Judgment of the Court of 6 November 1984. - Robert Fearon & Company Limited v Irish Land Commission. - Reference for a preliminary ruling: Supreme Court - Ireland. - National restrictions on the possibility of owning land. - Case 182/83.



European Court reports 1984 Page 03677

Spanish special edition Page 00821

Swedish special edition Page 00679

Finnish special edition Page 00661



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

1 . FREE MOVEMENT OF PERSONS - FREEDOM OF ESTABLISHMENT - PRINCIPLE OF NON-DISCRIMINATION - SYSTEM OF COMPULSORY ACQUISITION BY PUBLIC BODIES

( EEC TREATY , ARTS 52 AND 222 )

2.FREE MOVEMENT OF PERSONS - FREEDOM OF ESTABLISHMENT - RESTRICTIONS - LEGISLATION GOVERNING THE OWNERSHIP OF LAND - LAND-OWNING COMPANY - RESIDENCE REQUIREMENT IMPOSED ON MEMBERS OF COMPANIES WHO ARE NATIONALS OF OTHER MEMBER STATES - PERMISSIBILITY - CONDITIONS

( EEC TREATY , ART . 52 )

Summary

1 . ALTHOUGH ARTICLE 222 OF THE TREATY DOES NOT CALL IN QUESTION THE MEMBER STATES ' RIGHT TO ESTABLISH A SYSTEM OF COMPULSORY ACQUISITION BY PUBLIC BODIES , SUCH A SYSTEM REMAINS SUBJECT TO THE FUNDAMENTAL RULE OF NONDISCRIMINATION WHICH UNDERLIES THE CHAPTER OF THE TREATY RELATING TO THE RIGHT OF ESTABLISHMENT .

2.ARTICLE 52 OF THE TREATY DOES NOT PREVENT A MEMBER STATE FROM MAKING EXEMPTION FROM COMPULSORY ACQUISITION MEASURES ADOPTED UNDER LEGISLATION GOVERNING THE OWNERSHIP OF RURAL LAND SUBJECT TO A REQUIREMENT THAT NATIONALS OF OTHER MEMBER STATES WHO HAVE TAKEN PART IN THE FORMATION OF A LAND-OWNING COMPANY RESIDE ON OR NEAR THE LAND , IF THAT RESIDENCE REQUIREMENT ALSO APPLIES TO NATIONALS OF THAT MEMBER STATE AND IF THE POWERS OF COMPULSORY ACQUISITION ARE NOT EXERCISED IN A DISCRIMINATORY MANNER .

Parties

IN CASE 182/83

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE SUPREME COURT OF IRELAND FOR A PRELIMINARY RULING IN THE PROCEEDINGS PENDING BEFORE THAT COURT BETWEEN

ROBERT FEARON AND COMPANY LIMITED ,

OBJECTOR/APPELLANT ,

AND

THE IRISH LAND COMMISSION ,

RESPONDENT ,

Subject of the case

ON THE INTERPRETATION OF ARTICLE 58 OF THE EEC TREATY ,

Grounds

1 BY ORDER OF 15 JUNE 1983 , RECEIVED AT THE COURT REGISTRY ON 25 AUGUST 1983 , THE SUPREME COURT OF IRELAND REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A QUESTION RELATING TO THE INTERPRETATION OF ARTICLE 58 OF THE EEC TREATY IN ORDER TO DETERMINE THE COMPATIBILITY WITH THE TREATY OF SECTION 32 ( 3 ) OF THE LAND ACT 1933 AS AMENDED BY SECTION 35 OF THE LAND ACT 1965 .

2 THAT QUESTION WAS RAISED IN THE CONTEXT OF PROCEEDINGS CONCERNING THE DECISION OF THE IRISH LAND COMMISSION TO ACQUIRE COMPULSORILY LAND OWNED BY ROBERT FEARON & COMPANY LIMITED , A COMPANY REGISTERED UNDER IRISH LAW .

3 THE PURPOSE OF BOTH THE LAND ACT 1933 AND THE LAND ACT 1965 IS TO INCREASE THE SIZE OF HOLDINGS OF LAND WHICH , IF THAT WERE NOT DONE , COULD NOT BE EXPLOITED ON AN ECONOMIC BASIS , TO PREVENT LAND SPECULATION , AND , FINALLY , TO ENSURE AS FAR AS POSSIBLE THAT THE LAND BELONGS TO THOSE WHO WORK IT . TO ACHIEVE THE LATTER OBJECTIVE , SECTION 32 ( 3 ) OF THE LAND ACT 1933 , AS AMENDED BY SECTION 35 OF THE LAND ACT 1965 , PROVIDES THAT THE IRISH LAND COMMISSION CANNOT EXERCISE ITS POWERS OF COMPULSORY ACQUISITION AGAINST PERSONS WHO HAVE RESIDED FOR MORE THAN ONE YEAR WITHIN THREE MILES OF THE LAND OR AGAINST BODIES CORPORATE ALL OF WHOSE SHAREHOLDERS MEET THE SAME RESIDENCE REQUIREMENT . IN THIS CASE , THE FIVE SHAREHOLDERS OF ROBERT FEARON & COMPANY LIMITED ARE BRITISH NATIONALS NONE OF WHOM MEETS THE RESIDENCE REQUIREMENT SET OUT ABOVE .

4 THE SUPREME COURT OF IRELAND , BEFORE WHICH THE MATTER HAD BEEN BROUGHT BY WAY OF A FINAL APPEAL , SUBMITTED THE FOLLOWING QUESTION TO THE COURT OF JUSTICE FOR A PRELIMINARY RULING :

' ' WHERE A STATUTE OF A MEMBER STATE CONTAINS A CONDITION REQUIRING THAT A PERSON ( OTHER THAN A BODY CORPORATE ) WHO OWNS LAND SHOULD HAVE RESIDED ON IT FOR A CERTAIN PERIOD , IF THE OWNER OF THE LAND IS A BODY CORPORATE , IS ARTICLE 58 TO BE INTERPRETED AS PROHIBITING A CONDITION REQUIRING THAT EACH OF THE PERSONS ENTITLED TO A BENEFICIAL INTEREST IN THE BODY CORPORATE SHOULD HAVE RESIDED ON THE LAND DURING A SIMILAR PERIOD?

' '

5 IN ITS WRITTEN OBSERVATIONS , THE COMMISSION CONTENDS FIRST OF ALL THAT THE SYSTEM OF COMPULSORY ACQUISITION BY PUBLIC BODIES IS PART OF THE SYSTEM OF PROPERTY OWNERSHIP IN IRELAND AND THAT ARTICLE 222 OF THE TREATY , ACCORDING TO WHICH ' ' THIS TREATY SHALL IN NO WAY PREJUDICE THE RULES IN MEMBER STATES GOVERNING THE SYSTEM OF PROPERTY OWNERSHIP ' ' , WOULD THUS ON ITS OWN JUSTIFY A NEGATIVE ANSWER TO THE QUESTION PUT BY THE NATIONAL COURT .

6 THAT CONCLUSION CANNOT BE ACCEPTED . BY VIRTUE OF ARTICLE 54 ( 3 ) ( E ) OF THE TREATY , THE RESTRICTIONS ON THE ACQUISITION AND USE BY A NATIONAL OF ONE MEMBER STATE OF LAND AND BUILDINGS SITUATED IN ANOTHER MEMBER STATE ARE AMONG THOSE WHICH ARE TO BE ABOLISHED WITH A VIEW TO THE REALIZATION OF FREEDOM OF ESTABLISHMENT . SIMILARLY , THE COUNCIL ' S ' ' PROGRAMME GENERAL POUR LA SUPPRESSION DES RESTRICTIONS A LA LIBERTE D ' ETABLISSEMENT ' ' ( GENERAL PROGRAMME FOR THE ABOLITION OF RESTRICTIONS ON THE FREEDOM OF ESTABLISHMENT ) OF 18 DECEMBER 1961 ( JOURNAL OFFICIEL 1962 , P . 36 ) LISTS , AMONG THE RESTRICTIONS ON FREEDOM OF ESTABLISHMENT TO BE ABOLISHED , PROVISIONS OR PRACTICES WHICH PROVIDE FOR LESS FAVOURABLE RULES FOR NATIONALS OF ANOTHER MEMBER STATE IN REGARD TO COMPULSORY ACQUISITION .

7 CONSEQUENTLY , ALTHOUGH ARTICLE 222 OF THE TREATY DOES NOT CALL IN QUESTION THE MEMBER STATES ' RIGHT TO ESTABLISH A SYSTEM OF COMPULSORY ACQUISITION BY PUBLIC BODIES , SUCH A SYSTEM REMAINS SUBJECT TO THE FUNDAMENTAL RULE OF NON-DISCRIMINATION WHICH UNDERLIES THE CHAPTER OF THE TREATY RELATING TO THE RIGHT OF ESTABLISHMENT .

8 AS THE COMMISSION RIGHTLY POINTS OUT , ARTICLE 58 OF THE TREATY , TO WHICH THE NATIONAL COURT ' S QUESTION REFERS , DOES NOT GOVERN THE SOLUTION OF THE MATTER IN LITIGATION IN THE MAIN PROCEEDINGS . THE EFFECT OF THAT ARTICLE IS TO ASSIMILATE , FOR THE PURPOSES OF GIVING EFFECT TO THE CHAPTER RELATING TO THE RIGHT OF ESTABLISHMENT , COMPANIES OR FIRMS FORMED IN ACCORDANCE WITH THE LAW OF A MEMBER STATE AND HAVING THEIR REGISTERED OFFICE , CENTRAL ADMINISTRATION OR PRINCIPAL PLACE OF BUSINESS WITHIN THE COMMUNITY , TO NATURAL PERSONS WHO ARE NATIONALS OF ONE OF THE MEMBER STATES . IN THIS CASE , SINCE FEARON & COMPANY LIMITED IS AN IRISH COMPANY FOR THE PURPOSES OF ARTICLE 58 OF THE EEC TREATY , IT CANNOT CLAIM IN IRELAND THE BENEFIT OF THE RIGHT OF ESTABLISHMENT GRANTED TO COMPANIES FORMED UNDER THE LAWS OF THE OTHER MEMBER STATES .

9 THE QUESTION RAISED BY THE SUPREME COURT OF IRELAND SEEKS TO ASCERTAIN , HOWEVER , WHETHER , HAVING REGARD TO THE RULES LAID DOWN IN THE TREATY , NATIONALS OF OTHER MEMBER STATES WHO HAVE EXECISED THEIR RIGHT OF ESTABLISHMENT IN IRELAND UNDER ARTICLE 52 OF THE TREATY BY PARTICIPATING IN THE FORMATION OF A COMPANY WITHIN THE MEANING OF ARTICLE 58 OF THE TREATY CAN BE REQUIRED TO MEET A RESIDENCE REQUIREMENT .

10 THAT QUESTION MUST BE ANSWERED IN THE AFFIRMATIVE IF THE OBLIGATION TO RESIDE ON OR NEAR LAND IS IMPOSED BY A MEMBER STATE , WITHIN THE FRAMEWORK OF LEGISLATION CONCERNING THE OWNERSHIP OF RURAL LAND WHICH IS INTENDED TO ACHIEVE THE OBJECTIVES SET OUT ABOVE , BOTH ON ITS OWN NATIONALS AND ON THOSE OF THE OTHER MEMBER STATES AND IS APPLIED TO THEM EQUALLY . A RESIDENCE REQUIREMENT SO DELIMITED DOES NOT IN FACT AMOUNT TO DISCRIMINATION WHICH MIGHT BE FOUND TO OFFEND AGAINST ARTICLE 52 OF THE TREATY .

11 THE REPLY TO THE QUESTION PUT TO THE COURT BY THE SUPREME COURT OF IRELAND MUST THEREFORE BE THAT ARTICLE 52 OF THE TREATY DOES NOT PROHIBIT A MEMBER STATE FROM MAKING EXEMPTION FROM COMPULSORY ACQUISITION MEASURES ADOPTED UNDER LEGISLATION GOVERNING THE OWNERSHIP OF RURAL LAND SUBJECT TO A REQUIREMENT THAT NATIONALS OF OTHER MEMBER STATES WHO HAVE TAKEN PART IN THE FORMATION OF A LAND-OWNING COMPANY RESIDE ON OR NEAR THE LAND , IF THAT RESIDENCE REQUIREMENT ALSO APPLIES TO NATIONALS OF THAT MEMBER STATE AND IF THE POWERS OF COMPULSORY ACQUISITION ARE NOT EXERCISED IN A DISCRIMINATORY MANNER .

Decision on costs

COSTS

12 THE COSTS INCURRED BY IRELAND AND THE COMMISSION , 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 PROCEEDINGS PENDING BEFORE THE NATIONAL COURT , THE DECISION AS TO COSTS IS A MATTER FOR THAT COURT .

Operative part

ON THOSE GROUNDS ,

THE COURT ,

IN ANSWER TO THE QUESTION REFERRED TO IT BY THE SUPREME COURT OF IRELAND BY ORDER OF 15 JUNE 1983 , HEREBY RULES :

ARTICLE 52 OF THE TREATY DOES NOT PREVENT A MEMBER STATE FROM MAKING EXEMPTION FROM COMPULSORY ACQUISITION MEASURES ADOPTED UNDER LEGISLATION GOVERNING THE OWNERSHIP OF RURAL LAND SUBJECT TO A REQUIREMENT THAT NATIONALS OF OTHER MEMBER STATES WHO HAVE TAKEN PART IN THE FORMATION OF A LAND-OWNING COMPANY RESIDE ON OR NEAR THE LAND , IF THAT RESIDENCE REQUIREMENT ALSO APPLIES TO NATIONALS OF THAT MEMBER STATE AND IF THE POWERS OF COMPULSORY ACQUISITION ARE NOT EXECISED IN A DISCRIMINATORY MANNER .