C-63/79

In Joined Cases 63 and 6 4 / 7 9

1. LISELOTTE BOIZARD, NÉE HERBER, a w i d o w , w i t h o u t occupation, residing at 37 Avenue de l'Émeraude, Brussels, represented and assisted by Paul Humblet, of the Brussels Bar,

1 — Language of the Case: French.

JUDGMENT OF 16. 10. 1980 — JOINED CASES 63 AND 64/79

2. MARTINE BOIZARD, student, residing at the same address, represented and assisted by Marcel Slusny, of the Brussels Bar,

both with an address for service in Scheidgen (Grand D u c h y of Luxem- bourg) at the premises of N a d i n e Speicher-Goossens, 14 R o u t e d'Echternach, applicants, v

composed of: T. Koopmans, President of Chamber, A. O'Keeffe and G. Bosco, Judges,

Advocate General: J.-P. Warner Registrar: A. Van Houtte

gives the following

BOIZARD v COMMISSION

JUDGMENT

Facts and Issues

The applicants are the widow and the — BFR 75 000 as compensation for dependent child within the meaning of the sorrow suffered Article 2 of Annex VII to the Staff Regu- lations of Mr Boizard, a former official — BFR 1 066 256 as material of the Commission, who died on 24 damages consisting in the loss of November 1972. financial support by her husband; the court assessed Mr Boizard's On 21 November 1972 the car which Mr expectation of life as being five Boizard was driving was involved in a years during which time he collision after the other driver, a certain would have allowed 40% of his Mr Teugels, failed to observe the rule of monthly salary of BFR 55 306 for giving way to traffic approaching from the cost of maintaining his wife; the right. The forensic pathologists instructed by the examining judge to (b) To the dependent child: investigate the cause of the deceased's death concluded: — BFR 25 000 as compensation for the sorrow suffered; — that the accident in question had not caused fatal injury; — BFR 574 671 as material damages (cost of maintenance equal to — that death was due to a severe 20% of Mr Boizard's salary cardiac arrest resulting amongst other during five years). causes from a previous myocardial infarct; Following the decease of Mr Boizard the — that such a heart attack could have Commission paid the survivors' and happened at any time, even without orphans' pensions to the applicants to trauma, for example after a shock. which they were entitled as from 1 March 1973. On the date on which it adopted the decision in issue the In a judgment of the Tribunal pensions amounted to BFR 29 604 Correctionnel [Criminal Court], Brussels, together with BFR 11 159 family of 29 November 1973 the accused, allowances in the case of Mrs Boizard Teugels, was found guilty of being "the and BFR 14 953 in the case of her agent who occasioned the death, to daughter.

On 22 May 1973 the defendant invited the applicant's lawyer "in view of the "Where the invalidity or death of an sensitive nature of this matter . . . to send official is caused by a third party, the the judgment delivered by the court rights of action of the official or of those which should, I think, be notified to you entitled under him against the third party within the next few days." shall vest in the Communities within the limits of their obligations under this pension scheme." In the meantime Mrs Boizard had asked Mr René Derveaux, an official at the Commission and a friend of the Boizard family, to intercede in the matter in The insurer of the third party liable order to obtain a statement of the claimed that that step was inadmissible amounts paid by way of pensions. The on the ground that the judgment had Commission contends that at that time been carried out and the damages Mr Derveaux himself knew nothing of awarded to those entitled under the the intentions of Mrs Boizard and deceased official had been paid, and that proposed to the Court that it hear that the Commission's rights by subrogation official as a witness should it think fit. It could not extend to more than the value maintains that although the financial at common law of the damages accruing certificates dated 10 May 1973 to those entitled under the official. containing a breakdown of Mr Boizard's Accordingly it was suggested to the salary and the widows' and orphans' defendant that it should take action survivors' pensions were "issued for against those entitled under the official communication to the court authorities" for the recovery of sums wrongly paid. it was not aware that the applicants were going to appear as "parties civiles" [civil parties] before the Tribunal Correctionnel in order to recover By a letter of 25 May 1977 the material damages from the third party defendant informed the applicants that liable. The applicants, for their part, by obtaining judgment against the third maintain that the Commission's officers party liable they had exercised rights of were kept informed of the criminal action which did not belong to them proceedings before that court.. thereby depriving the Commission of its right to recourse under Article 47 of Annex VIII which prohibits double By a letter of 14 March 1974 the payments. The Commission invited the applicants' lawyer sent to the applicants to repay to it amongst other Commission a copy of the judgment things the amounts awarded under the delivered on 29 November 1973 asking head of material damages, indicating that that it should be sent to the insurers with it would not be opposed to any proposals

On 1 June 1978 the Commission II — C o n c l u s i o n s of the p a r t i e s adopted the decision in issue by which, pursuant to Article 41 of Annex VIII of the Staff Regulations prohibiting double The applicants claim that the Court payments, the monthly payments of the should: pensions falling due to Mrs Biozard and her daughter and amounting to BFR 1. Declare the Decision of 1 June 1978 29 604 and BFR 14 953 respectively were to be null and void; made subject to deductions of BFR 8 000 and BFR 5 000 respectively with effect 2. Declare the express rejection of the from 1 June 1978 until the outstanding applicants' complaint dated 19 amounts of BFR 1 066 256 and BFR January 1975, so far as necessary, to 574 671 to be repaid in that way had be null and void; been recovered, those deductions being indexed and varying automatically by the 3. Order the opposite party to pay to the same percentage increase as the gross applicants all sums retained by it in amount of the monthly pension pursuance of the decision of 1 June payments before the deductions. 1978 which the applicants estimate at BFR 100 000, subject to amendment during the proceedings; The applicants drew up a complaint dated 19 July 1978 against that decision 4. Order the opposite party to pay such which was lodged on 27 July 1978. By a interest as the Court may consider letter dated 19 January 1979 from the normal, from the date of the defendant that complaint was rejected on deductions in question; the ground that it was unlawful for pension rights to overlap with damages 5. Order the opposite party to pay the recoverable at common law as costs. compensation for the same injurious circumstances for which the pensions themselves are intended to be The Commission claims that the Court compensation, and on the ground of the should: legal principle by which the person who deprives another of the benefit of subro- 1. If it thinks fit, hear Mr René gation on which he could legitimately Derveaux, a Commission official, as a

III — Submissions and argu- ments of the parties The applicants claim that the Commission may not rely on Article 41 of Annex VIII as the provision is not applicable to the situation existing as between the parties. The first paragraph 1. The applicants believe that Article 47 thereof allows the amount of the pension of Annex VIII to the Staff Regulations to be recalculated as does the second does not prohibit the overlapping of paragraph if there has been a mistake of pensions with damages payable to a third law. In the instant case the pension is not party. The principle of non-overlapping in question. The issue is therefore one of was certainly in the mind of the misuse of powers. Community legislature when it drew up that provision, but it does not accord with any rule of equity. Article 47 is intended to adjust the respective rights of The applicants therefore advance three the administration and of officials or submissions; they are based: those entitled under them. The Community legislature vested the rights of action against the third party liable in the administration, apparently reserving — first, on the breach of Article 41 of to the administration the power not to Annex VIII to the Staff Regulations act and to leave the official or those inasmuch as that provision covers entitled under him to bring their own only the recalculation, modification action which in principle subsists. or withdrawal of a pension, and not a case in which neither the principle nor the amount of the pension is in question; the defendant is attempting The applicants contend that the content by means of a wrong construction of of their lawyer's letter of 19 April 1973, the provision and by the misuse of of the certificates sent to the applicants procedures to achieve a set-off by the Commission on 10 May 1973, and between the pension and a debt of the Commission's letter of 22 May which is not vested in it: alone show that the defendant had waived the right to assert its rights of subrogation. The administration in fact believed that the action was a sensitive — secondly, on the breach of Article 47 one and that the applicants had some of Annex VIII to the Staff Regu- prospects of success whereas it probably lations inasmuch as the defendant had none. The applicants therefore claims to be entitled to seek payment

— thirdly, on the breach of Article 85 of the Staff Regulations inasmuch as, As regards the second submission the although not expressly referring to Commission contends that by the effect that provision, and almost denying of "subrogation dans l'action", that is to that it is relying thereon, the say, the vesting of the legal power to act, defendant purports to apply the rule for which provision is made by Article 47 which it lays down whilst the of Annex VIII to the Staff Regulations, conditions attached by the that power was not vested in the Community legislature to the applicants in this case. Since they had no recovery of sums overpaid are not power to act their rights were "illusory" fulfilled in this case, as the defendant and, to the extent to which one head of itself admits. the damage was already made good or bound to be so made by the payment of pensions, did not even exist in the shape of rights to damages from the third party. The Staff Regulations cannot 2. The defendant denies that the therefore allow those entitled under an decision in issue constitutes "misuse of official to bring their own action which powers" and insists that it was taken in in principle subsists; in fact subrogation the normal exercise of the power of consists of the divesting and transfer of withdrawal or revocation of which the rights, and the victim's right to damages power to recalculate the amount of the falls to the ground when the burden of pension, provided for by Article 41 of the injury to that person is assumed by a Annex VIII to the Staff Regulations, is third party subrogated to the rights of but an illustration. That power had been the victim. legitimately exercised as soon as it was discovered, subsequent to the grant of the pensions, that the recipients thereof were receiving damages from the third The defendant states that the phrase party thereby altering the extent of their "subrogation dans l'action" should not rights under the Staff Regulations as be understood in the narrow sense of derived from the rule against double "subrogation dans l'instance" [subro-

gation to the proceedings]. A study of years to do so) in order to procure an comparative law shows that "subrogation admission that they were entitled to avail dans l'action" has the same scope as themselves of it from the first year. "subrogation dans les droits du recours" [subrogation to the rights of redress] or "subrogation dans les droits" [subro- gation to the rights] in general. It entails The Commission furhter asserts that in not only the right to step into the shoes the decision in issue it did not give the of the person whose rights are error of its officers as one of the reasons subrogated and pursue the claim which therefor. he has made but also the right to commence an action in the place of that person and the right to step into his shoes in any action which he has As regards the third submission the improperly brought. Commission replies that the decision in issue was not taken pursuant to Article

The decision against the insurer of the third party does not in fact constitute a "retroactive liable, the administration, once informed withdrawal" of previous pension of the criminal proceedings, should await payments; it is a partial "withdrawal/ their outcome. Moreover, if the applicant revocation" — taking effect, therefore, believed that they could pursue their civil only in the future — of an earlier action to the extent to which they did, provision of pension rights. the reason for that is to be found not in their belief that the Communities right to recourse had been waived in their favour, but in the applicants' ignorance 3. In their statement in reply the of Article 47 of Annex VIII. Ignorance applicants first of all point out that at the of the law is no excuse. At any rate a time when the events occurred, and plaintiff cannot be considered to be particularly at the time of their rejoinder entitled to exercise the right of action of as "parties civiles", . Mr Boizard's a third party solely because that third daughter was barely 14 years old and party has waived the exercise of that since she did not intervene personally in

BOIZARD v COMMISSION

It is not true that the defendant has actually calculated afresh or modified the pensions under the terms of Article 41 of The applicants repeat that failure by the Annex VIII to the Staff Regulations. The defendant to avail itself of the right to evidence for that is that if the applicants which it was subrogated does not auto- were at any given time to pay to the matically create a debt owed to it and defendant the balance of the debts that there is no suitable machinery in the alleged to be owed to it the pension Staff Regulations (save for Article 85 would cease to be subject to a deduction which the defendant cannot and does and would be once more paid without not want to invoke) to provide a set-off there being any need to apply Article 41 between the pensions and the debt

permits it. But it does not have the right pension scheme), the legislature then to introduce set-off — which is nothing spoke of "subrogation dans les droits du other than a coercive measure — and recours" ["the Communities shall. . . disguise it as a measure having a quite assume the rights of redress"]. Of further different purpose. significance is the proposal for a regu- lation to amend the Staff Regulations put forward by the Commission on 13 June 1979 (Official Journal C 191, p. 9) by As regards the second submission the which an Article 85a would be inserted; applicants argue that if it is here a matter paragraph (1) is worded as follows: of "subrogation dans l'action" and not of "subrogation dans le droit" the original right of the "subrogeant" [the person whose rights are divested] "Where the death, accidental injury or remains on foot, or potentially so; if the sickness of a person covered by these "subrogé" [the person acquiring the Staff Regulations is caused by a third right of action] does not exercise his party, the Commission shall, in respect right, the "subrogeant" may use his right of the obligations incumbent upon them which if not used remains in abeyance so under the Staff Regulations consequent

Therefore the defendant's efforts to 4. The Commission first points out as to prove on the one hand the repugnance to the facts that it did not wait until 1977 the legislature of double payments and, before giving attention to the situation on the other hand, that "action" must be created by the condemnatory judgment. understood as "droit" are futile. On 10 November 1975 it wrote to the insurer of the third party to try to recover the monetary gain awarded to the applicants following the decease of Mr Boizard. As to the Commission's wish not to assert its right of action the applicants state that although waiver is not to be presumed it may still be proved by presumption. The fact that the The defendant stresses that in no sense applicants' conduct and indeed that of does it reproach Mrs Boizard for having their lawyer may be explained by their appeared as "partie civile" before the ignorance of Article 47 of Annex VIII Belgian criminal court; it reproaches her only bears out the argument set forth for exceeding her rights and claiming above. Finally, the applicants did not act and obtaining for her own gain payment as "assignees" but by virtue of their own of sums which the Commission alone original right, temporarily transferred to was entitled to claim. the "subrogé" as the legislature intended, and they were able to assert that right on account of the waiver, or in any event evidence of inaction, on the part of the Commission. In arguing that there has been no recal- culation of the pension in the circum- stances envisaged in Article 41 since, when the amount of the damages is recovered, the pension will again be paid Whether the waiver or inaction by the without a new decision having to be defendant was intentional or the result of taken pursuant to Article 41, the an administrative error, the omission is applicants overlook the fact that if a new sufficiently significant to be inexcusable decision will not be necessary it is and it falis to the Commission to bear because the withdrawal/revocation the consequences. decision is adopted for an indefinite period. The fact that in this case the recalculation of the pension has taken the form of a fixed deduction does not alter its nature in any way. To speak of As regards the third submission the set-off in relation to those deductions applicants remain of the opinion that the would be totally inappropriate. The defendant tried to apply Article 85 of the decision in issue rests exclusively on the

Nothing is to be gained by allegations of In regard to the second submission the some kind of misconduct in the context defendant contends that since "subro- of an action for annulment. The gation dans l’action" depends on "subro- defendant was not guilty of any gation dans le droit" which underlies it, misconduct. It was not compelled to the differences in wording emphasized appear as a "partie civile" and could just by the applicants appear to be accidental as well have brought its subrogation and to have no legal significance. Fur- action in the civil courts, even up to the thermore, by determining the subject- end of 1977. It was not until 1974 that it matter of a subrogation action, the succeeded in ascertaining the mistake Community legislature thereby laid down made by the applicants. Having the true extent of the prohibition on contacted the insurer of the third party double payment and defined the precise liable, with a view to taking all possible scope of the rights remaining vested in steps to recover the payments, it could the victim and those entitled under that do no more than abide by the reply of person. Since the rights of the latter the insurer. persons are satisfied in so far as compensation is paid to them pursuant to the Staff Regulations their rights of action against the third party are As regards the first submission the divested in favour of the Communities Commission replies that if the Court is and are retained only to the extent to of the opinion that the reasons on which which the damage they have suffered is the decision in issue was based should not covered. The extent of subrogation, have referred to Article 85 of the Staff and consequently of the prohibition on Regulations it is within its power to double payment, depends broadly replace the incorrect reason with the speaking on whether or not the benefits proper one. paid by the body in which rights become vested are in the nature of an indemnity. By specifically relating the subrogation action to the pensions paid to those At the hearing on 13 June 1980 the entitled under an official killed in an applicants, represented by Paul Humblet accident due to the negligence of a third and Marcel Slusny, of the Brussels Bar, party the Community legislature ipso and the Commission of the European facto believed that by paying out Communities, represented by Robert pensions the Communities help to make Andersen, of the Brussels Bar, presented good the damage suffered by those their oral submissions. entitled · under the official thereby incurring loss for which the Communities are entitled to claim The Advocate General delivered his compensation from the third party liable. opinion at the sitting on 10 July 1980.

2 As the two cases are related the Court (First Chamber) by order of 30 May 1979 joined them for the purposes of the procedure and the judgment.

3 The facts giving rise to the dispute are the following. On 21 November 1972 the car which Mr Boizard was driving was in a collision with a vehicle which did not give way to him when he was approaching from the right.

BOIZARD v COMMISSION

Mr Boizard died three days later. Proceedings were brought against the other driver in the Tribunal Correctionnel [Criminal Court], Brussels. The applicants appeared as "parties civiles" before the court and the accused and his insurer were declared liable and ordered by judgment of 29 November 1973 to pay the following amounts by way of damages:

(a) To Mrs Boizard:

— BFR 75 000 as compensation for the sorrow suffered

6 The Commission invited the applicants' lawyer to send it a copy of the judgment delivered on 29 November 1973 which was done by letter of 14 March 1974.

JUDGMENT OF 16. 10. 1980 — JOINED CASES 63 AND 64/79

7 On 10 November 1975 the Commission contacted the insurer of the third party responsible for the accident taking that step pursuant to Article 47 of Annex VIII to the Staff Regulations which provide that:

"Where the invalidity or death of an official is caused by a third party, the rights of action of the official or of those entitled under him against the third party shall vest in the Communities within the limits of their obligations under this pension scheme."

The insurer of the third party liable claimed that that step was inadmissible on the ground that the judgment had been carried out and the damages awarded to those entitled under the deceased official had been paid, and that the Commission's rights by subrogation could not extend to more than the value at common law of the damages accruing to those entitled under the official. Accordingly it was suggested to the defendant that it should take action against those entitled under the official for the recovery of sums wrongly paid.

8 By a letter of 25 May 1977 the defendant informed the applicants that by obtaining judgment against the third party liable they had exercised rights of action which did not belong to them thereby depriving the Commission of its right of recourse under Article 47 of Annex VIII which prohibits double payments. The Commission invited the applicants to repay to it amongst other things the amounts awarded under the head of material damages indicating that it would not be opposed to any proposals for repayment by instalments at "reasonable" intervals of the principal amount only and not the interest.

1 4 By their third submission the applicants plead breach of Article 85 of the Staff Regulations inasmuch as the Commission, although not expressly referring to that provision, and almost denying that it is relying thereon, purports to apply the rule which it lays down whilst the conditions attached by the Community legislature to the recovery of sums overpaid are not fulfilled in this case, as the defendant itself admits.

15 The Commission denies that the decision in issue constitutes a misuse of powers and insists that it was taken in the normal exercise of the power to withdrawal or revocation of which the power to recalculate the amount of the pension provided for by Article 41 of Annex VIII to the Staff Regu- lations is but an illustration. In reality the decision does nothing more than comply with the Staff Regulations and prevent, by means of a reassessment of their entitlement, the individuals concerned from receiving an improper double payment.

JUDGMENT OF 16. 10. 1980 — JOINED CASES 63 AND 64/79

16 As regards the second submission the Commission contends that by the effect of "subrogation dans l'action", that is to say, the vesting of the legal power to act, for which provision is made by Article 47 of Annex VIII to the Staff Regulations, that power was not vested in the applicants in this case. Since they had no action their rights were "illusory" and, to the extent to which one head of the damage was already made good or bound to be so made by the payment of pensions, .did not even exist in the shape of rights to damages from the third party.

BOIZARD v COMMISSION

20 The Commission does not deny that the widows' and orphans' pensions were properly granted and determined as to their amount in accordance with the provisions of the Staff Regulations and Annex VIII thereto. The recalcu- lation of those pensions in order to recover a sum allegedly received from a third party, even if to the possible detriment of the Communities, does not come within Artcile 41 of the annex.

21 Accordingly the decision in issue must be annulled and there is no further need to examine the other submissions.

22 Consequently the Commission should be ordered to pay to the applicants the sums deducted in respect of each of them together with interest calculated from the date of the deductions. A fair rate is 8%.

Costs

23 Under article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs.

OPINION OF MR WARNER — JOINED CASES 63 AND 64/79

3. Orders the Commission to pay the costs.

Koopmans O'Keeffe Bosco

Delivered in open court in Luxembourg on 16 October 1980.

J. A. Pompe T. Koopmans Deputy Registrar, President of the First Chamber for the Registrar

OPINION OF MR ADVOCATE GENERAL WARNER DELIVERED O N 10 JULY 1980