OPINION OF MR ADVOCATE-GENERAL REISCHL

DELIVERED ON 5 DECEMBER 1973 (*1)

Mr President,

Members of the Court,

The proceedings which I am considering today are concerned with claims under Annex VII to the Staff Regulations, arising when officials of the Communities fulfil the duty under Article 20 of the Staff Regulations on taking up their appointment or on transfer, i.e. take up residence at the place where they are employed.

I will briefly mention the following facts. Mr and Mrs Louwage, the applicants in the proceedings, have had their matrimonial home in Luxembourg since 1956. Mr Louwage was at first employed outside the Communities. From 20 July 1964 he was employed as auxiliary with the Commission in Brussels. He was appointed a probationer there with effect from 1 October 1968 and an established official (Salary grade C 4) with effect from 1 April 1969. Mrs Louwage was originally an auxiliary at the Council of Ministers in 1958. She was appointed an established official with the European Parliament in Luxembourg with effect from 1 November 1958.

On her application and to satisfy her desire to be able to live together with her husband in Brussels, Mrs Louwage was seconded to the Commission in Brussels, at first for six months as from 5 April 1971 and then for a further six months from 6 October 1971. She was finally transferred to the Commission with effect from 5 April 1972.

In spite of the appointment of Mr Louwage as an official in Brussels and in spite of the authorization to move given to him on 14 May 1969 the residence of the couple remained at the beginning in Luxembourg. At that time Mr Louwage had apparently only a small furnished flat in Brussels and later a larger furnished flat, which Mrs Louwage shared from the time of her secondment to Brussels. From 1 October 1968 to 27 September 1969, therefore, Mr Louwage received daily subsistence allowance in accordance with Article 10 of Annex VII to the Staff Regulations.

The removal of the family possessions and the surrender of the flat in Luxembourg did not come about until 27 January 1972 after Mrs Louwage had applied on 11 November 1971 for authorization to move. The removal expenses amount to 24600 BF. They were paid by the applicants on 22 August 1972.

Mrs Louwage received a note dated 25 October 1972 from the Head of the ‘Individual Rights and Privileges’ Division of the Directorate of Social Affairs of the Commission. The note stated that before the removal expenses could be reimbursed it would be necessary to look into the reason why the removal firm had initially submitted a bill which was far in excess of the actual costs. As regards the installation allowance it was explained that on Mrs Louwage's application she would receive one month's basic salary and that Mr Louwage would also receive a corresponding allowance according to his basic salary at the time of his establishment as an official, from which however a deduction would be made in accordance with Article 10 (2) of the former Annex VII to the Staff Regulations. Mrs Louwage was not entitled to payment of daily subsistence allowance, since on being seconded to Brussels she had lived together with her husband. Finally, it was observed in the note that from 1 April to 27 September 1969 Mr Louwage had wrongly received daily subsistence allowance and that corresponding amounts would be deducted from his salary.

The applicants did not agree with this note and on 13 November 1972 submitted a joint complaint to the Director-General of Administration. They claimed inter alia that Mr Louwage had rightfully received daily subsistence allowance until 27 September 1969, because he was not able to move to Brussels. Further, the allowance of the full 24600 BF paid as removal expenses on 22 August was claimed, i.e. reimbursement without regard to the daily subsistence allowance received by Mr Louwage. Finally it was contended that Mrs Louwage was entitled to daily subsistence allowance for the duration of her secondment to Brussels up to the removal of the family possessions, because during this time the common family household had not been in Brussels, for the family returned to Luxembourg every weekend, where a tenancy was maintained until 31 January 1972.

Since the applicants received no reply to this complaint within the period of 4 months laid down in Article 90 of the new Staff Regulations, i.e. before 30 March 1973, they filed an appeal on 29 June 1973 with the Court.

The following claims are made in the appeal:

—to annul the note of 25 October 1972;

—to order the Commission to pay a sum of 24600 BF as removal expenses with interest at 4 % as from 22 August 1972;

—to order the Commission to pay to Mrs Louwage the amount of one month's basic salary as installation allowance;

—to order the Commission to pay to Mrs Louwage a daily subsistence allowance for the period from 5 April 1971 to 27 January 1972 in accordance with Article 10 of Annex VII to the Staff Regulations;

—to declare that Mr Louwage rightfully received the daily subsistence allowance between 1 April 1969 and 27 September 1969, and that he is not bound to repay it even by way of deductions from his salary.

After the proceedings were started, two notices dated 31 July 1972 signed by a member of the Commission were sent to the applicants.

In one note Mr Louwage was informed that he ought to have received only 14650 BF as notional removal expenses in the period from 1 April to 30 September 1969. However, no repayment of the excess paid as daily subsistence allowance would be required because the conditions of Article 85 of the Staff Regulations were not fulfilled. Under Article 5 (4) of Annex VII to the Staff Regulations he could receive only half the installation allowance to which he would otherwise be entitled and moreover the deductions had to be made which were provided for by Article 10 of the former Annex VII to the Staff Regulations and Article 5 of the internal directive of the Commission of 17 March 1971 relating to removal expenses and daily subsistence allowance.

Mrs Louwage received a notice to the effect that as far as removal expenses were concerned the fact that her husband had received notional removal expenses in the form of daily subsistence allowance after 1 April 1969 would have to be taken into consideration with the result that there remained only 9950 BF to be allowed. As regards the installation allowance it was once more explained to her that she would receive one month's basic salary. Finally, she was not entitled to daily subsistence allowance, since she had joined her husband in Brussels on 5 April 1971 and had thereby re-established the matrimonial home.

The applicants thereupon in the reply dropped a part of their original claim. Only the application for an order that the Commission should pay removal expenses amounting to 24600 BF and daily subsistence allowance to Mrs Louwage for the period from 5 April 1971 to 27 January 1972 was pursued. The applicants also maintained their claim that the Commission should be ordered to pay the whole costs of the proceedings in any event.

As regards these remaining claims, which in the Commission's view are unfounded, it must be said:

The application for the allowance of removal expenses is based on Article 9 of Annex VII to the Staff Regulations, which provides that the expenses incurred in respect of removal of furniture and personal effects shall be reimbursed to an official who is obliged to change his place of residence in order to comply with Article 20 of the Staff Regulations and who had not been reimbursed in respect of the same expenses from another source.

It is not disputed that the applicants have incurred and paid expenses amounting to 24600 BF in the removal of the family possessions. A dispute arises only as to whether an amount of 14650 BF should be deducted from this sum, as the Commission seeks. The reason adduced for such a deduction is that part of the daily subsistence allowance paid to Mr Louwage after 1 April 1969 (viz. the amount mentioned) has to be regarded as notional removal expenses within the meaning of Article 10 (3) of Annex VII to the Staff Regulations and paragraph 4 of the internal directive issued by the Commission on 17 March 1971 relating to removal expenses and daily subsistence allowance. Moreover the Commission considered itself justified in making a deduction because the removal related to common family possessions. From this it deduced that the removal expenses had been borne by the conjugal community and therefore the claim to an allowance also belonged to this community. Therefore to avoid unjust enrichment the conjugal community must allow the notional removal expenses which it received to be taken into account.

If the applicants are now of the opinion that the aforementioned note of the member of the Commission to Mr Louwage of 31 July 1973 implies that the Commission will not take into account these removal expenses, they are mistaken. All that is said in the note is that the amounts wrongfully received by Mr Louwage after 1 April 1969 will not be required to be refunded because the conditions of Article 85 of the Staff Regulations are not satisfied. According to the clear wording of the note this is only the amount which remains if the so-called national removal costs amounting to 14650 BF are deducted from the total amount of the daily subsistence allowance amounting to 36000 BF which had been paid. However the notional removal expenses are not described in the said note as having been paid wrongfully and consequently the remark made about the non-application of Article 85 of the Staff Regulations cannot apply to them.

Going beyond that it seems to me questionable whether it could be said that the amount of 14650 BF could not be classed in the category of notional removal expenses, because a removal at that time was not possible for Mr Louwage. In this respect the first applicant relies on Article 10 (4) of Annex VII to the Staff Regulations according to which the application of the rule relating to notional removal expenses is excluded if in the opinion of the appointing authority the official was unable to remove. The applicant further relies on para. 8 of the aforesaid directive of the Commission. It may justifiably be queried, however, whether the conditions of these provisions (making of an application with supporting documents and express approval by the appointing authority) were fulfilled. In this connection there is only a letter of the first applicant of 6 May 1969 (it ought obviously to be 6 June 1969), in which conversation on 5 June 1969 is referred to and it is stated that he could not contemplate a removal during the course of 1969.

This certainly thorny question may be left open, for the daily subsistence allowance paid to Mr Louwage cannot be regarded even partly as notional removal expenses. Mr Louwage was appointed a probationer on 1 October 1968 and established with effect from 1 April 1969. He received authorization to move in a note dated 14 May 1969 and delivered 28 May 1969.

As regards the payment of daily subsistence allowance, Article 10 (3) of Annex VII of the Staff Regulations which were in force at the time governed such a case. It is there stated: ‘Where an official does not remove to the place where he is employed, although he is authorized to do so, his entitlement to daily subsistence allowance shall not exceed the total amount to which he would have been entitled if he had removed. The appointing authority shall in such case determine the maximum amount to which the official is entitled, applying Article 9 for the purpose of removal expenses.’ From this it could perhaps be taken that if a removal does not take place within a certain period after it has been authorized it has the consequence that the payment of daily subsistence allowance from a corresponding date can be regarded as the reimbursement of notional removal expenses. That would in the present case therefore, if perhaps a two month period were regarded as appropriate, be from 29 July 1969, but on the other hand in no event from 1 April 1969. In truth however even this interpretation appears scarcely defensible, for it must not be overlooked that it was expressly stated to Mr Louwage in the authorization for the removal that daily subsistence allowance would be paid to him in accordance with Article 10 of Annex VII up to the date of the actual removal and ‘en principe pour une période ne pouvant excéder quatre mois a compter de la date de la notification de l'autorisation de déménagement’. In the absence of reference to Article 10 (3) of Annex VII, which at the time was not defined in any implementing directive, this can only be understood as meaning that Mr Louwage would have in any case a period of four months for the removal and that in consequence the daily subsistence allowance paid during this period could only be considered as such and not as the reimbursement of notional removal expenses.

If, as the Commission seeks to do, its internal directive of 17 March 1971 is applied to the case of Mr Louwage and this is done having regard to the fact that the directive was to take effect as from 5 March 1968, i.e. retrospectively, then the case is governed by paragraph 4 thereof in which it is provided that an official who has not effected his removal in the year after his establishment in spite of receiving authorization to do so shall be entitled to daily subsistence allowance for a period of 6 months and thereafter from the seventh month to the extent of the amount of the notional removal expenses. As regards the present case, it thus depends upon the establishment, as it is described in Article 34 of the Staff Regulations. Daily subsistence is due for a period of six months from this time on. Only from the seventh month does the provision apply that daily subsistence allowance shall be regarded as notional removal expenses and limited to a corresponding amount. Since Mr Louwage was established with effect from 1 April 1969 then according to the directive of the Commission in no case can the daily subsistence allowance be classified as notional removal expenses as early as 1 April 1969. This could happen at the earliest from 1 October 1969, i.e. at a time when Mr Louwage obviously was no longer receiving daily subsistence allowance.

Since Mr Louwage did not receive notional removal expenses, it can be left open whether such costs, which have been reimbursed to one of the spouse, must be taken into account on the subsequent removal of the family possessions by reason of the transfer of the other spouse if they relate to a community of goods.

The claim for reimbursement of removal expenses amounting to 24600 BF is thus valid.

2.In the second place Mrs Louwage claims the payment of daily subsistence allowance in accordance with Article 10 of Annex VII of the Staff Regulations for the period from her first secondment to Brussels, i.e. 5 April 1971, to her removal to Brussels, i.e. to 27 January 1972. Article 10 in the version in force at the time provides: ‘Where an official furnishes evidence that he cannot continue to reside in his own home and has not removed to the place where he is employed, he shall be entitled for not more than twelve months to a daily subsistence allowance …’

The Commission refuses to apply these provisions on the ground that their conditions are not fulfilled, since Mrs Louwage lived together with her husband as soon as she was seconded to Brussels. The home, in the French text ‘foyer’, was established there; because it was the place where the applicants were both employed, Brussels already at that time represented the main residence, while only a secondary residence remained in Luxembourg.

Against this the second applicant has stated that there was only a furnished flat in Brussels, in which their son could not be accommodated on his visits at weekends. The family residence therefore remained in Luxembourg. Moreover, an immediate transfer of the residence and the removal of the family possessions could not be considered because the situation of Mrs Louwage in Brussels appeared uncertain, being simply a temporary secondment.

As regards this dispute I have the impressions that the Commission is too one-sided in basing itself on the French text of the Staff Regulations, and, by placing the emphasis on the cohabitation of the spouses, it moreover attributes a meaning in the concept of ‘foyer’, that it does not necessarily have. If the German text of the Staff Regulations, which is equally authoritative, is considered — I quoted it a little while ago — the Commission's inference can scarcely be maintained. All that is required there is that an official cannot continue to reside in his own home (“an seinem bisherigen Wohnsitz wohnen”) and has not removed to the place where he is employed. From this it may be inferred that to give rise to a claim for daily subsistence allowance the official must have had to leave his former residence on the grounds of his employment without being able at the same time to remove his personal possessions. Moreover the new Article 10 of Annex VII is so expressed. In view of this the second applicant's claim can be declared valid without more ado.

To this moreover may be added the wording of the internal directives laid down by the Commission, which were issued in implementation of Article 10 and which have already been mentioned. According to it the payment of daily subsistence allowance is clearly made to depend upon the effective removal. In this respect I refer to paragraphs 1, 3, and 4 — and as particularly relevant to the second applicant's case — 6, according to which on a change of place of employment subsistence allowance shall be paid to the official, who is compelled to change his residence, up to the removal.

Finally, it may also be observed that, if the accent is placed on the decisive criteria in this way, it best meets the meaning and object of the provision. Additional expenses for a second residence and for travel to the original place of residence arise through the change of the place of employment and so long as the household of the official concerned is not similarly transferred. The Staff Regulations seek to compensate for these additional expenses in the form of daily subsistence allowances. This is also true — as should not be forgotton — if unmarried persons have to make such a change of place; this is also true if a spouse must separate himself from the family place of residence and it is even true if both spouses — which is quite conceivable — have cause to change their place of residence for reasons of employment at the same time. Looked at in this way it is not decisive that married persons live together in a common household; it is much more decisive whether they can live in their own household or have only a temporary place of stay besides this until they carry out the removal.

If it is borne in mind that the employer can shorten the state of affairs which gives rise to the obligation to pay daily subsistence allowance by giving authorization for the removal (in this respect I refer again to the second paragraph of the internal directive of the Commission), and if it is considered that use was not immediately made of this provision in the case of Mrs Louwage, then it can be inferred only that the employer himself regarded the situation based on the secondment as uncertain and did not therefore wish her to remove.

Having regard to the fact that the family home of the applicants with their own possessions remained until the removal in Luxembourg, which was the only place where their son could come together with his parents, since the furnished flat in Brussels was obviously not suitable for this, and having regard also to the internal directives, which the Commission issued in a clarification of Article 10 of Annex VII, I am of the opinion that in the present case the claim of Mrs Louwage to the payment of daily subsistence allowance for the period from 5 April 1971 to 27 January 1972 cannot be denied.

With this conclusion the matter should moreover be left and the Commission should not be ordered to pay a particular sum, for if I see it rightly the Commission will have to have regard to paragraph 5 of its directives and it has already obviously paid Mrs Louwage an installation allowance amounting to one month's salary.

3.As regards the costs of the proceedings, Article 69 (4) of the Rules of Procedure provides that a party who discontinues or withdraws from proceedings shall be ordered to pay the costs, unless the discontinuance or withdrawal is justified by the conduct of the opposite party.

The following has to be said in the present case: first it cannot be disputed that the claim to interest has been abandoned as a result of the case law of the Court which the Commission cited. As regards the claim by Mrs Louwage to installation allowance it has to be considered that it had already been recognized in the note of 25 October 1972, i.e. before the proceedings began. As regards the application to pay Mr Louwage an installation allowance amounting to two month's basic salary it must be said that it was not mentioned in the administrative complaint and that therefore it ought to have been rejected as inadmissible according to the provisions of the new Staff Regulations. Thus as regards these three claims which have been withdrawn no decision on costs in favour of the applicants is justified.

Only as regards the application for a declaration that Mr Louwage is under no obligation to reimburse the daily subsistence allowance should the costs be borne by the Commission, because the corresponding notification in the note of 25 October 1972, which gave rise to the proceedings, was withdrawn in a note of the Commission of 31 July 1973, i.e. only after the commencement of the legal proceedings.

Having regard to the fact that the action, in so far as the claims have been maintained, must succeed, and since the Commission in any case has to bear its own costs under Article 70 of the Rules of Procedure, it appears to me after all appropriate that the Commission should bear three-quarters of the applicants costs. They should bear the rest of their costs themselves.

4.To summarize once more:

The Commission should be ordered to pay the second applicant removal expenses amounting to 24600 BF as claimed. Further it should be declared that the Commission must pay Mrs Louwage daily subsistence allowance for the period from 5 April 1971 to 27 January 1972 under Article 10 of Annex VII of the Staff Regulations. Three-quarters of the applicant's costs of the proceedings should be borne by the Commission.

(1) Translated from the German.