OPINION OF MR ADVOCATE-GENERAL WARNER

DELIVERED ON 18 SEPTEMBER 1975

My Lords,

The genesis of the dispute in this case lies in legislation of the Federal Republic of Germany designed to prevent the cumulation of pension benefits by those who have spent part of their working life in the service of that State and part in the service of an international or supranational institution. The applicant, Herr Meyer-Burckhardt, is a retired official of the Commission of the EEC who, before entering its service, had held office for a very long period in the German civil service. He has found that, under the German legislation in question, the result of his receiving a pension from the Commission has been to reduce the amount of his German civil service pension, a reduction which attained considerable proportions during the period to which the application pertains.

In essence, the applicant claims damages from the Commission for its alleged failure to take action against the Federal Republic under Article 169 of the EEC Treaty following the refusal of the Bundesverwaltungsgericht, a Court against whose decisions there is no judicial remedy under German law, to refer to this Court, under Article 177 of the Treaty, the question of the compatibility of that German legislation with Community law.

The facts are these. The applicant was born in 1908. After having been employed for 32 years in the German civil service, he was given leave by the German authorities to enter the service of the then EEC Commission with effect from 1 July 1958. He says that, at this stage, his 32 years of service entitled him to expect a pension equal to 72 % of his salary reckonable for pension purposes under the legislation of the Federal Republic.

He remained in the employment of the Commission until 1967, when, on grounds of invalidity, he was retired from the service of the Commission with effect from 30 June 1967 and from the civil service of the Federal Republic with effect from 31 March 1967. He then started to receive, and still does receive, pensions both from the Commission and from the Federal Republic. His pension from the Commission amounts to 60 % of his basic salary, which was the maximum payable under the provisions of Articles 77 and 78 of the Staff Regulations as they stood at the time of his retirement He has always received that pension. His pension from the Federal Republic has, on the other hand, fluctuated.

Initially, the Federal Republic computed that pension taking into account not only the applicant's period of employment in the German civil service but also his period of employment with the Commission, and awarded him a pension equal to 75 % of his reckonable salary. On 19 June 1968, however, there was enacted in Germany a statute (‘Gesetz zur Änderung beamtenrechtlicher und besoldungsrechtlicher Vorschriften’ BGBl 1968 I p. 848) amending the Bundesbeamtengesetz, the statute governing the civil service and the salaries of civil servants. This amending statute introduced a new paragraph 160 (b) into the Bundesbeamtengesetz. That paragraph provides that, where a retired civil servant is in receipt of payments arising by virtue of his employment with an international or supranational institution, his German pension is to be reduced at the rate of 2·14 % for each year of his service with that institution. It further provides that, where the retired civil servant is in receipt of the maximum invalidity pension that could be paid to him as a result of his employment by that institution, the payment of his German pension is to be completely suspended. The effect of this provision is to some extent alleviated by article 10 of the amending statute, which permits those already in receipt of a pension at the time that statute came into force to continue to receive a German pension equal to 12 % of their reckonable salary.

The result was that from 1 October 1968 the applicant's German pension was reduced to 12 % of his reckonable salary.

On 6 December 1968, the applicant commenced an action before the Verwaltungsgericht of Freiburg, seeking annulment of the inevitable administrative decision reducing his German pension to 12 % of his reckonable salary.

Nothing further appears to have happened with regard to the applicant's case until 1 July 1972, when Regulation (Euratom, ECSC, EEC) No 1473/72 of the Council (OJ 1972 L 160) came into force. This modified inter alia, articles 77 and 78 of the Staff Regulations, raising the maximum pension to 70 % of basic salary, but also introducing a formula for the calculation of invalidity pensions under which the applicant would be entitled only to a pension based on ten years' service. Having regard, however, to his ‘acquired rights’, the Commission has continued to pay him his 60 % pension and, since this is no longer the maximum Community pension, the German authorities now only deduct 21·4 % (i.e. ten times 2·14 %) from his basic 75 % pension, so that he receives a German pension of 53·6 % of his reckonable salary. Perhaps wisely, the applicant does not seek to challenge this. His claim is limited to the period from 1 October 1968 to 30 June 1972.

On 24 February 1972, the Bundesverwaltungsgericht delivered Judgment in the Ganschow case (II C 32/70, Annex 2 to the Application). That case was concerned with the application of paragraph 160 (b) of the Bundesbeamtengesetz to Herr Ganschow, another retired Commission official. He had claimed that that paragraph was incompatible with Community law, and asked that certain questions be referred by the Bundesverwaltungsgericht to this Court under Article 177 of the EEC Treaty. The Bundesverwaltungsgericht refused to order such a reference on the ground that no question of Community law was raised the answer to which was not clear. It is to be observed that the provision of paragraph 160 (b) that was applicable in Herr Ganschow's case was the first sentence of it, under which a German civil service pension is reduced by 2·14 % for each year of the recipient's service with an international or supranational institution, i.e. the provision now applicable to Herr Meyer-Burckhardt and the validity of which he does not challenge.

In reaching its decision the Bundesverwaltungsgericht relied on an earlier decision of its own and on certain decisions of other German Courts and of the French Conseil d'Etat. It held that those authorities established the proposition that a Court of a Member State against whose decisions there is no judicial remedy under national law is not bound under the third paragraph of Article 177 to refer to this Court a question of Community law the answer to which is not open to any doubt. I do not think, my Lords, that it would be appropriate for me to discuss in detail the authorities so relied upon by the Bundesverwaltungsgericht. But, in view of certain submissions that were made on behalf of Herr Meyer-Burckhardt, I think it right to say that the proposition, as so stated, is in my opinion correct, for, in my opinion, Article 177 is concerned with real questions and not with points which may be raised by parties but can admit of only one answer. Having said that, I think it right also to add that, in my opinion, national Courts should exercise great caution before reaching the conclusion, on any point of Community law, that the answer to it admits of no possible doubt.

On 23 May 1973, i.e. before the Verwaltungsgericht of Freiburg had delivered judgment in his own case, the applicant submitted to the Commission a request, expressed to be made under Article 90 (1) of the Staff Regulations, to the effect that the Commission should take action against the Federal Republic under article 169 of the EEC Treaty to put an end to what he alleged to be a breach by the Bundesverwaltungsgericht of the third paragraph of article 177 of the EEC Treaty (Annex 5 to the application). In essence the applicant based his request upon the decision of the Bundesverwaltungsgericht in the Ganschow case and his fear that a similar decision would be reached in his own case.

On 28 June 1973 the Verwaltungsgericht of Freiburg delivered judgment dismissing the applicant's action (Annex 3 to the Application) and on 30 August 1973 the applicant appealed directly to the Bundesverwaltungsgericht, though he has now asked that Court to stay the proceedings in his appeal until the present application has been decided by Your Lordships.

Not having received a reply from the Commission to his request of 23 May 1973 within the four months prescribed by Article 90 (1) of the Staff Regulations, the applicant submitted to the Commission a complaint, expressed to be made under Article 90 (2) of those Regulations, against the implied decision rejecting that request (Annex 7 to the Application). This complaint was received by the Commission on 11 October 1973.

On 18 October 1973 the Commission wrote to the applicant expressly rejecting his request (Annex 6 to the Application) and on 7 February 1974 it wrote to him expressly rejecting his complaint (Annex 8 to the Application).

The Commission's reason for rejecting the applicant's request were shortly stated and its reasons for rejecting his complaint were merely stated to be the same. They were, first, that, in the view of the Commission, proceedings of the kind that the applicant wished to see initiated would involve a challenge to the independence of the judicial organs concerned in the cases to which they related and, secondly, that, in any event, there was no legal foundation for such proceedings.

My Lords, I think that those reasons were, to say the least, unhappily expressed.

If the Commission meant that, in its opinion, proceedings against a Member State under Article 169 do not lie for failure by one of its Courts to comply with the third paragraph of Article 177, the Commission was, I think, wrong. It is trite law in this Court that compliance with the provisions of Community law is required of all the organs of a Member State, be they executive, legislative or judicial. The third paragraph of Article 177 imposes an obligation that is as binding on Member States as any other obligation undertaken by them under the Treaty, for aught that compliance with it is a matter for their judicial organs. A Member State is, in my opinion, just as amenable to proceedings under Article 169 for failure to fulfil that obligation as it is for failure to fulfil any other.

On the other hand it is obvious that proceedings against a Member State for failure by one of its Courts to comply with Article 177 should not lightly be undertaken by the Commission. If what the Commission meant, in the statement of its reasons, was that, in considering whether to exercise the discretion undoubtedly conferred upon it by Article 169, it had formed the view that such proceedings would be inexpedient, and indeed unjustified, in the present case, it was in my opinion on unimpeachable ground.

Be that as it may, the applicant did not appeal against the rejection of his complaint.

On 18 April 1974, he submitted to the Commission a fresh request expressed to be made under Article 90 (1) of the Staff Regulations (Annex 10 to the Application). This request was to the effect that the Commission should pay to him damages amounting to DM 122486·88, this being according to his computation (Annex 1 to the application) the amount of pension of which he had been deprived between 1 October 1968 and 30 June 1972. This request was stated to be based on the second paragraph of Article 215 of the EEC Treaty, and also on Article 24 of the Staff Regulations. The first two paragraphs of the latter Article read as follows:

‘Each Community shall assist any official in its service, in particular in proceedings against any person perpetrating threats, insulting or defamatory acts or utterances, or any attack to person or property to which he or a member of his family is subjected by. reason of his position or duties.

It shall compensate the official for damage suffered in such cases, in so far as the official did not either intentionally or through grave negligence cause the damage and has been unable to obtain compensation from the person who did cause it’.

The remaining two paragraphs of the Article deal with the obligation of Community Institutions to facilitate the further training and instruction of their officials and to take such training and instruction into account for purposes of promotion in their careers.

Under both Article 215 of the Treaty and Article 24 of the Staff Regulations the applicant's case was in essence (as indeed it is in this action) that he had suffered damage at the hands of the Commission because of its failure to institute proceedings against the Federal Republic for its alleged breaches of Community law. These alleged breaches, he said, were committed not only by the Bundesverwaltungsgericht itself, but also by the Federal Government, whose Counsel had, on the applicant's appeal to that Court, lodged a pleading (Annex 4 to the Application) urging it not to refer to this Court the questions suggested by the applicant. The Federal Government was thereby, said the applicant, participating in the breaches of the Treaty of which the Bundesverwaltungsgericht was guilty.

In anticipation, perhaps, of an argument to which I shall soon have to advert, the applicant's request expressly made the point that an action tor damages is an autonomous form of action affording a remedy independent of that afforded by an action for annulment.

Again the applicant received no reply from the Commission within the four months prescribed by Article 90 (1) of the Staff Regulations, so, on 1 September 1974, he submitted a complaint under Article 90 (2) of those Regulations against the implied decision rejecting his request (Annex 12 to the Application). An express rejection of his request was in fact eventually addressed to him on 7 November 1974 (Annex 9 to the Application).

Having received no reply to his complaint, the applicant commenced the present proceedings against the Commission on 31 January 1975.

As one might have expected in the circumstances, the Commission submits on a number of grounds that the action is inadmissible.

As to this, the first problem seems to me to arise from the circumstance that the applicant relies simultaneously upon the second paragraph of Article 215 of the EEC Treaty and upon the Staff Regulations. In my opinion it is not open to an applicant in this Court to do that.

I leave aside the difficulty that the Staff Regulations derive their authority from all three founding Treaties, whereas Article 215 pertains only to the sphere of operation or the EEC Treaty. It could be pointed out, on behalf of the applicant, that there are, in the other two founding Treaties, Articles corresponding to Articles 215, viz. Article 180 of the Euratom Treaty and Article 40 of the ECSC Treaty — though the latter is in a substantially different form. Maybe it could also be said on his behalf that, as an ex-official of the erstwhile EEC Commission, before the Merger Treaty took effect, he is entitled to rely exclusively on the provisions of the EEC Treaty and on the provisions of the Staff Regulations in so far as they derive their authority from that Treaty, and that he is not concerned with problems arising from the existence of the other two Communities.

Be that so. Looking only at the EEC Treaty, it seems to me plain that there is, procedurally speaking, a distinction between proceedings for ‘compensation for damage’ under the second paragraph of Article 215, jurisdiction to entertain which is conferred on this Court by Article 178, and proceedings under the Staff Regulations, jurisdiction which is conferred on the Court by Article 179. The distinction has been observed in the framing of the relevant secondary legislation. Thus, under the Rules of Procedure of the Court, actions under Article 179 may be heard by a Chamber (as indeed this action is being) whereas actions under Article 178 must be heard by the Full Court. The distinction has also been implicitly recognized in many judgments of the Court and of its Chambers, as well as in Opinions of its Advocates-General. I will not weary Your Lordships with a recital of them. I need only remind Your Lordships that, in the Opinion that he delivered on 26 June 1975 in Cases 4 & 30/74 Scuppa v Commission (not yet reported) Mr Advocate-General Trabucchi expressly mentioned it. The circumstance that the Second Chamber did not, in that case, follow Mr Advocate-General Trabucchi in his interpretation of the facts, does not of course detract from the authority of what he said on this point.

In the result I am of the opinion that this action, having regard to its antecedents, should be considered as having been brought by the applicant under Article 179 and the Staff Regulations, and not under Articles 178 and 215. As a matter of substance this can make no difference, because it is clear that the Court has in proceedings under Article 179 the same kind of jurisdiction to award damages as it has in proceedings under Article 178 — consider for instance Case 23/69 Fiehn v Commission (Rec. 1970 (2) p. 547), Case 79-71 Heinemann v Commission (Rec. 1972 (2) p. 579), Cases 10 & 47/72 di Pillo v Commission [1973] ECR 763 and Cases 15 etc/73 Schots and Others v Council and Others [1974] ECR 177.

The Commission submits that, on the footing that the action is one under Article 179, it is time-barred. In support of this submission the Commission relies on a number of authorities in this Court which establish the proposition that, where an applicant is out of time to claim annulment of an administrative decision, he cannot get round the timebar by bringing an action for damages in respect of the same decision: see for instance Case 59/65 Schreckenberg v Commission [1966] ECR 543 (Rec. 1966 p. 786), Case 4/67 Muller v. Commission [1967] ECR 365 (Rec. 1967 p. 470) and Cases 15 etc/73 (already cited). Here, says the Commission, the applicant was, when he brought the action, out of time to claim annulment of its decision rejecting his first complaint and he cannot get round this by suing for damages.

To this the applicant replies that, as is shown by another line of cases decided by the Court, the proposition relied upon by the Commission does not apply where the applicant has no locus standi to sue for annulment, because an action for damages is an autonomous form of action affording a remedy independent of any right to annulment — see for instance Case 4/69 Lütticke v Commission (Rec. 1971 (1) p. 325), Case 5/71 Aktien-Zuckerfabrik Schöppenstedt v Council (Rec. 1971 (2) p. 975), Cases 9 & 11/71 Compagnie d'Approvisionnement de Transport et de Crédit SA and Grands Moulins de Paris SA v Commission (Rec. 1972 (1) p. 391), Case 43/72 Merkur v Commission [1973] ECR 1055 and Case 153/73 Holtz & Willemsen GmbH v Council and Commission [1974] ECR 675. Those were of course all cases of actions brought under Article 178, but that the same principle applies in actions brought under Article 179 is apparent from Cases 10 & 47/72 (already cited).

Here, says the applicant, Case 48/65 Lütticke v Commission [1966] ECR 19 (Rec. 1966, p. 27) shows that a private person has no locus standi to challenge the validity of a decision of the Commission declining to take action against a Member State under Article 169. His action for damages should accordingly be treated as autonomous and the period within which he was entitled to bring it as unrelated to the date of the rejection of his first complaint by the Commission.

My Lords, I am inclined to think that, on this particular point, the applicant is right. But his argument upon it seems to me to entail, in itself, the inevitable failure of his action.

In his Opinion in Case 48/65 Mr Advocate-General Gand convincingly demonstrated why it was impossible for a private person to have any right to challenge the validity of a decision of the Commission declining to take action against a Member State under Article 169. Much of Mr Advocate-General Gand's reasoning seems to me to lead also to the conclusion that such a person cannot sue the Commission for damages in respect of such a decision. In particular, for the Court to entertain such an action would involve that it should, in the absence of that Member State as a party, and without affording it any of the safeguards afforded to a Member State under Article 169, decide whether or not it was in breach of the Treaty.

Numerous decisions of the Court make it clear that, in order to succeed in an action for damages, an applicant must prove three things:

1. that he has suffered damage;

2. that that damage has been caused by the conduct of the defendant Institution; and

3. that that conduct was unlawful.

In saying that numerous decisions of the Court establish that proposition I have in mind both cases brought under Article 178 and cases brought under Article 179. From the former category I instance Case 4/69 and Case 153/73 (both already cited). From the latter category I instance Case 23/69 and Case 79/71 (both, again, already cited).

Nor do I overlook that, in Cases 9 & 11/71 (already cited), the Court hinted that it might, in appropriate circumstances, recognize in an applicant a right, if not to damages, at least to compensation, even in the absence of any unlawful conduct on the part of the defendant, on the basis of the French doctrine of ‘rupture de l'égalité devant les charges publiques’. But there is no suggestion that the applicant claims, or could be entitled to, such a right in the present case.

So the first question to be asked is whether he has suffered any material damage. He alleges of course that he has, and quantifies it at DM 122486·88. But has he, my Lords, suffered that damage? His case is still pending before the Bundesverwaltungsgericht, and I doubt if it can be permissible to make any assumption as to what that Court will decide.

Let us, nonetheless, assume, in the applicant's favour, that the Bundesverwaltungsgericht will decide against him and, in the process, decline to refer to this Court the questions of Community law suggested by the Applicant.

The second question then arises whether the resultant damage, or at all events loss, to the applicant can be held to have been caused by the conduct of the Commission.

The first duty of the Commission, under Article 169 of the EEC Treaty, was, I apprehend, to consider whether the Federal Republic of Germany had failed to fulfil an obligation under the Treaty. Before coming to an affirmative conclusion as to this, the Commission must, under Article 169, give the Federal Republic the opportunity to submit its observations. What those observations would have been and what effect they would have had on the corporate mind of the Commission, one can only surmise.

Suppose, however, that the Commission would have concluded that the Federal Republic was in breach of the Treaty and that it was expedient for it (the Commission) to carry the matter further. The Commission would then, under Article 169, have delivered a ‘reasoned opinion’ on the matter.

What then would have been the reaction of the German authorities, including the Bundesverwaltungsgericht? Of course, one does not know, because it depends, among other things, on what would have been the contents of that hypothetical opinion.

At all events, Article 169 provides that ‘If the State concerned does not comply with the opinion within the period laid down by the Commission, the latter may bring the matter before the Court of Justice’.

So, at best for the applicant, the Commission might have found itself having to exercise a fresh discretion, as to whether to bring the matter before this Court

Suppose it did. Who can say what, in all the circumstances, the decision of this Court would have been? It is very far from clear, to say the least, that the applicant is right in saying that the provision of the Bundesbeamtengesetz of which he complains is incompatible with Community law.

So, my Lords, even assuming in favour of the applicant that he has suffered the loss he alleges, the causal link between that loss and the conduct of the Commission is so tenuous as to be no link at all.

That being so, it is hardly necessary to consider the question whether the conduct of the Commission was unlawful. But I think it right to say that, in my opinion, the duty of the Commission to the applicant was, at the very most, conscientiously to consider his request. It cannot have owed him a duty, of such a kind that a breach of it would be actionable, to exercise its discretion under Article 169 in a particular way.

In the result I am of the opinion that this action should be dismissed, but that, in view of the fact that it is brought under Article 179 of the EEC Treaty, the applicant should, in the matter of costs, have the benefit of Article 70 of the Rules of Procedure of the Court.