JUDGMENT OF THE GENERAL COURT (Fifth Chamber, Extended Composition)
11 October 2023 (*)
(Civil service – EIB staff – Remuneration – Dependent child allowance – Education allowances – Recovery of sums paid but not due – Lack of competence of the author of the act – Infringement of the limitation period)
In Case T‑529/22,
QT, represented by L. Levi, lawyer,
applicant,
v
European Investment Bank (EIB), represented by G. Faedo and J. Pawlowicz, acting as Agents, and by A. Glavasevic and V. Wellens, lawyers,
defendant,
THE GENERAL COURT (Fifth Chamber, Extended Composition),
composed of J. Svenningsen, President, C. Mac Eochaidh, J. Laitenberger, J. Martín y Pérez de Nanclares (Rapporteur) and M. Stancu, Judges,
Registrar: H. Eriksson, Administrator,
having regard to the written part of the procedure,
further to the hearing on 20 June 2023,
gives the following
Judgment
1 By her action under Article 270 TFEU and Article 50a of the Statute of the Court of Justice of the European Union, the applicant, QT, seeks, first, annulment of the decision of the European Investment Bank (EIB) of 28 September 2021 to proceed with the recovery of an amount of EUR 61 186.61 wrongly paid towards education allowances, dependent child allowances and related benefits, for the period from July 2014 to June 2017 (‘the recovery decision’), and of the EIB’s decision of 20 May 2022 rejecting her administrative appeal (‘the decision rejecting the administrative appeal’) and, secondly, compensation for the damage which she allegedly suffered as a result of those decisions.
Background to the dispute
2 The applicant has been an EIB employee since 16 March 2006. From July 2014 to June 2017 inclusive, she received, inter alia, dependent child allowances and education allowances (‘the contested allowances’) for her son in respect of freediving training followed by him during that period at the Apnea Academy West Europe, in Adeje (Spain).
3 Following information received by the European Anti-Fraud Office (OLAF) from an EIB employee concerning possible irregularities in the grant of education allowances and derived entitlements at the EIB, in November 2017 OLAF opened an investigation concerning 70 EIB employees, including the applicant.
4 On 16 April 2018, OLAF informed the applicant that an investigation had been opened concerning her.
5 On 7 December 2020, OLAF sent the EIB its final report, drawn up on 4 December 2020, which recommended the EIB to open, first, disciplinary proceedings in respect of the applicant and, secondly, proceedings for the recovery of the contested allowances and the benefits derived for the period from July 2014 to June 2017.
6 The applicant was informed that the EIB had been notified of OLAF’s report closing its investigation and its recommendations by letter of 29 January 2021, which also informed her of the implementation of the two sets of proceedings which would be carried out separately by the EIB.
7 By email of 21 June 2021, the EIB explained in detail the sums which made up the total amount of EUR 61 186.61, identified by the EIB with a view to recovery, and invited the applicant to submit her observations, which she did on 17 August 2021.
8 On 28 June 2021, the EIB sent the applicant OLAF’s final report and invited her to a pre-disciplinary hearing.
9 By email of 28 September 2021, the EIB adopted the recovery decision through a repayment plan under which EUR 565.79 is deducted from the applicant’s monthly salary from the month of September 2021 to the month of December 2030.
10 On 20 May 2022, the EIB adopted the decision rejecting the administrative appeal brought by the applicant on 29 November 2021.
Forms of order sought
11 The applicant claims that the Court should:
– annul the recovery decision and the decision rejecting the administrative appeal (together, ‘the contested decisions’);
– order the EIB to reimburse the amounts recovered, together with default interest at the rate applied by the European Central Bank (ECB) plus two percentage points;
– order the EIB to pay the costs.
12 The EIB contends that the Court should:
– dismiss the action as unfounded;
– order the applicant to bear all the costs.
Law
The subject matter of the claims for annulment
13 It is clear from settled case-law that claims for annulment formally directed against the decision rejecting a pre-litigation application challenging an act adversely affecting an official or staff member have the effect of bringing that act before the General Court where those claims, in themselves, have no independent content (see, to that effect, judgment of 7 September 2022, KL v EIB, T‑651/20, not published, EU:T:2022:512, paragraph 36 and the case-law cited).
14 However, an express decision rejecting a pre-litigation application may, in view of its content, not be confirmatory of the measure challenged. That is the case where the decision rejecting the pre-litigation application contains a re-examination of the situation of the person concerned in the light of new elements of law or of fact, or where it changes or adds to the original decision. In such circumstances, the rejection of the pre-litigation application constitutes a measure subject to review by the judicature, which will take it into consideration when assessing the legality of the contested measure or will even regard it as an act adversely affecting the applicant replacing the contested measure (see, to that effect, judgment of 24 April 2017, HF v Parliament, T‑584/16, EU:T:2017:282, paragraph 71 and the case-law cited).
15 In the present case, the applicant submits that her claims against the decision rejecting the administrative appeal are admissible in that a new document was sent to her, namely the file note of 26 April 2022, annexed to that decision, in response to a complaint alleging lack of competence of the author of the recovery decision.
16 Although the decision rejecting the administrative appeal does not change the provisions of the recovery decision concerning its amount and conditions, that decision is nevertheless not entirely devoid of independent content. Whilst confirming the recovery decision, the decision rejecting the administrative appeal contains additional reasons, in response to that appeal, which provide clarifications and adjudicate on the complaints raised by the applicant, in particular that alleging lack of competence of the author of the recovery decision.
17 In those circumstances and having regard to the fact that the applicant does not differentiate in her argument on the basis of each of the contested decisions, it is necessary to examine them together (see, to that effect, order of 18 September 2018, Dreute v Parliament, T‑732/17, not published, EU:T:2018:582, paragraph 42).
Substance
The applicant’s first head of claim
18 In support of her claims for annulment, the applicant puts forward four pleas in law. The first alleges lack of competence of the author of the recovery decision, the second, infringement of the five-year limitation period laid down in Article 16.3 of the EIB Staff Rules (‘the SR’), the third, infringement of that limitation period concerning the conditions necessary for recovery and, fourth, infringement of Articles 2.2.3 and 2.2.4 of the SR and a manifest error of assessment.
– The first plea, alleging lack of competence of the author of the recovery decision
19 The first plea contains in essence two parts, the first alleging that there was no lawful subdelegation of powers to the Head of the ‘Individual Rights and Payment’ Unit (‘the Head of Unit’) with a view to the adoption of the recovery decision and, the second, that there was no dual signature on that decision.
20 In the first place, the EIB submits that the recovery decision was indeed adopted by the Head of Unit under a subdelegation of powers, confirmed a posteriori by the file note of 26 April 2022. In the second place, it states that the email containing that decision was sent outside the framework of the subdelegation defined by its rules, which do not refer to recovery decisions following OLAF investigations.
21 As a preliminary point, it should be noted that the parties agree that the competent authority within the EIB for adopting decisions for the recovery of undue amounts is, in principle, the Director-General of Personnel. It is also not disputed that the author of the recovery decision at issue is not the Director-General of Personnel but the Head of Unit. By contrast, according to the EIB, the Head of Unit received for that purpose a lawful subdelegation of powers from the Director-General of Personnel.
22 In the first place, it should be recalled that, according to settled case-law, a delegation of powers cannot be presumed and that even when entitled to delegate its powers the delegating authority must take an express decision transferring them and the delegation can relate only to clearly defined executive powers (see, to that effect, judgments of 13 June 1958, Meroni v High Authority, 9/56, EU:C:1958:7, pp. 149 to 154, and of 26 May 2005, Tralli v ECB, C‑301/02 P, EU:C:2005:306, paragraph 43).
23 In the present case, the EIB stated at the hearing that the subdelegation of powers under which the Head of Unit adopted the recovery decision was an unwritten subdelegation. That subdelegation was, however, clear from the letter of the Director-General of Personnel to the applicant of 29 January 2021 communicating to the applicant her intention to proceed with the recovery and her agreement expressly referred to in the recovery decision.
24 It is clear that the material in the file does not substantiate that subdelegation.
25 The content of the Director-General of Personnel’s letter of 29 January 2021 does not show that she decided to subdelegate the actual recovery of the contested allowances to the services under her management, which included the ‘Individual Rights and Payment’ Unit. That letter merely informs the applicant of OLAF’s recommendations following its investigation concerning her and the EIB’s intention to follow up on that investigation as quickly as possible and to implement those recommendations separately.
26 Furthermore, the reference, in the recovery decision, to the Director-General of Personnel’s agreement with that decision cannot be regarded as equivalent to an express decision, within the meaning of the case-law cited in paragraph 22 above, taken by the Director-General to transfer to the Head of Unit the power to carry out the recovery procedure recommended by OLAF. Moreover, the Director-General does not appear amongst the recipients in copy in the email by which the recovery decision was adopted.
27 As for the file note of 26 April 2022 by which the Director-General of Personnel confirmed having subdelegated the power to adopt the recovery decision to the Head of Unit, the EIB itself recognised, in its pleadings and at the hearing, that that could not constitute a lawful subdelegation of powers, since it took place subsequent to that decision.
28 Therefore, in so far as the subdelegation of powers is not established, it must be concluded that the recovery decision was adopted by an authority without competence to do so.
29 In the second place, it is indeed apparent from the case-law that a decision taken by an authority without competence to do so because of infringement of the rules for allocation of the powers conferred upon it may be annulled only if the failure to comply with those rules adversely affects one of the guarantees given to officials by the Staff Regulations of Officials of the European Union or the principles of good administration in matters of staff administration (judgments of 30 May 1973, Drescig v Commission, 49/72, EU:C:1973:58, paragraph 13; of 7 February 2007, Caló v Commission, T‑118/04 and T‑134/04, EU:T:2007:37, paragraph 68; and of 17 November 2017, Teeäär v ECB, T‑555/16, not published, EU:T:2017:817, paragraph 52).
30 However, it must also be borne in mind that the rules of sound administration in the management of staff require, inter alia, that the allocation of powers within the institutions be clearly defined and published. The same obligation applies to EIB management bodies, which are in no different position from that in which the management bodies of other EU bodies and institutions find themselves in their relations with their staff (see, to that effect, judgment of 17 November 2017, Teeäär v ECB, T‑555/16, not published, EU:C:2017:817, paragraph 53 and the case-law cited).
31 As is apparent from paragraphs 22 to 28 above, the alleged competence of the author of the recovery decision was neither clearly defined nor published.
32 It follows that the recovery decision was vitiated by a lack of competence which undermined the principles of sound administration in the management of staff and that that decision must therefore be annulled in its entirety. Consequently, the decision rejecting the applicant’s administrative appeal is also vitiated by an error of law, in that it concluded that the Head of Unit was competent to adopt the recovery decision.
33 Therefore, the first part of the first plea in law must be upheld without it being necessary to examine the second part of that plea relating to the dual signature.
34 The Court considers, nevertheless, that it is appropriate, in order to ensure the proper administration of justice, also to examine the second plea in law.
– The second plea in law, alleging infringement of the five-year limitation period
35 The applicant submits, in essence, that the EIB infringed the five-year limitation period laid down in Article 16.3 of the SR by recovering the contested allowances which were paid to her from July 2014 to June 2017. Pursuant to the abovementioned five-year limitation period, the recovery could not relate to sums paid before 28 September 2016, that being five years before the adoption of the recovery decision.
36 The EIB submits, on the contrary, that the opening of an investigation by OLAF necessarily entailed the interruption of the limitation period in respect of the recovery of the contested allowances, from the date on which the applicant was informed of the opening of an investigation concerning her, on 16 April 2018, until OLAF’s final report, on 4 December 2020, which was notified to her on 7 December 2020.
37 As a preliminary point, it should be noted that, in the same way as provided for in Article 85 of the Staff Regulations of Officials of the European Union (‘the Staff Regulations’), Article 16.3 of the SR provides as follows:
‘16.3 Compensation
Amounts unduly paid to a member of staff or their rightful claimants under these [SR] shall be recovered if the recipient was aware that there was no due reason for the payment or if the fact of the overpayment was patently such that he could not have been unaware of it.
Compensation may be spread over several months. It shall not exceed one fifth of the member of staff’s base monthly salary.
The compensation must be carried out no later than five years from the date on which the amount was unduly paid, unless the [EIB] is able to establish that the recipient deliberately misled the administration with the view to obtaining the sum concerned. In this case the request for recovery shall not be invalidated even if this period has elapsed.’
38 First, it should be stated that the EIB does not submit that the present case comes under the exception to the application of the limitation period provided for in Article 16.3, third subparagraph, second sentence, of the SR. Secondly, the EIB notes, in its pleadings, that the question of whether the applicant deliberately misled it with a view to obtaining the payment of the contested allowances had to be determined in the context of possible disciplinary proceedings which would be brought separately from the recovery proceedings. At the hearing, the EIB indicated to the Court that such proceedings had been opened and were still ongoing at that time.
39 On the other hand, the EIB submits that the five-year limitation period, which applies in the present case, ceased to run during the OLAF investigation. Such an interruption could be inferred from the provisions of Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 2013 concerning investigations conducted by [OLAF] and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/1999 (OJ 2013 L 248, p. 1), in particular Article 5(3) thereof. It submits that, under that provision, while OLAF conducts an internal investigation, the bodies, offices or agencies concerned are not to open a parallel investigation into the same facts. In addition, it submits that OLAF formally requested it, by an email of 14 June 2018, not to conduct any parallel investigations whilst its internal investigation was not closed. Thus, it claims that it was unable to take any action, with the result that the limitation period could not run as far as it was concerned.
40 The EIB also submits that the interruption of the five-year limitation period by the opening of an investigation by OLAF is required in accordance with the principle of sound administration and the principle of sincere cooperation stemming from Article 13 TFEU. According to the EIB, to decide otherwise would be tantamount to depriving it of any opportunity to recover amounts wrongly paid to its staff each time those staff were the subject of a long and complex investigation by OLAF.
41 Lastly, the EIB notes that the principle of an interruption of the five-year limitation period in the event of an investigation by OLAF was recognised in the case-law based on the provisions of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ 2018 L 193, p. 1) (‘the Financial Regulation’). According to the EIB, it makes little difference whether or not there is a provision of substantive law providing for such an interruption.
42 In that regard, it must be observed that, according to the case-law, the function of a limitation period is to ensure legal certainty and that that fundamental requirement prevents the administration from indefinitely delaying the exercise of its powers (judgment of 9 June 2021, DI v ECB, T‑514/19, EU:T:2021:332, paragraph 58).
43 In order to fulfil its function of ensuring legal certainty, a limitation period must be determined in advance, and it is the EU legislature which is responsible for determining its duration and the rules for its application (judgment of 15 July 1970, ACF Chemiefarma v Commission, 41/69, EU:C:1970:71, paragraphs 19 and 20; see, also, judgment of 17 March 2021, EJ v EIB, T‑585/19, not published, EU:T:2021:142, paragraph 33 and the case-law cited). 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, and, once a limitation period is adopted by it, the judicature cannot substitute another period in a particular case (see, by analogy, judgment of 23 March 2022, ON v Commission, T‑730/20, not published, EU:T:2022:155, paragraph 34 and the case-law cited).
44 In the present case, it is apparent from the clear wording of Article 16.3 of the SR that the EIB must recover the sums wrongly paid to its staff within a period of five years from their payment, except where it is established that the member of staff concerned intended to mislead it in order to obtain that payment.
45 By contrast, Article 16.3 of the SR contains no reference concerning the interruption or suspension of the limitation period for recovery in the event of the opening of an investigation by OLAF on the facts giving rise to that recovery.
46 Therefore, legal certainty precludes the EIB from being able to rely on the opening of an investigation by OLAF concerning a staff member in order to submit that the limitation period has been interrupted or suspended.
47 Article 5(3) of Regulation No 883/2013, provides that ‘while [OLAF] is conducting an internal investigation, the institutions, bodies, offices or agencies concerned shall not open a parallel investigation into the same facts, unless agreed otherwise with [OLAF]’.
48 It should be pointed out that the adoption of a decision for the recovery of sums wrongly paid cannot amount to an investigation.
49 As regards the EIB’s argument based on the principles of sound administration and sincere cooperation, and more specifically the alleged instruction given to the EIB by OLAF in the email of 14 June 2018, it must be held that the content of that email does not support the inference that OLAF expressly requested the EIB not to recover the contested allowances. Furthermore, at the hearing, in response to a question put by the Court, the EIB stated that it had not consulted OLAF in that regard.
50 Accordingly, there was nothing to prevent the EIB from recovering the amounts that it considered had been wrongly paid to the applicant before the conclusion of OLAF’s investigation concerning her.
51 Thus, contrary to what is submitted by the EIB, the absence of the interruptive or suspensive effect of OLAF’s investigations on the limitation period provided for by Article 16.3 of the SR does not deprive the EIB of any possibility of recovery of the amounts wrongly paid in the event of a long and complex investigation by OLAF relating to the lawfulness of such payments and does not contravene the requirement to safeguard the financial interests of the European Union.
52 In any event, it is for the EIB to adopt a rule providing for such an interruption or suspension in its regulatory framework.
53 It follows from the foregoing that, if the principle of legal certainty is not to be disregarded, the EIB’s argument that the principles of sincere cooperation and sound administration justified it recovering the contested allowances outside the five-year limitation period provided for by Article 16.3 of the SR cannot succeed.
54 Consequently, on the day of the adoption of the recovery decision the EIB was, in principle, no longer entitled to recover the amounts that had been paid to the applicant, in respect of the contested allowances, up to 28 September 2016. The EIB’s other arguments are not such as to call that conclusion into question.
55 The EIB’s argument that the applicant was aware, before the expiry of the five-year limitation period, that her eligibility for the contested allowances had been called into question by the administration must be rejected, since Article 16.3 of the SR does not provide for the interruption or suspension of the limitation period in such a situation. Moreover, it is unambiguously apparent from that provision that the starting point for the five-year period for the recovery of the undue amounts is the date of payment of those amounts and not the date on which the beneficiary became aware that they were unlawful.
56 The same applies to the analogy made by the EIB with the provisions of the financial regulation. By that argument, the EIB refers to the judgment of 19 July 2016, HG v Commission (F‑149/15, EU:F:2016:155), which upheld the principle of an interruption of the five-year limitation period where there was an investigation by OLAF, without that being directly called into question by the Court in its judgment of 15 December 2021, HG v Commission (T‑693/16 P RENV-RX, EU:T:2021:895). It must be noted that the Court held that the limitation period provided for in Article 85 of the Staff Regulations did not apply to the dispute in that case. It was not the payment of undue amounts to the official in question but the financial damage that that official caused to the administration by his conduct that gave rise to that dispute. Furthermore, it is abundantly clear from that judgment that the Court took the view that the five-year limitation period for amounts receivable by the European Union in respect of third parties under the financial regulation, which ran from the finding of such a debt and which is interrupted by any act seeking the recovery of that debt, could not apply, whether directly or even as a parameter of the reasonable period. That finding is based on the fact that the limitation period laid down in those provisions can only concern a period after the finding of the debt, and not an earlier period, such as the period during which the facts occurred which gave rise to that debt (see, to that effect, judgment of 15 December 2021, HG v Commission, T‑693/16 P RENV-RX, EU:T:2021:895, paragraphs 129 and 130).
57 Therefore, it must be held that the contested decisions were adopted in breach of the five-year limitation period provided for in Article 16.3 of the SR, as regards the amounts paid to the applicant up to 28 September 2016.
58 It follows from all of the foregoing that the second plea must also be upheld. Consequently, the contested decisions must be annulled.
The applicant’s second head of claim
59 By her second head of claim, the applicant seeks repayment of the amounts recovered under the contested decisions, together with default interest set at the ECB rate increased by two points. At the hearing, the applicant stated that her application was for the Court to exercise its unlimited jurisdiction conferred by Article 91(1) of the Staff Regulations.
60 The EIB disputes the need for the Court to exercise its unlimited jurisdiction in that the measures which entailed the annulment of the contested decisions would result in the repayment of the amounts recovered under those decisions.
61 It should be noted, in the present case, that the Court cannot exercise the jurisdiction conferred on it by Article 91(1) of the Staff Regulations without depriving of its effectiveness the EIB’s obligation to take the necessary measures to comply with this judgment under the first paragraph of Article 266 TFEU. As a consequence of the annulment of the contested decisions, it is for the EIB to take a new decision, which may take various forms, which the court cannot pre-empt by ruling on the applicant’s second head of claim.
62 In those circumstances, the applicant’s claim for damages must be dismissed.
Costs
63 Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
64 Since the EIB has essentially been unsuccessful, it must be ordered to pay the costs in accordance with the forms of order sought by the applicant.
On those grounds,
THE GENERAL COURT (Fifth Chamber, Extended Composition)
hereby:
1. Annuls the decision of the European Investment Bank (EIB) of 28 September 2021 for the recovery of an amount of EUR 61 186.61 wrongly paid to QT towards education allowances, dependent child allowances and related benefits, for the period from July 2014 to June 2017, and the EIB’s decision of 20 May 2022 to reject her administrative appeal;
2. Dismisses the claim for damages;
3. Orders the EIB to pay the costs.
Svenningsen | Mac Eochaidh | Laitenberger |
Martín y Pérez de Nanclares | | Stancu |
Delivered in open court in Luxembourg on 11 October 2023.
[Signatures]