René Demont v European Commission (115/80)

(a)Inadequate and contradictory statement of grounds for the contested decision

The contested decision finds the following irregularities proven against Mr Demont:

Mr Demont maintains first that those allegations are mistaken in fact and wrong in law.As to the first charge, Mr Demont essentially states that in 1978 he observed the limit of 90 % and that in any case, in 1977 as well as 1978, the Commission did not grant advances but rather reimbursed the sums already paid out by the officials concerned and that the practice of the Commission is contrary to the last subparagraph of Article 8 (2) of Annex VII to the Staff Regulations, which states, inter alia, that the costs of travel by air are to be reimbursed simply on production of the tickets.The Commission maintains that it is clear from the documents in the file that Mr Demont granted himself an advance of 100 % on the cost of his annual journey in 1977 and 1978 and that it was by way of advance and not by way of reimboursement. It adds that, with respect to officials whose place of origin or place of employment or both are outside Europe, the costs of the annual journey are reimbursed on production of supporting vouchers and not simply on production of the tickets. Supporting vouchers, according to the Commission, should be understood to mean not the tickets purchased but the tickets used which alone prove that the journey actually took place.As to the second charge, Mr Demont states that at the material time, namely in 1976, the imprest accounts in Santiago were administered by Mr L and that, in any event, the real and immediate need to take on staff which led him to take such an initiative has never been disputed.The Commission retorts first that Mr Demont had always performed de facto the duties of administrator of imprest accounts in Santiago as is borne out by a decision of the Director-General for the Budget dated 12 August 1977 appointing him administrator of imprest accounts with retroactive effect to 1 December 1973. It adds that the requirement for a temporary member of staff in Santiago was not acknowledged by the administration, which is confirmed by the fact that it had refused to sanction the employment of a temporary member of staff and that Mr Démont was only able to overcome that refusal by diverting to that end funds which he had obtained by way of a proposal for commitment of expenditure for packaging costs which had in reality not been incurred.Moreover, even if Mr Demonťs argument could be upheld, the procedure was still irregular since Mr Demont paid the temporary member of staff directly and not, as logic would dictate, the employment agency, there being no legal relationship between the temporary member of staff and the employer when an employment agency is used. The Commission concludes therefore that the applicant used an artificial form of invoicing and misled the administration and thus made it impossible to check the true destination of Community funds.As to the third charge, Mr Demont states that he regularly paid the cleaners at the Santiago office in cash and that he cannot be accused of any irregularity by reason of the fact that, once the payments had been made, he set up a benevolent savings scheme in the sole interests of the cleaners with the amounts which they spontaneously entrusted him with. He adds that the Commission cannot at this stage allege that the wages of the cleaners as from 1977 were clearly higher than those normal in Santiago for the same work since that allegation was not made in the disciplinary proceedings or mentioned in the decision to reprimand him.The Commission states on the contrary that it is clear from the report of the commission of inquiry that “Mr Démont acknowledges that he pays them (the cleaners) only one-half of their wages and the difference after several months”. This point was also confirmed by statements by the cleaners themselves.As regards the allegation as to the amount of wages received by the cleaners, the Commission points out that it is not a new allegation since the decision of 15 June 1979 mentions the irregularities concerning “the amounts of payments made to cleaners”.It is the Commission's view that it was not for Mr Démont, on his own initiative, to defer the payment of a part of the wages of certain employees, whilst at the same time making out receipts which did not correspond to the true position, or to grant to those employees wages considerably higher than those normal in Santiago. By acting in that way without informing headquarters, Mr Démont prevented a proper audit of the use of Community funds and infringed the principle of the proper management of public funds.As regards the fourth charge, Mr Démont maintains that he never agreed with the law firm Muñoz Rios & Cia in Santiago the amount of the fee note claimed by them after they had acted on behalf of an official of the delegation who had been interrogated by the police; he had quite simply registered the note, subsequently sending all the correspondence on the matter to headquarters in Brussels which never replied to him. He states that he could never in any way have accepted the fee note since the decision as to payment must be taken by head office, which has still not paid it.The Comtnission retorts that it is clear beyond doubt from the statements of the lawyers involved as well as from two letters addressed by them to Mr Démont appearing in the file that they agreed with the applicant the amount of their fees.Mr Démont states moreover that the grounds upon which the contested decision is based are contradictory inasmuch as, on the one hand, the decision mentions the allegations set out above and, on the other hand, it recognizes that the other duties entrusted to the applicant by the administrative authority did not allow him sufficient time to devote himself properly to the duties of administering the imprest accounts, that the conditions at the Santiago office were quite abnormal as a result both of the political and social situation and of the distance from headquarters and that finally the applicant did not obtain any personal gain from his irregular activities.According to Mr Démont, those circumstances, expressly accepted and acknowledged by the Commission, are exceptional and are of such a nature as to exempt him from responsibility.The Commission considers on the other hand that those circumstances, whilst they may be considered and were in fact considered as mitigating circumstances, still cannot expunge the applicant's shortcomings. It points out that Mr Demont never requested to be relieved of his duties as administrator of imprest accounts and that the special situation existing in Chile had no direct connection with the irregular conduct of Mr Demont in the administration of the funds which were entrusted to him and that the fact that Mr Demont did not derive any personal benefit from that conduct does not mean that those irregularities did not harm the good administration of the European Communities.

(b)Breach of the duty of assistance under Article 24 of the Staff Regulations of Officials and of the principles of good administration and of legitimate trust

In his second submission Mr Demont maintains that, by failing to investigate a violent exchange of correspondence between the applicant and Mr L shortly before the allegations were made against him, the Commission has failed to take into account an essential feature of the circumstances in which the allegations were made, which led to the imposition of the disciplinary measure. The Commission was thus in breach of its duty of assistance towards officials under Article 24 of the Staff Regulations as well as of the general principles of good administration and of the trust which an official is legitimately entitled to place in his institution.Mr Demont considers that, if the Commission had fulfilled its duty of assistance and had, at the time of the disciplinary proceedings, inquired also into the events leading up to the allegations, it could not have failed to see that they were defamatory.The applicant states moreover that, in accordance with the general principle of good administration, as has been recognized by the case-law of the Court, the administrative authority must take into consideration all the factors which are likely to guide it in its decision. In the present case, however, he alleges that the Commission has not taken into account two essential factors, namely:— That the allegations were manifestly made as a result of a dispute which had broken out between two officials;— That the allegations, as the disciplinary authority itself has even said, contained a great number of defamatory statements.Mr Demont maintains finally that under the principle of legitimate trust which the Court has recognized as forming part of the Community legal order, the Commission should have made an exhaustive investigation and have shown an impartial attitude to all the factors to be taken into consideration; it ought to have examined all the items in the file produced by the applicant in his defence.The Commission states first, that the invoking of the principle of “legitimate trust” is not relevant to the present case. Indeed that principle was established by the Court principally in relation to actions based on Article 215 of the EEC Treaty. Its exact scope in regard to legal proceedings involving officials thus remains indeterminate. The applicant has not shown that this principle differs in scope, even slightly, from the principles of good administration and the duty of assistance.The Commission points out, so far as may be relevant, that the contested decision expressly refers to the memoranda and documents adduced by Mr Demont and that it must therefore follow that those documents were taken into consideration. The Commission is, however, under no obligation to address itself in its decision to all the arguments that persons subject to proceedings before it, particularly disciplinary proceedings, might put forward in their own defence.As regards the duty of assistance and the principle of good administration, the Commission maintains that in reality the decision to reprimand Mr Demont was not in any way based on the letter containing the allegations by Mr L. but on the report of the commission of inquiry sent to Santiago, on the statements made by the applicant and numerous witnesses at the hearings and also on numerous documents forwarded by them and in particular by the applicant.The disciplinary measure which was imposed on Mr Demont was the culmination of meticulous disciplinary proceedings in the context of which it would have been completely superfluous to have regard to a commonplace incident which arose between Mr L. and Mr Demont and which bore no relation to the irregularities alleged against the latter.By referring to the abovementioned factors the Commission moreover rejected a number of allegations for which there was insufficient evidence and thus fulfilled its duty of assistance and good administration.

(c)Infringement of the rights of the defence

The third submission made by Mr Demont relates to an infringement of Article 26 of the Staff Regulations and of the rights of the defence and a breach of the general principles of the Staff Regulations in disciplinary matters and may be divided into four heads as follows:— The shortness of the time allowed to the applicant in which to prepare his defence at the first hearing after notification of the allegations: the period allowed was limited to three days;— The Commission's refusal to allow the applicant or his counsel to examine the disciplinary file;— The failure to supply to the applicant statements made by a number of officials during the disciplinary proceedings;— The omission from the file of a memorandum drawn up during the disciplinary proceedings by the official appointed to lead the inquiry.As to the first head Mr Demont states that the Commission admits that it informed him only on 25 September 1978 that he was subject to disciplinary proceedings and that his first hearing in the context of those proceedings had been fixed for 28 September 1978. Mr Demont emphasizes that the requirement to give persons subject to disciplinary proceedings a reasonable period within which to prepare their defence is recognized by the Staff Regulations. Since the first hearing, which is usually decisive in charting the course of the rest of the disciplinary proceedings, is of prime importance, he considers that the period of three days which was given him on that occasion was clearly inadequate and that therefore there was a serious breach of the rights of the defence.The Commission retorts that the applicant was heard on three occasions, namely on 28 September 1978 and 19 January and 3 April 1979, that he was given the opportunity to call several witnesses and adduced in evidence a number of explanatory documents accompanied by very numerous appendices so that, regardless of the period of time allowed him before his first hearing, he was fully able to exercise his rights to defend himself throughout the proceedings, which continued for nearly nine months.As to the second head Mr Demont states that the rights of the defence were also infringed in this case by the refusal of the Commission to allow the applicant or his counsel to examine the disciplinary file. That refusal constitutes at the same time an infringement of Article 26 of the Staff Regulations which gives an official the right at any time to consult his personal file, of which the disciplinary file forms an integral part.According to Mr Demont, the conduct of the Commission is contradictory and ambiguous.Indeed, the Commission cannot be heard to acknowledge that the rights of the defence must at all times be respected and in the same breath to contend that a provision of the Staff Regulations (in this case Article 87) exempts it from such observance.Moreover, if the Commission acknowledges, as it does, that the allegations made against an official together with the documents on which they are based, must be brought to the notice of the official it is difficult to understand why it then refuses the applicant access to the disciplinary file which contains nothing other than those very allegations and documents.The Commission points out first that, pursuant to the sixth paragraph of Article 26 of the Staff Regulations, Mr Demont was entitled at any time to consult his personal file (of which the disciplinary file formed a part, although physically it was contained in separate files owing to the large number of documents involved) and that if he was not able to consult it before the closure of the disciplinary proceedings that was simply due to his not making a request to that effect sooner.As regards the refusal to allow the applicant's counsel to consult the file, the Commission maintains that counsel's position is not the same as that of the official concerned. Article 87 of the Staff Regulations does not provide for an official to be represented when the disciplinary proceedings are likely only to result in a written warning or a reprimand. Observance of the rights of the defence is therefore ensured since the official himself has access to the disciplinary file.The Commission adds that it was only by a letter dated 2 April 1979, which arrived at the relevant department on 6 April 1979, that Mr Demont's counsel requested permission to consult the file and that at that time the work involved in the disciplinary proceedings was essentially terminated, the last hearing of the applicant having taken place on 3 April 1979. In those circumtances the refusal to allow counsel to intervene cannot be considered as an infringement of the rights of the defence.As to the third head Mr Demont maintains that the rights of the defence were infringed inasmuch as the Commission did not bring to the notice of the applicant, before the outcome of the disciplinary proceedings, certain statements by witnesses which were amongst the factors taken into account by the Commission in imposing the disciplinary measure and which are expressly mentioned in the decision to reprimand the applicant.Any administrative measure adopted in breach of the fundamental principle according to which a judicial decision adopted on the basis of documents which the parties have not been able to consult is, according to the case-law of the court, absolutely void.Mr Démont contests the Commission's argument to the effect that the omission to bring to his notice the aforementioned documents was not detrimental to him, by stating that it is impossible to know what might have been the decision of the appointing authority if the applicant had been able to make known his observations and arguments in his defence following the hearings which were kept secret. In this case a rule of public policy or an essential procedural requirement has been infringed, which must of necessity entail the absolute nullity of the decision.The Commission, after stating that some of the reports of hearings, mentioned in its decision, were brought to the notice of Mr Démont before the outcome of the disciplinary proceedings, argues that the omission to bring the other reports to his attention did not prejudice him in any way.It states that it may be inferred from the well-settled case-law of the Court that before proceedings in the course of which certain documents were not brought to the attention of the party concerned may be annulled, it must be shown that the documents played a decisive role in the process of reaching the decision arrived at in the proceedings. In the present case Mr Démont has not adduced, or attempted to adduce, the slightest evidence to show that the omission to bring to his attention the aforementioned transcripts of the hearings prejudiced him in any way.The absence of any prejudice is confirmed by the fact that in his complaint dated 10 August 1979, that is, subsequent to the time when he had been able to examine the whole of his file, Mr Démont did not raise any special objections to those documents.An examination of the witnesses' statements is moreover sufficient to confirm that they did not throw any new light on the facts which were finally regarded as proved by the disciplinary authority.As to the fourth head Mr Démont states that the disciplinary file does not contain a memorandum addressed by the official appointed to lead the inquiry, Mr Lannoy, to Mr Hay dated 7 May 1979 the contents of which were favourable to the applicant.The Commission replies that the memorandum is indeed to be found in the file.