61986C0021

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My Lords,

Mrs Samara, who had been an official in Grade C*5, Step 3, was appointed as an established official of the Commission in Grade C 3, Step 1, with effect from 1 January 1983, following an open competition in which she came first . Her request for reclassification and her complaint as to the Commission' s refusal on 16 February 1983 to reclassify her were rejected by decision of 5 August 1983 . Pursuant to her application, on the basis that she should have been appointed to a higher step in the grade, the Court annulled both those decisions by its judgment of 15 January 1985 in Case 266/83 . The Commission was told that it "must reconsider the applicant' s position and apply the criteria laid down in Article 32 of the Staff Regulations ".

On 23 April 1985 the Commission appointed Mrs Samara in Grade C*3, Step 3, with retrospective effect from 1 January 1983 . On 13 June 1985 it paid her the difference between a C*3, Step 1, salary and a C*3, Step 3, salary for the period from 1 January 1983 to 31 May 1985 . On 21 June 1985 she asked for interest on the amount of that difference from the date upon which each monthly payment became due . That request was treated as a complaint under Article 90 ( 2 ) of the Staff Regulations . No decision having been given in response to it, it has been treated as implicitly rejected . She now claims the like interest which she says, since the sums were payable in the Grand Duchy of Luxembourg, should be at the rate of 9% pursuant to a Grand Ducal regulation of 22 November 1984 .

The Commission' s first reply is that this claim is inadmissible . If she wanted interest she should have asked for it in the first proceedings when she challenged the 1983 decision as to classification . She did not do so; the Court did not order that interest be paid on any outstanding salary found to be due; she is now out of time and cannot raise in these proceedings a matter which she could have canvassed in the first application .

I do not accept that these proceedings are inadmissible . The object of the first application was to annul the classification . It was not for the Court in those proceedings to fix her proper classification . That was a matter for the Commission in giving effect to the Court' s judgment under Article 176 of the EEC Treaty, albeit the result might be inevitable . Even if she could have asked for interest in the first application, she was in my view entitled to seek first the annulment and then to come a second time to argue that the Commission has not fully given effect to the Court' s decision . If the Commission had retroactively regraded her but not paid her the salary difference, she could have brought proceedings for its recovery . Her claim for interest, if well founded, is in pari materia .

Whether she is entitled to interest on those monies in respect of back salary until the date they were paid is a more difficult question, there being nothing in the Staff Regulations which expressly deals with it .

She puts her case simply . She should all along have been classified in Grade 3, Step 3, and paid the appropriate salary . She was not paid it on the dates it should have been paid . She was thus kept out of her money and lost the use of it; conversely the Commission had the use of it by not paying her until 13 June 1985 . She should be compensated for the loss due to the delay in payment .

The Commission replies that such a claim is wrong in principle and contrary to decisions of the Court .

The Court has, undoubtedly, been concerned many times with claims for interest . It does not seem to me that it can be said that one universal rule has been laid down in respect of all claims for interest . Thus, a distinction has been drawn between claims of interest for delay in payment of a debt on the one hand, and claims for delay in the performance of another obligation, which are more in the nature of a claim for damages, on the other . Where there is a claim for delayed payment of a debt, the Court has sometimes required a serious error to have been made which went beyond a mere mistake in calculation ( Case 3/66 Alfieri v Parliament (( 1966 )) ECR 437; Case 106/76 Deboeck v Commission (( 1977 )) ECR 1623 and Case 14/77 Van der Branden v Commission (( 1977 )) ECR 1683 ). In other cases interest has been awarded for a wrongful failure to pay without any particularly serious error being required to be established . Moreover, interest has sometimes been awarded only from the date of a complaint under the Staff Regulations, or from the institution of proceedings before the Court or from the date the payments fell due if later than such a complaint or application ( e.g . Case 58/75 Sergy v Commission (( 1976 )) ECR 1139; Case 9/81 Williams v Court of Auditors (( 1982 )) ECR 3301 ). This has not, however, always been so . Thus in Case 115/76 Leonardini v Commission (( 1978 )) ECR 735 default interest was awarded for the late payment of a disablement award, such interest to run not from the date of the complaint in 1976, but from the date in 1968 when the award with reasonable diligence should have been assessed . Moreover, the rate of interest has varied from time to time according to circumstances .

It seems that the practice in Member States varies as to the payment of interest in respect of a debt and nothing has been said in this case which indicates that there is a general rule uniformly followed in Member States . Thus, for example, in contending that interest can never run before the date of a complaint asking for it, the Commission has laid stress on the need for a "mise en demeure", a formal demand for it . That, the Court is told, is a rule of Belgian and Luxembourg law, but it is not as I see it a rule in all Member States . Nor, as the Commission accepts, is the distinction between "intérêts compensatoires" and "intérêts moratoires", accepted in French, Belgian and Luxembourg law, to be found in the law of at any rate some other Member States .

In the absence of Community legislative provisions as to interest, and of a rule common to Member States, the question has to be decided as a matter of principle within the discretion given to the Court in staff cases under Article 91 of the Staff Regulations, under which, in "disputes of a financial character the Court of Justice shall have unlimited jurisdiction ".

The effect of the Court' s earlier judgment is that Mrs Samara' s initial classification was erroneous in law, since it was not in accordance with the criteria laid down in Article 32 of the Staff Regulations . Following the annulment of that classification, the Commission on 23 April 1985 retrospectively regraded her with effect from 1 January 1983 and subsequently paid her the differential between the two grades . It is accepted that the Commission having regraded her, the amount of the differential was due as a debt . Did the debt fall due on 23 April 1985, even if calculated in respect of the period from 1 January 1983, or is it to be treated as falling due month by month from 1 January 1983 once she had been retrospectively regraded? The Commission, as I understand it, accepts that it is to be treated as falling due month by month from 1 January 1983 as a result of the retrospective regrading . I consider that the Commission is right so to do . Thus money, which ought to have been paid had the appointment been made in accordance with the Staff Regulations, was not paid at the time when it is to be treated as having been due . She was thus kept out of money due to her as a debt . In my opinion interest for the delayed payment should follow .

If the debt did not fall due until 23 April 1985, when she was reclassified with retrospective effect, then it may be arguable that no interest could run before that date . For my part I would not accept that argument . The Commission was required to consider her position and in effect to put right what had been wrongly done . To put her in the position she should have been in ( and to comply fully with the Court' s judgment ), she should have been paid the differential plus interest for the delayed payment while she was kept out of her money .

The Commission points to the fact that the Court in paragraph 14 of its earlier judgment refers to the "ambiguous context" resulting from the Regulations . I do not accept that as a defence to the claim, even accepting that there was room for two views as to the effect of the Regulation . In the end the money was, wrongly, not paid, and it seems to me inappropriate that entitlement to interest should depend on the degree of fault in a case like the present where an appointment has been made which is erroneous in law . If it is necessary to find that the "delay in payment of the allowance constitutes a wrongful act or omission on the part of the (( Commission )) which had in fact caused the (( applicant )) damage" ( Case 101/74 Kurrer (( 1976 )) ECR 259 ), then in my view it is here established that the wrongful classification by the Commission caused damage, namely the loss of the use of the money, to be measured by the appropriate rate of interest on the amount due from time to time .

It seems to me that different considerations arise where an error is made in legislation by the Council or the Commission, and where, after its correction following a Court ruling, the error is removed and money is paid late . This is particularly so if there is an element of discretion in the amount to be awarded . That, as I read it, is the ratio decidendi in the Court' s judgments of 30 September 1986, of which Case 176/83 Allo and others v Commission is an example . Moreover, in that case the Court accepted that "an obligation to pay default interest can arise only where the amount of the principal sum owed is certain or can at least be ascertained on the basis of established objective factors ". In the present case the amount due was certain once the grade was fixed, and in the light of all the objective circumstances there really was no scope to appoint Mrs Samara other than in Grade 3, Step 3, once Article 32 of the Staff Regulations was properly applied . Once it is accepted that the differential was due retrospectively, as a result of the decision of 23 April 1985, then the debt was of a certain amount within the meaning of that decision .

Nor do I accept that there can never be a claim for interest if the principal sum is paid before proceedings are brought . If interest fell to be paid, it is not, in my view, just that an applicant should be deprived of it by the payment of the principal before complaint or application is made that interest due has not been paid .

Although there may well be cases where justice is satisfied by limiting the interest to the period beginning with the date of the complaint under the Staff Regulations ( e.g . where what is really claimed is in the nature of damages ), it does not seem to me to be equitable so to limit it in a case like the present where a liquidated sum is demanded as a debt due and unpaid . Accepting as I do that Mrs Samara was entitled to seek the annulment of the erroneous decision as a first step, it seems to me that when the position was rectified she was entitled to ask for interest for the period of delay .

For my part, I would accordingly accept her claim for payment of interest in respect of each debt as it is treated retrospectively as having fallen due . At the least, if, contrary to my opinion, it is a rule of Community law that there must be a "mise en demeure", such interest should run from the date of her complaint in Case 266/83, namely from 26 April 1983 .

The applicant contends that the interest ( if awardable ) should be assessed on the basis of the rate in force in Luxembourg, where the money was due to be paid . That, in my view, is wrong . Any interest should as a general rule be at the same rate for the whole Community as a matter of Community law . If interest is to be paid it seems to me that the appropriate rate for the relevant period should be 8%, as awarded, for example, in the recent cases, Case 118/84 Royale Belge ( judgment of 20 June 1985 ) and Joined Cases 169/83 & 136/84 Leussink ( judgment of 8 October 1986 ).

In my opinion, the order should therefore be that the Commission is liable to pay interest to Mrs Samara on the amount of the difference in remuneration between a person in Grade 3, Step 1, and in Grade 3, Step 3, from 1 January 1983 from the date upon which each payment of salary became due until payment of those amounts on 13 June 1985 at the rate of 8 %. I would also award interest on the amount so found due from 13 June 1985 until payment . Mrs Samara' s costs should be paid by the Commission .