61999CC0449_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
1. This appeal was lodged by the European Investment Bank (hereinafter also: the Bank) against the judgment of the Court of First Instance of 28 September 1999 in Case T-140/97 Hautem v EIB [1999] ECR-SC I-A-171 and II-897 (hereinafter: the contested judgment). The Court of First Instance annulled the decision of the Bank of 31 January 1997 to dismiss Mr Hautem on disciplinary grounds, and ordered the Bank to pay him the remuneration which he should have received since his dismissal. The Bank is now seeking partial annulment of that judgment.
Legal background
2. The Statute of the Bank is incorporated into a protocol which is annexed to the original EEC Treaty (now the EC Treaty) and forms an integral part thereof. Pursuant to the Statute, the Board of Governors approved the Rules of Procedure of the Bank on 4 December 1958 and amended them on many occasions thereafter. Under Article 29 of the Rules of Procedure, the Board of Directors must prescribe the regulations concerning the staff of the Bank, which it did on 20 April 1960 (hereinafter: the Staff Regulations). The staff of the Bank are subject to the provisions contained in the Staff Regulations.
3. In the present proceedings Articles 1, 4, 5, 13, 38, 41 and 44 of the Staff Regulations are of particular relevance.
Article 1 of the Staff Regulations reads as follows:
Members of staff shall conduct themselves in the discharge of their duties and outside working hours in a manner befitting the international character of the Bank and their duties.
The following obligation is laid down in Article 4 of the Staff Regulations:
Members of staff shall devote their working activities to the service of the Bank. Except with prior permission of the Bank, they shall not:
(a) engage in any professional activity outside the Bank, particularly of a commercial nature ...
...
As regards family members of the Bank's staff, Article 5 of the Staff Regulations states:
Members of staff shall declare their family circumstances once yearly, and whenever there is any change in them, together with, where appropriate, mention of their spouse's profession and any post or appointment in which the latter is gainfully employed.
...
Article 38 of the Staff Regulations sets out the disciplinary measures which may be taken against members of the staff of the Bank:
The following disciplinary measures may, depending upon individual cases, be taken against members of staff who fail to fulfil their obligations to the Bank:
...
(3) summary dismissal for grave misconduct, with or without severance grant;
...
Article 13 of the Staff Regulations governs the relationship between the Bank and its staff:
Relations between the Bank and the members of its staff shall, in principle, be governed by individual contracts in conjunction with these Staff Regulations. The Staff Regulations shall be an integral part of these contracts.
In addition, Article 44 of the Staff Regulations states that:
The general principles common to the laws of the Member States of the Bank shall apply to individual contracts concluded under these Regulations in conformity with Article 13.
Article 41 of the Staff Regulations governs the jurisdiction of the Court of Justice:
Disputes of any nature between the Bank and individual members of staff shall be brought before the Court of Justice of the European Communities.
4. Article 91 of the Staff Regulations of Officials of the European Communities (hereinafter: Staff Regulations of Officials) contains the following provision regarding the jurisdiction of the Court of Justice:
1. The Court of Justice of the European Communities shall have jurisdiction in any dispute between the Communities and any person to whom these Staff Regulations apply regarding the legality of an act embodying a complaint against such person within the meaning of Article 90(2). In disputes of a financial character the Court of Justice shall have unlimited jurisdiction.
...
Facts and procedure
5. The facts underlying the appeal are set out at paragraphs 6 to 24 of the contested judgment. They may be summarised as follows.
6. Mr Hautem has been employed by the Bank as a messenger since 16 December 1994. Mr Hautem and Mr Yasse, who is also a messenger at the Bank, were involved in the establishment of the undertaking Mon de l'Evasió in which they each hold a 16% share. The undertaking, which was founded in Andorra in April 1996, is concerned with the import and export, wholesale, retail sale and promotion of books, publications and advertising material. As from 1 July 1996 the undertaking has formally been under the management of Mr Hautem's spouse.
7. On 28 October 1996 the Bank received by fax a letter dated 1 October 1996 with the letterhead of SARL Skit-Ball, established in Marseille, which was signed by a Mr Ingargiola. The letter was addressed to Mr Chevlin, the head of the Bank's personnel department. The reference section of the letter read as follows:
Litige concernant une transaction commerciale entre la société Skit-Ball et les personnes citées: M. Yasse Bernard se disant directeur financier, M. Hautem Michel se disant responsable du secteur informatique de cette dite Bank.
Mr Ingargiola asked the addressee to ensure that an amount of FRF 46 500 be transferred to the sender's undertaking in payment of the purchase of a Skit-Ball, a mobile exhibition stand used for sales and advertising, information or sales campaigns. In the event of failure to do so, he threatened to take legal proceedings against Messrs Yasse and Hautem. The letter was accompanied by copies of a number of documents, namely:
- a letter dated 6 September 1996 from Mr Yasse, with the letterhead of the undertaking Mon de l'Evasió, Yasse Bernard, administrateur délégué-Départment juridique, délégation commerciale Benelux, 5 rue de l'Église, L-4994 Schouweiler. In this letter Mr Yasse provided information about the undertaking Mon de l'Evasió, that is to say a commercial register number, a VAT number and the address of an intermediary undertaking.
- a cheque in favour of the undertaking Skit-Ball drawn on an account of the undertaking Mon de l'Evasió with Crédit Andorrà, signed by Mr Yasse on 9 September 1996, for the amount of FRF 46 5000;
- a letter of 27 September 1996, addressed to Mr Ingargiola, apparently written and signed by Mr Hautem, in which he describes certain problems with the Skit-Ball stand acquired by the undertaking Mon de l'Evasió.
- a communication from the Société Marseillaise de Crédit of 30 September 1996 notifying the undertaking Skit-Ball of the rejection of a cheque for FRF 46 500.
8. On 4 November 1996 the Bank communicated to Mr Hautem the fax from Mr Ingargiola dated 28 October 1996, together with the attachments, and asked him for an explanation. Mr Hautem replied by letter of 6 November 1996, stating that the allegations made by Mr Ingargiola in the fax were untrue and, as regards the letter of 27 September 1996 apparently written by him, that his wife had used his name and signature to try to resolve the problems which had arisen with the undertaking Skit-Ball.
9. The Bank subsequently commissioned the private security firm International Security Company BV (Interseco) (hereinafter: Interseco) to carry out an investigation into this matter. On 28 November 1996 Interseco sent the Bank a report (hereinafter: the Interseco report).
10. By letter of 7 November 1996 the Bank suspended Mr Hautem for three months. During those three months a joint committee was to deal with the matter in conformity with Article 38 of the Staff Regulations. His salary was to be maintained but he was denied access to the offices of the Bank.
11. By letter of 19 November 1996, addressed to the Bank, Mr Ingargiola withdrew the accusations he had made against Messrs Hautem and Yasse in the fax of 28 October 1996. Mr Ingargiola stated that Messrs Hautem and Yasse had never made use of the offices or name of the Bank and that they had had no commercial contacts with the undertaking Skit-Ball on their own account or on behalf of the Bank.
12. An internal investigation within the Bank revealed, in addition to a number of compromising telephone calls, the existence of four documents on the hard disc of the computer used by Mr Yasse which concerned activities unrelated to his occupation:
- a fax, with the letterhead World Escape - Mon de l'Evasió, addressed to Mr Miguel Muntadas at Crédit Andorrà, instructing him to transfer the amount of FRF 20 000 to the account of the undertaking Skit-Ball. The sender section stated Yasse Bernard - administrateur;
- a fax identical to the above in terms of format, sender, date and signature, addressed to an exhibition centre, concerning the participation of the undertaking Mon de l'Evasió in a trade fair;
- a fax addressed to Mrs Schruger, at Pegastar SA, dated 7 November 1996, with the letterhead World Escape - Mon de l'Evasió and concerning the consignment of 12 books. The sender section stated Yasse Bernard-Mon de l'Evasió SL;
- a reference for Crédit Andorrà recommending Messrs Yasse and Hautem as clients.
13. The list of telephone calls showed that in the months of August and September 1996 Mr Yasse telephoned the undertaking Skit-Ball five times and Crédit Andorrà eight times from his workplace at the Bank. Mr Hautem called the undertaking Skit-Ball once in August and once in September.
14. On 31 January 1997 the President of the Bank took the decision, on the basis of the unanimous view of the joint committee, to dismiss Mr Hautem summarily pursuant to the third paragraph of Article 38 of the Staff Regulations, without loss of his severance grant, for infringement of Articles 1, 4 and 5 thereof (hereinafter: the dismissal decision). The dismissal decision states as follows:
- Mr Hautem founded, together with a colleague, an undertaking under the name of Mon de l'Evasió and, without informing the Bank thereof, conducted activities of a commercial nature for the account of that undertaking.
- In engaging in those activities, Mr Hautem made reference to the fact that he was with the Bank.
- Mr Hautem made use, for his commercial activities, of the property of the Bank. In certain cases, such as the use of the fax, the Bank's own references were not covered up, thus possibly giving the correspondents the impression that the Bank was involved in his activities.
- Mr Hautem's explanation of the change in Mr Ingargiola's position and Mr Hautem's statement that he did not send any personal faxes from the Bank on behalf of the undertaking Mon de l'Evasió are inconsistent with his conduct and with a rational understanding of the file.
- Mr Hautem failed to inform the Bank of the activities of his spouse in connection with the undertaking Mon de l'Evasió.
- In light of these facts the President considers that there are sufficient grounds to assume that the abovementioned acts constitute an infringement of the Staff Regulations.
- As the joint committee observed, Mr Hautem's engagement in commercial activities, without having obtained permission from the Bank, constitutes an infringement of Article 4 of the Staff Regulations. This breach is all the more serious because in engaging in these commercial activities Mr Hautem referred to his connection with the Bank and made use of the Bank's means of communication.
- The failure to report the functions which Mr Hautem's spouse performs constitutes an infringement of Article 5 of the Staff Regulations.
- Furthermore, his general conduct is, as is evident from the abovementioned facts, not consistent with the conduct expected of a servant of the Bank. This conduct constitutes an infringement of Article 1 of the Staff Regulations.
15. The dismissal decision makes no further reference to use by Mr Hautem of the Bank's telephone facilities.
16. On 31 January 1997 the president adopted an analogous decision to dismiss Mr Yasse. Infringements of Articles 1 and 4 of the Staff Regulations were alleged against him.
17. On 29 April 1997 Mr Hautem lodged a appeal against the dismissal decision with the Court of First Instance. The appeal was registered under case number T-140/97. On the same date Mr Yasse lodged an appeal against the decision to dismiss him. In its judgment of 28 September 1999 in Case T-141/97 Yasse v EIB [1999] ECR-SC I-A-177 and II-929 the Court of First Instance dismissed Mr Yasse's application for annulment of the decision to dismiss him and for damages (hereinafter the Yasse judgment).
18. The Court of First Instance joined Cases T-140/97 and T-141/97 for the purpose of the hearing. During the proceedings Messrs Hautem and Yasse were originally represented by the same counsel, but on account of supervening conflicting interests of both counsel, Mr Hautem was represented by another counsel.
The contested judgment
19. In Case T-140/97 Mr Hautem's appeal seeks inter alia, on the one hand, annulment of the decision of the Bank of 31 January 1997, whereby he was dismissed on disciplinary grounds without loss of severance grant, and reinstatement in his post and, on the other hand, compensation from the Bank for the damage occasioned to him. In the event of reinstatement, Mr Hautem is seeking inter alia payment of the arrears of his salary. Mr Hautem put forward six pleas in law in support of his action. In the contested judgment the Court of First Instance considered, in substantive terms, only the second plea in law based on a manifestly incorrect assessment of the facts. The most important considerations of the Court of First Instance in respect of this plea in law are set out, in a somewhat summarised form, below.
20. The Court of First Instance states that it is necessary to consider whether the Bank made a manifestly incorrect assessment of the facts in adopting the dismissal decision. Such a decision necessarily entails a careful consideration on the part of the institution which must have regard to the serious and irrevocable consequences thereof. The institution has wide discretion in that respect and the role of the Court of Justice is limited to ascertaining whether the facts on which the decision is based are materially accurate and whether there has been any manifest error in the assessment of the facts (contested judgment, paragraph 66).
21. In the contested decision the Bank took account of various complaints in respect of the appellant without stating specifically the matters on which they were based. In order to establish whether or not a manifest error was made in the assessment of the facts, it is necessary to consider the acts imputed to the appellant and the documents cited by the Bank (contested judgment, paragraph 67).
22. The fact that he is a founder shareholder in the undertaking Mon de l'Evasió, with a holding of 16%, did not, in the view of the Court of First Instance, constitute proof of his engagement in a commercial activity. Being a founder shareholder was not tantamount to being a manager and therefore it was necessary to ascertain whether or not the appellant in fact took part in the activities of the undertaking (contested judgment, paragraph 68).
23. Contrary to the matters stated in the contested decision and to the submissions of the Bank, the Court of First Instance considered that it had not been established that the appellant made incorrect use of the Bank's name or that he took advantage of his connections with the Bank in a manner inconsistent with the Staff Regulations. In his letter, sent by fax on 28 October 1996, Mr Ingargiola described Mr Hautem as the official responsible for the computer section of the Bank. However, in his statement to Interseco Mr Ingargiola himself conceded that during their sole meeting Mr Hautem had told him that he was employed as a messenger at the Bank. Furthermore, Mr Ingargiola stated that: Mr Yasse passed himself off as someone important in the finance department and I based my assumption of Mr Hautem's function on that. His wife had occasionally said that her husband did something connected with computers (contested judgment, paragraph 69).
24. As regards the use of the property of the Bank for financial ends, the Court of First Instance established that Mr Hautem's part in the drafting of the four documents found in Mr Yasse's computer could not be characterised as the systematic use of property for commercial ends. The mere fact that Mr Hautem was involved in the creation of these documents, even if this could be regarded as assistance in the conduct of a commercial activity, did not mean that he engaged in a professional activity of a commercial nature within the meaning of Article 4 of the Staff Regulations. Finally, and contrary to what is stated in the contested decision, Mr Hautem's behaviour could not give rise to the impression that the Bank was involved in his activities because the documents concerned were not sent to the addressees by the appellant and his signature did not appear on them (contested judgment, paragraph 70).
25. As regards the inferences to be drawn from Mr Ingargiola's letter, sent by fax on 28 October 1996, the Court of First Instance noted that the appellant himself in fact admitted to his part in the commercial transaction which Mr Ingargiola brought to light. However, Mr Ingargiola told Interseco that Mr Yasse and Mrs Hautem had presented themselves as the owners of the undertaking Mon de l'Evasió, that they had a promotion project for the Skit-Ball stand and that they had purchased a Skit-Ball stand. Mr Ingargiola emphasised that he met the appellant only once and that on that occasion the appellant explained to him that his wife dealt with matters in the company Mon de l'Evasió together with Mr Yasse. Mr Ingargiola also stated that he had the impression that the appellant had nothing to do with the undertaking Mon de l'Evasió. Consequently, the letter which Mr Ingargiola faxed on 28 October 1996 did not constitute sufficient evidence to show that Mr Hautem engaged in a professional activity of a commercial nature (contested judgment, paragraph 71).
26. As regards Mr Ingargiola's letter of retraction dated 19 November 1996, the Court of First Instance stressed that the contents thereof were, as far as Mr Hautem is concerned, confirmed by Mr Ingargiola's abovementioned statements and are consistent therewith. Moreover, the Bank adduced no evidence to the contrary (contested judgment, paragraph 72).
27. As to the letter of 27 September 1996 which is ascribed to Mr Hautem, the Court of First Instance stated that it provided no evidence to show that it was written and signed by his spouse, as he claimed. The reasons which, according to Mr Hautem, led his spouse to write this letter as if he were the author were not plausible. At the hearing Mr Hautem stated that his spouse had preferred to act thus because he had been the one who had taken Mr Ingargiola's telephone call regarding the Skit-Ball stand. Mr Ingargiola, for his part, confirmed the existence of this telephone call with Mr Hautem during which Mr Hautem had told him that his wife, who was responsible for this matter, was not there at that time. However, it is illogical to assume that, if the appellant made this statement to Mr Ingargiola on 24 September, Mrs Hautem thought that she had to write the letter addressed to Mr Ingargiola on 27 September 1996, that is to say three days later, and with reference to the Skit-Ball stand, as if it were from her spouse as administrateur délégué, management et marketing of the undertaking Mon de l'Evasió. The letter of 27 September 1996 confirms, on the assumption that it was written and signed by Mrs Hautem, that Mr Hautem was involved in this commercial transaction. On the other hand, this involvement does not show that Mr Hautem engaged in a professional activity of a commercial nature (contested judgment, paragraph 73).
28. Furthermore, both the documents attached to Mr Ingargiola's letter sent by fax on 28 October 1996, that is to say the letter of 6 September 1996 from Mr Yasse and cheque No 6 555 542 signed by him, and the documents presented by the Bank as attachments to the rejoinder, that is to say the faxes of 24 September and 2 October 1996, both of which were signed by Mr Yasse, in no way established that Mr Hautem was engaged in commercial activities (contested judgment, paragraph 74).
29. The Court of First Instance concluded from the foregoing that the evidence adduced by the Bank, viewed as a whole, showed that the appellant, as he himself acknowledged, occasionally assisted both his spouse and Mr Yasse in the conduct of a commercial activity and that he had participated in a commercial transaction - that is to say the purchase of the Skit-Ball stand by the undertaking Mon de l'Evasió. Nevertheless, in view of the incidental nature and limited extent thereof, this collaboration by the appellant could not be characterised as engagement in a professional activity of commercial nature within the meaning of Article 4 of the Staff Regulations. Similarly, it was not proven that the appellant referred to his connection with the Bank, involved the Bank in his activities, or made personal use of the Bank's property (contested judgment, paragraph 75).
30. Consequently, the Bank made a manifest error in the assessment of the facts. Therefore, the Court of First Instance upheld the appeal and annulled the contested decision without considering it necessary to examine the complaint concerning the appellant's failure to report the activities of his spouse in connection with the undertaking Mon de l'Evasió or the other pleas in law put forward in the action for annulment (contested judgment, paragraph 76).
31. Since, under Article 41 of the Staff Regulations, the Court of First Instance had jurisdiction in disputes of any nature between the Bank and individual officials thereof, it was appropriate to apply, by analogy, Article 91(1) of the Staff Regulations of Officials of the European Communities under which the Court of First Instance has unlimited jurisdiction in disputes of a financial character. Consequently, the Bank was ordered to pay Mr Hautem the remuneration which he should have received since his dismissal (contested judgment, paragraph 77).
32. The Court of First Instance:
(1) annulled the decision of the European Investment Bank of 31 January 1997 dismissing the appellant without loss of severance grant;
(2) ordered the European Investment Bank to pay the appellant the remuneration which he should have received since his dismissal;
(3) dismissed the appellant's claims for damages;
(4) dismissed as inadmissible the claim for damages brought by the European Investment Bank;
(5) ordered the European Investment Bank to bear its own costs and pay the costs of the appellant.
The appeal
33. By an application registered with the Court of Justice on 26 November 1999, the Bank brought an appeal, pursuant to Article 49 of the Statute of the Court of Justice, against the abovementioned judgment of the Court of First Instance of 28 September 1999 in Case T-140/97. Under Article 120 of the Rules of Procedure there was no oral procedure in the context of this appeal.
34. In its appeal the Bank claims the Court should:
- set aside points 1 and 2 of the operative part of the judgment delivered by the Court of First Instance on 28 September 1999 in Case T-140/97;
- order the respondent to bear his own costs.
Mr Hautem contends that the Court should:
- declare the appeal inadmissible or, in the alternative, unfounded;
- uphold points 1 and 2 of the operative part of the judgment delivered by the Court of First Instance on 28 September 1999 in Case T-140/97;
- order the appellant to pay the entirety of the costs in the two instances;
- reserve to the respondent all other pleas in law, rights and claims.
35. The Bank puts forward two pleas in law in support of its appeal. The first plea alleges an erroneous assessment of the facts by the Court of First Instance in the contested judgment and erroneous reasoning. The second plea in law alleges infringement of the contractual rules applicable to relations between the European Investment Bank and members of its staff.
First plea in law
36. The Bank essentially contends that the Court of First Instance erred in its assessment of the facts and in its statement of reasons in regard to Articles 1, 4 and 5 of the Staff Regulations. Its claims may be summarised as follows:
(a) The Court of First Instance wrongly considered that the actions carried out by Mr Hautem could not be regarded as professional activities of a commercial nature within the meaning of Article 4 of the Staff Regulations;
(b) The Court of First Instance wrongly declined to acknowledge that Mr Hautem had infringed the rules on conduct set out in Article 1 of the Staff Regulations, not only in consequence of his conduct during the proceedings but also when it stated that Mr Hautem had not engaged in any professional activities of a commercial nature and also concluded that he had not involved the Bank in his activities or made improper use of the Bank's property;
(c) The Court of First Instance wrongly attached no importance to the unauthorised conduct of commercial activities in Andorra by Mr Hautem's spouse who was thus acting in breach of Article 5 of the Staff Regulations.
37. Mr Hautem contends that the first plea in law is inadmissible because it requires a fresh examination of the facts by the Court of Justice and the claims do not seek a legal analysis by the Court of Justice. Essentially Mr Hautem argues that the Court of First Instance interpreted the Staff Regulations correctly.
38. Before examining the arguments put forward by the Bank, I consider it useful first to recall the settled case-law of the Court of Justice concerning the admissibility of appeals.
39. It follows from Article 225 EC and Article 51(1) of the EC Statute of the Court of Justice that an appeal must be limited to points of law and must be based on the grounds of lack of competence of the Court of First Instance, a breach of procedure before it which adversely affects the interests of the appellant or an infringement of Community law by the Court of First Instance. Therefore, this appeal can be based only on an infringement of rules of law by the Court of First Instance. The Court of Justice has no jurisdiction to find or assess the facts or, in principle, to inquire into the evidence which the Court of First Instance took into account in support of the facts.
40. None the less, the Court of Justice has accepted a number of circumstances in which a factual assessment is nevertheless possible in an appeal. This is the case in particular where the substantive inaccuracy of the findings of the Court of First Instance is apparent from the documents submitted to it. The Court of Justice has jurisdiction to review the manner in which the Court of First Instance characterised the facts in case and determined the legal consequences thereof. Moreover, the question whether the reasoning of the judgment of the Court of First Instance is contradictory or insufficient is also a point of law which, as such, can be raised on appeal.
41. However, in principle the facts in the Hautem case are no longer open to debate in the appeal. They were established by the Court of First Instance in the contested judgment. I emphasise that fact because - as Mr Hautem correctly observes - the Bank makes a large number of allegations in its appeal which I can only regard as an attempt on its part to ask the Court of Justice to conduct an assessment of the facts, which is a matter for the Court of First Instance alone. In what follows I shall first exclude the pleas in respect of Articles 4, 1 and 5 respectively of the Staff Regulations which are, in my view, inadmissible on account of their factual nature, before going on to consider the substance of the arguments put forward by the Bank.
A - Alleged infringement of Article 4 of the Staff Regulations
42. The Court of First Instance held that Mr Hautem rendered no more than incidental and limited assistance both to his wife and Mr Yasse in the conduct of a commercial activity (paragraphs 70 to 73 of the contested judgment). On the other hand, the Bank contends that the documents which the Court of First Instance considered were central to the commercial activities of the undertaking Mon de l'Evasió and of its partners at the time when Mr Ingargiola's letter was sent to the Bank by fax on 28 October 1996. It claims that the preparations and decision-making relating to these actions and the performance thereof involve, of necessity, the conduct of a professional activity of a commercial nature both in respect of Mr Hautem and Mr Yasse. The Court of First Instance characterised the actions of Mr Yasse as such but not those of Mr Hautem. More specifically, the Bank argues that the Court of First Instance characterised Mr Hautem's actions incorrectly in law on account of the circumstances set out below.
43. Firstly, the Court of First Instance was wrong not to acknowledge Mr Hautem's active involvement in regard to the documents found in Mr Yasse's computer. This was true in particular of the recommendation of Messers Hautem and Yasse as customers of Crédit Andorrà in respect of the opening of a line of credit. As regards the drafting and use of the other documents, the Bank points out that in his defence Mr Hautem made statements about these documents which were untrue. In its view, these false statements were necessary to obscure Mr Hautem's interest in the undertakings' activities. However, at paragraph 70 of the contested judgment the Court of First Instance did not characterise Mr Hautem's activities in law in the same way as it did identical actions in respect of Mr Yasse at paragraphs 65 and 77 of the Yasse judgment. Moreover, the reasoning of the contested judgment in this respect must be regarded as insufficient and contradictory since the Court of First Instance took no account of the fact that Mr Hautem's statements regarding these documents, like those of Mr Yasse, in no way tally with the reality of the facts (paragraph 66 of the Yasse judgment).
44. Secondly, the Bank argues that although Mr Hautem did not sign any documents which were sent to Crédit Andorrà, there is, on the other hand, no evidence to show that he was not involved in the decision-making process concerning the sending and use thereof. After all, he had a direct interest in sending and using at least two documents relating to the reference in which he and Mr Yasse were recommended as customers to Crédit Andorrà with a view to opening up a line of credit and which were faxed from the Bank. It was wrong to characterise Mr Hautem's participation as concrete involvement in the performance of actions of a clearly commercial nature as the actions mentioned in paragraph 65 of the Yasse judgment were described. The Court of First Instance thus imposed an unacceptable limitation on the expression commercial transaction and the Bank asks the Court to review this point of substance.
45. Thirdly, the Bank considers that Mr Ingargiola's statement to Interseco (see paragraph 71 of the contested judgment) seeking to minimise Mr Hautem's role in the Skit-Ball affair, contradicts the fax sent by Mr Ingargiola on 28 October 1996. Nor is that statement consistent with the letter of 27 September 1996 which was drawn up to create the impression that it came from Mr Hautem as administrateur délégué, management et marketing of the undertaking Mon de l'Evasió.
46. Fourthly, as regards the consistency between the fax of 28 October 1996 and Mr Ingargiola's letter of retraction of 19 November 1996 (see paragraph 72 of the contested judgment), the Bank refers to paragraph 70 of the Yasse judgment which, it claims, shows that the Court of First Instance did not attach credence to the spontaneity of this retraction. Therefore, there is a contradiction between the value placed on this retraction in the context of the judgment relating to Mr Hautem and that placed on Mr Ingargiola's same retraction in the case of Mr Yasse.
47. Finally, the Bank argues that the reasoning of the Court of First Instance at paragraph 73 of the contested judgment must be regarded as insufficient and contradictory. On the basis of logical and consistent reasoning, the Court ought to have taken account of the fact that the letter of 27 September 1996 could only have come from Mr Hautem and, moreover, had to be read in the context of the acts imputed to him.
- Assessment as regards admissibility
48. The Bank's allegation referred to at paragraph 43 above is essentially that, in failing to characterise Mr Hautem's assistance in sending the documents to Crédit Andorrà as a commercial transaction, the Court of First Instance provided insufficient reasoning and, moreover, gave an assessment of the facts which was incorrect in law. The Court of First Instance is thereby construing too narrowly the expression activity ... of a commercial nature within the meaning of Article 4 of the Staff Regulations.
49. However, at paragraph 70 of the contested judgment the Court of First Instance already held that, on the basis of the evidence adduced, Mr Hautem's limited involvement in the creation of the four documents on Mr Yasse's computer could not be characterised as a systematic use of the Bank's property for commercial purposes. The fact that the Court of First Instance did not consider Mr Hautem's possible intentions as regards the documents is in itself a factual assessment which cannot be challenged on appeal. Moreover, the Bank has put forward no legal argument at all to show that the Court of First Instance erroneously construed the expression activity ... of a commercial nature too narrowly.
50. The assessment of Mr Ingargiola's statements and the authorship of the letter of 27 September 1996 are central to the parts of the first plea in law set out at paragraphs 45 and 47 above, which essentially claim that the Court of First Instance was wrong not to conclude that the acts imputed to Mr Hautem constituted a professional activity of a commercial nature. In the contested judgment account was taken of Mr Ingargiola's successive statements both in the setting out of the factual background and the assessment of that background by the Court of First Instance. From Mr Ingargiola's letter of 19 November 1996, in which he withdrew the accusations made in the fax communication of 28 October 1996, and from similar statements made to Interseco, the Court of First Instance concluded that the fax communication of 28 October 1996 did not provide sufficient evidence to show that Mr Hautem engaged in a professional activity of a commercial nature. In respect of the letter of 27 September 1996 to Mr Ingargiola the Court of First Instance found that Mr Hautem adduced no evidence at all to support his contention that it was written and signed by his spouse. It considered that the reasons which, according to Mr Hautem, led his spouse to write this letter as if as he were the author thereof are improbable. However that may be, it is claimed that this letter confirms Mr Hautem's involvement in a commercial transaction consisting in the purchase of a Skit-Ball stand. However, in the view of the Court of First Instance, that involvement was not sufficient to establish that Mr Hautem engaged in a professional activity of a commercial nature. In essence, the Court of First Instance concluded that the facts, as established by it, could not support the conclusion that Mr Hautem was guilty of a prohibited professional activity of a commercial nature within the meaning of Article 4 of the Staff Regulations. That view based on the facts cannot be challenged on appeal.
51. I therefore consider that those parts of the plea in law are inadmissible.
52. On the other hand, the Bank's argument at paragraphs 44 and 46 of this Opinion is essentially that in the Hautem and Yasse judgments the Court of First Instance drew mutually contradictory inferences from the same or analogous facts in each case as regards the (false) statements of Mr Yasse and Mr Hautem respectively and the value placed on Mr Ingargiola's statements in the two judgments. These contradictions may be regarded as a possible flaw in the statement of reasons and that in itself is a question of law which may be raised on appeal.
- Assessment as regards substance
53. However, the Bank's line of argument cannot be accepted as regards the substance.
54. The manner in which the false statements were assessed in each case may appear to be contradictory. This relates to the incorrect statements made by Messrs Yasse and Hautem in regard to the documents found in Mr Yasse's computer. The Court of First Instance found that these statements do not accord with reality (paragraphs 65 and 66 of the Yasse judgment). However, contrary to the contention of the Bank, the Court of First Instance did not draw different legal inferences from those untrue statements but from the facts relating to the preparation and creation of the documents concerned. On that basis the Court of First Instance found that the nature of Mr Yasse's involvement in the affairs of Mon de l'Evasió was more extensive and more structured than that of Mr Hautem.
55. It is clear from paragraph 65 of the Yasse judgment that this ex-employee admitted that he drew up the documents concerned, which were of a clearly commercial nature, and that he faxed them from the Bank. However, he denied that he himself signed the documents which were sent since that was the task of Mrs Hautem. At paragraph 66 of the Yasse judgment the Court of First Instance stated that this claim was inconsistent with the actual facts. Mr Yasse's active involvement and his commercial interest are subsequently set out in detail at paragraphs 67 to 76 of the Yasse judgment. The conclusion at paragraph 77 of the Yasse judgment is that the Bank did not err in its assessment of the facts in concluding that Mr Yasse had engaged in activities of a commercial nature without the permission of the Bank, that he had used the property of the Bank to that end, and had conveyed the impression to the outside world that the Bank itself was involved in them. Therefore, in the view of the Court of First Instance, the Bank correctly concluded that Mr Yasse engaged in a professional activity of a commercial nature within the meaning of Article 4 of the Staff Regulations.
56. In respect of Mr Hautem the Court of First Instance found at paragraph 70 of the contested judgment that he collaborated with Mr Yasse in drawing up the documents which were found on Mr Yasse's computer. However, the Court of First Instance consequently concluded that his mere involvement in the drafting of the documents concerned, even if that could be described as assistance in the conduct of a commercial activity, could not be characterised as engagement in a professional activity of a commercial nature within the meaning of Article 4 of the Staff Regulations.
57. On the basis of the factual context the Court of First Instance was able to establish that Mr Yasse's involvement in regard to the documents in question found in his computer was of a different nature from that of Mr Hautem. Mr Yasse was discernibly engaged more intensively in the affairs of Mon de l'Evasió than Mr Hautem. That is confirmed, inter alia, by the statements by Mr Ingargiola, as mentioned at paragraphs 71 and 73 of the contested judgment. In its assessment of Article 4 of the Staff Regulations the Court of First Instance drew a distinction between the structured pursuit of professional activities of a commercial nature and incidental support for such activities and, on the basis of the facts, subsequently drew different inferences in respect of Mr Yasse and Mr Hautem. This reasoning is comprehensible, consistent and adequate. Moreover, in this context the Bank did not substantively challenge the distinction made by the Court of First Instance between the professional conduct of a commercial activity and incidental support therefor, or the legal consequences attached by it to that distinction in regard to the application of Article 4 of the Staff Regulations.
58. Accordingly, the Court of First Instance did not provide an inadequate and contradictory statement of reasons. The part of this plea in law concerning the infringement of Article 4 of the Staff Regulations is unfounded.
B - Alleged infringement of Article 1 of the Staff Regulations
59. The Bank submits that the Court of First Instance failed to establish that Mr Hautem, as a member of the Bank's staff, conducted himself in such a manner as to infringe the duty of loyalty laid down in Article 1 of the Staff Regulations.
60. In putting forward this argument the Bank is challenging, first, paragraph 69 of the contested judgment in which the Court of First Instance held that it had not been established that Mr Hautem used the name of the Bank for his own ends or that he made improper use of his position as a member of the Bank's staff. It claims that the Court of First Instance thus disregarded the fact that, through his involvement in the decision to send the faxes found in Mr Yasse's computer to Crédit Andorrà, in particular the fax requesting a line of credit for himself, Mr Hautem helped to create the impression that the Bank was involved in a commercial activity. In rejecting this claim by the Bank, the Court of First Instance disregarded an infringement of Article 1 of the Staff Regulations. For, in accordance with the judgment in Williams v Court of Auditors, observance of the duty of loyalty is required not only in the performance of specific tasks entrusted to an official but extends to the whole relationship between the official and his institution.
61. As regards the alleged improper use of the Bank's property by Mr Hautem and the considerations of the Court of First Instance at paragraph 70 of the contested judgment, the Bank contends, secondly, that in respect of two documents Mr Hautem had a specific interest not only in drawing up the texts concerned but also in sending them, and consequently in the processing of them. That, it claims, also constitutes an infringement of Article 1 of the Staff Regulations.
62. Thirdly, the Bank argues that the Court of First Instance failed to discern and identify the serious reasons which specifically warranted Mr Hautem's dismissal. The dismissal decision emphasises that the dismissal is based in particular on the suspicious circumstances surrounding Mr Hautem's defence. The Bank points specifically to the contradictory and even false statements made by Mr Hautem. By failing to appreciate that such conduct is inconsistent with the duty of loyalty which each member of staff owes to his institution, the Court of First Instance misinterpreted Article 1 of the Staff Regulations.
- Assessment as regards admissibility
63. The first claim is plainly inadmissible. Since the Court of First Instance established as a fact that it had not been demonstrated that Mr Hautem used the name of the Bank for his own ends or that he made improper use of his position as a member of the Bank's staff, there can be no question of any breach of the duty of loyalty laid down in Article 1 of the Staff Regulations. Essentially, the Bank is seeking by means of this plea a re-assessment of the facts. The reference to the judgment in Williams v Court of Auditors is, in this strictly factual context, somewhat misplaced.
64. The second claim is also inadmissible. Its intention is to challenge the factual finding of the Court of First Instance that Mr Hautem made no improper use of the Bank's property for commercial ends by emphasising the alleged interests of Mr Hautem in sending the two documents.
65. The third plea seeks a characterisation of Mr Hautem's actual conduct during the investigation which preceded the dismissal decision - dealt with in detail at first instance - differing from the manner in which the Court of First Instance, albeit impliedly, characterised it. Although the Court of First Instance indeed took note of that conduct in the contested judgment, it no longer needed to give specific consideration to this aspect of the dismissal decision once it had established that the factual grounds on which the decision was based were insufficient to be able to support it. In raising this claim the Bank is consequently departing from the factual and legal framework within which the contested judgment was delivered. Therefore, I consider it to be inadmissible. That applies a fortiori to the factual arguments which the Bank bases on Mr Hautem's conduct as a party to the proceedings at first instance. They cannot, by definition, be put forward in order to substantiate a decision which formed the subject-matter of the legal proceedings at first instance.
66. Therefore, this part of the appeal must also be declared inadmissible in its entirety.
C - Alleged infringement of Article 5 of the Staff Regulations
67. The Bank further claims that, in respect of the infringement of Article 5 of the Staff Regulations by Mr Hautem, paragraph 76 of the contested judgment contains inadequate reasoning and discloses an error in law. However, it is left to the Court of Justice to assess, in the context of the acts imputed to Mr Hautem, the significance of this infringement, in particular in the light of the fact that Mr Hautem's spouse herself admitted that she was involved in the management of the undertaking in the month prior to her spouse's dismissal.
68. Mr Hautem considers this plea in law to be inadmissible because the Court of First Instance stated at paragraph 76 of the contested judgment that consideration of the infringement of Article 5 of the Staff Regulations was not necessary.
- Assessment as regards admissibility
69. At paragraph 76 of the contested judgment the Court of First Instance stated that it was not necessary to adjudicate on the possible failure of Mr Hautem to report the business activities of his spouse to the Bank because it has already been established on other grounds that a manifest error of assessment had been made and that therefore the dismissal decision had to be declared void. By this plea in law the Bank is attempting to elicit a substantive judgment from the Court of Justice as regards an aspect of the decision contested at first instance on which the Court of First Instance no longer had to adjudicate once it had been established that the decision already had to be annulled on other grounds.
70. This attempt by the Bank is, in my view, plainly inadmissible.
71. For the sake of completeness I should add that it may be inferred from the dismissal decision that the Bank based the summary dismissal primarily on the alleged infringement of Article 4 of the Staff Regulations. It is unclear whether the omission regarding the reporting obligation in Article 5 of the Staff Regulations would also have resulted, independently, in Mr Hautem's dismissal, in other words whether this failure could in itself have justified the severe disciplinary penalty of dismissal. The question is specifically to what extent the particular circumstances of the Hautem case, namely the involvement of his wife in activities of a commercial nature within the meaning of Article 4 of the Staff Regulations, are relevant in this respect.
Second plea in law
72. The second plea in law is directed at paragraph 77 of the contested judgment in which the Court of First Instance applied, by analogy, a provision of the Staff Regulations of Officials of the European Communities in the dispute between the Bank and Mr Hautem and ordered the Bank to pay him the remuneration due to him since his dismissal. The Bank disputes the lawfulness of this reasoning by analogy.
73. The Bank takes the view that the structure and operation of the European institutions differs from that of the European Investment Bank and this also applies to legal relations with its staff. On the basis of Articles 13 and 44 of its Staff Regulations and the interlocutory judgment in Mills, the appellant argues that a distinction must be drawn between the staff regulations of the Bank, which are contractual, and the rules governing officials of the European Communities, which are regulatory. By ordering the Bank to pay the arrears of salary from the date of dismissal, the Court of First Instance applied reasoning based on the Staff Regulations which could not be applied to it, as, the Bank claims, the Court of Justice specifically held in Mills.
74. In addition, the Bank points to the alleged contradiction in the contested judgment. The Court of First Instance did not pronounce on the reinstatement of the respondent. That may be because it considered that only the Bank, and not the Court of First Instance, was authorised to take such a decision or because it took the view that such a measure was not consistent with the legal nature of a contractual regime under which the employer - in this case the Bank - cannot be compelled to enter into a new contract with the party concerned. The contradiction lies in the fact that the Court of First Instance applied reasoning based on the Staff Regulations as the basis for ordering the Bank to pay the arrears of salary, but failed to express a view on reinstatement. The only legally correct reasoning in the present case, in the event of dismissal without cause, would be to order the Bank to pay compensation for the damage occasioned to the employee dismissed, in accordance with the general principles of the laws of the Member States.
75. By contrast, Mr Hautem argues that the second plea in law was never referred to or developed in the proceedings before the Court of First Instance. It constitutes a new plea in law which must be regarded as inadmissible.
- Assessment
76. The essence of this second plea in law is the claim that the Court failed, at paragraph 77 of the contested judgment, to appreciate the particular contractual regime governing relations between the Bank and its staff, in particular by ordering the Bank to pay compensation in the form of arrears of salary by reference by analogy to Article 91(1) of the Staff Regulations of Officials.
77. This plea in law is, in my view, admissible. Under Article 42(2) of the Rules of Procedure of the Court of Justice, no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure. In the proceedings before the Court of First Instance the Bank was not in a position to be apprised of the reasoning in paragraph 77 of the contested judgment. Therefore, there can be no question of a new plea in law which is inadmissible.
78. It is established that Article 41 of the Staff Regulations stipulates that the Court of Justice has jurisdiction over disputes of any nature between the Bank and individual members of its staff. This article lays down no restrictions as to the nature of such disputes, nor is such a restriction to be found elsewhere in the Staff Regulations.
79. In the judgment in Mills v EIB the Court of Justice stated that [i]f the contract is terminated contrary to the provisions of the individual contract or of the regulations which are deemed to be an integral part thereof the party having illegally terminated the contract must accordingly be ordered to compensate the other party for the material and non-material damage occasioned to the latter by such illegality (paragraph 24). Furthermore, the Court considered that although the continuation of the contract depends above all on the mutual consent of the parties which constitutes the basic condition for the existence of the contract, this does not prevent both the provisions of the contract and the general principles of the law of master and servant, to which the last article of the Staff Regulations of the Bank refers, from imposing limits to this intention of the parties (paragraph 25). The Court then ruled that [a] termination of a contract which exceeds those limits may be void and it will be for the court having jurisdiction, in this case the Court of Justice, to make a declaration to that effect (paragraph 26). The Court concluded that [i]n particular, termination of a contract taking the form of "summary dismissal for grave misconduct", the penalty prescribed by Article 38 of the Staff Regulations of the Bank, might be declared void if the Court found that such misconduct had not occurred (paragraph 27).
80. In the proceedings at first instance the Court of First Instance declared void the decision to dismiss Mr Hautem for grave misconduct because it took the view that there were insufficient legitimate grounds. Consequently, it had to adjudicate on compensation for the damage occasioned to the dismissed member of staff by the unlawful act of the Bank. Moreover, such compensation was claimed by Mr Hautem. No specific rules or principles which restrict the court in its adjudication on compensation to be awarded in the present case are to be found either in the Staff Regulations or in the grounds of the abovementioned judgment in Mills. In that respect it will at most, as Advocate General Warner correctly noted in his opinion in Mills, be able to take a limited cue from the general rules of the law of master and servant common to the Member States of the Bank.
81. Moreover, the fact that the Staff Regulations governing the legal relations between the Bank and its staff contain no limitation on the jurisdiction of the Court of Justice gives grounds for the supposition that the Court of Justice has unlimited jurisdiction over disputes of a financial nature between the Bank and its staff.
82. This is confirmed, in my view, by the recently drawn up Conditions of Employment for Staff of the European Central Bank. The legal relations between the European Central Bank (ECB) and its staff are also contractual in the context of the Conditions which in this regard display strong similarities with the Staff Regulations of the European Investment Bank. However, in the Conditions the jurisdiction of the Court of Justice in disputes between the ECB and its staff is restricted to the legality of the measure or decision at issue, unless the dispute is of a financial nature, in which case the Court of Justice has unlimited jurisdiction.
83. In light of the foregoing, I conclude that the Court of First Instance did not, strictly speaking, need to refer by analogy to the Staff Regulations of Officials in order to establish its unlimited jurisdiction over the financial claims made in the present case.
84. The question remains whether the Court of First Instance failed to appreciate the particular contractual legal relations between the Bank and the members of its staff by ordering the Bank to pay compensation in the form of arrears of salary. That question must, in my view, be answered in the negative.
85. Since, in the light of the foregoing, the Court of First Instance has unlimited jurisdiction to consider claims for compensation for damage, it can also award compensation for damage consisting of loss of income as a result of unlawful dismissal. The claim for payment of arrears of salary frequently forms - in labour disputes under private law as well - part of a claim for compensation. Loss of income is the primary damage which an employee sustains as a result of an unlawfully ordered dismissal. Thus no argument may be based on the award of compensation in the form of arrears of remuneration in itself in order to support the allegation of a failure to appreciate the contractual legal relations between the Bank and its staff.
86. Nor, moreover, are there any other respects in which contested paragraph 77 of the judgment may provide support for this view.
87. Therefore, I conclude that the second plea in law put forward by the Bank is unfounded.
Costs
88. Under Article 69(2) of the Rules of Procedure of the Court of Justice, which are applicable to appeal proceedings pursuant to Article 118 thereof, the unsuccessful party must be ordered to pay the costs if they have been applied for in the successful party's pleadings. Mr Hautem has requested the Court to order the Bank to pay all the costs in the two instances. In Case T-140/97 the Court of First Instance already ordered the Bank to pay Mr Hautem's costs in the proceedings before it. Since the appeal is non-admissible or unfounded, the European Investment Bank must also be ordered to pay the costs of the appeal.
Conclusion
89. For the foregoing reasons I therefore propose that the Court should:
- declare the appeal inadmissible in part;
- reject the pleas in the appeal declared admissible;
- order the European Investment Bank to pay the costs.