JUDGMENT OF 16. 10. 1980 — JOINED CASES 63 AND 64/79 BOIZARD v COMMISSION

In Joined Cases 63 and 64/79

THE COURT (First Chamber) composed of: T. Koopmans, President of Chamber, A. O'Keeffe and G. Bosco, Judges, Advocate General: J.-P. Warner Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

I — Summary of the facts and written procedure

II — Conclusions of the parties

III — Submissions and arguments of the parties

Decision

Costs

I —. Summary of the facts and written procedure

(a). To the widow:

(b). To the dependent child:

II —. Conclusions of the parties

1. Declare the Decision of 1 June 1978 to be null and void;

2. Declare the express rejection of the applicants' complaint dated 19 January 1975, so far as necessary, to be null and void;

3. Order the opposite party to pay to the applicants all sums retained by it in pursuance of the decision of 1 June 1978 which the applicants estimate at BFR 100000, subject to amendment during the proceedings;

4. Order the opposite party to pay such interest as the Court may consider normal, from the date of the deductions in question;

5. Order the opposite party to pay the costs.

1. If it thinks fit, hear Mr René Derveaux, a Commission official, as a witness as to the facts set forth in paragraph 5 of the defence;

2. In any event reject the applications as unfounded.

III —. Submissions and arguments of the parties

1. The applicants believe that Article 47 of Annex VIII to the Staff Regulations does not prohibit the overlapping of pensions with damages payable to a third party. The principle of non-overlapping was certainly in the mind of the Community legislature when it drew up that provision, but it does not accord with any rule of equity. Article 47 is intended to adjust the respective rights of the administration and of officials or those entitled under them. The Community legislature vested the rights of action against the third party liable in the administration, apparently reserving to the administration the power not to act and to leave the official or those entitled under him to bring their own action which in principle subsists.

2. The defendant denies that the decision in issue constitutes misuse of powers and insists that it was taken in the normal exercise of the power of withdrawal or revocation of which the power to recalculate the amount of the pension, provided for by Article 41 of Annex VIII to the Staff Regulations, is but an illustration. That power had been legitimately exercised as soon as it was discovered, subsequent to the grant of the pensions, that the recipients thereof were receiving damages from the third party thereby altering the extent of their rights under the Staff Regulations as derived from the rule against double payments and calling in question the very principle that rights once granted should remain unchanged.

3. In their statement in reply the applicants first of all point out that at the time when the events occurred, and particularly at the time of their rejoinder as parties civiles, Mr Boizard's daughter was barely 14 years old and since she did not intervene personally in the proceedings it cannot be argued that her conduct was at fault.

4. The Commission first points out as to the facts that it did not wait until 1977 before giving attention to the situation created by the condemnatory judgment. On 10 November 1975 it wrote to the insurer of the third party to try to recover the monetary gain awarded to the applicants following the decease of Mr Boizard.

1. By two applications dated 12 April 1979 the applicants, Mrs Liselotte Boizard née Herber, and Miss Martine Boizard, respectively the widow and daughter of Georges Boizard, a Commission official who died on 24 November 1972, brought actions for the annulment of the Commission's Decision of 1 June 1978 by which:

2. As the two cases are related the Court (First Chamber) by order of 30 May 1979 joined them for the purposes of the procedure and the judgment.

3. The facts giving rise to the dispute are the following. On 21 November 1972 the car which Mr Boizard was driving was in a collision with a vehicle which did not give way to him when he was approaching from the right. Mr Boizard died three days later. Proceedings were brought against the other driver in the Tribunal Correctionnel [Criminal Court], Brussels. The applicants appeared as parties civiles before the court and the accused and his insurer were declared liable and ordered by judgment of 29 November 1973 to pay the following amounts by way of damages:

4. Following the decease of Mr Boizard the Commission paid the widows' and ophans' pensions to the applicants to which they were entitled as from 1 March 1973.

5. By letter of 19 April 1973 the applicants' lawyer asked the Commission if Mr Boizard was insured with the Communities under a group insurance policy against personal injury or came under contractual rules entitling his next-of-kin to financial assistance on account of his decease.

6. The Commission invited the applicants' lawyer to send it a copy of the judgment delivered on 29 November 1973 which was done by letter of 14 March 1974.

7. On 10 November 1975 the Commission contacted the insurer of the third party responsible for the accident taking that step pursuant to Article 47 of Annex VIII to the Staff Regulations which provide that:

8. By a letter of 25 May 1977 the defendant informed the applicants that by obtaining judgment against the third party liable they had exercised rights of action which did not belong to them thereby depriving the Commission of its right of recourse under Article 47 of Annex VIII which prohibits double payments. The Commission invited the applicants to repay to it amongst other things the amounts awarded under the head of material damages indicating that it would not be opposed to any proposals for repayment by instalments at reasonable intervals of the principal amount only and not the interest.

9. On 1 June 1978 the Commission adopted the decision in issue pursuant to Article 41 of Annex VIII to the Staff Regulations.

10. On 19 July 1978 the applicants lodged a complaint with the appointing authority against that decision pursuant to Article 90 (2) of the Staff Regulations of Officials. By letter of 19 January 1979 the Commission rejected that complaint.

11. The decision in issue was not put into effect until 1 April 1979.

12. The applicants put forward three submissions. According to their first submission the Commission cannot rely on Article 41 of Annex VIII as that provision is not applicable to the situation existing as between the parties. It allows the amount of the pension to be recalculated in the case of error or omission and a pension to be modified or withdrawn if there has been a mistake of law. In the instant case the pension is not in question. The issue is therefore one of misuse of powers.

13. According to the second submission the Commission has acted in breach of Article 47 of Annex VIII inasmuch as it claims to be entitled to seek payment of the sums recovered by the applicants from the third party responsible for the accident whereas the provision in point makes provision for only subrogation dans l'action [subrogation] and not for subrogation dans le droit [assignment of the right of action]. The Community legislature vested the rights of action against the third party liable in the administration, apparently reserving to the administration the power not to act and to leave the official or those entitled under him to bring their own action which in principle subsists. The conduct of the Commission up to 25 May 1977 demonstrated that it had waived the assertion of its rights of subrogation.

14. By their third submission the applicants plead breach of Article 85 of the Staff Regulations inasmuch as the Commission, although not expressly referring to that provision, and almost denying that it is relying thereon, purports to apply the rule which it lays down whilst the conditions attached by the Community legislature to the recovery of sums overpaid are not fulfilled in this case, as the defendant itself admits.

15. The Commission denies that the decision in issue constitutes a misuse of powers and insists that it was taken in the normal exercise of the power to withdrawal or revocation of which the power to recalculate the amount of the pension provided for by Article 41 of Annex VIII to the Staff Regulations is but an illustration. In reality the decision does nothing more than comply with the Staff Regulations and prevent, by means of a reassessment of their entitlement, the individuals concerned from receiving an improper double payment.

16. As regards the second submission the Commission contends that by the effect of subrogation dans l'action, that is to say, the vesting of the legal power to act, for which provision is made by Article 47 of Annex VIII to the Staff Regulations, that power was not vested in the applicants in this case. Since they had no action their rights were illusory and, to the extent to which one head of the damage was already made good or bound to be so made by the payment of pensions, did not even exist in the shape of rights to damages from the third party.

17. As regards the third submission the Commission replies that the decision in issue was not taken pursuant to Article 85. Any sum overpaid to which that provision refers in order to bring it under the heading recovery is to be understood exclusively as being a sum received from the Communities and not from third parties.

18. The first submission of the applicants must be upheld. Article 41 of Annex VIII to the Staff Regulations provides :

19. Furthermore Article 85 of the Staff Regulations provides that any sum overpaid 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. This last provision does not cover the recovery of a sum overpaid received from a third party; it covers only a sum overpaid by the Communities.

20. The Commission does not deny that the widows' and orphans' pensions were properly granted and determined as to their amount in accordance with the provisions of the Staff Regulations and Annex VIII thereto. The recalculation of those pensions in order to recover a sum allegedly received from a third party, even if to the possible detriment of the Communities, does not come within Artcile 41 of the annex.

21. Accordingly the decision in issue must be annulled and there is no further need to examine the other submissions.

22. Consequently the Commission should be ordered to pay to the applicants the sums deducted in respect of each of them together with interest calculated from the date of the deductions. A fair rate is 8%.

23. Under article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs.

24. As the defendant has failed in its submissions it should be ordered to pay the costs.

On those grounds, THE COURT (First Chamber) hereby:

1 Annuls the Commission's Decision of 1 June 1978;

2 Orders the Commission to pay each of the applicants the amounts deducted together with interest thereon at 8% from the date of the deductions;

3 Orders the Commission to pay the costs.