C-92/82

JUDGMENT OF THE COURT (THIRD CHAMBER) 20 OCTOBER 1983 1

Max Gutmann v Commission of the European Communities

(Official — Resettlement allowance — Recoveiy of undue payment)

Case 92/82

Officials — Recoveiy of undue payment — Conditions — Awareness of the official that there was no due reason for the payment (Staff Regulations, Art. 85)

In Case 92/82

JUDGMENT OF 20. 10. 1983 — CASE 92/82

APPLICATION for the annulment of the Commission's decision to recover , under Article 85 of the Staff Regulations , sums paid as a resettlement allowance ,

THE COURT ( Third Chamber )

composed of: Y. Galmot , President of Chamber , Lord Mackenzie Stuart and U . Everling , Judges ,

Advocate General : G . F. Mancini Registrar : P , Heim

gives the following

By letter of 17 November 1980, Mr forced me to carry out a pretence of Gutmann applied for payment of the resettlement, which you must have resettlement allowance on the ground recognized as such." that he had left his permanent residence in Luxembourg and resettled in Paris. That application was accompanied by Accordingly, he requested that the note a certificate of permanent residence of 5 January 1981 altering his pension ("domicile") issued by the municipal rights be annulled and that his corre­ authorities of Paris. Shortly afterwards spondence be sent to him at his address Mr Gutmann submitted a telephone bill in Luxembourg. Mr Gutmann confirmed which was intended to establish that he the contents of that letter in writing on had resettled in Paris. At the same time, 13 March 1981. he stated that the removal would take place in accordance with the Com­ By letter of 31 March 1981, the mission's letter of 30 October 1980, in Commission replied that it was obliged other words at a later date. to continue to apply the weighting fixed for France and that, in addition it could not extend the period allowed for In consequence, the resettlement allow­ resettlement. ance was paid to him on 23 March 1981. In addition, as from February 1981, the Luxembourg weighting for the calcu­ On 21 May 1981, Mr Gutmann sub­ lation of his pension was replaced by that mitted a complaint under Article 90 of fixed for France, with retroactive effect the Staff Regulations to the appointing to December 1980 and January 1981. authority, seeking the annulment of the Commission's decisions to apply retro­ actively the weighting fixed for France to Following the alteration of the weight­ his pension and to send him his ing, Mr Gutmann wrote to the Com­ correspondence at his Paris address. mission on 4 March 1981 complaining about that last measure, which had detrimental effects for him. That letter By letter of 16 June 1981, the Com­ stated inter alia: mission agreed to those requests but stated that, at the same time, it con­ sidered that it was obliged to take the necessary steps, under Article 85 of the "By your letter No 6755 of 30 Staff Regulations and Article 46 of November 1980 you granted me an Annex VIII thereto, to recover the sum extension of the period for removal. unduly paid to him as a resettlement allowance, BFR 340 720, since that payment had been obtained as a result of On the other hand, you decided not to grant an extension for the payment of false declarations, it did not correspond the resettlement allowance. to any real state of affairs and therefore constituted an unjustified enrichment of Mr Gutmann. The Commission stated in conclusion that the sum would be Nevertheless you could not have been recovered over four months, by deduc­ unaware, in view of the medical certi­ tions from his monthly pension until the ficate which I sent to you on 27 October amount of BFR 340 720 was reached. 1980, that as a result of my wife's serious illness, it was impossible to effect either the removal or the resettlement within On 6 September 1981, Mr Gutmann the prescribed periods; you therefore submitted a complaint under Article 90

(2) of the Staff Regulations against that The Commission contends that the last decision. The complaint was rejected Court should: as unfounded by the appointing auth­ ority in a letter of 24 February 1982. Dismiss the application; Mr Gutmann brought this action by application which was lodged at the Make an appropriate order as to costs. Court Registry on 18 March 1982. Following his death, the action was continued by his two daughters. The written procedure followed the normal course. Ill — Submissions and arguments of the parties Upon hearing the report of the Judge- Rapporteur and the views of the Advocate General, the Court (Third The applicants claim in their application Chamber) decided to open the oral that the disputed decision is based on procedure without any preparatory Article 85 of the Staff Regulations and inquiry. that it is therefore necessary to consider whether Mr Gutmann "was aware that there was no due reason for the payment II —- Conclusions of the parties or [whether] the fact of the overpayment was patently such that he could not have been unaware of it" (Article 85 of the The applicants claim that the Court Staff Regulations). They submit that should: the Commission has not indicated in what way Mr Gutmann made "false 1. Declare the application admissible; declarations", when and where such declarations were made and how he 2. With regard to the substance, grant should have known that the sum that the the application, and consequently: Commission now seeks to recover was paid without due reason. Mr Gutmann 3. Declare that the Commission was made it sufficiently clear to the Com­ wrong in deciding to withhold the mission's officers in Brussels that he was sum of BFR 340 720 from Mr unable to resettle his whole family in Gutmann's pension rights; Paris together, at the same time. It was, 4. Order the Commission to reimburse, moreover, for that reason that the period within one week from the delivery of for removal was extended by the the judgment, the sums unduly administration, which was therefore withheld; aware that Mr Gutmann and his eldest daughter were established in the place of 5. Declare that the Commission owes resettlement. Mr Gutmann has never interest at 12% on all sums retained, denied that he had resettled. in each case from the day on which the sum was withheld; The applicants cite the judgment in 6. As far as necessary, annul the implied Verhaaf v Commission (Case 140/77 and express rejection of their [1978] ECR 2117) which states that "the complaint; specific and characteristic purpose of an installation allowance is to enable an 7. In any event order the Commission to official to bear, in addition to removal pay the costs. expenses, the inevitable expenses in-

The judgment in Meganck (Case 36/72 In the second place, it is necessary to [1973] ECR 527) in which Mr Meganck consider whether Mr Gutmann was was alleged to have placed himself in an actually aware that there was no due irregular situation by his own conduct reason for the payment (Article 85 of the and to be therefore precluded from Staff Regulations) or whether he himself relying on his good faith, cannot be brought about the administration's error applied in this instance. Not all the by his own conduct (judgment in declarations made by Mr Meganck, Meganck, cited above). It is that second unlike those made by Mr Gutmann, were possibility which is relevant to this case. in conformity with the obligations under Mr Gutmann declared by letter of the Staff Regulations. 17 November 1980 that he had left his permanent residence in Luxembourg and resettled in Paris. But by letter of 4 March 1981, he admitted that he had The Commission does not dispute the carried out a "pretence of resettlement" admissibility of the action. As regards the and stated that the address in Paris was substance, however, it cites the opinion the flat where his elder daughter was of Mr Advocate General Mayras of 11 studying while his wife, his younger April 1973 in the Kuhl case (Case 71/72 daughter and he himself were still living [1973] ECR 705, at p. 714, in particular in Luxembourg. It is, moreover, clear pp. 719 and 720) in which he states, inter that Mr Gutmann could not claim the alia, that an institution may take action resettlement allowance while, at the same to recover undue payment except "if the time, asking that his pension continue to official remained unaware that there was be calculated on the basis of the no due resaon for the payment and if, weighting fixed for Luxembourg, with­ under normal circumstances, he could out revealing the pretence. not have been aware of it because it was in no way obvious to him".

Finally, when it becomes apparent, after Mr Gutmann merely slightly misunder­ an official has retired, that the stood certain provisions of the Staff Commission has paid to him in error Regulations and the annexes thereto sums which it is entitled to recover from and believed that he was entitled to the him, those sums may be deducted at any Luxembourg weighting, inasmuch as moment from the payments in respect of Luxembourg was the place where his his pension. expenses were highest, although the resettlement allowance (Paris) and the weighting requested (Luxembourg) are somewhat irreconcilable (that question remains open however). In their reply the applicants point out that Mr Gutmann never stated that "the removal has taken place". On the contrary he always made it clear that the removal had not yet taken place. Mr In the applicant's view the Commission is Gutmann at no time provided incorrect attempting to establish Mr Gutmann's information such as. might have caused bad faith in respect of the weightings, an error to be made and he clearly although no one would wish to explained that for family reasons he was compromise a resettlement allowance in unable to transfer his family to Paris or order to obtain a few extra francs on the anywhere else. The Commission could weighting. not have been unaware that Mr Gut­ mann continued to reside in Luxembourg since he had requested and obtained an extension of the period for removal. The Commission in its rejoinder points out that Mr Gutmann did not submit a complaint against the refusal to extend the prescribed period for resettlement, By the use of the word "simulacre" but, on the contrary, he claimed to have (pretence) of resettlement, Mr Gutmann resettled in Paris. On 4 March 1981, simply wanted to show that he himself however, he admitted that resettlement and his elder daughter had settled in was "impossible" and that he was France. That expression therefore means continuing "to live in Luxembourg". "the impossibility of resettling in Paris immediately with all his family" (as is required by the first subparagraph of Article 6 (4) of Annex VII to the Staff Regulations). No one would take up It was stated in the Verhaaf judgment residence in Paris, have a telephone (cited above) that the installation or installed and register with the French resettlement allowance is intended to electricity board merely for the purposes cover "the inevitable expenses incurred of a "semblance without reality". through integrating in new surround­ ings". It follows that resettlement is linked to the concept of habitual residence. There must be a real and The Kuhl case cited by the Commission positive connection with some degree of concerns a completely different situation continuity between the individual and his in which the applicant could hardly deny family, on the one hand, and the place that she ought to have realized that there indicated as being that of the family was no due reason for the payment. residence, on the other.

2 Mr Gutmann died on 22 March 1982 and the proceedings were continued by his two daughters .

3 Following his retirement , Mr Gutmann received, at his request , pursuant to Article 6 (4) of Annex VII to the Staff Regulations , an allowance of BFR 350 720 on the ground that he had left his permanent residence in

JUDGMENT OF 20. 10. 1983 — CASE 92/82

Luxembourg and resettled in Paris. The Luxembourg weighting for the calcu­ lation of the pension was at the same time replaced by that fixed for France.

4 By letter of 4 March 1981, Mr Gutmann protested against the alteration in the weighting. In that letter he complained that the Commission had "compelled him to carry out a pretence of resettlement". The Commission had refused to allow his application for the extension of the period he was allowed for resettlement although at the same time it granted him an extension of the period for removal. Mr Gutmann stated that in reality "it was impossible for him to effect either the removal or the resettlement" for family reasons and that he was continuing to live in Luxembourg with his wife and one of his two daughters.

5 By letter of 31 March 1981, the Commission replied that it was obliged to continue to apply the weighting fixed for France.

11 In those circumstances, it is necessaiy to conclude that Mr Gutmann was or should have been aware of the fact that the payment of the resettlement allowance represented an undue payment within the meaning of Article 85 of the Staff Regulations and that, seen in that context, the statement of the grounds for the Commission's decision is sufficient.

12 The application must therefore be dismissed as unfounded.

Costs

13 Article 69 (2) of the Rules of Procedure provides that the unsuccessful party is to be ordered to pay the costs.

1 4 However, Article 70 of the Rules of Procedure provides that, in proceedings brought by servants of the Communities, the institutions are to bear their own costs.

OPINION OF MR MANCINI — CASE 92/82

Delivered in open court in Luxembourg on 20 October 1983.

J. A. Pompe Y. Galmot

Deputy Registrar President of the Third Chamber

OPINION OF MR ADVOCATE GENERAL MANCINI DELIVERED ON 6 OCTOBER 1983 1

Mr President, Gutmann, a former official of the Com­ Members of the Court, mission of the European Communities, against that institution, seeking the annulment of a decision concerning the 1. The application of 18 March 1982 recovery of a resettlement allowance, initiating these proceedings consists of and the repayment with interest of sums a number of claims made by Max withheld.

1 — Translated from the Italian.