JUDGMENT OF 21. 2. 1974 — JOINED CASES 15-33, 52, 53, 57-109, 116, 117, 123, 132 AND 135-137/73 SCHOTS-KORTNER AND OTHERS v COUNCIL, COMMISSION AND PARLIAMENT

In Joined Cases

THE COURT (Second Chamber) composed of: M. Sørensen (Rapporteur), President of Chamber, P. Pescatore and Lord Mackenzie Stuart, Judges, Advocate-General: A. Trabucchi Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

A —. The facts of the cases, the subject matters of the applications and the views of the parties may be summarized as follows:

I — Facts and procedure

1. The applicants, who are officials of the institutions of the European Communities, as a result of their marriage and application of Article 4 (3) of Annex VII of the Staff Regulations in the then current version before its deletion by Regulation No 558/73 of the Council of 26 February 1973 (OJ L 55 of 28 February 1973, p. 1), had their expatriation allowance withdrawn or refused by decisions of the institutions to which they belonged. By judgments of 7 June 1972 in Cases 20 and 32/71 (Sabbatini v European Parliament and Bauduin v Commission, Rec. 1972, pp. 345 and 363) the Court held that the said Article 4 (3) of Annex VII to the Staff Regulations established an arbitrary difference in treatment between officials, in that it made the right of the interested officials to continuance of the expatriation allowance after marriage dependent on the acquisition of the status of head of household, as that was defined at the time. Consequently the Court held that the decisions by which Mrs Sabbatini-Bertoni and Mrs Bauduin-Chollet had had their expatriation allowance withdrawn lacked legal basis and must be declared void. As a result of these judgments, the defendants granted to all the applicants the expatriation allowance with effect from 1 July 1972. Between 25 July 1972 and 14 November 1972, the applicants submitted complaints through their immediate superiors, requesting payment of the arrears of expatriation allowance. The periods in respect of which the applicants claim payment of arrears are of very different duration, the longest going back to February 1953 and the shortest to February 1972. The applications were either expressly or by implication rejected by the defendants.

2. By applications lodged with the Court between 27 February and 23 May 1973, the applicants asked the Court to order payment of the arrears of the expatriation allowance as from the date when that allowance was withdrawn or refused up to the date when it was restored and, to the extent necessary, to annual the decisions on the part of the defendants withdrawing or refusing this allowance.

3. In statements lodged between 4 April 1973 and 26 June 1973, the defendants raised objections concerning the admissibility of the applications and asked the Court, in conformity with Article 91 of the Rules of Procedure, to decide upon these objections without going into the substance of the matter.

4. In statements lodged between 14 June 1973 and 23 July 1973, the applicants argued that the objections as to admissibility were not well-founded.

5. By orders of 19 March, 21 March, 27 March and 30 May 1973 the Court, having heard the Advocates-General, decided to assign Cases 28 to 32, 52 and 53, 57 to 104, 116 and 117, 132 and 135 to 137/73 to the Second Chamber.

6. By orders of 11 April and 30 July 1973, the Court (Second Chamber) after hearing the report of the Judge-Rapporteur, and the opinion of the Advocate-General, decided to join the cases for the purposes of the oral procedure and judgment.

7. The Court (Second Chamber) after hearing the report of the Judge-Rapporteur and the opinion of the Advocate-General, decided to open the oral procedure without any preparatory inquiry.

II — Pleas and arguments of the parties as to the admissibility of the appeals

The Council makes the point, as regards Cases 15 to 27 and 33/73, that it follows from Article 87 of Regulation No 147/72 (OJ L 160/72) that the complaints lodged after 30 June 1972 are subject to the rules laid down by the new Articles 90 and 91 of the Staff Regulations. In fact the applicants in disregard of these provisions introduced their complaints too late. The decisions criticized were taken between August 1961 and April 1971; the complaints were only sent to the administration in October 1972. The period between the decisions of the authority and the complaints therefore amounted to well beyond the three months' period specifically laid down by Article 90 of the Staff Regulations. Besides, the applications are not admissible under Article 91 of the Regulations. In none of the cases was a complaint received by the authority within the periods laid down by Article 90.

The Commission points out that as regards Cases 28 to 32, 52 and 53, 57 to 104, 116 and 117, 132 and 135 to 137/73, a simple examination of the dates when the allowance was stopped or refused and the date when the applications were lodged, shows that the applications are inadmissible because they are time-barred, having been made after the expiration of a period of three months from the act complained of, laid down by Article 91 of the Staff Regulations applicable at the time, as it stood prior to the alterations introduced by Regulation No 1473. This Regulation in no way grants the applicants relief against the bar to which they had previously become subject und which therefore had crystallized.

The Parliament points out that it is legally unable to accede to the complaints on the part of the interested parties in Cases 33, 105 to 109 und 123/73. It has no authority to modify the past effects of administrative decisions not capable of being re-opened. The position of the applicants is governed by acts that occurred between June 1965 and September 1970. These had not been the subject matter of either an administrative complaint or of legal proceedings, and are no longer capable of being impugned. The complaints made by the applicants in September 1972 are not admissible since they were made outside the period laid down in Article 90 (2) of the Staff Regulations, as amended. It follows that pursuant to Article 91 (2) of the Regulations as amended, the appeals likewise are not admissible.

The applicants in all the cases, except Case 137/73, reply that the appeals are in the first place actions for payment of arrears and that actions for payment of money due constitute an autonomous form of action that is not subject to the time limits of Article 91 of the Staff Regulations. As a subsidiary point, the applicants argue that, at any rate in the majority of cases, they were, able to ascertain that the expatriation allowance had been discontinued or had remained unpaid only by reading their salary statements, there not having been any express and written communication on this point, stating reasons. As regards the salary statements, these have no value except simply for information. That being the case, the decisions resulting in the discontinuance or refusal of the allowance were not properly notified to the applicants within the meaning of Article 25 of the Staff Regulations, and in the absence of a proper notification, the periods laid down in the former Article 91 of the Staff Regulations had not started to run.

As a further subsidiary point, the applicants maintain that the time for the applications started running afresh by reason of new facts supervening. The first new fact was the judgments of the Court of 7 June 1972 previously mentioned. Without disregarding the Court's case law according to which a judgment constitutes a new fact only in relation to the persons directly affected by the annulled act, the applicants emphasize that the Court has applied this priciple when pronouncing judgments involving annulment by reason of either the disregard on the part of the administrative authority of a specific rule of law, or the wrong interpretation or application thereof. But the annulment effected by the judgments of 7 June 1972 was based upon the illegality found to exist in the rule of law applied to the parties involved — as is was to the applicants. Accordingly the declaration of annulment contained in the judgments of 7 June 1972 involves a judgment not only in the specific case but of general import, since it is concerned with the legality of a provision of general applicability which was applied equally and under the same conditions to the applicants in the present appeals.

In the applicants' opinion it is permissible in these special circumstances to argue that the circle of persons directly concerned by the judgments extends to all those affected by the provision of the Regulations held to have been illegal.

The second new fact cited by the applicants is the decision taken by the respondents henceforth, or again, to grant the applicants the expatriation allowance with effect from 1 July 1972. Whilst it had previously been held that the applicants, by reasen of their marriage, did not fulfil — or no longer fulfilled — the conditions for the grant of the expatration allowance, the new decision — the actual situation being unchanged and the provision in question not yet having been abolished — recognized that these conditions were satisfied. In the applicants' opinion these decisions taken together, might even be called a general change of course in administrative practice, thus constituting a new fact. As regards the judgment of 15 December 1966 given in Case 34/65 (Mosthaf v Commission, Rec. 1966, p. 745) where the Court held that where the authorities take action to give effect to judgments of the Court it is not so much the administrative act but rather the judgment itself that can be called the new fact, the applicants argue that in the present case the new decisions amount to a modification of the legal view of the administrative authority vis-à-vis the applicants themselves, whilst in the Case of Mosthaf v Commission it was a matter of modification of the legal view of the administration vis-à-vis officials other than the applicant, from which the latter claim to benefit.

The applicant in Case 137/73 maintains that in the light of the general principles and of principles of internal law accepted in the Member States it is important to clarify the nature, the effect and the extent of the judgments of the Court of 7 June 1972, holding Article 4 (3) of Annex VII to the Staff Regulations to be illegal. She argues that an appeal to the Court aiming at the annulment of an illegal decision should be regarded as an appeal based on an ultra vires act, and that judgments given on such appeals have an effect not only vis-à-vis the applicants but erga omnes.The Court's judgments cover alk officials and consequently also the applicant. She maintains that the effects of the nullity of a legal act are reducible to the cardinal principle that, the void act being deemed never to have existed, its consequences are retrospectively nullified. It would be shocking to find that by the prior application of a legal provision that was in fact null and of no effect und the illegality of which extends erga omnes, one might be refused compensation on the ground that the period for appeal had expired.

In the applicant's view the case law recognizes that a void act involving a degree of irregularity or illegality that is too striking or too unjust, must be regarded as non-existent. The concept of non-existence is used by the case law in order to correct certain rules of procedure that might seem too rigorous in particular circumstances. The applicant points out that the gravity of the illegality of Article 4 (3) of Annex VII to the Staff Regulations is all the more evident by reason of the fact that the Community institutions are obliged to abolish, in the field of remuneration in the internal law of Member States, all discrimination between the sexes.

The applicant further cites the legal relationship between the Commission and its officials: the officials are involved in a legal situation over which they have no control but which they must, if necessary, endure, at the mercy of modifications or new decisions by the Commission. It follows from this situation that the Commission, which itself is the author of the provisions of the Staff Regulations, creates in the official a strong presumption that these are in accordance with that legality on which all its actions rest. Moreover, the applicant considers that it would be only equitable for all pecuniary consequences of a unilateral act declared void by reason of illegality to be wholly assumed by the party responsible for it. Finally, it is essential that an executive authority, having a rule-making power, should not with impunity be able to make provisions to its advantage, disregarding the legality to which it must conform.

The applicant concludes that the legal provision under which the decision to ease payment of the expatriation allowance was taken ought to be considered as non-existent and that accordingly Articles 90 and 91 of the Staff Regulations must be applicable as from the Commission's decision of 1 September 1972, restoring the allowance as from 1 July 1972, without more extensive retrospective effect.

B —. The oral hearings took place on 27 September and 15 November 1973. The applicants were all represented by Maître Grégoire, except the applicant in Case 137/73, who was represented by Maître Chomé and Maître Haas, of the Brussels Bar; the Council was represented by its Legal Adviser Mr Lesort, the Commission by its Legal Adviser Mr Griesmar, and the Parliament by its Secretary-Gieneral Mr Nord, assisted by Maître Bonn. At the hearing the three institutions persisted in their pleas for the appeals to be rejected for reasons of inadmissibility. They refer in particular to the judgment of 8 February 1973 in Case 56/72 (Goeth v Commission, [19731 E.C.R. 181) in which the Court confirmed its case law relating to the non-admissibility of appeals presented after the expiration of the timelimits. As regards the applicants' view that the applications constitute an autonomous form of action, the institutions reply that only Article 179 of the EEC Treaty can provide the legal basis for appeals. And according to this provision the limits and conditions determined by the Staff Regulations apply to all legal proceedings between the Community and its staff. Accordingly only Articles 90 and 91 of the Staff Regulations are applicable in this case. Besides, in the applications the payment demanded is in no way presented as a claim for compensation of damage suffered. From any point of view an application on the basis of Articles 178 and 215 of the EEC Treaty would constitute a misuse of procedure since it would aim at achieving by way of Article 178 a result which can only be attained by way of Articles 173 and 179. In the institutions' view it cannot seriously be argued that the formalities provided by Article 25 of the Staff Regulations are mandatory in cases of purely automatic and accountancy application of arithmetical details laid down by the Staff Regulations, that leave no margin for subjective evaluation. They moreover draw attention to the fact that Article 90 (2) of the Staff Regulations provides, on pain of non-admissibility of the subsequent appeal, that the complaint must be lodged within three months calculated from ‘the date of notification of the decision to the person concerned and in no case latter than the date on which the latter received such notification’. There is in fact no doubt that the applicants were aware of the withdrawal of their expatriation allowance more than three months before they lodged their administrative complaint. In this respect the institutions refer to the judgments of the Court of 8 May 1973 and of 30 May 1973 in Cases 33/72 and 36/72 (Gunnella v Commission and Meganck v Commission, [1973] E.C.R. 475 and 527). As regards the arguments based upon the occurrence of new facts capable of starting time running afresh, the institutions refer to the case law of the Court, in particular the judgment of 17 June 1965 in Case 43/64 (Müller v Council, Rec. 1965, p. 500) according to which a judgment constitutes a new fact only as far as the persons directly concerned by the act annulled are concerned. In line with this reasoning, the decision in the present appeals cannot be any different. Besides, this decision would be in conformity with principles recognized more or less absolutely in the law of the different Member States. The institutions moreover stress the fact that the judgments in the Sabbatini and Bauduin cases did not declare any annulment for reasons of illegality of the basic text, that is Article 4 (3) of Annex VII to the Staff Regulations. The annulment only covered the individual decisions to applying the same. It is a matter of principle that where an objection of illegality is allowed, the annulment of the consequential act never has the effect of annulling the original act. One cannot, from a declaration of non-applicability, deduce the absolute retrospective nullity of the provision of the Regulations involved and consider oneself entitled to attach to this nullity effects so contrary to all legal tradition, as to involve the annulment of individual decisions of application that were not appealed against within the time limits laid down. The formal annulment of Article 4 (3) of Annex VII was in fact the work of the legislator, who by Regulation No 558/73 of 26 February 1973 (OJ L 55, p. 1) cancelled this provision, but with a retrospective effect limited to 1 July 1972. As regards the administrative decisions granting the expatriation allowances anew as from 1 July 1972, these did no more than anticipate the advent of a new set of rules, and this was in fact brought into being by the aforementioned Regulation. Any other interpretation ought to be rejected. As regards the argument that Article 4 (3) ought to be considered as non-existent, the institutions argue against this that one can only use as a ground for non-existence the absence of an element essential to the very formation of the act, or such a defect that the act itself can be regarded as manifestly unsuited for use in applying a legislative or regulatory provision. Accordingly there cannot in the present case be any question of non-existence. The institutions point out that the concept of ‘head of household’, involved in the Sabbatini and Bauduin judgments, has in the course of years undergone an evolution in national laws and in legal and social thinking in general. The applicants maintain that they have shown the existence of an administrative breach of duty capable of forming the basis of a request for indemnification and they refer in this respect to the precedent of the judgment of 13 July 1972 in Case 79/71 (Heinemann v Commission), Rec. 1972, p. 579). They point out moreover that in the Sabbatini and Bauduin judgments the Court considered Article 4 (3) of Annex VII to be illegal in that it established an arbitrary difference of treatment between officials. Yet it is in application of this provision of the Regulations that, at the time, the expatriation allowance was withdrawn from the applicants. This withdrawal had therefore taken place by applying a provision declared to have been illegal and which because of this fact is deemed never to have existed and never to have been capable of having an effect in law. Besides, it is established that notwithstanding their marriage the applicants always fulfilled the legal conditions for obtaining the grant of this allowance. The applicants wonder whether this does not essentially constitute a new fact. In their view the declaration of illegality of a rule of law, even if it was in a dictum to a judgment — but a dictum indissolubly linked to the operative part declaring the annulment, for which it provides the necessary basis — has of necessity an effect erga omnes. The applicant in Case 137/73 points out that the system established by Articles 17, 174 and 184 of the EEC Treaty justifies, in certain extreme cases, recourse being had to the theory of non-existence. Since the conditions for an appeal for annulment by reason of illegality are very strict, it is indispensable, in cases where the illegality is of particular gravity, to be able to have recourse to automatic nullity as distinct from ordinary nullity, which is aimed at by Article 174 of the Treaty. The applicant considers that the act in question might be termed non-existent or automatically void. Article 119 of the Treaty constitutes an indirect way of prohibiting the creation of new discriminatory situations; the infringement of a precise provision in the EEC Treaty must be considered a completely unjustifiable act, all the effects of which ought to be cancelled.

C —. The Advocate-General presented his opinion at the hearing of 13 December 1973.

Grounds of judgment

1. The actions, filed at the Court between 27 February and 23 May 1973, are for payment to the applicants of arrears of expatriation allowance calculated from the day when this was withdrawn or refused, in application of Article 4 (B) of Annex VII to the Staff Regulations, up to the date when it was restored to them.

2. They are further for annulment — to the extent necessary — of the defendants' decisions withdrawing or refusing the applicants the benefit of the, expatriation allowance, and of the decisions rejecting their complaints with a view to obtaining the grant of the allowance for the period prior to 1 July 1972.

3. By preliminary documents, on the basis of Article 91 of the Rules of Procedure the defendants raised arguments of inadmissibility by reason of the lateness of the appeals, arguing that these had not been lodged in compliance with the rules laid down by Articles 90 and 91 of the Staff Regulations.

4. Under Article 91, an appeal to the Court of Justice shall lie only if the appointing authority has previously had a complaint submitted to it pursuant to Article 90 (2) within the period prescribed therein.

5. Under Article 90, any complaint against an act adversely affecting an official must be submitted to the appointing authority within a period of three months from the date of notification of the decision to the person concerned but in no case later than the date on which the latter became aware of it.

6. A simple examination of the dates of withdrawal or refusal of the expatriation allowance on the one hand and the dates of the appeals on the other, shows that the latter are inadmissible since they were lodged after the expiration of the time limits laid down by Articles 90 and 91 of the Staff Regulations.

7. The applicants retort that, the appeals are in the first place actions for payment of arrears and that such actions constitute an autonomous form of action which is not subject to the time limits of Articles 90 and 91 of the Staff Regulations.

8. The actions described in this way in fact seek to obtain the annulment of decisions taken by the defendant institutions and are based on the alleged illegality of those decisions.

9. In none of the applications is the payment claimed presented as a claim for compensation for damage caused by the institutions.

10. Even if the applicants intended to claim compensation for damage caused by the institutions in the exercise of their functions, such an action in the present case has its origin in the alleged illegality of the institutions' decisions and cannot therefore be distinguished from an action for annulment.

11. The basis for the appeals thus lies exclusively in Article 179 of the EEC Treaty, which provides that the Court shall have jurisdiction in any dispute between the Community and its servants within the limits and under the conditions laid down in the Staff Regulations.

12. The appeals are therefore subject to the time limits of Articles 90 and 91 of the Staff Regulations.

13. This argument must therefore be rejected.

14. Some of the applicants maintain that time has not started running against them, since the original decisions withdrawing or refusing the expatriation allowance were not properly communicated to them in accordance with Article 25 of the Staff Regulations.

15. The applicants could have realized that their allowance had been withdrawn or refused only by reading their salary statements, without there having in this respect been any express and reasoned written communication.

16. A salary statement does not constitute a decision within the meaning of Article 25 of the Staff Regulations.

17. It is not denied that the applicants had knowledge of the decisions resulting in the withdrawal or refusal to them of the expatriation allowance more than three months before the making of the administrative complaint.

18. The sending of the monthly salary statement has the effect of starting the time for appeal running, where it clearly shows the decision taken.

19. In the present case this condition is fulfilled.

20. This ground of appeal must accordingly be rejected.

21. Finally, the applicants raise various arguments with a view to showing that time had in. any event started to run afresh in their case.

22. One of the applicants in this respect maintains that the provisions of Article 4 (3) of Annex VII to the Staff Regulations amount to illegality of so striking a kind that they must be considered as ‘non-existent’.

23. The finding of non-existence of a rule is said to relieve the applicant from being time-barred by reason of the expiry of the time-limits for appeal.

24. All the applicants refer for the same purpose to the occurrence of certain ‘new facts’.

25. The Court's judgments of 7 June 1972 in Case 20/71, Sabbatini v European Parliament and Case 32/71, Bauduin v Commission are said to amount to a new fact.

26. The ground of annulment of the individual decisions pronounced by these judgments was the illegality found to exist in Article 4 (3) of Annex VII to the Staff Regulations;

27. It is precisely by application of this provision, found to have been illegal, that the benefit of the expatriation allowance was withdrawn or refused to the applicants.

28. The decisions taken by the defendant institutions consequent upon the Court's judgment, with a view to granting henceforth — or restoring — the allowance to the applicants as from 1 July 1972, is said to constitute a second new fact.

29. These decisions might be termed a general change of direction in administrative practice, and are said thus to constitute a new fact.

30. Following upon the Court's judgments of 7 June 1972 and the steps taken by the institutions, first in favour of the applicants individually and subsequently in favour of all the officials, by the modifications made in the Staff Regulations, the principle of equal treatment of officials in its application to the problem of the expatriation allowance to be granted to female officials, is no longer in issue.

31. The appeals are solely for payment to the applicants of arrears of expatriation allowance for the period prior to the decisions mentioned.

32. It therefore appears that the admissibility of the appeals must be judged with due regard to the need for legal certainty, indispensable to the proper functioning of the Community institutions, reflected in the fixing of time limits by Article 91 of the Staff Regulations.

33. In any event the provisions of Article 4 (3) of Annex VII to the Staff Regulations cannot be termed ‘non-existent’, originating as it does with the competent authority and taken with due regard to the procedural and formal conditions laid down by the Treaties.

34. In the first place the parties treat as ‘new facts’ the circumstance that following upon the judgments of 7 June 1972, the provision in Article 4 (3) of Annex VII to the Staff Regulations appears to have been defective, and accordingly invalid as from the coming into force of the Staff Regulations.

35. Secondly, they take this view of the decisions, consequent upon the same judgments of the Court, taken in respect of them by the defendant institutions, bearing in mind that the effect of these decisions was the recognition with retrospective effect of the nonvalidity of the provision in the Staff Regulations mentioned.

36. The judgments of 7 June 1972 have the authority of res judicata only in relation to the parties involved at that time.

37. It is right to point out moreover that they could not have pronounced the annulment of the regulatory provision involved, within the meaning of Article 174, first paragraph, but that they simply placed on record the inapplicability of this provision and consequent upon this pronounced the annulment of the individual decisions taken on that basis.

38. In these circumstances, the judgments cannot be relied upon by parties who at the appropriate time omitted to make use of the possibilities of appeal offered to them by the Staff Regulations and by the Treaty.

39. The general change in direction of administrative practice following upon these judgments must in the present circumstances be considered as the anticipated application of a formal amendment in the Staff Regulations but must not be understood as permitting the retrospective re-opening of a situation resulting from decisions taken in relation to the applicants, which at the expiry of the time limits for appeals had become final.

40. These pleas must therefore be rejected.

41. It follows from the foregoing taken together that the appeals were presented out of time and that for that reason they must be declared inadmissible.

Costs

42. The applicants have failed in their actions.

43. Under the terms of Article 69 (2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs.

44. However, under the terms of Article 70 of the said Rules, the costs incurred by the institutions in actions brought by employees of the Community are to be borne by such institutions.

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the oral observations of the parties; Upon hearing the opinion of the Advocate-General; Having regard to the Protocols on the Statute of the Court of Justice; Having regard to the Staff Regulations of the European Communities, especially Articles 25, 90 and 91; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, especially Articles 69, 70 and 91, THE COURT (Second Chamber) hereby:

1 Dismisses the actions as inadmissible;

2 Orders each party to bear its own costs.