Supreme Court grants leave to appeal on exhaustion of remedies exception for invalid EU regulation categorisation.

THE SUPREME COURT

[Supreme Court Appeal No: 38/2019]

Clarke C.J.

O’Malley J.

Irvine J.

BETWEEN:

CATALIN PETECEL (Suing through his legal guardian MARIA PETECEL) and MARIA PETECEL

Applicants

And

THE MINISTER FOR SOCIAL PROTECTION, IRELAND and THE ATTORNEY GENERAL

Respondents

Judgment of Ms. Justice Iseult O’Malley delivered on the 18th day of July 2019

Introduction

1. The applicants have sought leave to appeal to this Court against a decision of the Court of Appeal (see Petecel v Minister for

Social Protection [2019] IECA 25) upholding the decision of the High Court (see Petecel v Minister for Social Protection [2018] IEHC

238) to dismiss their claim for judicial review reliefs. Having conducted an oral hearing on the application, the Court reserved

judgment.

2. The proceedings stem from the refusal of an application by the first named applicant (hereafter “the applicant”) for disability

allowance. Both the High Court and the Court of Appeal held that he should not have sought judicial review, on the basis that he had

not fully utilised the statutory review and appeals procedures set out in the Social Welfare Consolidation Act 2005 and had therefore

failed to exhaust an appropriate alternative remedy.

General considerations

3. The jurisdiction of the Supreme Court to hear appeals is set out in the Constitution. As is clear from the terms of Article 34.5.3°

thereof and the many determinations made by this Court since the enactment of the Thirty-third Amendment, it is necessary, in order

for this Court to grant leave to appeal from a decision of the Court of Appeal, that it be established by the applicant that the decision

sought to be appealed involves a matter of general public importance, or that it is otherwise necessary in the interests of justice that

there be an appeal to this Court.

4. The general principles applied by this Court in determining whether to grant or refuse leave to appeal having regard to the criteria

incorporated into the Constitution as a result of the 33rd Amendment have now been considered in a large number of determinations

and are fully addressed in both a determination issued by a panel consisting of all of the members of this Court in B.S. v Director of

Public Prosecutions [2017] IESCDET 134 and in a unanimous judgment of a full Court delivered by O’Donnell J. in Price Waterhouse

Coopers (A Firm) v Quinn Insurance Ltd. (Under Administration) [2017] IESC 73. The additional criteria required to be met in order

that a so-called ‘leapfrog appeal’ direct from the High Court to this Court can be permitted were addressed by a full panel of the Court

in Wansboro v Director of Public Prosecutions [2017] IESCDET 115.

5. It should be noted that any ruling on an application for leave is a decision particular to that application and is final and conclusive

only as far as the parties are concerned. The issue calling for the Court’s consideration is whether the facts and legal issues meet the

constitutional criteria as above identified. It will not, save in the rarest of circumstances, be appropriate to rely on a refusal of leave

as having a precedential value relative to the substantive issues, if and when such issues should further arise in a different case.

Where leave is granted on any issue, that matter will be disposed of in due course in the substantive decision of the Court.

Background facts

6. The applicant is a Romanian national who lawfully resided and worked in the State between 2008 and 2011. In late 2011 he was

diagnosed with multiple sclerosis. Apart from one brief stay in Ireland in 2012 he has remained in Romania since then. His condition has

deteriorated very severely. He is now unresponsive and requires 24-hour care.

7. The application for disability allowance was made in September 2016 and was refused by a deciding officer on the basis that the

applicant was not resident in the State. It should be noted here that the applicant’s advisors at that stage took the position that

their client was, although absent from the State, habitually resident here. They also contended that disability allowance was, under

the relevant European Union Regulation, a “sickness benefit” and as such should be considered “exportable” – that is, payable to the

applicant outside the State.

8. The applicant then applied, under the provisions of the Act of 2005, for a review of the decision by another deciding officer. The

review resulted in a decision that the applicant was not habitually resident. Separately, it was determined that disability allowance

was not exportable because it was categorised as a “special non-contributory cash benefit” under Regulation (EC) No 883/2004 of the

European Parliament and of the Council of 29 April 2004 on the coordination of social security systems, O.J. L166, 30.4.2004 (“the

Regulation”).

9. By way of extremely brief explanation, the Regulation deals with the circumstances in which certain types of social security

payments may be exportable. Annex X of the Regulation lists by name a number of payments described as special non-contributory

cash benefits, which are specific to individual Member States and in respect of which a State may impose a habitual residence

condition. Disability allowance is listed in Annex X, and s.210 (9) of the Act of 2005 imposes such a condition. A person cannot be

considered to be habitually resident if he or she does not have a legal right to reside.

The High Court

10. In dismissing the proceedings, the trial judge (Barrett J.) noted that the applicant was seeking declaratory relief and a reference

to the Court of Justice of the European Union. However, he declined to consider any of the substantive issues raised, holding that the

applicant had failed to exhaust alternative remedies. By reference to the provisions of the Act of 2005, those remedies included the

right to appeal to an appeals officer and the right to seek a review of a decision of the appeals officer by the Chief Appeals Officer.

An adverse decision from the latter could be appealed on a point of law to the High Court, or, alternatively, the Chief Appeals Officer

might decide to refer a question of law to that Court.

11. It is relevant to note that Barrett J. recorded the applicant’s argument on this issue as being that the statutory appeals

framework was unable to address the issues in the case and that it would ultimately end up in the High Court. Barrett J. took the view

that to accede to this would be to place the applicant unfairly ahead of those who went through the proper process, and would

encourage dishonest applicants to contrive points of law with a view to sidestepping the appeals process. He also noted the

submission that the Chief Appeals Officer did not have the power to make a preliminary reference to the Court of Justice, but

considered that the point of law concerned would be determined either in separate proceedings recently commenced in the High Court

or at a later stage in the applicant’s own case.

The Court of Appeal

12. On appeal, the applicant argued that he could not be required to exhaust the appeals process in circumstances where he could

not obtain the remedy he sought under that process. The judgment (delivered by Costello J.) describes the “essence” of his case as

being the contention that disability allowance was incorrectly listed in Annex X of the Regulation. The appeals officers and the Chief

Appeals Officer did not have jurisdiction to determine this issue, and those officials do not make references to the CJEU. He further

submitted that the case concerned very complex issues relating to European Union and social welfare law, and that the High Court

was the more appropriate venue for such matters. An appeal to the High Court under the Act was said to be unsuitable, on the basis

that it would be limited to an examination of the original decision by the officials, with a view to establishing whether or not they had

based the decision on an identifiable error of law or an unsustainable finding of fact.

13. Costello J. did not accept that cases involving complex issues of European law constituted an exception to the obligation to

exhaust a statutory appeals process. She acknowledged that there was force in the submission that a party should not be required,

as a precondition to judicial review, to engage in a “pointless” appeals process which could never confer the benefit sought. However,

she was satisfied that the process was not pointless in the instant case. The points of law raised by the applicant could be referred

to the High Court by the Appeals Officer, or by the applicant in an appeal on a point of law. (I note here that the reference to an

appeals officer is presumably a typographical error, this power being confined to the Chief Appeals Officer.) While she accepted that

the parameters of such an appeal were as described by the applicant, there was no authority to suggest that the High Court could

not refer a question to the CJEU in dealing with it, or that the High Court could not declare that the State had erred in its

categorisation of disability allowance for the purposes of the Regulation. She considered, indeed, that the High Court would have a

broader jurisdiction on a statutory appeal than on judicial review, since it could decide that the applicant was in fact entitled to the

allowance.

14. The applicant had relied upon the judgment of Clarke J. in EMI Records (Ireland) Ltd. & Ors. v The Data Protection Commissioner

[2013] 2 I.R. 669, where it had been noted that in some cases an appeal would not permit the person aggrieved to adequately

ventilate the basis of their complaint about the original decision. Clarke J. had referred in this context to the judgment of Hogan J. in

Koczan v Financial Services Ombudsman [2010] IEHC 407, where that judge had pointed out that this situation might arise because

of constitutional difficulties, or because of other circumstances where the body to whom the statutory appeal lies would not have

jurisdiction to deal with all the issues.

15. Costello J. held that these exceptions to the general obligation did not arise, given the statutory provisions for appeals or

references to the High Court on points of law.

The application for leave

16. In the original written application for leave, the applicants had submitted that two issues arose, being the categorisation of

disability allowance in Annex X of the Regulation and the habitual residence of an EU national who is outside the State due to illness.

In oral argument counsel has accepted that the applicant does not have a right of residence in this State. Had this issue remained

live, it could reasonably have been argued that the statutory appeal process still had some role to play. However, the case now

comes down to the issue of exportability of the payment, which in turn depends on the validity of its categorisation in the Regulation.

The applicant again submits that the appeals officers are bound to accept that the categorisation is valid and therefore do not have

jurisdiction to grant any form of relief. In those circumstances, it is argued that an EMI-type exception arises.

17. It must be noted that the applicants continue to maintain that, regardless of the jurisdictional issue, it is appropriate to seek

judicial review, rather than to invoke the appeals mechanism, in social welfare cases involving complex questions of EU law.

18. The respondents have confirmed their position in respect of certain aspects of the debate. They take the view that there is no

right of appeal against a decision not to revise an original decision of a deciding officer (an issue that is under appeal to the Court of

Appeal in unrelated proceedings). However, they point out that the applicant could have appealed the original decision within the 21

days permitted, and that the question whether a late appeal can be accepted has never been considered.

19. The respondents also confirm their view that the Social Welfare Appeals Office is not a “tribunal” for the purpose of making

preliminary references under Article 267 of the TFEU but reiterate that the Chief Appeals Officer can refer any question of law to the

High Court.

20. On the jurisdictional argument, the respondents say that a national court has the power to declare that a payment has been

validly included in the Annex. However, they accept (notwithstanding the view of Costello J. that there was no authority on the

point) that the national court would have no jurisdiction to invalidate a regulation or any part thereof. Nonetheless, in general, the

respondents submit that there is an interest in ensuring that individuals utilise the statutory process rather than assuming a right to

seek judicial review on the basis of any alleged complexity of law.

Decision

21. The Court considers that the applicants have raised a point of law of general public importance and will accordingly grant leave.

The leave will be limited to two questions. The Court does not consider as viable the proposition that the obligation to exhaust

remedies should not extend to cases involving complex issues of law. The first question, therefore, is whether the lack of jurisdiction

within the statutory social welfare appeals process to grant any form of remedy in respect of the allegedly invalid categorisation of

disability allowance gives rise to an exception to the general obligation to exhaust statutory remedies before seeking judicial review.

22. It is common case that, while the High Court might be satisfied that a challenge to the categorisation was groundless, it would

not have jurisdiction to invalidate any part of an EU Regulation if it felt that the challenge was justified or was in doubt as to the

issue. In the latter circumstances the only option would be to refer the question to the Court of Justice. Since the categorisation is

the only matter now in dispute between the parties, the Court will grant leave on the question whether, if the answer to the first

question is Yes, this Court should refer a question to the Court of Justice on the substantive issue of validity rather than remitting the

matter to the High Court. This will involve hearing arguments as to the strength of the contention that disability allowance is wrongly

categorised in Regulation 883/2004, and as to whether it could be appropriate for this Court to refer a question to the Court of

Justice where the substantive issue has not been considered in the High Court.

38-2019 Catalin Petecel (suing through his legal guardian Maria Petecel) v Minister for Social Protection, Ireland and the Attorney General RESP

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38-2019 Catalin Petecel (suing through his legal guardian Maria Petecel) v Minister for Social Protection, Ireland and the Attorney General AFL

Web.pdf