**Case C-404/06**

**Quelle AG**

**v**

**Bundesverband der Verbraucherzentralen und Verbraucherverbände**

(Reference for a preliminary ruling from the Bundesgerichtshof)

(Consumer protection – Directive 1999/44/EC – Sale of consumer goods and associated guarantees – Right of the seller, where goods not in conformity are replaced, to require the consumer to pay compensation for the use
of those goods – No charge for the use of the goods not in conformity)

Summary of the Judgment

1.        *Preliminary rulings – Jurisdiction of the Court – Limits*

*(Art. 234 EC)*

2.        *Approximation of laws – Sale of consumer goods and associated guarantees – Directive 1999/44*

*(European Parliament and Council Directive 1999/44, Art. 3)*

1.        In proceedings under Article 234 EC, which are based on a clear separation of functions between the national courts and the
Court of Justice, any assessment of the facts in the case is a matter for the national court before which the dispute has
been brought and which must assume responsibility for the subsequent judicial decision, and which must determine, in the light
of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment
and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the
interpretation of Community law, the Court is in principle bound to give a ruling.

The Court may refuse to rule on a question referred for a preliminary ruling by a national court only where it is quite obvious
that the interpretation of Community law that is sought bears no relation to the facts of the main action or its purpose,
where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give
a useful answer to the questions submitted to it.

In that context, the uncertainty as to whether the national court – following an answer given by the Court of Justice to a
question referred for a preliminary ruling relating to interpretation of a directive – may, in compliance with the principles
laid down by the Court, interpret national law in the light of that answer cannot affect the Court’s obligation to rule on
that question. Any other approach would be incompatible with the very aim of the powers given to the Court by Article 234
EC, which are intended, in essence, to ensure the uniform application of Community law by the national courts.

(see paras 19-22)

2.        Article 3 of Directive 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees is to be interpreted
as precluding national legislation under which a seller who has sold consumer goods which are not in conformity may require
the consumer to pay compensation for the use of those defective goods until their replacement with new goods.

It follows from the wording of the Directive, as well as from the related *travaux préparatoires*, that the Community legislature intended to make the ‘free of charge’ aspect of the seller’s obligation to bring goods into
conformity an essential element of the protection afforded to consumers by the Directive. The ‘free of charge’ requirement
attaching to the seller’s obligation to bring the goods into conformity, whether by repair or replacement, is intended to
protect consumers from the risk of financial burdens which might dissuade them from asserting their rights in the absence
of such protection. The certain nature of the ‘free of charge’ aspect, which was intentional on the part of the Community
legislature, means that the seller cannot make any financial claim in connection with the performance of its obligation to
bring into conformity the goods to which the contract relates. Furthermore, the ‘free of charge’ aspect of the seller’s obligation
to bring goods into conformity is consistent with the purpose of the Directive which is to ensure a high level of consumer
protection.

(see paras 33-34, 36, 43, operative part)

JUDGMENT OF THE COURT (First Chamber)

17 April 2008 (*)

(Consumer protection – Directive 1999/44/EC – Sale of consumer goods and associated guarantees – Right of the seller, where goods not in conformity are replaced, to require the consumer to pay compensation for the use
of those goods – No charge for the use of the goods not in conformity)

In Case C‐404/06,

REFERENCE for a preliminary ruling under Article 234 EC, by the Bundesgerichtshof (Germany), made by decision of 16 August
2006, received at the Court on 28 September 2006, in the proceedings

**Quelle AG**

v

**Bundesverband der Verbraucherzentralen und Verbraucherverbände,**

THE COURT (First Chamber),

composed of P. Jann (Rapporteur), President of the Chamber, A. Tizzano, A. Borg Barthet, M. Ilešič and E. Levits, Judges,

Advocate General: V. Trstenjak,

Registrar: B. Fülöp, Administrator,

having regard to the written procedure and further to the hearing on 4 October 2007,

after considering the observations submitted on behalf of:

–        Quelle AG, by A. Piekenbrock, Rechtsanwalt,

–        the Bundesverband der Verbraucherzentralen und Verbraucherverbände, by P. Wassermann and J. Kummer, Rechtsanwälte,

–        the German Government, by M. Lumma and J. Kemper, acting as Agents,

–        the Spanish Government, by N. Díaz Abad, acting as Agent,

–        the Austrian Government, by C. Pesendorfer, acting as Agent,

–        the Commission of the European Communities, by A. Aresu and B. Schima, and by I. Kaufmann-Bühler, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 15 November 2007,

gives the following

**Judgment**

1        This reference for a preliminary ruling relates to the interpretation of Article 3 of Directive 1999/44/EC of the European
Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees (OJ
1999 L 171, p. 12; ‘the Directive’).

2        The reference has been made in the course of proceedings between Quelle AG (‘Quelle’), a mail-order company, and the Bundesverband
der Verbraucherzentralen und Verbraucherverbände (‘the Bundesverband’), an authorised consumers’ association acting on behalf
of Ms Brüning, one of Quelle’s customers.

**Legal context**

*Community legislation*

3        The Directive was adopted on the basis of Article 95 EC. The first recital in the preamble thereto states that, in accordance
with Article 153(1) and (3) EC, the European Community must contribute to the achievement of a high level of consumer protection
by the measures it adopts pursuant to Article 95 EC.

4        Article 3 of the Directive, entitled ‘Rights of the consumer’, provides:

‘1.      The seller shall be liable to the consumer for any lack of conformity which exists at the time the goods were delivered.

2.      In the case of a lack of conformity, the consumer shall be entitled to have the goods brought into conformity free of charge
by repair or replacement, in accordance with paragraph 3, or to have an appropriate reduction made in the price or the contract
rescinded with regard to those goods, in accordance with paragraphs 5 and 6.

3.      In the first place, the consumer may require the seller to repair the goods or he may require the seller to replace them,
in either case free of charge, unless this is impossible or disproportionate.

A remedy shall be deemed to be disproportionate if it imposes costs on the seller which, in comparison with the alternative
remedy, are unreasonable, ... .

Any repair or replacement shall be completed within a reasonable time and without any significant inconvenience to the consumer,
taking account of the nature of the goods and the purpose for which the consumer required the goods.

4.      The terms “free of charge” in paragraphs 2 and 3 refer to the necessary costs incurred to bring the goods into conformity,
particularly the cost of postage, labour and materials.

5.      The consumer may require an appropriate reduction of the price or have the contract rescinded:

–        if the consumer is entitled to neither repair nor replacement, or

–        if the seller has not completed the remedy within a reasonable time, or

–        if the seller has not completed the remedy without significant inconvenience to the consumer.

...’

5        The 15th recital in the preamble to the Directive states that ‘Member States may provide that any reimbursement to the consumer
may be reduced to take account of the use the consumer has had of the goods since they were delivered to him; ... the detailed
arrangements whereby rescission of the contract is effected may be laid down in national law’.

6        Under the first sentence of Article 5(1) of the Directive (that article being entitled ‘Time limits’):

‘The seller shall be held liable under Article 3 where the lack of conformity becomes apparent within two years as from delivery
of the goods.’

7        Article 8(2) of the Directive (that article being entitled ‘National law and minimum protection’), provides:

‘Member States may adopt or maintain in force more stringent provisions, compatible with the Treaty in the field covered by
this Directive, to ensure a higher level of consumer protection.’

*National legislation*

8        Paragraphs 439 and 346 are among the provisions of the German Civil Code (Bürgerliches Gesetzbuch; ‘the BGB’) adopted in order
to transpose the Directive into German domestic law.

9        Paragraph 439(4) of the BGB, entitled ‘Subsequent performance’, states:

‘Where a seller delivers goods free from defects for the purposes of subsequent performance, he may require the purchaser
to return the defective goods pursuant to Paragraphs 346 to 348.’

10      Paragraph 346(1) to (3) of the BGB, entitled ‘Effects of termination of the contract’, states as follows:

‘1.      If one party to a contract has reserved the right to terminate the contract or if he has a statutory right of termination,
then, if termination occurs, any performance received shall be returned, and the benefits derived from such performance shall
be surrendered.

2.      The debtor shall pay compensation for value, in lieu of restitution or surrender, where:

(1)      restitution or surrender is excluded by virtue of the nature of what has been obtained;

(2)      he has used up, transferred, encumbered, processed or transformed the object received;

(3)      the object received has deteriorated or has been destroyed, any deterioration resulting from the proper use of the object
for its intended purposes being disregarded.

If the contract specifies a counter-performance, such counter-performance shall be taken as a basis for calculation of the
compensation for value; if compensation is to be paid for the benefit deriving from a loan, it shall be sufficient to show
that the value of such benefit was lower.

3.      No obligation to pay compensation for value shall arise:

(1)      if the defect which gives the right to termination became apparent only during the processing or transformation of the object;

(2)      in so far as the creditor is responsible for the deterioration or destruction, or in so far as the damage would also have
occurred in his hands;

(3)      if, in the case of a statutory right of termination, the deterioration or destruction has occurred in the hands of the person
entitled, even though he has taken the care that he customarily exercises in relation to his own affairs.

Any remaining enrichment must be surrendered.’

11      Paragraph 100 of the BGB, headed ‘Benefits’, provides that:

‘Benefits are the fruits of a thing or of a right, including the benefits arising from use of the thing or exercise of the
right’.

**The dispute in the main proceedings and the question referred for a preliminary ruling**

12      In August 2002, Quelle delivered a ‘stove-set’ to Ms Brüning for her private use. In early 2004, Ms Brüning noticed that the
appliance was not in conformity. Since repair was not possible, Ms Brüning returned the appliance to Quelle, who replaced
it with a new appliance. However, Quelle required Ms Brüning to pay EUR 69.97 by way of compensation for the benefit which
she had obtained from use of the appliance initially delivered.

13      The Bundesverband, acting as Ms Brüning’s authorised representative, demanded reimbursement to her of that amount. In addition,
it applied for an order prohibiting Quelle, in cases where goods not in conformity with the contract of sale (‘not in conformity’)
are replaced, from invoicing consumers for the use of those goods.

14      The court hearing the case at first instance granted the application for reimbursement, but dismissed the arguments seeking
an order directing Quelle not to invoice customers for the use of goods not in conformity. The appeals brought against that
judgment – both by Quelle and by the Bundesverband – were dismissed. The Bundesgerichtshof, before which appeal proceedings
have been brought on a point of law, notes that, under Paragraph 439(4) of the BGB, read in conjunction with Paragraph 346(1)
and (2)(1) thereof, the seller is entitled, in cases where goods not in conformity are replaced, to payment by way of compensation
for the benefits derived by the purchaser from the use of those goods until their replacement with new goods.

15      While expressing doubts regarding the unilateral burden thus placed on the purchaser, the Bundesgerichtshof states that it
sees no way of correcting the national legislation by means of interpretation. An interpretation to the effect that the seller
could not claim payment from the purchaser for use of the replaced goods would be at odds with the wording of the relevant
provisions of the BGB and the clear intention of the legislature, and is prohibited by Paragraph 20(3) of the Basic Law (Grundgesetz),
according to which judicial authority is bound by legislation and by the law.

16      Being unsure, however, whether the provisions of the BGB are in compliance with Community legislation, the Bundesgerichtshof
decided to stay proceedings and to refer the following question to the Court for a preliminary ruling:

‘Are the provisions of Article 3(2) of [the Directive], read in conjunction with the first subparagraph of Article 3(3) and
Article 3(4) thereof, or of the third subparagraph of Article 3(3) of [the Directive] ... to be interpreted as precluding national
legislation which provides that, where consumer goods are brought into conformity with the contract by means of delivery of
replacement goods, the seller may require compensation from the consumer for use of the goods originally delivered, which
were not in conformity with the contract?’

**The question referred**

17      By its question, the national court essentially asks whether Article 3 of the Directive is to be interpreted as precluding
national legislation under which a seller who has sold consumer goods which are not in conformity may require the consumer
to pay compensation for the use of those defective goods until their replacement with new goods.

*Admissibility*

18      At the hearing, Quelle argued that the question referred for a preliminary ruling is not admissible, given that the national
court has stated that the provisions of national law implementing the Directive are open to only one interpretation and that
German constitutional law prohibits the national court from espousing an interpretation *contra legem*. In consequence, if the Court of Justice were to place a different construction on Article 3 of the Directive, the national
court would not be able to take account of the Court’s answer.

19      In that regard, it must be recalled that, in proceedings under Article 234 EC, which are based on a clear separation of functions
between the national courts and the Court of Justice, any assessment of the facts in the case is a matter for the national
court before which the dispute has been brought and which must assume responsibility for the subsequent judicial decision,
and which must determine, in the light of the particular circumstances of the case, both the need for a preliminary ruling
in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently,
where the questions submitted concern the interpretation of Community law, the Court is in principle bound to give a ruling
(see, inter alia, Case C‐419/04 *Conseil général de la Vienne* [2006] ECR I‐5645, paragraph 19, and Case C‐119/05 *Lucchini* [2007] ECR I‐0000, paragraph 43).

20      The Court may refuse to rule on a question referred for a preliminary ruling by a national court only where it is quite obvious
that the interpretation of Community law that is sought bears no relation to the facts of the main action or its purpose,
where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give
a useful answer to the questions submitted to it (see, inter alia, *Conseil général de la Vienne*, paragraph 20, and *Lucchini*, paragraph 44).

21      That is not the position in the present case.

22      The uncertainty as to whether the national court – following an answer given by the Court of Justice to a question referred
for a preliminary ruling relating to interpretation of a directive – may, in compliance with the principles laid down by the
Court (see, to that effect, Joined Cases C‐397/01 to C‐403/01 *Pfeiffer and Others* [2004] ECR I‐8835, paragraphs 113 to 116, and Case C‐212/04 *Adeneler and Others* [2006] ECR I‐6057, paragraphs 110 to 112), interpret national law in the light of that answer cannot affect the Court’s obligation
to rule on that question. Any other approach would be incompatible with the very aim of the powers given to the Court by Article
234 EC, which are intended, in essence, to ensure the uniform application of Community law by the national courts (Case C‐461/03
*Gaston Schul Douane-expediteur* [2005] ECR I‐10513, paragraph 21, and Case C‐344/04 *IATA and ELFAA* [2006] ECR I‐403, paragraph 27).

23      It follows that the reference for a preliminary ruling is admissible.

*Substance*

24      According to the Bundesverband, the Spanish and Austrian Governments and the Commission of the European Communities, Article
3(3) of the Directive clearly establishes that it is not only the repair of goods not in conformity that must be carried out
for the consumer free of charge by the seller, but also – where appropriate – their replacement with goods which are in conformity.
In all the situations covered by that provision, the ‘free of charge’ requirement applies as a whole and in full, being intended
to protect the purchaser from the risk of financial burdens which might dissuade him from asserting his rights.

25      The German Government observes that the wording of the Directive gives no clear indication whether the seller may, in cases
where goods not in conformity are replaced, claim payment for the use of those goods. It points out that, in terms of internal
logic, the 15th recital in the preamble to the Directive sets out a very general principle of law, leaving the Member States
entirely free to legislate on the question concerning the situations in which the consumer is required to pay compensation
for the use of goods.

26      As a preliminary point, it should be borne in mind that, under Article 3(1) of the Directive, the seller is to be liable to
the consumer for any lack of conformity in the goods at the time when they are delivered.

27      Article 3(2) of the Directive lists the rights which the consumer may rely on against the seller in cases where the goods
delivered are not in conformity. Initially, the consumer has the right to require the goods to be brought into conformity.
If that is not possible, he may subsequently require a reduction in the price or rescission of the contract.

28      As regards the bringing into conformity of the goods, Article 3(3) of the Directive states that the consumer is entitled to
require the seller to repair the goods or to replace them – in either case free of charge – unless that is impossible or disproportionate.

29      The German Government argues that, in both Proposal 96/C 307/09 for a European Parliament and Council Directive on the sale
of consumer goods and associated guarantees (OJ 1996 C 307, p. 8) and Amended Proposal 98/C 148/11 for a European Parliament
and Council Directive (OJ 1998 C 148, p. 12), submitted by the Commission, the text merely referred either to a repair of
the goods free of charge or to a replacement thereof. The fact that those proposals are silent as to the financial consequences
of replacement goes to show that it was not intended that the Directive should govern the question of compensation for use.

30      However, that is entirely irrelevant since it is the expression ‘in either case free of charge’ – used in Common Position
(EC) No 51/98, adopted by the Council on 24 September 1998 with a view to adopting the Directive (OJ 1998 C 333, p. 46) –
which was retained in the definitive text, thus reflecting the intention of the Community legislature to strengthen consumer
protection.

31      The expression ‘free of charge’ is defined in Article 3(4) of the Directive as referring to ‘the necessary costs incurred
to bring the goods into conformity, particularly the cost of postage, labour and materials’. It follows from the use by the
Community legislature of the adverb ‘particularly’ that that list is illustrative, not exhaustive.

32      The fact, relied upon by the German Government, that Press Release C/99/77 of the ‘Parliament – Council’ Conciliation Committee
of 18 March 1999 on agreement on consumer guarantees gives a restrictive definition of the term ‘free of charge’ is irrelevant
in that regard. It is settled case-law that, where a statement recorded in Council minutes is not referred to in the wording
of a provision of secondary legislation, it cannot be used for the purpose of interpreting that provision (see, inter alia,
Case C‐292/89 *Antonissen* [1991] ECR I‐745, paragraph 18, and Case C‐402/03 *Skov and Bilka* [2006] ECR I‐199, paragraph 42).

33      Thus it follows from the wording of the Directive, as well as from the related travaux préparatoires, that the Community legislature
intended to make the ‘free of charge’ aspect of the seller’s obligation to bring goods into conformity an essential element
of the protection afforded to consumers by the Directive.

34      The ‘free of charge’ requirement attaching to the seller’s obligation to bring the goods into conformity, whether by repair
or replacement, is intended to protect consumers from the risk of financial burdens which, as the Advocate General observed
in point 49 of her Opinion, might dissuade them from asserting their rights in the absence of such protection. The certain
nature of the ‘free of charge’ aspect, which was intentional on the part of the Community legislature, means that the seller
cannot make any financial claim in connection with the performance of its obligation to bring into conformity the goods to
which the contract relates.

35      Support for that interpretation is to be found in the intention, manifested by the Community legislature in the third subparagraph
of Article 3(3) of the Directive, to provide effective protection to consumers. That provision states that any repair or replacement
is to be completed not only within a reasonable time but also without significant inconvenience to the consumer.

36      That interpretation is also consistent with the purpose of the Directive which, as stated in the first recital in the preamble
thereto, is to ensure a high level of consumer protection. As follows from Article 8(2) of the Directive, the protection provided
by it is minimal and, although Member States may adopt more stringent provisions, they may not undermine the guarantees laid
down by the Community legislature.

37      The other arguments advanced by the German Government against that interpretation are not such as to call it into question.

38      As regards, first, the scope which must be accorded to the 15th recital in the preamble to the Directive, which permits account
to be taken of the use the consumer has had of the goods not in conformity, it should be noted that the first part of that
recital refers to a ‘reimbursement’ to be made to the consumer, whereas the second part mentions the ‘detailed arrangements
whereby rescission of the contract is effected’. Those expressions are identical to those used in the Common Position of the
Council to which the German Government also referred.

39      That terminology makes it clear that the situation envisaged in the 15th recital is restricted to cases where the contract
is terminated, as provided for in Article 3(5) of the Directive, and where, pursuant to the principle that the contracting
parties must each give up the benefits they have received, the seller must reimburse to the consumer the selling price of
the goods. Contrary to the contentions of the German Government, the 15th recital cannot, therefore, be interpreted as a general
principle enabling the Member States to take account, in any situation they wish, including that of a mere request for replacement
submitted pursuant to Article 3(3) of the Directive, of the use which the consumer has had of goods not in conformity.

40      As regards, secondly, the German Government’s assertion that the fact that, by virtue of the replacement of goods not in conformity,
the consumer has the benefit of new goods without having to make proper payment constitutes unjust enrichment, it should be
borne in mind that Article 3(1) of the Directive makes the seller liable to the consumer for any lack of conformity which
exists at the time the goods are delivered.

41      If a seller delivers goods which are not in conformity, it fails correctly to perform the obligation which it accepted in
the contract of sale and must therefore bear the consequences of that faulty performance. By receiving new goods to replace
the goods not in conformity, the consumer – who, for his part, paid the selling price and therefore correctly performed his
contractual obligation – is not unjustly enriched. He merely receives, belatedly, goods in conformity with the specifications
of the contract, which he should have received at the outset.

42      The fact remains that the seller’s financial interests are protected, on the one hand, by the two-year time-limit laid down
in Article 5(1) of the Directive and, on the other, by the fact that, under the second subparagraph of Article 3(3) of the
Directive, it may refuse to replace the goods where that remedy would be disproportionate in that it would impose unreasonable
costs on the seller.

43      In the light of all the foregoing, the answer to the question referred must be that Article 3 of the Directive is to be interpreted
as precluding national legislation under which a seller who has sold consumer goods which are not in conformity may require
the consumer to pay compensation for the use of those defective goods until their replacement with new goods.

**Costs**

44      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court,
the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs
of those parties, are not recoverable.

On those grounds, the Court (First Chamber) hereby rules:

**Article 3 of Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale
of consumer goods and associated guarantees is to be interpreted as precluding national legislation under which a seller who
has sold consumer goods which are not in conformity may require the consumer to pay compensation for the use of those defective
goods until their replacement with new goods.**

[Signatures]

---

- Language of the case: German.