JUDGMENT OF THE COURT OF FIRST INSTANCE (Fourth Chamber)

14 December 1995

Case T-72/94

Komninos Diamantaras

v

Commission of the European Communities

‛Officials — Expatriation allowance — Official not having habitually resided in the Member State of employment — Staff Regulations, Annex VII, Art. 4(1 )(a)’

Full text in Greek II-865

Application for

— annulment of the Commission's decision, notified to the applicant by administrative note of 22 February 1993, refusing to grant him an expatriation allowance;

— an order that the Commission pay that allowance from the date on which he took up his duties with the Commission.

Decision:

Commission's decision annulled and Commission ordered to pay the expatriation allowance.

Abstract of the Judgment

The applicant, of Greek nationality, has been an official at the Commission since 1 November 1992. From 1 December 1985 until 31 December 1988 he was employed by a company whose seat is in Brussels in order to carry out a contract concluded between that company and the Commission. From 1 January until 15 December 1989 he worked as an independent adviser to the Commission. During that entire period he lived in Brussels.

Having declared to the municipal authorities in Brussels that he was about to leave, the applicant returned to Athens, where he worked from 2 January 1990 until 31 October 1992 for the Kentro Ananeosimon Pigon Energeias (CRES), whose seat is at Pikermi-Koropi, Attiki (Greece). Under the contracts concluded between the Commission and CRES, the applicant, who was in charge of CRES's office in Brussels, travelled on several occasions to Brussels, where he had two flats.

After he had taken up his duties with the Commission and filled in the form for persons entering the Commission's service, giving as his place of residence, from 16 December 1989 to 31 October 1992, Kifisia (Greece), and as the place of his professional activity, from 2 January 1990 to 31 October 1992, Athens, Pikermi (Greece), the applicant was sent a decision of the Commission stating that he was not entitled to the expatriation allowance provided for in Article 4 of Annex VII of the Staff Regulations of the European Communities.

The applicant lodged a complaint against that decision, which was rejected by the Commission.

Substance

According to consistent case-law, the fundamental purpose of the expatriation allowance is to compensate for the extra expense and inconvenience of taking up permanent employment in a country with which the official has established no lasting tie before his entry into service. For such a lasting tie to be established, thus entailing the loss to the official of the benefit of the expatriation allowance, the legislature requires that the official should have had his habitual residence or exercised his main professional activity for a period of five years in the country where he is posted. Any interpretation which would exclude from the benefit of the expatriation allowance an official who had had his habitual residence or exercised his principal processional activity only for part of the reference period of five years would thus disregard the purpose of the expatriation allowance as established by case-law (paragraph 48).

See: T-4/92 Vardakas v Commission [1993] ECR II-357, para. 39

It is clear on reading the judgment in Benzler v Commission to which the Commission refers, that the situation in that case was very different from that of this case. Accordingly, the Commission's argument based on that judgment does not alter the conclusions drawn from the above case-law (paragraph 49).

See: T-63/91 Benzler v Commission (1992] ECR II-2095

It should be noted that Article 4(1 )(a) of Annex VII to the Staff Regulations provides that the reference period of five years to be taken into consideration expires six months before the official takes up his duties. The Court considers that the reason for that six-month period is to avoid a situation where officials who have practically completed the entire reference period of five years in the country in which it is intended they will work change their habitual residence or the place where they carry on their main occupation only shortly before they take up their post. That precaution taken by the legislature in defining the conditions governing the grant of the expatriation allowance is further corroboration of the principle that the officiai loses entitlement to it only if, during the reference period, he had his habitual residence or carried on his main occupation in the country of the place where he is employed (paragraph 50).

Sporadic and brief absences from the country of employment cannot necessarily be considered sufficient to deprive the official's residence in the State of employment of its habitual nature (paragraph 51).

See: 188/83 Witte v Parliament [1984] ECR 3465; T-90/92 Magdalena Fernández v Commission [1993] ECR II-971

Contrary to the Commission's argument, the Court considers that the derogation in the last sentence of Article 4(1) (a) of Annex VII to the Staff Regulations cannot be restricted solely to persons who have been on the staff of another State or international organization, because it refers to ‘circumstances arising from work done for another State or for an international organization’. In that connection, the status of independent adviser to the Commission, representing a direct legal relationship between the person concerned and the institution, corresponds to circumstances arising from work done for an international organization. In view of the fact that, pursuant to the final sentence of Article 4(l)(a), circumstances arising from work done for an international organization are not to be taken into account, the reference period of five years to be taken into account is consequently the period between 16 May 1986 and 31 December 1988 and between 16 December 1989 and 30 April 1992 (paragraph 52).

See: 201/88 Atala-Palmerini v Commission [1989] ECR 3109, para. 6

The Court considers that the documents on the file show clearly that the applicant lived in Brussels and exercised his sole occupation there from 1 December 1985 until 31 December 1988, hence during the first part of the reference period. The Court finds that the applicant's contention that he did not have his permanent or habitual residence there within the meaning of the provisions concerned during that part of the period is not supported by any evidence (paragraph 53).

With regard to the second part of the reference period, the Court notes that the applicant has given a plausible explanation for each piece of evidence relied upon by the Commission and that he has adduced considerable evidence to show that although he travelled to Brussels over that period, his habitual residence was in fact in Greece and it was there that he intended to establish his habitual centre of interests. Although there is no need to comment on the probative value of each piece of evidence and proof relied upon by the applicant, the Court considers that, taken together, they tend to cast significant doubt on the probative value of the evidence relied upon by the Commission. It must be held that that the Commission has not adduced any supplementary evidence to contradict the applicant's probative evidence or to show that his effective habitual residence was in Brussels for the second part of the reference period (paragraphs 56 to 58).

In the circumstances, the Court considers that the applicant must be regarded as having established to a sufficient degree in law that, during the period from 16 December 1989 to 30 April 1992, his habitual residence was in Greece (paragraph 59).

Accordingly the applicant fulfils the condition required by Article 4(1 )(a) of Annex VII to the Staff Regulations, namely that he did not habitually reside or carry on his main occupation within the State of employment for the entire reference period of five years (paragraph 60).

It follows that the Commission's decision refusing to pay an expatriation allowance to the applicant must be annulled. Consequently the Commission must be ordered to pay the sums corresponding to that allowance from 1 November 1992, with a deduction of the amounts already paid to him as expatriation allowance, together with default interest calculated from the dates on which each sum fell due until actual payment. With regard to the rate of the default interest, the Court considers that the rate of 10% claimed by applicant is excessive and that it should be set at 8% per annum (paragraphs 61 and 62).

Operative part:

1. The Commission's decision, notified to the applicant by administrative note of 22 February 1993, refusing to grant him expatriation allowance is annulled.