JUDGMENT OF 30. 1. 1974 — CASE 148/73 LOUWAGE v COMMISSION
In Case 148/73
THE COURT (First Chamber) composed of: A. M. Donner, President of Chamber, R. Monaco and C. Ó Dálaigh (Rapporteur), Judges, Advocate-General: G. Reischl Registrar: A. Van Houtte
gives the following
JUDGMENT
Issues of fact and of law
The facts of the case, the subject matter of the applications and the views of the parties may be summarized as follows:
I — Facts and procedure
1. The husband and wife applicants, at present officials of the Commission of the European Communities in Brussels, formerly lived in Luxembourg where Mrs Louwage had been engaged on 15 July 1958 on the auxiliary staff of the secretariat of the Councils and on 1 November 1958 as an established official with the European Parliament. Mr Louwage was at first engaged in an independent profession in Luxembourg, but after having applied for a position with the Commission of the EEC in Brussels, he was engaged on 20 July 1965 on the auxiliary staff. On 1 October 1968 he was appointed probationary official with the single Commission, and established on 1 April 1969. From Brussels he visited his family each weekend in Luxembourg. Wishing to ‘re-establish a true family home’, Mrs Louwage was seconded at her request from the European Parliament to the Commission in Brussels for a period of six months as from April 1971, which was renewed until she was established in April 1972. As soon as his wife arrived in Brussels, Mr Louwage left the small flat which he previously occupied and moved with her into another small flat while waiting for the house which they were having built at Overijse to be finished. On 11 November 1971 without waiting for her transfer to be confirmed, but assured that it would be done so speedily, Mrs Louwage requested permission to move. She received no reply to her letter in which she pointed out that neither her husband nor herself had as yet started to move in and that they had not received either the installation allowance or the daily subsistence allowance. And yet they were not ‘able to live in the family home still maintained in Luxembourg’ where they returned each weekend as did their son (a student in Liège) for whom they had no facilities in Brussels. The removal however took place on 27 January 1972 and the removal bill was settled on 22 August 1972.
2. On 25 October 1972 Mrs Louwage received a note from the Directorate of Social Affairs, signed by the Head of the ‘Individual Rights and Privileges’ Division, in reply to the steps which she had taken to recover the removal expenses, the payment of the daily subsistence allowance and the installation allowance due to her husband and herself. In this note: the administration refused any reimbursement of removal expenses until the remover had given an explanation of the error in the invoice (he had in fact submitted an invoice for 40600 BF which was settled in the sum of 24600 BF); Mrs Louwage was recognized as being entitled to an installation allowance equal to the amount of her monthly basic salary at the date of her transfer and Mr Louwage as similarly entitled subject to a reduction of 20 % of the amount of the daily subsistence allowance which he had received during the fifth and sixth months which he had lived in Brussels; as regards the daily subsistence allowance it would be recovered from the salary of Mr Louwage in respect of the period from 1 April to 27 September 1969 for which he had wrongfully received it as ‘notional removal expenses’; as for Mrs Louwage she was not entitled, since in establishing herself in Brussels, she had ‘rejoined’ her husband.
3. On 30 November 1972 the applicants submitted a complaint under Article 90 of the Staff Regulations to the Director-General of Administration seeking the annulment of the decisions contained in the note of 25 October, the reimbursement of the removal expenses (24600 BF) and the payment of the daily subsistence allowance to Mrs Louwage, for whom Brussels had always been an uncertain residence, since the family home had in fact remained established in Luxembourg. The complaint was also directed ‘against the decision to recover the daily subsistence allowance from Mr Louwage which had been paid for a notional removal’. Finally since the Commission did not object to payment of the installation allowance, it appeared equitable to the applicants that it should be paid to each of them at the rate for a ‘single person’.
4. Since there was no reply to this complaint, the applicants lodged the present appeal on 28 June 1973. The written procedure followed the normal course. On the report of the Judge-Rapporteur, after hearing the Advocate-General, the Court (First Chamber) decided to proceed without a preparatory inquiry.
II — Conclusions of the parties
The applicants claim that the Court should:
1) annul the note of 25 October 1972;
2) order the Commission
a) to pay to Mrs Louwage a sum of 24600 BF — with interest at 4 % as from 22 August 1972 to date of payment — as removal expenses (the applicants subsequently did not pursue their claim to interest for delay);
b) to pay to Mr Louwage the amount of two months basic salary as installation allowance (the applicant subsequently abandoned the claim to the second month);
c) to pay to Mrs Louwage as daily subsistence allowance for the period from 5 April 1971, the date of her taking up employment with the Commission in Brussels, to 27 January 1972, the date of her removal, the amounts provided in the table in Article 10 of Annex VII;
3) declare that Mr Louwage rightfully received the daily subsistence allowance between 1 April and 27 September 1969, that the administration is not entitled to require reimbursement from him of the said allowance, nor to recover it by deductions from his salary, and that the conditions for recovery of undue payment provided for in Article 85 of the Staff Regulations are not fulfilled (the applicant subsequently accepted the undertaking on the part of the appointing authority to abandon all claim to reimbursement);
4) order the Commission to pay the costs.
The defendant contends that the Court should:
1) reject as otiose and inadmissible the application by Mr Louwage for annulment of the decision of 25 October 1972 relating to the recovery of part of the daily subsistence allowance paid to him prior to 27 September 1969 (the applicant has accepted this);
2) reject as inadmissible and in any case unfounded the claim by Mr Louwage to an installation allowance equal to two months basic salary (the applicant has abandoned this claim);
3) reject as unfounded the claim by Mrs Louwage to complete reimbursement of the actual cost of removal from the common home as well as the claim to daily subsistence allowance for the period from 5 April 1971 to 27 January 1972;
4) reject as otiose and therefore inadmissible the application to which she is entitled, but which the defendant will show has recently been effected and in any case before judgment;
5) order the applicants to pay the costs (in the rejoinder, the defendant leaves this to the discretion of the Court).
III — Submissions and arguments of the parties
The defendant makes no objection to the admissibility of the application.
Substance
First submission: infringement of Article 9 of Annex VII to the Staff Regulations
The second applicant submits that the decision contained in the note dated 25 October 1972 does not satisfy the provisions of Article 9 of Annex VII to the Staff Regulations and that the removal expenses ought to be reimbursed her.
The defendant replies that it was Mr Louwage who settled the amount of 24600 BF and that the applicants could claim only the difference between the amount paid to the remover (24600 BF) and the notional removal expenses which Mr Louwage had received in 1968 as daily subsistence allowance (14650 BF), i.e. 9950 BF.
A decision of the Commission dated 17 March 1971, taking effect as from 5 March 1968, stipulated that ‘where an official has been authorized to move but has not done so during the year following his establishment … he shall be entitled to daily subsistence allowance for an initial period of six months and thereafter from the seventh month for a minimum period of a further six months to the extent of his notional removal expenses. Any over-payment shall be recovered’. This wording is to be compared with the former Article 10 (3) of Annex VII to the Staff Regulations in force when Mr Louwage was established, which, as regards the official who did not effect his removal within the year of his being established, limited the amount of his daily subsistence allowance to ‘the total amount of payments to which he would have been entitled in the event of removal’.
The defendant considers that the daily subsistence allowance paid to Mr Louwage from 1 April 1969 to 27 September 1969, i.e., as from the seventh month of the period during which he benefited from it, necessarily comprised a not insignificant amount of ‘notional removal expenses’. The amount of the notional expenses, relating to a removal from Luxembourg to Overijse (from 201 to 250 km) made by a head of household official in grade C, is 12650 BF according to the scale annexed to the abovementioned directives, to which must be added 2000 BF in respect of the son dependent on Mr Louwage. Thus in receiving from 1 April 1969 to 27 September 1969 a total daily subsistence allowance amounting to 36000 BF, Mr Louwage had received a preliminary instalment of 14650 BF towards ‘the extent of his notional removal expenses’ as a result of the requirement in the Staff Regulations that he had to be reimbursed at a flat rate and in advance for future removal expenses that were not incurred during the year following his establishment. This sum, once having gone into the conjugal community for a very good reason (since it related to the defendant's responsibility for removal expenses not yet incurred) could not be taken into account until the spouses, having effected their common removal and thereby incurred a debt to the removal firm on behalf of their conjugal community, sought to obtain from the defendant reimbursement of the common funds paid to the removal firm in discharge of the common debt.
In view of the payment already made in 1969 to Mr Louwage, the legal administrator of the conjugal community, it appears to the defendant that only 9950 BF remains payable.
The second applicant replies that the defendant has no obligation to the conjugal community constituted by the applicants, but towards its agents.
It is to Mrs Louwage that Article 9 of Annex VII must be applied. Moreover the defendant could not recover against the community of property a sum which it declared it would forgo as regards Mr Louwage (letter of 31 July 1973).
The defendant does not think that there ought to be a refund to Mrs Louwage of the whole 24600 BF, disregarding the prior lumpsum refund granted for the same reasons to the spouses. Such would create an unjustifiable enrichment of the family. No ill-feeling dictated the decision, the grounds of which had nothing to do with the question of ‘penalizing the woman’ by reason of her sex.
Moreover, contrary to the second applicant's view, it does not follow from the decision of 31 July 1973 that ‘the notional removal expenses allowed to the husband could not be taken into account on the removal of Mrs Louwage at the end of January 1972’. The defendant has expressly abandoned the claim to recover, on the footing of undue payment, the excess paid, i.e., the difference of 21350 BF between the daily subsistence allowance between 1 April 1969 and 27 September 1969 (36000 BF) and the notional removal expenses (14650 BF). On the other hand it has not abandoned the claim to deduct from the amount of the real costs of removal, the amount of the notional expenses (14650 BF), not because they had been wrongly paid, but to avoid a reimbursement greater in value than the liability arising from the same facts and cause, on the basis of which there had already been a prior reimbursement in the form of a fixed sum paid in advance.
Second submission: infringement of Article 10 of Annex VII to the Staff Regulations
The second applicant observes that she fulfilled the conditions of the former Article 10 (1) of Annex VII to the Staff Regulations, since she had not been able to continue to reside in her home and had not been able, for a period of nine months, to effect her removal (the nine months were calculated from the date of her provisional posting to Brussels and that of her removal).
The defendant recalls the terms of the decision of 31 July 1973: ‘as from your secondment to the Commission on 5 April 1971 you have rejoined your husband who has been living for several years in Brussels and, by reason of this, your home has been re-established. One of the conditions referred to in the former Article 10 (1) of Annex VII to the Staff Regulations, i.e., not being able to continue to live at home, is not therefore fulfilled in your case’. The defendant disputes the claim by the second applicant that the family had lived until the day of the removal in Luxembourg. A home cannot be constituted by a flat used as a secondary weekend residence and for the rest of the time simply as a furniture store. Defined primarily by the cohabitation of the spouses, the matrimonial home was reestablished as from April 1971 in Brussels, which had become the place where they worked and the place where they cohabitated five out of seven days. This view does not seem to contradict that of the second applicant, according to whom a transfer to Brussels was requested ‘in order to re-establish a true family home’.
The second applicant replies that the defendant has admitted that until April 1971 the matrimonial home was in Luxembourg. To satisfy the requirements of Article 20 of the Staff Regulations the second applicant had left the said home and had shown that she was no longer able to live there. The second applicant disputes that the matrimonial home was re-established in Brussels on her arrival there. Even if this were so it would have no effect on the application of Article 10 since the daily subsistence allowance was paid on condition that the employee had left his home and that he had not been able to effect his removal. These two conditions were fulfilled. Moreover, a removal on the basis of a secondment, as was the applicant's case, would not have been possible.
The former Article 10 of Annex VII, in force at the time the rights arose, would resolve the question in the second applicant's favour, even if the argument that the matrimonial home had been re-established in Brussels had to be accepted. Indeed the first sentence of the said Article adopts the criterion of interruption in the continuity of residence and not that of change of residence. The official was entitled to the daily subsistence allowance when he was able to prove that there had been a break in the continuity of residence in his home. Since the defendant admitted that the home prior to 5 April 1971 was in Luxembourg, the small flat in Brussels was a different home from that in Luxembourg and there was a change of home and a break in continuity within the meaning of Article 10 of the Annex VII in force in April 1972.
The defendant disputes that in April 1971 the second applicant had ‘left her home’. Such would have been the case had the home remained in Luxembourg. But it is not possible to leave a home if it remained in the same place. There was, at the same time as the change of residence of a person who came to live in another town with her husband, a simultaneous transfer of the home. Since home is the principal place of cohabitation, there can be only one. The second applicant began in April 1971 and thereafter continued to live in her home, which was the couple's small flat in Brussels, for the former flat in Luxembourg simultaneously lost the character of a home and became a secondary residence.
The object of Article 10 of Annex VII is to enable the administration to accept liability for necessary but temporary expenses of double residence arising for an official from the fact that he is temporarily obliged to live alone in a hotel or in a second flat at the place of his new post, whereas the rest of his family (wife and children) continue to live in the place where he previously had his post. It is clear that in this case the official could show ‘that he cannot continue to reside in his own home’.
But this is not the present case. Since April 1971 the home of the applicants was no longer in Luxembourg. They preferred to live for some months in a small flat and to retain in addition their former flat in Luxembourg as a weekend residence. If they had been able as from April 1971 to establish their matrimonial home in the house at Overijse, in the event that it had been finished, and to move their furniture, the second applicant would not have thought she had a case to claim the daily subsistence allowance under Article 10 of Annex VII, by reason of the fact that the removal of the common furniture would already have taken place.
The present claim for the second applicant amounts to making the defendant responsible for the fact that the house in Overijse was not habitable as from April 1971.
The oral hearing took place on 15 November 1973.
The applicants were represented by Victor Biel, advocate at the Cour Supérieure de Justice of the Grand-Duché of Luxembourg, and the Commission of the European Communities by its Legal Adviser, Joseph Griesmar, acting as agent.
The Advocate-General delivered his opinion at the hearing on 5 December 1973.
Grounds of judgment
1. By an application filed on 29 June 1973, the applicants have asked the Court to annul the decisions contained in a note from the Head of the ‘Individual Rights and Privileges’ Division of 25 October 1972, refusing to apply for their benefit the provisions of Articles 5, 9 and 10 of Annex VII to the Staff Regulations.
2. During the course of the proceedings the applicants abandoned certain claims and others have been satisfied.
3. The two points remaining in dispute concern the claims of the second applicant to obtain on the one hand a refund of the removal expenses involved in her transfer from the European Parliament in Luxembourg to the Commission in Brussels and on the other hand the payment of subsistence allowance for the period from 5 April 1971, the date of her first provisional secondment to the Commission, to 27 January 1972, date of her removal.
The first claim
4. The second applicant claims reimbursement of the whole of the expenses of removal of the common furniture, amounting to 24600 BF.
5. The defendant relies on the principle that, while reimbursement of the removal expenses is due to the two spouses, they are not each entitled to the whole, and therefore admits liability only for an amount equal to the difference between the actual cost of the removal and the daily subsistence allowance that the first applicant received as a fixed payment in advance made because he had not moved within a year after taking up his duties.
6. The first applicant received, as daily subsistence allowance, from 1 April 1969, date from which his establishment took effect, to 27 September 1969, a sum of 36000 BF, 14650 BF of which the defendant regards as representing the notional removal expenses.
7. In support of this argument the defendant refers to the terms of an internal directive of the Commission of 17 March 1971 according to which as from 5 March 1968‘where an official has been authorized to move but has not done so during the year following his establishment … he shall be entitled to daily subsistence allowance for an initial period of six months and thereafter from the seventh month for a maximum period of a further six months to the extent of the notional removal expenses’.
8. By a note dated 14 May 1969 the administration authorized the first applicant to effect his removal within a period of one year as from the date his establishment took effect, i.e., before 1 April 1970.
9. The daily subsistence allowance referred to in Article 10 of Annex VII to the Staff Regulations is paid to an official who is head of household for a period of 180 days.
10. The said note of 14 May 1969 limited this allowance in the case of the first applicant to four months from the notification of the authorization to move, i. e., to 27 September 1969.
11. The afore-mentioned terms of the internal directive of the Commission imply that the first plaintiff was entitled to daily subsistence allowance for a period of six months, i.e., from 1 April 1969 to 1 October 1969, then as from the seventh month, ‘to the extent of the amount of the notional removal expenses’.
12. Although an internal directive has not the character of a rule of law which the administration is always bound to observe, it nevertheless sets forth a rule of conduct indicating the practice to be followed, from which the administration may not depart without giving the reasons which have led it to do so, since otherwise the principles of equality of treatment would be infringed.
13. The date from which the calculation of the first period of six months must be made is that of the establishment of the official.
14. The first plaintiff was established with effect from 1 April 1969.
15. The daily subsistance allowance must therefore be calculated from this date.
16. It is only from 1 October 1969 that it would have been paid ‘to the extent of the notional removal expenses’.
17. However it is not disputed that it has not been paid to the first applicant since 27 September 1969.
18. It is established therefore that the first applicant has never received any payment whatsoever as notional removal expenses.
19. As regards this claim the appeal succeeds.
The second claim
20. The second applicant maintains that under Article 10 of Annex VII to the Staff Regulations, as it stood at the time, she is entitled to the benefit of daily subsistence allowance for the period between the date of her first secondment to Brussels and that of her removal.
21. This Article provides that ‘where an official furnishes evidence that he cannot continue to reside in his own home and has not removed to the place where he is employed, he shall be entitled for not more than twelve months to a daily subsistence allowance . ..’.
22. The administration disputes that in the case in question the second applicant could not continue to reside in her home, which, as from her arrival in Brussels, was re-established in the small flat into which she moved with her husband.
23. The second applicant replied that the matrimonial home remained in Luxembourg, since a removal of the common furniture to Brussels could not be envisaged so long as her position remained that of a secondment.
24. Moreover, in not granting the second applicant the authorization to remove which she had requested, the administration had confirmed that it had not yet taken a decision regarding her.
25. The basis for daily subsistence allowance lies inter alia in the obligation on the part of the official to remove to a residence other than that which he occupied previously, without however being able to give up this latter.
26. The defendant has not established that such was not the case.
27. The fact that this official at the place of her secondment rejoined her husband, himself an official, in a provisional residence is not decisive, since it is established that their matrimonial home remained in Luxembourg.
28. So long, therefore, as the removal had not taken place, i.e., before 27 January 1972, the second applicant ought to have received the daily subsistence allowance within the limits provided for by the Staff Regulations.
29. Thus the appeal succeeds on the second claim.
Costs
30. Under the terms of Article 69 (2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs.
31. The defendant has failed in its submissions and must therefore pay the costs.
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 Staff Regulations, especially Articles 9 and 10 of Annex VII; Having regard to the Protocols on the Statute of the Court of Justice; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, especially Article 69; THE COURT (First Chamber) hereby:
1 Annuls the decision by which the Commission refused the applicants reimbursement of removal expenses amounting to 24600 BF.
2 Annuls the decision by which the Commission refused to pay the second applicant daily subsistence allowance for the period between 5 April 1971 and 27 January 1972.
3 Orders the Commission to bear the whole of the costs of the proceedings.