62023TJ0494_RES
Case T‑494/23
HG
v
European Commission
Judgment of the General Court (Tenth Chamber, Extended Composition) of 16 October 2024
(Civil service – Officials – Compensation for damage suffered by the European Union – Recovery of a debt by offsetting – Limitation period – Applicable law – Second subparagraph of Article 98(2) of Regulation (EU, Euratom) 2018/1046 – Concept of ‘normal circumstances’ – Prior formal decision establishing the claim which was the subject of the action)
EU budget – Financial regulation – Recovery of debts due to the European Union from third parties – Limitation period – Starting point of the limitation period – Entry into effect of new rules between the establishment of the debt by prior decision and the communication of the debit note – Immediate application in the absence of transitional provisions
(European Parliament and Council Regulations No 966/2012, Art. 81(1), and 2018/1046, Arts 98(2), 279, 281 and 282)
(see paragraphs 20-25)
EU budget – Financial regulation – Recovery of debts due to the European Union from third parties – Limitation period – Starting point of the limitation period – Establishment of the debt at the end of a particular procedure prior to its formal establishment – Challenge by the official owing that debt of the prior decision establishing it – Sending of the debit note following the definitive resolution of the dispute
(European Parliament and Council Regulation 2018/1046, Art. 98(2))
(see paragraphs 27-32)
EU budget – Financial regulation – Recovery of debts due to the European Union from third parties – Procedure of recovery by offsetting – Application of the procedure after rejection of the claim by the official owing the debt to withdraw the debit note and of the debtor’s failure to make contact with the competent services – No breach of the principle of good administration and of the duty to have regard for the welfare of officials
(European Parliament and Council Regulation 2018/1046, Art. 102(1))
(see paragraph 40)
Résumé
By its judgment, the Court, sitting in extended composition, dismisses the action brought by HG, an official of the European Commission, against several decisions of that institution on the offsetting of claims concerning him. By doing so, the Court rules on the novel question of the starting point of the limitation period for the recovery of debts owed to the European Union, pursuant to the Financial Regulation of 2018. (
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)
In the present case, by decision of 10 February 2015, the Commission imposed a disciplinary penalty on HG and ordered him to pay compensation for damage suffered by the European Union in the amount of EUR 108 596.35 on the basis of the first paragraph of Article 22 of the Staff Regulations of Officials of the European Union. That decision, which the applicant has challenged, came into effect on 1 March 2015.
By its judgment in HG v Commission (T‑693/16 P-RENV-RX), (
2
) the Court, inter alia, reduced the amount of compensation sought from HG to EUR 80000 on the date of delivery of the judgment, on the ground that the Commission had contributed to bringing about the damage.
The Commission’s authorising officer responsible sent a debit note to HG dated 3 March 2022, for the amount of EUR 80000, indicating 19 April 2022 as the payment deadline. Claiming the existence of a five-year limitation period, HG submitted a request to withdraw that debit note, which was rejected by the authorising officer.
From 10 October 2022, HG was notified of the accounting officer’s successive decisions seeking to offset the debt that he had in respect of the Commission against his salary or other amounts that he owed to it. HG submitted several complaints against those decisions, which were rejected by decision of 5 May 2023. In that decision, the Commission stated, inter alia, that the five-year limitation period on which the applicant had relied on the basis of the Financial Regulation of 2018 is not applicable to the situation, which is governed by the Financial Regulation of 2012, (
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) which does not provide for a time limit for the communication of a debit note.
Findings of the Court
In the first place, the Court observes that the provisions of the second subparagraph of Article 98(2) of the Financial Regulation of 2018, providing for the five-year limitation period relied on by the applicant, are applicable from the date of the entry into force of that regulation, that is 2 August 2018, in accordance with Article 282(2) of that regulation. The transitional provisions laid down in Article 279 of that regulation and the retroactive or deferred dates of applicability for certain provisions, laid down in Article 282(3) thereof, do not concern them. Furthermore, Article 281 of the Financial Regulation of 2018 provides that, save for exceptions not relevant in the present case, the Financial Regulation of 2012 is repealed with effect from 2 August 2018.
The Court notes that, in accordance with the principles of succession of rules over time, in principle, a new rule applies immediately to the future effects of a situation which arose under the old rule. The future effects of a situation which arose under an old rule must be understood to include the current effects of that situation from the time when the new rule applies. The application of a new rule to the current effects of a situation which arose under the old rule does not constitute a retroactive application of the new rule.
Accordingly, a new rule applies from its date of applicability set out in the act introducing it, and while, in principle, it does not apply to legal situations that have arisen and become definitive under the old rule, it does apply to their future effects, and to new legal situations. More specifically, procedural rules are generally taken to apply from the date on which they enter into effect, as opposed to substantive rules, which are usually interpreted as applying to situations existing before their entry into effect only in so far as it clearly follows from their terms, their objectives or their general scheme that such an effect must be given to them.
In the present case, the debt owed to the European Union by HG had not become definitive on 2 August 2018, since the applicant had challenged that debt and the action in connection with it was still pending and, accordingly, it cannot be recognised that, before that date, in the light of those circumstances, the Commission had definitively lost the right to recover that debt due to a delay in implementing that right. First, the Financial Regulation of 2012 did not provide for a particular time limit for sending a debit note and, second, the reasonable time which an EU institution must nevertheless respect in this type of situation in order to exercise its powers was not exceeded in the light of the circumstances. Consequently, the second subparagraph of Article 98(2) of the Financial Regulation of 2018 applies in respect of the debt at issue.
Since the second subparagraph of Article 98(2) of the Financial Regulation of 2018 provides that the five-year limitation for the sending of the debit note to the debtor period runs ‘from the time when the Union institution was, in normal circumstances, in a position to claim its debt’, the Commission was fully entitled to find that the circumstances of the present case in which a contested debt which may subsequently be cancelled or reduced were normal, within the meaning of that provision, only once the judgment in HG v Commission (T‑693/16 P-RENV-RX) had become final.
In that regard, in a procedural situation where the debt first had to be established, at the end of a particular procedure, by a formal decision prior to its establishment, such an interpretation of the second subparagraph of Article 98(2) of the Financial Regulation of 2018 is in the interests of good administration. It is favourable both to the interests of creditor institutions and those of their debtors or any third parties concerned, since it does not oblige the authorising officer responsible in all circumstances to order the recovery of debts contested, in their principle or in their amount, by debtors before knowing the final fate of those debts and without taking the abovementioned interests into account. In particular, when a debt is against an official and the latter contests it, both in its principle and in its amount, by requesting the annulment or alteration of the prior decision which established it, the authorising officer may, in order to determine the appropriate time for establishing the debt, in order to order its recovery and send the debit note, take into consideration, inter alia, in the light of the administration’s duty to have regard for the welfare of its employees (which requires the administration to take into account not only the interests of the service, but also those of the official concerned), the importance of the sum involved in relation to the official and his or her assessment of the possibility that that sum, particularly if it arises from the liability of the official being incurred, is amended by the judicature in the exercise of unlimited jurisdiction.
In the second place, the Court notes that, by adopting the contested decisions, the Commission’s accounting officer did not breach the principle of good administration or the duty of the institutions to have regard for the welfare of their officials, since the accounting officer proceeded to offset the applicant’s salary or the reimbursements of expenses, as required under Article 102(1) of the Financial Regulation of 2018, and by raising of its own motion a plan for repayment in instalments leaving the applicant with a suitable income taking into account his level of remuneration.
(
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)	Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ 2018 L 193, p. 1; ‘the Financial Regulation of 2018’).
(
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)	Judgment of 15 December 2021, HG v Commission (T‑693/16 P-RENV-RX, EU:T:2021:895).
(
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)	Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ 2012 L 298, p. 1; ‘the Financial Regulation of 2012’).