JUDGMENT OF THE EUROPEAN UNION CIVIL SERVICE TRIBUNAL (Third Chamber)

12 March 2014

Case F‑128/12

CR

v

European Parliament

(Civil service — Remuneration — Family allowances — Dependent child allowance — Recovery of overpayments — Intention to mislead the administration — Proof — Inapplicability as against the administration of the five-year limitation period for making a request for recovery — Plea of illegality — Pre-litigation procedure — Rule requiring correspondence between the complaint and the action — Plea of illegality raised for the first time in the action — Admissibility)

Application:      under Article 270 TFEU, applicable to the EAEC Treaty pursuant to Article 106a thereof, in which CR seeks annulment of the decision of the European Parliament to recover, outside the five-year limitation period, sums unduly received by way of dependent child allowance.

Held:      The action is dismissed. CR is to bear his own costs and is ordered to pay the costs incurred by the European Parliament. The Council of the European Union, intervener, is to bear its own costs.

Summary

1.      Actions brought by officials — Prior administrative complaint — Correspondence between the complaint and the action — Same subject-matter and legal basis — Plea of illegality raised for the first time in the action — Admissibility

(Staff Regulations, Arts 90 and 91)

2.      Officials — Recovery of overpayments — Limitation period — Staff member having deliberately misled the administration — Inapplicability of the limitation period against the administration — Breach of the principle of legal certainty by the Union legislature — None

(Staff Regulations, Art. 85, second para.)

3.      Officials — Recovery of overpayments — Limitation period — Staff member having deliberately misled the administration — Inapplicability of the limitation period against the administration — Breach of the principle of proportionality — None

(Staff Regulations, Art. 85, second para.)

4.      Officials — Recovery of overpayments — Limitation period — Exception — Intention of a staff member to mislead the administration — Burden of proof

(Staff Regulations, Art. 85, second para.)

1.      Considerations relating to, respectively, the purpose of the pre-litigation procedure, the nature of the plea of illegality and the principle of effective judicial protection preclude a plea of illegality raised for the first time in an action being declared inadmissible on the sole ground that it was not raised in the complaint that preceded the action.

In the first place, as regards the purpose of the pre-litigation procedure, in the light of the principle that acts adopted by the institutions of the European Union are presumed to be lawful, according to which EU rules remain fully effective as long as they have not been found to be unlawful by a competent court, the appointing authority cannot choose to disapply a general measure in force which in its view would infringe a higher-ranking rule of law with the sole aim of permitting a non-judicial resolution of the dispute. Such a choice must a fortiori be excluded where the appointing authority concerned acts in a situation of circumscribed powers, as is the case where the conditions for the application of Article 85 of the Staff Regulations are satisfied and the administration is required to recover the sums overpaid to one of its staff. In the exercise of powers where it has no discretion, the appointing authority is unable to withdraw or amend the decision challenged by the staff member, even where it considers that a plea of illegality directed against the provision on the basis of which the contested decision was adopted is well founded.

In the second place, as regards the nature of the plea of illegality, Article 277 TFEU gives expression to the general principle conferring upon any party to proceedings the right to challenge indirectly, for the purpose of obtaining the annulment of a measure against which it can bring proceedings, the validity of a previous act of an EU institution which constitutes the legal basis of the contested measure, if that party was not entitled to bring a direct action challenging the act which thus affected him without his having been in a position to seek its annulment. Article 277 TFEU is thus intended to protect litigants against the application of an illegal measure, it being understood that the effects of a judgment finding that the measure is inapplicable are limited solely to the parties to the dispute and that the judgment does not call into question the measure itself, which is no longer amenable to challenge.

Even on the assumption that the obligation to raise a plea of illegality in the complaint, failing which it will be declared inadmissible, can fulfil the purpose of the pre-litigation procedure, the very nature of a plea of illegality is to reconcile the principle of legality and the principle of legal certainty.

It follows therefore from the wording of Article 277 TFEU that the possibility of challenging a measure of general application after the expiry of the period for bringing an action is open to a party only in proceedings before the Courts of the European Union. Such a plea cannot therefore be fully effective in an administrative appeal procedure.

In the third and last place, the sanction of inadmissibility of a plea of illegality raised for the first time in the application constitutes a limitation of the right to effective judicial protection that is not proportionate to the aim pursued by the correspondence rule, namely to permit an amicable settlement of the disputes between the official concerned and the administration. While any normally diligent official is deemed to be familiar with the Staff Regulations, a plea of illegality involves by its very nature reasoning which assesses the legality of the Staff Regulations in the light of general principles or higher rules of law, so that an official or member of staff who submits a complaint and does not necessarily have the appropriate legal expertise cannot be required to raise such a plea at the pre-litigation stage, failing which a plea of that kind raised at a later stage will be declared inadmissible.

(see paras 32, 33, 35, 36, 38-40, 44, 45)

See:

16 March 1978, 7/77 Ritter von Wüllerstorff und Urbair v Commission, para. 7; 13 February 1979, 101/78 Granaria, para. 4; 6 March 1979, 92/78 Simmenthal v Commission, para. 39; 3 July 1980, 6/79 and 97/79 Grassi v Council, para. 15; 14 July 1983, 144/82 Detti v Court of Justice, para. 16; 19 January 1984, 262/80 Andersen and Others v Parliament, para. 6; 7 June 1988, 63/87 Commission v Greece, para. 10; 5 October 2004, C‑475/01 Commission v Greece, para. 18

30 September 1998, T‑13/97 Losch v Court of Justice, para. 99; 30 September 1998, T‑154/96 Chvatal and Others v Court of Justice, para. 112; 19 May 1999, T‑34/96 and T‑163/96 Connolly v Commission, para. 168 and the case‑law cited therein; 12 July 2001, T‑120/99 Kik v OHIM (Kik), para. 55; 23 January 2002, T‑386/00 Gonçalves v Parliament, para. 34; 25 October 2006, T‑173/04 Carius v Commission, para. 45 and the case-law cited therein; 17 September 2008, T‑218/06 Neurim Pharmaceuticals (1991) v OHIM — Eurim-Pharm Arzneimittel (Neurim PHARMACEUTICALS), para. 52; 21 November 2013, F‑72/12 and F‑10/13 Roulet v Commission, para. 48 and the case-law cited therein

7 June 2011, F‑64/10 Mantzouratos v Parliament, para. 22; 20 June 2012, F‑66/11 Cristina v Commission, para. 34

2.      The limitation period, by preventing situations which arose a long time previously from being indefinitely brought into question, tends to strengthen legal certainty but can also allow the acceptance of situations which at least in the beginning were unlawful. The extent to which provision is made for it is thus the result of a choice between the requirements of legal certainty and those of legality, on the basis of the historical and social circumstances prevailing in a society at a given time. It is accordingly a matter for the legislature alone to decide. It is not therefore open to the Courts of the European Union to criticise the EU legislature for the choices it makes concerning the introduction of rules on limitation and the setting of the corresponding time-limits.

The fact that the second sentence of the second paragraph of Article 85 of the Staff Regulations precludes the possibility of relying as against the administration on the five-year limitation period for operating a recovery procedure where the administration is able to prove that the member of staff concerned deliberately misled it is not therefore in itself unlawful from the point of view of compliance with the principle of legal certainty.

(see paras 48, 49)

See:

6 October 2005, T‑22/02 and T‑23/02 Sumitomo Chemical and Sumika Fine Chemicals v Commission, paras 82 and 83

3.      By virtue of the principle of proportionality, the legality of EU rules is subject to the condition that the means employed must be appropriate to attainment of the legitimate objective pursued by those rules and must not go further than is necessary to attain it, and, where there is a choice of appropriate measures, it is necessary, in principle, to choose the least onerous.

The objective pursued by Article 85 of the Staff Regulations is clearly to protect the financial interests of the European Union in the specific context of relations between the institutions of the Union and their staff, that is to say, persons who are bound to those institutions by the specific duty of loyalty provided for in Article 11 of the Staff Regulations, which requires, in particular, that an official is to conduct himself ‘solely with the interests of the Union in mind’ and carry out the duties assigned to him ‘in keeping with his duty of loyalty to the Union’.

The second sentence of the second paragraph of Article 85 of the Staff Regulations requires the administration to recover overpayments in full in the specific situation where it is able to establish that the member of staff concerned deliberately misled it, in breach of the specific duty of loyalty referred to above. In such a context, the provision precluding reliance on the five-year limitation period does not go further than is necessary to attain the objective pursued.

(see paras 60-63)

See:

28 March 2012, F‑36/10 Rapone v Commission, para. 50

4.      According to the second paragraph of Article 85 of the Staff Regulations, the request for recovery of any sum overpaid must be made no later than five years from the date on which the sum was paid. However, that five-year period may not be relied on as against the appointing authority where it is able to establish that the recipient deliberately misled the administration with a view to obtaining the sum concerned. It is clear from the wording of the second sentence of the second paragraph of Article 85 of the Staff Regulations, therefore, that it is for the administration to prove that the member of staff concerned intended to mislead it.

Where the appointing authority based the request for recovery of an overpayment on the fact that the staff member had made false declarations to the administration on a number of occasions and that those false declarations emanated from an official in a senior grade, with experience as a lawyer dealing with civil service matters who did not deny that either he was aware that there was no due reason for the payment or he ought to have been aware that that was so, it proved to the requisite legal standard that the staff member intended to mislead it.

(see paras 67, 68, 72, 73)