C-36/72

FRANÇOIS MEGANCK, official in the Official Publications Office of the Com­ munities, resident in Luxembourg, represented by Victor Biel, advocate at the Cour superieure de Justice du Grand-Duché de Luxembourg, having chosen his address for service in Luxembourg in the chambers of his legal adviser Victor Biel, 71 rue des Glacis, applicant, v

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by its legal adviser, Pierre Lamoureux, acting as agent, having chosen his address for service in Luxembourg at the chambers of its legal adviser Emile Reuter, 4 boulevard Royal, defendant,

1 — Language of the Case: French.

JUDGMENT OF 30. 5. 1973 — CASE 36/72

Reference to the Court for a preliminary ruling on the validity of recovery of overpayments,

THE COURT (Second Chamber)

MEGANCK v COMMISSION

November 1970 had not been The Advocate-General presented his completely executed in the sense that opinion at the hearing on 13 December only the dependent child allowance and 1972. the education allowance had been Pursuant to an Order of the Court withdrawn and the head of household (Second Chamber) of 27 February 1973 allowance had continued to be paid and the parties submitted certain documents moreover his daily subsistence allowance and replied in writing to various had not been reduced to the rate questions. provided for a single person following the loss of this status as head of household. III — Submissions of the On 23 February 1972, Mr Meganck submitted a complaint to the President parties of the Commission under Article 90 of the Staff Regulations, in which, refering The applicant submits that the Court should to his bona fides, he requested, in accordance with Article 85 of the [a) declare his application admissible Regulations, that the sums which had and well-founded; been paid to him might be retained. By note dated 10 March 1972, the head (b) declare that he was not aware that of the Personnel Department of the there was no due reason for the Commission informed Mr Meganck that payment made to him and that the an overpayment of 69 519 BFr (38 850 fact of the overpayment was not Fr by way of subsistence allowance and patently such that he could not have 30 669 Fr by way of allowance for head been unaware of it; of household) would be recovered by the administration. (c) declare in consequence that the sums overpaid should give no right to Save for an acknowledgment of receipt recovery; the complaint by Mr Meganck of 23 February 1972 has not been answered by (d) order the Commission to pay the the Commission. costs of the proceedings.

(a) It follows from Article 5 of the applicant has acted fraudently or that he decision of the Commission of 26 has been guilty of a grave breach February 1971 regarding the exercise of equivalent to fraud. Such is not at all the the powers conferred by the Staff position in the present case. Regulations on the appointing authority As regards the head of household that for the application of Article 85 of allowance the applicant was at no time the Regulations, the powers conferred aware that there was no due reason for on the appointing authority are the payment. Having in all honesty exercised, with regard to officials posted notified the administration of his new to Luxembourg and paid from working position he had no reason not to assume funds, by the Assistant Director-General that the appropriate deductions had not of Personnel and Administration holding been made from his salary. As to the office in that town. From Article 7 of the total sum of his final salary statement, same decision listing the provisions of he could legitimately have attributed it the Regulations the application of which to various successive increases in his the powers conferred on the appointing basic salary without being guilty of any authority are exercised in their respective serious negligence. spheres by the heads of department of It cannot be maintained that the error the Directorate-General of Administra­ committed by the administration, that is tion. It follows also that the head of the that there was no due reason for the Personnel Department, who signed the payment, was patently such that the note of 10 March 1972, had no applicant could not have been unaware competence whatsoever to take any of it: all the Administrative departments measure with regard to the recovery of who had received the memorandum of sums overpaid. 25 November 1970 had made the same Since the ground of lack of competence mistake and the salary statements sent to is a matter of public interest it ought to officials are difficult to understand. be admitted although it had been raised With regard to the subsistence allowance only during the course of the oral the applicant was unaware that there proceedings. was no due reason for its payment at the (b) The decision or the administrative rate applicable to officials who were constraint referred to in the proceedings heads of household.

Assistant Director-General of Personnel reminded or of which he could not have and Administration holding office at been unaware, have made the overpay­ Luxembourg who is normally responsi­ ments obvious. ble for the orders to pay and the With regard to the head of household payment of salaries, grants and allowance it should be pointed out that allowances. The present case concerns from June to December 1970 the the deduction from the monthly applicant's salary, instead of being payment of salary made on the order of reduced, had increased. the same Assistant Director-General. The Moreover the salary notice for allegation of lack of competence was December 1970 consisted not of a thus not substantiated. printed salary slip but of plain paper in (b) The interpretation which the such a way that the various columns of applicant places on Article 85 of the amounts made on this notice comprised Regulations disregards the duties of no printed information giving details of officials; it likewise disregards the it; it should have been a normal reaction inevitable errors which an administration for the applicant to ask the can commit and which is the very reason administration for details of the various for the provisions regarding the recovery sums.

It cannot be necessary to show fraud in The argument that the administrative order to justify recovery of overpay­ department did not notice the error is ments. In German law an undue neglect irrelevant; Article 85 of the Regulations of the attention which should be given could only have any meaning on the to the perusal of statements suffices; the basis that its authors foresaw that the French Council of State tends to be even administration could be led to make, less indulgent. without realizing it, overpayments of The fact that an administration makes which the recipient could not be unaware. an overpayment could be a simple mistake; the overpayment would not Regarding payments where the sum prevent partial or complete recovery depends on the particular situation of unless it was continued for a very long the recipient, the latter can, when the time or in spite of what the recipient overpayment is sufficiently detailed and says. quite clearly conflicts with the recipient's As regards the facts in question it is entitlement, perceive a mistake more appropriate to note that the applicant easily than the administrative Staff who has received statements the perusal of have to control several thousand which with a minimum of diligence and officials.

normal attention must, in view of the The recipient could thus not have been Staff Regulations of which he had been unaware that he was receiving a head of

JUDGMENT OF 30. 5.1973 — CASE 36/72

household allowance to which he was allowance according to whether the not entitled; Article 85 of the official is head of household or not. The Regulations is quite obviously applica­ applicant ought then to have perceived ble. that the subsistence allowance, which As to the subsistence allowance, this had was being paid to him, was at the rate of to be claimed each month on a special that of head of household by reason on the one hand of its amount and on the form; consequently when making his claim the applicant would necessarily other hand of the details given on the have known of Article 10 of Annex VII payment slip. of the Regulations, which clearly Article 85 of the Regulations is likewise stipulates a different rate of subsistence applicable here.

5 The application lodged on 22 June 1972 is concerned with the implied decision rejecting the request, arising from the failure on the part of the competent authority to reply within a period of two months from the lodging of the complaint of 23 February 1972.

MEGANCK v COMMISSION

6 It follows on the other hand from the very terms of the application that the applicant did not consider the note of 10 March 1972 as a decision on which an application could be made, especially as at the date of 22 June 1972 the period for an application against this act had expired.

7 It follows that the admissibility and basis of the application must be judged solely on the implied decision of rejection which is deemed to be constituted by the silence maintained by the Commission with regard to the complaint of 23 February 1972.

The ground of lack of competence

8 During the course of the oral proceedings the applicant raised a new ground arising from the fact that the disputed decision was signed by an official, i.e. the head of the Personnel Department holding office in Luxembourg, who was incompetent to exercise delegated powers such as arise from the decision of the Commission of 26 February 1971 regarding the exercise of powers conferred by the Staff Regulations on the appointing authority, which decision was made under the first paragraph of Article 2 of the Staff Regulations.

Merits

14 The nature and the amount of the overpayments are not disputed by the applicant.

15 The dispute relates solely to the question whether the Commission is within its rights to exact repayment of the disputed sums having regard to Article 85 of the Regulations, which provides that any sum overpaid shall be recovered 'if the recipient was aware that there was no due reason for the payment or if the fact of the overpayment was patently such that he could not have been unaware of it'.

16 It is established that the applicant, following the change in his domestic circumstances which took place about 1 July 1970, delayed until October of the same year giving notice of this to the Community authorities.

17 Thus having placed himself in an irregular situation by his own conduct he cannot rely on his good faith to be released from the obligation to return the sums overpaid during this period.

18 As regards the payment of the head of household allowance for the period afterwards, it is established by the documents produced by the Commission that the salary slips issued to the applicant from March 1971 to January 1972 show each time the payment of an allowance as 'head of household'.

24 It is true that details were subsequently given in an explanatory note issued to the officials and staff of the Commission in Luxembourg on the salary computations for February 1971, but these were not of a nature to permit the actual identification of the figures shown in the salary slips previously issued.

25 It must be recognized that for this period the overpayment was not patent.

26 Finally as regards the daily subsistence allowance paid for the period from November 1970 to October 1971, it appears from the explanations given by the parties and the documents produced by the Commission that these allowances were made on a declaration by the applicant by a special payment distinct from the payment of salary.

27 The declarations signed to this effect by the applicant on forms supplied by the administration contain no visible distinction as to whether these allowances were claimed as head of household or not.

28 Although the internal accounting documents of the Commission make a distinction in this respect, it is equally established that the vouchers issued to the applicant at the time of payment indicated the ground of payment only in a general manner as being 'daily subsistence allowances'.

29 In these circumstances it cannot be held against the applicant that he did not recognize the fact that these allowances were still being paid to him at the rate applicable to officials who were heads of household.

34 It is thus appropriate that the Commission should pay a part of the costs of the applicant, assessed at 50 %.

35 Moreover, under the terms of Article 70 of the Rules of Procedure, the costs incurred by the institutions in proceedings instituted by servants of the Communities shall be borne by the institutions.

On those grounds,

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the oral observations of the parties; Upon hearing the opinion of the Advocate-General; Having regard to the Staff Regulations, especially Articles 85, 90 and 91; Having regard to the Protocols on the Statute of the Court of Justice; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, especially Articles 69 and 70;

THE COURT (Second Chamber)

hereby:

Delivered in open court in Luxembourg on 30 May 1973.

A. Van Houtte P. Pescatore

Registrar President of the Second Chamber

OPINION OF MR ADVOCATE-GENERAL MAYRAS

DELIVERED ON 13 DECEMBER 1972 1

Mr President, This system comprises: Members of the Court, — the head of household allowance (Article 1 (1)) equal to 5 % of basic I — The facts salary; — the dependent child allowance and After having worked for several years as the education allowance which are a freelance proof-reader for the fixed sums. European Communities, Mr François Meganck was recruited as a temporary Finally, he received a daily subsistence agent on 1 June 1970 at the Office for allowance the benefit of which is Official Publications of the Communi­ accorded, by virtue of Article 10 (section ties; he was established in the post of 1) of Annex VII for a period of 12 proof-reader on 1 December 1971. months for officials who prove that they Mr Meganck had a minor daughter cannot continue to reside at home but dependent on him who in June 1970 was who have not moved to the place of still proceeding with her studies. At the their allocation. The rate of this daily time of his recruitment he therefore subsistence allowance varies according benefited under the system of allowances to the family situation. Mr Meganck in favour of heads of household laid benefited from the rate laid down for down by Annex VII of the Staff heads of household in accordance with Regulations. his grade.