C-252/78

JUDGMENT OF THE COURT (FIRST CHAMBER) OF 11 JULY 1979<appnote>1</appnote>

Arne Broe

v Commission of the European Communities

"Recovery of undue payment"

Case 252/78

Officials — Recovery of undue payment — Conditions — "Patent" overpayment — Concept (Staff Regulations of Officials, Art. 85)

JUDGMENT OF 11. 8. 1979 — CASE 252/78

of the Brussels Bar, with an address for service in Luxembourg at the office of its Legal Adviser, M. Cervino, Jean Monnet Building, Kirchberg, defendant,

APPLICATION for the annulment of the decision of the Commission to recover from the applicant sums paid by way of the household allowance in respect of the period from 1 January 1975 to 31 August 1977, as well as of the implied decision rejecting the complaint submitted by the applicant on 14 April 1978,

THE COURT (First Chamber)

composed of: J. Mertens de Wilmars, President of Chamber, A. O'Keeffe and T. Koopmans, Judges,

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

Staff Regulations, the conditions for application of Article 85 of the Staff payment of which are set out in detail in Regulations which states that "Any sum Article 1 of Annex VII to the Staff Regu­ overpaid shall be recovered if the lations. 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 2. Following the applicant's divorce on it." That memorandum stated, however, 8 August 1977, payment of the that recovery would be made only of the household allowance ceased with effect amounts paid after 1 January 1975 from January 1978 since the applicant because for the period from 1 July to 31 had no dependent child. An examination December 1974 the salary received by of the applicant's file carried out on that the applicant's wife had only exceeded occasion led to the discovery by the the upper limit fixed in relation to the officers of the Commission that he had grant of the household allowance as a been drawing the household allowance result of a retroactive readjustment improperly from 1 July 1974 because carried out in December 1974. Provided from that date his wife's income before that no mistake has been made the deduction of tax had exceeded the upper amount claimed is thus reduced to Bfr limit provided for, in respect of the grant 92 536, having regard to the fact that the of the household allowance, by Article 1 applicant did not receive a payment of (3) of Annex VII to the Staff Regu­ arrears of salary amounting of Bfr 6 828 lations in the version in force during the in January 1978. period in question. In those circum­ stances the defendant considered that there were grounds for the recovery of the sums overpaid. 5. On 14 April 1978 the applicant submitted a complaint under Article 90 (2) of the Staff Regulations against the defendant's decision to implement the 3. Accordingly, the applicant's salary provisions of Article 85 of the Staff statement for January 1978 indicated Regulations. that he would have to repary to the defendant the sum of Bfr 96 272. A first memorandum dated 10 February 1978 from the Salaries, Pensions, Missions 6. This application, dated 10 and Miscellaneous Allowances Division November, was received at the Court confirmed to the applicant the amount of Registry on 13 November 1978. the household allowance which had been paid in error and stated that with effect from February 1978 that sum would be recovered by means of twelve monthly 7. In the meantime the Commission has deductions from his remuneration of rejected the applicant's complaint by Bfr 8 347. decision adopted on 27 November 1978 and notified to him on 8 December 1978.

In his first submission in the application the applicant maintains that the defendant had infringed Article 85 of the II — Conclusions of the parties Staff Regulations of Officials of the European Communities. That provision provides for two cases in which a sum (1) The applicant claims that the Court overpaid may be recovered, that is, if the should: recipient was aware that there was no due reason for the payment or if the fact of the overpayment was patently such (a) Declare the application admiss­ that he could not have been unaware of ible and well founded; it. Neither of those two conditions is satisfied in this instance. The applicant (b) Annul the defendant's decision was not aware that there was no due to recover the sums overpaid to reason for payment of the household the applicant by way of the allowance from 1 January 1975 and the household allowance in respect defendant, on whom the burden of proof of the period from 1 January rests, does not maintain that. Further­ 1975 to 31 August 1977, as well more, the fact of the overpayment was as of the implied decision not patently such that the applicant rejecting his complaint submitted could not have failed to be aware of it. It on 14 April 1978; is not obvious from an examination of the salary statements that the household allowance was paid in error since the (c) Order the defendant to repay to applicant was unaware of either the the applicant the sums deducted portion of his wife's remuneration to be by way of recovery of the undue taken into consideration for the payment of the household allowance for the afore­ application of Article 1 (3) of Annex VII to the Staff Regulations, or how to mentioned period, as increased calculate the maximum remuneration of by default interest at the rate of the spouse, above which, in principle, the 8% per annum with effect from the date on which each sum is household allowance is no longer deducted; payable and which, by reason of the effect of the weighting, was not that referred to in Article 1 (3) of Annex VII (d) Order the defendant to pay the to the Staff Regulations. The fact of the costs. overpayment was so little evident that the expert officers of the Commission did not discover it motu proprio although (2) The Commission contends that the they had all the information available to Court should: enable them to do so.

inasmuch as even if the conditions laid 292 500 for those officials who are down by Article 85 of the. Staff Regu­ employed in Belgium. lations were satisfied certain information which he has obtained shows that the defendant has not required the recovery of sums overpaid in other cases similar to his. The Commission states that the applicant cannot claim to have been unaware of the existence of those provisions. It considers that even if the applicant succeeded in establishing that he was unaware of the application of the weighting to the upper limit of Bfr 250 000 despite its publication in the Staff Courier, that would not make the 2. As regards the first submission relied fact of the overpayments any less patent, on by the applicant the Commission states in its defence that it follows from since no official is entitled to rely on his the case-law of the Court and, in ignorance of a measure which has been duly published in the Official Journal or particular, from the judgment of 27 June internal notices addressed to the staff. It 1973 in Case 71/72, Kuhl v Council of goes on to state that far from relieving the European Communities ([1973] ECR 705), that once an official claims that he the applicant of his duty to repay the sums overpaid his alleged unawareness of had no knowledge of the fact that the the application of the weighting to the sums paid to him were paid in error, the upper limit of Bfr 250 000 is in fact of question whether the undue payment was such a nature as to show even more patently evident must be examined. The Commission maintains that the clearly that there was no due reason for the payments. The Commission also arguments put forward by the applicant takes the view that the applicant cannot in support of the proposition that the claim that he was unaware of the amount fact of the overpayment was neither of remuneration received by his wife. evident nor a fortiori so patent that he could have been unaware of it does not bear close examination. It recalls first that Article 1 (3) of Annex VII to the Staff Reulations in the version in force on the entry into service of the applicant Secondly, the Commission states that the and his wife fixed the upper limit of the fact that the overpayments result from an annual income of a spouse before deduc­ error on the part of the administration is tion of tax at Bfr 250 000. It also not in itself sufficient to rule out the observes that at their meeting on 26 application of Article 85 of the Staff October 1973 the heads of ad­ Regulations. In that connexion it relies ministration agreed that in future the on the opinion of Mr Advocate General weighting for the country where the Mayras, according to which an error on official and spouse performed their the part of the administration, even duties would be applied to the upper where it is not brought about by the limit of Bfr 250 000. The effect of that official, does not in any way exclude an system which has remained in force action for recovery: in fact, it is during the whole of the period during obviously one of the necessary which the applicant received the conditions for bringing it (Opinion in household allowance, has been to raise Case 71/72, Kuhl v Council [1973] ECR the aforementioned upper limit to Bfr at p. 719). Consequently, it is pointless

2. Since the salary statements only The Commission concludes that the clear indicate the grant of the allowance terms of Article 1 (3) of Annex VII of they do not reveal the irregularity, the Staff Regulations, as supplemented with the result that in order to by the aforementioned decision adopted discover it it would have been by the heads of administration, the pub­ necessary to refer to the provisions of lication of those measures in all the the Staff Regulations which deal with official languages, the fact that the the various elements said to make up applicant could not have been unaware the remuneration. of the remuneration received by his wife and the circumstances in which he was informed that he would be entitled to the 3. When his former wife entered the household allowance are all factors service of the defendant in February which show that the fact of the disputed 1974 the relevant department overpayments was patently such that the informed him that he was entitled to applicant could not have been unaware the household allowance. of it.

4. Six or seven other officials who were As regards the second submission, which in the same position as he was had is relied on by the applicant in the alter­ also not discovered the error. native, that is, breach of the principles of fairness, equality, distributive justice and sound administration, the defendant challenges the statements made by the From those four preliminary observations applicant and concludes that unless he the applicant concludes that the error provides fuller information that was not patently such that he could not submission must be dismissed. have been unaware of it and that his application is well-founded.

lations, that is, in envelopes addressed to officials whose situation was identical to the staff by name. Moreover, even his own to inform them that the problem though Article 1 of Annex VII to the was under consideration and, as regards Staff Regulations clearly indicates the three of them, that the decision had even upper limit to be taken into been taken to recover the undue consideration that is only one element of payment. the problem, since it is then necessary to compare that upper limit with the amount of the spouse's income before deduction of tax, which is un­ 4. In its rejoinder the Commission questionably a complicated procedure. states, first, that it has not accepted that the applicant was entirely unaware that there was no due reason for the payment of the household allowance but has only As regards the defendant's argument that stated that in the absence of any if necessary he should have asked the evidence it is not in a position to come to responsible department for additional any conclusion on that point. information the applicant observes that if additional information is necessary in order for him to become aware of an The defendant continues by stating that error then it is not patently such that he it is impossible to accept the applicant's could not have been unaware of it, since argument that the fact of the over­ it must be obvious to anyone exercising payment of the household allowance ordinary care. cannot be patent since the adminis­ tration, which has a specialized department available to deal with those matters, did not discover the irregularity The applicant maintains that where a for approximately two years. It refers husband and wife are employed by the again to the observations put forward in same institution an official is not its defence and adds that its departments required to concern himself with the do not have the power to carry out a effect of the spouse's income on the systematic and consistent review of the other party's rights to remuneration, level of remuneration received by the since the administration is necessarily in spouses of its officials and servants and possession of all the facts. Accordingly, that for that reason it requires its such official is under no obligation to officials to inform it of any change communicate those facts to the which takes place, in particular as institution in question. If the regards the gainful employment of their Commission's officers do not establish spouses. In this instance the applicant any correlation between the files of the failed to fulfil that duty, which prevented husbands and wives in its service the the Commission from checking whether fault must not be imputed to the official or not there was due reason for the but to the institution. payment of the household allowance.

add the net sum received by his wife to amount of the spouse's income is only the amount of Community tax paid in incumbent upon those officials whose order to obtain the monthly amount spouse is not employed by the whose annual equivalent must be Commission. On the contrary, it compared with the upper limit provided considers that that duty is incumbent for by the Staff Regulations. upon all officials whose spouse is in gainful employment, whether or not at the Commission. By neglecting to perform that duty the applicant has disregarded the undertaking into which he entered when he took up his appointment and has failed in the The defendant disputes the applicant's "fundamental duty of ... co-operation allegation that he had no knowledge of which all officials owe to the authority to Article 1 (3) of Annex VII to the Staff which they belong" (judgment of 14 Regulations and of the decision adopted December 1966, Case 3/66, Alfieri v by the heads of administration since, as European Parliament [1966] ECR at p. he acknowledges himself, he received on 448). his appointment a "vade-mecum" in Danish and a copy of the Staff Regu­ lations in German, a language which according to his periodic report for the period from January 1974 to June 1975 he knew "very well". As regards the In conclusion the Commission takes note reading of the Staff Courier it is not too that the applicant is abandoning the much to expect an official in his grade to submission relating to breach of the distinguish between important notices principles of fairness, equality, distri­ and those of an anecdotal nature. butive justice and sound administration and to abuse of powers.

3 On the basis of the foregoing provisions the applicant drew the household allowance until he informed the administration that he and his wife had been divorced on 8 August 1977. Following communication of that information and as the applicant had no dependent child payment of the household allowance was stopped with effect from January 1978.

4 In addition to the provisions referred to above Article 1 of Annex VII contains a paragraph (3) which limits the right to the household allowance. According to the version of that paragraph in force at that time, a married official with no dependent child who is in principle entitled to receive that allowance shall not receive it if the spouse is gainfully employed with an annual income, before deduction of tax, of more than Bfr 250 000. That figure was raised to Bfr 292 500 with effect from 1 November 1973 for officials employed in Belgium.

JUDGMENT OF II. 7. 1979 — CASE 252/78

5 A check carried out when, following notification by the applicant, the administration ceased payment of the household allowance with effect from 31 December 1977, showed that from 1 July 1974 his wife's income had exceeded the upper limit laid down in Article 1 (3) of Annex VII to the Staff Regulations, with the result that from that date the household allowance had not been due to the applicant and had been paid to him in error.

6 In those circumstances the administration informed the applicant on 10 February 1977 that the sums overpaid would be recovered with the exception of those paid between 1 July and 31 December 1974 during which period his wife's salary had exceeded the upper limit in question only as a result of a retroactive readjustment. The appointing authority failed to reply to a complaint within the meaning of Article 90 of the Staff Regulations within the period, of four months prescribed by that article with the result that on the expiry of that period its silence constituted the implied decision rejecting the complaint, annulment whereof is now sought together with that of the decision of 10 February 1977.

11 In that connexion the applicant claims, first, that an error which the administration has itself committed over several years cannot be regarded as patent, particularly as it had full knowledge of the salary which it was itself paying to his wife. That argument cannot be accepted. It is not a question of whether the error was or was not patent to the administration, but whether it was so to the applicant and the situation of an administrative authority, which is responsible for the payment of thousands of salaries and allowances of all kinds, cannot be compared to that of an official who has a personal interest in checking the payments made to him each month.

12 Secondly, the applicant claims that the salary "statements on which the amount of the allowance was indicated did not enable him to ascertain that it was irregular while on the other hand, "to calculate the upper limit on the income of one's spouse, above which the allowance is no longer paid ... is complicated and would be a task for an expert".

15 It follows from the foregoing considerations that in this instance the Commission made a correct use of Article 85 of the Staff Regulations, with the result that the application must be dismissed.

Costs

16 Under Article 96 (2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs. As the applicant has failed in his submissions he must be ordered to pay the costs.

However, under Article 70 of the Rules of Procedure, in proceedings by servants of the Communities, institutions shall bear their own costs.

BROE v COMMISSION

On those grounds,

A. Van Houtte J. Mertens de Wilmars Registrar President of the First Chamber

OPINION OF MR ADVOCATE GENERAL MAYRAS DELIVERED ON 21 JUNE 1979 <apnote>1</apnote>

Mr President, I — The dispute concerns the Members of the Court, household allowance provided for in Article 67 (1) of the Staff Regulations of Officials. The conditions' governing the After the cases of Meganck v Commission grant of that allowance are laid down in of the European Communities (judgment Article 1 of Annex VII to the Staff Regu­ of 30 May 1973, [1973] ECR 527) and lations, paragraph (3) of which, in the Kuhl v Council of the European version in force at the time of the events Communities (judgment of 27 June 1973, in dispute, provided that: [1973] ECR 705) I am giving for the third time my opinion in a case "If the spouse of an official is gainfully concerning the recovery of sums paid in employed, with an annual income, error to an official of the Communities. before deduction of tax, of more than 1 — Translated from the French.