JUDGMENT OF 21.5.1981 — CASE 29/80 REINARZ v COMMISSION
In Case 29/80
THE COURT (Second Chamber) composed of: P. Pescatore, President of Chamber, A. Touffait and O. Due, Judges, Advocate General: Sir Gordon Slynn Registrar: J. A. Pompe, Deputy Registrar
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 procedure
The applicant, who became an official of the European Coal and Steel Community (ECSC) in 1952 and of the Commission of the European Economic Community (EEC) on 15 April 1959, in Grade A 2, requested that Regulation No 2530/72 be applied to him; in consequence, he retired in the interests of the service on 1 May 1973.
In return, the applicant received for one year a monthly allowance equal to his last salary which was paid to him in Belgium where he was temporarily resident and, thereafter, from 1 May 1974, a monthly allowance equal to 80 % of his basic salary. That allowance was paid to him in Canada, where the applicant settled from 1 May 1974 to 1 September 1977, and paid in Canadian dollars in accordance with the last subparagraph of Article 3 (3) of Regulation No 2530/72, weighted at the rate fixed for Belgium. The conversion rate adopted under those rules was BFR 46.25 to one Canadian dollar whereas, according to the applicant, the current market exchange rate was BFR 35 to one Canadian dollar during the period in question, with the result that he lost approximately one million Belgian francs. In 1976 the applicant applied to' the Court for the annulment or the last subparagraph of Article 3 (3) of Regulation No 2530/72 and for damages against the Commission on the ground that payment to him of the monthly allowance pursuant to Article 3 (1) (b) of the said regulation was effected in Canadian dollars on the basis of a fictitious exchange rate, in accordance with the contested provision, which was much higher than the actual market exchange rate between the Belgian franc and the Canadian dollar. The action was declared inadmissible by judgment of 17 February 1977 on the ground that it had not been preceded by an official complaint (Case 48/76, Reinarz v Commission [1977] ECR 291).
By letter of 9 May 1978, which the Commission never received, and by letter of 21 November 1978, to which he attached a photocopy of the first letter, the applicant submitted primarily a request within the meaning of Article 90 (1) of the Staff Regulations that the Commission take a decision granting him damages for the loss suffered in which request he relied essentially on grounds of fairness and, as a secondary point, he submitted a complaint within the meaning of Article 90 (2) in which he also claimed damages but on the ground that the Commission's calculations were contestable because they were based on provisions which were unlawful or, at the very least, inapplicable.
On 28 March 1979, the Commission rejected his request as unfounded and pointed out that “the complaint has not been lodged within the period prescribed by Article 90 (2) of the Staff Regulations”.
By registered letter of 22 June 1979, the applicant submitted a complaint within the meaning of Article 90 (2) against the Commission's decision rejecting his request.
By. letter of 21 December 1979, the Commission also rejected that complaint pointing out that “it is not admissible”.
Faced with that rejection, the applicant has brought the present application which was received at the Court Registry on 18 January 1980.
On 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 holding a preparatory inquiry.
II — Conclusions of the parties
The applicant claims that the Court should:
“1. Declare that with regard to the allowances paid to the applicant in Canada during the period from 1 May 1974 to 1 September 1977 pursuant to Regulation No 2530/72, the last subparagraph of Article 3 (3) of that regulation and the third paragraph of Article 63 of the Staff Regulations are not to be applied to the applicant; 2. Order the Commission on grounds of fairness to compensate the applicant for the financial loss suffered by him during the period referred to in paragraph 1 by virtue of the application of the provisions referred to in paragraph 1 or at least order the Commission to pay the applicant such financial compensation as the Court sees fit; 3. Order the Commission to bear the costs”.
The defendant contends that the Court should:
“Dismiss the claim for compensation: principally on the ground that it is inadmissible, alternatively on the ground that it is unfounded, and Order the applicant to bear the costs”.
III — Summary of the submissions and arguments of the parties
A — Admissibility
The Commission maintains primarily that this action is inadmissible on the ground that it is a repetition of a claim for damages which the Court has already dismissed as inadmissible in its above-mentioned judgment of 17 February 1977.
Furthermore, the application is also inadmissible on the ground that the applicant has submitted two successive complaints, the Commission contending that the first letter constitutes a complaint and not a request.
Finally, the provisions criticized by the applicant were amended on 1 April 1979 by Council Regulation No 3085/78 of 21 December 1978 (Official Journal, L 369, p. 6) and are no longer in force.
Therefore “the Commission finds that Mr Reinarz has failed to avail himself within the prescribed period of the means of redress provided for under the Staff Regulations and the Treaty”.
The applicant considers that the Commission wrongly regards the letter of 9 May 1978 as a complaint within the meaning of Article 90 (1) and (2) of the Staff Regulations. That letter contains “a long explanation to the effect that the applicant has submitted primarily a request to the Commission” and only in the alternative, that is to say in the event of the Commission's taking the view that the conditions for acceding to his principal request have not been complied with, has he submitted a complaint.
Since that letter of 9 May 1978 failed to reach the Commission, the applicant sent another letter on 28 November 1978, to which a photocopy of the earlier letter was attached in which he pointed out to the Commission that he had submitted a request and, only as a secondary point, a complaint.
The Commission admittedly regarded the first letter exclusively as a complaint, treated it as such and rejected it. That is why, in his complaint of 22 June 1979, the applicant expressly drew the Commission's attention to the fact that it had wrongly considered the first letter as a complaint. In fact, the Commission did not take any decision concerning the request submitted to it by Mr Reinarz in accordance with the provisions of Article 90 (1) of the Staff Regulations.
Therefore, the applicant maintains that he adhered strictly to the procedure prescribed by the Staff Regulations and, consequently, to the time-limits laid down therein: he “requested the Commission to grant him compensation on grounds of fairness for the loss suffered”. Finally, the applicant fails to see what argument the Commission can deduce from the fact that the provisions criticized by him on grounds of fairness have been amended by Council Regulation No 3085/78 with effect from 1 April 1979. In his view, the amendment indicates merely that the Commission realized that the application of a monetary parity bearing no relation to reality was indefensible.
In its rejoinder, the Commission maintains first that the letter of 28 November 1978 is described by the applicant himself as “a supplement to his complaint, or to his request, within the meaning of Article 90 (1) and (2) of the Staff Regulations”. Subsequently, it reiterates that there were sound reasons for regarding the two letters sent by the applicant as complaints and, consequently, for rejecting them as such.
According to the Commission, the applicant relies, on the basis of equitable considerations contra legem, upon the fact that the amendment contained in Regulation No 3085/78 lacks retroactive effect. The amendment of the rule applied to Mr Reinarz for the period from 1974 to 1977 which entered into force on 1 April 1979 “cannot have the effect of reviving a dispute which has been barred by limitation for several years”. Furthermore, the action is inadmissible on the additional ground that it has been brought before the Court after the expiry of the period specified in Article 90 (2) of the Staff Regulations.
B — Substance
In his application, the applicant founds his case on six arguments.
1) The Commission is bound in fairness to compensate the applicant for the loss of income suffered during the period complained of “because the strict application and implementation of the provisions of Regulation No 2530/72 in conjunction with those of the third paragraph of Article 63 of the Staff Regulations in relation to the applicant was arbitrary, discriminatory, unjustified and wholly unfair”. The preamble to Regulation No 3085/78 demonstrates that the Commission itself came to the conclusion that it was necessary to amend the provisions of the Staff Regulations concerning the monetary parities and the detailed rules to be applied for the transfer in a currency other than Belgian francs of the allowance to which an official or former official is entitled. The amendment is based on Article 3 of the aforesaid regulation which, referring back to the second paragraph of Article 63 of the Staff Regulations, lays down that the above-mentioned allowances must be paid on the basis of the par values used for the implementation of the general budget of the European Communities. According to the applicant, however, the fact that Regulation No 3085/78 does not cover earlier cases constitutes proof of the negligent and arbitrary manner in which the Commission has treated him.
2) The strict and inflexible application of the fourth subparagraph of Article 3 (3) of Regulation No 2530/72 is also contrary to the system established by that regulation which is designed to ensure equivalence in the purchasing power of the allowances in question by introducing certain weightings, the purpose of which is precisely to ensure such equivalence. Furthermore, the Commission, “in complete disregard of the Council and of the Staff Regulations”, adopted measures taking into account the diminished purchasing power in the case of officials carrying out their duties in South American countries, for which no weighting has been fixed, but has failed to adopt any provisions in relation to the applicant who is in a comparable situation, such difference in treatment being discriminatory. Admittedly, the allowances paid to him in Canada were weighted at the rate fixed for Belgium but that weighting bears no relation to the level of prices and the cost of living in Canada.
3) The Community has enriched itself at the applicant's expense given that the advantage in the exchange rate resulting from the payment in devalued Canadian dollars of an allowance calculated in Belgian francs has been entirely to the benefit of the Community's finances.
4) The applicant criticizes above all “the manner in which — namely by taking into account the principles of care, fairness and good faith — the Commission is to fulfil an obligation” arising under the Staff Regulations which corresponds to the directly applicable right to payment vested in officials or former officials and he refers to the judgment given by the Court on 31 May 1979 in Case 156/78 Newth v Commission [1979] ECR 1941 in which the Commission “considered that there was an indissoluble link between the weighting applicable to the place of residence and the currency in which payment is to be effected”. This view, in his opinion, precludes payment in the currency of a country for which no weighting has been fixed.
5) The Commission has also acted in breach of the general principle of human rights that everyone is entitled, upon termination of service, to settle in the country of his choice without sustaining a loss in consequence of a reduction in the emoluments which have accrued to him by virtue of the duties which he has performed.
6) Finally, by applying the rules complained of, the Commission has infringed the letter and the spirit of Article 12 of the Protocol on the Privileges and Immunities of the European Communities which reserves to former officials certain privileges customarily accorded to officials of other international organizations. The Commission should have submitted proposals in sufficient time to ensure that this provision was effectively applied.
The Commission, after explaining that it intends to examine the substance of the case only for the sake of completeness, maintains that it has correctly applied Regulation No 2530/72, the provisions of which are explicit and accordingly incapable of being interpreted, and that the regulation has been amended only with effect from 1 April 1979 by Regulation No 3085/78. Furthermore, when he decided to settle in Canada, Mr Reinarz was or should have been aware, on the basis of the provisions in force which were by no means ambiguous, of the financial consequences linked to his choice of residence. Consequently, it is difficult for him to rely on inequality of treatment compared with other officials who are also subject to measures governing early retirement and who have likewise decided to settle in a country outside the European Communities. Against that background, and contrary to the opinion expressed by the applicant, the recent case-law of the Court (the above-mentioned Newth judgment and the judgment of 13 February 1980 in Case 256/78 Misenta v Commission [1980] ECR 219) in no way supports his case.
In his reply, the applicant reiterates first of all that the amendment introduced by Regulation No 3085/78 makes it “clear beyond all doubt” that the Commission had realized that the application of monetary parities bearing no relation to the real state of affairs was indefensible and he wonders why he should be “the victim” of the application of those provisions which it has proved necessary to abolish.
With regard to the Commission's argument that he should have been aware, on the basis of “clear” provisions, of the financial consequences resulting from his settling in Canada, the applicant disputes that those provisions can be considered as being clear. He maintains in this respect that “the head of the Legal Department of the Communities” informed him orally at the time that the application of the last subparagraph of Article 3 (3) of Regulation No 2530/72 “was restricted in his opinion to the Member States of the Community” which tallies with the opinion expressed by the Commission in the above-mentioned Newth case, that is to say that there is an indissoluble link between the weighting applicable to the place of residence of the persons concerned and the currency in which payment to them is to be effected.
The Commission has, moreover, failed to recognize the financial loss incurred by the applicant as a result of his settling in Canada compared with the vast majority of former officials who have continued to reside in one of the Member States of the Community and have received in its entirety the full allowance to which they are entitled under Regulation No 2530/72. In his view therefore he has suffered obvious discrimination compared with all those other former officials without the Commission's being able to furnish any acceptable objective justification for it. Finally, the applicant points out that there were pressing reasons for his settling in Canada upon termination of service and that, apart from that necessity, a general principle of human rights, which has already been referred to confers on all persons the right to settle in the place of their choice without suffering discrimination or less favourable treatment as regards their financial situation. The Commission has failed to rebut this argument just as it has also disregarded the provisions of Article 12 of the Protocol on the Privileges and Immunities of the European Communities relied upon by the applicant.
In its rejoinder, the Commission replies point by point to the arguments adduced by the applicant in his reply.
Even if, with regard to the opinion expressed by the head of the Legal Department on the applicability of the last subparagraph of Article 3 (3) of Regulation No 2530/72, his assertion is to some extent based on fact, the Commission nevertheless fails to see what the applicant is endeavouring to prove, given that the contents of that assertion do not add anything in support of his case.
As regards the claim that it was necessary for the applicant to settle in Canada, the Commission considers that this argument is not pertinent to the subject-matter of the dispute “given that the material event (application of Article 12 of the Staff Regulations) occurred prior to termination of service”.
The Commission also observes that Article 12 of the Protocol on the Privileges and Immunities of the European Communities is applicable to officials and other servants only during the performance of their duties. Lastly, it recalls that in the circumstances it applied the provisions in force at the time identically to all officials who were permitted to opt for early retirement, with the result that it is incorrect to speak of inequality of treatment which must be rectified on grounds of fairness (contra legem).
IV — Oral procedure
The applicant, represented by A. J. Hammerstein, of the Heerlen Bar, and the Commission, represented by R. Baeyens and R. Nys, acting as Agents, assisted by an expert, Mr Tanzili, presented oral argument and replied to questions put by the Court at the sitting on 19 March 1981.
The Advocate General delivered his opinion at the sitting on 9 April 1981.
Decision
1. By application received at the Court Registry on 18 January 1980, Mr Reinarz, a former official of the European Communities in Brussels who is currently in receipt of an allowance under Regulation No 2530/72 of the Council of 4 December 1972 introducing special and temporary measures applicable to the recruitment of officials of the European Communities in consequence of the accession of new Member States, and for the termination of service of officials of those Communities (Official Journal, English Special Edition 1972 (1-8 December), p. 11), brought an action first for a declaration that with regard to the allowances paid to the applicant in Canada during the period from 1 May 1974 to 1 September 1977 the provisions of the last subparagraph of Article 3 (3) of Regulation No 2530/72 in conjunction with those of the last paragraph of Article 63 of the Staff Regulations were not applicable to him and, secondly, for an order requiring the Commission to compensate him on grounds of fairness for the financial loss which he claims to have suffered as a result of the application of those provisions, or at least to pay him such damages as the Court sees fit.
2. Upon relinquishing his post with the Communities in 1973, the applicant settled in Canada and accordingly his allowance, calculated in Belgian francs, was paid in the currency of that country calculated on the basis of the par values accepted by the International Monetary Fund which were in force on 1 January 1965, pursuant to Article 3 (3) of Regulation No 2530/72 in conjunction with the third paragraph of Article 63 of the Staff Regulations.
3. In 1976, the applicant applied to the Court for the annulment or at least for a declaration of inapplicability as far as he was concerned of the aforesaid provisions and for compensation in respect of the loss which he claimed to have suffered but the Court, in its judgment of 17 February 1977 in Case 48/76 Reinarz v Commission [1977] ECR 291, declared his application inadmissible on the ground that it was not preceded by an official complaint, a condition precedent to any application to the Court.
4. By letter of 9 May 1978 and again by letter of 28 November 1978, the applicant submitted to the appointing authority primarily a request within the meaning of Article 90 (1) of the Staff Regulations that the Commission take a decision granting him compensation for the losses which he claimed to have suffered or at least awarding him damages to make good his financial loss. In the same letter, having regard to the possibility that the Commission might reject his request, the applicant submitted in the alternative a complaint, on the basis of Article 90 (2) of the Staff Regulations, concerning the fact that the Commission had, in calculating his monthly allowances, relied on the aforesaid provisions of the regulations, including the Staff Regulations, which provisions he claimed should be declared null and void or at least inapplicable in relation to him.
5. The Commission considered that the steps taken by the applicant amounted to a complaint within the meaning of Article 90 (2) of the Staff Regulations and rejected it on 28 March 1979.on the grounds that it was time-barred and unfounded.
6. On 22 June 1979, the applicant raised with the Commission the objection that it had mistakenly considered his request for compensation as a complaint and he pointed out that, by that letter, he was submitting in accordance with Article 90 (2) of the Staff Regulations a complaint “against the rejection of his request that it take the decision relating to him which he sought”.
7. The Commission rejected that complaint by letter of 21 December 1979 recalling once again that “it is not admissible” or well founded. On 18 January 1980, the applicant brought this application against the rejection of his complaint.
Admissibility of the application
8. The Commission challenges the admissibility of the application on the grounds that, first, this is a repetition of an application for damages which has already been brought before the Court in Case 48/76 and dismissed by judgment of 17 February 1977 and, secondly, that the applicant's letter of 9 May 1978 constitutes a complaint and proceedings have been instituted before the Court after the expiry of the period specified in Article 90 (2) of the Staff Regulations.
9. However, since it appears from the applicant's letter of 9 May 1978 that he submitted primarily a request to the appointing authority and in the alternative a complaint, it is necessary to consider the admissibility of each of those steps separately.
10. With regard to the complaint concerning the manner in which the Commission has calculated the applicant's monthly allowances since 1 May 1974, it should be recalled that the three-month period provided for in Article 90 (2) of the Staff Regulations starts to run from the date of notification of the decision to the person concerned but in no case later than the date on which the latter has received such notification if the measure affects a specified person. In the present case, the document complained of consists of the first salary statement of May 1974, which enabled the applicant to establish the method of calculation employed by the Commission. In consequence, the complaint submitted four years later must be deemed to have been lodged out of time pursuant to Article 90 (2) of the Staff Regulations and therefore the application must be declared inadmissible on this point.
11. However, as regards the principal request submitted by the applicant to the Commission, Article 90 (1) lays down that:
“Any person to whom these Staff Regulations apply may submit to the appointing authority, a request that it take a decision relating to him”.
12. It follows from that article that since no specific period is provided for within which a request is to be submitted, it cannot be held against the applicant that he has submitted such a request to the appointing authority which the Court has previously dismissed, though solely on the ground that the preliminary administrative procedure has not been adhered to; his right to have recourse to the means of redress provided for by the Staff Regulations subject to compliance with the requirements thereof, which have moreover been met by the applicant, is thus left intact. On this point, therefore, his submissions are admissible.
Substance
13. In this context, the applicant, who essentially seeks on grounds of fairness compensation or damages from the Commission for the loss suffered, alleges that the application of the provisions of Article 3 of Regulation No 2530/72 in conjunction with those of Article 63 of the Staff Regulations has resulted in discrimination against him compared with other former officials residing in one of the Member States which the Commission has implicitly recognized in the preamble to Council Regulation No 3085/78 of 21 December 1978 amending the monetary parities to be used. This system is also contrary to the general principle of human rights which allows any person to settle, on termination of service, in the country of his choice without suffering a reduction in emoluments, and to Article 12 of the Protocol on the Privileges and Immunities of the European Communities.
14. The objection to that argument is that the applicant — who retired from the Community of his own initiative — cannot have been surprised by the fact that legislation containing express provisions which was amended only as from 1 April 1979 by Council Regulation No 3085/78 of 21 December 1978 was applied to him. Accordingly, he was well aware of the amount of the monthly allowance to be paid to him on his departure for Canada in May 1973 and he accepted it with full knowledge of the facts.
15. This system does not, moreover, result in discrimination against officials who are in the same position as the applicant, that is to say, where they have also chosen to reside in a country outside the Communities.
16. Finally, Article 12 (c) of the Protocol on the Privileges and Immunities of the European Communities has no relevance in the present case and all that need be stated in this regard is that it is applicable only in the territory of each of the Member States.
17. Therefore, it is necessary to conclude that the application must be dismissed.
Costs
18. Under Article 69 (2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs.
19. However, under Article 70 of the Rules of Procedure, in proceedings brought by servants of the Communities, institutions shall bear their own costs.
On those grounds, THE COURT (Second Chamber) hereby:
1 Dismisses the application;
2 Orders the parties to bear their own costs.