61979C0789
OPINION OF MR ADVOCATE GENERAL WARNER
DELIVERED ON 7 MAY 1980
My Lords,
This is an application by the Commission under Article 91 of the Rules of Procedure of the Court for a decision on a preliminary objection as to the admissibility of two actions brought against the Commission under Article 173 of the EEC Treaty. The applicants in those actions (which have been joined by order of the Court) are two Italian companies, Calpak S.p.A., of Bologna, and the Società Emiliana Lavorazione Frutta S.p.A. of Ravenna. Both are processors (canners and bottlers) of fruit and vegetables, including pears. By their actions they seek to challenge the legality of measures taken by the Commission, or allegedly taken by the Commission, concerning the method of distributing a Community production aid for Williams pears preserved in syrup. For the sake of brevity I propose to refer in this opinion (except in citations) to Williams pears preserved in syrup simply as “preserved pears”.
The basic regulation on the common organization of the market in products processed from fruit and vegetables is Council Regulation (EEC) No 516/77 of 14 March 1977. That Regulation was amended by Council Regulation (EEC) No 1152/78 of 30 May 1978 which introduced a system of production aids intended to make certain products (specified in an Annex Ia) processed from plums, peaches and tomatoes harvested in the Community more competitive with imports from non-member countries.
That system is based on contracts between growers and processors fulfilling certain prescribed requirements and under which a minimum price is to be paid by the processors. The amount of the aid is so fixed as to make up the difference between Community prices, established having regard to that minimum price and to processing costs, and the prices of products from non-member countries. The minimum price and the amount of the aid are fixed annually in accordance with the procedure laid down in Article 20 of Regulation No 516/77, that is the Management Committee procedure.
The Council recognized that such an aid might stimulate over-production. By Article 3a (5) of Regulation No 516/77, inserted by Regulation No 1152/78, it provided as follows :
“Where the Community production potential for a product referred to in Annex la is likely to cause a major imbalance between production and marketing possibilities, the Council, acting by a qualified majority on a proposal from the Commission, may decide to limit the granting of the production aid to a specified quantity, taking account of average production in the three years preceding the marketing year for which the aid is fixed.”
Following the entry into force of Regulation No 1152/78, the Commission adopted Regulation (EEC) No 1530/78 of 30 June 1978 laying down rules for the application of the system of aid. I need refer only to Article 6 of that Regulation, which was heralded by a recital that “provisions should be adopted on the determination for each processor of the maximum quantity for which aid may be given if Article 3a (5) is applied”.
Article 6 (in its original version) read :
“1.
In cases covered by Article 3 a (5) of Regulation (EEC) No 516/77, the application for aid shall be supported by a statement of the average quantity produced by the undertaking in the three years preceding the marketing year for which the aid is fixed.
2.
Where the processor has been producing the product concerned for less than three years, his application for aid shall be supported by a statement, as appropriate, either of the average quantity produced in the last two years or of the quantity produced in the year preceding the marketing year in question.
3.
Where processors have begun processing during the marketing year in question, the aid shall be limited to a quantity not exceeding a percentage, to be determined in accordance with the procedure laid down in Article 20 of Regulation (EEC) No 516/77, of the total quantity for which the processors referred to in the preceding paragraphs may receive aid.
The Member State concerned shall determine, within the limit of the percentage referred to above, the total quantity eligible for aid and shall allocate it fairly among the new processors.
4.
Where an undertaking decides not to process the produce concerned, the Member State shall allocate the quantity in respect of which the said undertaking could have received the aid, among the new processors, in accordance with paragraph 3. Any balance remaining shall be allocated fairly among the other processors.”
A year later, by Regulation (EEC) No 1639/79 of 24 July 1979, the Council extended the system of aid, so far as here material, to preserved pears with effect from the beginning of the 1979/80 marketing year.
On the same day the Council adopted Regulation (EEC) No 1640/79, which applied only to preserved pears. The preamble to that Regulation referred to Article 3a of Regulation No 516/77 and continued:
“... whereas in cases where the situation described in paragraph 5 of that article arises there is scope for limiting aid to a specified quantity, taking account of average Community production for the three years preceding the marketing year for which the aid is fixed; whereas this situation is likely to arise for Williams pears preserved in syrup...; whereas the production aid should accordingly be limited in respect of this product to a specified quantity in accordance with the above-mentioned criteria; whereas it is appropriate to fix this quantity at 83% of the average Community production referred to above;”
Article 1 of the Regulation provided:
“The granting of production aid for Williams pears preserved in syrup... shall be limited for each marketing year to 57100 tonnes”.
On 6 August 1979, the Commission adopted four Regulations, provisions of the third and fourth of which the applicants seek to impugn in the present actions.
The first was Regulation (EEC) No 1729/79 whereby, so far as material, the Commission determined that the marketing year for preserved pears should run from 15 July to 14 July.
The second was Regulation (EEC) No 1730/79 whereby, again so far as material, the Commission fixed for the 1979/80 marketing year the amount of the aid to be paid in respect of preserved pears and the minimum price to be paid by processors to growers for Williams pears. The aid was to be 26.41 ECU per 100 kg (immediate packing included) and the minimum price was to be 28.13 ECU per 100 kg net, ex grower. We were told that the aid in substance covered the cost of the pears.
The third Regulation in the series was Regulation (EEC) No 1731/79, the title of which described it as “laying down detailed rules restricting the granting of production aid for Williams pears preserved in syrup”. Its preamble, after referring to the fact that Council Regulation No 1640/79 had fixed the quantity of preserved pears in respect of which aid might be paid at 57100 tonnes, recited that “provisions should be adopted to ensure that this overall quantity is distributed between the various processing undertakings” and that “the quantity of the said preserves in respect of which new undertakings may qualify for aid should be determined”. Article 1 then provided :
“The granting of production aid for Williams pears preserved in syrup... shall be restricted, in respect of each processing undertaking, to 105% of the quantity produced during the 1978/79 marketing year.”
Article 2 provided:
“In respect of Williams pears preserved in syrup, the percentage given in Article 6 (3) of Regulation (EEC) No 1530/78 [i.e., Your Lordships remember, the percentage set aside for new processors] shall be fixed for each marketing year at 2% of the total quantity produced within the territory of each Member State and qualifying for aid by virtue of Article 1.”
Article 3 provided that the Regulation should apply “with effect from the beginning of the 1979/80 marketing year”, i.e., Your Lordships observe, not merely for that year.
The fourth Regulation was Regulation (EEC) No 1732/79. The Commission thereby made a number of amendments to Regulation No 1530/78. In particular, by Article 1 (3), it completely replaced Article 6 of Regulation No 1530/78. I refrain from reading the amended Article 6 in full. Essentially it differed from the original version in that, by a new paragraph 1, an application for aid in a case within Article 3(a) 5, instead of being supported by a statement of the average quantity produced by the applicant in the three years preceding the marketing year for which the aid was fixed, was to' be supported by a statement of the quantity produced by him “during the marketing year preceding the marketing year in question”; and in that the original paragraph 2, relating to an applicant who had been producing for less than three years but had begun producing before the marketing year in question, disappeared.
In September 1979, there was some correspondence between a trade association to which the applicants belong (the Associazione Italiana Prodotti Alimentari) and the Italian Ministry of Agriculture and Forests. From that correspondence it appeared, among other things, that the Ministry took the view that Italian processors of Williams pears could receive 64% and no more of the available amount of aid. The Ministry cited in support of that view “Commission working paper VI E.1./63/79 of 12 July 1969”, but without producing any copy of it. The applicants' solicitors wrote on 24 October 1979 to the Commission asking whether they might be provided with a copy of the document. Their request was refused.
Such were the circumstances in which these actions were brought in November 1979.
Where the question is as to the admissibility of an action it is of course necessary to focus attention on the precise nature of the claim or claims made in that action. The claims made here were formulated in the applications in a number of alternative ways. As subsequently explained, however, on behalf of the applicants in their written answer to the Commission's application and at the hearing, those claims boil down essentially to three:
(1)
That the Court should declare void Article 1 of Regulation No 1731/79;
(2)
That it should declare Article 1 (3) of Regulation No 1732/79 void in so far as it amended Article 6 of Regulation No 1530/78;
(3)
That it should declare void an alleged decision of the Commission “to give to, or to set aside for, the applicants a share (based on the proportion that the applicants' production in 1978/79 bore to total Italian production) of 64 % and no more, of the total production aid for Williams pears preserved in syrup”.
In order to understand the arguments put forward on behalf of the applicants in support of those claims it is necessary to bear in mind certain facts stated in the applications. They may be summarized as follows.
There are only 38 undertakings which process Williams pears in the Community, 15 in France and 23 in Italy. Of those, some are co-operatives or government-owned while others, like the applicants, are commercial undertakings. The quantity of pears processed in any year varies from processor to processor and depends primarily on the size of the crop. When there is a light crop the price for fresh pears is relatively high and the quantity of pears available for processing is proportionately low. Conversely, when there is a heavy crop it is more profitable to preserve pears and a higher proportion of the total crop is processed. Co-operative and government-owned processors tend to have a regular production cycle whereas undertakings such as the applicants tend to be more flexible and responsive to variations in the quantity of pears available for processing. Such processors may, in years where the crop is light, process only small quantities of pears or even none at all. The processing season in each year is relatively short, coinciding with the availability of the fresh fruit in the late summer and the autumn. In 1978/79 French production of preserved pears was higher than usual relative to Italian production.
I propose to begin by considering the admissibility of the applicants' third claim.
From what the Italian Ministry of Agriculture and Forests had written to their trade association, the applicants deduced that the Commission had determined, or had agreed with the French and Italian national authorities, that the available amount of aid should be divided amongst the French and Italian processors, both existing and new, in the proportion of 36% to the French and 64% to the Italian, although no such allocation was mentioned anywhere in the relevant regulations. The applicants saw that arrangement as the real reason for the limit of 105% of 1978/79 production fixed by the Commission in Article 1 of Regulation No 1731/79 as compared with the limit of 83% of average production for the preceding three years referred to by the Council in Regulation No 1640/79. The limit of 105% would give the French authorities “sufficient headroom” to be sure that they could distribute to the French producers the whole of the 36%.
In response to a request made by the Court, the Commission produced not only the working paper dated 12 July 1979 to which the Italian Ministry of Agriculture and Forests had referred but also two earlier ones, dated 16 May 1979 and 7 June 1979 respectively.
The Commission denied that it had been a party to any agreement or arrangement with national authorities to divide the amount of aid between France and Italy in the proportion 36% — 64%. Still less, it said, had it taken any “decision” to that effect. It explained to us that the working paper of 12 July 1979 had been prepared by its responsible division with a view to enabling it to fix (as it did by Regulation No 1730/79) the minimum price to be paid to growers and the amount of the aid for the 1979/80 marketing year in respect of, among other products, preserved pears. The percentages of 36% and 64% referred to in the document represented the proportions of the total of preserved pears produced in 1978/79 declared to the Commission by the French and the Italian authorities. Those percentages had to be taken into account in order to arrive at the weighted averages to be used as data for the calculation of the minimum price and of the relevant Community price for 1979/80. It seems to me, having looked at the document, that that explanation makes complete sense. Having regard to the way in which, under Council Regulation No 1152/78, the minimum price and the amount of the aid for any year are to be determined, it was right, for the purpose of fixing them for 1979/80, to look at the figures for 1978/79. The percentages of 36% and 64% were also referred to in the working paper of 7 June 1979, which was prepared by the Commission at the request of the Council in order to enable it to see what the cost would be of an aid for preserved pears. The applicants might, in the light of the documents disclosed by the Commission and of its explanations, have withdrawn their third claim but they did not do so.
In my opinion, however, that claim is plainly inadmissible, because, as the Commission submitted, any such “decision” or “agreement” or “arrangement” as the applicants allege that the Commission made could not have any legal effect. It could not add to or contradict the provisions of the relevant regulations. So it could not be a decision within the meaning of Article 173 at all. Moreover, even if it were, it would affect generally all processors of Williams pears, whether established or new, in France and in Italy, if not throughout the Community, and so could not be held to be of “individual concern” to the applicants.
The Commission told us that the Italian authorities did seem to have taken the view that aid for Italian produced preserved pears was limited to 64% of the total of 57100 tonnes fixed by Council Regulation No 1640/79. The reason for that seems to lie in a discrepancy between the figures of Italian production in 1978/79 supplied by the Italian authorities to the Commission, on the basis of which the Council fixed the limit of 57100 tonnes, and the statements of their production in 1978/79 made subsequently by Italian processors to the Italian authorities with a view to obtaining aid for 1979/80. The Commission does not think however that such a discrepancy would justify treating the Regulations as if they imposed an a priori limitation of the aid available to processors established in a particular Member State; and it said that it was in touch with the Italian authorities about the problem. I agree of course with the Commission and would add that, if the Italian authorities are misapplying the regulations, only the Italian courts can afford the applicants a remedy.
So I turn to the applicants' first and second claims.
The main point taken by the applicants in support of those claims is that it was unlawful for the Commission to prescribe, as the basis for each processor's entitlement to aid, his production in the single marketing year 1978/79, instead of his average production in the three years 1976/77, 1977/78 and 1978/79. The effect was markedly to favour French processors to the detriment of Italian processors. Your Lordships will remember that I produced at the hearing a table based on the statistics of French and Italian production from 1973 to 1978 set out in the Commission's working paper of 7 June 1979. That table showed that, whilst 83% of average Community production in the three years 1976 to 1978 and 105% of Community production in the single year 1978 were (to the nearest 1%) the same (and 57100 tonnes was roughly the median between them), the adoption of the latter criterion instead of the former increased the French processors' entitlement to aid by 37.3% and reduced the Italian processors' entitlement by 13.3%.
The Commission does not dispute the figures. Those appearing on its behalf made it clear to us that they wished to refrain so far as possible, on this application which is only about the admissibility of the actions, from going into the substance of the case. They confined themselves to indicating that, on the substance, the Commission's submission would be that it was not bound, as a matter of law, to adopt the criterion of the three-year average, which was no more than something of which the Council must “take account”. They also outlined the political reasons that lay behind the decision to adopt the criterion of 105% of 1978/79 production. Chief among them seemed to be that, according at all events to the Commission's interpretation of the Council's intention, that intention had been only to limit the fall in Community production, i.e. to stabilize it at its 1978 level. The statistics to which I have referred do indeed show a steady decline in Community production, and also in Italian production, from 1973 to 1978, with the exception of a surge in 1976 (which as we all remember was an exceptional year for many kinds of fruit). The Commission says that the political decision taken by the Council (at its so-called “Marathon meeting” from 18 to 22 June 1979) was actually that the aid should apply only to 105% of the quantity produced in 1978, and that that was translated into 83% of the three-year average when that decision came to be embodied in Council Regulation No 1640/79. (In support of that, the Commission cites the account of the decision given in the Bulletin of the European Communities, No 6 of 1979, at p. 60. That is in fact a Commission publication, not a publication emanating from the Council). Other considerations were mentioned on behalf of the Commission, such as that it was reasonable to take a base period that suited the co-operatives and that there had, for climatic reasons, been a dip in French production in 1977.
It would not be right for me, on this application, to express any views on the substance of the case.
The Commission submits, in my opinion rightly, that a person other than a Member State or a Community institution, in order to be entitled, under the second paragraph of Article 173 of the Treaty, to challenge the legality of an act of a Community institution in the form of a provision in a regulation, must satisfy three conditions:
(1)
he must be able to show that, although in that form, the act is really (at all events in so far as it concerns him) a decision;
(2)
he must be able to show that it concerns him directly; and
(3)
he must be able to show that it concerns him individually.
On behalf of the applicants it was submitted that it would be enough for them to show that the second and the third of those conditions were satisfied, because the requirement of individual concern was so closely related to the requirement that the act be, by its nature, a decision, that only exceptionally could an act satisfy the tests of direct and of individual concern to an applicant without also having the character of a decision. That is, in my opinion, a wrong approach. It is perfectly true that, in many situations, the question whether an act is by its nature a decision can be answered by considering whether it is of direct and individual concern to a particular person or class of persons. But there is abundant authority in this Court to the effect that, in the correct analysis, the requirement that the provision in question should be, by its nature, a decision and not a legislative act is independent of the requirements that it should be of direct and individual concern to the applicant. I discussed the relevant authorities in my opinion in the “Ball Bearings” cases, Cases 113 and 118 to 121/77 [1979] ECR at p. 1243, and I refrain from doing so again.
Those authorities also establish that, in order to decide whether a provision is by its nature legislative or constitutes a decision, one must consider whether it is of “general application” (in the sense in which that expression is used in Article 189 of the Treaty) or, on the contrary, is apt to determine only what is to happen in a particular person's case or in an identifiable number of cases. It is this test that is analogous to the test that has to be applied to decide whether an act is of individual concern to an applicant.
There is, however, another principle that seems to me relevant here. Where the provision in question is embedded in a set of legislative provisions the answer to the question whether it may none the less be regarded as a decision (directed at a particular person or class of persons) depends upon whether it is severable from the rest of those provisions or, on the contrary, forms part of a “legislative whole” — the expression used by the Court in Cases 103 to 109/78, Société cíes Usines de Beauport v Council [1979] ECR 17 (paragraph 16 of the judgment). Here again I find myself in agreement with what I understood to be the submission of the Commission.
Applying those principles to Article 1 of Regulation No 1731/79, the subject-matter of the applicants' first claim, it seems to me that they lead inevitably to the conclusion that that claim is inadmissible. It is not true to say that that provision affects only an identifiable number of persons. The applicants argued that it affected only those processors who had produced preserved pears in 1978, a closed class to which they belonged. But it affects also established processors who did not produce preserved pears in 1978 although they had produced them in earlier years and might produce them again in later years; it affects them by excluding them from any allocation of aid except as “new” processors. (The applicants themselves gave us an example of such a processor, a company called La Cesellate S.p.A., which, they said, produced preserved pears continuously from 1966 to 1976, and did so again “on a significant scale” in 1979). Article 1 affects also new processors, whose rights are defined by Article 2 of the regulation by reference to Article 1. By the same token it cannot be said that Article 1 is severable from the rest, because Article 2 would become meaningless without it.
In an endeavour to escape from that conclusion the applicants submitted that there was no “absolute dichotomy” between decisions on the one hand and regulations strictu sensu on the other. In support of that submission they cited the “Ball Bearings” cases, in which I said expressly, and the Court accepted implicitly, that one might exceptionally come across a hybrid instrument that was a decision in so far as it affected particular persons but a regulation in so far as it affected others.
As the judgments of the Court in those cases show, however, they were exceptional cases, turning very much on their own facts, in particular the fact that the regulation there in question named the “Big Four” and the fact that it sought to institute machinery whereby their compliance with undertakings that they had given might be secured.
The argument of the applicants on this point echoed the view that I expressed in Case 162/78, Wagner ν Commission, where I said:
“It does not seem to me to matter that the text of Article 1 (a) of Regulation No 1837/78 does not distinguish expressly between traders who had refunds fixed before 1 June 1978 and other traders affected by the provision. If that were material, acts that were by their nature decisions could be converted into regulations by lumping together the various classes of persons thereby affected under a sufficiently broad formula. Indeed the decisions of the Court in Cases 113 and 118 to 121/77 NTN Toyo Bearing Co Ltd and Others ν Council and Commission... show that an act that is in other respects a regulation applying generally may, in so far as it affects particular persons, constitute a decision concerning them directly and individually.”
The Court in its judgment (dated 20 November 1979 and not yet reported) firmly rejected that approach. I would be the last to encourage Your Lordships to create confusion and uncertainty in the law by going back on that decision.
It was also submitted on behalf of the applicants that the Court should seek out the intention of the Commission in enacting the provision in question, to see whether it had been legitimate. Your Lordships will remember that, in support of that submission, we were given a vivid example of what the Commission might perpetrate by legislating by reference to the height of people's factory chimneys; and referred to certain Belgian and Dutch authorities. It seems to me that, by that submission, the applicants were really trying to convert the concept of “misuse of powers” in Article 173, from being a ground upon which the Court may find that an act of a Community institution is illegal, into a ground upon which it may hold that an action brought by a private person to challenge that act is admissible. Unlike Article 33 of the ECSC Treaty, Article 173 does not enable a private person, by alleging a misuse of powers, to render admissible an action that would otherwise be inadmissible.
I am therefore of the opinion that the applicants' first claim should be held inadmissible.
The inadmissibility of their second claim is, in my opinion, manifest, and I do not propose to take up much of Your Lordships' time over it. Article 6 of Regulation No 1530/78 was clearly legislative in character and so were the amendments made to it by Article 1 (3) of Regulation No 1732/79. Indeed those amendments were only consequential on the provisions of Regulation No 1731/79.
In the result I am of the opinion that these actions should be dismissed as being inadmissible and that the Commission, having asked for costs, should be held entitled to them. It is not, I think, for me to hazard a view as to whether or not, if the applicants are right on the substance of the case, the Treaty affords them a different remedy.