JUDGMENT OF 14. 12. 1979 — CASE 257/78 DEVRED v COMMISSION

In Case 257/78

THE COURT (First Chamber) composed of: A. O'Keeffe, President of Chamber, J. Menens de Wilmars and T. Koopmans, Judges, Advocate General: J.-P. Warner Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

The facts of the case and the arguments submitted by the parties in the course of the written procedure may be summarized as follows:

I — Facts and procedure

1. By a contract of 6 March 1967 the applicant was engaged for the first time to work for the European Communities, in that instance the European Atomic Energy Community, as an auxiliary employee in Category C, Group VI, Class 2. On 11 January 1968 she was made a probationary official with effect from 1 January of the same year in Grade C 3, Step 1, pursuant to Regulation (EAEC) No 11 laying down the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the European Atomic Energy Community. By a decision of 28 July 1971, which took effect on 15 September 1971, she was transferred to the Joint Research Centre at Ispra where she continued to be employed until she resigned and left the service of the Communities on 19 June 1972.

2. The applicant, who was of British nationality when she was first employed, married Jacques Devred, a Belgian national, on 8 April 1970 and thus under Belgian law acquired Belgian nationality as she did not exercise the option which is allowed for by Belgian law to renounce Belgian nationality within six months after the marriage. During the whole of the period from 6 March 1967 to 19 June 1972 she drew the expatriation allowance, which at present is provided for and regulated by Annex VIII to the Staff Regulations, pursuant to Article 69 of the Staff Regulations.

3. On 1 December 1977, after taking part in an open competition, she was recruited a second time as a probationary official in Grade C 4 in the employment of the Council but was transferred, with effect from 16 December 1977, to the Commission where she was assigned to a post in Grade C 4, Step 3, in the Directorate General for Personnel and Administration.

4. The expatriation allowance was again paid to her from when she was recruited for the second time until the time when the officers of the Commission, considering that she no longer met the requirements for receiving that allowance on the date of her second engagement, withdrew it as from February 1978 and decided that the amounts which she had been paid under that allowance during the period from 16 December 1977 to 31 January 1978 should be recovered as having been unduly paid. Subsequently the sums which had been recovered in this way were however repaid to her as the officers concerned accepted that the conditions laid down by Article 85 of the Staff Regulations for the recovery of sums paid without due reason were not satisfied in this instance.

5. On 28 April 1978 the applicant submitted a complaint to the appointing authority against the decision withdrawing her expatriation allowance. Since the authority allowed the period of four months provided for in Article 90 of the Staff Regulations to elapse without replying, her complaint was rejected by implication by a decision on 28 August 1978. The present application, dated 24 November 1978 and received at the Court Registry on 27 November 1978, was lodged by the applicant against the implied decision rejecting her complaint. After hearing the report of the Judge Rapporteur and the views of the Advocate General, the Court 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 the application is admissible and well-founded;

2) Primarily: Annul the Commission's decision to withdraw from the applicant the expatriation allowance and the implied decision rejecting the complaint made in this respect;

3) Alternatively:

a) Decide that the applicant shall remain entitled to receive the expatriation allowance or at least order the defendant to pay the applicant an allowance of an amount equivalent to the expatriation allowance from the date on which it was withdrawn, for the length of the repayment period, in respect of the principal and interest, of the loan taken out by the applicant with the ‘Beamtenheimstättenwerk’ [a civil servants' building society] or, in any event, up to the day on which the expatriation allowance as adjusted is compensated for by the increases in the basic salary;

b) Annul the contested decisions to the extent indicated under 3 (a);

4) Order the defendant to pay the costs.

The Commission contends that the Court should

1) Reject the application as inadmissible;

2) Order the applicant to pay the costs.

III — Submissions and arguments of the parties

A — The application

The applicant submitted three arguments in her original application. The first, presented as the principal argument, relates to the infringement of Article 119 of the EEC Treaty, of Article 4 (1) (a) of Annex VII to the Staff Regulations, and to the principle of equality. The applicant complains that the expatriation allowance was withdrawn from her on the ground, apparently, that she had acquired by marriage the nationality of the State in which she was employed. She considers that the concept of nationality referred to in Article 4 (1) (a) of Annex VII to the Staff Regulations should be interpreted, in accordance with Article 119 of the EEC Treaty, the principle of equality and the case-law of the Court, in such a way as to avoid any unwarranted difference of treatment between male and female officials who are, in fact, placed in comparable situations. That being so, it is necessary to leave out of account not only the nationality which was imposed by law on a female official upon her marriage with a national of another Member State (which the Court has already decided in its judgment of 20 February 1975, Case37/74 Van den Broeck [1975] ECR 235), but also the nationality which is acquired by a female official by virtue of her marriage with a national of another Member State even if she may renounce that nationality so long as, however, the female official retains and intended to retain her original nationality.

The second argument, presented as an alternative, relates to the infringement of Article 4 (1) (b) of Annex VII to the Staff Regulations. The applicant complains that the Commission decided to deprive her of the expatriation allowance on the ground that she did not habitually reside outside Belgian territory during the ten years ending at the date of her entering the service. The applicant maintains that Article 4 (1) (b) of Annex VII to the Staff Regulations, under which an expatriation allowance is to be paid ‘to officials who are or have been nationals of the State in whose territory the place where they are employed is situated but who during the ten years ending at the date of their entering the service habitually resided outside the European territory of that State for reasons other than the performance of duties in the service of a State or of an international organization’, must be interpreted as meaning that for the purposes of applying that provision an official is always deemed to reside in the State of which he is a national or in his country of origin, if residence in another State is the result of service in an international organization. According to that interpretation the applicant has, or should be deemed to have, always resided outside Belgian territory during the period of ten years prior to the date of her entry into the service. Within that period of ten years, from 16 December 1967 to 15 December 1977, she resided outside Belgian territory from 1 July 1971 to 16 December 1977, whilst before that, that is to say from 16 December 1967 to 30 June 1971, although she resided on Belgian territory, it was for the purpose of her service in an international organization, in this case the European Communities, and she was in any case drawing the expatriation allowance.

The third argument, presented as a further alternative, relates to the infringement of the legal rule that the administration is liable for any wrongful act or omission and there arises a right to compensation which may be paid in kind.

The defendant was at fault in withdrawing the applicant's expatriation allowance after having granted it; the applicant entered into financial commitments on the basis of her remuneration — including the expatriation allowance — in order to purchase a flat, and the withdrawal of that allowance upsets the balance between her income and her financial commitments. According to the applicant, if it is held that the initial grant of the expatriation allowance was unlawful, that would establish at the same time that the defendant was at fault in granting it and that it thereby misled the applicant as to the total amount of her monthly salary, a wrongful act for which compensation must be given by continuing to pay the expatriation allowance to the applicant or, at least, by according her an allowance of an equivalent amount for the period of the above-mentioned loan or else until the increases in her basic salary make good the loss of the expatriation allowance.

B — The defence

In its statement of defence the Commission replies with regard to the first argument that the interpretation given by the applicant to Article 4 (1) (a) of Annex VII to the Staff Regulations, is far from being in accordance with the case-law of the Court but, on the contrary, runs counter to it. Whilst according to the judgment in the Airola case (judgment of 20 February 1975, Case 21/74 [1975] ECR 221), the fact that a nationality is imposed upon a female official on her marriage without it being possible for her to renounce it, although she has retained her nationality of origin by virtue of an express declaration, cannot result in the loss of the expatriation allowance, the judgment delivered on the same day in the Van den Broeck case (supra) qualifies the matter. Where a wife is able to renounce the nationality acquired by marriage and does not do so, there are no reasons associated with equal treatment why the nationality which was acquired on marriage should not be taken into account in applying the first indent of Article 4 (1) (a) in Annex VII to the Staff Regulations.

The applicant's argument is also incompatible with Article 4 (3) of Annex VII (which came into force with retroactive effect from 1 July 1972 by virtue of Articles 21 and 35 of Regulation No 912/78 of 2 May 1978, Official Journal L 119, p. 1) which provides, in accordance with the case-law of the Court, that, for the purposes of the provisions which govern the conditions for granting the expatriation allowance, it is only where a female official has by marriage ‘automatically acquired and cannot renounce the nationality of the State in whose territory she is employed’ that she may be considered not to have that nationality. The applicant's argument goes beyond the intention of the Community legislature which was to follow the case-law established by the judgment in the Van den Broeck case referred to above, and infringes Article 4 (3) of Annex VII to the Staff Regulations.

In the applicant's view her British nationality, which is her nationality of origin, should, for the purpose of applying the provisions concerning the expatriation allowance, take precedence over the Belgian nationality which has been acquired by marriage but she has submitted no argument in support of that opinion although legal writings and national case-law concerning the determination, where dual nationality is held, of which nationality is to be considered as ‘effective’ or ‘dominant’ would lead to preference being given in her case to the Belgian nationality.

As far as the second argument is concerned, the defendant first recalls that Article 4 (1) (b) of Annex VII to the Staff Regulations provides that the expatriation allowance shall be paid in particular to officials who are nationals of the State in whose territory the place where they are employed is situated but who ‘during the ten years ending at the date of their entering the service habitually resided outside the European territory of that State for reasons other than the performance of duties in the service of a State or of an international organization’. The Commission maintains that according to that provision the requirement of residence in a different country in order to be able to claim the expatriation allowance must have the following characteristics: (1) it must have been habitual; (2) it must have been for a period of ten years; (3) it must have been for reasons concerned with the performance of duties in the service of a State or of an international organization.

The Commission concludes that none of those conditions is fulfilled in the present case since between 1967 and 1971 the applicant resided in Belgium, the country of which she has been a national since her marriage, between 1971 and 1972 she resided in Italy whilst in the service of the Communities and between 1971 and 1974 she resided in Saudi Arabia whilst working for a regional office of the United Nations.

As to the third argument, based on the infringement of the rule which compels the defendant to give compensation for the damage due to the wrongful act, which it is said to have committed, the Commission contends that in the present case there has been no wrongful act, no damage, and no causal connexion between its conduct and the alleged damage.

As to the wrongful act, the case-law of the Court, especially the judgments of 28 May 1970 (Joined Cases 19, 20, 25 and 30/69, Richez-Parise and Others [1970] ECR 325) and 9 July 1970 (Case 23/79 Fiehn [1970] ECR 547) states that apart from the exceptional instance, the adoption of an incorrect interpretation does not constitute in itself a wrongful act. The applicant fails to explain why the fact that the expatriation allowance was paid by mistake should constitute an exceptional instance of a wrongful act; on the contrary, the officers of the Commission realized their error in less than two months and rectified it immediately.

As to the alleged damage and the causal connexion the defendant maintains that the applicant took out the loan with the Beamtenheimstättenwerk at least four months after being notified of the withdrawal of the expatriation allowance, so that any financial difficulties connected with repayment of the loan cannot have been caused by the defendant's conduct, even if that conduct should be considered as wrongful which the Commission denies.

C — The reply

In the reply the applicant sets out the following observations.

As to the first argument

The correct interpretation of the concept of nationality in Article 4 (1) (a) of Annex VII, in the light of the principle of equality already referred to in the application, is that the nationality acquired by marriage must be ignored even if it is possible to renounce it, if a female official retains and intended to retain her nationality of origin. The applicant goes on to observe that even if she had renounced the nationality acquired by marriage, that renunciation would not have eliminated the discriminatory treatment criticized by the Court because, according to Belgian law, the renunciation would not have retroactive effect so that in any case she would for a certain time have had the nationality which was conferred by her marriage.

As the object of the expatriation allowance is, according to the case-law of the Court, to compensate officials for the extra expense and inconvenience of taking up employment with the Communities and being thereby obliged to change their residence, the applicant asks what grounds there could be for according different treatment to, on the one hand, a man of British nationality working for the Commission in Brussels who, on marrying a Belgian woman, retains his right to the expatriation allowance and, on the other, a woman of British nationality also working for the Commission in Brussels, but who, because she has married a Belgian, is not entitled to the expatriation allowance, subject to the application of Article 4 (1) (b), on the pretext that she has acquired Belgian nationality by marriage. If the female official wishes to retain her nationality of origin the latter should be the nationality to which reference is made for the purposes of the application of Article 4 (1) (a) of the Staff Regulations and to do otherwise would amount to discrimination.

The applicant goes on to say that her argument does not conflict with the case-law in the judgment in Case 37/74, Van den Broeck, cited above. There is an essential difference between that case and this, for in the Van den Broeck case the official in question had on her marriage not merely acquired Belgian nationality but also lost, ipso facto, French nationality, whereas the applicant in this case has retained her nationality of origin. In the Van den Broeck case the issue concerned only one nationality, that acquired by marriage, whereas in this case there is dual nationality and the applicant's renunciation of Belgian nationality would not have enabled her to ‘recover’ her British nationality, as she has retained it. Her situation is much closer to that which the Court dealt with in the judgment in the Airola case cited above.

As regards Article 4 (3) of Annex VII, as amended by Regulation No 912/78, the applicant claims that that article does not lay down any general rule of interpretation for the concept of nationality which appears in Article 4 (1) (a). It accords with what the Court held in the judgment in the Airola case, but remedies only the one instance of discrimination which gave rise to that judgment, not the different situation at issue in these proceedings.

The general principle stated both in the judgment in the Van den Broeck case and in the judgment in the Airola case, namely that the concept of ‘nationality’ referred to in Article 4 of Annex VII should be interpreted so as to avoid any unwarranted difference in treatment between male and female officials, means that the applicant's position is analogous to that envisaged by Article 4 (3). That provision should be interpreted as correcting an instance of discrimination, but not as preventing other discrimination of a similar nature from being eliminated.

The applicant reiterates the importance of the fact that in any event in this case the point at issue is the consequence of the fact that two nationalities exist side by side. There exists therefore a‘positive’ conflict of nationality since the recognition of a right depends on the nationality. In order to resolve the conflict international courts have further developed the notion of ‘active’ or ‘effective’ nationality which had already been established by the national courts. For an official of the Communities who has dual nationality the ‘active’ or ‘effective’ nationality is that which is taken into consideration by the institutions with regard to the official's recruitment and career progress, that is to say, in this case, British nationality. The applicant further states that of the two nationalities which she holds, only her British nationality accords her all the rights which are conferred on nationals and she should be considered as having the closest connexion with whichever of the two States accords her full civil and political rights. The facts relied on by the defendant in maintaining that the applicant's connexion with the Belgian State is particularly close are the result of the circumstance that she was recruited and employed in Brussels. However no special significance should be attached to that circumstance as it is common to all non-Belgian officials who are employed in Brussels and draw the expatriation allowance.

Drawing support from the view put forward by Advocate General Mayras in his opinion in Case 33/72 (Gunnelia [1973] ECR 475) the applicant claims that only her situation at the time when she first entered the service is relevant; in her case, prior to her first appointment, when she was posted to Brussels, she had never possessed Belgian nationality and had never resided in Belgium.

As to the second argument

The applicant draws a comparison between subparagraphs (a) and (b) of Article 4 (1) and concludes from it that the general scheme of the article shows that residence in a particular place is not taken into account when that residence is due to the performance of duties with an international organization. She considers that her previous residence in Belgium while working for the Communities has therefore been ‘cancelled out’. From June 1972 to December 1977 she was resident outside Belgian territory, in Italy, Saudi Arabia and Tunisia, and thus during the period of ten years which have to be taken into account she was, or must be deemed to have been, resident outside Belgian territory for nine years and one month, which entitles' her to the expatriation allowance.

The argument that while in Saudi Arabia she was in the service of an international organization is not valid since she was working for a regional office of the United Nations as a local employee and on the basis of short-term contracts.

As to the third argument

The applicant maintains that in point of fact she had already entered into definite financial commitments before she received her salary slip for February 1978, even though the first loan contract was only formally signed on 17 February 1978. She claims that it was impossible for her to cancel everything and not to proceed with the transaction she had commenced, particularly because the defendant had failed, in violation of the provisions of Article 25 (2) of the Staff Regulations, to notify her in writing and with a statement of reasons of the decision to withdraw from her the expatriation allowance.

The applicant concludes that damage was occasioned and that there is a causal connexion between that damage and the wrongful act or omission. As to the existence of a wrongful act or omission she claims that the defendant has acknowledged that it failed, when the applicant was recruited for the second time, to check whether she met the conditions for the granting of the expatriation allowance. That constitutes one wrongful act on the part of the Commission and it was guilty of another when it issued an official certificate relating to her net monthly remuneration. As to the damage, it lay in the difficulty, if not impossibility, of meeting in the future the financial commitments entered into on the basis of the higher salary.

As far as compensation for the damage is concerned, the applicant maintains the argument she put forward in the application and adds, in the alternative, that if the Court considers that she ought, as far as possible, to have cancelled the commitment she had entered into prior to receiving her salary slip for February 1978, the defendant should pay her compensation of an amount equal to the penalty she would have had to pay for doing so.

D — The rejoinder

The Commission first replies to the applicant's arguments concerning the fact that when a foreign woman exercises the option to renounce the nationality acquired by marriage it does not have retroactive effect. It points out, first, that since she did not exercise that option the applicant is in the situation not of an official who ‘has had’ the nationality of the State in which she is employed, but of an official who still possesses such nationality. It points out, secondly, that contrary to the view expressed by some of the legal writers cited by the applicant, it is evident from the work of an eminent author (De Page, Vol. I, No 361, published 1962) that the renunciation in question does have retroactive effect. Even if the renunciation does not have retroactive effect the officers of the Commission have always continued to pay the expatriation allowance to any official who had, for a few days or a few months, the nationality of the State in which he or she was employed owing to peculiarities of the law of that State, since the temporary acquisition of that nationality for such a short period cannot be considered as voluntary and must be treated in the same manner as the automatic acquisition of nationality without any option to renounce it.

As to the alleged incompatibility of Article 4 of Annex VII to the Staff Regulations with Article 119 of the EEC Treaty and the principle of equality, the Commission maintains that in the judgment in the Van den Broeck case the Court did not distinguish between female officials on the basis of whether or not, following their marriage, they possessed one or two nationalities, but confined itself to deciding that for the purposes of the expatriation allowance the nationality automatically imposed on an official on her marriage must be left out of account. According to the Commission, as the applicant has not renounced Belgian nationality as Belgian law allows her to do, she possesses the nationality of the State in which she is employed within the meaning of Article 4 (1) (a) of Annex VII to the Staff Regulations.

The Commission then points out that, contrary to what the applicant maintains, there is nothing to support the statement that the wording of Article 4 (3) of Annex VII fails to convey properly the intention of the Community legislature and that the meaning of it is that nationality acquired by an official on marriage is never to be taken into account even if the official has the option of renouncing it, provided that he retains his previous nationality at the same time. That interpretation is in conflict with the unequivocal wording of the provision and distoas the intention of the authors of the Staff Regulations which was, according to the decision in the Airola case, to leave out of account nationality, acquired automatically without the official being able to renounce it.

In response to the applicant's arguments that — because she has dual nationality — priority should be given to her British nationality which is her ‘effective’ nationality, the Commission, basing itself on the opinion of Advocate General Mayras in Case 33/72, Gunnelia, cited above, points out that the circumstance of nationality must be evident on a plain and simple examination and that, moreover, there is no question here of resolving a ‘positive conflict of nationalities’, which is a concept taken from private international law. These proceedings concern only the scope of regulations which apply within an international organization and which govern the rights and duties of its officials and employees. The condition of having ‘the nationality of the State where he is employed’ must therefore be considered to be fulfilled by the mere fact that an official has that nationality, even if he has another.

Finally, further in the alternative, the Commission maintains that the British nationality which the applicant claims to have is not her ‘active’ or ‘effective’ nationality within the meaning assigned to that concept by legal writers and the decisions on international law. Relying in particular on the judgment of the International Court of Justice in the Nottebohm case (Reports of Cases 1955, pp. 23 to 25), the Commission recalls that determination of the ‘effective’ nationality is a question of fact which must be settled on the basis of circumstances such as the habitual residence of the individual, the centre of his activities, and the language he speaks, including the preference shown by the individual expressly or by implication.

In those circumstances the argument that the applicant's ‘effective’ nationality should be that which was taken into consideration by the defendant for her recruitment and career progress must be rejected, because according to the last part of Article 27 of the Staff Regulations, no posts shall be reserved for nationals of any specific Member State.

The truth is, the Commission continues, that the applicant has no residence in Great Britain and has never lived there, and she has no voting rights nor is she eligible to stand in elections there. In Belgium, on the contrary, she is entitled to vote in the communal, district, provincial, legislative and European elections and may be called to serve on a jury of a Cour d'Assizes. On the applicant's own test the Belgian State accords her the benefit of political rights to a considerably greater degree than does Great Britain. On the basis of the factors listed in its statement of defence the Commission concludes that there is a ‘social fact of attachment’ to Belgium going beyond the ordinary consequences of being employed in that country which, in conjunction with the absence of connexion with Great Britain, establishes that the applicant's Belgian nationality is unequivocally her ‘effective’ nationality.

The Commission then points out that the applicant's nationality has to be determined at the date of her recruitment for the second time. The reference made to the opinion of Advocate General Mayras in the Gunnelia case, referred to above, is irrelevant because in that case the official had been reinstated at the end of a period of leave on personal grounds. As is clear from a reading of Article 35 of the Staff Regulations, a person taking leave on personal grounds does not lose his status as an official for the duration of the leave and the connexion with the Community institution is not broken.

As to the second argument in the alternative concerning the alleged infringement of Article 4 (1) (b) of Annex VII, the Commission replies that in order to support her interpretation that the time spent in the service of a State or an international organization during the ten years preceding the official's recruitment should not be taken into consideration, the applicant is obliged to juxtapose artificially subparagraphs (a) and (b) of Article 4 (1), which relate to two different cases and the wording of which itself contradicts the interpretation put forward, for the closing words of Article 4 (1) (a) relate only to subparagraph (a). According to the Commission the applicant cannot be considered as having habitually resided outside the territory of the State in which she was employed during the ten years prior to when she took up her post for the second time, for she habitually resided, or is to be considered as having so resided, outside Belgium only for less than seven years during that time.

As to the third argument, relating to the existence of a wrongful act or omission, the Commission first points out, drawing support from the case-law of the Court in Joined Cases 19, 20, 25 and 30/69 (Richez-Parise, [1970] ECR 325) and Case 23/69 (Fiehn, [1970] ECR 547) that the applicant fails to show how the original, irregular grant of the expatriation allowance as a result of an incorrect interpretation of the Staff Regulations can constitute by way of exception a wrongful act or omission, and emphasizes that it took less than two months to correct the mistake in question.

As to the damage, the defendant provides certain details concerning the chronology of events which preceded the commitments entered into by the applicant and her spouse. According to the Commission, the applicant was in full possession of the facts as from 15 February 1978. The argument that the second paragraph of Article 25 of the Staff Regulations was infringed, apart from being a new one since it was invoked for the first time in the reply and is therefore inadmissible, is in any event quite irrelevant.

According to the Commission the most elementary prudence should have led the applicant to refrain from entering into the commitment on 17 February 1978, something which she was perfectly entitled to do without incurring any penalty at all.

As to the causal connexion, the Commission recalls that it showed in its statement in defence that there is no connexion between the mistaken interpretation adopted by its staff and the damage alleged to have occurred which, even if it is established, is due to the irresponsible manner in which the applicant entered into financial commitments which she now finds to be disproportionate to her income.

As regards the compensation which has been asked for, the Commission notes that the applicant has not produced any evidence to show that she is virtually unable to meet her commitments, or that failure to enter into the first commitment on 17 February 1978 could have rendered her liable to pay a penalty.

IV — Oral procedure

At the hearing on 4 October 1979 oral observations were submitted by the applicant, represented by E. Lebrun, of the Brussels Bar, and the Commission of the European Communities, represented by D. Jacob, of the Brussels Bar.

At the request of the Court the applicant produced a number of documents, in addition to those which she had submitted previously, concerning the conditions under which she took out the loan on which she relied to justify her claim for damages.

The Advocate General delivered his opinion at the sitting on 22 November 1979.

Decision

1. The principal object of the application is the annulment of the Commission's decision to withdraw from the applicant, with effect from 1 February 1978, the expatriation allowance provided for in Article 69 of the Staff Regulations for Officials of the European Communities and, alternatively: to ensure, in any event, that payment of the expatriation allowance is continued until such time as the applicant shall have repaid a loan which she contracted on the basis of her resources as constituted by, inter alia, that allowance, or to order the Commission to pay an equivalent sum as compensation.

2. The applicant, who is British by birth, married a Belgian citizen in Belgium on 8 April 1970 thereby automatically acquiring Belgian nationality. She had the option of renouncing it by making an ad hoc declaration in the manner prescribed by Belgian law, but did not exercise that option, so that she has definitively acquired Belgian nationality without having thereby lost her British nationality however.

3. When she was engaged by the European Communities in March 1967 she fulfilled the conditions for the granting of an expatriation allowance, which was in fact paid to her without interruption until the moment she terminated her employment by resigning with effect from 19 June 1972.

4. On 1 December 1977 she once again entered the service of the Communities at Brussels. The competent officers of the Commission first paid her the expatriation allowance but shortly afterwards, taking the view that because she had acquired Belgian nationality by marriage she no longer fulfilled the conditions for receiving the allowance, they notified her that it was to be withdrawn with effect from February 1978.

The application for the annulment of the decision

5. In so far as the application seeks the annulment of the decision at issue, it is based principally on the infringement of the provisions of subparagraph (a) of Article 4 (.1) of Annex VII to the Staff Regulations and of the general principle of equality and, in the alternative, on the infringement of the provisions of subparagraph (b) of the same paragraph.

6. Under Article 62 of the Staff Regulations an official's remuneration comprises ‘basic salary, family allowances and other allowances’. Amongst those allowances, Article 69 provides for an expatriation allowance, detailed rules for the payment of which are laid down by Article 4 (1) of Annex VII to the Staff Regulations which provides that the allowance shall be paid:

‘(a) to officials:

who are not and have never been nationals of the State in whose European territory the place where they are employed is situated, and

who during the five years ending six months before they entered the service did not habitually reside or carry on their main occupation within the European territory of that State. For the purposes of this provision, circumstances arising from work done for another State or for an international organization shall not be taken into account.

b) to officials who are or have been nationals of the State in whose territory the place where they are employed is situated but who during the ten years ending at the date of their entering the service habitually resided outside the European territory of that State for reasons other than the performance of duties in the service of a State or of an international organization’.

7. Article 21 (2) of Council Regulation No 912/78 of 2 May 1978 (Official Journal L 119, p. 1) added to Article 4, inter alia, a third paragraph, which was made applicable retroactively with effect from 1 July 1972 by virtue of the second paragraph of Article 35 of Regulation No 912/78. Article 4 (3) provides: ‘For the purposes of paragraphs 1 and 2, an official who has by marriage automatically acquired and cannot renounce the nationality of the State in whose territory he or she is employed shall be treated in the same way as an official covered by the first indent of paragraph 1 (a)’.

The infringement of Article 4 (1) (a) of Annex VII to the Staff Regulations and of the principle of equality

8. Under the first indent of Article 4 (1) (a) of Annex VII to the Staff Regulations, the expatriation allowance shall be paid to officials ‘who are not and have never been nationals of the State in whose territory the place where they are employed is situated’.

9. In its judgment of 20 February 1975 in Case 21/74 (Airola [1975] ECR 221) the Court acknowledged that according to the general principle which prohibits any unwarranted difference of treatment as between officials according to whether they are male or female, the first indent of Article 4 (1) (a), cited above, should be interpreted as meaning that where an official receives the expatriation allowance on the basis of the fact that he or she does not have the nationality of the State in which he or she is employed, that allowance may not be withdrawn when, as a result of marriage with a national of the Member State where the official is employed, the nationality of the spouse is automatically imposed on him or her without the official being able to renounce it.

10. In a second judgment delivered on the same day, in Case 37/74 (Van den Broeck [1975] ECR 235), however, the Court held that the first indent of Article 4 (1) (a) cited above, still applies when a female official is able to renounce the nationality she had acquired by marriage, but chooses not to avail herself of that opportunity.

11. According to the applicant, that provision should be interpreted, in the light of that case-law, as meaning that she remains entitled to receive the expatriation allowance even though she did not exercise her option of renouncing the Belgian nationality which she acquired by marriage. Account is in fact to be taken of the fact that she has retained her British nationality and that circumstance is sufficient to justify continuing payment of the expatriation allowance.

12. That argument must be rejected. In fact where the person concerned was able to renounce the nationality which causes her to lose the benefit of the expatriation allowance, there is no reason associated with the purposes for which that allowance was granted for disregarding the fact that, by an act of her own volition subsequent to, but distinct from, her marriage, the official decided to assume the nationality of the place in which she is employed.

13. Secondly, the applicant claims that when, as a result of her marriage, a female official, whilst acquiring a new nationality, retains her nationality of origin and the latter entitled her to the expatriation allowance, the nationality of origin should be considered as the preponderant nationality, thus justifying continuance of the expatriation allowance, or in any event that that is the solution to be adopted when the nationality of origin appears in fact to be the ‘effective’ nationality compared with the nationality acquired by marriage.

14. The concept of effective nationality is used mainly in private international law in order to resolve positive conflicts of nationality. The concept cannot be transferred to a quite different sphere from that for which it was developed, specifically the scope of the Staff Regulations for Officials of the Communities, in order to determine entitlement to receive the expatriation allowance, when, apart from the exception expressly provided for in Article 4 (1) (b), an official who has the nationality of the place in which he is employed is not entitled to that allowance.

15. Moreover, even if the applicant's point of view were to be adopted, it should be observed that she has failed to show that she is considered in Great Britain as a ‘patrial’, whereas under the declaration made by the Government of the United Kingdom of Great Britain and Northern Ireland on the definition of the term ‘nationals’ annexed to the Final Act of 22 January 1972 on the accession to the European Communities of the new Member States, the term ‘national’ is to be understood, as far as the United Kingdom is concerned, to refer only to patrials and to Gibraltarians.

16. The applicant further claims that when an official has dual nationality, that which is to be taken into consideration for the granting of the expatriation allowance should be the nationality relied on by the institutions for her recruitment and the progress of her career and that in that respect she is and has always been considered by those institutions as being an official of British nationality.

17. That argument cannot be accepted. Payment of the expatriation allowance is independent of the conditions in which the careers of individual officials and other servants develop, for those conditions must take no account of considerations based on nationality.

Infringement of Article 4 (1) (b) of Annex VII to the Staff Regulations

18. Under Article 4 (1) (b) of Annex VII to the Staff Regulations, the expatriation allowance shall be paid ‘to officials who are or have been nationals of the State in whose territory the place where they are employed is situated but who during the ten years ending at the date of their entering the service habitually resided outside the European territory of that State for reasons other than the performance of duties in the service of a State or of an international organization’.

19. The applicant has not established that she has ever fulfilled the factual conditions laid down by the provisions of the abovementioned subparagraph (b) for payment of the expatriation allowance.

20. Moreover, the interpretation of that provision put forward by her, which is to be applied to her and according to which a period of employment and residence in Belgium prior to her second engagement is to be treated as a period of residence outside Belgium on the ground that the previous residence was for reasons connected with her employment in the service of the Communities gives a meaning to subparagraph (b) which is contrary to its express terms and irreconcilable with both the wording and the aims of that provision.

The request that payment of the expatriation allowance should be temporarily continued or that damages should be awarded

21. The request for compensation which, in substance, this head of claim constitutes is founded on the allegation that the applicant took out a loan for the purpose of purchasing a dwelling on the basis of the level of her income including the expatriation allowance and that by first granting that allowance when she was engaged for the second time only to withdraw it afterwards, the Commission upset her plans and has therefore committed a wrongful act for which the applicant should be compensated.

22. That claim must also be rejected. An administrative authority which remedies an unlawful situation cannot be considered as committing an act which is wrongful or such as to render it liable.

23. Moreover, examination of the case and the documents produced by the applicant in the course of the oral proceedings show that she entered into the financial commitments involved in the loan to which she refers at a time when the allowance in question had already been withdrawn from her.

24. As the applicant has failed in her submissions, the application must be rejected.

Costs

Under Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs. As the applicant has failed in her submissions, she must be ordered to pay the costs.

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

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

1 Dismisses the application;

2 Orders each party to pay its own costs.