Case C-221/05

Sam Mc Cauley Chemists (Blackpool) Ltd

and

Mark Sadja

v

Pharmaceutical Society of Ireland and Others

(Reference for a preliminary ruling from the Supreme Court)

(Directive 85/433/EEC – Mutual recognition of diplomas – Pharmacists – Recognition of diplomas held by pharmacists working in new pharmacies open to the public – Scope of the discretion enjoyed by Member States)

Judgment of the Court (Third Chamber), 13 July 2006

Summary of the Judgment

Freedom of movement for persons – Freedom of establishment – Activities in the field of pharmacy

(Council Directive 85/433, Art. 2)

Article 2(1) of Directive 85/433 concerning the mutual recognition of diplomas, certificates and other evidence of formal qualifications in pharmacy, including measures to facilitate the effective exercise of the right of establishment relating to certain activities in the field of pharmacy, imposes an obligation on each Member State to recognise the diplomas listed in Article 4 thereof awarded to nationals of Member States by other Member States, in accordance with Article 2 of Directive 85/432 concerning the coordination of provisions laid down by law, regulation or administrative action in respect of certain activities in the field of pharmacy, by giving such diplomas the same effect in the State’s territory as those diplomas listed in Article 4 which it itself awards. However, the first subparagraph of Article 2(2) of Directive 85/433 states that Member States need not give effect to the diplomas referred to in Article 2(1) with respect to the establishment of new pharmacies open to the public, it being understood that pharmacies which have been in operation for less than three years are also to be regarded as new.

It follows that Article 2 of Directive 85/433, in its entirety, imposes an obligation of mutual recognition only in respect of pharmacies which have been in operation for at least three years. Therefore, a Member State which complies merely with that minimal level of recognition of diplomas is not exercising any discretion conferred by that directive.

(see paras 27-28, 33-34, operative part)

JUDGMENT OF THE COURT (Third Chamber)

13 July 2006 ( )

(Directive 85/433/EEC – Mutual recognition of diplomas – Pharmacists – Recognition of diplomas held by pharmacists working in new pharmacies open to the public – Scope of the discretion enjoyed by Member States)

In Case C-221/05,

REFERENCE for a preliminary ruling under Article 234 EC from the Supreme Court (Ireland), made by decision of 11 May 2005, received at the Court on 19 May 2005, in the proceedings

Sam Mc Cauley Chemists (Blackpool) Ltd,

Mark Sadja

v

Pharmaceutical Society of Ireland,

Minister for Health and Children,

Ireland,

Attorney General,

THE COURT (Third Chamber),

composed of A. Rosas, President of the Chamber, J. Malenovský (Rapporteur), S. von Bahr, A. Borg Barthet and A. Ó Caoimh, Judges,

Advocate General: C. Stix-Hackl,

Registrar: K. Sztranc-Slawiczek, Administrator,

having regard to the written procedure and further to the hearing on 16 March 2006,

after considering the observations submitted on behalf of:

– Sam Mc Cauley Chemists (Blackpool) Ltd and Mr Sadja, by G. Hogan SC and M. Hayden SC, and by C. Maguire BL,

– the Minister for Health and Children, Ireland, and the Attorney General, by D. O’Hagan, acting as Agent, and P. Sreenan SC, J. Heslin BL and E. Neary, solicitor,

– the Commission of the European Communities, by H. Støvlbæk and M. Shotter, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1 This reference for a preliminary ruling concerns the interpretation of Article 2 of Council Directive 85/433/EEC of 16 September 1985 concerning the mutual recognition of diplomas, certificates and other evidence of formal qualifications in pharmacy, including measures to facilitate the effective exercise of the right of establishment relating to certain activities in the field of pharmacy (OJ 1985 L 253, p. 37).

2 The reference was submitted in the course of proceedings between Sam Mc Cauley Chemists (Blackpool) Ltd (‘Sam Mc Cauley Chemists’) and Mr Sadja, on the one hand, and the Pharmaceutical Society of Ireland, the Minister for Health and Children (‘the Minister’), Ireland and the Attorney General, on the other, concerning the validity of a statutory instrument which transposes Article 2 of Directive 85/433 into Irish law.

Legal context

Community legislation

3 The seventh recital in the preamble to Directive 85/433 is worded as follows:

‘Whereas, under their national policies in the sphere of public health, which seek inter alia to ensure the satisfactory dispensing of medicinal products over their entire territories, certain Member States restrict the number of new pharmacies that may be established, while others have adopted no such provisions; whereas in these circumstances it is premature to provide that the effects of the recognition of diplomas, certificates and other evidence of formal qualifications in pharmacy must also extend to the pursuit of the activities of pharmacist as the controller of a pharmacy open to the public for less than three years; whereas this problem must be re-examined by the Commission and the Council within a certain period’.

4 Article 2 of the same directive provides:

‘1. Each Member State shall recognise the diplomas, certificates and other formal qualifications listed in Article 4 awarded to nationals of Member States by other Member States in accordance with Article 2 of Directive 85/432/EEC by giving such qualifications, as regards the right of access to and pursuit of the activities referred to in Article 1, the same effect in its territory as those diplomas, certificates and other formal qualifications, listed in Article 4, which it itself awards.

2. However, Member States need not give effect to the diplomas, certificates and other formal [qualifications] referred to in paragraph 1 with respect to the establishment of new pharmacies open to the public. For the purposes of applying this directive, pharmacies which have been in operation for less than three years shall also be regarded as new.

Five years after the date stipulated in Article 19(1), the Commission shall submit a report to the Council on the way in which Member States have implemented the preceding subparagraph and on the possibility of extending the effects of mutual recognition of the diplomas, certificates and other formal certificates referred to in paragraph 1. It shall make any appropriate proposals.’

National legislation

5 Article 15.2.1 of the Constitution of Ireland provides:

‘The sole and exclusive power of making laws for the State is hereby vested in the Oireachtas [Irish Parliament]: no other legislative authority has power to make laws for the State.’

6 Under Article 29.4.10 of that Constitution:

‘No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State which are necessitated by the obligations of membership of the European Union or of the Communities...’

7 The European Communities Act, 1972 was adopted in order to give effect to that latter constitutional provision. Section 2 of that Act states that ‘the treaties governing the European Communities and the existing and future acts adopted by the institutions of those Communities shall be binding on the State and shall be part of the domestic law thereof under the conditions laid down in those treaties’. Section 3 of that Act confers power on a Minister of State to ‘make regulations for enabling section 2 of this Act to have full effect’. Such regulations may include ‘provisions repealing, amending or applying, with or without modification, other law...’.

8 Under section 2 of the Pharmacy Act, 1962:

‘1. A person shall not keep open shop for the dispensing or compounding of medical prescriptions unless

(a) the person is an authorised person and the shop and the dispensing and compounding of medical prescriptions therein are personally supervised by the person or by an authorised person …

...

3. In this section “authorised person” means a registered pharmaceutical chemist ...

3 A. In this section the expressions “authorised person” and “registered pharmaceutical chemist” shall not include a person registered by virtue of Section 22A of the Pharmacy Act (Ireland), 1875 ... acting in respect of a shop for the dispensing or compounding of medical prescriptions or for the sale of poisons where such shop has been in operation for less than three years.

…’

9 Section 22A of the Pharmacy Act, 1875, provides for the registration as a pharmaceutical chemist of a person who holds any diploma, certificate or other evidence of formal qualifications in pharmacy awarded in another Member State in accordance with Article 2 of Council Directive 85/432/EEC of 16 September 1985 concerning the coordination of provisions laid down by law, regulation or administrative action in respect of certain activities in the field of pharmacy (OJ 1985 L 253, p. 34).

10 Section 2(3A) of the Pharmacy Act, 1962, and section 22A of the Pharmacy Act, 1875, were both introduced into Irish law, as regards the versions applicable to the case in the main proceedings, by the European Communities (Recognition of Qualifications in Pharmacy) Regulations 1991 (‘the 1991 Regulations’), which were adopted by the Minister in order to transpose Directive 85/433 into Irish law. Those regulations were based on section 3 of the European Communities Act 1972.

The main proceedings and the question referred for a preliminary ruling

11 Sam Mc Cauley Chemists is the owner of a pharmacy in Cork (Ireland) which commenced business in October 2000 and had, at the material time for the main proceedings, been in operation for less than three years.

12 Mr Sadja obtained his pharmacy degree in the United Kingdom. He was designated the ‘authorised person’ to keep open shop in the abovementioned pharmacy. When the Pharmaceutical Society of Ireland, which keeps the Register of Pharmaceutical Chemists for Ireland and is also the regulatory authority for pharmacists in that Member State, learned of that designation following an inquiry, it maintained that Mr Sadja was not, having regard to section 2(3A) of the Pharmacy Act, 1962, an authorised person within the meaning of that Act and that he was not therefore qualified to supervise the pharmacy in question. The Pharmaceutical Society of Ireland required that that situation be remedied, because practising as a pharmacist without authorisation is an offence in Ireland.

13 In order to challenge that interpretation, Sam Mc Cauley Chemists and Mr Sajda brought an action before the High Court, which was dismissed. They then appealed to the Supreme Court seeking a declaration, for reasons based on Irish constitutional law, that the 1991 Regulations were invalid in so far as they inserted section 2(3A) into the Pharmacy Act, 1962.

14 It is not disputed before the referring court that the State can transpose directives into national law by means of regulations which amend primary legislation only if that is necessitated by membership of the European Communities. Any amendment to such legislation which goes beyond what is required by a directive can be adopted only by the Oireachtas.

15 In that context, Sam Mc Cauley Chemists and Mr Sadja submitted that, in so far as the 1991 Regulations purported to exclude from their scope a registered pharmaceutical chemist working in a pharmacy which has been in operation for less than three years, the State was exercising the discretion conferred by Directive 85/433 on the Member States. It is clear from a reading of that Directive in its context that that discretion relates to purely national-law concerns.

16 The State availed itself of section 3 of the European Communities Act, 1972. It purported to transpose the Directive by a statutory instrument amending an Act of the Oireachtas. It was not entitled to do so, however, because the exercise of that discretion was not necessitated by any obligation of Community law for the purposes of Article 29.4.10 of the Constitution of Ireland.

17 Accordingly, it is claimed that the State encroached upon the exclusive power of making laws for the State vested in the Oireachtas by Article 15.2.1 of the Constitution. Only the Oireachtas has the power to amend an Act of the Oireachtas.

18 The Minister, by contrast, contended that the 1991 Regulations were necessitated by the obligations of Ireland’s membership of the Communities within the meaning of Article 29.4.10 of the Constitution. The insertion of section 2(3A) by those Regulations did not constitute the exercise by or on behalf of the State of any discretion. It reflected the limited scope of the Member State’s obligation under Directive 85/433.

19 The national court considers that, on the assumption that the measure implementing Directive 85/433 constitutes the exercise of a discretion based on purely national‑law considerations, in so far as it excludes from its scope work by certain pharmacists, that court would be compelled to hold that it was not permissible to amend the Pharmacy Act, 1962, by statutory instrument, in view of the terms in which Article 15 of the Constitution of Ireland is couched. The 1991 Regulations would thus be invalid.

20 In those circumstances, the Supreme Court decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Does Article 2 of ... Directive [85/433]:

(a) impose a single obligation limited to requiring a Member State to recognise the qualifications referred to in Article 2(1) of the Directive except with respect to the establishment of new pharmacies as defined in Article 2(2) [of that directive], or,

(b) does it impose on a Member State a distinct obligation to recognise the qualifications referred to in Article 2(1) but, in addition, confer on Member States a discretion whether to extend such recognition to persons holding such qualifications with respect to the establishment of new pharmacies open to the public, as defined in Article 2(2)?’

On the question referred

21 By its question, the national court is essentially asking whether Article 2 of Directive 85/433 merely imposes an obligation on Member States to recognise diplomas, certificates and other formal qualifications (‘diplomas’) in respect of activities in pharmacies which have been in operation for at least three years or whether, in addition, it confers on them a discretion whether to extend the recognition of diplomas with respect to the establishment of new pharmacies open to the public, as defined in Article 2(2) of that directive.

22 Article 43 EC provides that, within the framework of the provisions of the EC Treaty on the right of establishment, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State are prohibited.

23 Those provisions include Article 47 EC, which empowers the Council to issue directives for the mutual recognition of diplomas in the case of, inter alia, the pharmaceutical professions.

24 In addition, the authorities of a Member State are required, when examining the application made by another Member State’s national for authorisation to practise a regulated profession, to take the professional qualifications of the party concerned into consideration and to compare, on the one hand, the qualifications shown by his diplomas and relevant professional experience with, on the other, the professional qualifications required by the national legislation to practise that profession, and to do so irrespective of whether or not a directive laying down specific rules on the mutual recognition of the diplomas concerned has been adopted (see, to that effect, Case C‑238/98 Hocsman [2000] ECR I-6623, paragraphs 23 and 31, and Case C‑313/01 Morgenbesser [2003] ECR I-13467, paragraphs 57 and 58).

25 The object of such directives is, as is apparent from Article 47(1) EC, to facilitate the mutual recognition of diplomas, by laying down rules and common criteria which result, as far as possible, in automatic recognition of those diplomas (Case C-31/00 Dreessen [2002] ECR I‑663, paragraph 26).

26 As regards the scope of those directives, Article 47 EC confers on the Community legislature the power to harmonise completely, where appropriate, the diplomas concerned, while leaving to the legislature’s judgment the manner in which it is to go about achieving such an objective. Therefore, the legislature is free to introduce harmonisation in stages, having regard to the fact that it is generally difficult to implement harmonising measures because it requires the competent Community institutions to draw up, on the basis of diverse and complex national provisions, common rules in harmony with the aims laid down by the Treaty and approved by a qualified majority of the Members of the Council, or even the unanimous agreement of the latter (see, to that effect, Case C-233/94 Germany v Parliament and Council [1997] ECR I-2405, paragraph 43, and Case C-166/98 Socridis [1999] ECR I-3791, paragraph 26).

27 In the present case, Article 2(1) of Directive 85/433 imposes an obligation on each Member State to recognise the diplomas listed in Article 4 thereof awarded to nationals of Member States by other Member States, in accordance with Article 2 of Directive 85/432, by giving such diplomas the same effect in the State’s territory as those diplomas listed in Article 4 which it itself awards.

28 However, the first subparagraph of Article 2(2) of Directive 85/433 states that Member States need not give effect to the diplomas referred to in Article 2(1) with respect to the establishment of new pharmacies open to the public, it being understood that pharmacies which have been in operation for less than three years are also to be regarded as new.

29 That provision thereby limits the scope of the obligation provided for in Article 2(1) of Directive 85/433 on the ground given in the seventh recital in the preamble thereto, which provides that certain Member States, in the sphere of public health, restrict the number of new pharmacies that may be established, while others have adopted no such provisions and that, in those circumstances, it is premature to provide that the effects of the recognition of diplomas in pharmacy must also extend to the pursuit of the activities of pharmacist as the controller of a new pharmacy.

30 In addition, according to the same recital, that problem must be re‑examined by the Commission and the Council within a certain period. For that purpose, the second subparagraph of Article 2(2) of Directive 85/433 provides that the Commission must submit a report to the Council on the possibility of extending the effects of mutual recognition of the diplomas referred to in Article 2(1) to the diplomas with respect to the establishment of new pharmacies, and requires it to make any appropriate proposals.

31 It follows from all those considerations that, as regards the recognition of diplomas in pharmacy, it was the aim of the Community legislature in adopting Directive 85/433 to introduce only partial harmonisation guaranteeing a minimal level of recognition of those diplomas, namely recognition with respect to the pursuit of activities in pharmacies which have been in operation for at least three years, while providing Member States with the possibility to go beyond the minimal requirements imposed by the Directive.

32 Having regard to the wording of the third paragraph of Article 249 EC, Member States are required to achieve that minimal level of recognition of diplomas, and in particular to make provision for such in their national law, and they have no discretion as to that result. The Community legislature decided in precise and unconditional terms, using the powers conferred on it by the Treaty, which diplomas in pharmacy are to be subject to the system for mutual recognition laid down by Directive 85/433.

33 It follows from a reading of Article 2 of Directive 85/433, in its entirety, that that provision imposes an obligation of mutual recognition only in respect of pharmacies which have been in operation for at least three years. Thus, where a Member State complies merely with that minimal level of recognition of diplomas it is not exercising any discretion stemming from Article 2 of Directive 85/433.

34 Therefore, the answer to the question referred must be that Article 2 of Directive 85/433 must be interpreted as meaning that a Member State which complies merely with the minimal level of recognition of diplomas laid down by that directive is not exercising any discretion conferred by that directive.

Costs

35 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Third Chamber) hereby rules:

Article 2 of Council Directive 85/433/EEC of 16 September 1985 concerning the mutual recognition of diplomas, certificates and other evidence of formal qualifications in pharmacy, including measures to facilitate the effective exercise of the right of establishment relating to certain activities in the field of pharmacy, must be interpreted as meaning that a Member State which complies merely with the minimal level of recognition of diplomas laid down by that directive is not exercising any discretion conferred by that directive.

[Signatures]