JUDGMENT OF 9. 11. 1978 — CASE 140/77 VERHAAF v COMMISSION

In Case 140/77

THE COURT (Second Chamber), composed of: Lord Mackenzie Stuart, President of Chamber, M. Sørensen and A. Touffait, Judges, Advocate General: G. Reischl Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

The facts and the arguments of the parties put forward during the written procedure may be summarized as follows:

I — Facts and written procedure

Under the first subparagraph of Article 7 (1) of the Staff Regulations of Officials of the European Communities, ‘The appointing authority shall, acting solely in the interests of the service and without regard to nationality, assign each official by appointment or transfer to a post in his category or service which corresponds to his grade’. Under the second subparagraph of Article 7 (1), an official may apply for a transfer within his institution.

Article 71 of the Staff Regulations provides that an official is entitled, as provided in Annex VII (rules on remuneration and reimbursement of expenses), to reimbursement of expenses incurred by him on taking up appointment, transfer or leaving the service.

The provisions of Section 3 (A) of Annex VII, in other words those of Article 5 thereof, relate to the installation allowance. It follows from Article 5 (2) that in the case of an established official who is entitled to the household allowance, an installation allowance equal to two months' basic salary is paid to him when he is posted to a new place of employment and is thereby called upon to transfer his place of residence in order to comply with Article 20 of the Staff Regulations (in other words, to reside either in the place where he is employed or at no greater distance therefrom than is compatible with the proper performance of his duties). Under the second subparagraph of Article 5 (3), the installation allowance is paid on production of substantiating documents; it is necessary to establish that the official, together with his family, has settled at the place where he is employed.

At the request of the applicant, a Principal Administrative Assistant (Grade B 1) at Directorate-General IX (Personnel and Administration) of the Commission, indicating that he was obliged to leave Brussels for personal reasons, the Director of Personnel posted him, by decision of 11 November 1975, to the Joint Research Centre at Petten in the Netherlands for an initial period of six months as from 1 August 1975. On 24 January 1976, once again at the request of the applicant, that posting was extended for a further period of six months, in other words from 1 February 1976 to 31 July 1976. The applicant received inter alia a full installation allowance (equal to two months' basic salary), which he was paid on 26 February 1976.

By memorandum of 22 March 1976, the applicant informed Mr Delauche, Assistant to the Director-General at Directorate-General DC, that he wished to return to Brussels since his work at Petten gave him little satisfaction and his difficulties had disappeared. ‘In view of the fact that my private circumstances have become stable,’ he wrote, ‘I would ask you once more to take action to make my working life happier too. To achieve this I consider it necessary for me to return to Brussels — preferably within a short time’.

The applicant was informed orally that this fresh request for a change of posting had been granted and he returned to Brussels on 17 May 1976. His administrative status was regularized by decision of the Director of Personnel of 24 May 1976. His removal expenses were reimbursed but the installation allowance which he requested on 31 May 1976 was refused by memorandum of 30 June 1976 from the Head of Division IX A 3 (Individual Rights and Privileges).

On 23 September 1976 the applicant requested the Commission, under Article 90 (1) of the Staff Regulations, to take a decision on the grant to him of the installation allowance as a result of his removal from Petten to Overijse, near Brussels. The Director of Personnel replied to this request in a memorandum of 21 January 1977 in which, having specified that: ‘The Staff Regulations mention no period or time-limit so far as the grant of the installation allowance is concerned’ and that the decision refusing it ‘seems to be in accordance with the spirit of the provisions of the Staff Regulations and with the requirements of the management of public funds’, he concluded: ‘I am however willing to give my agreement that you should be reimbursed for the expenses which you have actually incurred in respect of your return to Brussels up to the full amount of the installation allowance’.

It follows from an exchange of memoranda between the applicant and the Director of Personnel that the latter considered that adequate evidence was not produced with regard to the expenses actually borne by the applicant when he settled in Overijse.

As the complaint lodged by the applicant on 20 April 1977 pursuant to Article 90 (2) of the Staff Regulations and directed against the decision of 21 January 1977 had not produced any reply, the applicant lodged this application on 19 November 1977.

The written procedure followed the normal course.

After hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court (Second Chamber) decided to open the oral procedure without instituting a preparatory inquiry.

II — Conclusions of the parties

The applicant claims that the Court should:

1) Annul the implied decision rejecting his administrative complaint of 20 April 1977;

2) Annul the decision of the Director of Personnel of 21 January 1977 to the extent to which it refuses the grant of a standard installation allowance;

3) Rule that the applicant is entitled to receive the abovementioned installation allowance as from the date on which he settled in Overijse;

4) Order the defendant to pay the above-mentioned installation allowance;

5) Rule that the conduct of the defendant has moreover caused the applicant material damage the amount of which the Court will fix at a sum equal to the interest at the legal rate calculated on the amount of the installation allowance from the date on which that allowance should have been paid until the date on which it is actually paid;

6) Order the defendant to pay the costs of the action, including lawyer's fees.

The Commission contends that the Court should:

Dismiss the application as unfounded on both heads, in other words as regards both the application for annulment and the claim for damages, and order the applicant to pay the costs.

III — Submissions and arguments of the parties

The applicant specifies that his request for the grant of an installation allowance was finally rejected by the decision contained in the memorandum from the Director of Personnel of 21 January 1977. The second purpose of the application is the annulment of that decision to the extent to which it refuses to grant the applicant an installation allowance under Article 5 of Annex VII to the Staff Regulations.

The implied rejection by the Commission of the complaint of 20 April 1977 requesting the annulment of the above-mentioned decision to the extent to which that decision refuses to grant the installation allowance is the first purpose of the application for annulment.

The applicant claims that he changed his place of residence from Petten to Oversijse because of his new posting to Brussels and the related duty referred to in Article 20 of the Staff Regulations to reside at no greater distance from Brussels than is compatible with the proper performance of his duties. By refusing by means of the contested decisions to grant him the standard installation allowance, the Commission has infringed the provisions of Article 5 (2) and (3) of Annex VII.

The applicant was legitimately able to expect that he would obtain his installation allowance from the date on which he settled in Overijse. In any case he suffers material damage objectively expressed by the loss of interest at the legal rate calculated on the amount of the allowance from the date on which that allowance should have been paid by the Commission until the date on which it is actually paid, in execution of the judgment annulling the contested decisions.

The Commission observes that Article 7 (1) of the Staff Regulations provides that an official is assigned to a post by the appointing authority solely in the interests of the service. Although an official may apply to be transferred within his institution, the decision necessary for this purpose must also be justified by the interests of the service; moreover, that decision should normally be final, at least in the sense that the length of the new posting is not linked to personal or family circumstances which are extraneous to the smooth functioning of the service within the Community.

In the present case there is no doubt that the decisions of 11 September 1975, 24 January and 24 May 1976 relating to the absolutely temporary posting of the applicant to Petten were all taken by the Director of Personnel at the express request of the applicant.

The Head of Division IX A 3 and the Director of Personnel refused, the former by memorandum of 30 June 1976 and the latter by memorandum of 21 January 1977, to pay the applicant a second full installation allowance in respect of a period of less than one year, because of the temporary nature and the limited length of the posting which had, moreover, been made at his own request. On the other hand, he has been reimbursed for all the other expenses which he actually incurred.

Even if it were possible to acknowledge that any ‘temporary’ posting must automatically give rise to the payment of an installation allowance whatever the actual circumstances of the specific case, in the present case this would manifestly constitute a misuse of rights.

The applicant replies that the Commission's argument according to which st posting granting a request for transfer by the persons concerned does not automatically entitle them to an installation allowance is in no way supported by the provision of the Staff Regulations. Quite on the contrary, supposing that the Commission's reasoning were followed, certain transfers would be made irregularly for reasons extraneous ‘to the smooth functioning of the service within the Community’, in other words for reasons contrary to the interests of the service. Such a statement would be contrary to the provisions of Article 7 of the Staff Regulations.

Once this principle has been acknowledged the applicant can only be requested to produce evidence that he has actually settled in Overijse and cannot be requested to supply evidence of the expenses which he has actually incurred.

Replying to the objection raised by the Commission of an alleged misuse of rights, the applicant emphasizes that none of the specific characteristics of a misuse of rights is present in this case. In particular, the right to the installation allowance has not been misused since it relates precisely to this case, in other words to the expenses incurred by an official who is obliged to transfer his place of residence to the place of his new posting.

The Commission rejoins, so far as the facts are concerned, that the real reason for the temporary posting of the applicant must be sought on the one hand in the application which he made to that effect and, on the other, in the very general duty of the administration to give its officials help and assistance (Fürsorgepflicht) to the extent to which and in so far as this is not contrary to ‘the interests of the service’.

As follows clearly from the applicant's personal file, his posting to Petten was of a completely temporary nature; it was moreover terminated by decision of the Director of Personnel of 24 May 1976 at the request of the applicant before the expiry of the stipulated period. The applicant had informed the administration that in the meantime his personal and family situation in Brussels had ‘become stable’ and that his removal to Petten was therefore no longer necessary.

With regard to the law, the Commission observes that the application is essentially for the annulment of the decision of 21 January 1977 of the Director of Personnel refusing the request for the installation allowance submitted in accordance with Article 90 (1) of the Staff Regulations. On the other hand, the claim for damages has no proper purpose since it is intended precisely to obtain an order that the Commission should pay that same allowance together with interest.

In its defence the Commission raised the objection of misuse of rights in the alternative and in so far as it was however necessary to grant an installation allowance automatically under Article 5 (3) to (5) of Annex VII to the Staff Regulations in respect of the successive postings regardless of the particular material circumstances of the present case. In fact it considers that it is not permissible for an official in favour of whom the administration, in reliance upon a very liberal application of the principle of the Fürsorgepflicht des Dienstherrn (employer's duty of assistance), took an assisting measure by posting him temporarily to Petten upon his request (and with his post), should be granted two successive installation allowances in a period of less than one year.

IV — Oral procedure

The applicant, represented by Mr X. Leurquin, and the Commission of the European Communities, represented by its Agent, Mr R. Baeyens, presented oral argument at the hearing on 13 July 1978.

The Advocate General delivered his opinion at the hearing on 12 October 1978.

Decision

1. The applicant, a Principal Administrative Assistant (Grade B 1) at Directorate-General LX of the Commission (Personnel and Administration) who, in 1975, was residing with his family in Brussels, submitted an urgent request to the Director of Personnel indicating that for personal reasons he was obliged to leave Brussels.

2. As a result of that request, the Director of Personnel posted the applicant, by decision of 11 November 1975, to the Joint Research Centre at Petten in the Netherlands for an initial period of six months as from 1 August 1975.

3. On 24 January 1976, once more at the request of the applicant, that posting was extended for a further period of six months, in other words from 1 February 1976 to 31 July 1976.

4. By memorandum of 22 March 1976, the applicant informed Mr Delauche, Assistant to the Director-General at Directorate-General IX, that he wished to return to Brussels ‘in view of the fact that my private circumstances have become stable’ adding that ‘I would ask you once more to take action to make my working life happier too. To achieve this I consider it necessary for me to return to Brussels — preferably within a short time’.

5. The applicant was informed orally that this fresh request for a change of posting had been granted and he returned to Brussels on 17 May 1976.

6. This change was confirmed by decision of the Director of Personnel of 24 May 1976 terminating as from 17 May 1976 the applicant's posting to the establishment at Petten.

7. The applicant received in respect of his posting to Petten, in addition to reimbursement of his travel and removal expenses, appropriate daily subsistence allowances and a full installation allowance.

8. So far as his return to Brussels was concerned, the applicant also received travel and removal expenses but his request of 23 September 1976 for a second installation allowance submitted under Article 90 (1) of the Staff Regulations was rejected by memorandum of 21 January 1977 of the Director of Personnel although the latter stated that he was nevertheless ready ‘to give my agreement that you should be reimbursed for expenses which you have actually incurred in respect of your return to Brussels up to the full amount of the installation allowance, of course’.

9. It follows from the file that no adequate evidence was produced with regard to the installation costs actually incurred by the applicant, with the exception of certain minor expenses.

10. Nevertheless, the applicant who, in accordance with his reply ‘does not deny that his posting to Petten … was in accordance with his personal wishes’, invokes the second subparagraph of Article 7 (1) of the Staff Regulations of Officials which provides that: ‘The appointing authority shall, acting solely in the interests of the service …, assign each official by appointment or transfer to a post in his category’, so as to claim that his transfers must be considered as being solely in the interests of the service, the automatic result of which is that he is entitled to the installation allowance under the conditions laid down in the Staff Regulations when he returns to Brussels.

11. In providing that any appointment or transfer must be made solely in the interests of the service, Article 7 of the Staff Regulations does not prevent the competent authorities from taking into account the personal wishes of those concerned.

12. The competent authorities have the power, in the interests of good administration and, where necessary, the duty, of which Article 24 is only an example, to take all temporary measures which are not likely to have an adverse effect on the functioning of the institution to enable an official to overcome his personal difficulties.

13. It follows clearly from the file that the Director of Personnel posted the applicant to Petten in August 1975 and also to Brussels in May 1976 in the exercise of that power and that those postings were made ‘in the interests of the service’ in the broad meaning of the term.

14. It would be moreover contrary to the principle of natural justice to permit the applicant, who has been granted a transfer at his express request and for personal reasons, to disregard that fact and to attribute his transfer solely to the requirements of his post.

15. It is necessary therefore to apply the provisions of the Staff Regulations and in particular those of Annex VII thereto which relate to the installation allowance in the light of the particular features of the applicant's situation.

16. Under Article 71 of the Staff Regulations, an official is entitled, as provided in Annex VII, to reimbursement of expenses incurred by him inter alia on transfer.

17. The provisions of Section 3 of Annex VII to the Staff Regulations on reimbursement of expenses provide in particular, having regard to certain specific and characteristic situations, for the payment of a standard allowance, such as the installation allowance, which simplifies the task of the administration by excluding the need for the latter to examine the expenses actually incurred by an official.

18. The specific and characteristic purpose of an installation allowance is to enable an official to bear, in addition to removal expenses, the inevitable expenses incurred through integrating in new surroundings for an indeterminate but substantial period of time.

19. With this in mind Article 5 (5) provides that an official who has received an installation allowance must refund part of the allowance if he voluntarily leaves the service of the Communities within two years.

20. It follows that the applicant, who at his own request was transferred twice during a relatively short time in special circumstances which arose as a result of family difficulties, cannot contest the validity of the decision of the Commission which considered that under the principles of the proper management of public funds he cannot be granted a second installation allowance considerably in excess of the expenses which he actually incurred.

21. The application must therefore be dismissed.

Costs

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

23. The applicant has failed in his submissions.

24. However, under Article 70 of the Rules of Procedure the institutions shall bear their own costs in proceedings brought against them by servants of the Communities.

On those grounds, THE COURT (Second Chamber) hereby:

1 Dismisses the application.

2 Orders the parties to bear their own costs.