5.

The principles laid down on the subject of the protection of expectations in the judgment in Case 74/74 in order to identify the appropriate premises are not of importance solely in relation to non-contractual liability, but can be used more generally in establishing the existence of legitimate expectations worthy of being protected, even though protection may take forms other than that of compensation for damages. The existence of legitimate expectations worthy of protection can be established only on the merits of each case, with due regard to the facts of the situation in the context of which the undertakings operate. By its very nature the principle does not lend itself to mechanical application, which might lead to unjustified generalizations and would accord neither with its specific equitable function nor with the day-to-day requirements of Community rules governing the economy. In order to establish whether there is an expectation worthy of protection, reference must, therefore, be made to the actual situation which forms the context of the Community act and of the conduct of the undertakings which claim that their legitimate expectation has been disregarded. It should be remembered that such an expectation is not the same as an individual right, but can exist even without the right. In this connexion my opinion in Case 78/74 noted that the facts which were material in the main action took place during the period prior to the crisis on the world market in wheat. At the material time in that case there was no widespread shortfall in production nor had there been a discernible tendency towards a substantial increase in the prices of the product concerned. It was also noted that there had been no indication that the undertaking concerned had indulged in speculation on the basis of receipt of the denaturing premiums, nor, speaking more generally, was it possible to establish that, on the common market, there had been any speculation based on application of the mechanism of denaturing premiums. We have seen that the general situation on the market which the two regulations with which we are here concerned were adopted to meet was clearly a very different one from that which had to be taken into account in connexion with the questions referred to this Court by the national court in Case 78/74. The undertakings which were engaged in denaturing operations could certainly not have been ignorant of the fact that, on the world market in the cereals involved in this case, there was a shortage which was becoming increasingly grave. They were also aware that the Community authorities had already begun to adopt measures designed to avoid a shortage in the Community, among the first of these being the imposition of a levy on exports. We know that the object of the premiums granted by the Community to encourage denaturing of common wheat is, by diverting the product from its natural use, to maintain its market in a situation of surplus which prevents it from finding its natural outlet. But, at a time when there is an ever-increasing danger of shortage, accompanied by a situation of developing and substantial price increases and by the adoption on the part of the Community authorities of measures restricting exports of the cereal to third countries, it must be recognized that the expectations of undertakings engaged in denaturing wheat are not the same as those which might be entertained in an economic context in which there are abundant supplies of the product intended for denaturing, as was, for example, the situation at the material time in Case 78/74. This is particularly true of the period separating the two regulations concerned, when the reduction in the premium which had taken place, in addition to the fresh increase in the export levy for common wheat exports to third countries, represented a further unmistakable alarm signal. In the context of such circumstances, it is not possible to establish the existence of certain conditions which, in your judgment in Case 74/74, especially paragraphs Nos 42 and 43, you considered essential before you would, for the benefit of those under the administrative control of the authorities, uphold their expectation that a provision in their favour should continue to apply. In particular, in respect of the changes made in the level of the denaturing premiums by the two provisions we are considering, it seems scarcely possible to accept that the. events could not have been foreseen, a condition in whose absence there is no recognizable expectation worthy of protection Moreover, the absence of machinery, such as the security provided when export refunds are fixed in advance, which makes it impossible to go back on a denaturing operation of which advance notice has been given, enables the conclusion to be drawn that an expectation based on the level of the denaturing premium which will be forthcoming can be regarded as, in principle, unworthy of the same protection as that due to an expectation related to compensatory amounts on exports. A careful assessment of the circumstances by the parties concerned should therefore have sufficed to undermine their confidence in the continuance of provisions whose abolition was required by the organization of the market and elementary consideration for the public interst. when account is taken of the particular circumstances in which the Commission regulations changing the denaturing premiums supervened, these considerations may suffice to justify denial of entitlement to benefit from the previous arrangements, even in respect of the quantities purchased by the denaturer which had already been duly notified to the intervention agency. In any case, the said considerations should, at least, mean discontinuance of the benefit of the previous arrangements for undertakings which effected the communication referred to in Article 4 (2) after the publication date of the regulation introducing new, less advantageous arrangements. In fact, from that date, even taking into account the economic context considered above, there can certainly no longer be any question of protecting the expectation; to keep in operation for a few weeks longer the incentive to denature, already recognized as excessive and counterproductive, would court the risk of encouraging purely speculative operations which, since they diverted further quantities of cereal from their normal use, would run counter to the objectives of the regulations concerned and, in the wider context, of the common market organization. In the light of these considerations and of the rejection of the possibility that the grounds adduced in the present proceedings are sufficient to justify a declaration that the two regulations of the Commission in question are invalid, the conclusion appears inevitable that there is no valid entitlement to the premium solely by virtue of completion of the formalities, which are not binding on the undertaking, relating to notice of the contemplated denaturing operations; it must also be concluded that, having regard to the particular market situation which led to adoption of the regulations, they must be wholly applied to all denaturing operations carried out after the date provided for their entry into force, even though the relevant requests were submitted prior to that date.