Opinion of Mr Advocate General Mischo delivered on 4 June 1991. - Gebrüder Schulte AG and H & E Reinert KG v Belgische Dienst voor Bedrijfsleven en Landbouw, Belgische Staat, Instituut voor veterinaire keuring and Vanden Avenne-Ooigem NV. - Reference for a preliminary ruling: Rechtbank van eerste aanleg Brussel - Belgium. - Contract for the sale of beef from intervention stocks - Latent defects - Claim made subsequent to the purchase. - Case C-113/90.



European Court reports 1991 Page I-04407



Opinion of the Advocate-General

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Mr President,

Members of the Court,

1. This Opinion concerns preliminary questions which have been referred to the Court in an action brought by two German meat-processing undertakings which, in an operation for the disposal of meat held by the Belgian intervention agency which was sold at a price fixed at a standard rate in advance according to the detailed rules laid down by Regulation (EEC) No 1431/87, (1) purchased meat which, on being thawed, revealed mould and part of which, after being declared by the German veterinary inspection authorities to be unfit for human consumption, had to be destroyed. That meat, which the aforementioned regulation required to be processed, had been purchased in order to be processed into meat-based preparations intended for human consumption.

2. The undertakings concerned ask the Brussels court to establish the liability of the Belgian State, the intervention agency and the veterinary inspection authority and also of the undertaking through whose stores the products passed before being sent to Germany (hereinafter referred to as "the defendants").

First question

3. Since the defendants rely on the applicable Community law, the national court submits first of all the following question:

"1. May it be inferred from Article 2(2)(d) of Commission Regulation (EEC) No 2173/79 of 4 October 1979 that the declaration made by the applicant prevents him from making a claim on the basis of the non-compliance of the goods supplied or on the basis of latent defects when the goods are sold in the form of deep-frozen products and those goods show signs of mould only after thawing at their place of destination and cannot therefore be considered for processing, or does the 'declaration' in question cover the externally ascertainable commercial characteristics of the product?"

4. Let me state first of all that, since the sale was made pursuant to Regulation No 1431/87, it is, in accordance with the third recital of the preamble thereto, subject to the rules laid down by Regulations No 2173/79 (2) and 2182/77, (3)

to which I shall refer later.

5. Article 2(2) of Regulation No 2173/79 sets out the conditions which a purchase application to an intervention agency must fulfil in order to be deemed valid for consideration. It provides in particular that the application must:

"...

(d) include a declaration whereby the applicant waives all claims as to the quality and characteristics of the product which may be assigned to him".

6. It is on the scope of that waiver that the national court is asking the Court to give a ruling.

7. The United Kingdom argues that the literal interpretation of that provision necessarily leads to the exclusion of all claims, whatever they may be. The ordinary meaning of the words requires that to be so.

8. However, the Commission also relies on a literal interpretation to support the contrary argument, invoking the specific meaning which is to be given to the terms of that provision in the context of the regulation in question. It argues in that respect that the word "quality" is to be found in Article 1(3) of Regulation No 1431/87, where reference is made to Annex I, which lists meats of a specified category corresponding to a specified quality. As for the word "characteristics", it refers to the state of the product as characterized by certain factors such as, for example, its presentation.

9. For my part, I consider that the problem cannot be resolved on the basis of the wording of the relevant provision alone and that it is necessary also to examine the purpose and the general scheme of the rules of which it forms part.

10. The defendants argue that a wide interpretation of the waiver clause is indispensable in order to facilitate the rapid procedure of operations for the disposal of stocks which would otherwise be unduly slowed down by incessant disputes regarding the product delivered. The Belgian and United Kingdom Governments also stress that the products in question are sold at prices which are much lower than market prices and that purchasers should therefore be aware that they are exposing themselves to a certain risk.

11. However, the answer to that may be that such an interpretation would be likely to dissuade undertakings from taking an interest in the products offered by the intervention agencies, which, on all the evidence, would prejudice the disposal of the stocks. It may indeed be accepted that, taking account of the price offered, purchasers cannot expect to obtain products of the highest grade. They know, in particular, that, in time, meat is susceptible of oxidizing even if it has been frozen according to the rules of the trade. That chemical phenomenon, which occurs inevitably, must not, however, be confused with the mould found to exist in the the main proceedings, which is the result of biological degradation caused by the appearance of germs, which is clearly less foreseeable. It should not be forgotten that this case is not concerned with refrigerated meat, such as we can all keep in our refrigerators for several days at a temperature of about +4 C, but with frozen meat, which, according to Council Directive 83/90/EEC, (4) must be stored and transported at a temperature of -12 C or colder (see Annex I to the directive, Chapter XIII, paragraph 65).

12. Oxidization reduces the quality of the meat, but mould renders it inedible, so that it ceases to be meat fit for human consumption; that represents a change in the nature of the product rather than a mere deterioration in its condition. To my mind, it is difficult to accept that the concept of "characteristics" appearing in the declaration of waiver can cover such a profound change. The risk taken by purchasers should not include the risk of receiving a product which has become unfit for the use laid down by the regulation, namely processing into preserved meat intended for human consumption.

13. It cannot reasonably be supposed that the regulations were intended to expose purchasers to the risk of incurring a threefold loss. They will have had to pay a price in return for which they will have obtained nothing and, furthermore, they must finance the destruction of the meat purchased. Finally, they also lose the amount of the security which the regulation requires them to supply especially to guarantee the performance of their obligation to process the meat. Article 3 of Regulation No 1431/87 expressly refers to Article 4 of Regulation No 2182/77 which provides that:

"Before the contract of sale is concluded, a security calculated to guarantee that the products will be processed shall be lodged with the competent authority of the Member State where the processing is to take place ...".

14. The United Kingdom and the defendants in the main proceedings also rely on the link between the waiver clause imposed on the purchaser and the possibility of carrying out a prior inspection of the goods offered which is provided for in Article 13 of Regulation No 2173/79, according to which:

"Intervention agencies shall make all necessary arrangements to enable prospective tenderers to inspect the products for sale before making their applications or submitting their tenders."

15. It is common ground between the parties that the waiver of possible claims by the applicant is linked to his right to carry out that prior inspection. That link is confirmed, moreover, by the eighth recital of the preamble to Regulation No 2173/79, which states that:

"... the submission of an application or a tender is facilitated if prospective purchasers are permitted to inspect the products; ... it should consequently be provided that the parties concerned waive in advance their right to lodge any complaint in respect of the quality and characteristics of the product which may be assigned to them".

16. The waiver must thus be understood as the counterpart of the possibility of inspection. It cannot therefore be given a subject-matter or a scope which exceeds the content of that inspection. The Commission states that, in practice, the purchaser' s right to carry out that inspection can be exercised only with difficulty, because he does not know from which store the meat which will be assigned to him will come.

17. Several provisions of Regulation No 2173/79 clearly indicate that the purchaser cannot know with certainty the exact source of the lot which he may receive.

18. Thus the second subparagraph of Article 2(2) provides that:

"The application may also name, in order of preference, the cold store or stores where the products applied for are stored." (5)

19. As a result, the purchaser is uncertain as to the cold store from which the product which he receives comes. This situation is accentuated under Regulation No 1431/87 applicable to the sales in question. In that respect, the Commission quotes Article 1(5) of that Regulation, which specifies that:

"Notwithstanding the second subparagraph of Article 2(2) of Regulation (EEC) No 2173/79, purchase applications shall not name the coldstore or stores where the products applied for are stored."

20. The purchaser thus no longer even has the option of expressing any preference whatsoever. The fact that it is impossible for him to know, at the time when he is able to carry out his prior inspection, the origin of the lot which will be assigned to him also results from Article 18(2) of Regulation No 2173/79, which specifies that:

"Delivery shall be taken of the goods in accordance with intervention agency rules for release from storage and no claims to any particular lots shall be allowed."

21. It is thus clear that the purchaser does not know from which cold store the lot which he will obtain comes. He is thus not in a position to carry out inspections of such a kind as to guarantee the state of the meat which will be assigned to him. He may, of course, make inquiries regarding the commercial characteristics of the whole of the lot offered. He can also, as the defendants and the United Kingdom stress, take samples in order to thaw them out and examine them. All that he can achieve by doing so, however, is to obtain an idea of the state of the piece analysed, but not of the state of the meat which will be specifically assigned to him.

22. The total quantity of meat put up for sale in Belgium under Regulation No 1431/87 was 1 500 tonnes. As pointed out in particular by the United Kingdom, that meat was necessarily of a non-homogeneous quality. The possibility of inspection available to the purchasers was therefore of scarcely any real significance and it cannot tip the balance in favour of a wide interpretation of the waiver clause.

23. For the same reasons, it is not necessary to address the question whether, by apparently not proceeding to examine the goods offered, the plaintiffs in the main proceedings have failed to show diligence in the exercise of their right of inspection, since they could not in any event thereby derive any certainty regarding the state of the meat which would be finally assigned to them.

24. Under Regulation No 1431/79 the waiver cannot, therefore, owing to the practical impossibility of carrying out an inspection with any real significance, be interpreted other than restrictively. It cannot, accordingly, include claims relating to possible latent defects in the product assigned.

25. With regard to the question of what claims are excluded as a result of the waiver clause, the Commission explains that such is the case with claims concerning the presentation and defects which can be detected by the naked eye. However, I do not consider it necessary to take a position on that point, since the main proceedings concern latent defects.

26. In the light of the foregoing considerations, I suggest that the following reply should be given to the first question referred:

"In the application of Regulation No 1431/87, Article 2(2)(d) of Commission Regulation (EEC) No 2173/79 of 4 October 1979 on detailed rules of application for the disposal of beef bought in by intervention agencies and repealing Regulation (EEC) No 216/69 must be interpreted as meaning that the declaration referred to therein does not cover any latent defects."

Second question

27. The national court also seeks a reply to the following question:

"Does not the extension of this 'declaration' to cover hygiene characteristics which make the product unsuitable for processing but which are not immediately ascertainable on the spot, conflict:

(a) with the purpose of Commission Regulation (EEC) No 1431/87 of 25 May 1987, in so far as it concerns sales of stocks 'for processing' ;

(b) with the purpose of Directive 64/433/EEC in so far as it makes the exporting State responsible for carrying out the health controls on the meat to be exported?"

28. Clearly, taking account of the fact that I have just suggested that the first question should be answered by giving a narrow interpretation of the "declaration" of waiver, the second question has become devoid of purpose. It is only in the alternative, therefore, that I will now go on to examine that question.

Question 2(a)

29. In my examination of the first question I have already indicated that a wide interpretation of the waiver clause would be incompatible with the purpose of Regulation No 1431/87, which concerns sale for processing. I would add that if the framers of the regulation had actually foreseen that purchasers would have to assume the risk of obtaining meat which was unfit for processing, they should have provided for the release of the security where the meat had been processed or destroyed.

Question 2(b)

30. There is no direct relationship between Directive 64/433/EEC (6) and Article 2(2) of Regulation No 2173/79. Whatever interpretation may be given of the waiver clause, the Member State remains responsible for the health inspection to be carried out on exported meat, pursuant to Articles 3, 4 and 5 of the Directive. (7) That responsibility must be capable of being enforced in the national courts, in accordance with the rules applicable to the non-contractual liability of the public authorities. As regards both the conditions to which it is subject and the results to which it can give rise, such an action would be different from that in which the selling authority is sued for defects in the meat delivered and which is based on the contractual obligations of that authority.

31. It follows that even a broad interpretation of the waiver clause cannot prevent a purchaser who has imported meat into another Member State and found that the Member State of origin has not fulfilled its obligations regarding inspections on export from having that Member State declared liable in law and, where appropriate, from obtaining compensation for the damage which he has suffered.

32. Taking account of all the foregoing, I suggest that the Court should answer the questions referred by the national court as follows:

"In the application of Regulation (EEC) No 1431/87, Article 2(2)(d) of Commission Regulation (EEC) No 2173/79 of 4 October 1979 on detailed rules of application for the disposal of beef bought in by intervention agencies and repealing Regulation (EEC) No 216/69 must be interpreted as meaning that the declaration referred to therein does not cover any latent defects.

In view of the reply to the first question, it is not necessary to answer the second question."

(*) Original language: French.

(1) - Commission Regulation (EEC) No 1436/87 of 25 May 1987 on the sale at prices fixed at a standard rate in advance of certain beef from intervention stocks for processing in the Community, repealing Regulation (EEC) No 786/87 and amending Regulation (EEC) No 2182/77 (OJ 1987 L 136, p. 26).

(2) - Commission Regulation (EEC) No 2173/79 of 4 October 1979 on detailed rules of application for the disposal of beef bought in by intervention agencies and repealing Regulation (EEC) No 216/69 (OJ 1979 L 251, p. 12).

(3) - Commission Regulation (EEC) No 2182/77 of 30 September 1977 laying down detailed rules for the sale of frozen beef from intervention stocks for processing within the Community and amending Regulation (EEC) No 168/76 (OJ 1977 L 251, p. 60).

(4) - Council Directive 83/90/EEC of 7 February 1983 amending Directive 64/433/EEC on health problems affecting intra-Community trade in fresh meat (OJ 1983 L 59, p.10).

(5) - It may, moreover, be pointed out that it was the difficulties experienced in applying this rule that led to its being abandoned in Regulation No 1431/87 (see the sixth recital of the preamble to that regulation). That confirms the Commission' s observations regarding the practice of exercising the purchaser' s right of inspection.

(6) - Directive 64/433/EEC of the Council of 26 June 1964 on health problems affecting intra-Community trade in fresh meat (OJ English Special Edition 1963-64, p. 185).

(7) - As amended by Council Directive 83/807EEC of 7 February 1983 amending Directive 64/433/EEC on health problems affecting intra-Community trade in fresh meat (OJ 1983 L 59, p. 10).