HG v European Commission (T-494/23)

Contents

Judgment of the General Court (Tenth Chamber, Extended Composition)16 October 2024^note(Civil service — Officials — Compensation for damage suffered by the European Union — Recovery of a debt by offsetting — Limitation period — Applicable law — Second subparagraph of Article 98(2) of Regulation (EU, Euratom) 2018/1046 — Concept of normal circumstances — Prior formal decision establishing the claim which was the subject of the action)In Case T‑494/23,HG, represented by L. Levi, lawyer,vEuropean Commission, represented by T. Bohr and L. Hohenecker, acting as Agents,THE GENERAL COURT (Tenth Chamber, Extended Composition),composed of O. Porchia, President, M. Jaeger, L. Madise (Rapporteur), P. Nihoul and S. Verschuur, Judges,Registrar: V. Di Bucci,having regard to the written part of the procedure,having regard to the fact that no request for a hearing was submitted by the parties within three weeks after service of notification of the close of the written part of the procedure, and having decided to rule on the action without an oral part of the procedure, pursuant to Article 106(3) of the Rules of Procedure of the General Court,gives the following

Judgment

1By his action under Article 270 TFEU, the applicant, HG, requests, first, the annulment of the European Commission’s decisions of 10 October 2022 (BUDG.C.4.001/AM/444), of 13 October 2022 (BUDG.C.4.001/PRS/444), of 11 November 2022 (BUDG.C.4.001/AM/444_3), of 12 December 2022 (BUDG.C.4.001/AM/444_4), of 9 January 2023 (BUDG.C.4.001/AM/444_5), of 19 January 2023 (BUDG.C.4.001/PRS/444_6), of 9 February 2023 (BUDG.C.4.001/LM/444), of 10 March 2023 (BUDG.C.4.001/LM/444) and of 11 April 2023 (BUDG.C.4.001/PRS/444) on the offsetting of claims concerning him (‘the contested decisions’) and, second, that the Commission be ordered to reimburse the sums recovered in the amount of EUR 24 092.59, plus default interest.

Facts

2By decision of 10 February 2015 (‘the decision of 10 February 2015’), the Commission imposed a disciplinary penalty on the applicant, one of its officials, and ordered him to pay compensation for damage suffered by the European Union in the amount of EUR 108 596.35 on the basis of the first paragraph of Article 22 of the Staff Regulations of Officials of the European Union (‘the Staff Regulations’). That decision, which the applicant has challenged, came into effect on 1 March 2015.

3By judgment of 15 December 2021, HG v Commission (T‑693/16 P-RENV-RX, EU:T:2021:895), the General Court, inter alia, reduced the amount of compensation sought from the applicant to EUR 80000 on the date of delivery of the judgment, on the ground that the Commission had contributed to bringing about the damage. The applicant’s appeal against that judgment was dismissed due to a manifest lack of jurisdiction of the Court of Justice (order of 30 June 2022, HG v Commission, C‑150/22 P, not published, EU:C:2022:523).

4No debit note was sent to the applicant between the adoption of the decision of 10 February 2015 and the delivery of the judgment of 15 December 2021, HG v Commission (T‑693/16 P-RENV-RX, EU:T:2021:895). The Commission’s authorising officer responsible sent a debit note to the applicant dated 3 March 2022, for the amount of EUR 80000, indicating 19 April 2022 as the payment deadline. The request to withdraw that note, made by the applicant on 18 March 2022 on the ground that there was a five-year limitation period, was rejected by the authorising officer by email of 1 April 2022. On 30 May 2022, the applicant submitted a complaint, on the basis of Article 90(2) of the Staff Regulations, against the decision to recover the amount of EUR 80000. On 31 May 2022, the applicant received a reminder letter from the accounting officer. Exchanges then took place with the accounting officer before, by decision of 27 September 2022, the appointing authority rejected the complaint of 30 May 2022 as inadmissible.

5From 10 October 2022, the applicant was notified of the accounting officer’s successive decisions seeking to offset the debt that he had in respect of the Commission against his salary or other amounts that he owed to it. The offset against his monthly salary was EUR 3350 and the offset against mission expenses was in full. The applicant submitted complaints against those decisions, which were rejected by decision of 5 May 2023. In that decision, the appointing authority stated, inter alia, that the five-year limitation period on which the applicant had relied on the basis 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 of 2018’) is not applicable to the situation, which is governed by Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ 2012 L 298, p. 1; ‘the Financial Regulation of 2012’). That authority adds that, in the absence of applicable statutory limitation periods, the principle requiring that the administration acts within a reasonable time was not disregarded in the light of the circumstances.

6On 10 August 2023, the applicant brought the present action, seeking, inter alia, as stated in paragraph 1 above, annulment of the contested decisions. Subsequent similar decisions are not the subject of the present action.

Forms of order sought

7The applicant claims that the Court should:– annul the contested decisions;– in so far as necessary, annul the decision of 5 May 2023 rejecting his complaints;– order the Commission to reimburse the sums recovered in respect of the contested decisions, that is, EUR 24 092.59, that amount to be increased by default interest calculated at the rate of the European Central Bank (ECB), plus two percentage points;– order the Commission to pay the costs.

8The Commission contends that the Court should:– dismiss the action as unfounded;– order the applicant to pay the costs.

The claims for annulment

9The applicant seeks the annulment of the contested decisions and, in so far as necessary, the decision of 5 May 2023 rejecting his complaints. According to settled case-law, claims for annulment formally directed against the decision to reject a complaint under Article 90(2) of the Staff Regulations have the effect of bringing the act against which the complaint was brought before the Court, where those claims, in themselves, have no independent content (see judgment of 16 January 2018, SE v Council, T‑231/17, not published, EU:T:2018:3, paragraph 21 and the case-law cited; see also, to that effect, judgment of 17 January 1989, Vainker v Parliament, 293/87, EU:C:1989:8, paragraph 8).

10In the present case, the claims for annulment of the decision to reject the complaints have no independent content in the sense that that decision confirms the contested decisions, that the applicant’s situation was not reviewed in the light of new elements of law or of fact and that that decision does not change or add to the contested decisions. Consequently, the claims for annulment submitted by the applicant must be understood as being directed against the contested decisions (see, to that effect, judgment of 24 April 2017, HF v Parliament, T‑584/16, EU:T:2017:282, paragraphs 71 and 72 and the case-law cited).

11In support of his action for annulment, the applicant raises three pleas in law. He alleges infringement of Articles 98, 100, 101 and 102 of the Financial Regulation of 2018, failure to comply with the reasonable time requirement and breach of the principle of good administration and of the duty to have regard for the welfare of officials.

First plea in law, alleging infringement of Articles 98, 100, 101 and 102 of the Financial Regulation of 2018

12The applicant submits, in essence, that the claim is time-barred under the second subparagraph of Article 98(2) of the Financial Regulation of 2018, because the debit note of 3 March 2022 had not been prepared within the five-year limitation period laid down in that provision from the time when the Commission could have claimed its debt. It follows that the authorising officer responsible should, in accordance with what is provided for in Article 101(2)(b) of that regulation, have waived recovery of the contested debt, since ‘the amount receivable [could not] be recovered in the view of … delay in the dispatch of the debit note in the terms defined in Article 98(2)’.

13The applicant submits that the applicability of the Financial Regulation of 2018 is apparent from the contested decisions, which refer to it as the legal basis. The fact that the set-off decisions postdating those which are the subject of the present dispute – which were sent to the applicant – also mention it as a legal basis confirms that it was the Commission’s intention to take the decisions at issue on that basis. It is not open to the Commission to modify the legal basis at the stage of the complaint procedure, as it did in the decision rejecting the applicant’s complaints of 5 May 2023, by replacing the legal basis initially used with the Financial Regulation of 2012, which does not provide for a time limit for adopting a debit note. It follows from the principle of legal certainty that the possibility of changing the grounds for a decision at the complaint stage cannot be understood as going so far as to allow its legal basis to be changed.

14The applicant adds that the Commission’s claim was of a fixed amount, due and certain from the adoption of the decision of 10 February 2015. The certain nature of the debt was not affected by the applicant’s challenge, in particular before the courts, nor did it suspend the time limit for preparing a debit note. Its fixed-amount nature, according to the applicant, is not affected by the fact that the amount of the debt, as had been set in the decision of 10 February 2015, was reduced in the judgment of 15 December 2021, HG v Commission (T‑693/16 P-RENV-RX, EU:T:2021:895). The latter did not give rise to a new debt but to the reduction of an existing debt. Lastly, the time limit for preparing the debit note was not suspended by the applicant’s challenge.

15The Commission contests the applicability of the Financial Regulation of 2018, arguing that the Financial Regulation of 2012, which does not provide for a time limit for the communication of a debit note, is applicable.

16The Commission submits, in that regard, that the determination of the applicable regulation had to be carried out from the time when the applicant’s debt had become certain, of a fixed amount and due, that is to say, from the adoption of the decision of 10 February 2015. However, under Article 282(2) of the Financial Regulation of 2018, that regulation was to apply only from 2 August 2018. No transitional provisions provided for a retroactive application of the five-year limitation period referred to in Article 98(2) of that regulation to debts already due before its entry into force. It follows that that time limit applies only to debts which became certain, of a fixed amount and due after the entry into force of the Financial Regulation of 2018, which is not the case for the debt at issue.

17An interpretation to the contrary would lead to the retroactive introduction of a time limit for the sending of the debit note for debts already due before the entry into force of the Financial Regulation of 2018, which is contrary to legal certainty and the principle of sound management and the protection of the European Union’s financial interests.

18In the present case, the applicability of the Financial Regulation of 2018 cannot arise from the mere fact that the contested decisions refer to that regulation as the legal basis, since that basis is incorrect and was legitimately rectified in favour of the Financial Regulation of 2012 in the decision to reject the complaints of 5 May 2023. It follows from the pre-litigation complaint procedure provided for in Article 90(2) of the Staff Regulations that the administration retains the option of modifying the grounds on the basis of which it adopted the contested decision before that decision is submitted for adjudication to the EU Courts. In addition, the Commission emphasises that the set-off decisions postdating the contested decisions do not form part of the dispute. Consequently, the grounds and provisions to which they refer cannot be taken into account.

19Lastly, according to the Commission, the five-year limitation period laid down in Article 81(1) of the Financial Regulation of 2012 had not expired when the contested decisions were adopted, since it had only started to run from the payment deadline communicated to the applicant in the debit note, that is 19 April 2022.

20The first subparagraph of Article 98(2) of the Financial Regulation of 2018 establishes that ‘[a]ny amount receivable that is identified as being certain, of a fixed amount and due shall be established by a recovery order by which the authorising officer responsible instructs the accounting officer to recover the amount’ and that ‘it shall be followed by a debit note sent to the debtor, [save for exceptions not relevant in the present case]’. The second subparagraph of Article 98(2) of the Financial Regulation of 2018 adds that ‘[t]he authorising officer shall send the debit note immediately after establishing the amount receivable and at the latest within a period of five years from the time when the Union institution was, in normal circumstances, in a position to claim its debt’. That provision specifies that ‘[s]uch period shall not apply where the authorising officer responsible establishes that, despite the efforts which the Union institution has made, the delay in acting was caused by the debtor’s conduct’.

21It must be observed that, in accordance with Article 282(2) of the Financial Regulation of 2018, the provisions of the second subparagraph of Article 98(2) of that regulation, providing for the five-year limitation period relied on by the applicant, are applicable from the same date as that of the entry into force of that regulation, that is 2 August 2018. The transitional provisions laid down in Article 279 of that regulation and the retroactive or deferred dates of applicability for certain provisions laid down in Article 282(3) thereof do not concern them. Furthermore, Article 281 of the Financial Regulation of 2018 provides that, save for exceptions not relevant in the present case, the Financial Regulation of 2012 is repealed with effect from 2 August 2018.

22Next, as regards the principles of succession of rules over time, the Court notes that, in principle, a new rule applies immediately to the future effects of a situation which arose under the old rule (see, to that effect, judgment of 14 April 1970, Brock, 68/69, EU:C:1970:24, paragraph 7). The future effects of a situation which arose under an old rule must be understood to include the current effects of that situation from the time when the new rule applies (see, to that effect, judgment of 11 July 2002, D’Hoop, C‑224/98, EU:C:2002:432, paragraph 25 and the case-law cited). The application of a new rule to the current effects of a situation which arose under the old rule does not constitute a retroactive application of the new rule (see, to that effect, judgment of 10 July 1986, Licata v ESC, 270/84, EU:C:1986:304, paragraph 31).

23Accordingly, it has been consistently held that a new rule applies from its date of applicability set out in the act introducing it, and while, in principle, it does not apply to legal situations that have arisen and become definitive under the old rule, it does apply to their future effects and to new legal situations. More specifically, it is apparent from the case-law that procedural rules are generally taken to apply from the date on which they enter into effect, as opposed to substantive rules, which are usually interpreted as applying to situations existing before their entry into effect only in so far as it clearly follows from their terms, their objectives or their general scheme that such an effect must be given to them (see, to that effect, judgment of 26 March 2015, Commission v Moravia Gas Storage, C‑596/13 P, EU:C:2015:203, paragraphs 32 and 33 and the case-law cited).

24It has also been held that, while a rule on limitation periods in relation to a customs debt was a substantive rule, because it governed the customs debt itself (see, to that effect, judgments of 23 February 2006, Molenbergnatie, C‑201/04, EU:C:2006:136, paragraphs 39 to 41, and of 3 June 2021, Jumbocarry Trading, C‑39/20, EU:C:2021:435, paragraph 35), it may however apply to the future effects of a situation in which the debt at issue had not become definitive, notwithstanding the fact that it was incurred under an old rule (see, to that effect, judgment of 3 June 2021, Jumbocarry Trading, C‑39/20, EU:C:2021:435, paragraph 38).

25In the present case, the debt owed to the European Union by the applicant had not become definitive on 2 August 2018, since the applicant had challenged that debt and the action in connection with it was still pending and, accordingly, it cannot be recognised that, before that date, that is approximately three and a half years after the decision of 10 February 2015, in the light of those circumstances, the Commission had definitively lost the right to recover that debt due to a delay in implementing that right. First, the Financial Regulation of 2012 did not provide for a particular time limit for sending a debit note and, second, the reasonable time which an EU Institution must nevertheless respect in this type of situation in order to exercise its powers (see, to that effect, judgment of 14 June 2016, Marchiani v Parliament, C‑566/14 P, EU:C:2016:437, paragraph 96 and the case-law cited) was not exceeded in the light of the circumstances. Consequently, the second subparagraph of Article 98(2) of the Financial Regulation of 2018 applies in respect of the debt at issue.

26In the light of the foregoing conclusion, it is not necessary to rule on the applicant’s arguments according to which the Commission cannot modify the legal basis of the contested decisions in its decision to reject the complaints of 5 May 2023.

27However, contrary to what the applicant claims, the limitation period provided for in the second subparagraph of Article 98(2) of the Financial Regulation of 2018 does not benefit him.

28That provision provides that the five-year limitation period runs ‘from the time when the Union Institution was, in normal circumstances, in a position to claim its debt’.

29The Commission was fully entitled to find that the circumstances of the present case in which a contested debt which may subsequently be cancelled or reduced, as proved to be the case, since the Court reduced the debt from EUR 108 596.35 to EUR 80000 in the judgment of 15 December 2021, HG v Commission (T‑693/16 P-RENV-RX, EU:T:2021:895), were normal, within the meaning of the second subparagraph of Article 98(2) of the Financial Regulation of 2018, only once the judgment had become final.

30In that regard, it must be emphasised that, in a procedural situation such as that in the present case where the debt first had to be established, at the end of a particular procedure, by a formal decision prior to its establishment, such an interpretation of the second subparagraph of Article 98(2) of the Financial Regulation of 2018 is in the interests of good administration, as it is favourable both to the interests of creditor institutions and to those of their debtors or any third parties concerned, since it does not oblige the authorising officer responsible in all circumstances to order the recovery of debts contested, in their principle or in their amount, by debtors before knowing the final fate of those debts and without taking the abovementioned interests into account. In particular, when a debt is against an official and the latter contests it, both in its principle and in its amount, by requesting the annulment or alteration of the prior decision which established it, the authorising officer may, in order to determine the appropriate time for establishing the debt, order its recovery and send the debit note, taking into account, inter alia, the administration’s duty to have regard for the welfare of its employees, which requires the administration to take into account not only the interests of the service, but also those of the official concerned (see, to that effect, judgment of 28 May 1980, Kuhner v Commission, 33/79 and 75/79, EU:C:1980:139, paragraph 22), the importance of the sum involved in relation to the official and his or her assessment of the possibility that that sum, particularly if it arises from the liability of the official being incurred, is amended by the judicature in the exercise of unlimited jurisdiction.

31That interpretation follows that of the Court of Justice which held that, even if an institution was, in normal circumstances, in a position to claim its debt from the date on which that debt was certain, of a fixed amount and due, that is, in the present case, on 1 March 2015, the date on which the decision of 10 February 2015 took effect, it was necessary to take into account the specific circumstances of the case to assess whether the authorising officer was late in communicating a debit note to the debtor (see, to that effect, judgment of 14 June 2016, Marchiani v Parliament,C‑566/14 P, EU:C:2016:437, paragraphs 103 and 104). In that regard, the Court of Justice specified that it was necessary, inter alia, to take into account the importance of the case for the person concerned, its complexity and the various procedural stages which the EU institution had followed (judgment of 14 June 2016, Marchiani v Parliament, C‑566/14 P, EU:C:2016:437, paragraph 99).

32That interpretation is also in accordance with the intention of the EU legislature which sought to introduce the provisions of the second subparagraph of Article 98(2) of the Financial Regulation of 2018, in particular, to take into account the case-law referred to in paragraph 31 above, as is apparent from paragraph 8 of the explanatory memorandum to the proposal for a Regulation of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union and amending Regulation (EC) No 2021/2002, Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1305/2013, (EU) No 1306/2013, (EU) No 1307/2013, (EU) No 1308/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, (EU) No 652/2014 of the European Parliament and of the Council and Decision No 541/2014/EU of the European Parliament and of the Council (COM/2016/0605 final – 2016/0282 (COD)).

33As regards the alleged infringement of Articles 100 and 102 of the Financial Regulation of 2018, the applicant does not put forward any argument to support it. Under the first paragraph of Article 21 of the Statute of the Court of Justice of the European Union, and the Rules of Procedure of the EU Courts, as interpreted in settled case-law, the application must state the pleas in law and arguments relied on in a sufficiently clear and precise manner to enable the defendant to prepare its defence and the court to rule, if necessary, without any further information. Otherwise, an obscure or vague complaint is inadmissible (see, to that effect, judgment of 12 December 2019, Tàpias v Council, T‑527/16, EU:T:2019:856, paragraphs 64 and 65 and the case-law cited). The complaints alleging infringement of Articles 100 and 102 of the Financial Regulation of 2018 are therefore inadmissible.

34It follows from the foregoing that the plea in law alleging infringement of Articles 98, 100, 101 and 102 of the Financial Regulation of 2018 must be rejected.

The plea in law alleging failure to comply with the reasonable time requirement

35The applicant submits that, in the event that the Financial Regulation of 2012, which does not specify the time limit in which a debit note must be communicated, were to apply, the Commission has failed in its obligation to comply with a reasonable time limit and the principle of legal certainty which would prevent it from exercising its powers definitively.

36It must be held that applicant put forward the plea alleging failure to comply with the reasonable time requirement only in the alternative, in the event that the Financial Regulation of 2012 were to apply. However, as held in paragraph 25 above, the Financial Regulation of 2012 does not apply to the contested decisions.

37The plea alleging failure to comply with the reasonable time requirement must therefore, in any event, be rejected.

The pleas in law alleging breach of the principle of good administration and of the duty to have regard for the welfare of officials

38The applicant submits that the absence of prior communication from the Commission services with him regarding the means of recovering the debt before the adoption of the contested decisions constitutes a breach of the principle of good administration and of the duty to have regard for the welfare of officials. In particular, he was not adequately informed of the grounds leading to the offsetting of debts, the schedule of payments or the possibilities of a rescheduling plan. The applicant also expresses surprise that the Commission finally sought to recover its debt two years after having waited six years to claim it.

39The Commission submits that it took both the applicable provisions and the applicant’s interests into account in choosing the means of recovery by offsetting over approximately two years taking into account the remuneration of the person concerned. Moreover, the applicant did not express any specific interest in a particular rescheduling of his debt. If that had been the case, the Commission would have been prepared to adapt the rescheduling plan.

40It must be noted that, in the authorising officer’s email of 1 April 2022, rejecting the request for the removal of the debit note of 3 March (see paragraph 4 above), submitted by the applicant himself, the latter was invited to contact the Commission services regarding the means of repaying his debt. It is not clear from the case file that the applicant took such a step, or that he spontaneously began to honour that debt, whether before or after the payment deadline of 19 April 2022 referred to in that debit note. In those circumstances, by having proceeded to offset the applicant’s salary or the reimbursements of expenses, as required under Article 102(1) of the Financial Regulation of 2018, and by raising of its own motion a plan for repayment in instalments over approximately two years, leaving the applicant with a suitable income taking into account his level of remuneration, the Commission’s accounting officer, by adopting the contested decisions, did not breach the principle of good administration or the duty of the institutions to have regard for the welfare of their officials.

41The pleas in law alleging breach of the principle of good administration and of the duty to have regard for the welfare of officials must therefore be rejected. Accordingly, the claims for annulment must be rejected.

The claim for reimbursement

42The applicant submits that he suffered material damage as a result of the contested decisions, corresponding to the total amount of deductions that he suffered, that is EUR 24 092.59. He requests the payment of that sum, plus default interest applied from the date of each of the contested decisions and calculated according to the manner set out in his claims.

43The Commission disputes the illegality of the contested decisions and therefore any damage.

44Since the claims for annulment of the contested decisions have been rejected, it is apparent that the request to order the Commission to reimburse the sums recovered cannot, in any event, succeed, without there being any need to examine the admissibility of such a request. The claim for reimbursement must therefore be rejected and, accordingly, the action must be dismissed in its entirety.

Costs

45Under 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. Since the applicant has been unsuccessful, he must be ordered to pay the costs, in accordance with the form of order sought by the Commission.

Operative part

On those grounds,THE GENERAL COURT (Tenth Chamber, Extended Composition)hereby:

1.Dismisses the action;

2.Orders HG to pay the costs.

Delivered in open court in Luxembourg on 16 October 2024.