61972C0071
OPINION OF MR ADVOCATE-GENERAL MAYRAS
DELIVERED ON 11 APRIL 1973 (
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)
Mr President,
Members of the Court,
I — The Facts
By way of family benefits listed under Article 67 of the staff regulations, officials of the European Communities receive for each dependent child who is in regular full-time attendance at an educational establishment, an education allowance which, by virtue of Article 3 Annex VII of the staff regulations, is equal to the actual education costs up to a monthly maximum.
However, the general provisions for giving effect to these Regulations adopted under the conditions laid down in Article 110 make a distinction between two situations:
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Where the children of the official attend a school away from the place where the family home is situated, the sum granted is the maximum monthly allowance.
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Where the children attend an establishment in the area in which the family home is situated, the official must choose between a flat-rate allowance which is slightly less than the maximum, and repayment of the costs actually incurred, on evidence that they were so incurred.
Finally, by Article 8 of the general provisions for giving effect to the staff regulations, officials are obliged to inform the Administration of any change in the educational situation of their children which is likely to lead to the withdrawal or reduction of the said allowance. This particularly applies to any change of school affecting the amount of the allowance.
Mme Anne-Marie Kuhl, who has been employed by the Community in Brussels since 1958, holds the post of reviser in the Translation Department of the Council of Ministers in Grade LA/4. She has three children.
The two elder children, Armin and Sigrid, attended a school at Duisburg, Germany, until August 1970. Thus Mme Kuhl received for each child the allowance provided for children who attend school away from home.
In September, 1970 those children joined the family home in Brussels and were enrolled at the European school there.
Pia, the youngest child, who had not previously attended school, was also enrolled there.
Thereafter, for each child Mme Kuhl could only claim the less favourable education allowance provided for children who attend school in the place where the family home is siutated.
But, on their return to school in autumn 1970 she failed to inform the Administration of the changed educational situation of her children. It was only on 15 January 1971, when requesting the refund of education costs incurred, that she informed the Secretariat of the Council of her children's attendance at the European school in Brussels since 1 September 1970.
However, as the necessary instructions had not been sent to the accounts department, for the last four months of 1970 Mm Kuhl received for the two elder children, and continued to receive for the whole of 1971, the maximum education allowances.
The error made by the Administration was only discovered at the end of the year by the Financial Controller. The accounts department was immediately told to take the necessary steps to correct the error.
The sum overpaid until 1972 amounting to 28000 Belgian francs, was deducted in toto from arrears of salary paid to Mme Kuhl following a decision on the general increase of salaries back-dated to 1 July 1970.
On 19 January 1972 having been informed verbally of the Administration's intention to make this deduction, Mme Kuhl requested the Director of Personnel of the Council to waive recovery of the undue payments. She claimed that it would be unfair, having regard to the long period — 16 months — during which the over-payments had been made.
Secondly, she maintained that the conditions of application of Article 85 of the Regulations were not fulfilled; she claimed to have been unaware that there was no due reason for the payments and disputed that the fact of the overpayment was patently such that she could not have been unaware of it. In fact, as she was unfamiliar with the methods of calculating education allowances, never having before received them for children living at home, she had not considered an increase in such sums to be abnormal, especially as she was now receiving allowances for three children instead of two.
On the following 10 March, the Secretary-General of the Council rejected her request on the grounds that, as it was the applicant who on the return to school in autumn 1970, failed to inform the Administration of the change of school made by her two elder children, she could not have been unaware of the over-payment of the education allowances until the end of that year at a rate which did not reflect the changed situation; moreover, the fact of the overpayment was easily ascertainable from the statement of the education allowances sent to the applicant, since. information concerning the applicable regulations was sent periodically to each official of the Council.
Following this reply, Mme Kuhl again approached the Administration on 13 March, this time merely to request that recovery of the overpayment be spread over a period, so that her salary would be reduced by only 2000 Belgian francs per month.
She was informed 10 days later she could not be repaid a sum which had already been deducted in toto from the payment of arrears of salary made in January.
Finally, on 7 June 1972, the applicant submitted to the appointing authority, in the person of the Secretary-General of the Council, a complaint within the meaning of Article 90 of the Regulations; she requested annulment of the decision ordering recovery of the underpayment on the basis of the arguments put forward in her initial request.
This complaint was expressly rejected on 30 June.
On 2 October, Mme Kuhl filed an appeal to your Court requesting you to decide that she was unaware that there was no due reason for payment of the sums received as education allowances, or that the fact of the overypayment was not patently such that she could not have been unaware of it.
She asks you, therefore, to annul the decision of the Council to recover the sums overpaid.
II — Admissibility of the Appeal
The Council, the defendant in this action, claims that the appeal is inadmissible. It maintains that the decision contested by the applicant to recover the sums overpaid was taken on 3 January 1972. On this date, in fact, the Administration drew up, and the authorizing officer signed, three memoranda addressed to the ‘Salaries & Allowances’ department, adjusting the amount of the education allowances to be paid to Mme Kuhl as from 1 September 1970 in respect of her children Armin and Sigrid.
The Council maintains that copies of these memoranda were sent to the applicant, as is shown by a reference in each of those documents.
Therefore, under Article 90 and 91 of the Regulations then in force, Mme Kuhl should either have filed an appeal directly with the Court of Justice within three months of receiving such notification or, within the same period, have lodged a complaint with the appointing authority.
According to the Council, she opted for the second alternative by her letter of 19 January 1972, which must be regarded as a complaint. Since on the following 10 March the Secretary-General of the Council expressly rejected the complaint, the appeal brought by the applicant more than three months later is out of time and therefore inadmissible.
I consider that this objection must be set aside.
Firstly, because the memoranda sent to the ‘Salaries & Allowances’ department relied on by the defendant do not constitute a decision, within the meaning of the Regulations, to recover undue payment under the provisions of Articles 25 and 85 of the Regulations.
The exercise of the power to recover a sum overpaid by the Administration involves a specific decision by the appointing authority or by the authority holding the delegated power for that purpose under Article 2 of the Regulations.
Moreover, by virtue of Article 25, any decision adversely affecting an official shall state the reasons on which it is based.
The memoranda of 3 January 1972 are merely accounting documents intended to notify the ‘Salaries & Allowances’ department of the bases on which education allowances were to be retrospectively calculated. Not only do they refer to Article 85 of the Regulation, but they indicate no ground for the recovery of the undue payment. They must be regarded purely as administrative measures within the accounts department and should have been preceded by a decision addressed to the applicant applying Article 85.
The Administration does not even attempt to maintain that, in this instance, such a decision had been taken before 3 January 1972.
Secondly, even if it is accepted that the memoranda in question do constitute a decision adversely affecting an official, it must still be shown that the applicant was informed of them before the period for introducing the appeal can begin to run.
Mme Kuhl expressly denies this. The Administration, which has the burden of proving that she was notified, merely relies in this connection on the words ‘copy to Mme Kuhl’ in the documents, without showing that these copies actually reached her.
It is not disputed that, following a verbal communication from an official of the Directorate of Personnel, the applicant was aware of the Administration's intention to recover the sum of 28691 Belgian francs paid in error. However, Article 25 of the Regulations requires that ‘any decision relating to a specific individual which is taken under these Staff Regulations shall at once be communicated in writing to the official concerned’.
This rule is mandatory. It is a sensible rule since it tends to avoid all discussion as to the existence of a decision, its content, the capacity of its author and the date on which it was taken.
To accept that the date on which the period for bringing an appeal begins to run — a period based on ideas of public interest — may depend on ‘awareness’ of a decision following a mere verbal communication, the exact meaning of which, the date and possibly even the substance would be difficult to establish, would introduce an element of uncertainty and leave room for disputes which the court would more often than not have difficulty in settling.
Article 25 of the Regulations, therefore, rejects unequivocally this idea of ‘awareness’ by requiring any decision relating to a specific official to be drawn up in the form of a written document and notified to the official concerned.
Finally, by a telex sent to the court after the oral procedure, replying to arguments put forward in court by counsel for the applicant, the Council's representative maintained that the note on the payment of arrears of salary, sent to Mme Kuhl on 15 January 1972 together with the monthly pay-slip, showed that the education allowances overpaid had been deducted from the arrears of salary paid on that date.
Even if it is accepted — which the applicant does not — that she had thus received confirmation of the earlier verbal communication, an accounting slip showing however clearly the nature of the sum deducted, cannot in my opinion, be regarded as a decision to recover the undue payment within the meaning of Article 85.
I am therefore led to the conclusion that the decision alone, notification of which began the period for filing the appeal or lodging the complaint, is contained in the letter of 10 March 1972, in which the Secretary-General of the Council rejected the applicant's request for the waiver of recovery of the undue payment.
Mme Kuhl lodged a complaint against that decision with the appointing authority, within the prescribed time. She brought an appeal before you within the period precribed against the express rejection of her complaint. Her appeal is therefore admissible.
III — The Merits
When discussing the merits of the case, it should be remembered that the principle of the recovery of undue payment is to be found in the civil legislation of the Member States of the Communities.
Article 1235 of the French Civil Code states that ‘any payment implies the existence of a debt. Any sum paid when there is no debt may be recovered’. Article 1376 of the same Code restates the principle of the recovery of undue payment ‘Any person who receives, either knowingly or in error, money which is not owed to him, shall return it to the person by whom it was incorrectly paid’.
Similar provisions are to be found in the laws of Germany (Paragraphs 818-822 of the BGB), Italy (Articles 2033 et seq. of the Civil Code) and Belgium (Article 1376 of the Civil Code).
Authoritative legal writers usually regard undue payment as a case of unjust enrichment and treat the action for recovery as a form of action ‘de in rem verso’.
Three conditions must be fulfilled in order to bring this action:
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firstly there must be either the payment of money or the
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performance of services in lieu of payment
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secondly, there must be no debt either in terms of money or arising out of the relationship between the ‘solvens’ and the ‘accipiens’.
Finally, there must be an error on the part of the ‘solvens’ or, as more generally appears from case law, an absence of true consent on his part.
The good faith of the ‘accipiens’, and even the fact that he was unaware of the error, does not prevent recovery of the sum.
Until now, you have not had occasion to rule on the recovery of sums overpaid to an official, but the concept of unjust enrichment has been considered in certain of your judgments, for example for the purposes of calculating the right to remuneration of an official re-instated after dismissal (Judgment of 19 March 1964, Case 18/63, Schmitz, Rec. 1964, p. 190) or after recinding a refusal to establish an official. (Judgment of 8 July 1965, Case 110/63, Willame, Rec. 1965, p. 822).
In the relations between a public body and its servants, the action to recover undue payment arises from principles of private law but has certain special features which take into account the frequent complexity of statutory rules and mitigate their effect in favour of officials who act in good faith.
The French system is certainly the most rigorous: by applying the principles of the Civil Code, it recognizes unreservedly the right of a public body to recover undue payment by means of enforceable orders for the transfer of funds, and if necessary, by an order for attachment (Conseil d'État, 23 March 1923, Bernichon, Rec. Lebon, p. 275).
In the absence of any guidance in the general statutory rules governing public servants, case law shows that an error is committed by the official who accepts remuneration which is not legally due to him (Conseil d'État 6 July 1938, Ceccaldi, Rec. Lebon, p. 631).
However, case law also shows that the official concerned may take advantage of an error made by the Administration and obtain an allowance, for example, where the error has been committed over a long period and recovery of the sum would be prejudical. (Conseil d'État, 21 July 1937, Demoiselle Buchta, Rec. Lebon, p. 749; Conseil d'État, 1 February 1956, Grinda, p. 753).
Therefore, the official must first submit to the transfer of funds and then bring an action for compensation against the public body.
In German law (Bundesbeamtengesetz paragraph 87), the civil law rules concerning unjust enrichment apply to an action for recovery against an official who may however, contest the recovery of undue payment by showing that there was no enrichment or that it had come to an end.
On the other hand, there may only be recovery where the official was aware that there was no due reason for the payment, or if the fact of the overpayment was patently such that he must have been aware of it.
German administrative case law shows that public servants must be aware of the statutory rules applying to them, particularly as regards remuneration. The recovery of a sum overpaid is, therefore, justified where the official concerned shows that there has been a ‘conspicuous lack of care’ (Judgment of the Bundesverwaltungsgericht of 21 December 1960 in the ‘Deutsches Verwaltungsblatt’, p. 336).
In Italy, case law was at first firmly against officials in applying the principle of recovery of undue payment and took no account of good faith, even where the error had been commited by the Administration over a long period.
More recently, however, the Italian Conseil d'Etat has held that there can be no repayment where, if the official concerned is not at fault, the wording of the statute was likely to raise difficulties of interpretation. (Consiglio di Stato, 30 September 1965, No 579, Rassegno Consiglio di Stato, VI Sez., I p. 497).
This also applies where the Administration has acted in such a way as to persuade the official that he was legally entitled to the sums paid (Consiglio di Stato, IV Sez., 22 December 1964, No 1589, Rassegno Consiglio di Stato 1964, I p. 2201).
Thus Italian case law also takes into account the fact that the official was — or under normal circumstances should have been — aware of the overpayment before allowing the right of recovery.
This is also the view of Community law which seems, on this point, to be inspired mainly by German law.
Article 85 of the Regulations begins by confirming the right to recover undue payment. Moreover, the initial wording of this article seemed to leave the Community Institutions with a considerable discretion in the exercise of this right, since the wording used states that ‘any sum overpaid may be recovered’, while in the amended Regulations, applicable as from 1 July 1972 under Regulation No 1473/72 of the Council, the word ‘may’ has disappeared; the Administration is therefore bound, henceforth, to bring an action for recovery. In this case, it is original Article 85 which applies, the decision in question being made before that date.
However, throughout the successive drafts of that Article, one condition remains necessary before the action for recovery of the undue payment may be legally brought;
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either the official concerned must actually have been aware that there was no due reason for the payment, recovery in such cases being ‘a fortiori’ justified since the official himself caused the Administrative error by failing to make, or by making inaccurate, statements as to his position,
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or the fact of the overpayment must have been patently such that he could not have been unaware of it.
I find that the following principles are clear from this wording:
1.
The action for recovery may only be brought if certain sums were paid in error to the official, i.e. if his total remuneration is higher than would result from a lawful application of the terms of the Regulations and the provisions for putting them into effect.
2.
The action for recovery is certainly justified where the official did not act in good faith, i.e. where, by his own action, he led the Administration into making an error or where, without being in any way responsible for it, he was actually aware that there was no due reason for the overpayment.
3.
Thus, an error on the part of the Administration, even where it is not brought about by the official, does not exclude an action for recovery: in fact, it is obviously one of the necessary conditions for bringing it. However, if the official remained unaware that there was no due reason for the payment and if, under normal circumstances, he could not have been aware of it because it was in no way obvious to him, there can be no action for recovery.
These principles must now be applied to the facts of this case.
In this respect a distinction must be made between two periods:
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the first covering 1 September — 31 December, 1970;
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the second covering the whole of 1971.
First, under Article 8 of the general provisions for giving effect to the staff regulations drawn up by the Council, the applicant was bound to inform the Administration of any change likely to lead to the withdrawal or reduction of the education allowances. This obligation would obviously be meaningless unless the Administration was informed of such changes without delay.
In this case, it is obvious that the change in the educational situation of Armin and Sigrid which occurred on 1 September 1970, when they were enrolled at the European School in Brussels after previously attending a German teaching establishment, was likely to lead to a reduction in the education allowances for each of these two children. Mme Kuhl failed to inform the Administration of this on the return to school in 1970. She only indicated the changed situation at the begining of 1971. Therefore, during the last four months of 1970 the Administration, lacking other information, continued to pay the flat-rate allowances at the higher rate for children attending a school away from the family home. The fact of the overpayment for this period was attributable to the applicant who had a duty to acquaint herself with the applicable provisions in the Regulations and should therefore have been aware that the rate at which educational allowances are paid is considerably reduced for children attending school in the town in which the family permanently resides. I find that the only reason which she has given for this ommission — namely that work was particularly heavy at this time — is in no way sufficient.
I think, therefore, that, with respect to the first period, recovery of the undue payment was certainly justified.
As regards the second period, the question is slightly different. It is established that, when on 15 January 1971, she requested repayment of the education costs incurred, (in particular the cost of sending the children to school by coach) the applicant did, belatedly, inform the Administration that Armin and Sigrid had changed schools, and at the same time that her daughter Pia had begun attending school. It is also established that a serious error was committed by the Personnel Department in omitting to pass this information on to the Department responsible for the authorization of education allowances. But this error is not, in itself, sufficient to deprive the defendant institution of the right to bring an action to recover the sums overpaid in 1971.
It may be accepted that the applicant was not directly aware that there was no due reason for the payments made after she notified the Administration, but should she not have realised this if she had exercised the care normally required from an official with regard to the staff Regulations concerning him?
This applies particularly where, as here, the person concerned is a higher-grade official who, although without legal training is sufficiently intelligent to check without difficulty the salary statements sent to him.
First, the regulations applying to education allowances were addressed individually to each servant of the Council by a staff announcement of 26 June 1963; the amendments made since that date to the regulations have been promulgated, together with an explanation of all the provisions in force, in particular by a staff announcement of 29 July 1970.
Moreover, officials were informed that they might obtain from the competent department any details they considered necessary.
The applicant is therefore unjustified in maintaining that she had no means of ascertaining the way in which these provisions were applied to her.
Secondly, although the amount of the education allowances is certainly relatively small compared to the total remuneration received by Mme Kuhl, it is far from negligible, since the difference between the sum lawfully due and that actually paid in 1971 amounts to almost 2000 Belgian francs per month.
Moreover, as these allowances are listed separately in the pay-slips it is easy to check the bases used in their calculation.
Finally, and most importantly, as the applicant had herself informed the Administration of the change in the educational situation of her children and should normally have expected a reduction in the total monthly allowances, even though they were now being granted for three children rather than for two, she could not have been unaware of the abnormal increase in the sums paid.
A simple check would have shown her that the accounts department had not realised the consequences of the change of educational establishment notified by her. In this case, the fact of the over-payment was sufficiently obvious that a servant as able and qualified as the applicant could not have been unaware of it, had he shown the degree of care demanded of him.
I consider therefore, that in this instance the conditions of Article 85 of the Regulations were fulfilled and the Council was legally able to exercise the power to recover the undue payment conferred by this provision of the Regulations.
I am therefore of the opinion:
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that the application should be rejected and
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that, according to Article 70 of the Rules of Procedure, the parties should bear their own costs.
(
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