Judgment of the Court of 28 April 1988. - Georg von Deetzen v Hauptzollamt Hamburg-Jonas. - Reference for a preliminary ruling: Finanzgericht Hamburg - Germany. - Additional levy on milk. - Case 170/86.



European Court reports 1988 Page 02355



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - MILK AND MILK PRODUCTS - ADDITIONAL LEVY ON MILK - ALLOCATION OF REFERENCE QUANTITIES EXEMPT FROM LEVY - PRODUCERS WHO SUSPENDED DELIVERIES UNDER THE NON-MARKETING PREMIUM SCHEME - NOT ALLOCATED REFERENCE QUANTITIES - PRINCIPLE OF THE PROTECTION OF LEGITIMATE EXPECTATIONS - BREACH

( COUNCIL REGULATION NO 1078/77, ART . 2 ( 2 ), AND COUNCIL REGULATION NO 857/84; COMMISSION REGULATION NO 1371/84 )

Summary

SINCE THERE IS NOTHING IN THE PROVISIONS OF REGULATION NO 1078/77 OR IN ITS PREAMBLE TO SHOW THAT THE UNDERTAKING NOT TO MARKET MILK ENTERED INTO UNDER THAT REGULATION MIGHT, UPON ITS EXPIRY, ENTAIL A BAR TO RESUMPTION OF MILK DELIVERIES BY THE PRODUCERS CONCERNED, THE FACT THAT THOSE PRODUCERS MAY, FOR THE ENTIRE PERIOD OF APPLICATION OF NEW REGULATIONS INTRODUCING AN ADDITIONAL LEVY ON MILK, BE DENIED ANY REFERENCE QUANTITY WHATSOEVER UNDER THOSE

REGULATIONS FRUSTRATES THE LEGITIMATE EXPECTATIONS OF THOSE PRODUCERS THAT THE EFFECTS OF THE SYSTEM OF NON-MARKETING PREMIUMS TO WHICH THEY HAD RENDERED THEMSELVES SUBJECT WOULD BE LIMITED .

CONSEQUENTLY, REGULATION NO 857/84, AS SUPPLEMENTED BY REGULATION NO 1371/84, IS INVALID IN SO FAR AS IT DOES NOT PROVIDE FOR THE ALLOCATION OF A REFERENCE QUANTITY TO PRODUCERS WHO, PURSUANT TO AN UNDERTAKING ENTERED INTO UNDER REGULATION NO 1078/77, DID NOT DELIVER MILK DURING THE REFERENCE YEAR ADOPTED BY THE MEMBER STATE CONCERNED .

Parties

IN CASE 170/86

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE FINANZGERICHT ( FINANCE COURT ) HAMBURG FOR A PRELIMINARY RULING IN THE PROCEEDINGS PENDING BEFORE THAT COURT BETWEEN

GEORG VON DEETZEN

AND

HAUPTZOLLAMT HAMBURG-JONAS

ON THE VALIDITY OF COUNCIL REGULATION ( EEC ) NO 856/84 OF 31 MARCH 1984 AMENDING REGULATION ( EEC ) NO 804/68 ON THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS ( OFFICIAL JOURNAL 1984 L 90, P . 10 ), COUNCIL REGULATION ( EEC ) NO 857/84 OF 31 MARCH 1984 ADOPTING GENERAL RULES FOR THE APPLICATION OF THE LEVY REFERRED TO IN ARTICLE 5C OF REGULATION ( EEC ) NO 804/68 IN THE MILK AND MILK PRODUCTS SECTOR ( OFFICIAL JOURNAL 1984 L 90, P . 13 ), AS AMENDED, AND COMMISSION REGULATION ( EEC ) NO 1371/84 OF 16 MAY 1984

LAYING DOWN DETAILED RULES FOR THE APPLICATION OF THE ADDITIONAL LEVY REFERRED TO IN ARTICLE 5C OF REGULATION ( EEC ) NO 804/68 ( OFFICIAL JOURNAL 1984 L 132, P . 11 ),

THE COURT

COMPOSED OF : G . BOSCO, PRESIDENT OF CHAMBER, ACTING AS PRESIDENT, O . DUE AND J.C . MOITINHO DE ALMEIDA ( PRESIDENTS OF CHAMBERS ), T . KOOPMANS, U . EVERLING, K . BAHLMANN, Y . GALMOT, C . KAKOURIS, R . JOLIET, T.F . O' HIGGINS AND F . SCHOCKWEILER, JUDGES,

ADVOCATE GENERAL : SIR GORDON SLYNN

REGISTRAR : H.A . ROEHL, PRINCIPAL ADMINISTRATOR

AFTER CONSIDERING THE OBSERVATIONS SUBMITTED ON BEHALF OF

GEORG VON DEETZEN, THE PLAINTIFF IN THE MAIN PROCEEDINGS, BY A . NUTZHORN, RECHTSANWALT, OLDENBURG,

THE COUNCIL OF THE EUROPEAN COMMUNITIES, BY A . BRAUTIGAM, PRINCIPAL ADMINISTRATOR IN THE COUNCIL' S LEGAL DEPARTMENT, ACTING AS AGENT,

THE COMMISSION OF THE EUROPEAN COMMUNITIES, BY ITS LEGAL ADVISER D . BOOSS, ACTING AS AGENT, AND BY MR CLESS, EXPERT,

HAVING REGARD TO THE REPORT FOR THE HEARING AND FURTHER TO THE HEARING ON 29 SEPTEMBER 1987,

AFTER HEARING THE OPINION OF THE ADVOCATE GENERAL DELIVERED AT THE SITTING ON 13 JANUARY 1988,

GIVES THE FOLLOWING

JUDGMENT

Grounds

BY AN ORDER OF 26 JUNE 1986 WHICH WAS RECEIVED AT THE COURT ON 10 JULY 1986, THE FINANZGERICHT ( FINANCE COURT ) HAMBURG REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A QUESTION ON THE VALIDITY OF THE COMMUNITY REGULATIONS ON THE ADDITIONAL LEVY ON MILK .

THAT QUESTION WAS RAISED IN PROCEEDINGS BROUGHT BY MR VON DEETZEN, A FARMER, AGAINST HAUPTZOLLAMT ( PRINCIPAL CUSTOMS OFFICE ) HAMBURG-JONAS . MR VON DEETZEN HAD RECEIVED A NON-MARKETING PREMIUM UNDER COUNCIL REGULATION NO 1078/77 OF 17 MAY 1977 INTRODUCING A SYSTEM OF PREMIUMS FOR THE NON-MARKETING OF MILK AND MILK PRODUCTS AND FOR THE CONVERSION OF DAIRY HERDS ( OFFICIAL JOURNAL 1977 L 131, P . 1 ). THE GRANT OF THE PREMIUM WAS CONDITIONAL UPON HIS NOT PRODUCING MILK OR MILK PRODUCTS FOR A PERIOD OF FIVE YEARS, ENDING ON 7 SEPTEMBER 1985 .

ON 22 MAY 1985, MR VON DEETZEN APPLIED TO THE COMPETENT GERMAN AUTHORITIES FOR THE ALLOCATION TO HIM OF A REFERENCE QUANTITY OF 190 665 KG OF MILK UNDER THE ADDITIONAL LEVY SYSTEM WHICH HAD BEEN INTRODUCED IN THE MEANTIME BY COUNCIL REGULATION NO 856/84 OF 31 MARCH 1984 AMENDING REGULATION ( EEC ) NO 804/68 ON THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS ( OFFICIAL JOURNAL 1984 L 90, P . 10 ), SUPPLEMENTED BY COUNCIL REGULATION ( EEC ) NO 857/84 OF 31 MARCH 1984 ADOPTING GENERAL RULES FOR THE APPLICATION OF THE LEVY REFERRED TO IN ARTICLE 5C OF REGULATION ( EEC ) NO 804/68 IN THE MILK AND MILK PRODUCTS SECTOR ( OFFICIAL JOURNAL 1984 L 90, P . 13 ) AND BY COMMISSION REGULATION ( EEC ) NO 1371/84 OF 16 MAY 1984 LAYING DOWN DETAILED RULES FOR THE APPLICATION OF THE ADDITIONAL LEVY REFERRED TO IN ARTICLE 5C OF REGULATION ( EEC ) NO 804/68 ( OFFICIAL JOURNAL 1984 NO L 132, P . 11 ). THE REFERENCE QUANTITY APPLIED FOR BY MR VON DEETZEN WAS THE SAME AS THE QUANTITY PRODUCED BY HIM IN THE YEAR BEFORE HE APPLIED FOR THE PREMIUM .

MR VON DEETZEN' S APPLICATION WAS REJECTED ON THE GROUND THAT HE HAD NOT DELIVERED MILK OR MILK PRODUCTS AT THE TIME OF THE ENTRY INTO FORCE OF THE GERMAN RULES FOR THE APPLICATION OF THE ADDITIONAL LEVY ON MILK, NAMELY 2 APRIL 1984 . AFTER AN UNSUCCESSFUL ADMINISTRATIVE APPEAL, MR VON DEETZEN BROUGHT PROCEEDINGS BEFORE THE FINANZGERICHT HAMBURG FOR A DECLARATION THAT, IN THE EVENT OF HIS RESUMING MILK PRODUCTION, HE WOULD NOT BE LIABLE FOR THE PAYMENT OF ANY LEVY UNDER THE RULES ON THE ADDITIONAL LEVY ON MILK .

THE FINANZGERICHT HAMBURG CONSIDERED THAT THE DECISION TO BE GIVEN IN THE ACTION PENDING BEFORE IT DEPENDED ON THE VALIDITY OF THE RULES ON THE ADDITIONAL LEVY ON MILK; IT THEREFORE STAYED THE PROCEEDINGS AND SUBMITTED THE FOLLOWING QUESTION TO THE COURT FOR A PRELIMINARY RULING :

"ARE COUNCIL REGULATIONS ( EEC ) NOS 856/84 AND 857/84 OF 31 MARCH 1984 ( THE LATTER AS MOST RECENTLY AMENDED BY REGULATION ( EEC ) NO 3571/85 ) AND COMMISSION REGULATION ( EEC ) NO 1371/84 OF 16 MAY 1984, AS MOST RECENTLY AMENDED BY REGULATION ( EEC ) NO 3005/85, VALID EVEN THOUGH FARMERS WHO DID NOT PRODUCE MILK DURING THE RELEVANT REFERENCE PERIOD BECAUSE THEY RECEIVED A NON-MARKETING OR A CONVERSION PREMIUM AND WHO HAVE ACCORDINGLY NOT BEEN ALLOCATED A REFERENCE QUANTITY FOR THE PURPOSES OF THE MILK QUOTA RULES ARE REQUIRED TO PAY A LEVY OF 75% OF THE MILK TARGET PRICE ON RECOMMENCING MILK PRODUCTION AFTER THE EXPIRY OF THE FIVE-YEAR PERIOD LAID DOWN ON THE GRANT OF THE PREMIUM?"

REFERENCE IS MADE TO THE REPORT FOR THE HEARING FOR A FULLER ACCOUNT OF THE FACTS OF THE MAIN PROCEEDINGS, THE RELEVANT COMMUNITY LEGISLATION, THE COURSE OF THE PROCEDURE AND THE OBSERVATIONS SUBMITTED TO THE COURT, WHICH ARE MENTIONED OR DISCUSSED HEREINAFTER ONLY IN SO FAR AS IS NECESSARY FOR THE REASONING OF THE COURT .

IT IS APPARENT FROM THE WORDING OF THE QUESTION SUBMITTED AND FROM THE GROUNDS OF THE ORDER FOR REFERENCE THAT THE NATIONAL COURT STARTS FROM THE PREMISS THAT THE COMMUNITY REGULATIONS ON THE ADDITIONAL MILK LEVY HAVE THE EFFECT OF PREVENTING A FARMER WHO DID NOT DELIVER MILK DURING THE REFERENCE YEAR, BY VIRTUE OF A WRITTEN UNDERTAKING GIVEN PURSUANT TO REGULATION NO 1078/77, FROM BEING GRANTED A REFERENCE QUANTITY UNDER THE ADDITIONAL LEVY SYSTEM, WITH THE RESULT THAT HE IS LIABLE TO THAT LEVY IN RESPECT OF HIS ENTIRE MILK PRODUCTION DURING THE PERIOD OF APPLICATION OF THE NEW SYSTEM .

THE INTERPRETATION OF THE ABOVE LEGISLATION WAS THE SUBJECT OF THE FIRST QUESTION SUBMITTED BY THE NATIONAL COURT IN CASE 120/86 ( MULDER V MINISTER VAN LANDBOUW EN VISSERIJ (( 1988 )) ECR 2321 ). IN REPLY TO THAT QUESTION, THE COURT RULED, IN ITS JUDGMENT DELIVERED TODAY, THAT :

"COUNCIL REGULATION ( EEC ) NO 857/84 OF 31 MARCH 1984, AS SUPPLEMENTED BY COMMISSION REGULATION ( EEC ) NO 1371/84 OF 16 MAY 1984, MUST BE INTERPRETED AS MEANING THAT FOR THE PURPOSE OF FIXING THE REFERENCE QUANTITIES REFERRED TO IN ARTICLE 2 OF THAT REGULATION THE MEMBER STATES MAY TAKE INTO ACCOUNT THE CIRCUMSTANCES OF PRODUCERS WHO, PURSUANT TO AN UNDERTAKING ENTERED INTO UNDER COUNCIL REGULATION ( EEC ) NO 1078/77 OF 17 MAY 1977, DID NOT DELIVER MILK DURING THE REFERENCE YEAR ADOPTED ONLY IN SO FAR AS EACH PRODUCER FULFILS THE SPECIFIC CONDITIONS LAID DOWN IN REGULATION NO 857/84 AND IF THE MEMBER STATES HAVE REFERENCE QUANTITIES AVAILABLE FOR THAT PURPOSE ".

THE QUESTION OF VALIDITY RAISED BY THE NATIONAL COURT MUST BE CONSIDERED IN THE LIGHT OF THAT INTERPRETATION .

MR VON DEETZEN MAINTAINS THAT THE REGULATIONS IN QUESTION INFRINGE GENERAL PRINCIPLES OF COMMUNITY LAW AND ARE THUS INVALID . HE CLAIMS THAT THEY WERE ADOPTED IN BREACH OF HIS RIGHT TO ENJOY PROPERTY AND HIS FREEDOM TO CHOOSE AN OCCUPATION AND INFRINGE THE PRINCIPLES OF EQUALITY, LEGAL CERTAINTY AND PROTECTION OF LEGITIMATE EXPECTATIONS . AS REGARDS THE LATTER PRINCIPLE IN PARTICULAR, MR VON DEETZEN STATES THAT THOSE PRODUCERS WHO, ENCOURAGED BY THE SYSTEM OF PREMIUMS, DISCONTINUED PRODUCTION WOULD NOT HAVE DONE SO IF THEY HAD KNOWN THAT THEIR NON-MARKETING AGREEMENTS WOULD HAVE THE EFFECT OF PREVENTING THEM FROM BEING ALLOCATED A REFERENCE QUANTITY UNDER THE NEW QUOTA SYSTEM .

THE COUNCIL AND THE COMMISSION, ON THE OTHER HAND, BOTH CONTEND THAT THE REGULATIONS AT ISSUE ARE VALID BECAUSE THEY ALLOW THE MEMBER STATES SEVERAL DIFFERENT WAYS OF GRANTING QUOTAS NOT SUBJECT TO THE ADDITIONAL LEVY TO THOSE PRODUCERS WHO, DURING THE REFERENCE YEAR, RECEIVED A PREMIUM UNDER REGULATION NO 1078/77 . THE COMMISSION ALSO ANALYSES THE SCOPE OF THE GENERAL PRINCIPLES RELIED UPON AND CONCLUDES THAT THEY HAVE BEEN PROPERLY RESPECTED IN THIS CASE . AS REGARDS MORE PARTICULARLY THE PRINCIPLES OF LEGAL CERTAINTY AND PROTECTION OF LEGITIMATE EXPECTATIONS, IT CONTENDS THAT THEY HAVE NOT BEEN INFRINGED SINCE THE PRODUCERS IN QUESTION WERE NOT ENTITLED TO EXPECT THAT, UPON THE EXPIRY OF THEIR FIVE-YEAR UNDERTAKING, THEY WOULD BE GRANTED AN UNLIMITED RIGHT TO RESUME MILK PRODUCTION .

IT MUST BE CONCEDED, AS THE COMMISSION HAS CORRECTLY POINTED OUT, THAT A PRODUCER WHO HAS VOLUNTARILY CEASED PRODUCTION FOR A CERTAIN PERIOD CANNOT LEGITIMATELY EXPECT TO BE ABLE TO RESUME PRODUCTION UNDER THE SAME CONDITIONS AS THOSE WHICH PREVIOUSLY APPLIED AND NOT TO BE SUBJECT TO ANY RULES OF MARKET OR STRUCTURAL POLICY ADOPTED IN THE MEAN TIME .

THE FACT REMAINS THAT WHERE SUCH A PRODUCER, AS IN THE PRESENT CASE, HAS BEEN ENCOURAGED BY A COMMUNITY MEASURE TO SUSPEND MARKETING FOR A LIMITED PERIOD IN THE GENERAL INTEREST AND AGAINST PAYMENT OF A PREMIUM HE MAY LEGITIMATELY EXPECT NOT TO BE SUBJECT, UPON THE EXPIRY OF HIS UNDERTAKING, TO RESTRICTIONS WHICH SPECIFICALLY AFFECT HIM PRECISELY BECAUSE HE AVAILED HIMSELF OF THE POSSIBILITIES OFFERED BY THE COMMUNITY PROVISIONS .

HOWEVER, THE REGULATIONS ON THE ADDITIONAL LEVY ON MILK GIVE RISE TO SUCH RESTRICTIONS FOR PRODUCERS WHO, PURSUANT TO AN UNDERTAKING ENTERED INTO UNDER REGULATION NO 1078/77, DID NOT DELIVER MILK DURING THE REFERENCE YEAR . THOSE PRODUCERS MAY IN FACT BE DENIED A REFERENCE QUANTITY UNDER THE NEW SYSTEM PRECISELY BECAUSE OF THAT UNDERTAKING IF THEY DO NOT FULFIL THE SPECIFIC CONDITIONS LAID DOWN IN REGULATION NO 857/84 OR IF THE MEMBER STATES HAVE NO REFERENCE QUANTITIES AVAILABLE .

CONTRARY TO THE COMMISSION' S CONTENTION, A TOTAL AND CONTINUOUS EXCLUSION OF THAT KIND FOR THE ENTIRE PERIOD OF APPLICATION OF THE REGULATIONS ON THE ADDITIONAL LEVY, PREVENTING THE PRODUCERS CONCERNED FROM RESUMING THE MARKETING OF MILK AT THE END OF THE FIVE-YEAR PERIOD, WAS NOT AN OCCURRENCE WHICH THOSE PRODUCERS COULD HAVE FORESEEN WHEN THEY ENTERED INTO AN UNDERTAKING, FOR A LIMITED PERIOD, NOT TO DELIVER MILK . THERE IS NOTHING IN THE PROVISIONS OF REGULATION NO 1078/77 OR IN ITS PREAMBLE TO SHOW THAT THE NON-MARKETING UNDERTAKING ENTERED INTO UNDER THAT REGULATION MIGHT, UPON ITS EXPIRY, ENTAIL A BAR TO RESUMPTION OF THE ACTIVITY IN QUESTION . SUCH AN EFFECT THEREFORE FRUSTRATES THOSE PRODUCERS' LEGITIMATE EXPECTATION THAT THE EFFECTS OF THE SYSTEM TO WHICH THEY HAD RENDERED THEMSELVES SUBJECT WOULD BE LIMITED .

IT FOLLOWS THAT THE REGULATIONS ON THE ADDITIONAL LEVY ON MILK WERE ADOPTED IN BREACH OF THE PRINCIPLE OF PROTECTION OF LEGITIMATE EXPECTATIONS . THOSE REGULATIONS MUST THEREFORE BE DECLARED INVALID ON THAT GROUND, AND IT IS UNNECESSARY TO CONSIDER THE OTHER ARGUMENTS AS TO THEIR INVALIDITY PUT FORWARD IN THE COURSE OF THE PROCEEDINGS .

THE REPLY TO THE QUESTION SUBMITTED MUST THEREFORE BE THAT COUNCIL REGULATION ( EEC ) NO 857/84 OF 31 MARCH 1984, AS SUPPLEMENTED BY COMMISSION REGULATION ( EEC ) NO 1371/84 OF 16 MAY 1984, IS INVALID IN SO FAR AS IT DOES NOT PROVIDE FOR THE ALLOCATION OF A REFERENCE QUANTITY TO PRODUCERS WHO, PURSUANT TO AN UNDERTAKING ENTERED INTO UNDER COUNCIL REGULATION ( EEC ) NO 1078/77 OF 17 MAY 1977, DID NOT DELIVER MILK DURING THE REFERENCE YEAR ADOPTED BY THE MEMBER STATE CONCERNED .

Decision on costs

COSTS

THE COSTS INCURRED BY THE COUNCIL OF THE EUROPEAN COMMUNITIES AND BY THE COMMISSION OF THE EUROPEAN COMMUNITIES, WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT, ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE, IN SO FAR AS THE PARTIES TO THE MAIN PROCEEDINGS ARE CONCERNED, IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT, THE DECISION ON COSTS IS A MATTER FOR THAT COURT .

Operative part

ON THOSE GROUNDS,

THE COURT,

IN REPLY TO THE QUESTION SUBMITTED TO IT BY THE FINANZGERICHT HAMBURG BY ORDER OF 26 JUNE 1986, HEREBY RULES :

COUNCIL REGULATION ( EEC ) NO 857/84 OF 31 MARCH 1984, AS SUPPLEMENTED BY COMMISSION REGULATION ( EEC ) NO 1371/84 OF 16 MAY 1984, IS INVALID IN SO FAR AS IT DOES NOT PROVIDE FOR THE ALLOCATION OF A REFERENCE QUANTITY TO PRODUCERS WHO, PURSUANT TO AN UNDERTAKING ENTERED INTO UNDER COUNCIL REGULATION ( EEC ) NO 1078/77 OF 17 MAY 1977, DID NOT DELIVER MILK DURING THE REFERENCE YEAR ADOPTED BY THE MEMBER STATE CONCERNED .