OPINION OF MR ADVOCATE GENERAL WARNER

DELIVERED ON 27 MARCH 1980

My Lords,

This case comes before the Court by way of a reference for a preliminary ruling by the Tribunal du Travail of Charleroi. The plaintiff in the proceedings before the Tribunal is the Caisse de Compensation des Allocations Familiales des Régions de Charleroi et Namur (which I shall call “the CCAF”). The defendant is Mr Cosimo Laterza. The queston at issue in those proceedings is as to Mr Laterza's entitlement to Belgian family allowances.

The papers before us show that, besides the CCAF, at least three other Belgian social security institutions have been concerned with Mr Laterza's case, namely the Fonds National de Retraite des Ouvriers Mineurs, the Caisse de Prévoyance du Centre and the Caisse de Compensation des Allocations Familiales de l'Industrie Charbonnière des bassins de Charleroi et de la Basse Sambre. The respective roles of those institutions are however irrelevant to the question Your Lordships have to decide and, to simplify matters, I propose to refer to them without distinction as “the Belgian authorities”.

The facts of the case are these.

Mr Laterza was born in Italy in 1936 and worked there from 1950 until 1955. Thereafter, for some fourteen years, he worked in Belgium as a miner. On 14 December 1969 he ceased work because of invalidity and on 16 February 1970 he applied to the Belgian authorities for an invalidity pension. On 12 May 1970 those authorities awarded him an invalidity pension payable from 1 June 1970. To that pension Mr Laterza was, so we were told, entitled on the basis of the insurance periods he had completed in Belgium alone. It amounted to BFR 4826.50 a month. A few days later, on 11 June 1970, the papers relating to Mr Laterza's case were sent to the competent Italian institution, the Istituto Nazionale della Previdenza Sociale (or “INPS”), for the assessment of any invalidity benefit due to Mr Laterza by reason of his period of work in Italy. That was in accordance with Articles 30 et seq. of Regulation No 4, under which an application for an invalidity pension was, generally, to be made in the first instance to the competent institution of the Member State in which the applicant was resident and that institution was to send the papers on to the competent institution of any other Member State where the applicant had completed insurance periods.

In February of the following year Mr Laterza returned to Italy and eight months later, on 18 October 1971, he married. As a result, the Belgian authorities, on 13 December 1971, decided that he was entitled to an increase in his pension, the increase taking effect from 1 November 1971. His pension now amounted to BFR 6921 a month. On 12 June 1972 Mr Laterza's first child, Antonio, was born. At this stage the INPS had still not made any decision as to Mr Laterza's entitlement to Italian invalidity benefit. The Belgian authorities awarded him Belgian family allowances in respect of Antonio.

There are two possible reasons why the Belgian authorities did that. One is that he was entitled to those allowances by virtue of Belgian law alone. The other is that he was, in the circumstances, entitled to them by virtue of Community law.

The relevant Belgian law is not absolutely clear. The Tribunal, in its order for reference, says nothing about it. The Commission drew our attention to Article 51 (3) of the Belgian “Lois coordonnées relatives aux allocations familiales”, which provides that “les allocations familiales ne sont pas dues en faveur des enfants élevés hors du Royaume”. In answer to a question put by the Court at the close of the written procedure, we were referred on behalf of Mr Laterza to the same provision. Mention was however made on his behalf of certain express derogations to it. What those derogations seem to boil down to, so far as this case is concerned, is that Article 51 (3) has effect subject to the requirements of Community law. That of course must be so. Surprisingly the CCAF, to which the same question was put by the Court, was unable to answer it. The likelihood, therefore, is that Mr Laterza was not entitled to Belgian family allowances by virtue of Belgian law alone. But whether he was or not is a question that can be finally determined only by the Belgian courts.

There can be no doubt on the other hand that Mr Laterza was, in the circumstances, entitled to Belgian family allowances by virtue of Community law. The relevant provision then in force was Artricle 42 of Regulation No 3 as amended by Council Regulation No 1/64/EEC, which was the provision that fell to be considered by the Court in Case 19/76, Triches ν Caisse Liégeoise pour Allocations Familiales [1976] 2 ECR 1243. Your Lordships will remember from that case that, in the original provisions of Regulation No 3 relating to family allowances for pensioners, the Council had sought to institute, for the computation of such allowances, a system that would take into account rights in different Member States, but that that system had proved in practice to be so complex as to be unadministrable. Indeed Mr Triches had, as a result, been deprived of any family allowances at all for a lengthy period. The purpose of Regulation No 1/64 was to abolish those complexities and to introduce a simple system based on the principle that only one Member State should be responsible for the payment of family allowances to a pensioner. It was that system that was applicable in Mr Laterza's case.

Since there is no authentic English text of Regulation No 3 or of Regulation No 1/64, I quote from the French text.

Paragraph 1 of the amended Article 42 provided:

“Les bénéficiaires d'une pension ou d'une rente due en vertu de la législation d'un seul État membre et qui résident sur le territoire d'un autre État membre ont droit aux allocations familiales conformément aux dispositions de la législation du pays débiteur de la pension ou de la rente comme s'ils résidaient dans ce pays.”

Paragraph 2 dealt with the case of

“bénéficiaires de pensions ou de rentes clues en vertu de la législation de plusieurs États membres.”

Paragraph 3 provided:

“Les dispositions des paragraphes 1 et 2 du présent Article sont applicables quel que soit l'État membre sur le territoire duquel les enfants résident.”

Thus, since at the time of Antonio's birth the INPS had come to no decision, so that Mr Laterza was drawing a Belgian pension only, Article 42 (1) applied and he was entitled to Belgian family allowances, even though he and his family were living in Italy.

On 1 October 1972, Council Regulations (EEC) Nos 1408/71 and 574/72 entered into force, replacing Regulations Nos 3 and 4. The provisions of the amended Article 42 of Regulation No 3 relating to family allowances for pensioners were re-enacted without material alteration by Article 77 of Regulation No 1408/71. So far as here in point that Article provides:

“1. The term ”benefits“, for the purposes of this Article, shall mean family allowances for persons receiving pensions for old age, invalidity or an accident at work or occupational disease ...

2. Benefits shall be granted in accordance with the following rules, irrespective of the Member State in whose territory the pensioner or the children are residing: (a) to a pensioner who draws a pension under the legislation of one Member State only, in accordance with the legislation of the Member State responsible for the pension; (b) to a pensioner who draws pensions under the legislation of more than one Member State: (i) in accordance with the legislation of whichever of these States he resides in provided that, taking into account where appropriate Article 79 (1) (a), a right to one of the benefits referred to in paragraph 1 is acquired under the legislation of that State, or (ii) in other cases ...”

(Article 79 (1) (a) merely provides for the aggregation of periods of insurance, employment or residence, where appropriate, in determining a person's right to benefit under the legislation of a Member State.)

On 23 January 1974 the INPS informed the Belgian authorities that it rejected the claim for Italian invalidity benefit because Mr Laterza was not regarded as being medically unfit under Italian legislation. By letter dated 7 February 1974 the Belgian authorities asked the INPS to reconsider its decision in the light of Article 40 (3) of Regulation No 1408/71. That provision read:

“A decision taken by an institution of a Member State concerning the degree of invalidity of a claimant shall be binding on the institution of any other Member State concerned, provided that concordance between the legislations of these States on conditions relating to the degree of invalidity is acknowledged in Annex IV.”

Concordance between the relevant Belgian and Italian legislations was so acknowledged.

Article 40 (3) of Regualtion No 1408/71 was new, in the sense that nothing like it was contained in Regulation No 3 or Regulation No 4. That brought into play Article 118 (1) of Regulation No 574/72, which (as amended with effect from 1 October 1972 by Council Regulation No 878/73 — see Articles 1 (25) and 2 of the latter Regulation) reads as follows:

“Where the date on which the contingency arises precedes the date of implementation of the Regulation [i.e. Regulation No 1408/71], and where the claim for pension has not yet been awarded before that date, such claim shall give rise to a double award, inasmuch as benefits must be granted, pursuant to such contingency, for a period prior to the last-mentioned date:

(a) for the period prior to the date of implementation of the Regulation, in accordance with the provisions of Regulation No 3 or of agreements in force between the Member States concerned; and

(b) for the period commencing from the date of implementation of the Regulation, in accordance with the provisions of the Regulation.

If, however, the amount calculated in pursuance of the provisions referred to under (a) is greater than that calculated in pursuance of the provisions referred to under (b), the person concerned shall continue to be entitled to the amount calculated in pursuance of the provisions referred to under (a).”

In other words Mr Laterza's right to an Italian invalidity pension was to be determined for the period before 1 October 1972 in accordance with the provisions of Regulations Nos 3 and 4 and for the period from that date in accordance with the provisions of Regulations Nos 1408/71 and 574/72, unless the proviso in the last paragraph of Article 118 (1) applied.

To continue the narrative, Mr Laterza's second child, Pietro, was born on 21 March 1974. The case was then still under consideration by the INPS. The Belgian authorities, so I infer, granted Mr Laterza family allowances in respect of Pietro also. On 31 October 1975, however, those authorities suspended payment of family allowances to Mr Laterza pending a decision of the INPS.

On 27 December 1976, the INPS decided that Article 40 (3) did constrain it to accept the Belgian authorities' assessment of Mr Laterza's health and that Mr Laterza was entitled to an Italian invalidity pension of 130650 lire per annum from 1 October 1972. That decision was communicated to the Belgian authorities.

As respects the period before 1 October 1972 the position remained that Mr Laterza was not entitled to Italian invalidity benefit because his medical condition was not recognized by the INPS as qualifying him for such a benefit. In consequence he was, unquestionably, by virtue of Article 42 (1) of Regulation No 3 (as amended), entitled for that period to Belgian family allowances and not to Italian family benefits.

When the Belgian authorities learned of the grant to Mr Laterza by the INPS of an Italian pension they promptly, so we were told, reduced the amount of his Belgian pension by the amount of the Italian pension. That action on their part is not however the subject of the present proceedings. What is relevant to them is that the Belgian authorities took the view that, as the result of the grant to him of an Italian pension, Mr Laterza's case fell within Article 77 (2) (b) (i) of Regulation No 1408/71, so that, as from 1 October 1972 he had been entitled to Italian family benefits and not to Belgian family allowances. Between 1 October 1972 and 31 October 1975 the Belgian authorities had paid to Mr Laterza by way of family allowances a total of BFR 104189. It appears that they sought in the first instance to recover that amount from the INPS under Article 111 of Regulation No 574/72, but that that attempt failed. On 29 August 1977, the CCAF commenced the present proceedings before the Tribunal du Travail of Charleroi in which it claims the BFR 104189 from Mr Laterza. Mr Laterza counterclaims for the difference between the Belgian and the Italian family benefits as from 1 October 1972, Belgian family allowances being higher than Italian family benefits.

Before the Tribunal du Travail, it was contended on behalf of Mr Laterza, in reliance on the decision of this Court in Case 32/76, the Saieva case [1976] 2 ECR 1523, that his right to the Italian pension and family benefits had been established in a manner incompatible with Article 94 (5) of Regulation No 1408/71, in that under that provision only the beneficiary himself may initiate a review of his rights. The Tribunal rejected that argument on the ground that, although the decision granting Mr Laterza an Italian pension (and so giving rise to his entitlement to Italian family benefits) was taken by the INPS on the initiative of the Belgian authorities, it did not amount to a revision of Mr Laterza's established rights but to the grant to him of rights which he had not had previously. No question on that point is referred to the Court, so I refrain from saying anything about it.

The other argument put forward on behalf of Mr Laterza, and the one on which his counterclaim was apparently based, was that the application of Article 77(2) (b) (i) of Regulation No 1408/71 should not result in a diminution of his rights to family benefits.

The question referred to the Court by the Tribunal du Travail, as one of interpretation of Article 77 (2) (b) (i), is :

“Should that provision be interpreted as meaning that entitlement to family benefits in the Member State in whose territory the recipient of an invalidity pension resides (in this case Italy) takes away the right to higher family benefits previously enjoyed in another Member State (in this case Belgium)?”

If Mr Laterza's entitlement to Belgian family allowances derived from Belgian law alone, there is of course no difficulty. It is well established by decisions of this Court that Article 51 of the Treaty does not empower the Council to legislate in such a way as to deprive a person of rights that he has under the law of a Member State independently of Community law. I will refer to that principle as “the Petroni principle” after the name of the leading case in the line of authorities establishing it (Case 24/75, Petroni ν ONPTS [1975] 2 ECR 1149). Accordingly Article 77 (2) (b) (i) of Regulation No 1408/71 could not be interpreted as taking away from Mr Laterza rights conferred on him by Belgian law unaided by Community law.

On the footing that Mr Laterza would be entitled to Belgian family allowances by virtue of Belgian law alone but for the fact that his children were being brought up outside Belgium, we were referred on his behalf to Case 32/77, the Giuliani case [1977] 2 ECR 1857. The reasoning of the Court in that case is not easy to follow and seems to me difficult to reconcile with the authorities according to which, where a person needs to invoke Community law in order to establish a right to benefit, he must accept the limitations imposed by that law (see e.g. Case 34/69, the Duffy case [1969] ECR 597, paragraph 8 of the judgment; Case 184/73, the Kaufmann case [1974] 1 ECR 517, paragraphs 9 et seq.; Case 50/75, the Massonet case [1975] 2 ECR 1473, paragraph 11; Case 83/77, the Naselli case [1978] ECR 683, paragraphs 12 and 13). In the Giuliani case the Court seems to have held that, although Mr Giuliani needed to invoke Article 10 of Regulation No 1408/71 in order to obtain payment of his pension, the Petroni principle rendered the limitation in Article 46 (3) of that Regulation inapplicable to him because the amount of his pension depended on German law alone without recourse to aggregation and apportionment. The judgment was delivered a week after the judgments in Case 22/77, the Mura case [1977] 2 ECR 1699, and Case 37/77, the Greco case, ibid. p. 1711, in which also the rules as to aggregation and apportionment were referred to, in a context where, as was subsequently shown by the judgments in Case 98/77, the Schaap case [1978] ECR 707, and Case 105/77, the Boerboom-Kersjes case, ibid. p. 717, the application or non-application of those rules was not really a decisive factor. It may be that a similar misapprehension underlay the decision in the Giuliani case. At all events it would not in my opinion be right to follow the Giuliani case in the present case, where neither Article 10 nor Article 46 of Regulation No 1408/71 is in point.

On behalf both of Mr Laterza and of the Commission we were referred to Case 100/78, the Rossi case [1979] ECR 831. The Commission went so far as to say that the choice before the Court in this case was between following the Triebes case and following the Rossi case. I do not think that that is right. Mr Rossi was entitled only to a Belgian invalidity pension. He therefore fell unquestionably within Article 77 (2) (a) of Regulation No 1408/71 and so was, by virtue of Community law, entitled to Belgian family allowances. The question whether he would have been entitled to them by virtue of Belgian law alone was not gone into. The question that the Court had to decide was whether, if Mr Rossi's wife, being in work in Italy, became entitled to receive Italian family benefits in respect of their children, his right to receive Belgian family allowances would, by virtue of Article 79 (3) of Regulation No 1408/71, be suspended entirely or suspended only to the extent of the (lesser) amount of the Italian family benefits. Mr Advocate General Capotorti saw two reasons why the latter must be the correct answer. The first lay in Article 60 of the relevant Belgian Arrêté Royal, the last paragraph of which provided that, where family allowances due under another title were less than those due under the Arrêté Royal, the person concerned should be entitled to claim the difference. That, said Mr Advocate General Capotorti, brought the Petroni principle into play, because Mr Rossi could not be deprived by Article 79 (3) of that to which he was entitled under Belgian law. Alternatively, said Mr Advocate General Capotorti, Article 79 (3) should be interpreted so that the suspension thereunder of a person's rights might be total or partial, according to the relative amounts of the family allowances linked to his pension and of the family benefits payable in the other Member State. In that regard Mr Advocate General Capotorti expressly drew the distinction between an “anti-duplication provision”, such as Article 79 (3) and a “choice of law provision” such as Article 77. (See [1979] ECR at pp. 849-852.) The Court, in its judgment, whilst adopting Mr Advocate General Capotorti's conclusion, did not clearly choose between his reasons.

The problem in the present case is different. It is whether (assuming that Mr Laterza was not entitled to Belgian family allowances by virtue of Belgian law alone) he was, under the relevant provisions of Community law, entitled as from 1 October 1972 to Belgian family allowances or to Italian family benefits.

There is, as I have said, no doubt that for the period before 1 October 1972 Mr Laterza was entitled only to a Belgian pension and therefore to Belgian family allowances. Nor is there any doubt that, if the INPS had issued at any time before 1 October 1972 its decision that he was not entitled to an Italian pension, he could not thereafter, except by his own volition, have been deprived of his right to those allowances. That is because only he, under Article 94 (5) of Regulation No 1408/71, as interpreted by the Court in the Saieva case, could have applied for the grant to him, after 1 October 1972, of an Italian pension.

It would be strange if the dilatoriness of the INPS resulted in his rights being different.

The authors of Regulations Nos 1408/71 and 574/72 took a number of precautions to ensure that beneficiaries of social security should not have their rights diminished as the result of the entry into force of those Regulations. There is Article 94 (5) of Regulation No 1408/71 and there is the proviso in the amended Article 118 (1) of Regulation No 574/72, both of which I have already mentioned. There are also Article 94 (9) of the former Regulation and Article 119 of the latter, protecting certain family benefits. Those provisions do not however extend to family benefits for persons in Mr Laterza's position.

The question is therefore whether the absence of any express provision protecting such benefits is to be taken to mean that the authors of the Regulations intended that the beneficiaries should be deprived of them in circumstances such as those of this case, or to mean that they overlooked the point so that there is a lacuna in the Regulations which should be filled by judicial decision, in order to avoid an unjust result (as, for instance, in Case 64/74, Reich ν HZA Landau [1975] 1 ECR 261). In my opinion the latter must be the right answer. In expressing that view I draw comfort from the fact that the Council, when adopting Regulation No 1408/71, recorded in its minutes the statement that: “It is understood that benefits granted in accordance with Regulation No 3 which turn out to be higher than those resulting from the application of Regulation No 1408/71 will not be reduced, in application of the principle of maintenance of accrued entitlement”. That statement of course has no legal force, but it is published (in the Commission's “Practical Handbook of Social Security for Employed Persons and their Families moving within the Community” at page 20 a) and we are not required to ignore it. I take comfort also from the fact that in the Saieva case the Court seems to have acknowledged the existence of a principle “that benefits awarded under Regulation No 3 which are more favourable than those payable under the new regulation shall not be reduced”. I think it possible that, in the case of family benefits linked to pensions, the authors of Regulations Nos 1408/71 and 574/72 thought that the transitional provisions applicable to pensions (Articles 94 (5) and 118 (1)) would be sufficient to take care also of the family benefits linked to them.

It should accordingly in my opinion be held that the entry into force of Regulation No 1408/71 could not have the result of making it possible (by the combined effect of Articles 40 (3) and 77 of that Regulation) for Mr Laterza to be deprived of his right to Belgian family allowances.

The question whether Mr Laterza should in some way account or give credit to the CCAF for the amount of any Italian family benefits he actually receives is not directly raised by the order for reference and I do not think it necessary to deal with it.

In the result I am of the opinion that, in answer to the question referred to the Court by the Tribunal du Travail, Your Lordships should rule as follows:

(1) No provision of Regulation No 1408/71 can deprive a person of a right conferred on him by the law of a Member State independently of Community law;