61959C0033(01)
FURTHER OPINION OF MR ADVOCATE-GENERAL LAGRANGE
DELIVERED ON 18 OCTOBER 1962 (
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Mr President,
Members of the Court,
I wish to present to you today the few additional observations suggested to me by the re-opening of the procedure, as prescribed by your Order of 21 March 1962, and by the subsequent procedures, both written and oral. They bear on liability and damage. Despite the illogical order, for greater simplicity I shall begin with the last point.
A — The damage
The controversy turns on whether the damage is hypothetical, and therefore not established, or whether on the contrary it ‘has arisen and still exists’ and, consequently, is capable of being compensated if liability is established.
I continue to think that, although the amount of the damage cannot, at the moment, be definitively quantified from the documents available to the Court, on the other hand its present existence is certain. In fact, the amount of the contributions claimed from the undertakings, which emerges from the provisional accounts drawn up by the High Authority, is in direct relation to the amount of the equalization payments made to the undertakings and to which they remain entitled, according to your judgment in the Mannesmann case, even when, owing to acts of fraud, the decision to make equalization available was wrong. It is the duty of the High Authority, acting on behalf of all the undertakings compulsorily participating in the scheme, to take legal proceedings to recover from the perpetrators of the frauds the payments wrongly made. It is thus only in so far as these recoveries are effective that the accounts can take them into consideration, as their amount reduces the charge to be borne by the contribution and, in consequence, reduces its total amount proportionately. Even on the assumption that this recovery were one day to be complete (which, as I have said, without being contradicted by the High Authority, is highly improbable), it is nonetheless true that at the moment the undertakings suffer the direct effect of this situation.
No doubt the position would appear more clearly if the final winding up of the scheme had taken place. At the end of last year it might legitimately have been hoped that this matter would not be delayed. In fact, we read in the report of the debates of the European Parliamentary Assembly, at the session of Tuesday 19 December 1961, pp. 64-65, the following statements made by Mr Hellwig, a member of the High Authority:
‘In March 1962 it is probable that all firms will receive a corrected account: in essence it will correspond to the sums still to be paid or received. Thus the undertakings will at last be able to see the position clearly. The final adjustments resulting from the checking of inspection by legal proceedings presently in progress will also naturally still need to be made …’
and, a little further on:
“Finally, we are continuing to claim repayment of the amounts of equalization illegally received; to this end civil actions are in progress before the national courts”
“Mr President, to sum up, in March the undertakings will receive a very clear account of the essential amounts. Minor amendments still need to be made; these will result from checks as yet unfinished and the outcome of the legal proceedings. If all the proceedings turn out as we expect, we hope to have finished by June of next year.”
If that final winding up had taken place, the amount of the damage would then be easy to fix. The winding up clearly presupposes that decisions would be taken with regard to the amount of the debts judged doubtful or irrecoverable, as it is not in the interest of a scheme such as this to leave matters in suspense indefinitely. It would therefore be sufficient, as I have said in my previous opinion, that the High Authority, if found guilty of a fault towards the applicant companies, was entitled by means of subrogation, assignment of claims or any other appropriate legal procedure to retain the part accruing to the applicants in the sums which might be recovered after the conclusion of operations. This is the case in national law, for example, in a matter which presents certain analogies with the present situation, that of bankruptcy. The closing of bankruptcy proceedings does not prevent subsequent unforeseen recoveries being distributed by the trustee for the benefit of the body of creditors in accordance with their individual rights; on these occasions there is in effect an actual re-opening of the bankruptcy. In my opinion, then, there is no doubt that if the final winding up had taken place, the injury would have had to be considered as certain — that it had arisen and still existed — to the extent that the amount of the contributions remains greater than it would have been in the absence of the frauds.
But I think that at this moment the injury exists. In fact, despite the provisional nature of the accounts drawn up to date, the contributions arising from them are nonetheless exigible and, to the extent that they have in fact paid the contributions which were required of them, the undertakings have suffered damage corresponding to the difference between what has been claimed from them and what they would have owed if the ferrous scrap for which equalization was wrongly made available through acts of fraud had not occurred. I persist, therefore, in this line of reasoning: the injury is certain, has arisen and still exists, which is sufficient to involve reparation if liability is established, with only the amount of the compensation due remaining unquatified, as frequently happens in national law.
B — Liability
I
I must first say a few words on the Italian and French cases invoked by the High Authority since the re-opening of the oral procedure.
With regard to the Italian cases, and in particular the judgment of the Corte d'Appello of Genoa of 15 January 1958 (“II Foro Italiano” 1959, first part, pp. 135-138), I merely wish to observe that they refuse to accept the admissibility of an action involving the liability of the State for an error committed in the exercise of its task of controlling banking activities. As emerges very clearly from the judgment of the Corte d'Appello of Genoa, this inadmissibility stems from the Italian legal system which, as in Belgium, rests on the fundamental distinction between subjective rights and legitimate interests; only the infringement of the former can involve the liability of the State before the competent civil law tribunals. This system is incompatible with that of the Treaty which is based on the concept of a wrongful act or omission, that is to say the public wrongful act or omission, anonymous it may be, directly involving the liability of the Community before the Communitv Court.
With regard to the French cases, I shall simply remark that they are wrongly invoked by the High Authority since, in short, they entirely admit the admissibility of actions taken by the injured party against the controlling authority charged with checking the activities of the department responsible. The only unusual feature is that in such a case French law requires serious error. The best-known example of this is that which gave rise to the judgments of the Conseil d'Etat, Caisse départementale d'assur-ances sociales de Meurthe-et-Moselle and others, 29 March 1946 (Recueil, p. 100, also publishedin ‘Lesgrandsarrets de la jurisprudence administrative”, 1958 edition, p. 264) in the case known as “bons de Bayonne” where the existence of serious error was moreover found igainst both the State and a local authority, in their duty of supervising a public municipal establishment. These decisions were applied in the case of the control of banking (Kampmann, 12 February 1960, Recueil, p. 107). With regard to the judgment of an administrative tribunal of first instance invoked by the High Authority, the rejection of the application is based on another ground.
Furthermore, it appears to me useless to insist since your case law too has always considered as fully admissible proceedings instituted by undertakings on the basis of Article 40 to bring an action against the High Authority to establish ts liability by reason of errors committed in the organization or operation)f the department for which it was responsible with regard to the equalization scheme for imported ferrous scrap in particular, the FERAM judgment, in Case 23/59, of 17 December 1959, he first delivered on the subject).
II
I come now to the second group of factors with regard to the nature and characteristics of the error necessary to involve the liability of the High Authority.
In this respect, it should once more be recalled that, as has been firmly established by your decisions, and in accordance moreover with the view long held by the High Authority, the acts of the agencies in Brussels are to be regarded on the same basis as acts of the High Authority itself and, in consequence, may involve the liability of the latter.
It emerges from this that too close a parallel must not be drawn with the situation arising from what is referred to as “administrative control”, that is to say the supervision exercised by the public authority over the actions of a decentralized group (for example by the State over a local authority) or on a private enterprise (such as the control of banks). In fact, there is a considerable difference between cases where the public authority limits itself to exercising supervision or even control over a legal person in public pr in private law carrying out an autonomous activity and with full liability towards third parties for the consequences of its actions, and cases where the public authority itself assumes full liability for the public service the employees of which are only the “agents” of that authority. According to this second argument — which is involved in this case according to your judgments — there is no special reason for requiring a wrongful act or omission (“faute lourde”). It is only necessary to make the distinction, as I have tried to do in order to classify the nature of the error, between the requirements one is usually entitled to expect from an administrative department and those, of necessity less precise, which relate to a supervisory activity. But, once again, the High Authority in this case exercises an internal supervision of a department for which it assumes full responsibility. Certainly, this is how the Court has hitherto viewed the concept of a wrongful act or omission with regard to the liability of the High Authority in the operation of the equalization scheme. In this respect it is sufficient to recall, inter alia, two passages taken from your decisions.
You stated in the judgments in Meroni and others, Cases 14/60 et seq., 13 July 1961, Rec. 1961, p. 339,
“Although it is not possible to criticize the High Authority for having rectified errors committed in calculating the basis of the equalization contributions, it must however be considered whether these errors could have been avoided by good administration, as they mayindicate the existence of a wrongful act or omission on the part of the High Authority — or the agencies in Brussels which amounts to the same thing”.
And, in the judgments in Fives Lille Cail and others, Cases 19/60 et seq., 15 December 1961, Rec. 1961, p. 592, we note the following passage:
By not preventing the agencies in Brussels
“from continuing their previous practices and, in particular, from making promises in October 1958 to the four applicant companies with regard to the granting of parity of transport, whatever were the reasons for this omission, it (the High Authority) has gravely neglected the duties of supervision required by a normal standard of care, and it is this shortcoming which gives rise to its liability”.
Rules of “good administration”, “duties of supervision” required by a “normal standard of care”, these are the criteria which you employ to determine whether, in each individual case, the generality of the actions of the High Authority are indicative of a “wrongful act or omission” within the meaning of Article 40 of the Treaty. As you know, the reply was in fact in the negative in the Meroni case and in the affirmative in the Fives Lille Cail case.
III
As in my view the framework of the dispute appears sufficiently clear, I now wish to present three categories of observations relating to the dispute itself.
1. On the Political aspect of the responsibility of the High Authority
I have already mentioned this briefly in my first opinion but I wish to insist that a very clear distinction must be kept between the political responsibility of the High Authority to the European Parliamentary Assembly and the civil liability which it may incur before the Court on the basis of Article 40 of the Treaty.
In particular, the question arises whether the Council of Ministers, when called upon to give its unanimous assent pursuant to Article 53, made that assent subject to the condition — evidently unwritten — that the High Authority should not interfere, or at least not excessively, in the functioning of the equalization scheme — which would seriously diminish the responsibility of the High Authority. Obviously this question concerns only its political responsibility, and it is understood that in this respect the Assembly was able to take it into account “as an extenuating circumstance”, despite the fact that the representatives of the High Authority declared that they assumed this political responsibility in full.
On the other hand, in the legal field, it is not possible to take the role of the Council of Ministers in the matter into account as such an extenuating circumstance: if I have for a large part used the Poher Report, and not only the Report of the High Authority, it is above all as a source of information that I have done so.
2. On the attenuation or possible exclusion of liability owing to the fact of the applicants' membership of the agencies in Brussels or of the regional offices
I had thought that this question might be left open, thinking that none of the three companies were members of the agencies in Brussels, the CPFI and OCCF: in fact they do not appear in any of the lists published in the ‘Moniteur Beige’ as an annex to the articles of association of these agencies.
In addition to the enquiry which you ordered, it emerges that this is the case with the Chassecompany, but on theother hand the two Meroni companies were members of the agencies in Brussels. They requested membership on 30 April 1953 in the case of Meroni (Settimo Torinese) and 28 May 1953 in the case of Meroni (Erba), thatis to say immediately after the formation of the agencies (the CPFI and the OCCF) effected by notarial act received on 24 April 1953. They do not however appear on the list of the founder members published with the articles in the annex to the ‘Moniteur Belge’ of 18 and 19 May 1953, p. 3115. At that time it was a matter of the optional scheme authorized by the High Authority on the basis of Article 53 (a) of the Treaty.
But the two Meroni companies withdrew as soon as the scheme was about to become compulsory pursuant to Decision 22/54, and the articles were consequently amended by notarial act of 1 April 1954. The new articles were also published in the annex to the ‘Moniteur Beige’ of 26 and 27 April 1954, p. 1833. Meroni (Erba) withdrew on 8 April 1954, prior to the publication of new articles and Meroni (Settimo Torinese) on 27 February 1954, prior therefore to Decision 22/54, taken on 26 March 1954 and published on 30 March in the Official Journal of the ECSC. This explains why neitherof the two companies appearson theattendance list (companies present or properly represented) which appears in the ‘Moniteur Beige’ as an annex to the articles as proprietors of the shares in the company necessary for membership of the CPFI and the OCCF: they had probably not effected the payments necessary to obtain the shares. No doubt the withdrawal, subject to a period of notice, had not yet taken effect, but since they could no longer participate in the general meetings, they were in fact excluded from exercising any rights of membership.
On the other hand, the two Meroni companies were always members of Campsider, which was in charge of the management of the regional offices.
It may be deduced from all this that the applicant companies clearly did not wish to associate themselves voluntarily with the compulsory arrangements. No doubt they relied thereafter on the High Authority which, in making the arrangements compulsory, had at the same time assumed full responsibility for its functioning. But, this point is in fact of little importance, since the rejoinder could always be made, that it rested with the applicants alone to avoid suffering the consequences of their purely voluntary abstention.
The real question is whether and to what extent the member companies, whether of the agencies in Brussels or of the regional offices, could exercise effective supervision over the management of those agencies and in particular over the conditions on which equalization was made available for ferrous scrap, such as ferrous scrap from ship-breakers' yards. In my opinion, the answer to this appears certain to be in the negative.
With regard to the CPFI and the OCCF, in the first place, it is sufficient to refer to the articles as published in the ‘Moniteur Belge’, to discover that the management was exclusively in the hands of the Board of Directors. This situation is, moreover, quite normal, as we are concerned here with problems of administration which ordinary members of the general meeting are not normally in a position to decide; it is very probable that the applicants, even if they had remained members, would not have been called upon to participate on the Board of Directors.
The situation is the same with Campsider, as it emerges from the articles produced. The practical possibility of a company not a member of the Board of Directors exercising supervision appears extremely slender, if one judges by the replies to the oral questions put at the last hearing.
With regard to the question whether Campsider comes under Article 2395 of the Codice civile italiano under the terms of which the shareholders in a company limited by shares are not bound by the acts of the directors and can even make them accountable to them, I do not think that it is necessary for you to settle this point. In fact, it is a question of national law which could only be put in the context of private law between Campsider and Meroni and not in the context of public law between Meroni and the High Authority, on the basis of Article 40. In this respect it is only necessary to take account of the factual situation. In practice, at least, it appears clear that no genuine supervision could normally have been exercised by the Meroni companies over the checks effected by Campsider relating to the availability of equalization for ferrous scrap and, moreover, that no genuine supervision could have been exercised by the Meroni companies and the Chasse company over the checks of the same kind carried out in Brussels if the three applicants had agreed to become members of the CPFI and OCCF.
3. Proof of the existence of a wrongful act or omission on the part of the High Authority
On the substance of the case, it is true to say that there are scarcely any new factors. However we see more clearly on what precise facts the applicants rely to establish the existence of a wrongful act or omission on the part of the agencies in Brussels and of the High Authority. This is particularly true of the Chasse company which limited itself in its application to invoking the acts of fraud committed by the Dutch official of the Ministry of Economic Affairs. It will be for you to decide whether, as I had thought at the outset, the limitation in that respect of the conclusions in the Chasse application continues to prevent any compensation allocated to that company from including the whole of the damage arising from the acts of fraud.
But I do not think that in putting that question relating to the ‘precise facts’ you intended to require fresh evidence of the existence of a wrongful act or omission. In fact I do not see that the applicants could produce anything new, unless information was required of them on the internal functioning of the administrations concerned (equalization agencies and the High Authority), for example the organizational defects of a particular office or the negligence of a particular head of department. But this would involve a singular contraction of the scope of Article 40 and would be contrary to your own case law as I have quoted it. Evidence of the wrongful act or omission must emerge from a comparison between, on the one hand, the actual facts of the frauds (which, unfortunately, are extremely precise and well established) and, on the other hand, the actions, faced with these facts, both of the agencies charged with the administration and the High Authority charged with supervision and inspection.
In this respect it seems more instructive to read the Report of the High Authority and the Poher Report than all the pleadings submitted and the arguments we have heard however well drafted and however brilliantly presented. In any case I have not altered my opinion and can only refer to my previous observations which I beg to present again for your attention.
I persist in my previous opinion, but relying on the judgment of the Court with regard to the restrictions which I thought it necessary to put forward concerning the Chasse company.
(
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