C-54/77

2. A claim made solely to cover the regards the future is always possible. eventuality of the contested 6. Under the law relating to the public measure's being annulled need not service the irregular grant or have been mentioned in the continued payment of elements of complaint. remuneration cannot create vested 3. Article 47 of the Staff Regulations of rights such as to prevent revocation. Officials of the ECSC refers to 7. No form is prescribed for complaints servants who before taking up their through official channels within the duties resided continuously for more meaning of Article 90 (2) of the Staff than six months in a place more than 25 kilometres from the seat of the Regulations; they must be in­ terpreted and understood by the Community. Accordingly, the administration with all the care that expression "place where they resided before their entry into the service" a large and well-equipped organi­ contained in Article 9 of the General zation owes to those having dealings Regulations adopted pursuant to the with it, including members of its Staff Regulations must be staff. Although it is not possible to understood to refer to the place prohibit the seeking of legal advice where the person concerned was by those concerned even at that living permanently and where he was stage, it is their own decision and the institution concerned cannot be held previously employed. liable for the consequences. 4. The concept of the "place of origin" is different from that of the "place 8. The claim for reparation of the where [officials] resided before their damage which the person concerned entry into the service". The "place of is said to have suffered by having to origin" is a term of art the function consult a lawyer to clarify his legal of which is to indicate the place position in order to lodge a which is relevant for determining the complaint may be regarded as annual or bi-annual travel expenses. vexatious.

APPLICATION for the annulment of the decision of the Commission of 18 January 1977 rejecting the complaints made by the applicant on 12 April and 30 June 1976, for an order that the Commission should acknowledge the applicant's entitlement to the expatriation allowance as from 1 January 1976 and pay the same, and for the payment of compensation to the applicant for the material damage suffered,

THE COURT (First Chamber),

composed of: G. Bosco, President of Chamber, A. M. Donner and A. O'Keeffe, Judges,

Advocate General: H. Mayras Registrar: A. Van Houtte

gives the following

JUDGMENT

By a memorandum dated 19 January and order the defendant to pay it to 1976 from the Head of the Individual him with retroactive effect to Rights and Privileges Division the 1 January 1976 together with legal applicant was informed that "the Direc­ interest at 8 % for the period from torate General for Financial Control has 1 January 1976 until the date of refused to endorse the continuance of payment of the arrears; the expatriation allowance", on the — Rule that in consequence of the an ground that during the period prior to of the defendant the applicant has his entry into the service of the High abo suffered material damage the Authority he was living in Brussels. It amount of which should be fixed by was stated that the applicant would be the Court at 15 000 francs; kept informed of the progress of the case. The applicant lodged a complaint — Order the defendant to pay the against that memorandum under Article costs.

90 (2) of the Staff Regulations of Officials of the European Communities The defendant contends that the Court which was registered on 12 April 1976. should:

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[1976] ECR at p. 1024, paragraph 7). istration of 8 April 1976 and the sub As to the action for damages, the sequent lodging of a second complaint applicant claims in reliance on the registered on 30 June 1976 have no judgment of the Court of 1 July 1976 in effect, it is alleged, on the assessment of Case 58/75, Sergy v Commission ([1976] the admissibility of the application. ECR at p. 1139) that it was the unlawful reversal of the decision to Since the complaint was deemed to have been rejected on 30 October 1976 the grant the allowance which caused him to incur the costs and suffer additional applicant had unul 30 January 1977 to

8 April 1976, since the first lations. It is therefore possible to regard memorandum of 19 January contained the application brought before the nothing more than information as to a Court on 26 April 1977 as admissible in precautionary measure in connexion so far as its objective is identical with with a financial technicality. In any that of the second complaint, it being case, by reason of the subject-matter, understood that at that date claims the head of division is not competent to relating to the first complaint were out lake such a decision.

JUDGMENT OF 9. 3. 1971 — CASE 54/77

A — Application for annulment From -that provision it appears that the applicant could claim continuance of — Infringement of the fourth the expatriation allowance on his paragraph of Article 97 of the Staff posting to Brussels only if the former Regulations of Officials of the Staff Regulations of Officials of the European Coal and Steel Com­ European Coal and Steel Community munity, as continued in force by the would have entitled him in the same final paragraph of Article 2 of Regu­ circumstances to the continuance of the lation No 259/68 of the Council of separation allowance. This point is 29 February 1968 (Official Journal, covered by Article 9 of the General. English Special Edition 1968 (I), p. Regulations of the Community (1956) 30) laying down the Staff Regu­ annexed to the Staff Regulations of lations of Officials of the European Officials of the European Coal and Communities; Steel Community:

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As a result the defendant considers that 3. The amount of the local allowance the applicant's previous place of granted to all servants and the residence was Brussels and that for this separation allowance granted to reason he does not fulfil the necessary servants who before taking up their condition for the continued payment of duties resided continuously for more the expatriation allowance, which was than six months in a place more than therefore properly stopped. 25 kilometres from the seat. " The applicant in his reply maintains that only Article 9 (b) of the General Regu­ lations of the Community of 1956 It is clearly apparent from these relating to withdrawal of the allowance provisions taken as a whole that the is relevant. Within the meaning of that applicant was entitled to the main­ provision his place of residence was tenance of this allowance only if he Wevelgem and not Brussels. The High adduced evidence that the place where Authority determined his residence of he resided prior to taking up his dudes origin at the time of his recruitment as in Luxembourg was more than 25 Wevelgem and this was confirmed by kilometres from his new residence, the Commission in 1968. namely Brussels. Although the grant of the separation The Court must therefore decide allowance depended on six months at a whether the place of residence of the place of employment, such condition no applicant before he entered the service longer applies for the withdrawal of the of the European Coal and Steel allowance when the recipient's posting Community was, as he claims, is changed by the institution to which he was attached. Weve lgem, which is more than 25 kilometres from Brussels, or Brussels, as The place of residence of an official the Commission considered when when he is recruited is that where his adopting the decision at issue. natural milieu is to be found. When he

has made an express choice to make his Legitimate expectation has been legal residence coincide with his natural frustrated in that the Commission, after milieu no further doubt is possible. seven and a half years, is not entitled to rescind a measure which had become The documents in the adminstrative file show that the applicant's place of final and thereby wrongfully disturb to residence was Wevelgem. its own advantage a predetermined balance of interests; moreover, the fact In its rejoinder, the defendant observes that there had been a formal decision that the applicant does not dispute that and no procedure for amending it gave the solution to the problem of his place rise to a legitimate expectation that the of residence prior to his entry into the expatriation allowance would continue service of the High Authority to be paid to the applicant. determines the regularity of the grant of In answer the defendant states that since the expatriation allowance which he received from 1968 to the end of 1975. the expatriation allowance had wrongly been paid to the applicant since 1968 Nor does the reply attempt to challenge and there had been no change in the facts which die defendant took as its circumstances such as to justify its basis to show that the applicant's continued payment since then, the previous place of residence was Brussels. Commission was fully entitled, and even It is not possible to read "previous place obliged, to stop it as soon as it became of residence" as meaning "place of aware of the irregularity.

The necessity to down the obligation to register. Persons regularize matters is limited only by the living alternately in two or more requirements of legal certainty and not districts are required to register in each. by any obstacle created by the The applicant did not comply with this intangibility of certain rights. Such obligation, which is further evidence requirements in no way prevent the that he resided solely in Brussels. revocation of irregular decisions as regards the future nor is there any time- limit in such a case.

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cit). suggested that there was a that once a reasonable period has distinction between the revocation of expired an irregular measure, whatever irregular individual measures which its nature, can no longer be revoked. create rights and the revocation of This desire to give further protection to measures which merely recognize the individual and social rights of national existence of rights. If, for the sake of of Member States is particularly worthy argument, it were assumed that the of attention where the measure creating Court allowed unconditional revocation the right has been expressly set out by of irregular individual measures only if the administrative authority in a written they do not create rights, consideration document containing the considered of the facts and the solutions given by decision of the competent institution. national laws shows that the grant of the expatriation allowance obviously In the present case this leads to the conclusion that the memorandum of 5 falls into this category. July 1968 containing the grant of the As for disturbing a "balance of expatriation allowance to the applicant interests", the defendant observes that is an individual decision on a financial the Court has never referred to this in matter taken by the relevant authority deciding cases between officials and and arising from the applicant's posting Community institutions. The legal to Brussels. connexion between the two and the facts and circumstances of the particular The applicant maintains that he has a case would appear to prevent such a vested right to the continued payment factor from being taken into account.­ of the expatriation allowance. In relation to his third submission, the In his reply, the applicant states that in the absence of any provision governing applicant cannot see how the the revocation of a unilateral relationship under the Staff Regulations between an official and his administrative measure, as for example Article 41 of Annex VIII to the Staff administration can alter or even

JUDGMENT OF 9. 3. 1978 — CASE 54/77

to maintain the validity of the contested general principles of liability for a decision withdrawing the applicant's wrongful act or omission there is no expatriation allowance. right to compensation unless the There is nothing in the judgments of the defendant has caused the applicant Court to indicate that it contemplates damage and the defendant's action employing, in cases of revocation, the constituted a wrongful act or omission. concept of a reasonable period which The applicant replies that if the applies to a retroactive withdrawal. application for annulment is successful Nor can the defendant follow the the costs — which the defendant will applicant when he says that it appears have to bear — will be only those of the from the case-law of the Court that procedure before the Court. Because of revocation as regards the future is the defendant's wrongful act the possible only where there is no express decision but a mere omission or applicant was obliged to consult a lawyer on his own initiative at the stage indulgence on the part of the authority. That contention if valid would make of the "complaint through official channels". There is therefore a direct impossible any revocation, even such as is limited to the future, of all irregular causal relationship between those "measures". expenses and the wrongful act of the The defendant adheres to the obser­ Commission. Such damage should likewise be made good by the vation set out in its defence as regards defendant. the distinction between measures creating rights and measures which In its rejoinder the defendant refers to simply recognize rights. The applicant's the contentions in its statement of reply contains nothing to invalidate the defence. defendant's previous observations.

4 After a general investigation the Directorate General concerned considered that the said allowance was being paid irregularly since the transfer of the applicant to Brussels and as from 1 January 1976 it refused to continue payment thereof.

5 The applicant submitted a first complaint within the meaning of Article 90 (2) of the Staff Regulations which was registered on 12 April 1976.

6 Meanwhile, by letter dated 8 April 1976, the Director General concerned had informed the applicant that after consideration of the matter he was confirming the original decision to withdraw the allowance but had decided to grant him a differential allowance ad personam intended to offset the loss of the expatriation allowance until it was absorbed by future increases in salary.

7 Thereupon the applicant on 28 June 1976 submitted a fresh complaint requesting the annulment of that decision of the Director General.

8 In reply to those complaints the Commission itself by letter dated 27 January 1977 confirmed the decisions taken and stated that the differential allowance would be extinguished only as a result of salary increases and not by increases in remuneration caused by an increase in the applicant's family responsibilities.

Admissibility

13 However, the two decisions are closely connected and show that the decision to withdraw the expatriation allowance was repeatedly reconsidered, if not as regards its justification in law at least as regards its consequences with regard to natural justice.

14 Accordingly, the letter from the Commission received by the applicant on 27 January 1977 cannot be regarded as a mere confirmation of the previous decisions but rather as the definitive outcome of a reconsideration of his position.

15 The application directed against the decision contained in that letter is therefore admissible.

16 The Commission also claims that the application is inadmissible as regards the claim for damages because it was not the subject of a complaint through official channels.

17 It appears from the application that this claim was made solely to cover the eventuality of the contested refusal's being annulled, so that there was no

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21 However, Article 106 of the Staff Regulations provides: "Any official in receipt of a separation allowance before these Staff Regulations were applied who does not qualify for an expatriation allowance under Article 4 of Annex VTJ shall be allowed the same amount as that which he would have received by way of separation allowance under the scale of remun­ eration existing before these Staff Regulations entered into force."

22 The conditions for the grant of the above-mentioned separation allowance, which was provided for by the Staff Regulations of Officials of the European Coal and Steel Community, differ from those of the expatriation allowance mainly in the fact that persons were entitled thereto "who before taking up their duties resided continuously for more than six months in a place more than 25 kilometres from the seat" (Article 47 (3) of the Staff Regulations).

23 Article 9 (b) of the General Regulations adopted pursuant to the Staff Regu­ lations, which took effect on the same day, provided: "Officials who as a result of a new posting take up residence less than 25 kilometres from the place where they resided before their entry into the service lose the right to the allowance".

JUDGMENT OF 9. J. 1978 — CASE 54/77

24 The applicant considers that the withdrawal of the expatriation allowance contravenes those provisions, in particular by reason of the fact that it is based on the supposition that his place of residence before he entered the service of the European Coal and Steel Community was Brussels, whereas it is said to appear clearly from his personal file that as from the time when he entered that service he gave as his "place of origin" the municipality of Wevelgem, which is more than 25 kilometres from his place of employment and the place where he now resides.

31 In the rules in force at the time, as in the present regulations, "place of origin" is a term of an having a function different to that of the concept employed in Article 47 of the Staff Reguladons of Officials of the European

HERPELS v COMMISSION

Coal and Steel Community and Article 9 of the General Regulations; it indicates the place which is relevant for determining the annual or biannual expenses of travel from the place where the official is employed to his place of origin, a matter which is at present governed by Articles 7 and 8 of Annex VII to the Staff Regulations.

32 Article 7 (3) provides: "An official's place of origin shall be determined when he takes up his appointment, account being taken of where he was recruited or the centre of his interests", words which clearly show that that concept is different from that of the "place where they resided before their entry into the service".

33 It follows that the applicant must be regarded as having satisfied the condition contained in Article 9 (b) of the General Regulations and that the submission of illegality must therefore be dismissed.

34 The applicant's second submission is that the contested decision infringed a vested right since the separation allowance had continued to be paid since 1968.

40 Article 85 of the Staff Regulations on the recovery of undue payment confirms this distinction by making recovery subject to well-defined conditions while recognizing by implication that undue payments may be stopped.

41 Officials, who are deemed to have knowledge of that provision, cannot rely on legitimate expectation in this respect.

42 The applicant's submissions cannot therefore be upheld and his application for annulment must be dismissed.

Claim for damages

43 The applicant claims that "by reason of the withdrawal ... of the allowance" he had to consult a lawyer to clarify his legal position and thus incurred legal expenses.

44 The applicant claims that those sums should be reimbursed to him and that the Commission should therefore be ordered to pay damages which he assesses at 15 000 francs.

so The application must therefore not only be dismissed but perhaps regarded as without any legal justification and therefore vexatious and this must be borne in mind in connexion with the order as to costs.

Costs

51 Article 70 of the Rules of Procedure provides that without prejudice to the second subparagraph of Article 69 (3) of those rules, in proceedings commenced by an official of an institution against the institution the latter shall bear its own costs.

52 The second subparagraph of Article 69 (3) provides: "The Court may order even a successful party to pay costs which the Court considers that party to have unreasonably or vexatiously caused the opposite party to incur".

53 As has been found, the claim for reparation of the damage which the applicant is said to have suffered by having to consult a lawyer to clarify his legal position in order to lodge a complaint may be regarded as vexatious.

54 It would therefore be right to order the applicant to bear the costs resulting from that claim because it must be stressed that such claims, while lacking any justification, nevertheless place a burden both on the defendant and on the Court in refuting them and should be discouraged.

1. Dismisses the application;

2. Orders the parties to bear their own cosa.

Bosco Donner O'Keeffe

Delivered in open court in Luxembourg on 9 March 1978.

A. Van Houtte G. Bosco

Registrar President of the First Chamber