Order — ECLI:EU:C:2004:1
Date: 2004-01-06
Language of the case: Dutch
Court formation: Third Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Agriculture and Fisheries;Milk products;Non-contractual liability
Concepts: Costs
Procedure: Action for damages;Application as to costs
Origin: Germany;Netherlands

Summary 
1. The levy scheme and the Court's case-law I -3095 
2. The applicants I -3099 
3. The admissibility of the applications 1-3100 
4. Assessment of the Community's liability 1-3102 
4.1. The requirements for liability applied by the Court in connection with legislative 
measures 1-3102 
4.2. Liability on account of the Court's declaration that Regulation N o 857/84 is invalid 
1-3105 
4.2.1. Liability as a result of the judgments in Mulder and von Deetzen declaring the 
regulation invalid I -3106 
(i) Breach of a superior rule of law for the protection of the individual 1-3106 
(ii) Serious and inexcusable nature of the breach of the principle of protection of 
legitimate expectations I -3106 
(iii) A limited and clearly defined group of producers are adversely affected by the 
breach I-3110 
(iv) The alleged damage went beyond the bounds of the economic risks inherent in 
activities in the milk sector 1-3112 
4.2.2. (No) liability as a result of the declaration of invalidity in the Spagl and Pastätter 
cases I -3114 
4.3. The existence of damage and the causal link I -3115 
5. Assessment of the damage 1-3117 
5.1. The period and reference quantity to be taken into account in calculating the 
damage 1-3118 
5.1.1. The period to be taken into account 1-3118 
5.1.2. The reference quantity to be taken into account 1-3118 
(i) Basis for the calculation 1-3118 
(ii) The reduction coefficient 1-3119 
* Original language: Dutch. 
I - 3094 
MULDER v COUNCIL A N D COMMISSION 
5.2. Assessment of the damage suffered by way of loss of profit 1-3121 
5.3. Interest due I -3123 
5.3.1. Legal interest I -3123 
5.3.2. Compensatory interest 1-3124 
Conclusion Į -3124 
Mr President, 
Members of the Court, 
1. The applicants in the joined cases which I 
am now to consider are farmers who, in 
accordance with undertakings given pursuant 
to Council Regulation (EEC) N o 1078/77 of 
17 May 1977, ' delivered no milk or dairy 
products during the reference year that their 
Member States adopted for the application of 
the additional levy introduced by Council 
Regulations Nos 856/842 and 857/843 of 
31 March 1984 (hereinafter referred to as 'the 
levy scheme'). As a result, they received no 
reference quantity, that is to say, a quantity 
exempted from the additional levy by virtue 
of Article 2 of Regulation N o 857/84. Pursu­
ant to Article 178 and the second paragraph 
of Article 215 of the EEC Treaty, the appli­
cants claim that the European Economic 
Community, represented by the Council and 
the Commission, should be ordered to pay 
compensation for the damage which they 
have sustained and are still to sustain as a 
result. 
These cases are the first two applications of a 
great number — at present more than one 
hundred — with that object which have been 
received at the Court. The Court has sus­
pended the proceedings in the other cases 
until judgment has been given in these pro­
ceedings. 
1. The levy scheme and the Court 's case-law 
2. The applicants' actions follow on from 
the Court's judgments of 28 April 1988 in 
Mulder4 and von Deetzen, 5 which were 
concerned with the application of Regulation 
N o 857/84 to producers who, pursuant to a 
non-marketing undertaking given under 
Regulation N o 1078/77, had not delivered 
any milk during the reference year adopted 
by the Member State concerned. Regulation 
N o 1078/77, which has since been repealed, 
provided for two types of premium, namely 
a non-marketing premium and a conversion 
premium. Only the former is relevant to 
these proceedings. The non-marketing pre­
mium was granted on request to any pro­
ducer undertaking not to dispose of milk or 
milk products from his holding whether for 
1 — Council Regulation (EEC) N o 1078/77 of 17 May 
1977 introducing a system of premiums for the non-
marketing of milk and milk products and for the conversion 
of dairy herds (OJ 1977 L 131, p. 1). 
2 — Council Regulation (EEC) N o 856/84 of 31 March 
1984 amending Regulation (EEC) N o 804/68 on the com­
mon organization of the market in milk and milk products 
(OJ 1984 L 90, p. 10). 
3 — Council Regulation (EEC) N o 857/84 of 31 March 
1984 adopting general rules for the application of the levy 
referred to in Article 5c of Regulation (EEC) N o 804/68 in 
the milk and milk products sector (OJ 1984 L 90, p. 13). 
4 — Case 120/86 Mulder v Minister van Landbouw en Visserij 
[1988] ECR 2321. 
5 — Case 170/86 von Deetzen v Hauptzollamt Hamburg-Jonas 
[1988] ECR 2355. 
I - 3095 
OPINION OF MR VAN GERVEN — JOINED CASES C-104/89 AND C-37/90 
a consideration or free of charge for a period 
of five years. For the sake of brevity I shall 
refer to producers who took advantage of 
the scheme introduced by Regulation No 
1078/77 as 'non-marketers'. 
3. In the judgment in Mulder the Court 
answered two questions which were referred 
by the College van Beroep voor het Bedrijf­
sleven (administrative court of last instance 
in matters of trade and industry) for a pre­
liminary ruling. In its first question, the 
national court asked whether in establishing 
the reference quantities referred to in Article 
2 of Regulation N o 857/84 Member States 
might not take account of the specific situa­
tion of non-marketers. The Court stated in 
reply that the Member States might take 
account of the special circumstances of non-
marketers 'only in so far as each producer 
fulfils the specific conditions laid down in 
Regulation N o 857/84 and if the Member 
States have reference quantities available for 
that purpose'. 
The second question in Mulder, which was 
also raised in von Deetzen's case, was 
whether or not in the light of that interpre­
tation Regulation N o 857/84 was valid. I 
shall set out in extenso the reasoning fol­
lowed by the Court in answering that ques­
tion (paragraphs 23 to 28 of the judgment in 
Mulder and paragraphs 12 to 17 of that in 
von Deetzen): 
'It must be conceded, as the Netherlands 
Government and the Commission have cor­
rectly observed, that a producer who has 
voluntarily ceased production for a certain 
period cannot legitimately expect to be able 
to resume production under the same condi­
tions as those which previously applied and 
not to be subject to any rules of market or 
structural policy adopted in the meantime. 
The fact remains that where such a producer, 
as in the present case, has been encouraged 
by a Community measure to suspend mar­
keting for a limited period in the general 
interest and against payment of a premium 
he may legitimately expect not to be subject, 
upon the expiry of his undertaking, to 
restrictions which specifically affect him pre­
cisely because he availed himself of the pos­
sibilities offered by the Community provi­
sions. 
However, the regulations on the additional 
levy on milk give rise to such restrictions for 
producers who, pursuant to an undertaking 
entered into under Regulation N o 1078/77, 
did not deliver milk during the reference 
year. As stated in the reply to the first ques­
tion, those producers may in fact be denied a 
reference quantity under the new system 
precisely because of that undertaking if they 
do not fulfil the specific conditions laid 
down in Regulation N o 857/84 or if the 
Member States have no reference quantities 
available. 
Contrary to the Commission's contention, 
total and continuous exclusion of that kind 
for the entire period of application of the 
regulations on the additional levy, preventing 
the producers concerned from resuming the 
marketing of milk at the end of the five-year 
period, was not an occurrence which those 
producers could have foreseen when they 
I - 3096 
MULDER v COUNCIL AND COMMISSION 
entered into an undertaking, for a limited 
period, not to deliver milk. There is nothing 
in the provisions of Regulation N o 
1078/77 or in its preamble to show that the 
non-marketing undertaking entered into 
under that regulation might, upon its expiry, 
entail a bar to resumption of the activity in 
question. Such an effect therefore frustrates 
those producers' legitimate expectation that 
the effects of the system to which they had 
rendered themselves subject would be lim­
ited. 
It follows that the regulations on the addi­
tional levy on milk were adopted in breach 
of the principle of protection of legitimate 
expectations. Those regulations must there­
fore be declared invalid on that ground, and 
it is unnecessary to consider the other argu­
ments as to their invalidity put forward in 
the course of the proceedings. 
The reply to the second question submitted 
must therefore be that Council Regulation 
(EEC) No 857/84 of 31 March 1984, as sup­
plemented by Commission Regulation 
(EEC) No 1371/84 of 16 May 1984, is 
invalid in so far as it does not provide for the 
allocation of a reference quantity to produc­
ers who, pursuant to an undertaking entered 
into under Council Regulation (EEC) N o 
1078/77 of 17 May 1977, did not deliver milk 
during the reference year adopted by the 
Member State concerned.' 
4. Approximately one year after the judg­
ments in Mulder and von Deetzen, the 
Council, by means of Regulation N o 
764/89, 6 added an Article 3a to Regulation 
No 857/84 providing for the grant of provi­
sional special reference quantities to non-
marketers. The grant of such reference quan­
tities was subject to certain conditions with a 
view to ensuring, in the words of the second 
recital in the preamble to the new regulation, 
that the producers concerned 
'intend and are really able to resume milk 
production and find it impossible to obtain a 
reference quantity pursuant to Article 2 of 
Regulation (EEC) N o 857/84'. 
The provisional special reference quantity is 
equal to 60% of the quantity of milk deliv­
ered by the producer concerned during the 
twelve calendar months preceding the month 
in which the application for the non-
marketing premium was made. This refer­
ence quantity is to be allocated to the pro­
ducer definitively if, within two years from 
29 March 1989, the producer can prove that 
he has actually resumed deliveries 7 and that 
the deliveries have attained during the previ­
ous twelve months a level equal to or greater 
than 80% of the provisional reference quan­
tity. If the holding is sold or leased before 
1 April 1992, the special reference quantity 
will be returned to the Community reserve. 
5. In order to make the allocation of the spe­
cial reference quantity provided for in Arti­
cle 3a possible, the Council proceeded as fol­
lows. In order to achieve the objective of 
production control, it first reduced the guar-
6 — Council Regulation (EEC) N o 764/89 of 20 March 
1989 amending Regulation (EEC) N o 857/84 adopting gen­
eral rules for tne application of the levy referred to in Article 
5c of Regulation (EEC) N o 804/68 in the milk and milk 
products sector (OJ 1989 L 84, p. 2). 
7 — Since none of the applicants sold the milk which he used to 
produce direct, I shall, for the sake of brevity, make no ref­
erence to the provisions of the levy scheme which deal with 
'direct sale'. 
I - 3097 
OPINION OF MR VAN GERVEN — JOINED CASES C-104/89 AND C-37/90 
anteed total quantity of each Member State. 8 
It compensated for the impact of the reduc­
tion on producers' individual reference 
quantities by decreasing the rate of with­
drawal introduced by Regulation No 
775/87 » from 5.5% to 4 .5%. 1 0 By Regula­
tion No 3881/89 n the Council increased the 
Community reserve referred to in Article 
5c(4) of Regulation N o 804/6812 to 
2 082 887.750 tonnes for 1989-1990 (the cor­
responding figure for 1988-1989 was 
443 000 tonnes), " of which 600 000 tonnes 
was earmarked for the allocation by the 
Member States of the special reference quan­
tities provided for in Article 3a of Regulation 
N o 857/84.14 
6. In the judgments given on 11 December 
1990 in the Spagl15 and Pastätter u cases the 
Court answered the question whether the 
60% rule laid down in Article 3a(2) of Reg­
ulation N o 857/84 was valid. On the one 
hand, the Court held that the Community 
legislature was entitled to apply a reduction 
coefficient to the volume of milk delivered 
by the producers concerned, in order to 
ensure that they were not accorded an undue 
advantage by comparison with the producers 
who had continued to deliver milk during 
the reference year. On the other hand, it held 
that, in comparison with the percentages by 
which the reference quantities of the latter 
producers had been reduced — which in no 
case exceeded 17.5% —, the reduction coef­
ficient might not be fixed at such a high level 
as specifically to affect non-marketers by 
very reason of the non-marketing undertak­
ing which they had given. The Court took 
the view that a 40% reduction was in breach 
of the principle of protection of legitimate 
expectations. Accordingly, it declared Article 
3a(2) of Regulation N o 857/84 invalid.17 
7. By Regulation N o 1639/91 of 13 June 
1991 18 the Council amended the Article 
3a(2) which the Court had declared invalid, 
replacing it by a provision of which the first 
subparagraph reads as follows: 
'The special reference quantity shall be deter­
mined by the Member State in accordance 
with objective criteria, by deducting from 
the quantity in respect of which the pre­
mium entitlement under Regulation (EEC) 
N o 1078/77 has been preserved or acquired a 
percentage representative of all the abate­
ments applied to the reference quantities 
established in accordance with Article 2, 
8 — Council Regulation (EEC) N o 3879/89 of 11 December 
1989 amending Regulation (EEC) N o 804/68 on the com­
mon organization of the market in milk and milk products 
(OJ 1989 L 378, p . 1). 
9 — Council Regulation (EEC) N o 775/87 of 16 March 
1987 temporarily withdrawing a proportion of the reference 
quantities mentioned in Article 5c(l) of Regulation (EEC) 
N o 80-4/68 on the common organization of the market in 
milk and milk products (OJ 1987 L 78, p. 5). 
10 — Council Regulation (EEC) N o 3882/89 of 11 December 
1989 amending Regulation (EEC) N o 775/87 temporarily 
withdrawing a proportion of the reference quantities men­
tioned in Article 5c(l) of Regulation (EEC) No 804/68 on 
the common organization of the market in milk and milk 
products (OJ 1989 L 378, p. 6). 
11 — Council Regulation (EEC) N o 3881/89 of 11 December 
1989 establishing, for the period 1 April 1989 to 31 March 
1990, the Community reserve for the application of the levy 
referred to in Article 5c of Regulation (EEC) No 804/68 in 
the milk and milk products sector (OJ 1989 L 378, p. 5). 
12 — Regulation (EEC) N o 804/68 of the Council of 27 June 
1968 on the common organization of the market in milk 
and milk products (OJ, English Special Edition 1968(1), p . 
176. 
13 — For the 1990-91 and 1991-92 periods see Council Regula­
tion (EEC) N o 1184/90 of 7 May 1990 (OJ 1990 L 119, p. 
30) and Council Regulation (EEC) N o 1636/91 of 13 June 
1991 (OJ 1991 L 150, p. 35). 
14 — The balance of the increase in the Community reserve 
(1 039 885.740 tonnes) was intended for the producers 
referred to in Article 3b of Regulation N o 857/84, a provi­
sion added by Council Regulation No 3880/89 of 
11 December 1989 (OJ 1989 L 378, p . 3). 
15 — Case C-189/89 Spagl v HauptzoUamt Rosenheim [1990] 
ECR 1-4539 . 
16 — Case C-217/89 Pastätter v Hauptzollamt Bad Reichenhall 
[1990] ECR 1-4585. 
17 — In the judgment of 22 October 1991 in Case C-44/89 von 
Deetzen [1991] ECR 1-5119, (hereinafter referred to as 'von 
Deetzen No 2') the Court confirmed, by reference to the 
judgments in Spagl and Pastätter, that Article 3a(2) of Regu­
lation N o 857/84 was invalid. 
18 — Council Regulation (EEC) N o 1639/91 of 13 June 
1991 amending Regulation (EEC) N o 857/84 adopting gen­
eral rules for the application of the levy referred to in Arti­
cle 5c of Regulation (EEC) N o 804/68 in the milk and milk 
products sector (OJ 1991 L 150, p. 35). 
I - 3098 
MULDER v COUNCIL AND COMMISSION 
including in any case a basic reduction of 
4.5%, or Article 6.' 
In the second recital in the preamble to that 
regulation the Council stated that a greater 
increase in the Community reserve could not 
be envisaged for the allocation of new special 
reference quantities without prejudicing the 
equilibrium of the milk market. The Council 
added that: 
'therefore, in order to grant new special ref­
erence quantities to producers having given a 
non-marketing or conversion undertaking, 
the possibility of reducing the reference 
quantities for other producers should be 
provided for, as suggested by the Court of 
Justice; ... provision should therefore be 
made to increase national reserves and Arti­
cles 3 and 5 of Regulation (EEC) No 
857/84 should be amended to this end'. 
2. The applicants 
8. The applicants in Case C-104/89, Messrs 
Mulder, Brinkhoff, Muskens and Twijnstra, 
are dairy farmers resident in the Netherlands 
who gave five-year non-marketing undertak­
ings. The premiums which they received in 
return were calculated on the basis of the 
following production quantities respectively: 
463 566 kg, 296 507 kg, 300 340 kg and 
591 905 kg. None of the applicants delivered 
any milk in 1983, the reference year adopted 
by the Netherlands. Mr Mulder's undertak­
ing expired on 30 September 1984, Mr 
Brinkhoff's on 4 May 1989, Mr Muskens's 
on 21 November 1984 and Mr Twijnstra's on 
9 April 1985. 
Before their undertakings expired, the appli­
cants applied to the competent Netherlands 
authority for a reference quantity. Their 
applications were turned down. They then 
appealed to the College van Beroep voor het 
Bedrijfsleven. In the course of the proceed­
ings brought by Mr Mulder, a number of 
questions were referred to the Court of Jus­
tice for a preliminary ruling. They were 
answered in the judgment of 28 April 1988. 
On 30 November 1988 the College van 
Beroep, acting on the basis of that judgment, 
annulled the decision of the Netherlands 
authorities refusing to grant Mr Mulder a 
reference quantity. Mr Mulder's claim for 
damages was, however, dismissed on the 
ground that: 
'the authority which adopted the Order had 
no power to take in that Order a specific 
measure in respect of producers such as the 
applicants which deviated from the provi­
sions of Regulation N o 857/84. That power 
was vested in the Council of the European 
Communities when it adopted the regula­
tion. It follows from the judgment that there 
was a legal obligation on the Council itself to 
take such a measure. Consequently, since the 
contested decision was taken within the lim­
its — laid down by Community law — of 
the Order and the defendant, as held above, 
was not empowered to step outside those 
limits, no obligation can arise on the part of 
the defendant to pay compensation for the 
damage sustained by the applicant.' 
By judgments of 10 May 1989 the College 
van Beroep reached the same decision 
regarding the actions brought by Messrs 
Brinkhoff, Muskens and Twijnstra for the 
annulment of the decisions refusing to grant 
them reference quantities. 
I - 3099 
OPINION OF MR VAN GERVEN — JOINED CASES C-104/89 AND C-37/90 
Following the Court's judgments in Mulder 
and von Deetzen — but before Regulation 
N o 764/89 was issued — Messrs Mulder, 
Brinkhoff and Twijnstra resumed milk pro­
duction (on 10 July 1988, 3 February 
1989 and 1 May 1988, respectively). They 
were not granted provisional special refer­
ence quantities, in the amounts of 
278 140 kg, 176 481 kg and 245 653 kg 
respectively, until August 1989, pursuant to 
the Netherlands legislation enacted in order 
to implement Article 3a of Regulation No 
857/84 which had been adopted in the mean­
time. Mr Muskens, for his part, deferred 
resumption of milk production until winter 
1989 following the allocation of a provisional 
special reference quantity of 180 204 kg in 
late July that year. 
9. The applicant in Case C-37/90, Mr Hei­
nemann, a dairy farmer resident in the Fed­
eral Republic of Germany, also entered into 
a non-marketing undertaking pursuant to 
Regulation N o 1078/77. His premium was 
calculated on the basis of a production quan­
tity of 39 102 kg. In accordance with the 
undertaking which he gave, he delivered no 
milk during 1983, the reference year adopted 
by Germany. Mr Heinemann's undertaking 
expired on 20 November 1984. 
Before the undertaking expired, Mr Heine­
mann applied to the Landwirtschaftskammer 
(chamber of agriculture) Hannover for a cer­
tificate on the basis of which he could 
apply to a dairy for an individual reference 
quantity. The Landwirtschaftskammer 
refused to issue him such a certificate and Mr 
Heinemann challenged that decision in the 
Verwaltungsgericht (Administrative Court) 
Hannover. When in July 1989 the Land-
wirtschaftskammer did issue such a certifi­
cate granting him a provisional special 
60% reference quantity under the German 
legislation adopted pursuant to Article 3a, 
which had been adopted in the meantime, 
there was no longer any reason for those 
proceedings. 
In December 1985 Mr Heinemann had also 
applied to Hauptzollamt (Principal Customs 
Office) Hannover to grant him a reference 
quantity of its own motion, but his request 
was refused. Mr Heinemann contested that 
decision by bringing proceedings in the 
Finanzgericht (Finance Court) Hannover. As 
he has since been allocated a provisional spe­
cial reference quantity of 22 023 kg pursuant 
to the 60% rule, those proceedings can only 
relate to the refusal to grant him a reference 
quantity of 100%. 
In August 1989 Mr Heinemann resumed 
deliveries of milk. 
3. The admissibility of the applications 
10. The Council and the Commission con­
test the admissibility of the applications 
brought before the Court. Referring to the 
Court's judgment in Krohn 19 they argue that 
a claim based on non-contractual liability on 
the part of the Community is admissible 
only if the decision adversely affecting the 
applicant can be attributed to a Community 
institution. They claim that in the cases 
before the Court the refusal to allocate a ref­
erence quantity must, however, be attributed 
to the relevant national authorities, since 
Articles 3, 4 and 4a of Regulation N o 
857/84 give the national authorities the 
power to allocate special or additional refer-
19 — Judgment of 26 February 1986 in Case 175/84 Krohn v 
Commission [1986] ECR 753. 
I -3100 
MULDER v C O U N C I L A N D COMMISSION 
enee quantities to producers such as the 
applicants. 
11. I agree with the applicants that that 
objection of inadmissibility must be rejected. 
In Krohn (paragraphs 18 and 19) the Court 
stated as follows: 
'The Court wishes to point out that the 
combined provisions of Articles 178 and 
215 of the Treaty only give jurisdiction to 
the Court to award compensation for dam­
age caused by the Community institutions or 
by their servants in the performance of their 
duties, or in other words for damage capable 
of giving rise to non-contractual liability on 
the part of the Community. Damage caused 
by national institutions, on the other hand, 
can only give rise to liability on the part of 
those institutions, and the national courts 
retain sole jurisdiction to order compensa­
tion for such damage. 
Where, as in this case, the decision adversely 
affecting the applicant was adopted by a 
national body acting in order to ensure the 
implementation of Community rules, it is 
necessary, in order to establish the jurisdic­
tion of the Court, to determine whether the 
unlawful conduct alleged in support of the 
application for compensation is in fact the 
responsibility of a Community institution 
and cannot be attributed to the national 
body.' 
On the basis of that reasoning the Court 
concluded in that case that the Commission 
and not the national authority was respon­
sible for the unlawful conduct which had 
been established, on the ground that the 
national authority was bound to : comply 
with the Commission's instructions 
(paragraph 23). 20 In the present cases, too, it 
must be held, as will be shown below, that 
the measures adversely affecting the 
applicants must be attributed to the Com­
munity institutions. 
12. In support of their action for damages 
against the Community institutions the 
applicants rely in the first place on the inval­
idity of Regulation N o 857/84 as held by the 
Court in Mulder and von Deetzen. The 
Court considered that that regulation was 
invalid on the ground that, because it did not 
provide for the allocation of a reference 
quantity to non-marketers, it frustrated that 
class of producers' legitimate expectations 
that the effects of the non-marketing under­
taking which they had entered into would be 
temporary. As the Court stated in von 
Deetzen No 2 (paragraph 21), non-marketers 
were 
'legitimately entitled to expect to be able to 
resume the marketing of milk at the end of 
their non-marketing or conversion period, 
and to carry on that activity under condi­
tions that involved no discrimination 
between them and other milk producers'. 
20 — In contrast, in the judgment of 7 July 1987 in Joined Cases 
89 and 91/86 L'Etoile commerciale and CNTA v Commis­
sion [1987] ECR 3005, in which the Court based itself on 
the same considerations (paragraphs 17 and 18) as I have 
quoted above, it was decided that the national authority 
bore the responsibility on the ground that in that case the 
Commission's act was not at the root of the damage found 
(paragraph 19). 
I -3101 
OPINION OF MR VAN GERVEN — JOINED CASES C-104/89 AND C-37/90 
It can be inferred from that case-law (as the 
College van Beroep did; see section 8 above) 
that the obligation to comply with the prin­
ciple of protection of legitimate expectations 
is incumbent on the Community legislature, 
and that, under that obligation, it was under 
a duty to give non-marketers such an entitle­
ment to a reference quantity that they were 
not disadvantaged, compared with milk pro­
ducers referred to in Article 2 of Regulation 
N o 857/84, precisely because they had 
entered into a non-marketing undertaking. If 
the Community legislature had properly 
complied with that obligation and granted 
non-marketers a right to a reference quan­
tity, the competent authorities in the Nether­
lands and in the Federal Republic of Ger­
many would have been unable to refuse to 
grant the applicants a reference quantity. 
Consequently, the refusal must be attributed 
to the Community legislature and not to the 
national authorities. 
The argument which the institutions derive 
from Articles 3, 4 and 4a of Regulation No 
857/84 is unfounded, since those provisions 
give the Member States merely the possibility 
of allocating special or additional reference 
quantities to certain categories of producer. 
Furthermore, that possibility is open only in 
so far as the specific conditions set out in 
those provisions are fulfilled (and not all 
non-marketers meet those conditions) and 
the Member States have sufficient reference 
quantities available. 
Consequently, the exception of inadmissibil­
ity cannot be upheld. 
13. The institutions also rely on other pleas 
of inadmissibility. In their defences in Case 
C-104/89, for instance, the Council and the 
Commission argued that the application did 
not satisfy the requirements of Article 38 of 
the Rules of Procedure. They maintained 
that it did not set out the factual grounds 
necessary in order to found a claim for non­
contractual liability on the part of the Com­
munity. In their rejoinders they dropped that 
plea. 
The Commission entered a further plea of 
inadmissibility in connection with Article 
38 of the Rules of Procedure regarding more 
specifically the alleged damage suffered by 
the applicant in Case C-37/90 as from 
1989 and the damage which the applicants in 
Case C-104/89 claim they will sustain in the 
future. There is no need for me to consider 
that plea of inadmissibility, since, as I shall 
explain (in sections 34, 35 and 36), I have 
concluded that the applicants' action must in 
any event be dismissed as regards all damage 
which allegedly arose after a reference quan­
tity was allocated in accordance with the 
60% rule. 
4. Assessment of the Community's liabil­
ity 
4.1. The requirements for liability applied by 
the Court in connection with legisUtive meas­
ures 
14. As the Court has consistently held, 'the 
liability of the Community on account of its 
legislative powers depends on the coinci­
dence of a set of conditions as regards the 
unlawfulness of the act of the institution, the 
fact of damage and the existence of a direct 
link in the chain of causality between the act 
and the damage complained of'.21 The 
requirements for a direct link in the chain of 
21 — Judgment of 8 December 1987 in Case 50/86 Grands Mou­
lins de Paris v EEC [1987] ECR 4833, paragraph 7. 
I -3102 
MULDER v COUNCIL AND COMMISSION 
causality and for actual damage and also the 
problems arising in connection with the 
assessment of the damage will be discussed 
later (sections 37, 38 and 39 and 40 to 
53 inclusive). I shall first consider the 
requirement for the legislative measures to 
have been unlawful. 
According to equally well-established case-
law of the Court, where the damage alleged, 
as in these cases, is the result of a legislative 
measure involving economic-policy choices, 
the fact that the measure is unlawful is not 
sufficient in itself to cause the Community to 
incur liability. The Community can be held 
liable in respect of such a measure only if 
there has been a sufficiently serious breach of 
a superior rule of law for the protection of 
individuals, which 'in the context of Com­
munity provisions in which one of the chief 
features is the exercise of a wide discretion 
indispensable for the implementation of the 
common agricultural policy' means that 'the 
Community can incur liability only in 
exceptional cases, namely where the institu­
tion manifestly and gravely disregarded the 
limits on the exercise of its powers'. 22 23 
15. In my view, it appears from this wording 
— although a clear pronouncement is war­
ranted 24 — that the expression 'manifestly 
and gravely disregarded the limits on the 
exercise of its powers' qualifies the words 'a 
sufficiently serious breach'.25 It indicates 
more specifically that in the case of legisla­
tive measures carried out pursuant to a broad 
discretion the public authority is allowed a 
certain margin of error. Only where the pub­
lic authority's error is inexcusable 26, that is 
to say where it could reasonably not have 
committed it 27, have powers been manifestly 
and gravely disregarded and there therefore 
has been a sufficiently serious breach (of a 
superior rule of law for the protection of 
individuals). 
16. The Court's case-law fleshes out the cri­
terion 'manifest and grave disregard of the 
limits on powers' and therefore also the 
requirement for there to have been a 'suffi­
ciently serious breach'. It appears from the 
case-law that that criterion is made up of 
two components: on the one hand, a compo­
nent related to the type and seriousness of 
the breach, in other words related to unlaw­
fulness; on the other, a component relating 
to the type of the damage caused thereby. 
More specifically, in the judgments of 
4 October 1979 in the 'Quellmehl' and 
22 — Grands Moulins de Paris, paragraph 8. See also the judg­
ment of 18 April 1991 in Case C-63/89 Assurances du 
Crédit v Council and Commission [1991] ECR 1-1799, 
paragraph 12, and the judgment of 27 June 1991 of the 
Court of First Instance in Case T-120/89 Stahlwerke Peine-
Salzeitter v Commission [1991] ECR 11-279, which in para­
graph 74 provides an extensive review of the case-law of the 
Court of Justice. 
23 — In my estimation, that case-law remains intact following the 
judgment of 17 November 1991 in Joined Cases C-6/90 and 
C-9/90 Francovich and Bonifad [1991] ECR 1-5357. Even if 
one shares the view taken by Mr Advocate General Mischo 
in his Opinion on those cases (see section 71 in particular) 
that the same requirements must apply in order for the 
Community to incur liability on account of legislative meas­
ures as apply in order for the Member Sutes to incur lia­
bility in that area, it must be borne in mind that the situa­
tion in Francovich and Bonifaci was one in which the 
relevant Member Sute to attain a result clearly prescribed 
by a directive and hence had only a limited discretion. In 
contrast, the case-law discussed in this context applies to 
situations in which the (Community) legislature has a broad 
measure of discretion. 
24 — The case-law of the Court is not unambiguous. Sometimes 
the use of the word 'or ' gives the impression that alternative 
criteria are involved (see, for example, the judgment of 
30 May 1989 in Case 20/88 Roquette frères v Commission 
[1989] ECR 1553, paragraph 26); at others the criteria are 
joined by *and' and therefore used conjunctively (see the 
judgment in Assurances du Crédit, citea above, paragraph 
12). 
25 — See also F. Schockweiler, Ín collaboration with G. Wivenes 
and J. M. Godart, 'Le régime de la responsabilité extra­
contractuelle du fait d'actes juridiques dans la Communauté 
européenne', Revue trìmesprieue de droit européen, 
January-March 1990, p. 27, at p. 60. 
26 — In Peine-Salzgitter (see in particular paragraph 108), the 
Court of First Instance speaks of the Commission mani-
fesdy and gravely and 'therefore inexcusably' disregarding 
the limits of its powers. 
27 — See also my Opinion of 19 November 1991 in Joined Cases 
C-363 and C-364/88 Finsider and Falck v Commission, 
paragraph 25. 
I -3103 
OPINION OF MR VAN GERVEN — JOINED CASES C-104/89 AND C-37/90 
'Maize Gritz' cases,28 the Court invoked the 
following circumstances in deciding that the 
Council had manifestly and gravely disre­
garded the limits on its powers through the 
exercise of a wide discretionary power essen­
tial for the implementation of the common 
agricultural policy: (i) the particular impor­
tance of the principle infringed by the regu­
lation (in those cases, the principle of equal­
ity) and hence the (objective) seriousness of 
the breach; (ii) the fact that the disregard of 
that principle affected a limited and clearly 
defined group of commercial operators; (iii) 
the fact that the damage alleged by the appli­
cants went beyond the bounds of the eco­
nomic risks inherent in the operators' activi­
ties in the sector concerned; (iv) the fact that 
the principle in question was infringed with­
out sufficient justification (which points to 
the inexcusable nature of the error made by 
the authority: see section 15 above). 
Accordingly, the circumstances which, 
according to that line of cases, point to the 
existence of a manifest, grave disregard of the 
limits of a discretionary power or of a suffi­
ciently serious breach of a superior rule of 
law (which means the same thing) include 
both circumstances relating to the serious (i) 
and unjustifiable or inexcusable (iv) nature of 
the breach, which are thus concerned more 
specifically with the unlawful nature of 
the act, and circumstances relating to the 
group adversely affected (ii) and to whether 
or not the adverse effect exceeded a normal 
risk (iii), which therefore are concerned 
more specifically with the damage caused by 
the act. 
17. As regards the unacceptable or inexcus­
able character of the breach, the judgment of 
26 June 1990 in Sofrimport19 contains an 
important pointer for the present cases. That 
case, like these proceedings, was concerned 
with regulations which the Court had 
declared invalid for infringing the principle 
of protection of legitimate expectations and 
which had caused the applicant undertaking 
to sustain damage in so far as they made it 
impossible for it to carry on a particular 
commercial activity (importation of dessert 
apples). 
In ruling on the issue of the liability of the 
Community, the Court held that there had 
been a breach of a superior rule of law (para­
graph 26), accepted that the breach was suf-
ficiendy serious (paragraph 27) and held that 
the damage alleged by the applicant under­
taking went beyond the limits of the eco­
nomic risk inherent in the business at issue 
(paragraph 28). The Court did not go into 
the requirement that the breach must have 
affected a limited and clearly defined group 
of commercial operators, because — I pre­
sume — that condition was plainly satisfied. 
As far as the present cases are concerned, 
what is interesting above all is the way in 
which the Court (in paragraph 27) inferred 
the existence of a sufficiently serious breach 
from the unacceptable nature of the breach 
of the Community provision that gave rise 
to a legitimate expectation: 
'by failing completely to take account of the 
position of traders such as Sofrimport, with­
out invoking any overriding public interest 
(in French: "sans faire état d'un intérêt pub­
lic peremptoire"), the Commission commit-28 — Judgments in Case 238/78 Ireks-Arkady v Council and 
Commission [1979] ECR 2955, paragraph 11, Joined Cases 
241, 242 and 245 to 250/78 DGV v Council and Commis­
sion [1979] ECR 3017, paragraph 11, Joined Cases 261 and 
262/78 Interquell Stärke-Chemie v Council and Commis­
sion [1979] ECR 3045, paragraph 14, and Joined Cases 
64 and 113/76, 167 and 239/78, 27, 28 and 45/79 P. Dumor-
tier Frères v Council [1979] ECR 3091, paragraph 11. 
29 — Case C-152/88 Sofrimport v Commission [1990] ECR 
1-2477. 
I - 3104 
MULDER v COUNCIL A N D COMMISSION 
ted a sufficiently serious breach of Article 
3(3) of Regulation No 2707/72'. 3° 
The Court considers therefore that the 
requirement of a sufficiently serious breach is 
satisfied where an institution fails completely 
to take account of the specific situation of 
particular traders without its being possible 
to invoke any overriding public interest by 
way of justification. 31 
18. It is also appropriate to refer to previous 
cases decided by the Court in connection 
with the kind of damage, in particular the 
judgment in HNL v Commission. iz In that 
case the Court stated (in paragraph 6) that: 
'individuals may be required, in the sectors 
coming within the economic policy of the 
Community, to accept within reasonable 
limits certain harmful effects on their eco­
nomic interests as a result of a legislative 
measure without being able to obtain com­
pensation from public funds even if that 
measure has been declared null and void'. 
In that case, the Court concluded therefore 
that the Community could not be held liable, 
because the regulation which had been 
declared void could not be regarded as hav­
ing caused damage going beyond the bounds 
of the normal economic risks inherent in the 
operators' activities in the sector concerned, 
partly in view of its limited impact on the 
price of feeding-stuffs. More specifically, 
according to subsequent cases the Court 
regards as damage going beyond such 
bounds and hence qualifying for compensa­
tion damage which is unforeseeable. For 
instance, in the judgment in BioviUc 33 (para­
graph 29) the Court held that 'the foresee-
ability of the risks inherent in the market 
conditions ... excludes the possibility of any 
recompense for the loss of competitiveness 
which [the applicant] has suffered'. Again, in 
the Grands Moulins de Paris case (cited 
above; see paragraph 21 of the judgment) the 
Court inferred from the finding that the 'leg­
islative trend was foreseeable and the appli­
cant had been aware of it for some time' that 
the alleged damage 'could not be regarded as 
going beyond the bounds of the economic 
risks inherent in applicant's business'. 
4.2. Liability on account of the Court's dec-
Uration that ReguUtion No 857/84 is invalid 
19. In the light of the case-law which has 
just been discussed, I shall now consider — 
having regard to the Court's decision relat­
ing to the invalidity of Regulation N o 
857/84, first in Mulder's and von Deetzen's 
cases and then in Spagl's and Pastätter's cases 
— the question whether there was a suffi­
ciently serious breach of a superior rule of 
law for the protection of individuals. In 
30 — See also the judgment of 14 May 1975 ¡n Case 74/74 CNTA 
v Commission [1975] ECR 533, in which (paragraph 44) the 
Court declared as follows: 'In the absence of an overriding 
matter of public interest (in French: "un intérêt public 
peremptoire"), the Commission has violated a superior rule 
of law, thus rendering the Community hable, by failing to 
include in Regulation N o 189/72 transitional measures for 
the protection of the confidence which a trader might legit­
imately have had in the Community rules.' 
31 — On the basis of the judgment in Amylum (Joined Cases 
116/77 and 124/77 Amylum v Council and Commission 
[1979] ECR 3497, paragraph 19) the Council and the Com­
mission argue that the Community may be held liable only 
if blame can be attributed to a Community institution and 
to arbitrary conduct. Arbitrary conduct is one of the least 
acceptable wavs, but not therefore the only way, in which a 
public authority may seriously and manifestly disregard the 
limits of its powers. Furthermore, failure to take account of 
the specific situation of economic operations (in this case 
the non-marketers: sections 22-26 infra), without its being 
possible to invoke any overriding public interest comes 
close to amounting to arbitrary treatment of those opera­
tors. 
32 — Judgment of 25 May 1978 in Joined Cases 83 and 94/76, 4, 
15 and 40/77 Bayerische HNL v Council and Commission 
[1978] ECR 1209. 
33 — Judgment of 6 December 1984 in Case 59/83 BioviLu v 
EEC [1984] ECR 4057. 
I -3105 
OPINION OF MR VAN GERVEN — JOINED CASES C-104/89 AND C-37/90 
accordance with that case-law I shall con­
sider the following four points, namely 
whether 
(i) there was a breach of a superior rule of 
law for the protection of individuals; 
(ii) the breach was serious and unjustifiable, 
that is to say, inexcusable; 
(iii) a limited and clearly defined group of 
commercial operators were adversely 
affected by the breach; 
(iv) the alleged damage went beyond the 
bounds of the economic risks inherent 
in activities in the milk sector. 
4.2.1. Liability as a result of the judgments in 
Mulder and von Deetzen decUrìng the regu­
lation invalid 
(i) Breach of a superior rule of law for the 
protection of the individual 
20. In Mulder (paragraph 26) and von 
Deetzen (paragraph 15), the Court declared 
Regulation N o 857/84 partially invalid on 
the ground that it frustrated the legitimate 
expectation of non-marketers, having regard 
to the provisions of Regulation No 1078/77, 
that the effects of the scheme would be tem­
porary. The Court accordingly held that the 
Council had created a situation which was 
such as to arouse expectations in individuals 
in a system from which they derived certain 
rights, and that, by frustrating those expecta­
tions, the Council had acted contrary to the 
principle of protection of legitimate expecta­
tions. In the aforementioned judgments in 
CNTA and Sofrimport the Court has already 
held that that principle, in conjunction with 
provisions of Community law from which 
individuals may derive rights, constitutes a 
superior rule of law for the protection of 
individuals the breach of which may cause 
the Community to incur liability. Moreover 
this is not contested by the institutions. 
For completeness' sake I would further point 
out that in his Opinion in Mulder's case 
Advocate General Sir Gordon Slynn con­
cluded that Regulation N o 857/84 also 
offended against another superior rule of law 
for the protection of individuals, namely the 
prohibition of discrimination. In any event, 
the Court held that it did not have to con­
sider other possible grounds for invalidity as 
it had already established that there had been 
a breach of the principle of protection of 
legitimate expectations. However, it appears 
from the passage quoted (in section 
12 above) from von Deetzen No 2 that the 
Court does in fact take the view that Regu­
lation N o 857/84 was contrary to the prohi­
bition of discrimination, on the ground that 
it did not allow the non-marketers to resume 
deliveries 'under conditions that involved no 
discrimination between them and other milk 
producers'. 
(ii) Serious and inexcusable nature of the 
breach of the principle of protection of legit­
imate expectations 
21. The Council and the Commission argue 
that the invalidity of Regulation N o 
I -3106 
MULDER v COUNCIL AND COMMISSION 
857/84 as held by the Court in Mulder and 
von Deetzen cannot be regarded as a suffi­
ciently serious breach. They point out that 
Regulation N o 1078/77 came into being in a 
market situation characterized by substantial 
and increasing milk surpluses. As appears 
from the first recital in the preamble to the 
regulation, the Community legislature con­
sidered it worthwhile in the circumstances to 
encourage the trend among farmers to cease 
milk production through the grant of a pre­
mium. 90% of non-marketers, the applicants 
included, opted to take advantage of the sys­
tem of the non-marketing premiums 34 and 
committed themselves to marketing no milk 
or milk products for a period of five years. 
The Council and Commission further argue 
that the intention behind the non-marketing 
premium was to give mainly weak farms the 
chance to give up milk production 
definitively on acceptable terms. In view of 
the type of persons interested in the non-
marketing premium — chiefly elderly per­
sons, persons with no successor, physically 
handicapped persons or persons with barely 
viable or downright unviable farms — and 
also the fact that the amount of the premium 
was significantly lower than the profit which 
a structurally sound farm could normally 
expect to make from milk production, the 
institutions argue that in 1984 when the levy 
scheme was introduced they were entitled to 
assume, absolutely reasonably, that produc­
ers who had received a non-marketing pre­
mium would no longer wish to resume milk 
production after an interruption of five 
years. 
Also according to the Council and the Com­
mission, the Community legislature was con­
scious that not all producers would be 
granted a reference quantity under Article 
2 of Regulation N o 857/84. For that very 
reason Articles 3, 4 and 4a (the latter having 
been added by Regulation N o 590/8535) 
made it possible for Member States to grant 
a special or an extra reference quantity in 
particular situations. In the light of the judg­
ments in Mulder and von Deetzen, the 
Council and the Commission accept the 
charge that they did not expressly mention 
non-marketers as being a category of pro­
ducers to whom Member States might grant 
a special reference quantity. They argue, 
however, that, since it was improbable that 
many non-marketers would resume produc­
tion and since the Member States had been 
empowered to assist producers in certain 
specific situations, negligence or an oversight 
capable of being regarded as being a suffi­
ciently serious breach was not involved here. 
What is more, the Council adds, non-
marketers could always have obtained a ref­
erence quantity by purchasing or leasing a 
farm or part of a farm. 
22. I do not agree. As can be seen from the 
passage cited above (section 17) from Sofrim-
port, to fail completely to take account of the 
34 — The others opted for the conversion premium, which can 
be left out of account in the present cases. For more infor­
mation about the system of premiums see the Special report 
of the Court of Auditors on the application of Regulations 
(EEC) N o 1078/77 and (EEC) N o 1041/78 introducing a 
system of premiums for the non-marketing of milk prod­
ucts and for the conversion of dairy herds (OJ 1983 C 278, 
p. 1). 
35 — Council Regulation (EEC) N o 590/85 of 26 February 
1985 amending Regulation (EEC) N o 857/84 laying down 
general rules for the application of the levy referred to in 
Article 5c of Regulation (EEC) N o 804/68 in the milk and 
milk products sector (OJ 1985 L 68, p. 1). 
I -3107 
OPINION OF MR VAN GERVEN — JOINED CASES C-104/89 AND C-37/90 
particular situation of traders, without 
invoking any overriding public interest, con­
stitutes a serious, inexcusable breach. 
In my view, such a situation seems to obtain 
in this instance also: (1) the institutions 
knew, or were in a position to know, that a 
not insignificant number of non-marketers 
would resume production and hence would 
be in a special situation; (2) they failed to 
take sufficient measures to cope with that 
special situation; (3) they are unable to 
invoke any overriding public interest by way 
of justification. I shall now explain each of 
these points. 
23. First, the institutions knew, or were in a 
position to know, that a not insignificant 
number of non-marketers would wish to 
resume production after the expiry of their 
non-marketing undertakings. Although it 
can be accepted, as the institutions maintain, 
that one of the aims 36 of Regulation No 
1078/77 was to encourage a number of pro­
ducers to cease milk production early and for 
good, the institutions knew, or in any case 
were in a position to know, that the means 
which had been chosen, that is to say the 
grant of a premium to persons undertaking 
temporarily to give up the production of 
milk and dairy products, was not capable of 
achieving that aim in all cases. 
24. Secondly, Regulation N o 857/84 made 
no provision for measures to deal sufficiently 
certainly with the non-marketers' special sit­
uation, of which the institutions were, or 
should have been, aware. The possibility of 
procuring a reference quantity by purchasing 
or leasing a farm certainly does not deal with 
the non-marketers' special situation. That 
possibility — which is not reserved specifi­
cally for non-marketers — requires an 
unforeseen financial effort that is unjustified 
on the part of producers who are entitled to 
resume milk production. Neither are Articles 
3, 4 and 4a of Regulation N o 857/84 appro­
priate to secure non-marketers' rights, since 
they merely empower and do not oblige the 
Member States to grant a special or an extra 
reference quantity under certain conditions. 
Moreover, those provisions cannot assist, or 
at best can only partly assist, non-marketers 
wishing to resume milk deliveries: 
— the first subparagraph of Article 3(1) of 
Regulation N o 857/84 can help non-
marketers to obtain a specific reference 
quantity only if they lodged a milk pro­
duction development plan pursuant to 
Directive 72/159/EEC 37 during the cur­
rency of the non-marketing undertaking; 
— on the basis of Article 3(2) of Regulation 
N o 857/84 a specific reference quantity 
36 — For more information about the aims of Regulation N o 
1078/77, see sections 1.1.3 and 1.1.4 of the Court of Audi­
tors' report to which reference has already been made. 
37 — Council Directive 72/159/EEC of 17 April 1972 on the 
modernization of farms (OJ, English Special Edition 
1972(11), p. 324). 
I -3108 
MULDER v COUNCIL AND COMMISSION 
can be granted only to young farmers 
who set up after 31 December 1980; 
— Article 4(1) of Regulation N o 
857/84 offers non-marketers no solution 
whatsoever, since it merely provides for 
the grant of additional reference quanti­
ties and therefore assumes that a basic 
reference quantity has already been 
granted under other provisions of the 
regulation; 
— neither is Article 4a of Regulation N o 
857/84 appropriate to assist the non-
marketers. It authorizes the Member 
States to allocate non-utilized reference 
quantities. Whether there are any non-
utilized reference quantities can be deter­
mined only after the event. Non-
marketers could not reasonably be 
expected to resume production without 
knowing beforehand the reference quan­
tity to the extent of which they might 
deliver milk without having to pay a levy. 
25. In their defences, the institutions attach 
particular importance to the second subpara­
graph of Article 3(1) of Regulation N o 
857/84. That provision authorizes the Mem­
ber States to grant a special reference quan­
tity to producers who have carried out 
investment even without a development plan. 
It is indeed broadly worded and permits a 
special reference quantity to be granted to 
non-marketers who, like the applicants in 
these proceedings, invested in dairy cattle 
with a view to resuming milk production. 
Despite this, I take the view that the institu­
tions were not entitled to assume that the 
Member States would actually take advan­
tage of that possibility (again, it was not an 
obligation) in order to enable the non-
marketers to resume milk deliveries. 3S 
Article 5 of Regulation N o 857/84 provides 
that Member States may grant specific or 
additional reference quantities only within 
their guaranteed quantity limit. A Member 
State taking advantage of one of the possibil­
ities provided for in Articles 3 and 4 of Regu­
lation N o 857/84 (on behalf, for instance, 
of non-marketers) must therefore also, as 
required by Article 2(3) of the regulation, 
adapt the reference quantities of those pro­
ducers who did in fact deliver milk in the 
course of the reference year. To my mind, 
the Member States could not be expected to 
impose on those producers such an effort of 
solidarity vis-à-vis non-marketers because 
the Community legislature itself had not 
made specific provision for them. Is it not 
significant in this regard that in 1989 (that is 
to say, after the judgments in Mulder and 
von Deetzeń) the Council itself took the ini­
tiative of increasing the Community reserve 
by 600 000 tonnes in order to enable the 
Member States to grant non-marketers a spe­
cial reference quantity of 60% of their 
former production (see section 5 above)? 
The Council manifestly assumed that in the 
absence of such an increase the Member 
States could not be expected to release refer­
ence quantities for non-marketers within 
their guaranteed quantity limits. 
38 — It emerges from Spronk's case how sparingly the possibility 
afforded by this provision has been taken up in the Neth­
erlands. In its judgment of 12 July 1990 in that case (Case 
C-16/89 Spronk v Minister van Landbouw [1990] ECR 
1-3185) the Court held that the relevant Netherlands imple­
menting provision was not contrary to Regulation No 
857/84. 
I-3109 
OPINION OF MR VAN GERVEN — JOINED CASES C-104/89 AND C-37/90 
26. Thirdly and lastly, the institutions cannot 
invoke any overriding grounds of public 
interest in order to justify the failure to 
accommodate in Regulation N o 857/84 the 
special situation of non-marketers who 
wished to resume milk production. Of 
course, I do not deny that the levy system 
itself pursues an important aim in the public 
interest. Nevertheless, I can see no reason — 
and have searched in vain for justification in 
the statement of reasons of the system intro­
duced in 1984 — for the Community legisla­
ture's failure to take any account at all of the 
non-marketers' special situation. 
(iii) A limited and clearly defined group of 
producers are adversely affected by the 
breach 
27. According to the Council and the Com­
mission, the breach did not affect a 'limited 
and clearly defined group of commercial 
operators'. To that end they refer to the 
Court's statement in Ireks-Arkady (para­
graph 11) and Inter quell (paragraph 14) to 
the effect that only a small number (namely 
18) quellmehl producers were affected and 
hence that requirement was satisfied. They 
further point out that in HNL (paragraph 7) 
the Court stated that the regulation which 
had been declared invalid 'affected very wide 
categories of traders, in other words all buy­
ers of compound feeding-stuffs containing 
protein'. In their view, that was one of the 
reasons why in that case the Court did not 
hold the Community liable. 
The Council and the Commission observe 
that in all 122 787 dairy farmers took advan­
tage of the premium system introduced by 
Regulation N o 1078/77. They acknowledge 
that the number of non-marketers entitled to 
claim compensation is not necessarily the 
same, but point out that neither may that 
number be reduced to the number of non-
marketers who applied for a provisional spe­
cial reference quantity of 60% of their 
former production pursuant to Regulation 
N o 764/89. 39 Other non-marketers, that is 
to say non-marketers who abandoned their 
plans to resume milk production sometime 
between the time when their non-marketing 
undertakings expired and the time when a 
provisional special 60% reference quantity 
could be applied for, may well be entitled to 
claim compensation. 
The applicants argue in the reply that in 
HNL the Court took the size of the group 
affected into account because as a result the 
'effects [of the regulation which was declared 
invalid] on individual undertakings were 
considerably lessened'. They infer from this 
that the Court did not wish to attach impor­
tance to the large number of persons affected 
per se, but rather saw it as an indication 
for assessing the extent of the damage sus­
tained individually by the persons affected. 
They further consider that, compared with 
the total number of dairy farmers in the 
39 — It appears from the answer given by Mr MacSharry on 
behalf of the Commission to Mr John Hulme (OJ 1990 C 
93, p. 26) that 13 187 non-marketers applied for such a ref­
erence quantity. It does not appear from the case-file how 
many non-marketers actually obtained such a reference 
nuantitv. 
I -3110 
MULDER v COUNCIL AND COMMISSION 
Community, the number of non-marketers 
constitutes a limited and clearly defined 
group. 
28. A 'clearly defined group' and a 'limited 
group' (in terms of numbers) are two differ­
ent criteria. The fact that the group con­
cerned must be 'clearly defined' in order for 
the Community to be able to be held liable 
means that the number of persons affected 
must be capable of being determined at the 
time when the ruling is given on the com­
pensation. That requirement is met in this 
instance. 
In that regard, it is important to point out in 
the first place that the circle of potential per­
sons affected is established a prion. Only 
non-marketers are eligible for compensation. 
Their number and identity are known. In 
HNĹ, where the Court rejected the claims 
for compensation, the situation was different. 
The Court referred in that judgment to the 
very large categories of traders affected, 'in 
other words, all buyers of compound 
feeding-stuffs containing protein' namely 
essentially all poultry farmers and egg pro­
ducers. In the present cases, not all non-
marketers can actually be regarded as having 
been adversely affected, but only those who, 
on the expiry of their non-marketing under­
taking, had not definitively abandoned milk 
production and suffered damage as a result 
because Regulation N o 857/84 prevented 
them from resuming production. Admit­
tedly, the number of those non-marketers is 
not definitely fixed, since whether they are 
entitled to compensation depends on proof 
that they had not yet ended milk production 
when their non-marketing undertakings 
expired. However, their number is certainly 
capable of being determined on the basis of 
such proof, as will be explained later (in sec­
tion 30). 
29. As far as the criterion of the 'limited 
group' is concerned, I can find no support in 
the case-law of the Court for making the 
Community's liability depend on the (abso­
lute) number of persons adversely affected. 
Even apart from the fact that it would be 
impossible for the Court to set a figure on 
that number, the words 'limited group' 
should be construed as referring to a group 
of undertakings on which the unlawful act 
imposed a specific disadvantage, in compari­
son with other groups of undertakings, 
which those other groups did not have to 
bear. That condition is clearly satisfied in the 
present cases: compared with milk producers 
who did not interrupt their milk production, 
the non-marketers concerned were affected 
by the levy system specifically — and, more­
over, seriously — since they alone were pre­
vented by the contested rules from produc­
ing milk and, as a result, could not resume 
milk deliveries. 
In HNL, the position in that respect was also 
different. The Court determined that the 
effect of the unlawful measure at issue in that 
case on the individual undertakings con­
cerned was small, since the price increase 
caused by the measure was definitely modest 
and the resultant burden was spread over the 
whole economic sector, since essentially all 
poultry farmers and egg producers were 
affected. 
I-3111 
OPINION OF MR VAN GERVEN — JOINED CASES C-104/89 AND C-37/90 
30. In connection with the determinacy and 
the number of persons adversely affected, I 
would, moreover, qualify the institutions' 
view that the number of non-marketers who 
are entitled to claim compensation is much 
in excess of those who applied for a special 
60% reference quantity. 
Whether non-marketers suffered damage as a 
result of the failure to grant them a special 
reference quantity depends on whether, at 
time when their non-marketing undertakings 
expired, they had already abandoned for 
good the intention to resume milk produc­
tion. If they had, they cannot claim that they 
had to stop production owing to Regulation 
N o 857/84 and therefore can lay no claim to 
compensation. Admittedly, it cannot be 
inferred with certainty from the fact that a 
non-marketer did not apply for a 60% refer­
ence quantity in 1989 — even though it was 
open for him to do so — that he had already 
stopped milk production at the end of his 
non-marketing period. Nevertheless, that 
fact is a serious indication that that is the 
case and therefore justifies reversing the bur­
den of proof. As a result, non-marketers 
who did not apply for a 60% reference 
quantity can argue that, when the non-
marketing undertaking expired, they were 
still minded to resume milk production but 
that they subsequently abandoned that plan. 
In order to be able to argue that, they must 
provide concrete proof that they actually 
made an effort towards or after the end of 
the non-marketing period to obtain a refer­
ence quantity. 
I would further point out that some non-
marketers applied for a provisional 60% ref­
erence quantity but did not receive it, 
because they did not satisfy the criteria laid 
down in Regulation N o 764/89, which were 
designed to make sure that the non-
marketers in question intended and were 
really able to resume milk production and 
found it impossible to obtain a reference 
quantity pursuant to Article 2 of Regulation 
N o 857/84 (see Article 3a(l) of Regulation 
No 857/84 and the second recital in the pre­
amble to Regulation N o 764/89). As regards 
those operators, the institutions may assume, 
unless evidence is adduced to the contrary, 
that those operators would not have been 
eligible for the grant of a special reference 
quantity for non-marketers if Regulation No 
857/84 had provided for one and that they 
are therefore not entitled to compensation. 
(iv) The alleged damage went beyond the 
bounds of the economic risks inherent in 
activities in the milk sector 
31. The Council and the Commission main­
tain that the criterion applied by the Court 
in the quellmehl and maize gritz cases that 
the damage alleged by the applicants should 
have gone beyond the bounds of the normal 
economic risks inherent in the operators' 
activities in the sector concerned is not satis­
fied in the present cases. Each of the institu­
tions sets forth a number of arguments. 
The Council asks whether the later grant of a 
reference quantity pursuant to Article 3 a of 
I -3112 
MULDER v COUNCIL AND COMMISSION 
Regulation N o 857/84, which was added by 
Regulation No 764/89 (and subsequently 
amended by Regulation N o 1639/91), does 
not in itself constitute sufficient compensa­
tion, in view of the monetary value which 
such a reference quantity represents. That 
argument cannot be accepted. The monetary 
value undoubtedly possessed by a reference 
quantity is the present value of the future 
earnings which can be obtained from milk 
production by virtue of the quantity granted. 
I cannot see how this value, which relates to 
future earnings — and which in any event is 
not peculiar to the reference quantities 
granted {ex post) to non-marketers —, can 
constitute compensation for past loss of 
earnings resulting from the failure to grant a 
reference quantity. 
For its part, the Commission adds that the 
applicant in Case C-37/90 was not com­
pelled by events to enter into a non-
marketing undertaking and that during the 
non-marketing period instead of producing 
milk he fattened bullocks. Those arguments 
cannot be accepted either. It is irrelevant 
whether or not a producer was compelled by 
events to enter into a non-marketing under­
taking, just as it is irrelevant what activities 
he carried out during the non-marketing 
period. In so far as replacement activities 
were carried on after the expiry of that 
period, an argument may, however, be 
inferred therefrom with regard to the limita­
tion of the damage sustained, a question 
which I shall be considering later (in section 
49). 
32. The Commission further argues that, in 
view of the large amount of intervention and 
adjustments in the milk sector, carrying on 
an activity in that sector entails not only the 
general risks to which every economic oper­
ator is subject, but also specific risks peculiar 
to activities in that sector. As a result, the 
alleged damage does not qualify for compen­
sation. 
That argument goes to the heart of the pre­
condition for establishing liability which is 
now under discussion. Above (in section 18) 
I pointed out that that precondition is met if 
the persons adversely affected suffered 
unforeseeable damage. As far as the present 
cases are concerned, it is established that the 
levy system placed the applicants in an 
unforeseeable situation, since in Mulder 
(paragraph 26) and von Deetzen (paragraph 
15) the Court declared that: 
'total and continuous exclusion of that kind 
for the entire period of application of the 
regulations on the additional levy, preventing 
the producers concerned from resuming the 
marketing of milk at the end of the five-year 
period, was not an occurrence which those 
producers could have foreseen when they 
entered into an undertaking, for a limited 
period, not to deliver milk'. 
33. In view of the foregoing, it must be con­
cluded that the invalidity of Regulation N o 
857/84 as found by the Court in Mulder's 
and von Deetzen's cases is such as to cause 
I -3113 
OPINION OF MR VAN GERVEN — JOINED CASES C-104/89 AND C-37/90 
the Community to incur liability for the 
damage suffered by the applicants. 
4.2.2. (No) liability as a result of the dedara-
tion of invalidity in the Spagl and Pastätter 
cases 
34. In Spagl and Pastätter and subsequently 
also in von Deetzen (No 2) the Court 
declared that Article 3a(2) of Regulation No 
857/84, as amended by Regulation No 
764/89, was invalid in so far as it restricted 
the special reference quantity provided for in 
that provision to 60% of the quantity of 
milk delivered by the producer during the 
twelve calendar months preceding the month 
in which the application for the premium 
was made. I consider that the declarations of 
invalidity in the Spagl and Pastätter cases, 
unlike the invalidity found in the Mulder 
and von Deetzen cases, cannot cause the 
Community to incur liability. Admittedly, 
the Court also held in Spagl (paragraph 29) 
and in Pastätter (paragraph 20) that the 
restriction was void for breach of the princi­
ple of protection of legitimate expectations 
and therefore in breach of a superior rule of 
law. However, it appears to me that the 
Community legislature's decision to restrict 
to 60% the reference quantity to be granted 
to non-marketers cannot be regarded as a 
manifest and serious misjudgment of its 
powers and therefore does not constitute a 
sufficiently serious breach of the principle of 
legitimate expectations. 
35. The fixing of the 60% rule is the out­
come of the policy choices which the Com­
munity legislature made with regard to the 
way in which account is be taken of the non-
marketers' special situation. Following the 
judgments in Mulder and von Deetzen it was 
plain to the Community legislature that the 
non-marketers in question could invoke an 
entitlement to the allocation of a reference 
quantity (see the third recital in the preamble 
to Regulation No 764/89). However, it also 
had to take account of 'the overriding neces­
sity of not jeopardizing the fragile stability 
that currently obtains in the milk products 
sector' (fifth recital in the preamble to Regu­
lation N o 764/89) and of the interests of 
other producers and of the disadvantage at 
which they would be put if the reference 
quantities allocated to them had to be 
reduced in order to enable a reference quan­
tity to be granted to the non-marketers. The 
balancing of these interests led the Commu­
nity legislature to increase the Community 
reserve by 600 000 tonnes for the benefit of 
the non-marketers and to decrease commen-
surately the total guaranteed quantity of each 
Member State, whilst offsetting the impact of 
that cut on individual reference quantities by 
decreasing the rate of withdrawal introduced 
by Regulation N o 775/87 (see section 
5 above). The limitation of the reference 
quantity to be allocated to non-marketers to 
60% — which is very different from their 
being completely excluded from having a 
reference quantity — remains in my view 
within the scope of the broad discretion 
which the Community legislature has in this 
sphere and cannot therefore be regarded as 
being a sufficiently serious breach, even 
though it turned out that the 60% rule was 
invalid. 
My conviction is reinforced by the fact that 
it appears from Mr Advocate General Jacobs' 
Opinion in the Spagl and Pastätter cases (in 
particular at paragraph 40) that the Court's 
judgments in Mulder and von Deetzen can 
also be understood as meaning that, whilst it 
I -3114 
MULDER v COUNCIL AND COMMISSION 
is true that non-marketers may not be 
excluded from milk production, the principle 
of protection of legitimate expectations does 
not preclude a limitation of the reference 
quantity at a level such that production may 
be resumed. In any event, in Sofrimport 
(paragraph 27), too, the Court attached 
importance to the fact that there was a com­
plete failure to take account of the special 
position of the trader concerned and con­
cluded that there had therefore been a suffi­
ciently serious breach of the principle of 
protection of legitimate expectations. 
36. I therefore conclude that the adoption 
by the Community legislature of the 60% 
rule in Article 3a(2) of Regulation N o 
857/84 did not constitute a sufficiently seri­
ous breach of the principle of protection of 
legitimate expectations. Consequently, the 
Community cannot be held liable on account 
of the declarations of invalidity in Spagl and 
Pastätter and the applicants' action must be 
dismissed as regards the damage which they 
maintain they sustained as a result of that 
invalidity. Neither can the Community be 
held liable for the damage which the appli­
cants maintain that they are still to suffer fol­
lowing the grant of an additional reference 
quantity pursuant to Article 3a(2) as 
amended by Regulation N o 1639/91, since 
the arrangements introduced by that regula­
tion go even further towards accommodating 
the non-marketers' special situation than the 
arrangements introduced by Regulation N o 
764/89 and do not manifestly and seriously 
disregard the Council's discretion with 
regard to the size of the percentage reduc­
tion, as that discretion was established in 
Spagl and Pastätter (see section 6 above). 
4.3. The existence of damage and the causal 
link 
37. The applicants claim that they could not 
carry on their occupation as dairy farmers 
from the time when their non-marketing 
undertaking expired until the time when 
they resumed milk deliveries to the extent of 
the 60% reference quantity which they were 
granted. During that period they were not 
entitled to receive a reference quantity as a 
result of Regulation N o 857/84 and there­
fore, owing to the magnitude of the addi­
tional levy, obtained no income from the 
normal exercise of their occupation. They 
therefore had to resort to other — in some 
cases, loss-making — agricultural activities. 
In order to qualify for compensation the 
damage must be certain and not be based 
merely on suppositions. The loss of profit 
invoked by the applicants satisfies that 
requirement. Admittedly, in Kampffmeyer 40 
the Court showed some reluctance with 
regard to damage in the form of loss of 
profit 'based on facts of an essentially specu­
lative nature'. The loss of profit at issue here 
is, however, more than speculative. To begin 
with, the applicants applied for and obtained 
a provisional 60% reference quantity under 
Regulation N o 764/89, and hence they do 
not come into the class of non-marketers 
which, in my view, may be assumed, until 
proof to the contrary is forthcoming, to have 
already stopped milk production when their 
non-marketing undertaking expired (see sec­
tion 30 above). Moreover, in the normal 
course of events milk production within the 
ambit of the common agricultural policy 
40 — Judgment in Joined Cases 5, 7 and 13 to 
24/66 Kampffmeyer y Commission [1967] ECR 245, at 266. 
I -3115 
OPINION OF MR VAN GERVEN — JOINED CASES C-104/89 AND C-37/90 
yields a profit. The institutions do not con­
test this, nor do they contest that milk pro­
duction without a reference quantity cannot 
be profitable. However, as has already been 
mentioned, they ask whether the later grant 
to the applicants of a reference quantity pur­
suant to the arrangements introduced after 
the event by Article 3a does not in itself con­
stitute sufficient compensation on the 
ground that that reference quantity caused 
an increase to take place in the applicant's 
assets. I have already discussed, and rejected, 
that argument above (in section 31). 
38. The institutions argue that there is 
no causal link between the relevant Com­
munity act and the alleged damage. In 
this connection, they rely, first, on the 
possibilities provided for in Articles 3, 4 
and 4a whereby Member States may grant 
reference quantities in certain specific 
situations and, secondly, on the opportuni­
ties which were available to the applicants to 
take action themselves in order to limit the 
damage. 
It must be granted to the Community insti­
tutions that the causal link between an 
unlawful act and the damage sustained may 
be broken entirely or partially by conduct 
(wrongful or otherwise) on the part of a 
third party or the injured party himself. 
As regards the institutions' first argument, 
namely that the Member States could have 
granted a special or additional reference 
quantity pursuant to Articles 3, 4 and 4a of 
Regulation N o 857/84, it must be pointed 
out, however, that the competent authorities 
in the Netherlands and the Federal Republic 
of Germany de facto did not grant any refer­
ence quantity to the applicants, because it 
was not possible to do so under the national 
implementing legislation in the circum­
stances in which the applicants found them­
selves. The institutions do not argue that the 
Netherlands or German implementing legis­
lation conflicts with the levy scheme. How­
ever, they consider that the causal link was 
nevertheless broken because of those Mem­
ber States' failure to grant non-marketers 
such as the applicants a reference quantity, 
although it was possible to do so more spe­
cifically under the second paragraph of Arti­
cle 3(1) of Regulation N o 857/84, which 
enables a reference quantity to be granted to 
producers who have invested in dairy catde 
(see section 25 above). That argument is 
unfounded because it fails to appreciate the 
right which the Court recognized in Mulder 
and von Deetzen for non-marketers to be 
granted a non-discriminatory reference 
quantity. As has already been stated (in sec­
tion 12), the obligation to grant such a refer­
ence quantity which corresponds to that 
right is not incumbent on the Member States 
but on the Community legislature itself. It 
follows that the inaction of the Member 
States cannot break the causal link between 
the damage and the unlawful conduct of the 
Community. 
As far as the second argument relied on by 
the institutions is concerned, it is sufficient 
to observe that the applicants did not fail to 
apply for a reference quantity, rather their 
efforts were fruitless (see sections 8 and 
9 above). Whether the applicants were under 
a duty to limit the damage they suffered by 
engaging in replacement activities and, if so, 
I -3116 
MULDER v COUNCIL AND COMMISSION 
whether failed to fulfil that duty will be con­
sidered later on in this Opinion (in section 
49). 
39. It appears from the foregoing that all the 
preconditions have been established for the 
Community to incur liability as a result of 
the declarations of invalidity in the judg­
ments in Mulder and von Deetzen but that 
that is not the case as regards the declaration 
of invalidity in the Spagl and Pastätter judg­
ments. In the next part of this Opinion I 
shall therefore consider how the damage 
caused in connection with the first finding of 
invalidity only is to be assessed. 
5. Assessment of the damage 
40. As the starting point for assessing the 
damage, the applicants in Case 
C-104/89 assume that financially they must 
be put in the situation in which they would 
normally have been had they been able to 
resume milk deliveries immediately after the 
expiry of the non-marketing undertaking on 
terms which did not discriminate against 
them compared with the producers referred 
to in Article 2 of Regulation N o 857/84. In 
my view, that seems to be a proper starting 
point, although its working out will involve 
a number of practical difficulties with •which 
the Court has not yet been faced. 
The most significant difficulty is of course 
how to reconstruct the situation in which the 
applicants would have found themselves if 
deliveries had been resumed immediately. In 
order to avoid that difficulty the institutions 
suggest that, if they are held liable, the 
amount of the compensation payable should 
be calculated on the basis of the amounts of 
the premiums provided for in Regulation N o 
1078/77. Although that solution has the 
merit of simplicity, I consider that it must be 
rejected on the ground that the amounts of 
the premiums would not be suitable com­
pensation for the damage. The Council and 
the Commission have themselves admitted 
that the amounts of the premiums provided 
for in Regulation N o 1078/77 are signifi-
candy lower than the profit which a struc­
turally sound farm can normally achieve 
from milk production (see section 21 above). 
In addition, Article 4 of Regulation N o 
1078/77 provided for tapering non-
marketing premiums (the higher the produc­
tion the lower the premium per 100 kilo­
grammes). Hence they are not related — 
quite the contrary — to the actual damage 
sustained by the applicants. 
41. How, then, is the damage to be assessed? 
I consider that it is necessary to draw a dis­
tinction in this regard. First, the period to be 
taken into account for the purposes of calcu­
lating the damage has to be established 
together with the reference quantity which 
the applicants could normally have claimed 
during that period. It appears to me that the 
Court has sufficient information to rule 
definitively on these aspects now. 
Secondly, it is a question of calculating the 
profit which the applicants could normally 
have obtained during the period concerned 
on the basis of the reference quantity to 
which they were entitled, and which they 
lost as a result of the invalidity established 
by the judgments in Mulder and von 
Deetzen, while taking into account the 
replacement activities which they carried out 
I -3117 
OPINION OF MR VAN GERVEN — JOINED CASES C-104/89 AND C-37/90 
during that period. Each of the parties has 
produced documents purporting to show 
how the loss of profit is to be calculated. 
However, those documents do not allow the 
Court to establish with sufficient certainty 
what compensation is due to each applicant. 
Consequently, it appears to me that the 
Court should be induced to rule on this 
point in an interlocutory judgment in which 
it should provide a few general indications 
while leaving it to the parties to assess the 
damage (more specifically, the loss of profit) 
by mutual agreement. In the event that they 
should fail to reach an agreement within, say, 
twelve months, it should be for the Court to 
settle in a final judgment those points on 
which no agreement has been reached. 
5.1. The period and reference quantity to be 
taken into account in cakuUting the damage 
5.1.1. The period to be taken into account 
42. Since I have already reached the conclu­
sion that the Community cannot be held lia­
ble for the damage which the applicants 
maintain they suffered and have still to suffer 
as a result of the unlawfulness of the 60% 
rule laid down in Article 3a(2) of Regulation 
N o 857/84 as established in the judgments in 
Spagl and Pastätter, the applicants are enti­
tled to seek compensation only for the 
period during which they had no reference 
quantity at all, that is to say for the period 
between the expiry of their non-marketing 
undertakings and, in principle, the entry into 
force of Regulation N o 764/89, Anicie 3 a of 
which introduced the 60% rule. 
I say in principle, because some applicants 
(Mulder, Brinkhoff and Twijnstra) resumed 
milk deliveries even before Regulation N o 
764/89 entered into force. Since milk deliver­
ies made before the grant of a 60% reference 
quantity pursuant to that regulation are free 
of levy in so far as they did not exceed the 
60% level (see Article 3a(5) of Regulation 
N o 857/84 as amended by Regulation N o 
764/89 and the seventh recital in the pream­
ble to the latter regulation), in such cases the 
date when deliveries actually resumed should 
be taken as the end date.41 
5.1.2. The reference quantity to be taken into 
account 
(i) Basis for the calculation 
43. The starting point for determining the 
reference quantity which the applicants 
could normally have claimed during the 
period in question must be Article 2(1) of 
Regulation N o 857/84, which provides that 
the reference quantity to be granted is to be 
equal to the quantity of milk delivered by 
the producer in 1981, plus 1%. However, 
under Article 2(2) the Member States were 
free to choose 1982 or 1983 as the reference 
year (in fact they all opted for 1983) pro­
vided that the quantity produced in that year 
was 'weighted by a percentage established so 
41 — I would point out again (see section 30 above) that, in my 
view, non-marketers who did not apply for a 60% reference 
3uantity pursuant to Regulation N o 764/89 should be 
eemed, in the absence of proof to the contrary, to have 
given up milk production for good during the currency of 
their non-marketing undertakings, with the result that nor­
mally they cannot argue that they suffered damage as a 
result of Regulation N o 857/84. That presumption that 
they discontinued milk production does not operate in the 
present cases, since the applicants did in fact apply for and 
obtain a 60% reference quantity. 
I -3118 
MULDER v COUNCIL AND COMMISSION 
as not to exceed the guaranteed quantity 
defined in Article 5c of Regulation (EEC) 
No 804/68'. Article 2(3) further provides 
that the percentages referred to in Article 
2(1) and (2) may be adapted by the Member 
States with a view to the grant of special or 
additional reference quantities pursuant to 
Articles 3 and 4 of Regulation No 857/84. 42 
In Spagl (paragraph 21) and Pastätter (para­
graph 12) the Court accepted that in the case 
of non-marketers who did not deliver any 
milk during the reference year adopted by 
the Member States the reference quantity 
could be calculated on another footing, 
namely on the basis of the volume of deliv­
eries which they made during a representa­
tive period preceding the non-marketing 
period. It is therefore uncontested that the 
basis for calculation provided for in Article 
3a(2) of Regulation No 857/84 must be used 
as the starting point, in other words the vol­
ume of deliveries during the twelve calendar 
months preceding the month in which appli­
cation was made for the non-marketing pre­
mium (called hereinafter 'the non-marketers' 
reference year'). 
However, the applicants in Case 
C-104/89 maintain that that basic figure 
should be increased by 1%. I consider that 
they are right. For the purposes of determin­
ing the reference quantity the Community 
legislature took as its basis milk deliveries in 
1981, plus 1% (see Article 2(1) of Regulation 
N o 857/84 and the second recital in the pre­
amble to that regulation). Since in the case of 
non-marketers the starting point must be 
milk deliveries during the non-marketers' 
reference year preceding 1981 — which 
means that they cannot take advantage of 
increased productivity between that year and 
1981 — it would be particularly unreason­
able and even discriminatory if they were 
additionally denied the 1% increase. 
(ii) The reduction coefficient 
44. The Court expressly recognized in Spagl 
(paragraph 21) and Pastätter (paragraph 12) 
that the Community legislature was entitled 
to apply to the basic figure for calculating 
the reference quantity to be allocated to non-
marketers a 'reduction coefficient designed to 
ensure that the category of producers con­
cerned was not accorded an undue advantage 
by comparison with the producers •who con­
tinued to deliver milk during the reference 
year'. However, the Court considered that a 
reduction coefficient of 40% was too high, 
on the ground that it appeared from the 
information provided to the Court that in no 
case did the reduction coefficient applied in 
the Member States pursuant to Article 2 of 
Regulation N o 857/84 (inclusive of the rate 
of withdrawal discussed in section 46) exceed 
17.5%. In this way, the Court indicated how 
an appropriate reduction coefficient for non-
marketers has to be determined, namely by 
applying a percentage which in the Member 
State of the producer concerned is represen­
tative of all the abatements which were 
applied there pursuant to Article 2 of Regu­
lation N o 857/84 to the reference quantity 
42 — Regulation No 1639/91 amended Article 2(3) of Regulation 
No 857/84 so that the percentages in question may now 
also be adapted with a view to the grant of a special refer­
ence quantity to non-marketers pursuant to Article 3a of 
Regulation No 857/84. 
I -3119 
OPINION OF MR VAN GERVEN — JOINED CASES C-104/89 AND C-37/90 
allocated to the producers referred to in that 
article.43 
As far as the period qualifying for compen­
sation (section 42 above) is concerned, this 
means more specifically that the basic refer­
ence quantity for the applicants (namely 
their production in the non-marketers' refer­
ence year plus 1%) for each of the years in 
that period (corresponding to the first to the 
fifth year of application of the levy sys­
tem *•) is to be reduced by a percentage rep­
resentative of the reduction coefficient which 
was applicable in each of those years in the 
Member State concerned. 
The applicants point out, however, that if 
non-marketers are not to suffer discrimina­
tion compared with producers referred to in 
Article 2, account must be taken of their par­
ticular situation. In that regard, they object 
that, on the lines of the Netherlands and 
German legislation (which was adopted after 
the Spagl and Pastätter judgments in order to 
implement Regulation N o 1639/91), account 
is taken of two specific reduction coeffi­
cients: the reduction coefficient which was 
applied in the first year to producers referred 
to in Article 2 and the rate of withdrawal 
introduced by Regulation N o 775/87, which 
currently amounts to 4.5%. 
45. The origin of the first objection lies in 
the fact that, as already mentioned, all the 
Member States opted for 1983 as the refer­
ence year, rather than for the volume pro­
duced in the (basic) reference year 1981, plus 
1%. In order in those circumstances to avoid 
exceeding the guaranteed total quantity per 
Member State, the Member States had — as 
expressly provided for in Article 2(2) of Reg­
ulation N o 857/84 — to reduce the individ­
ual reference quantities by a certain percent­
age. 
I agree with the applicants that when a rep­
resentative reduction coefficient is deter­
mined for non-marketers no account may be 
taken of the percentage determined as 
described above in accordance with Article 
2(2). That percentage compensates for the 
fact that the reference quantity of producers 
referred to in Article 2 was established on 
the basis of a reference year (1983) in which 
in most cases, in view of the steady rise in 
productivity in the sector, producers deliv­
ered more milk than they did in 1981. Since 
the basis applying to non-marketers is milk 
deliveries made during the non-marketers' 
reference year prior to 1981 (plus 1%), it 
would be unreasonable and discriminatory 
to apply to them the reduction coefficient 
determined pursuant to Article 2(2) of Regu­
lation N o 857/84, since that coefficient is 
designed to compensate for the advantage of 
the higher production achieved between 
1981 and 1983, the later reference year 
adopted by the Member States. 
The foregoing does not, however, mean that 
the entire reduction coefficient which was 
43 — The Council also took this view, as appears from the new 
version of Article 3a(2) of Regulation No 857/84 intro­
duced by Regulation No 1639/91 (as set out in section 
7 above). 
44 — The levy scheme was originally introduced for five succes­
sive periods of 12 months (see Article 5c(l) of Regulation 
No 804/68 as added by Regulation No 856/84). 
I -3120 
MULDER v COUNCIL AND COMMISSION 
applied in the relevant Member State pursu­
ant to Article 2 of Regulation N o 
857/84 should be left out of account, but 
only the reduction referred to in paragraph 2 
thereof, not the reductions laid down by the 
Member States pursuant to paragraph 3. The 
latter reductions are intended to make it pos­
sible to grant a special or additional reference 
quantity to producers in one of the special 
situations referred to in Articles 3 and 4 of 
the regulation. The applicants would be 
placed at an advantage in comparison with 
other producers if in determining the refer­
ence quantity to be granted to them no 
account were to be taken of such reduction 
coefficients, which were provided for on 
grounds of solidarity. 
45. The applicants' second objection relates 
to the taking into account of the withdrawal 
of a uniform proportion of each reference 
quantity, as laid down by Regulation N o 
775/87. That withdrawal was not introduced 
until the fourth year of application of the 
levy scheme and may therefore not be taken 
into account when calculating the damage 
which the applicants suffered during the first 
three years of application of the scheme. 
However, as from the fourth year the refer­
ence quantity taken as the basis for calculat­
ing the damage may be reduced by the same 
percentage as was applied to producers 
referred to in Article 2, provided, however, 
that when the damage is assessed account is 
taken of the compensation which was 
received by those producers under Article 
2 of Regulation No 775/87 in respect of the 
withdrawal. The non-marketers would also 
have received that compensation when the 
reference quantity to which they would nor­
mally have been entitled was withdrawn. 
5.2. Assessment of the damage suffered by 
way of loss of profit 
47. As I have already observed, this is a 
point on which, owing to the lack of suffi­
ciently certain and precise evidence, the 
Court can for the time being provide only 
general indications with a view to the parties' 
reaching agreement. Such indications can 
relate only to the situation of the applicants 
in the present joined cases but may, never­
theless, be useful when assessing the com­
pensation claims of other non-marketers 
who are in a similar situation. 
It is for the injured parties to prove the truth 
and extent of the damage suffered by way of 
loss of profit. I understand loss of profit to 
mean the profit which the applicants would 
have made from milk production had they 
been able to resume production at the proper 
time. The parties are in agreement about the 
starting point: account must be taken of the 
profit from the delivery of a quantity of milk 
— equal to the reference quantity to which 
the applicants would have been entitled dur­
ing the relevant period — which corresponds 
to the profits made by milk producers with 
the same reference quantity during the same 
period and under circumstances similar to 
those in which the applicants would have 
been had they been producing. However, the 
parties are not in agreement about the 
amount of the profit expressed as a percent­
age of sales (that is to say, the reference 
quantity). 
The guideline to be used in order to deter­
mine loss of profit should be the normal 
I -3121 
O P I N I O N O F MR VAN GERVEN — J O I N E D CASES C-104/89 A N D C-37/90 
course of events, having regard to the special 
circumstances.4 5 This means that the basis 
for calculation to be employed is the profit 
which, according to reliable statistical data, is 
representative of the relevant Member State 
or region with specific characteristics in the 
relevant year in the case of a farm of the 
same size as the applicant's. 
48. As regards the calculation of loss of 
profits, there are two specific problems 
which the Court can resolve as of now. First, 
there is a problem raised by the institutions. 
According to them, it is not possible for the 
applicants to have actually produced, after 
the expiry of the non-marketing period, 
from young cows whose milk yield had not 
yet developed a quantity of milk equal to the 
reference quantity which they claim. The 
applicants state in the reply in response to 
this claim that they were in fact able to 
exploit the reference quantity in full since 
they purchased more mature cattle. 
That, after the expiry of the non-marketing 
undertaking, the applicants had to start up 
milk production afresh should, in the normal 
course of events, have had an impact on 
profitability during the starting period seems 
to me to be correct. Depending on the cir­
cumstances, this will be caused either by the 
lower yield of young cows (the Commission 
talks about young cows' productivity being 
25% below that of more mature animals) or 
by the higher purchase price of more mature 
cows. It is for the institutions to adduce reli­
able general data in support of this defence 
argument. If the applicants consider that 
their actual circumstances differ from the 
normal course of events, they must provide 
sufficient proof that that is the case. 
49. The second problem is concerned with 
setting income from replacement activities 
against lost profits. After their non-
marketing undertakings expired all the appli­
cants took up replacement activities when 
Regulation N o 857/84 made it impossible for 
them to resume milk production. By so 
doing they undoubtedly acted in accordance 
with a general legal principle to the effect 
that the injured party must display ordinary 
vigilance in order as far as possible to con­
tain the damage within reasonable limits. 4 6 
The institutions consider, however, that the 
applicants did not make enough efforts to 
obtain adequate profits from the replacement 
activities. The applicants disagree, although it 
appears that the applicants in Case 
45 — To have regard to the normal course of events seems to be a 
general principle common to the legal systems of the Mem­
ber States. See the references to Belgian, English, French, 
German, Netherlands and Swiss law in the Belgian standard 
work by J. Ronse, 'Schade en schadeloosstelling (onrecht­
matige daad)', Algemene Praktische Rechtsverzameling, 
1957, N o s 73 and 74. See more specifically the wording of § 
252 of the German Bürgerliches Gesetzbuch (Civil Code), 
which reads as follows: 'Der zu ersetzende Schaden umfasst 
auch den entgangenen Gewinn. Als entgangen gilt der 
Gewinn, welcher nach dem gewöhnlichen Laufe der Dinge 
oder nach den besonderen Umständen, insbesondere nach 
den getroffenen Anstalten und Vorkehrungen, mit Wahr­
scheinlichkeit erwartet werden konnte.' ['The compensation 
shall also include lost profits. Profit is deemed to have been 
lost which could probably have been expected in the ordi­
nary course of events, or according to the special circum­
stances, especially in the light of the preparations and 
arrangements made.' (The German Civil Code, trans, by 
Forrester, Goren and Ilgen, North-Holland Publishing Co., 
Amsterdam.)] 
46 — The Court has recognized this principle in staff cases. More 
specifically, in the judgment in Case 58/75 Sergy v Commis­
sion [1976] 1139 (paragraphs 46 and 47) the Court held that 
a lack of ordinary vigilance was partly responsible for the 
damage suffered by the applicant and that that had to be 
taken into account when assessing the extent to which the 
defendant had to make good the damage. For a recent study 
in comparative law, see R. Kruithof, 'L'obligation de la par­
tie lésée de restreindre la dommage', Revue critique de juris­
prudence belge, 1989, p. 12 et se<ļ., which includes numer­
ous references to Belgian, English, French, German and 
Netherlands law. 
I - 3122 
MULDER v COUNCIL AND COMMISSION 
C-104/89 recorded operating losses in a large 
number of financial years during which they 
carried on replacement activities. They claim 
that the Community must also compensate 
them for those losses. 
Also as regards that dispute it is for the insti­
tutions to prove with the help of reliable sta­
tistical data what profit can be obtained in 
the relevant Member State or region with 
specific characteristics in the relevant year in 
the normal course of events on a farm with 
similar infrastructure to that of the applicant 
in the sector to which the replacement activ­
ity belongs. It is then again for the applicants 
to adduce counter-evidence supported by 
sufficient data and possibly to prove personal 
reasons (such as serious illness or other 
exceptional setbacks) which explain why the 
operating result which they achieved was 
lower than a normal operating result. The 
normal profit so determined — even if the 
actual profit was lower — should conse­
quently be deducted from the amount of the 
proved loss of profits. 47 As for any operat­
ing losses incurred in the relevant period, 
they are not normally eligible for compensa­
tion on the ground that there is no causal 
link between those losses and the regulation 
which was declared invalid; in view of the 
fact that the replacement activities under­
taken by the applicants are normally profit­
able, it must be assumed that any losses are 
to be attributable to factors for which the 
Community does not have to answer. 48 
50. I would make one final observation con­
cerning the circle of persons entitled to claim 
compensation — mainly only those non-
marketers who applied for and obtained a 
provisional 60% reference quantity pursuant 
to Regulation N o 764/89 (see section 
30 above) — with whom the institutions will 
have to reach agreement in the event that the 
Court decides that the Community is liable 
for the damage suffered as a result of the 
invalidity of Regulation No 857/84. 
In my view, there is nothing to prevent the 
institutions from drawing up an overall set­
tlement which takes account of the standard 
types of injured party. Indeed this is appro­
priate in view of the need to treat in the same 
way injured parties who are in similar cir­
cumstances. It is open to individual injured 
parties to show by producing sufficient evi­
dence, as has been emphasized above, that a 
different arrangement is justified for them on 
account of exceptional personal circum­
stances. 
5.3. Interest due 
5.3.1. Legal interest 
51. The parties agree that if the Community 
is held hable to pay compensation, it will 
47 — If it should appear that the applicants obtained a higher 
profit than the normal profit from the replacement activi­
ties, that extra profit should not be deducted from the lost 
profits, since the Community should not derive an advan­
tage from special efforts made by the applicants. 
48 — There may in fact be a causal connection between some 
losses and the regulation which was declared invalid, for 
example in the case of the loss alleged by some applicants in 
Case 104/89 on the sale of cows purchased in 1983 or 
1984 with a view to the resumption of milk production, 
which was subsequendy made impossible by Regulation 
N o 857/84. 
I -3123 
OPINION OF MR VAN GERVEN — JOINED CASES C-104/89 AND C-37/90 
have to pay legal interest on the amount pay­
able as from the day on which judgment is 
given. However, their opinions differ about 
the rate of interest. The applicants in Case 
C-104/89 claim 8%. The applicant in Case 
C-37/90 proposes 7%. The institutions put 
the rate of interest at 6%. 
The Court has repeatedly held, most recently 
in Sofrimport, that as a general rule the obli­
gation to pay interest arise on the date on 
which judgment is given. However, at one 
time it set the rate without further explana­
tion at 6% (in the quellmehl and maize gritz 
cases), at another at 8% (in the more recent 
Sofrimport case). In my view, the guideline 
should be the level of legal interest which is 
applied at the time when the Court gives its 
judgment in the Member State in which the 
applicants worked and in which they would 
therefore normally use or invest the compen­
sation due to them. 
5.3.2. Compensatory interest 
51. In their application, the applicants in 
Case C-104/89 assessed the damage which 
they sustained allowing for an amount for 
interest not received for each year from 
1984 to 1989. In their reply they claim com­
pensatory interest only from 30 March 
1989 (that is to say, from the date of the 
application) on the total amount of the dam­
age which they allege they suffered up until 
the end of 1989. The applicant in Case 
C-37/90 has not applied for compensatory 
interest in this application or in his reply. At 
the hearing, however, he asked the Court to 
assess the damage allowing for compensatory 
interest. He observed that that unreceived 
interest constituted part of the damage sus­
tained, since he had to pay interest on a bank 
loan which he had taken out. 
53. It is for the Court to order the Commu­
nity to pay compensation for the whole of 
the damage suffered by the applicants, which 
would therefore include compensatory inter­
est in so far as the amount of compensation 
fixed by the parties by mutual agreement 
after the interlocutory judgment does not 
already take full account of the time which 
has elapsed until that date. For the reasons 
set out above (in section 51) that interest also 
must be calculated on the basis of the usual 
rate of interest in the applicants' Member 
State. 
C o n c l u s i o n 
54. Fo r the reasons set ou t in the foregoing I p ropose that, before deciding further, 
the C o u r t should: 
(1) declare that the E u r o p e a n Economic C o m m u n i t y mus t pay the applicants an 
a m o u n t commensu ra t e with the damage which they sustained in the per iod 
be tween the expiry of the non-marke t ing under tak ing wh ich they entered into 
pu r suan t to Counc i l Regulat ion N o 1078/77 of 17 M a y 1977 and the grant to 
I -3124 
MULDER v COUNCIL AND COMMISSION 
them of a provisional reference quantity pursuant to Article 3a of Council 
Regulation N o 857/84 of 31 March 1984 (which was added by Council Regu­
lation N o 764/89 of 20 March 1989) or the time at which they resumed milk 
deliveries if they did so before the grant of the aforesaid reference quantity; 
(2) dismiss the remaining claims for compensation; 
(3) declare that, within 12 months of the delivery of the judgment, the parties are 
to provide the Court with a calculation of the amount of damage determined 
by mutual agreement which takes account of the fact that, for each year of the 
period referred to in paragraph 1, the applicants could have delivered a quan­
tity of milk corresponding to the milk deliveries which they made during the 
year preceding the month in which they applied for the premium, plus 1%, 
which amount is to be diminished by a percentage representative of the reduc­
tions which the Member State concerned applied in each year of the aforemen­
tioned period to the reference quantity fixed in accordance with Article 2 of 
Regulation N o 857/84 for the milk producers referred to in that article — with 
the exception of the reduction connected with the adoption of a reference year 
later than 1981, but including the reduction resulting from the application of 
the rate of withdrawal introduced by Regulation N o 775/87 —, and which 
further takes account, in assessing loss of profit, of the profit which, in the 
normal course of events and subject to the applicant's proving exceptional cir­
cumstances, would have been made by a producer in comparable circum­
stances who received the same reference quantity as the applicants were enti­
tled to, but less the normal income obtained by the applicants from their 
replacement activity, which is to be assessed in accordance with the same cri­
terion and established by means of the same methods of proof; 
(4) declare that legal interest is due on the amount of compensation to be paid as 
from the date on which the judgment is given at the rate applying in the Mem­
ber State concerned on that date, and possibly also compensatory interest at 
the usual rate applying in the Member State concerned, in so far as the amount 
of compensation to be paid does not already take fully into account the time 
which has elapsed up until then; 
(5) declare that if the parties fail to agree or to agree on all points within 
12 months of the date on which the judgment is given, the parties must for­
ward their calculations to the Court with a view to the settlement of the out­
standing points in issue; 
(6) reserve the costs. 
I-3125