FMC plc, FMC (Meat) Ltd, DT Duggins Ltd, Marshall (Lamberhurst) Ltd, Montelupo Ltd and North Devon Meat Ltd v Intervention Board for Agricultural Produce and Ministry of Agriculture, Fisheries and Food.
Date: 1996-02-08
1 By order of 1 July 1994, received at the Court on 27 July 1994, the High Court of Justice, Queen' s Bench Division, referred to the Court for a preliminary ruling under Article 177 of the EC Treaty a number of questions on the validity and interpretation of Article 4(1) of Commission Regulation (EEC) No 1633/84 of 8 June 1984 laying down detailed rules for applying the variable slaughter premium for sheep and repealing Regulation (EEC) No 2661/80 (OJ 1984 L 154, p. 27), as amended by Article 1 of Commission Regulation (EEC) No 1922/92 of 13 July 1992 amending Regulation (EEC) No 1633/84, cited above, and determining the conditions for the reimbursement of the clawback following the judgment of the Court of Justice in Joined Cases C-38/90 and C-151/90 (OJ 1992 L 195, p. 10), the validity and interpretation of Article 2 of Regulation No 1922/92, cited above, and the interpretation of paragraph 30 of the judgment of the Court of Justice in Joined Cases C-38/90 and C-151/90 Lomas and Others [1992] ECR I-1781.
12 In that judgment, the Court also ruled that the declaration that Article 4(1) and (2) of Regulation No 1633/84 was invalid could not be relied on with effect from a date prior to that of the judgment, except by traders or those entitled through them who initiated proceedings or made an equivalent complaint under the applicable national law before that date (paragraph 30 and point 2 of the operative part).
26 Considering that the dispute involved an assessment of the validity of the Community rules in question and raised issues concerning the interpretation of Community law, the High Court of Justice, Queen' s Bench Division, decided to stay proceedings and referred the following questions to the Court of Justice for a preliminary ruling:
"1. Is Article 4(1) of Commission Regulation (EEC) No 1633/84 (as amended by Article 1 of Commission Regulation (EEC) No 1922/92) invalid as being, inter alia, ultra vires Article 24(5) of Council Regulation (EEC) No 3013/89 and/or in contravention of the principles of proportionality and legal certainty in so far as:
(a) operators electing to pay clawback on the basis of the first subparagraph of Article 4(1) are required, in accordance with the fourth subparagraph of Article 4(1), to provide proof satisfactory to the competent national authorities of the amount of premium actually granted for the products subject to the said clawback?
(b) the only alternative for operators who are unable to provide such proof is to elect under the second subparagraph of Article 4(1) to be charged an amount of clawback which is fixed equal to the average amount of the premiums fixed for the week of departure of the products and the three previous weeks?
2. If the answer to Question 1(a) is No, what is the nature of the proof that may be required of the operators by the competent national authorities?
3. In relation to claims for repayment of clawback paid prior to 10 March 1992, is paragraph 30 of the judgment of the Court of Justice in Joined Cases C-38/90 and C-151/90 R v Lomas [and Others] to be understood as permitting traders who initiated proceedings or made an equivalent complaint under the applicable national law prior to that date to rely upon the invalidity of Articles 4(1) and 4(2) of Commission Regulation (EEC) No 1633/84:
(a) only with regard to the charging of clawback in respect of periods subsequent to the date of initiation of proceedings or the making of an equivalent complaint; or
(b) with regard also to the charging of clawback in respect of periods prior to the initiation of proceedings or the making of an equivalent complaint, subject to any applicable limitation period; or
(c) with regard to the charging of clawback in respect of some other period and, if so, which?
4. Is Article 2 of Commission Regulation (EEC) No 1922/92 invalid on the grounds, inter alia, of contravening the principles of proportionality and legal certainty in so far as:
(a) operators electing to claim reimbursement on the basis of the first subparagraph of Article 2(1) are required, in accordance with Article 2(2), to provide a specification of the premium actually granted for the same products that are subject to the clawback and proof satisfactory to the competent national authorities thereof?
(b) the only alternative for operators who are unable to provide such specification and proof is to elect under the second subparagraph of Article 2(1) to be reimbursed the difference between the clawback actually paid and the average amount of the premiums fixed for the week of departure of the products and the three previous weeks?
5. If the answer to Question 4(a) is No, what is the nature of the proof that may be required of the operators by the competent national authorities?
6. In determining a claim by an operator for reimbursement of clawback in proceedings brought in a national court:
(a) what substantive rules of Community law (if any) apply in determining the amount which is to be reimbursed?
(b) is the national court entitled or obliged, as a matter of Community law, to take account of the following factors (and, if so, which), each of which may be capable as a matter of national law of diminishing or extinguishing the liability of the competent national authority:
(i) the principle that the plaintiff has the burden of proving as a matter of fact the existence and extent of the overpayment alleged;
(ii) the fact that the sums, except where they were paid under protest, were paid under a mistake of law;
(iii) the fact that repayment of the sums overpaid may constitute, wholly or partially, unjust enrichment of the operator;
(iv) the limitation periods contained in Articles 2(2) and 14 of Council Regulation (EEC) No 1430/79 (as amended) and in any applicable national legislation?"
Questions 1 and 4
49 It follows that, subject to certain rules concerning time-limits, Regulation No 1922/92 merely provides that traders must supply proof to the satisfaction of the competent United Kingdom authorities of the amount of the premium actually granted for the products concerned.
50 Moreover, Regulation No 1922/92 leaves to those national authorities the task of deciding whether the proof supplied by traders is satisfactory.
51 In the absence of any Community legislation on the matter, the United Kingdom authorities must base their decision on national law, subject to the limits imposed by Community law.
52 It is important to note in that regard that, in accordance with the duty of cooperation in good faith imposed on the Member States by Article 5 of the EC Treaty, the national authorities may not undermine either the effect or the effectiveness of Community law. The Court has consistently held that detailed procedural rules laid down by the applicable national law cannot therefore be less favourable than those governing similar domestic procedures nor render virtually impossible or excessively difficult the implementation of Community legislation and thereby affect the exercise of rights conferred by the Community legal system (see, most recently, the judgment in Case C-312/93 Peterbroeck v Belgian State [1995] ECR I-0000).
54 By its third question, the national court seeks in substance to ascertain whether paragraph 30 of the judgment in Lomas and Others means that an exporter fulfilling the conditions set out therein may claim reimbursement only of clawback unduly charged after the date on which he brought legal proceedings or also of clawback unduly charged before that date.
55 In principle, a judgment of the Court in proceedings for a preliminary ruling declaring a Community act to be invalid takes effect, like a judgment annulling an act, from the date on which the act entered into force, with all the consequences which that entails, in particular, for charges levied pursuant to the measure declared invalid.
56 The Court may, however, limit in the judgment itself the temporal effects of a preliminary ruling declaring a Community regulation invalid, where that is justified by overriding considerations of legal certainty. That power is inferred from an interpretation of Articles 173, 174 and 177 of the Treaty, taken together, the reference for a preliminary ruling on the validity of an act and the action for annulment being the two mechanisms provided by the Treaty for reviewing the legality of legislation.
57 It is for the Court, where it exercises the power to limit the effect on past events of a declaration in preliminary ruling proceedings that a Community regulation is invalid, to decide whether an exception to that temporal limitation of the effect of its judgment is to be made in favour of the party to the main proceedings which brought an action before the national court against the national measure implementing the regulation, or whether, conversely, a declaration of invalidity applicable only to the future is an adequate remedy even for that party.
58 When it undertakes that assessment, the Court is concerned in particular to ensure that the persons concerned are not deprived of the right to effective judicial protection in the event of a breach of Community law by the institutions and that the practical effect of Article 177 is not jeopardized (see the judgment in Case C-228/92 Roquette Frères v Hauptzollamt Geldern [1994] ECR I-1445, paragraph 27).
59 In Lomas and Others, the Court held that if the invalidity of Article 4(1) and (2) of Regulation No 1633/84 could be relied on in support of claims concerning the charging of the clawback in respect of periods prior to the date of the preliminary ruling on invalidity, it would give rise to significant financial consequences and serious organizational difficulties, and that overriding considerations of legal certainty precluded legal situations which had produced all their effects in the past from being called in question. However, the Court considered it necessary to derogate from that principle in favour of traders or those entitled through them who had asserted their rights in due time.
60 Accordingly, the Court held that the invalidity of Article 4(1) and (2) of Regulation No 1633/84 could not be relied on with effect prior to the date of that judgment, except by traders or those entitled through them who had initiated proceedings or made an equivalent complaint under the applicable national law before that date (paragraph 30).
61 On the other hand, the Court did not set any further limits on the initiation by the traders concerned of proceedings before the national court for the reimbursement of clawback unduly paid before delivery of the judgment in the preliminary ruling proceedings declaring Community legislation invalid, and in particular it did not set limits to the period of payment of the clawback in respect of which individuals may rely upon the Court' s ruling on invalidity.
62 In those circumstances, if the traders concerned are not to be deprived of the right to effective judicial protection in the event of a breach of Community law by the institutions, they must be able to rely on the invalidity of Article 4(1) and (2) of Regulation No 1633/84 in respect of periods not only subsequent to, but also prior to, the bringing of an action or the making of an equivalent complaint, in principle as from the date on which the provisions declared invalid by the Court entered into force.
63 In the absence of Community rules on the matter, claims for reimbursement of clawback unduly charged must be made in accordance with the detailed procedural rules laid down by national law, always provided, as the Court has consistently held, that such rules are not less favourable than those governing similar domestic claims and are not so framed as to render virtually impossible or excessively difficult the exercise of rights conferred by the Community legal system (see, for example, the judgments in Case C-338/91 Steenhorst-Neerings v Bestuur van de Berijfsvereniging voor Detailhandel, Ambachten en Huisvrouwen [1993] ECR I-5475, paragraph 15, in Case C-410/92 Johnson v Chief Adjudication Officer [1994] ECR I-5483, paragraph 21, and in Peterbroeck, cited above, paragraph 12.)
64 In particular, Community law does not preclude the application of a period of limitation or prescription laid down by a rule of national law which restricts the period prior to the bringing of the claim in the national court in respect of which reimbursement of undue payments may be obtained, where that rule is not discriminatory and does not prejudice the actual right conferred on individuals by a preliminary ruling on invalidity (see Johnson, cited above).
65 On that point, the Court has already held in Johnson that application of a national rule which does not preclude the bringing of legal proceedings, but merely limits to one year the period prior to submission of the claim in respect of which benefits may be obtained, does not adversely affect the actual right conferred on individuals to rely on Community law.
66 Accordingly, the answer to Question 3 must be that, as regards claims for repayment of clawback unduly paid prior to 10 March 1992, paragraph 30 of the judgment in Lomas and Others is to be interpreted as meaning that traders or those entitled through them who prior to that date initiated proceedings or made an equivalent complaint under the applicable national law may rely on the invalidity of Article 4(1) and (2) of Regulation No 1633/84 as from the date of its entry into force, subject to the application, within the limits set by Community law, of any national rules limiting the period prior to the submission of a claim in respect of which repayment of a sum unduly paid may be obtained.
Question 6
71 Furthermore, it is settled case-law that, in the absence of Community legislation governing a matter, it is for the domestic legal system of each Member State to lay down the detailed procedural rules governing actions for recovery of sums unduly paid, on the understanding however that such rules may not be less favourable than those governing similar domestic actions and may in no circumstances be so framed as to render virtually impossible or excessively difficult the exercise of rights conferred by Community law (see, most recently, Peterbroeck, cited above, paragraph 12).