. therefore claims that the Court should “rule that the payment of interest at a rate to be fixed by the court to persons covered by a social security scheme is a question of national law which only the national courts can decide. Consequently the provisions of Article 45 (1) and (4) of Regulation No 574/72 are not relevant”.

In its written observations the Commission examines the following two questions :

1) Does Article 45 (4) of Regulation No 574/72 prevent proceedings being brought before a national court against the refusal of a social security institution to effect the payment of benefits on a provisional basis for which provision is made in Article 45 (1) or against delay in making such payment?

2) If such proceedings are possible, can they lead to the award to the insured person of interest at a rate to be fixed by the court on the amounts payable?

Regarding the first question the Commission argues that, taken in isolation, Article 45 (4) could be read as excluding any possibility of proceedings before the courts against decisions to be taken by social security institutions in implementing Article 45. In the Commission's view, however, that interpretation should not be upheld. The expression “not open to appeal” should be read in conjunction with the passage concerning the provisional nature of the measure. Article 45 (4) means only that there should be no judicial involvement, following the decision regarding payment of benefits on a provisional basis, in the determination of the final position of the person concerned with regard to his entitlement to benefits.

On the other hand, that provision does not prejudice proceedings which may be brought against the incorrect application of Article 45, particularly in cases of refusal to award benefits or delay therein or of provisional payment of amounts which are not proportionate to the benefits payable. Any other interpretation would place a false construction upon the mandatory nature of the provisions of Article 45 and the requirements ensuing from its nature as a regulation pursuant to Article 189 of the EEC Treaty, in particular the direct effects which it must have in the internal legal order of the Member States.

Regarding the question whether the proceedings which may be brought by the insured person before the competent national courts if the benefits payable under Article 45 of Regulation No 574/72 are not paid or are paid belatedly may concern the award of interest at a rate to be fixed by the court on the amounts payable, the Commission takes the view that as the law now stands the national court must ascertain from the rules of its national law whether that law enables it to find in favour of such an application. The award of interest at a rate to be fixed by the court can be a means of ensuring the effective safeguarding of Community provisions. In any event, there is nothing in Article 45 (4) of Regulation No 574/72 to prevent an order for payment of interest being made if such interest may be payable under national law.

In conclusion, the Commission proposes that the following answer should be given to the question referred to the Court:

“Article 45 (4) of Regulation No 574/72 does not prevent a national court, before which proceedings have been brought relating to the failure by a social security institution to fulfil its obligations under Article 45 (1), (2) or (3) in the matter of the payment of benefits on a provisional basis, from awarding to a person entitled to such benefits, at his request and in application of national law, interest at a rate to be fixed by the court on the amount of the benefits payable”.

III — Oral procedure

The Commission presented its oral observations at the sitting on 29 November 1979.

The Advocate General delivered his opinion at the sitting on 17 January 1980.

Decision

1. By a judgment of 19 March 1979, which was received at the Court Registry on 9 April 1979, the Belgian Cour de Cassation [Court of Cassation] requested the Court for a preliminary ruling under Article 177 of the Treaty on a question concerning the interpretation of Article 45 (1) and (4) of Regulation No 574/72 of the Council of 21 March 1972 fixing the procedure for implementing Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons and their families moving within the Community (Official Journal, English Special Edition 1972 (1), p. 159).

2. The question was raised in the course of litigation between a worker claiming pension payments and the Office National des Pensions pour Travailleurs Salariés (O.N.P.T.S.), the issue being whether interest at a rate to be fixed by the court is payable under national law on the amount of benefits payable on a provisional basis under Article 45 (1) and (4) of the abovementioned regulation.

3. Article 45 (1) of Regulation No 574/72 provides that: Paragraph (4) of that provision states that the institution required to pay benefits under paragraph (1) “shall forthwith inform the claimant of the fact, drawing his attention explicitly to the provisional nature of the measure taken and to the fact that it is not open to appeal”.

“If the investigating institution establishes that the claimant is entitled to benefits under the legislation which it administers without having recourse to insurance periods or periods of residence completed under the legislation of other Member States, it shall pay such benefits immediately on a provisional basis”.

4. The question which has been asked by the Cour de Cassation is as follows :

“Where the investigating institution referred to in Article 45 (1) of Regulation (EEC) No 574/72 of the Council of the European Communities of 21 March 1972 fixing the procedure for implementing Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons and their families moving within the Community establishes that the claimant is entitled to benefits under the legislation which it administers without having recourse to insurance periods completed under the legislation of other Member States and where it does not immediately pay such benefits on a provisional basis and where, after the claimant has brought proceedings against it before the national court having jurisdiction in order to obtain an interim decision, the investigating institution decides to grant the benefits on a provisional basis as from a date prior to the date on which legal proceedings are brought, do the provisions of Article 45 (1) and (4) of the abovementioned regulation prevent the court before which the proceedings are brought from granting, at the request of the claimant and in application of national law, interest at a rate to be fixed by the court on the amount of the benefits payable on a provisional basis from the date on which legal proceedings were brought?”

5. The O.N.P.T.S. maintains that the request for a preliminary ruling is inadmissible, alleging that the question which has been asked is “inopportune” in view of the various arguments relied on before the court making the reference. It should be noted, however, that it is not for this Court to pronounce on the expediency of the request for a preliminary ruling. As regards the division of jurisdiction between national courts and the Court of Justice under Article 1 77 of the Treaty it is for the national court, which is alone in having a direct knowledge of the facts of the case and of the arguments put forward by the parties, and which will have to give judgment in the case, to appreciate, with full knowledge of the matter before it, the relevance of the question of law raised by the dispute before it and the necessity for a preliminary ruling so as to enable it to give judgment.

6. The O.N.P.T.S. further maintains that the expression “not open to appeal” in Article 45 (4) means that all possibility of challenging in the courts decisions which may be adopted by the competent institutions under Article 45 is excluded. Hence, in particular, it would be a misapplication of Article 45 for a national court to award to the person entitled to benefits, by virtue of national provisions, interest at a rate to be fixed by the court on the amount of the benefits payable.

7. The Court cannot endorse that interpretation. It is incompatible with the fact that payment of benefits on a provisional basis under Article 45 is obligatory in nature. Article 45 (1) requires the competent institution, where the conditions have been met, to pay “immediately” benefits which are due on a provisional basis. The fact that the payment of benefits is obligatory is confirmed by Article 45 (4) which refers to “the institution required to pay benefits under paragraphs (1), (2) or (3)”. The obligation which Article 45 thus imposes on the competent institutions corresponds to a right conferred on persons covered by social security which national courts are bound to safeguard.

8. Accordingly, Article 45 (4) cannot be interpreted as being intended to exclude all possibility of protection by the courts of the entitlement to benefits on a provisional basis. The expression “not open to appeal” in Article 45 (4), coupled with the words “provisional nature” which precede it, means only that the measures adopted by the competent institutions under Article 45 (1) may not be the subject-matter of proceedings which seek to obtain a definitive settlement of the person's entitlement to benefit. However, Article 45 (4) does allow a claim to be made before the appropriate national courts against the competent institution's failure to perform, or delay in performing, the obligations imposed on it by Article 45 (1) and permits interest on the amounts payable to be awarded to the claimant at a rate to be fixed by the court in accordance with the provisions of national law as a result of such proceedings.

9. The answer to the question referred to the Court must therefore be that Article 45 (4) of Regulation No 574/72 does not prevent the national court before which proceedings are brought against the failure of the competent institution to fulfil the obligations imposed on it under Article 45 (1) of that regulation from granting the claimant, at his request and in application of national law, interest at a rate to be fixed by the court on the amount of the benefits payable on a provisional basis.

Costs

10. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, 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 proceedings before the national court, the decision as to costs is a matter for that court.

On those grounds, THE COURT (Third Chamber), in answer to the question referred to it by the Belgian Cour de Cassation by judgment of 19 March 1979, hereby rules:

1 The arguments are summarized in the section headed “Facts and procedure” above.