Judgment of the court (second chamber) of 8 November 1979 Hans Michaelis v Commission of the European Communities ‘Weighting’

In Case 219/78

THE COURT (Second Chamber) composed of: A. Touffait, President of Chamber, P. Pescatore and Lord Mackenzie Stuart, Judges, Advocate General: F. Capotorti Registrar: J.-F. Bellis, Legal Secretary

gives the following

JUDGMENT

Facts and Issues

I — Facts and procedure

1. The applicant, Hans Michaelis, was born on 7 August 1914 in Duisburg and entered the service of the High Authority of the ECSC on 6 July 1953. By a decision of 15 October 1956 of the President of the High Authority he was appointed an official in Category A, Grade 3, Step 3. By a decision of 15 February 1963 signed by the President of the Euratom Commission the applicant was appointed Director of the Economic Affairs Division in Grade A 2, Step 4, with effect from 1 January 1962. By a decision of 13 July 1966 signed by the President of the Euratom Commission the applicant was appointed with effect from 22 June 1966 Director General (Grade A 1, Step 4) of the Directorate General for Industrial and Economic Affairs. The President of the Commission of the European Communities notified the applicant by a letter of 22 March 1968 of his transfer to the post of Director General for General Research and Technology. By a decision of the Commission of 3 February 1971 the applicant was retired from his post as Director General in the interests of the service pursuant to Article 50 of the Staff Regulations of Officials of the European Communities and placed at the disposal of the Commission as a special adviser for the period from 15 February to 1 September 1971, after which date he was granted the benefit of Article 42 of the Staff Regulations of Officials of the ECSC. From 1 September 1971 to 31 August 1974 the applicant, pursuant to Article 42 (retirement in the interests of the service) of the Staff Regulations of Officials of the ECSC of 28 January 1956, received a monthly allowance corresponding to his basic wage and family allowances. On 29 September 1971 the Commission and the applicant concluded a contract whereby the latter was appointed an unpaid adviser with the task of drawing up a memorandum on a European policy for the supply of raw materials. That contract was renewed a number of times and was terminated on 31 October 1976.

2. By a decision of 5 September 1974 of the Director of Personnel at the Commission the applicant's right to a retirement pension was recognized with effect from 1 September 1974. The applicant, who had stated that he resided at Vallendar in the Federal Republic of Germany and had produced a certificate of residence to that effect, claimed payment of the resettlement allowance provided for in Article 6 (4) of Annex VII to the Staff Regulations. He was refused that allowance. Mr Pratley, the head of division, explained in his letter of 20 June 1974 that that decision of refusal was based on the fact that the applicant had not removed to Vallendar and that he had retained his home in Brussels as a permanent adviser to the Commission. However, in his application the applicant claimed that he did not receive that letter of 20 June 1974 before the month of August 1974. By a letter of 22 July 1974 signed by Mr Pratley the applicant was informed of all the factors to be taken into account in determining his pension rights and was requested to complete a questionnaire giving the information needed to calculate his pension. In that questionnaire, which was signed on 1 August 1974, the applicant certified that he resided in Vallendar and wished to establish his domicile there. He mentioned however that ‘the exact time of the removal is under discussion with the Director of Personnel IX A 4’. On the basis of that declaration the Commission applied the weighting for the Federal Republic of Germany to the applicant's pension. On 5 September 1974 a detailed statement of the calculation of his pension rights was communicated to the applicant. In his declaration of 26 January 1976 concerning his family situation the applicant indicated as his place of residence two addresses, Brussels and Vallendar. On the other hand the applicant, in his declaration of 29 January 1977, indicated as his sole place of residence his Brussels address, stating that correspondence should be sent there. By a letter of 11 September 1977 to the Head of Division IX A 4 the applicant requested that the Belgian weighting should be applied to the payment of his retirement pension. In a note of 22 September 1977 Mr Pratley complied with that request with effect from 1 September 1977.

3. By a letter of 26 September 1977 the applicant requested that that weighting should be applied retroactively with effect from 1 September 1974. That retroactive application was refused by a letter of 18 November 1977, bearing the reference IX A 4 (77) D/6292. By a letter of 6 December 1977 received at the Secretariat General of the Commission on 14 December 1977 the applicant lodged a complaint within the meaning of Article 90 (2) of the Staff Regulations of Officials against the decision of 18 November 1977 of the head of the ‘Individual Rights and Privileges’ Division of Directorate General IX refusing to apply with retroactive effect, from 1 September 1974, the weighting in force for Belgium. The Commission, by a letter of 12 July 1978, signed by Mr Tugendhat, rejected that complaint in principle but agreed to apply from 1 January 1977 the weighting for Belgium on the basis of the declaration lodged by the applicant on 29 January 1977 giving Brussels as his sole place of residence.

4. The applicant instituted the present proceedings by an application lodged at the Court Registry on 2 October 1978. The written procedure followed the normal course. The Court (Second Chamber), after hearing the Advocate General, decided to open the oral procedure without any preparatory inquiry.

II — Conclusions of the parties

The applicant claims that the Court should:

‘1. Declare that this application is admissible as far as concerns its form and has been filed within the period prescribed by Article 91 of the Staff Regulations; 2. As far as concerns its substance: (a) Declare that, in so far as the decision of 12 July 1978 refuses to apply retroactively the weighting for Belgium, it has no legal foundation and must consequently be annulled; (b) Declare that since his retirement on 1 September 1974 the applicant has been entitled to the application of the weighting in respect of Belgium; (c) Declare that the difference between the amount which was payable to the applicant in accordance with Belgian weighting and the amount which he in fact received in accordance with German weighting shall bear interest at 6 o/o per annum from the dates when the various payments fell due and from not later than 6 December 1977 being the date of the applicant's complaint; Consequently refer the matter back to the appointing authority for attention; (d) Order the Commission to bear the costs.’

The Commission contends that the Court should dismiss the application as unfounded and order the applicant to bear the costs.

III — Submissions and arguments of the parties

The applicant, in his application instituting the proceedings, declares that the application in based on the clear provisions of Article 82 of the Staff Regulations of Officials, which provides that pensions shall be weighted for the country of the Communities where the person entitled to the pension declares his home to be. The applicant denies all liability for the administration's failure to apply the weighting correctly. The applicant cannot be adversely affected by the fact that he reacted only after a delay of three years since the terms of Article 41 of Annex VIII to the Staff Regulations provide that ‘The amount of pension may at any time be calculated afresh if there has been error or omission of any kind’. It is therefore impossible for an application for a lawful and equitable determination of pension rights to be out of time. The refusal of the administration to apply to the applicant the weighting for Belgium with effect from 1 September 1974 constitutes a form of unjustified enrichment. In this connexion the applicant refers to Article 85 of the Staff Regulations concerning recovery of undue payment and considers that it must also be possible for officials to rely upon the right to repayment provided for in that article. Finally, it is contradictory to maintain, as does the Commission, that the refusal to grant the resettlement allowance to the applicant does not in itself establish that the applicant had not returned to his place of origin when in reality that refusal was based on the fact that the applicant had maintained his home in Brussels.

The Commission claims, in its statement of defence, that in matters of pensions the determination of pension rights effected by the administration is largely based on the information supplied and the choice made by the retired official. In fact Article 40 of Annex VIII to the Staff Regulations requires the institution in which the official was serving at the time when his active employment ended to communicate to him a detailed statement of the calculation of his pension. The first paragraph of Article 41 of that annex empowers the administration to calculate the amount of pension afresh ‘if there has been error or omission of any kind’. In this connexion in particular it is the duty of an official in favour of whom benefits arise under a pension to furnish such written proof as may be required by the administration and to inform the latter of any facts liable to affect his entitlement (Article 43).

With regard to the resettlement allowance the Commission observes that it is paid when evidence is provided of the resettlement of the official and his family after the final termination of his service, provided that such resettlement takes place at the latest three years after the termination of his service. The provisions in this matter depend on Article 71 of the Staff Regulations which concerns the reimbursement of expenses incurred inter alia on leaving the service and have nothing to do with the pension arrangements laid down in Article 77 et seq. of the Staff Regulations, the detailed rules for which are laid down in Annex VIII.

There is therefore little point in endeavouring, as does the applicant, to combine in the present case the attitudes of the administration with regard to the granting of a resettlement allowance, on the one hand, and the application of the weighting for a specified country under the retirement pension arrangements, on the other. Furthermore, the foregoing constitute two separate complaints submitted by the applicant and the appointing authority adopted different solutions in each case.

The Commission further emphasizes that it did not undertake any positive action and accordingly cannot incur any liability for its application of the provisions of the Staff Regulations, in particular Article 82 thereof, in so far as the weighting applied to the payments of the pension until 31 December 1976 was that in force for Germany, in which country the retired official declared that he had established his residence.

According to the Commission the applicant, who was a director general and has remained throughout a university professor, could not have been unaware of the provisions of the Staff Regulations which affected the determination of his pension rights, the more so since those provisions were pointed out to him in the letter of 22 July 1974 from the Head of Division IX A 4 and since, with regard to the questionnaire completed by the applicant on 1 August 1974, the detailed statement of the calculation of his pension, drawn up on the basis of the information furnished by him, was duly communicated to him on 5 November 1974.

The applicant in his reply claims that, pursuant to Article 41 of Annex VIII to the Staff Regulations, the only condition prescribed for having pension rights calculated afresh is that there has been an error or omission. It is clear that in the present case the weighting for the Federal Republic of Germany was applied in error. In view of the decision adopted by the administration concerning the resettlement allowance and the reference to that matter contained in the declaration of 1 August 1974 it could not have been unaware that the applicant's place of residence was Brussels and that the Belgian weighting should accordingly have been applied. The argument of the Commission that the applicant could not have been unaware of the provisions of the Staff Regulations on this point is entirely irrelevant. It can also be inferred by a contrario reasoning from Article 42 of Annex VIII to the Staff Regulations, which imposes a time-limit of one year within which persons entitled under a deceased official must apply for their pension, that an official may claim a rectification of his pension rights at any time, and also therefore retroactively.

The Commission in its rejoinder claims that the fact that the administration considered that the applicant had not furnished sufficient evidence of his resettlement in Vallendar does not rule out the possibility that he may have intended to establish his home there for the purposes of Article 82 of the Staff Regulations whilst retaining a place of residence and an address for correspondence in Brussels. In those circumstances there is no foundation in fact or in law for the applicant's argument that the refusal of the administration to grant the resettlement allowance necessarily implies acceptance of a place of residence in Belgium and should have been followed by the application of the Belgian weighting in spite of the fact that the person concerned chose to establish his home in the Federal Republic of Germany.

The Commission also emphasizes that Article 41 of Annex VIII to the Staff Regulations upon which the applicant relies is not applicable to the present case. The choice of a home expressed by the applicant in his declaration of 1 August 1974 for determining his pension rights cannot in fact be considered as an error, or a fortiori as an omission, for which the administration is responsible. This applies with even greater force in that the administration, as soon as the official entitled to the pension had indicated Brussels as his home in his declaration of 28 September 1977, applied the Belgian weighting to his pension with effect from 1 September 1977. The decision of the Commission notified by the letter of 12 July 1978 even permitted the Belgian weighting to be applied with retroactive effect from 1 January 1977 since the declaration lodged by the applicant on 29 January 1977 gave Brussels as his address.

Finally, the Commission observes that the ground of action based on the principle of unjustified enrichment is unfounded. By way of a detailed example the Commission shows that in the present case the application to the pension of the weighting in force for Germany with payment in German marks at the rate laid down by the Staff Regulations provided the person concerned with a net pension the value of which corresponds to that of the pension multiplied by the weighting applicable to Belgium and paid in Belgian francs. On the other hand, the retired official would have gained an ‘enrichment’ if he had claimed the application to his pension of the Belgian weighting and the payment thereof in German marks at the favourable rate laid down in the Staff Regulations.

IV — Oral procedure

The parties presented oral argument at the hearing on 13 September 1979.

The Advocate General delivered his opinion at the sitting on 11 October 1979.

Decision

1. The application, which was received at the Court Registry on 2 October 1978, claims the annulment of the partial rejection by the Commission of the complaint submitted on 6 December 1977 by the applicant seeking the application with retroactive effect for the period until 1 January 1977 of the weighting for Belgium to his retirement pension.

2. The applicant, an honorary director general at the Commission, retired with effect from 1 September 1974. Upon being requested to furnish all the information necessary for determining his pension rights he completed on 1 August 1974 a questionnaire in which he certified inter alia that his place of residence was Vallendar in the Federal Republic of Germany. Instead of giving the date from which that choice was to take effect, as was required by the questionnaire, he merely mentioned that ‘the exact time … is under discussion with the Director of Personnel IX A 4’. The applicant intended thereby to refer to a claim for payment of an allowance in respect of his resettlement in the Federal Republic of Germany, which he had submitted pursuant to Article 6 (4) of Annex VII to the Staff Regulations of Officials. That claim had been refused by a letter of 20 June 1974 on the grounds that the applicant had failed to furnish proof of his resettlement in Vallendar and that his home was still in Brussels where he continued to work as an adviser to the Commission. The applicant maintains that that letter did not come to his notice until August 1974.

3. On the basis of the applicant's declaration of 1 August 1974 the defendant institution applied to his retirement pension the weighting for the Federal Republic of Germany. A detailed statement of the calculation of his pension was communicated to the applicant on 5 September 1974.

4. In his declaration of 26 January 1976 concerning his family circumstances the applicant gave two addresses for his place of residence: Brussels and Vallendar. However, in the following year he stated in his declaration of 29 January 1977 that his sole place of residence was at his address in Brussels and that correspondence should be sent to that address.

5. In response to the claim of the applicant dated 11 September 1977 the defendant institution agreed to apply to his retirement pension, with effect from 1 September 1977, the weighting fixed for Belgium. The defendant institution nevertheless refused to comply with the applicant's claim, submitted on 26 September 1977, to have that weighting applied with retroactive effect from 1 September 1974. Following the submission of a complaint by the applicant on 6 December 1977 the defendant institution on the other hand agreed to grant him, with effect from 1 January 1977, the application of the weighting for Belgium on the basis of the declaration which he had made on 29 January 1977, which gave his Brussels address as his sole place of residence.

6. The applicant initiated the present proceedings in order to establish his right to the retroactive application for the period from 1 September 1974 to 31 December 1976 of the weighting fixed for Belgium. The application is based on the second subparagraph of Article 82 (1) of the Staff Regulations, which provides that pensions shall be weighted for the country of the Communities where the person entitled to the pension declares his home to be, and on Article 41 of Annex VIII to the Staff Regualtions which provides that ‘The amount of pension may at any time be calculated afresh if there has been error or omission of any kind’.

7. According to the applicant the administration has erred in applying the weighting fixed for the Federal Republic of Germany. Having regard to the grounds upon which it relied in rejecting his claim for the resettlement allowance the defendant institution could not have been unaware of the fact that the applicant had retained his home in Brussels, to which furthermore it continued to address correspondence to him. That error by the administration led to unjustified enrichment on its part which entitles the applicant to claim payment of the sums improperly retained by it. The applicant claims that this solution must prevail by analogy with that provided in favour of the administration by Article 85 of the Staff Regulations which authorizes it to claim, on certain conditions but without any limit as to time, the reimbursement of sums unduly paid to officials.

8. The Court cannot uphold that view. It is clear from the second subparagraph of Article 82 (1) of the Staff Regulations that the weighting is fixed in relation to the country of the Communities in which the person concerned ‘declares his home to be’. It is common ground that the applicant, after being duly informed of the factors to be taken into account in calculating his pension, declared in the questionnaire of 1 August 1974 that he resided in Vallendar in the Federal Republic of Germany. On the basis of that declaration the defendant institution drew up a detailed statement of the calculation of the applicant's pension rights which it communicated to him on 5 September 1974 and which elicited not the slightest reaction from him. In fact the applicant at no time during the period in question indicated to the administration that a home address other than that mentioned in the declaration of 1 August 1974 should have been taken as the basis for the calculation of his pension rights. The defendant institution cannot accordingly be held to have committed an error in establishing the weighting since its conduct in this matter was based on the statements of the applicant himself in accordance with the provisions of the second subparagraph of Article 82 (1) of the Staff Regulations. It should be noted that when the applicant requested on 11 September 1977 that the administration should amend the weighting it did so immediately with effect from 1 September 1977 and indeed subsequently agreed to apply that amendment with effect from 1 January 1977 on the basis of the declaration which he had made on 29 January 1977.

9. It must accordingly be found, without its being necessary to consider the question of the admissibility of the application, that the latter must in any case be dismissed as manifestly unfounded.

Costs

10. Pursuant to Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to bear the costs. Nevertheless, pursuant to Article 70 of the Rules of Procedure the institutions shall bear the costs which they have incurred in proceedings commenced against them by officials of the Communities.

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

1 Dismisses the application;

2 Orders the parties to bear their own costs.

1 Language of the Case: French.