61966C0005
OPINION OF MR ADVOCATE-GENERAL GAND
DELIVERED ON 19 APRIL 1967 (
1
)
Mr President,
Members of the Court,
The fourteen applications which have been made to you by the Kampffmeyer company and by other German cereal importers are the sequel to your judgment of 1 July 1965 which, on the application of the Toepfer company, annulled the decision of the Commission of the EEC dated 3 October 1963, authorizing the Federal Republic to keep in force the protective measures taken by it on the previous 1 October for the importation of maize originating in France.
Drawing the conclusions which that judgment appears to them to involve, the applicants, who all had the applications for import licences which they had requested on 1 October refused by the competent German agency, ask you to order the Commission to make good the injury caused to them by the illegal decision, which according to their conclusions amounts to almost four million DM.
The importance of the judgment which you are called upon to give is not confined solely to the amount of the sums in dispute. It applies above all to a question of principle in respect of which for the first time — if one excepts your judgment in the Plaumann case (15 July 1963, Rec. 1963, p. 197)—you have to deal with the interpretation of the ambiguous provisions — no doubt intentionally ambiguous — of the second paragraph of Article 215 of the Treaty of Rome concerning the non-contractual liability of the Community. The question comes before you in circumstances even more delicate since the conduct of the Commission complained of overlaps closely the conduct of the Federal Republic which alone has benefited financially from the disputed transactions and whose liability the applicants are seeking to establish before the courts of that country. Although it is for you under the combined provisions of Article 178 and the second paragraph of Article 215 of the Treaty to rule on the liability of the Community and although your jurisdiction stops there, you can hardly exercise it without putting the actions of the Federal Government more or less in question.
Your judgment in the Toepfer case ana the report of the hearing relieves me from labouring the circumstances of law and of fact in which the present proceedings were initiated. We should merely recall that the whole machinery for the common organization of the market in cereals, established by Regulation No 19 of the Council, is based upon a levy system which co-ordinates prices in trade between the Member States and takes into account the difference between the free-at-frontier price of the exporting country and the threshold price of the importing country.
The threshold price is fixed annually by the importing State and the free-at-frontier price is in principle fixed every week by the Commission, on the basis of information provided by the exporting State. There is, however, no fixing of prices except when at the date in question this latter price, being lower than the threshold price, must lead to a levy.
The levy is calculated by the importing State, which collects it and keeps the proceeds. You know that in the Federal Republic it is the Einfuhr- und Vorratsstelle für Getreide und Futtermittel which is entrusted with putting the rules into operation, and especially with displaying posters showing the rates of levy and with the issue of import certificates — commonly called licences — which are valid for four months.
The levy collected is that which is applicable on the day of importation. Nevertheless, since Regulation No 31/63 (Official Journal No 59, p. 1225), importers of maize originating in Member States may ask to have the rate of levy applied which relates to the day on which the licence was applied for, subject to certain adjustments. But, since the market price, as the statement of reasons shows, does not generally alter in the same manner at the end of one marketing year and at the beginning of the following marketing year, this option is not open, in respect of maize for which the marketing year commences on 1 October, for imports made during the months of October, November and December.
The levy machinery replaces all the systems by which the Member States could previously take action on their market; if imports cause or threaten to cause serious disturbances to that market which might endanger the objectives laid down in Article 39 of the Treaty, Article 22 of Regulation No 19 empowers the State concerned to take the necessary protective measures which it does not otherwise describe but which may go as far as closing the frontier.
We know what happened. At the time of its decision of 27 September 1963, which was valid as from 1 October, the Commission did not fix a price, relying on information provided by the O.N.I.C., the competent French organization, showing a free-at-frontier price higher than the German threshold price. Consequently on 1 October the Einfuhr- und Vorratsstelle posted a rate of levy of 0.00 DM. On the same day it received requests for import licences for January 1964 at this previously determined rate of 0.00 DM for an amount of 126000 metric tons and certain of the applicants immediately made contracts for the purchase of French maize. Being concerned at this influx of applications, the German administration started by withdrawing the table concerning the rates of levy, and then suspended as from 1 October the grant of import licences for maize originating in Member States and third countries. That decision, taken on the basis of Article 22 of Regulation No 19, was immediately notified to the Commission.
The Commission for its own part adopted two measures. By a decision of 1 October 1963 it fixed, as from the following day, a free-at-frontier price of 422 francs being thus considerably less than the threshold prices for October 1963 and January 1964 which varied from 420 to 434 DM. Then, by a decision of 3 October 1963 addressed to the Federal Government it authorized the latter to maintain the suspension of the issue of import licences for maize up to and including 4 October.
As to the licences requested by the applicants, they were refused on 3 October by the Einfuhr- und Vorratsstelle.
From this sprang twofold litigation which is continuing side by side at both Community and national levels and which has dealt successively with the legality of the measures taken by the various authorities and the liability incurred by them in respect of those measures. In fact, although the Toepfer company obtained from you the annulment of the decision of the Commission of 3 October on the ground that the basic conditions laid down in Article 22 were not fulfilled, that company and the other applicants obtained a judgment from the German administrative court that the refusal on the same day of their requests for licences was illegal, because the formalities to which the legislation of the Federal Republic subjects the taking of protective measures were not observed.
And, as well as asking you to order the Community to make good the damage caused by the validation by the Commission of the protective measures, the German civil court has an action pending before it for damages against both the Federal Republic and the Einfuhr- und Vorratsstelle. As you know, the Landgericht of Bonn is waiting until you have decided upon the liability of the Community before it gives judgment.
I
Before embarking upon the substance of the case, you must decide upon the question of admissibility from the point of view of the periods of limitation for certain applications — more precisely Applications 5/66, 7/66 and 14 to 21/66. Prior to the institution of proceedings before you, the underakings concerned made applications for compensation to the Commission, which were received by the latter on various dates between 1 and 14 October 1965. After sending an interim reply on 28 October the Commission rejected these applications as unfounded on 2 March 1966, namely more than four months after having had the matter referred to it. As to the applications to the Court, they were lodged either before the reception of this rejection (19 February in Case 5/66, 28 February in Case 7/66), or thereafter (29 April in Cases 14 to 21/66), but in any case more than four months — increased by an extension of time-limits on account of distance — after the lodging of the administrative complaint.
Here we are confronted with Article 43 of the Statute of the Court of Justice, which reproduces mutatis mutandis Article 40 of the Statute of the Court of Justice of the ECSC. This article provides that proceedings in matters arising from non-contractual liability shall be barred after a period of five years from the occurrence of the event giving rise thereto; its admissibility does not depend on any prior complaint to the institution. But it continues as follows: ‘The period of limitation shall be interrupted if proceedings are instituted before the Court or if prior to such proceedings an application is made by the aggrieved party to the relevant institution of the Community. In the latter event [that is to say, when there is a prior application] the proceedings must be instituted within the period of two months provided for in Article 173; the provisions of the second paragraph of Article 175 shall apply where appropriate’.
If the provision which I have just quoted has general scope and in fact lays down periods of limitation, then the disputed applications are out of time. In fact, in the absence of any response within two months after the making of the complaints, time began to run in respect of the period of two months provided for in the second paragraph of Article 175 and it was only after the expiration of that period that the applications were lodged. This is so, even if the extension of the period by six days by reason of distance is taken into account, as this adds only to the period of limitation properly so-called and cannot increase the period within which the institution concerned is obliged to define its position.
Ihe applicants maintain, it is true, that they do not consider themselves to be in the situation provided for in Article 43 for the following reason. Whilst the French version of this article mentions the ‘demande préalable’ (‘if prior to … proceedings an application is made’) the German version refers to the victim who ‘seinen Anspruch geltend macht’; this expression implies that not only are the reasons for the claim for damages to be given but also the exact figure of those damages, which has not been done except by the applicant in Case 5/66. That argument is not very convincing. You accept that applications to the Court do not show from the outset the amount of the damages claimed (Plaumann, 15 July 1963, Rec. 1963, p. 224); and it is not possible to see how one should be stricter in respect of a prior application to an institution. Furthermore, it happens — and such is the case in the present instance — that the dispute might bear not upon the amount but upon the principle of compensation; a complaint, even without figures and even if it is directed towards obtaining an amicable solution, therefore constitutes a prior application within the meaning of Article 43.
The fact remains that the disputed provision may appear as being drafted in unusual terms and its strict interpretation as being unfortunate. It penalizes those who apply to the institution concerned as soon as damage occurs, thus depriving them of a part of the time which the beginning of Article 43 grants them for claiming their rights. It is unusual, moreover, to describe that which has the effect of shortening and not of prolonging the period of limitation as an interruption. Lastly there is not to my knowledge any analogous provision in the law of any Member States. Since the Agent of the Commission referred to French law in his pleadings, I must state specifically that that law includes no such provisions. Under that law an application for compensation is subject to a prior application to the administration and its failure to reply for four months is equivalent to an implied decision of rejection and allows the matter to be brought before the court; but, as opposed to applications in respect of ultra vires acts, the person concerned is not barred from instituting proceedings until two months after he has been notified of an express decision of rejection (Law of 7 June 1956, fifth paragraph of Article 1).
And the Commission, which raises no objection to the applications, itself interprets the final provision of Article 43 as governing the length of an interruption which prolongs the period of limitatation of five years which is laid down in the first sentence of the article, and which may in no event be shortened. In other words, it refers to the case where, just before the period of limitation expires, the applicant makes a prior application to the administration: the periods provided for in Articles 173 and 175 are added to the normal period of five years in order to prolong the duration of the period of limitation. I fully realize that such a construction amounts to quite a bold interpretation; its expedient nature and the fact that it is maintained by the defendant itself enables me to suggest it to you and to regard the applications as admissible.
In the event of your not accepting this proposal, it remains to be considered whether the letter of 2 March 1966, which expressly but belatedly rejected the administrative applications, can start time to run afresh in respect of a new period of limitation. For my part I strongly doubt it because it is limited simply to confirming a refusal already given.
II
1.
The applications which have been made to you are based on the second paragraph of Article 215 of the Treaty which provides that in the case of non-contractual liability the Community shall, in accordance with the general principles common to the law of the Member States, make good any damage caused by its institutions or by its servants in the performance of their duties. This wording is clearly less explicit than that of Article 40 of the ECSC Treaty, which links the concept of reparation to that of ‘a wrongful act or omission’. It is particularly so to the extent to which it refers to common general principles, whilst the laws of the Member States in respect of the liability of public authorities are far from being identical. It is sufficient to recall that, depending on the country, this liability is distinguished by the application or the transposition in the case of public authorities of the rules of private law, and is brought into play before the courts; in France on the contrary different rules of jurisdiction and of substantive law are applied, because it is the administrative courts which have developed an independent and subtle concept of administrative liability, based in general upon a wrongful act or omission of the public service and, exceptionally, on risk. In truth the differences bear perhaps more on the legal technique employed than on the results which follow in practice. The principle of the liability of the administration is recognized in all the States — it is at least a general common principle — and in different ways the sphere of this liability tends to increase everywhere.
It remains to be said, however, what at should be in Community law. During the oral procedure one of the advocates for the applicants warned you in a pressing manner against what he called the ‘minimum theory’, which consists in accepting the right to compensation only when the law of each of the six Member States, taken individually, provides for it; it is not in fact to the ‘law’ but to the ‘general principles’ that the second paragraph of Article 215 refers you. For by employing such a wide expression it is upon you in the final analysis that the authors of the Treaty have conferred the task of settling the system of extra-contractual liability; it is a task of comparison and of creation such as you have already had to carry out in other spheres. The directive which for example Article 40 of the ECSC Treaty gave you by mentioning an ‘unlawful act or omission’ did not exempt you from defining in a more precise manner the content of this concept of Community law, without your being obliged in every case to accept the meaning lent to it by national law. Many of the decisions which you have already made are necessarily to be found in the system which you have defined because the purpose and the organization of the Communities have too many common points not to give identical solutions to problems which give rise to their functioning. But, as in any legal work, theory can be built only by successive strokes and emerges from the reconciliation of judgments; it is a culmination.
At the outset, and without claiming to develop a general theory, we must consider whether, in the circumstances of law and fact found in the case, the Community has a liability towards the applicants by reason of the decision which you have declared illegal. Three main questions arise which are those to be found in any system of liability, whatever its basis: the fact complained of — the causal link between that fact and the damage alleged — the amount of the damage giving the right to reparation.
2.
First, the fact complained of, which is the decision of 3 October 1963 by which the Commission authorized the German Government to maintain up to and including 4 October the protective measures taken as from 1 October. You have held it to be illegal because no serious disturbance of the market such as is envisaged in Article 22 was to be feared.
But not every illegality or infringement of the rule of law necessarily gives rise to a right to reparation. The applicants admit that two conditions must in addition be fulfilled and consider that they are fulfilled in the present case. It is necessary that the provision infringed should be intended to protect the interests of those who have suffered injury. It is necessary further that the illegality committed should constitute a wrongful act. Although agreeing on these principles, the defendant does not agree on the application which the applicants claim should be made in the present case.
(a)
The first condition was imposed by you in the judgment in the Vloeberghs case (9 and 12/60, Rec. 1961, p. 391) when you had to interpret Article 40 of the ECSC Treaty, and one may logically extend the application of it within the framework of the second paragraph of Article 215. It is based upon German law where Article 34 of the Basic Law makes a public authority liable only when the party responsible for the damage has infringed its obligations to third parties in the performance of a duty which has been entrusted to it; it is necessary to say, further, that if one is to believe counsel for the applicant in Case 13/66 that concept should be interpreted today in a very flexible manner. It is not without analogy with that concept of Italian law that rules which exist exclusively or principally in the public interest create, according to the circumstances, a legitimate interest allowing an action for annulment to be brought, but give no subjective right on the basis of which an action for damages may be brought. But, although it is admissible, that condition should not be followed too strictly for fear of rendering the concept of liability devoid of meaning.
The defendant states that by not supervising the use made by the German Government of its power to take protective measures it disregarded a rule which was not established in the interests of importers but in that of the community to which the regular functioning of the common organization of the markets is important. It compares Article 22 of the regulation to various articles of the Treaty with a similar procedure and points out that all these provisions have basically the same object as the power of supervision which Article 169 gives it, and of which it is not possible to say that it is used to protect the interests of a particular group of traders. It proposes in any case to remain within the sphere of Article 22; on the hypothesis that it also infringed Article 18 of the same regulation, which prohibits recourse to any other protective measure, it is a matter of a prohibition which is addressed directly only to the Member States and more or less indirectly to the Commission through the intermediary of Article 22.
It is clear that the organization of the markets should be effected in the interest of the whole community, but it may be said also that that organization is founded upon the principle of free trade. Although it is intended to protect the position of producers, it does not ignore the fact that the increase in trade between the Member States presupposes, in the interests of the consumers themselves, that guarantees and opportunities should be given to intermediaries and in particular to importers. In order to be capable of use in support of an action for compensation it is not necessary that the disputed provisions should be intended exclusively to serve the interests of importers; it is sufficient that they also contribute to the defence of their interests. The precision with which Article 22 lays down the assumptions which allow freedom of trade to be limited is intended also to guarantee to commercial undertakings that the transactions which are the reason for their existence will not be upset except in strictly defined circumstances; one thinks for example of the necessity of making provision for rules so that goods in transit are not affected by protective measures, of a hope expressed in that article of not making exporters suffer damage which is excessive or avoidable, all being matters which are of no importance to the community considered as a whole. Even if these are not provisions which have been disregarded in the present case, it is proper to use them to describe Article 22 as a whole.
I consider therefore that the nature of the rule infringed does not exclude the right of the applicants to take advantage of it by means of an action for damages. I would add — without insisting on the point — that your judgment in the Toepfer case may be regarded as pointing in that direction, to the extent to which it accepts that applicants are directly and individually concerned by the act annulled. No doubt it is necessary to take care not to confuse the conditions of admissibility of an application for annulment with those concerning the question whether an action for damages is well founded: the second paragraph of Article 176 of the Treaty provides that the obligation placed upon the author of the act annulled to take the necessary measures to comply with the judgment annulling the act shall not affect any obligation which may result from Article 215. But the effort which you have made by your judgment of 1 July 1965 to give access to the Court, which is so meanly granted by Article 173, would be hardly understandable were it not accompanied by an equal liberality in considering actions for damages.
(b)
This first point does not suffice to show that the decision of 3 October 1963 is of such a nature as to involve the liability of the Community. The applicants admit in principle that it is necessary that the illegality should be wrongful; they dispute on the contrary that the wrongfulness required may ‘vary’ according to the circumstance in order to take into account the nature of the activity in question, as, for example, when the Commission carries out supervisory activities, it cannot be regarded as liable, except for ‘gross malfeasance’.
Leaving this last question aside for the moment, I shall quickly consider the arguments developed by the parties. Taken together they reproduce on many points with a slightly different emphasis the arguments put forward in Joined Cases 106 and 107/63, which is not surprising. There it was a question whether such circumstances of fact (annual consumption of maize in the Federal Republic — tonnage of licences requested for January 1964, etc.), amounted to a threat of serious disturbance of the market sufficient to justify the validation by the Commission of the protective measures. Now that the assessment made by it which governed the legality of its decision has been held by you to be mistaken, it is a matter of stating whether that mistake was due to negligence on its part, as the applicants maintain, or whether, as the Commission says, it is due to the inherent complexity or uncertainty of forecasting in economic matters, with the result that no error could be attributed to it. That argument was developed in the written procedure; you will remember also that at the hearing the Agent of the Commission deduced from the wording of your judgment in the Toepfer case that you did not hold that the decision disputed at that time was insufficiently reasoned, or that it infringed the principle of proportionality or disregarded the concept of serious disturbance of the market, but was only an incorrect evalution of the factual situation; he attempted to show how, both because of the complexity and novelty of the problem put to the Commission and because of the very short period of time in which it had to make its decision, the error by which it was vitiated was thereby capable of being explained and was consequently not wrongful.
That argument is not without weight. It is true, first of all, that the law of certain Member States does not regard every error of construction of legal wording as vitiated by a wrongful act. German law appears to take into account the uncertainties which may exist as to the scope of the wording which has not yet been clarified by the case-law of the highest court; if the opinion which has been arrived at after careful examination appears legally defensible, the fact that this opinion is later disapproved cannot be regarded retroactively as a wrongful act. We see in the same field of thinking that, in order to decide that errors in calculating the bases for equalization levies do not amount ipso facto to a wrongful act or omission, your judgment in the Meroni case points out that these errors may be the ‘'result of the difficulty of solution of intricate problems’ (14/60 Rec. 1961, at p. 341). The same reasons led the French Conseil d'État to give a narrow interpretation to the concept of a wrongful act or omission in respect of economic matters to the point where a commentator was able to say that in this sphere there existed a ‘wide margin of acceptable error’.
It is usual in addition to take into account the conditions under which a decision must be made in order to decide upon the negligent or diligent conduct of the party responsible for it: the speed with which it must be taken and the necessity of engaging in numerous consultations in a short time are considerations which must certainly be taken into account.
Whatever the value of the argument advanced by the Commission, it does not appear absolutely convincing to me. I consider for my part that the conduct of that institution was vitiated by a certain negligence which gave its illegal decision a wrongful character. I base my opinion for this on the following reasons:
Because of certain, at least apparent, contradictions which are contained in its statements you have asked the Commission to inform you whether it could at the time have adopted a decision fixing free-at-frontier prices which would have avoided the hidden difficulties which appeared. The reply which you were given shows quite clearly — and I consider, in a convincing manner — that the decision of 27 September 1963, which was valid as from the following October and which did not include the fixing of a free-at-frontier price, amounted to a proper application of the rules then in force. There was therefore a gap in the system which contributed to the creation of the difficulties which the protective measure was intended to overcome, and it was to avoid the renewal of these difficulties that the Council on a proposal of the Commission instituted a system of premiums by Regulation No 56/64. I do not propose to consider in this respect the very delicate question whether the fact of an institution's not adopting a regulation or not making a proposal for this purpose to the authority competent to promulgate it may involve it in extra-contractual liability. I wish simply to emphasize that the legal position was such that the Commission should have expected difficulties and displayed special care. It should have done so all the more since 1 October, the date on which the decision of 27 September entered into force, was also that on which the new maize year began and which would cause alterations in price levels, and that on which importers could apply for licences at a rate of levy fixed in advance for the following January. The coincidence of these various facts should have alerted the departments which, one must accept, have a profound knowledge of the machinery of the agricultural markets. Furthermore, these departments have sufficient sources of information either of their own or through their usual informants to shape their decision: they know the annual consumption of maize in the Federal Republic and the import needs which would appear at the beginning of the following year. The relative increase in the number of transactions between that country and France, in accordance furthermore with the objectives of a common organization of the markets, should have enabled it to realize whether the licences requested were capable of disturbing the balance of this market. Even if it was one of the first times when the Commission had to make a decision on protective measures, the situation was not unforeseeable for it, but the seriousness of the measure to be taken required deeper consideration than that which the Commission gave it.
The Commission takes refuge, it is true, behind the shortness of the time which was given to it, and during the course of which it had to consult the Member States meeting in the Management Committee. It emphasizes that these States, and in particular France which was especially concerned by the question, shared its opinion regarding the legality of the protective measures. But Article 22 (2) allowed it a maximum period of four working days as from the notification by the Federal Republic to make a decision; as that notification was made in the evening of 1 October, it was not required to make its decision until 3 October whilst conducting its investigation. It maintains that it had to deal with the situation created by the Federal Government as soon as possible; but not to the extent of taking an insufficiently considered decision. As to the fact that the Management Committee, which is required to be consulted, approved its view, this has no bearing upon the possible liability of the institution.
I consider thus that in the present case there was negligence and consequently a wrongful act. Taking into account the possibility that you will agree with this point of view, the Commission adds that the disputed decision was taken by it in the performance of its duty of supervision; on such am assumption it could be liable only if it were possible to show that it had committed a ‘gross malfeasance’ that is to say, if its act — to use a concept of German law — had been affected by ‘gross negligence’ (große Fahrlässigkeit), and I readily admit that this cannot be said of it.
In support of its argument, the Commission relies upon the opinion held in respect of Article 40 of the ECSC Treaty by certain of your Advocates-General (particularly in the cases of Vloeberghs—Rec. 1961, at p. 469 and Hants Fourneaux de Chasse [1962] E.C.R. 381, an opinion which your judgments have never expressly accepted or rejected. I would mention however that in recognizing the liability of the High Authority for the actions of the Brussels organizations which it controlled your judgment in the Fives-Lille-Cail case was based on the fact that the institution ‘seriously neglected the duties of supervision which normal diligence required of it’ (Joined Cases 19 and 21/60 and 2 and 3/61, Rec. 1961, at p. 592), whilst the judgment in the Forges de la Providence case restricts itself to finding ‘lack of care’ (Joined Cases 29, 31, 36, 39 to 47, 50 and 51/63, Rec. 1965, at p. 1157).
Is it necessary to grade wrongdoing in the system of liability in the second paragraph of Article 215 so as to require gross malfeasance in respect of supervision, as is accepted for example in the French law of administrative liability? It does not appear necessary to me to decide that question today, because the action of the Commission within the framework of Article 22 of Regulation No 19 is outside the assumptions which explain this particular requirement. Classically, it justifies itself by the autonomy of the organization which is supervised, and also by the fact that supervision is exercised over general conduct but not over each individual act, so that, as your judgment in the Forges de la Providence case points out, certain actions of the body under supervision may escape the attention of the supervisory body. That is the difficulty of supervision which is behind the requirement of gross malfeasance to create liability. Here there is nothing like it, since the Commission is necessarily informed of the protective measure and is required to take a decision retaining, modifying or abolishing that measure. Even when it retains the measure, its situation is not the same as that of a supervisory body which simply refrains from intervening. In that respect, negligence such as that which I believe I have been able to show appears to me to amount to a wrongful act of involving the Community's liability.
Although the applicants rely essentially on the concept of malfeasance, the majority of them have not set aside the concept that another basis could have been given to their action. They have claimed that they had a right to obtain the import licences for which they had applied; the decision of the Commission which deprived them of this right amounted to an intervention similar to expropriation, and there is a general principle of law that such intervention creates a right to monetary reparation. In fact it is, it appears, a principle of German Jaw in respect of measures taken legally or illegally by the public authorities but not amounting to a wrongful act (Ehle — Klage und Prozeßrecht des EWG-Vertrags — Commentary on Article 215, p. 6), to which the Commission raises the objection that the conditions necessary for its application are not fulfilled in the present case. It is certain in any case that on this point there is no principle common to the law of our six States: French law for example does not recognize liability without malfeasance, arising from a risk, unless the activity is lawful. Furthermore the applicants have only outlined their claims without trying to explain exactly the law on which they rely, which excuses me from dwelling longer on the matter.
3.
In order that the Community should be liable it is not sufficient that the action of the Commission was wrongful, it is necessary that it should have been the cause of the damage; that is the intention of Article 215 which speaks of damage caused by the institutions. More exactly, it is necessary that there should have been a direct causal link between the action or decision in dispute and the alleged injury; that is what is required by the judgment in the Aciéries du Temple case (Rec. 1963, p. 603) within the framework of Article 40 of the ECSC Treaty, and the solution at which it arrives must be extended to the sphere with which we are concerned.
It is not always easy, however, to establish this causal relationship. Negatively it may be said that there is no causal link raising the question of liability when the same result occurred in an identical manner but without failure by the administration to fulfil its obligations. But the theories developed in this field by jurists and philosophers are innumerable, as counsel reminded you. One may regard any event without which damage would not have occurred as the cause of it; one may keep to the most recent event; one may attribute the damage to the events preceding it which were likely to cause it in the natural course of things.
Curiously enough the parties which discussed the existence of malfeasance at length hardly dwelt upon this aspect of the question. However, it is this with which the applicants are concerned, when they submit that the Commission, far from retaining the protective measure which you have held to be illegal, should have annulled it and annulled it retroactively. Legally it appears to me quite correct that, if the basic conditions to which recourse to protective measures is subject were not fulfilled, the institution was required not only to bring them to an end for the future, but to annul them in respect of the past, any other manner of dealing with the situation being in fact liable to deprive its decision of its effectiveness. But in the case of retroactive annulment, the applicants would have been able satisfactorily to complete their transactions which were based on a zero levy, which was no longer possible when you annulled the disputed decision. It is therefore that which caused the damage.
As to the Commission, it hardly adopted a position in the written procedure; at the hearing, its Agent recalled that the licences had been refused by the Einfuhr- und Vorratsstelle on 3 October whilst the decision of the authorities in Brussels was not notified to the German Government until 4 October, at a time when damage had already been done, and it added that the only complaint which one could make against the Commission was of having failed to require the Federal Republic to abolish the protective measures already taken. I agree with this analysis, but it implies that the decision of the Commission was also the condition for the occurrence of the damage.
It was not in fact the only condition; for that it was necessary to have two concurrent — or successive — acts: that of the Federal Republic which took the protective measure and refused the licences and that of the Commission which, by validating that measure, increased the damage or refused to require the German Authorities to eliminate it.
it the Federal Government was the primary cause that does not prevent the Commission also from having caused the damage. Allow me here to cite a passage of the opinion of Mr Advocate-General Roemer in the Vloeberghs case which appears to me to apply mutatis mutandis to the present case: ‘The fact that the attitude of a Member State contrary to the Treaty is the basis of a relationship of cause and effect does not exclude the consecutive omission of the High Authority from being regarded as the direct cause of the damage. If the High Authority has omitted to use its powers of supervision in respect of a Member State it is liable for the damage arising from the original conduct of a Member State contrary to the Treaty’ (Joined Cases 9 and 12/60 Rec. 1961, at p. 475).
To accept therefore that the Community, the direct cause of the injury, must make compensation for it indubitably raises a delicate problem. The applicants, who consider that the Federal authorities are partly responsible, have brought actions for damages against these authorities before the competent court, but they say that as soon as one of the legal persons — State or Community—‘jointly liable’ has given a favourable decision in respect of their requests, they will give up their claims against the other, ‘any question of contribution being then a matter for those jointly liable’.
The difficulty arises from the fact that, although two legal persons have jointly caused the same damage, they are governed by two strictly separate legal systems. Even if the Federal Republic participates in common organization of the market, it is not for you to consider its conduct in this sphere and the extent to which it has possibly contributed to the damage; its liability must be decided by the German courts and on the basis of German law. This strict separation prevents you from taking its actions into account in order to require the Community to pay only a part of the compensation for the damage, or for you to hold it jointly liable. On the other hand, you may, if you consider it proper, give judgment accompanied by a proviso ensuring that the same damage shall not twice be the subject of compensation.
4.
I come thus to the last question: the amount of damages for which compensation may be made. Let me say first of all that the diversity of the situations involved and the complexity of the files will not allow you to decide it immediately. It will be necessary for you to give an interlocutory decision and to appoint an expert. My observations thus have the purpose of dealing with the questions of principle which appear and to indicate the framework of his task.
The applicants of course all applied for import licences on 1 October 1963 for the following January; seven of them (the applicants in Cases 5, 7, 14, 15, 16, 19 and 21/66) state that on the same day they bought larger or smaller quantities of maize on the French market in anticipation of the issue of the licences requested.
The damage which they consider they have suffered through the refusal with which they were met is divided by them into two categories:
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the loss suffered which corresponds in certain cases to the penalties which they had to pay to their vendors to obtain the cancellation of their contracts, and in others the loss resulting from the re-sale of the quantities which were actually delivered to them;
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loss of profits resulting from the fact that the licences were not issued which corresponds to the profit which they would have made if they had been able to import the goods without levy. Their estimates, furthermore, vary considerably, since they range, according to the applicants, from 9.66 DM to 77.40 DM per metric ton.
The Commission makes two criticisms of a general nature concerning these estimates, independently of its objections on points of detail which it raises in each case, either upon the figures given or upon the documents intended to support them. The first criticism deals with the losses suffered in relation to the contracts of sale made by the seven applicants which I have mentioned, losses for which they were themselves liable. The size of the quantities for which licences had been applied for on 1 October was sufficient, says the Commission, to show that a breach had been opened in the levy system which should logically have led to protective measures. The applicants were thus unwise not to wait for the licences before making contracts of purchase or by not including in them an option to cancel should the licences not be granted to them.
It is quiet certain that importers are always liable, because of Article 22, to the effects of any protective measure; one may however hesitate to accept the Commission's argument without reserve. The applicants are not wrong in fact in saying that, as the levy of 0.00 DM resulted from the application of the provisions in force and as this rate was confirmed to certain of them who made enquiries by telephone, the importers had no reason to doubt its correctness. Nevertheless, as nothing requires them to make contracts before having obtained licences, one may consider that in doing so, although not committing a wrongful act, they at least took a risk which should remain their responsibility.
This point however remains doubtful. There is however no doubt that those of the applicants who made contracts after 2.15 p.m. were in error. At that time in fact the Einfuhr- und Vorratsstelle put up a notice stating that the rates of levy were provisionally withdrawn for rectification of free-at-frontier prices, which should have indicated to those concerned a modification of the previous legal situation. It is therefore for those who allege damage to prove that the contracts were in fact made before the time-limit. The second criticism of a general nature dealt with a calculation by the applicants of the lucrum cessans or consequential damage. The amount at which they put it appears to the Commission to foe contrary to a general principle which it says is common to the laws of liability of the Member States, and according to which ‘no reparation can be claimed for the loss of benefits which are contrary to public policy’. As the object of Regulation No 19 is to compensate for the difference in price between the exporting and importing countries, to import without levy maize purchased in the exporting country at a price clearly less than the market price is contrary to the principles of this regulation. It is even more so to obtain profits far exceeding the normal margin from that transaction, that is to say, the margin which must be taken into consideration at the time of the fixing of the threshold price which is in Germany 3 DM. Again this figure, which is valid for imports actually made and which covers general costs, should be reduced for imports which were not actually effected.
But the Commission appears to me to give too wide a scope to the principle on which it relies. All the laws agree, of course, that a situation contrary to public policy or to morality cannot have legal effect; one may quote the way in which the law deals with the concubine or the refusal to compensate damage suffered in case of loss of profits arising from gaming, or an administrative decision obtained by fraudulent manoeuvres, but it is not at all clear that the transaction criticized by the Commission should foe classified with these various cases. The argument of the defendant would be convincing if the importers were obliged to resell imported goods at prices fixed by the law, if these prices were based on decided factors and if precisely fixed margins of profit were included in the price. But that is not the system instituted by Regulation No 19; subject to the payment of the levy, the importer is free as regards his purchase and sale prices. If, as a result of the market situation, he does not manage to sell his goods at the price for which he hoped, he bears the loss unless a marginal profit should be guaranteed, but on the other hand he can keep the profits which his ability brings him. The defendant in its rejoinder (page 20) speaks itself of the ‘considerable commercial risks which, as is known, are characteristic of transactions concerning the import of cereals’, and one knows the speculative nature of this market; but the fact of making a fortunate transaction is not contrary to the legal system in force.
Although it is necessary to reject the Commission's argument, that does not imply that all the figures put forward by the applicants concerning the consequential damage must be accepted: it suffices, in order to be convinced of this, to recall that they vary between 9.66 DM and 77.40 DM. What basis should be used? Since your judgment of 1965 decides that there was no reason to adopt protective measures on 1 October 1963 and that the applicants therefore had a right to receive the licences not subject to levy which they were applying for, their right to the profit which they would normally have made in January 1964 must be recognized. But the sale prices ruling at that time must be corrected to take account of various factors which would have operated if the licences had actually been granted: for the quantities which were not the subject of an immediate contract of purchase, the French prices might have increased because of the increase in demand and the sale prices in Germany would have fallen a little. What would have been the influence of these various factors has been discussed by the defendant and certain applicants without their being able to reach agreement. It will be for the expert to hear the parties and to specify for you the figure which it appears to him should be accepted, taking into account in every case the reasons given by the importers in respect of the various transactions which they made. It is only then that you will be able to fix the amount of compensation due to each of the applicants and in respect of which it appears to me that the principle should now be accepted.
I should like to say in ending that 1 do not share the fears expressed with such insistence by the Agent of the Commission as to the unfortunate consequences which there might be for its functioning as a result of the finding that it is liable. I cannot believe that it would be capable of paralysing the spirit of initiative and decision of its agents. The experience of national administrations in countries where the law has long recognized the liability of public authorities does not justify such fears.
In sum, I am of the opinion :
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that the liability of the EEC should be recognized in principle in respect of the fourteen applicants as a result of the injurious consequences of the decision of the Commission of 3 October 1963;
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that an expert should be appointed with the task of specifying within the limits I have indicated above the amount of damages to be awarded to them;
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that costs should be borne by the defendan.
(
1
)	Translated from the French.