61999CC0178_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
I - Introduction
1. By order of 29 December 1998, the Bezirksgericht Bregenz (District Court, Bregenz) (Austria) referred to the Court for a preliminary ruling three questions on the interpretation of the provisions of the EC Treaty relating to the free movement of capital and the Agreement on the European Economic Area. The body making the reference seeks in particular to ascertain whether the requirement of prior transfer authorisation with constitutive effect in order to acquire an unbuilt plot of land is compatible with Community law. Following the judgment in Konle, a number of cases concerning Austrian authorisation procedures for the acquisition of immovable property have been brought before the Court. In the present case, however, the Court must first rule on the question whether the Bezirksgericht Bregenz, which has referred the questions in its capacity as the Grundbuchsgericht (court responsible for land registration matters), can be regarded as a court or tribunal of a Member State within the meaning of Article 234 EC.
II - Legal framework
A - National law
2. Under Austrian law, ownership of immovable property is acquired by means of a court-approved entry (acquisition of title) in the land register. In connection with the approval of an ownership entry, the court known as the Grundbuchsgericht must examine whether ownership authorisation is necessary and, if so, whether such authorisation has been granted or whether the acquisition of ownership may be possible without transfer authorisation. The Grundbuchsgericht forms part of the Bezirksgericht, a judicial authority of first instance. The applicable law is to be found both in the federal legislation and in the regulations of the constituent States.
3. The Grundverkehrsgesetz of the constituent State of Vorarlberg distinguishes between built plots of land, those which are unbuilt but designated as building land, and those which are agricultural. In the case of built plots, the Grundverkehrsgesetz provides for a model declaration (Grundverkehrserklärung) in which the acquirer undertakes not to use the acquired dwelling as a holiday residence. Paragraph 7 of the GVG provides that the purchaser must give that declaration himself in writing. After verification, the mayor of the commune in which the plot is situated or the chairman of the Grundverkehrs-Landeskommission (Regional Commission on Land Transactions; hereinafter: the Landeskommission) must officially recognise the declaration. The purchaser of the plot of land may then have the ownership registered by the Grundbuchsgericht.
4. For unbuilt plots designated as building land, Paragraph 8 of the GVG expressly requires transfer authorisation. Such authorisation must be granted if the acquirer shows that the plot of land will, within a specified time, be put to a use conforming to the land-use plan. Under Paragraph 13(2) of the GVG, the Landeskommission decides in the first instance on the granting of authorisation.
5. In the absence of the declaration required pursuant to Paragraph 7 of the Grundverkehrsgesetz, or if transfer authorisation with constitutive effect as referred to in Paragraph 8 is not granted, the land transaction is unconditionally void by virtue of Paragraph 29 of the GVG.
6. The Grundbuchsgesetz contains the procedure for the Grundbuchsgericht. Under Paragraph 76 of the GBG, the Grundbuchsgericht may, except in the cases specified in the GBG or in another law, order entry in the register, not of its own motion, but only at the request of parties or authorities. The application for registration must be accompanied by the necessary documents. Before approving entry, the Grundbuchsgericht examines whether the criteria laid down in Paragraph 94 of the GBG have been satisfied, including the presence of a transfer authorisation as referred to in Paragraph 8 of the GVG, without further investigating the wishes of the parties. Paragraph 95(1) of the GBG provides that, in principle, the Grundbuchsgericht decides to grant or reject the application without hearing the parties and without giving any provisional decisions. However, in a number of clearly defined circumstances there is in fact provision for the parties to be heard. If the application for registration is rejected, Paragraph 95(3) of the GBG provides that the decision must state the reasons which prevent approval. The only remedy at law which Paragraph 122(1) of the GBG provides against land register decisions of the Bezirksgericht is the Rekurs.
B - Community law
7. Article 56(1) EC (formerly Article 73b(1) of the EC Treaty) states: [w]ithin the framework of the provisions set out in this Chapter, all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited.
III - Facts and procedure
8. The facts in this case, as they appear from the order for reference and from the documents lodged by Doris Salzmann-Greif, can be summarised as follows:
9. Doris Salzmann-Greif (hereinafter Ms Salzmann), resident in Fußbach in the judicial district of Bregenz, purchased from Walter Schneider, resident in the same commune, an unbuilt plot of land situated in the locality. The purchaser and the vendor are both Austrian nationals. On 5 November 1998 Ms Salzmann sent the Landeskommission a declaration. That declaration corresponds mutatis mutandis to the declaration referred to in Paragraph 7 of the GVG, which the Landeskommission recognises as sufficient for built plots of land because it contains an acceptance of the obligation not to use the acquired immovable property as a holiday residence. In her declaration, Ms Salzmann expressly invoked Article 73b(1) of the EC Treaty. The Landeskommission therefore found that the declaration was not in accordance with the requirements laid down by the Grundverkehrsgesetz, and so could not be officially recognised.
10. On or around 12 November 1998, in order to acquire title to the plot of land concerned, Ms Salzmann submitted an application for registration to the Bezirksgericht Bregenz which, sitting as the Grundbuchsgericht, must decide on the application. The declaration of 5 November 1998 is attached to the application. In the grounds put forward in support of the application for registration, Ms Salzmann argues that, by virtue of the requirements of Community law and of the Agreement on the European Economic Area, she does not need prior authorisation. On account of the absence of any transfer authorisation, the application was subsequently rejected by a Rechtspfleger (judicial officer) by decision of 16 November 1998. Ms Salzmann lodged an appeal against that rejection before the Bezirksgericht Bregenz, sitting as the Grundbuchsgericht, on 18 November 1998.
11. The Bezirksgericht Bregenz then decided, by order of 29 December 1998, to refer the following questions to the Court of Justice for a preliminary ruling under Article 177 of the EC Treaty (now Article 234 EC):
1. May nationals of a Member State of the European Union rely on free movement of capital even if a capital transaction has no transnational element?
2. Is it compatible with free movement of capital for an official land transfer authorisation, which has constitutive effect, to be required for the acquisition of building land?
3. What effect does the standstill clause in point 1(e) of Annex XII to the EEA Agreement have on new types of situation requiring authorisation under land transfer law which were created after the signature of the EEA Agreement on 2 May 1992?
12. The order was received at the Court on 14 May 1999. Written observations were submitted by Ms Salzmann, the Commission, the Austrian Government and the Spanish Government. The hearing, at which Ms Salzmann, the Commission and the Austrian Government were represented, took place on 14 December 2000.
13. The Spanish Government and the Commission have expressed serious reservations with regard to the jurisdiction of the Court to answer the questions referred by the Bezirksgericht. The Austrian Government has also put forward its objections concerning the admissibility of the reference and clarified these in reply to written questions from the Court. In the light of those reservations and objections, the nature of the national proceedings and the capacity of the body making the reference must first be examined.
IV - The jurisdiction of the Court
A - Observations submitted
14. The first paragraph of Article 234 EC confers jurisdiction on the Court to give preliminary rulings concerning the interpretation of the Treaty and the acts of the institutions of the Community. Under the second paragraph of Article 234 EC, where such a question is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court of Justice to give a ruling thereon.
15. The interveners rely on the Court's case-law concerning Article 234 EC in order to challenge the admissibility of the reference. As is well known, it is settled case-law that the question whether a body making a reference is a court or tribunal for the purposes of Article 234 EC is governed by Community law alone. In order to determine whether a body is a court or tribunal, a number of institutional factors must be taken into account, such as whether the body is established by law, whether it is permanent, whether its jurisdiction is compulsory, whether its procedure is inter partes, whether it applies rules of law and whether it is independent. In addition, the case must result in a judgment in proceedings intended to lead to a decision of a judicial nature.
16. The Commission and the Spanish Government argue that the nature of the activity performed by the Bezirksgericht Bregenz in this case, namely, ruling on an application for registration of ownership, bears strong similarities to the Italian giurisdizione volontaria in the Job Centre case. As in that case, the national court in the present case also decides as an administrative body and does not exercise any judicial function. In accordance with the judgment in Job Centre, for those reasons the Bezirksgericht Bregenz does not have jurisdiction in the present case to refer questions to the Court for a preliminary ruling.
17. The Commission's doubts as to the admissibility of the reference are further reinforced by the particular features of the present case. It infers from the order for reference of the Bezirksgericht Bregenz that the applicant has never applied for an authorisation as required by national law, and that no decision has been taken on the substance of the case. The authority concerned has merely confirmed in writing that the declaration given by the applicant is not in accordance with national law. Those factors, together with the fact that Ms Salzmann relies directly on Article 73b of the EC Treaty in her application, give the Commission the impression that she is more interested in obtaining a review by the Court of the authorisation requirement in Paragraph 8 of the GVG than in obtaining entry of the transfer of ownership concerned in the land register.
18. The Austrian Government points out that the procedure under the Austrian Bundesgesetz provides for inter partes elements in special cases. Nevertheless, it too is of the opinion, on the basis of the judgment in Job Centre, that in the present case the Bezirksgericht Bregenz cannot be regarded as a court or tribunal within the meaning of Article 234 EC.
19. At the hearing, Ms Salzmann likewise drew attention to possible inter partes elements in the procedure, only then to argue that in this case the Bezirksgericht Bregenz was in fact sitting as a court or tribunal within the meaning of Article 234 EC. At the same time, she submitted that the body making the reference was not a body deciding at first instance, but an appeal body, and for that reason these were indeed judicial proceedings.
B - Assessment
20. For the record, I note as a preliminary point that the issue of jurisdiction must be considered separately from that of whether the rules of the Treaty on free movement of capital are also applicable in a purely national context, which is the subject of the first question. There is moreover, in my opinion, no question of a hypothetical or contrived situation, as the Commission seems implicitly to suggest. The order for reference contains sufficient considerations of national law and facts to enable the Court to give a ruling at least on the first two questions referred. The questions are relevant since, in this case, Ms Salzmann has an actual interest in an authoritative interpretation of Article 56 EC. The Court's answer could, after all, result in no transfer authorisation being necessary for the acquisition of title to the immovable property acquired by her, since the national legislation appears to be incompatible with Community law.
21. Moreover, there is not the slightest dispute about the institutional requirements which the Court's case-law imposes on the body making the reference. In Austria, the Bezirksgericht is the local court of first instance, with powers in the field of criminal and civil law and with a number of special functions. A Bezirksgericht is established by law, is independent and exercises its function on a permanent basis.
22. The Court's extensive case-law which delimits the concept of court or tribunal within the meaning of Article 234 EC more precisely can therefore be left aside here. This case is not about the nature of the body as a court or tribunal, but about whether the questions referred for a preliminary ruling have been framed in the exercise of a judicial function. To that end, reference must be made to the judgment in Job Centre.
23. In Job Centre, the questions referred for a preliminary ruling were framed by the Tribunale civile e penale (Civil and Criminal District Court), Milan. The Tribunale had received an application for confirmation of Job Centre's memorandum of association. That application had to be examined in non-contentious proceedings. Under the Italian Civil Code, the Tribunale must order the registration of the company if, after hearing the submissions of the public authorities, it finds that the company's articles of association meet the conditions laid down by law. With regard to the admissibility, the Court held as follows:
9 Whilst [Article 234 EC] does not make reference to the Court subject to the proceedings during which the national court frames a question for a preliminary ruling being inter partes ..., it is none the less apparent from Article [234 EC) that a national court may refer a question to the Court only if there is a case pending before it and if it is called upon to give judgment in proceedings intended to lead to a decision of a judicial nature ... .
10 That is not the case in the present instance.
11 When, in accordance with the applicable national legislation and under the "giurisdizione volontaria" procedure, the national court rules on an application for confirmation of a company's articles of association with a view to its registration, it is performing a non-judicial function which, in other Member States, is entrusted to administrative authorities. It is exercising administrative authority without being at the same time called upon to settle any dispute. Only if the person empowered under national law to apply for such confirmation seeks judicial review of a decision rejecting that application - and thus of the application for registration - may the court seised be regarded as exercising a judicial function, for the purposes of Article [234 EC], in respect of an application for the annulment of a measure adversely affecting the petitioner ....
24. I infer from those considerations that the Court wishes to make a clear distinction between courts or tribunals which settle disputes and courts or tribunals which, acting as administrative authorities or in some other capacity, execute certain administrative matters in judicial form, that is to say, with the guarantees of a true judicial procedure.
25. The judgment in Victoria Film confirmed the principles established in Job Centre, even though the questions referred in that case were not framed by a judicial body but by an advisory board. The Court declared that a Swedish revenue board acting in the context of a request from an undertaking for a preliminary decision on a taxation matter was not entitled to make a reference since it was not called upon to settle a dispute and thus did not exercise any judicial function. The board fulfilled certain criteria which might make it possible to regard it as a court or tribunal, such as independence and power to deliver binding decisions in application of rules of law. However, the Court considered that, like the Tribunale civile e penale in Job Centre, the board performed an essentially administrative function. The Court also took into consideration in its ruling the fact that in other Member States this function also was expressly entrusted to an administrative authority (the tax authorities), and that only where the taxpayer brought an action challenging a preliminary decision could the court or tribunal, before which the matter was thus brought, be regarded as a court or tribunal for the purposes of Article 234 EC.
26. Returning to the circumstances of the present case, if they are compared with those in Job Centre, I am of the opinion that there cannot reasonably be any doubt about the similarities in the national procedures and in the working methods of the bodies making the references.
27. First, it can be noted that in both cases a duly established judicial body exercises a special function at first instance, namely entry in a register of, in one case, a company and, in the other, a transfer of ownership of immovable property. Despite the civil-law consequences attached to such registration in both cases, the activities involved are of a purely administrative nature.
28. A second similarity relates to the acquisition of title to immovable property. Elsewhere in the Union, responsibility for overseeing a correct transfer and for registering immovable property does not normally lie with the courts and tribunals, but with administrative bodies, semi-public institutions or civil-law notaries.
29. Third, the Bezirksgericht, like the Tribunale civile e penale, takes a decision according to the applicable criteria which are laid down in statutory provisions. Neither court is competent to decide to make the entry of its own motion. The Bezirksgericht assesses the documents produced and decides on the basis thereof whether and how registration can take place. In principle, the purchaser and/or vendor are not heard, which further reinforces the non-judicial nature of the process. There is also no dispute between the purchaser and the vendor of the land. At most there can be said to be a difference of opinion between Ms Salzmann and the Bezirksgericht Bregenz, in this case acting as an administrative agency of the Austrian State, which refuses to register a transfer of immovable property. However, that situation is comparable with the position of any administrative body which rejects an application for authorisation.
30. Fourth, in the judgment in Job Centre, the Court attaches importance to the possibility for the applicant of appealing if the application for registration is rejected. Such a possibility also arises in this case. Should the Bezirksgericht Bregenz reject the application for entry of the transfer of title, it is open to Ms Salzmann to appeal to judicial institutions at second and third instance.
31. On the basis of the foregoing considerations alone I am persuaded that the Bezirksgericht Bregenz, when sitting as the Grundbuchsgericht, performs a non-judicial function. It is thus not a court or tribunal, within the meaning of Article 234 EC, which is entitled to refer questions to the Court for a preliminary ruling. The fact that the Bezirksgericht otherwise complies with the institutional requirements set out in the case-law, which a body must meet in order to refer questions for a preliminary ruling, is irrelevant in this respect.
32. However, a number of points need to be examined further.
33. First of all, the possible inter partes elements in the procedure. Ms Salzmann draw attention to the declaration of 5 November 1998 which is not recognised by the Landeskommission because a different declaration is required. Ms Salzmann and the Austrian Government also cite the power which the Grundbuchsgericht has under the Grundbuchsgesetz to put questions to parties.
34. However, those circumstances are not sufficient for the Bezirksgericht to be regarded in the present case as a court or tribunal within the meaning of Article 234 EC. In an administrative procedure to register a particular legal status it is normal, where not all the required documents are produced in the first instance, for the administrative body to give the applicant a further opportunity to provide the missing documents. Even if the possibility of the parties being heard in exceptional circumstances demonstrates the presence of inter partes elements, that does not in itself constitute a sufficient argument. The Court has not held the requirement of inter partes proceedings to be decisive for the admissibility of questions referred for a preliminary ruling. Possible inter partes elements do not in this case alter the administrative character of ownership registration.
35. I find Ms Salzmann's argument that the Bezirksgericht is not a body deciding at first instance, but an appeal court, more relevant. The Bezirksgericht, she claims, indicates in the order for reference that it is acting as an appeal court. The Landeskommission and the Rechtspfleger previously took a negative decision against which Ms Salzmann, as she maintains, brought an appeal before the Bezirksgericht Bregenz. For that reason, this is undoubtedly a legal dispute which, moreover, is already being heard and determined at second instance.
36. Nevertheless, that argument cannot be accepted either. Nowhere in the order for reference is it stated that the Bezirksgericht is an appeal court. On the contrary, the Bezirksgericht clearly states that its task is to decide, in its capacity as the Grundbuchsgericht in accordance with the Grundbuchsgesetz, on an application by Ms Salzmann. In other words, the Bezirksgericht has framed the questions in the context of a procedure for land registration. For the sake of completeness, I shall nevertheless examine Ms Salzmann's arguments further.
37. Her argument that the Bezirksgericht is acting as an appeal court in respect of the Landeskommission's decision to refuse to recognise the declaration drawn up by her is simply incorrect. Under Paragraph 13 of the GVG, she should have lodged an objection to that decision with the Unabhängige Verwaltungssenat, an independent administrative body, in order to obtain a review of the Landeskommission's assessment. The Bezirksgericht Bregenz, sitting as the Grundbuchsgericht, does not have jurisdiction to hear and determine objections to decisions of the Landeskommission. When it acts as an administrative body in connection with the registration of immovable property transactions, it can only examine whether the statutory conditions for such registration have been satisfied. The Bezirksgericht had to refuse the registration applied for by Ms Salzmann since the legally required authorisation was lacking.
38. Ms Salzmann's argument that in this case the Bezirksgericht is acting as an appeal court in respect of a negative decision given by the Rechtspfleger, who had rejected her application for registration, is equally unfounded. Ms Salzmann was required to lodge the application for registration of the transaction in question with the Bezirksgericht. In that court it was dealt with, not by a judge, but by a Rechtspfleger. A Rechtspfleger is a judicial officer charged with the performance of certain functions defined by law, which are mainly of a non-contentious nature. His powers are set out in detail in the Rechtspflegergesetz. He deals with civil-law matters which come before the judge at first instance, such as the enforcement of judgments, insolvency cases, commercial register cases, successions and the registration of ownership rights in ships and immovable property. The Rechtspfleger thus significantly lightens the workload of the judge, in particular with respect to relatively simple acts which in other Member States are often performed by non-judicial authorities and officials. It is hardly necessary to add that, where the judge is charged with the exercise of administrative functions, such as the registration of immovable property, the Rechtspfleger, who deputises for him in those functions, also acts in an administrative capacity.
39. Pursuant to the Rechtspflegergesetz, the Rechtspfleger acts under a limited authority from the judge, which moreover can be withdrawn at any time. He is bound by the judge's instructions. The judge also has the power, if he deems it necessary, to transfer to himself any matter being dealt with by the Rechtspfleger. In a number of circumstances, the Rechtspfleger is even required to refer a case to the judge.
40. In this case, in accordance with the applicable national law, the Rechtspfleger did not allow Ms Salzmann's application for registration of the immovable property transaction in question. According to the scheme of the Rechtspflegergesetz, any decision by a Rechtspfleger is subject to correction by the judge. Ms Salzmann availed herself of the only remedy at law available to her against the decision of the Rechtspfleger, which was to bring a Rekurs before the Bezirksgericht. The nature of the Rechtspfleger's function means that any application for review of his decisions must be made to the judge under whose responsibility he works.
41. Construed thus, the Rekurs brought before the Bezirksgericht by Ms Salzmann in this case is in the nature of an administrative-law objection, whereby the judge examines whether the Rechtspfleger working under his responsibility has acted correctly in the performance of the administrative duties assigned to him. Under Paragraph 11 of the RPG and Paragraph 122 of the GBG, the judge may make one of two decisions on the Rekurs brought by Ms Salzmann. If he is of the opinion that the registration applied for does in fact satisfy the requirements of the Grundbuchsgesetz, he may still perform the official act requested by Ms Salzmann. If he is of the opinion that he is unable to allow the objections put forward by Ms Salzmann to the decisions of the Rechtspfleger, he must refer the Rekurs on to a superior judicial authority, in this case the Landesgericht, for further consideration.
42. It is clear from those procedural provisions that the Rekurs against decisions of the Rechtspfleger before the court where he is employed is in the nature of an administrative-law objection. Only if it needs to be referred on to the higher level of the Landesgericht does the Rekurs acquire, upon being heard by that court, the nature of an administrative-law appeal. It follows that Ms Salzmann's argument, that in this case the Bezirksgericht is hearing an appeal against the decision of the Rechtspfleger, is incorrect.
43. The Bezirksgericht, sitting as the Grundbuchsgericht, therefore performs a non-judicial, administrative function, both where the judge himself decides on the registration of immovable property transactions and where he reviews such decisions taken by the Rechtspfleger working under his responsibility. The questions submitted to the Court in this case thus do not emanate from a court or tribunal within the meaning of Article 234 EC. The Court does not have jurisdiction to give a ruling on them. That does not of course affect the right of any judicial authority which is called upon to hear an appeal against the decision of the Bezirksgericht Bregenz to refer questions, as a court or tribunal, to the Court for a preliminary ruling.
V - Conclusion
In the light of the above, I propose that the Court of Justice of the European Communities rule that it does not have jurisdiction to answer the questions framed by the Bezirksgericht Bregenz in the order for reference of 29 December 1998.