Hubert Wachauf v Bundesamt für Ernährung und Forstwirtschaft.
Date: 1989-07-13
9 The very wording of that provision shows that it relates to production units which satisfy two conditions, namely that they should be operated by a producer, that is to say a person who sells milk or other milk products directly to the consumer or who supplies the purchaser ( Article 12(c ) of Regulation No 857/84 ) and that they should be located within the geographical territory of the Community . The concept of a "holding" does not, however, presuppose that, in the event of the production units in question being leased, the dairy herd and the technical facilities necessary for milk production have been provided by the lessor or that, under the terms of the tenancy agreement, those production units are to be utilized specifically for milk production .
11 The reply to be given to the first question must therefore be that the term "holding" in Article 12(d ) of Council Regulation No 857/84 of 31 March 1984 covers all the agricultural production units which are the subject of a lease, even if those units, as leased, had neither dairy cows nor the technical facilities necessary for milk production and the lease provided for no obligation on the part of the lessee to engage in milk production .
The second question
13 According to Article 7(1 ) of Regulation No 857/74, as amended by Council Regulation No 590/85 of 26 February 1985 ( Official Journal 1985, L 68, p . 1 ), "where a holding is sold, leased or transferred by inheritance, all or part of the corresponding reference quantity ( that is to say the quantity exempt from the additional levy ) shall be transferred to the purchaser, tenant or heir according to procedures to be determined ". However, paragraph ( 4 ) of that article provides that "in the case of rural leases due to expire, where the lessee is not entitled to an extension of the lease on similar terms, Member States may provide that all or part of the reference quantity corresponding to the holding or the part thereof which forms the subject of the lease shall be put at the disposal of the departing lessee if he intends to continue milk production ". It is apparent from the provisions quoted, considered as a whole, that the Community legislature intended that at the end of the lease the reference quantity should in principle return to the lessor who retakes possession of the holding, subject, however, to the Member States' power to allocate all or part of the reference quantity to the departing lessee .
15 The surrender of a tenanted holding upon the expiry of a lease has comparable legal effects, within the meaning of Article 5(3 ) of Regulation No 1371/84, to those brought about by the transfer of the holding upon the grant of the lease, for both transactions entail a change in the possession of the production units in question within the contractual relations created by the lease . Consequently, the surrender, upon the expiry of the lease, of leased agricultural production units is a case covered by Article 5(3 ) of Regulation No 1371/84, provided that upon the grant of the lease their transfer falls under Article 5(1 ), which is the case when a "holding" within the meaning of Article 12(d ) of Regulation No 857/84, as interpreted above in reply to the first question, is involved .
17 The Court has consistently held, in particular in its judgment of 13 December 1979 in Case 44/79 Hauer v Land Rheinland Pfalz (( 1979 )) ECR 3727, that fundamental rights form an integral part of the general principles of the law, the observance of which is ensured by the Court . In safeguarding those rights, the Court has to look to the constitutional traditions common to the Member States, so that measures which are incompatible with the fundamental rights recognized by the constitutions of those States may not find acceptance in the Community . International treaties concerning the protection of human rights on which the Member States have collaborated or to which they have acceded can also supply guidelines to which regard should be had in the context of Community law .
18 The fundamental rights recognized by the Court are not absolute, however, but must be considered in relation to their social function . Consequently, restrictions may be imposed on the exercise of those rights, in particular in the context of a common organization of a market, provided that those restrictions in fact correspond to objectives of general interest pursued by the Community and do not constitute, with regard to the aim pursued, a disproportionate and intolerable interference, impairing the very substance of those rights .
19 Having regard to those criteria, it must be observed that Community rules which, upon the expiry of the lease, had the effect of depriving the lessee, without compensation, of the fruits of his labour and of his investments in the tenanted holding would be incompatible with the requirements of the protection of fundamental rights in the Community legal order . Since those requirements are also binding on the Member States when they implement Community rules, the Member States must, as far as possible, apply those rules in accordance with those requirements .
22 The Community regulations in question accordingly leave the competent national authorities a sufficiently wide margin of appreciation to enable them to apply those rules in a manner consistent with the requirements of the protection of fundamental rights, either by giving the lessee the opportunity of keeping all or part of the reference quantity if he intends to continue milk production, or by compensating him if he undertakes to abandon such production definitively .
23 The submission that the rules in question conflict with the requirements of the protection of fundamental rights in the Community legal order must therefore be rejected .