JUDGMENT OF THE COURT OF FIRST INSTANCE (Third Chamber)

16 May 2007

Case T-324/04

F

v

Commission of the European Communities

(Civil Service – Officials – Expatriation allowance – Action for annulment – Action for damages – Article 4(1)(a) of Annex VII to the Staff Regulations – Concept of international organisation – Habitual residence and main occupation – Retroactive refusal to pay the expatriation allowance – Recovery of amounts wrongly paid)

Application: first, for annulment of the decisions of the Commission refusing with retroactive effect to pay the applicant the expatriation allowance and determining the method for recovery of the amounts wrongly paid on that account and, second, repayment of all the amounts which have been or will be deducted from the applicant’s salary from February 2004, plus interest, and damages for the material and non-material loss allegedly suffered.

Held: The action is dismissed. The parties are ordered to bear their own costs.

Summary

1.      Officials – Remuneration – Expatriation allowance – Conditions for granting

(Staff Regulations, Annex VII, Art. 4(1))

2.      Officials – Remuneration – Expatriation allowance – Conditions for granting

(Arts 46 CS and 48 CS; Staff Regulations, Annex VII, Art. 4(1)(a))

3.      Officials – Principles – Protection of legitimate expectations – Sound administration – Duty to have regard for the welfare of officials

(Staff Regulations, Art. 85; Annex VII, Art. 4(1))

1.      It is sufficient for only one of the criteria set out in Article 4 of Annex VII to the Staff Regulations to be met, that is to say, for an official to have either his habitual residence or his main occupation in his place of employment for him not to receive the expatriation allowance.

As regards the determination of his main occupation, the fact that the official was a qualified lawyer and was entitled to practise in his country of origin during the reference period is not in itself sufficient to prove that he was actually practising that profession as his main and predominant activity, in the absence of specific information as to the duration and substance of that activity.

As for the determination of his habitual residence, the fact that the official renewed his official identity papers, remained covered by the sickness insurance scheme in his country of origin and was domiciled there for tax purposes does not in itself prove that his permanent centre of interests was still in that country. Although some of those factors may show that the official had lasting ties with his country of origin, they are purely formal considerations which do not prove his actual residence. As regards, more particularly, the payment of taxes in the country of origin, under the double taxation agreement between that country and the official’s country of employment, the production of tax returns in the country of origin, without any evidence of the decision that would be taken concerning the official by the authorities in the two countries under that agreement, is not, in itself, sufficient to prove habitual residence in the country of origin, since such returns could result from a unilateral decision on the part of the official to pay his taxes in that country.

(see paras 54, 65, 76-77)

See: T‑18/98 Reichert v Parliament [2000] ECR-SC I‑A‑73 and II‑309, para. 30; T-60/00 Liaskou v Council [2001] ECR-SC I‑A‑107 and II‑489, para. 63

2.      In order to be regarded as an ‘international organisation’ for the purposes of the last sentence of the second indent of Article 4(1)(a) of Annex VII to the Staff Regulations, an organisation must have been identified and recognised formally by States or international organisations created by States. Such recognition may take the form of a formal declaration, act de lege lata, agreement or a convention expressly stating that the organisation in question is in fact recognised by States or international organisations created by States.

Articles 46 and 48 of the ECSC Treaty, which provide for undertakings and associations to work with the Commission in order to facilitate the performance of the tasks entrusted to it, do not constitute formal recognition of those undertakings and associations, but rather establish the rights and obligations applicable, under the terms of that Treaty, to those concerned by it.

Furthermore, the fact that the Commission was able to consult those undertakings and associations, and that they attended advisory or preparatory meetings, cannot be regarded as equivalent to the Communities’ entrusting the bodies in question with a task in the public interest.

Lastly, in order to assess the international nature of an organisation, account must be taken only of its own composition, and not of its membership of other organisations with an international composition.

(see paras 113, 115, 117, 121-122)

See: T-4/92 Vardakas v Commission [1993] ECR II‑357; T-99/03 Atienza Morales v Commission [2005] ECR-SC I‑A‑225 and II‑1029, para. 35

3.      The fact that the administration, when carrying out a full inspection of an official’s personal file, has not detected that he has been paid the expatriation allowance improperly cannot be regarded as a specific act of the administration liable to give rise to legitimate expectations on the part of the official that the amounts wrongly paid cannot subsequently be recovered, since that fact merely demonstrates the persistence of the administration’s error, which is the basis for the application of Article 85 of the Staff Regulations.

However, where the improper payment of that allowance was so obvious that an experienced official with a high grade exercising ordinary care should have been aware of it, his failure to notify the administration that his financial entitlements may have been wrongly paid places the official, through his own conduct, in an improper situation, so that he cannot rely on his good faith in order to be released from the obligation to repay the amounts wrongly paid. In such a case, the administration cannot be alleged to have infringed its duty to have regard for the welfare of officials or the principle of sound administration, since that principle led to the correct application of Article 85 of the Staff Regulations.

(see paras 159, 164-166, 170)

See: T‑312/02 Gussetti v Commission [2004] ECR-SC I‑A‑125 and II‑547, para. 106 and the case-law cited therein