C-299/93

BAUER v COMMISSION

OPINION OF ADVOCATE GENERAL COSMAS delivered on 7 February 1995 *

1. By an application received at the Court I — Facts and legal framework Registry on 28 May 1993 Ernst R. Bauer, a permanent official of the Commission of the European Communities, is requesting the Court under Article 153 of the EAEC Treaty to determine the dispute which has arisen between himself and the Commission con­ A. Facts cerning a tenancy agreement entered into between them containing a relevant arbitra­ tion clause.

2. Mr Bauer, a permanent Commission offi­ cial assigned to the Joint Research Centre in Ispra, resided from 1 February 1965 until 6 July 1993 in a block of flats in an apart­ ment let to him by the Commission. That apartment was made available to the EAEC In particular Mr Bauer claims that the Court by the Italian Government in accordance should: with the terms of the agreement of 22 July 1959 concerning the establishment of the aforementioned Joint Research Centre. 1

1. Declare both the termination of the ten­ ancy and the increase of the rental by the 3. The use of the apartment was founded on Commission to be unlawful and therefore successive tenancy agreements of 1 February to annul them. 1965, 1 June 1968 and 1 June 1969 respec­ tively.

1 — According to the application the building belongs to the Instituto Autonomo per le Case Popolari di Varese (Auton­ omous Institute for Popular Housing in Varese), the apart­ 2. Order the Commission to pay compensa­ ment in issue was sublet to the applicant. Nonetheless, the Commission in its defence states that the abovementioned tion for material and non-material damage building along with others was made available to the EAEC suffered. for 99 years under Article 1 of the agreement of 22 July 1959 and that accordingly the Commission enjoys full rights of disposition over property let by it to its officials. In its reply the applicant does not challenge those submissions by the Commission. However, neither from the wording of the agreement at issue nor from other items in the file may it be * Original language: Greek. inferred that that agreement was a subletting agreement.

5. The monthly rent which in 1969 amounted to LIT 29 000 underwent suc­ cessive upward adjustments until in July B. Legal framework 1992 it reached the amount of LIT 62 000. By letter of 5 August 1992 the Commission informed Mr Bauer that with effect from August 1992 the rent would be LIT 327 265.

7. Law No 392 of 27 July 1978 'on tenancies of residential property' 3provides in Chapter 1 (tenancies of real estate for residential

6. For his part Mr Bauer replied to the abovementioned letters by complaints (of 2 — The proposed agreement provided that 'it is entered into by the contracting parties solely in order to cover the temporary 15 October 1992 as regards the termination housing needs of the tenant and the members of his family.' Furthermore, it provided that 'in any event and irrespective of the tenancy and of 29 October 1992 as of the duties performed by the tenant within the Joint regards the final increase in the rent payable Research Centre at Ispra the present agreement is entered into only for such period as is deemed necessary in order to under the letting) under Article 90 of the enable the tenant to resume responsibility for his own hous­ ing needs.' Staff Regulations. Mr Bauer considers that 3 — Official Gazette of the Italian Republic, General Series, No those requests were tacitly rejected by the 211, 29 July 1978.

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BAUER v COMMISSION

purposes of Title I (tenancy agreement), inter has been no recorded increase in the popula­ alia, as follows: tion or, in any event, the percentage increase is lower than the national average in accor­ dance with the information published by ISTAT (National Statistical Service). The community shall ensure public notification of that pre-condition and of the relevant 'Article 1. Duration of the tenancy. The increases.' duration of a tenancy of residential property cannot be less than four years. If the con­ tracting parties agreed a shorter period or a tenancy for an indefinite period, the tenancy shall be deemed to have been entered into for a period of four years (...)

Articles 12 to 25 lay down the methods for determining the amount of the rent. Article 4 — It should be pointed out that Article 89 of Law No 353 of 26 entitled 'Scope' provides, inter alia, as fol­ 26 November 1990 (amending the code of civil procedure), as amended by Article 2 of Law No 477 of 4 December lows: 'Articles 12 to 25 shall not apply to 1992 repealed Article 43 of Law No 392/78. Law No 477 is stipulated as entering into force as from 1 January tenancies of property situated in communi­ 1993 (Article 92) and with effect from 2 January 1994 as far ties whose population in accordance with the as existing tenancies are concerned. The date of entry into force of that law was subsequently altered by successive pro­ 1971 census does not exceed 5 000 inhabit­ visions the last of which (Decree 571 of 7 October 1974 (Official Gazette of the Italian Republic No 237 of ants provided that in the five-year period 1994)) provides that the date of entry into force is to be prior to the entry into force of this law and 16 December 1994. Consequently, at the time of the lodge­ ment of the application at the Court the provisions of Article in every succeeding five-year period there 43 of Law No 392/78 were fully in force.

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OPINION OF MR COSMAS — CASE C-299/93

8. Italian law contains no single set of legal 3. They present a great degree of variety provisions governing the provision of given that they sometimes relate to resi­ accommodation for service-related reasons. dential premises provided free of charge, That question is governed from sector to at other times to dwellings in respect of sector by provisions concerning the provi­ which the rent is determined by the same sion of accommodation for service-related law designating them official accommoda­ reasons to officials required to perform their tion, and at other times to dwellings duties in certain places of employment. whose rent is determined under the provi­ sions of Law No 392/78.

Article 11. If neither of the parties informs Article 16. The Court of Justice of the Euro­ the other of his intention to terminate the pean Communities shall have sole jurisdic­ contract by registered letter with recorded tion concerning disputes arising under this delivery which must reach the other party agreement. The agreement shall be governed three months before the end of the tenancy, by Italian law.' the contract is deemed to have been tacitly renewed for a further year on the terms set out therein and subsequently shall be deemed to be renewed from year to year. Such tacit renewal shall not however signify that the agreement is governed by the provi­ II — Forms of order sought by the parties sions concerning tenancies for an indefinite period. The tenancy shall be terminated before the end of the term if for any reason the employment relationship between the tenant and the Joint Research Centre at Ispra is terminated or if for whatever reason the operational requirements which dictated the 10. In his application Mr Bauer claims that provision by the competent services of the the Court should: Centre to the tenant in its absolute discretion of the apartment in question no longer sub­ sist. The tenant shall be required to give notice by registered letter to the personnel and administration department within ten 1. Declare unlawful and invalid and accord­ days from the date on which he receives ingly annul: notice of termination of the employment relationship with the Centre or of any alter­ ation in the nature of his duties as opposed to the duties which he was performing at the time when the use of the service apartment was granted to him, of the date on which he (a) the requests of 30 July 1992 and intends to surrender the premises let 28 September 1992 for the surrender of together with an indication of the substan­ the property let

12. Under Article 153 of the EAEC Treaty 'the Court of Justice shall have jurisdiction 3. In any event order the Commission to to give judgment pursuant to any arbitration pay compensation for non-material dam­ clause contained in a contract concluded by age suffered in the amount of ECU or on behalf of the Community, whether 10 000. that contract be governed by public or pri­ vate law.' Moreover, in accordance with 6 Decision 93/350/Euratom, EAEC, EEC the

6 — Decision of 8 June 1993 amending Council Decision 4. Order the Commission to pay the appli­ 88/591/ECSC, EEC, Euratom, establishing a Court of First Instance of the European Communities (OJ 1993 L 144, cant's costs. p. 21).

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BAUER v COMMISSION

Court continues to have jurisdiction in Article 16 of the tenancy agreement to bring respect of matters based on Article 153 before the Court any dispute relating to that of the EAEC Treaty in actions brought by agreement. Consequently, the admissibility natural or legal persons in connection with of the application which is brought before agreements entered into before the entry into the Court under the contractual clause force of that decision. referred to above is not dependent on the observance of the procedural preconditions contained in Article 91 of the Staff Regula­ tions. 7The application is therefore admis­ sible.

In the light of the foregoing there can be no doubt that the Court's jurisdiction to deter­ mine the action brought by Mr Bauer flows from the arbitration clause contained in Arti­ cle 16 of the tenancy agreement in issue (which predated the aforementioned Deci­ IV — Substance sion 93/350) in conjunction with the provi­ sions of Article 153 of the EAEC Treaty.

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OPINION OF MR COSMAS — CASE C-299/93

The following two questions therefore arise: 3. The tenancy agreement may be termi­ nated early if the employment relation­ ship between the tenant and the Joint Research Centre is terminated or if the operational requirements which dictated 1. Was the tenancy agreement in question the provision by the competent services of agreed in relation to the provision of the Centre of the accommodation to the service-related accommodation? tenant in its absolute discretion no longer subsist (Article 11).

2. If the answer to the first question is in the affirmative is that factor sufficient to pre­ clude the application to the agreement of Law No 392/78?

16. Do those characteristics suffice to remove the agreement in question outside the scope of Law No 392/78?

15. The first of the two questions mentioned above must, I think, be answered in the affir­ mative.

A. Termination of the agreement

19. Mr Bauer in his pleadings requests the Court 'to declare unlawful and invalid and on that ground to annul' the requests of 30 July and 28 September 1992 whereby the applicant was required to surrender posses­ sion of the rented premises on 31 December 1992. However, from the actual terms of the abovementioned requests, it appears, I con­ 17. It is clear that the agreement cannot be sider, in a manner which is not open to dis­ brought within any of the categories of pute that those requests (in the same way as agreement excluded from the scope of Law the requests of 19 April 1991 and 3 March No 392/78 by Article 26 thereof; further­ 1993 seeking surrender of the rented prop­ more, the other provisions of the law pro­ erty on 30 June 1991 and 15 March vide no indications concerning the exclusion 1993 respectively) constitute no more than therefrom of tenancy agreements in respect demands for the surrender of the rented of accommodation on service-related property after termination of the agreement grounds. Finally, there are no other provi­ effected by the Commission by its letter of sions apart from those mentioned in the 31 January 1990 in accordance with which abovementioned law laying down a special the agreement was to be deemed terminated scheme of provisions in respect of tenancy as at 31 May 1990. On the basis of those fac­ agreements such as the one at issue in this tors it must be accepted on a proper con­ case. 9 The special Community provisions struction of the applicant's pleadings that the concerning the Commission's powers in latter is in actual fact seeking a declaration of relation to its officials contain no specific the illegality of the termination as at 31 Jan­ rules governing the provision of service uary 1990; the 'requests' to which the appli­ accommodation by the Commission to its cation relates simply constitute the steps 10 taken to enforce termination. Moreover, it officials.

may be inferred from the application that the visions of Articles 12 to 25 of Law No illegality affecting, according to the appli­ 392/78. cant, the termination of the tenancy agree­ ment by the Commission resides in the fact that the termination in question is less than six months from the date (31 May 1990) on which the agreement came to an end in accordance with the pattern followed estab­ lished by the successive renewals of the con­ In order to refute that allegation, in the tract in accordance with Law No 392/78: terms formulated, it is sufficient to point out 1.6.1978 to 31.5.1982, 1.6.1982 to 31.5.1986, that Law No 392/78 provides in Article 1.6.1986 to 31.5.1990 and 1.6.1990 to 26 that the provisions of Articles 12 to 25 in 31.5.1994. That allegation is well founded connection with the determination of the because, as has already been explained, the review of the rent do not apply to property agreement in question is governed by Law in communities with a population less than No 392/78 which provides in Article 3 that the limits laid down in that article. As the in order that the tenancy agreement may not Commission argued (see defence, page 4 of be deemed to be tacitly renewed the relevant the French translation) and was not con­ notice of termination must be served by one tested during the written procedure, Ispra's of the parties on the other at least six months population is less than the limits laid down before the end of the tenancy agreement. in Article 26.

Consequently, the applicant's claim, as deduced interpretatively from his pleadings, must be accepted with the result that the ter­ Irrespective, however, of the foregoing, that mination on 31 January 1990 by the Com­ claim which concerns the determination of mission of the agreement in issue must be the amount of 'lawful' rent was made declared unlawful. although the provisions of Articles 43 and 44 of Law No 392/78 were not observed. It should be recalled that under those provi­ sions the submission of a claim for legal pro­ tection with regard to determination or adjustment of the rent must, if it is to be B. The increase in the rent admissible, be preceded by the submission to the competent court of a claim for adjust­ 12 ment. Accordingly, the claim in this con-

Mr Bauer considers that the purchase of the property which he completed in the early months of 1993 (see paragraph 6 above) took place under conditions of urgency and It has already been stated that it may directly immediate need and the price was thus be inferred from all the pleadings submitted greater than he would have been required to by the applicant that in his view the 'lawful' pay under normal purchasing conditions. rent must be deemed to be that stemming from the application of Articles 12 to 25 of Law No 392/78. However, it has also been stated that those provisions cannot be applied in the present case. Moreover, the applicant makes no other submissions in law or in fact which would allow the Court to determine the exact amount of the 'lawful' In that context Mr Bauer assesses the rent payable by him for the period from amount of material damage as follows: 1 August 1992 to 6 July 1993 with the result that it is impossible to determine the differ­ ence between the rents paid and the 'lawful' rents to which the applicant refers.

1. An amount equal to the difference between on the one hand rental payments due until the correct termination of the agreement (31 May 1994) according to Mr Subsequently, the claim for the reimburse­ Bauer and, on the other hand, interest (at ment of the abovementioned amount must 10% per annum) for the same period on be rejected primarily because the terms in the amount paid by Mr Bauer for the which it is couched are too vague. acquisition of a property.

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OPINION OF MR COSMAS — CASE C-299/93

2. An amount equal to the cost of transport­ tion needs of the applicant, to purchase a ing his effects to the new residence and property. Furthermore, the applicant the cost of cleaning and the carrying out adduces no evidence in support of his of complete decoration of that property. assertion that the price of the property exceeded the price which he would have paid under normal conditions in his view.

a deleterious effect on his mental state. But V — Costs he adduces no evidence, simply reserving the right 'to produce medical certificates if con­ sidered necessary'. In view of the fact that 25. Under the first subparagraph of Article following the express agreement of the par­ 69(3) of the Rules of Procedure the Court ties the oral procedure was dispensed with, may order that the parties bear their own that last reservation cannot supply the lack costs if each party succeeds on some and fails of evidential elements. Thus, that claim must on other heads. Since the applicant was be rejected principally because it is uncertain unsuccessful in part, the parties should bear and, in any event, unproven. their own costs.

VI — Conclusion

26. For all those reasons I propose that the Court should:

(1) Declare unlawful the termination of the tenancy agreement by the Commis­ sion.

(2) Reject the remainder of the applicant's claims.

(3) Order the parties to bear their own costs .