C-30/66

JUDGMENT OF THE COURT 30 NOVEMBER 19671

Firma Kurt A. Becher

v Commission of the European Communities2 Case 30/66

Summary

1. Procedure — Proceedings in matters arising from non-contractual liability for reparation for the same damage brought both against the EEC and a Member State — Necessity for a decision of the national court before a decision by the Court of Justice

2. Non-contractual liability — Damage resulting from an act illegal under Com­ munity law and the law of a Member State — Existence of a right to reparation against the EEC dependent upon proof of the prior exhaustion of all methods of recourse (EEC Treaty, Article 215)

JUDGMENT OF 30. 11. 1967 — CASE 30/66

address for service in Luxembourg at the Chambers of Georges Reuter, Advocate, 7 avenue de l'Arsenal,

applicant,

v

Commission of the European Communities , assisted by Claus-Dieter Ehlermann, Legal Adviser in the Legal Department of the Commission of the European Communities, with an address for service in Luxembourg at the offices of Henri Manzanarès, Secretary of the Legal Department of the Com­ mission of the European Communities, 2 place de Metz,

defendant,

Issues of fact and of law

I — Summary of the facts In order to co-ordinate prices in trade between the Member States Regulation The facts may be summarized as fol­ No 19 provides that the State into the lows: territory of which goods are imported The applicant is a German importer of shall impose a levy. This levy corres­ cereals. Among other things, it makes ponds to the difference between the free- regular importations into 'the Federal at-frontier price of the exporting coun­ Republic of maize originating in France. try, fixed daily by the Commission, and Since 31 July 1962, these imports have the threshold price, fixed by the import­ been made under Regulation No 19 of ing country. When the free-at-frontier the Council, on the gradual establish­ price is equal to or higher than the ment of a common organization of the threshold price, the levy is fixed at market in cereals. zero.

BECHER v COMMISSION

lation No 19. portation of cereals is issued by the In its judgment of 1 July 1965 in EVSt upon request. Joined Cases 106 and 107/63, the Court Article 2 (1) of Regulation No 31/63 of Justice held the decision of the Com of the Council provides for the possi mission of 3 October to be illegal and bility of fixing the rate of levy in ad annulled it. vance in the import licence in the case The applicant carried out seven con of the importation of maize originating tracts for the purchase of French maize

applicable to maize originating in France contract the supplier repurchased the of 0.00 DM. On the same day the ap maize at the price ruling on the day of plicant company lodged two separate re-purchase, with reimbursement of the applications with the EVSt for the issue difference between that price and the of import licences for the importation original purchase price. of French maize with the rate of levy On 7 December 1966 the applicant fixed in advance at 0.00 DM for the company made an application for dam month of January 1964. In all, import ages against the Commission. licences for a total of 126000 metric tons were applied for on 1 October for

1 October, in accordance with Article the date of the institution of pro 22 (1) of Regulation No 19, and in ceedings; cluding a suspension of import licen 2. Order the defendant to pay the ces. costs.' The applicant lodged an appeal against the refusal of the EVSt with the Ver In its -reply, the applicant claims that the Court should: waltungsgericht (Administrative Court), Frankfurt 11/2/815/64). The Ver '1.

JUDGMENT OF 30. 11. 1967 — CASE 30/66

2. Order the defendant to pay the protect commercial interests. As Regu­ costs.' lation No 19 obliges importers actually The defendant contends that the Court to use the import licences and to pay should: the various deposits, the right of im­ porters to the strict observance of the — dismiss the application as unfounded; and rules of law laid down and the fixing of prices resulting therefrom must corre­ — order the applicant to pay the costs.' spond to the considerable risks arising from that obligation. The Commission III — Submissions of the has thus failed to carry out its duty parties towards the applicant to take a fair and proper decision.

The applicant states that, by its decis­ According to me applicant, the illegal decision of the Commission is the result ion of 3 October 1963, which was held by the Court to be illegal, the Com­ of improper conduct on the part of its mission has caused it damage which members or officials who, before ap­ must be made good in accordance with proving the protective measure, failed to Article 215 of the Treaty. It alleges make an exact and careful analysis of the facts in order to ascertain whether that its application for reparation is the conditions laid down in Article 22 necessary as the fact that numerous other German importers have already in­ of Regulation No 19 were satisfied in stituted proceedings against the Com­ every respect. The facts of the case mission for the same reason shows that should have led the Commission to make

BECHER v COMMISSION

In a more general the Comimission itself wished to prevent manner, Article 18 (1) is not intended the unforeseen consequences of its de to protect the interests of importers, as cision, appropriate in itself, of 27 Sep the principle of free movement of goods tember not to fix a free-at-frontier price, was conceived in the interests of the which again gives rise to liability on Community and not in the particular its part. interests of trade. It is not possible to

able only if the rule infringed was in the law of public liability in Germany tended to protect the interests of the and Italy. applicant. The duty of the Commission In its reply, the applicant states: to verify the legality of protective meas — that by holding in its judgment of 1 ures was not laid down in the interests July 1965 that the illegal decision was of the applicant, but in the collective of direct and individual concern to interest of the proper functioning of the the 27 importers in question the common organization of the markets in Court established that the provisions

as is evidenced both by the opinion lation No 16/64, claiming that all these of the Advocate-General in Case provisions have the same objective as the 25/65 and by the judgment in Joined power conferred by Article 169 of the Cases 9 and 12/60; Treaty, that is to say, a power to review — the free movement of goods as pro the legality of the actions of Member vided for by Regulation No 19 is

stipulated not only in the general intervention agencies must purchase interest of the Member States, but substantial quantities of indigenous also so that the individuals subject to cereals; this interpretation is based on the rules of the common organization both the opinion of the Advocate- of the markets may possess rights and General and the judgment of the enjoy the corresponding legal pro Court in Joined Cases 106 and 107/ tection to the extent to which obliga 63 (Toepfer), but even if it appears tions are imposed upon them (see the that such interpretation is mistaken, judgment in Case 26/62). there is still no wrongful act.

Feram, Vloeberghs, Chasse and Plau tective measure, during which time mann (25/62). the Member States must be consult The question of the existence of a ed, the agreement of the various de wrongful act or omission and the de partments of the Commission must gree of blame necessary to provide the be obtained, a collective decision basis of a right to reparation depends must foe taken and that decision of on the nature of the public activity in the Commission must 'be notified to question and the circumstances in which the Member State concerned, that that activity is carried on. such a decision, which moreover must In this connexion the defendant states: always be taken without any warning, — tnat it interpreted Article 22 of cannot be subject to the same re Regulation No 19 as meaning that quirements as a normal measure and there is a serious disturbance of the that mistakes likely to give rise to market caused by imports and likely public liability must show a marked to endanger the objectives laid down degree of seriousness; in Article 39 of the Treaty when — that in putting forward the argu there is a danger that the imports ments already advanced in Joined may cause prices to fall to the level Cases 106 and 107/63 (Toepfer) the of the intervention price, so that the defendant claims that its attitude was

legally defensible and that it could the facts upon which it now relies have regarded the German market as that it disputes whether this is so being threatened by a serious dis and requests the production of all turbance in the sense mentioned the documents in question; above; — that it folows unequivocally from — that its decision was not motivated by the judgment of the Court of 1 July reasons foreign to the objective of 1965 that the defendant's allegation Article 22, that it also denies that as to the complexity of the tasks the adoption of protective measures which it must carry out before taking

correct; the Management Committee for — that, when deciding on the legality Cereals were of the same opinion of a protective measure on its own and that, because of this, it is not responsibility, the defendant may not possible to complain of negligence merely rely on the legal argument of on the part of the defendant capable the Member State whose very actions of amounting to a wrongful act or are being reviewed; omission; — that the Management Committee, — that, if the Court considers, however, which merely gives an expert opinion, that there was negligence on the part cannot exonerate it from a respon of the defendant, the latter relies sibility which devolves upon it and upon the fact that under the terms it alone; of Article 22 as regards a Member — that no common principle exists ac State it carries out only a duty of cording to which administrative liabil supervision; that the Advocates-Gen ity is not involved in the case of eral have stated time and again that slight negligence, that in any event carrying out such duty does not re such a principle does not exist in sult in public liability except in German law, that the defendant case of 'gross malfeasance' and that wrongly refers to the case-law of the it is sufficiently clear from the fore Court in support of such a principle, going observations that the defendant that that case-law only deals with a cannot be accused of such conduct in failure to act on the part of the super

JUDGMENT OF 30. 11. 1967 — CASE 30/66

D — The amount of the damage situation such as that obtaining on 1 October 1963 was certain to give rise The applicant states mat it applied for to protective measures and it should it­ two import licences on 1 October 1963 self therefore bear the losses resulting for January 1964 in respect of the from the cancellation and repudiation of quantities of maize shown in its appli­ the contracts of purchase made on 1 cation and that it bought on the French October. The defendant refers in this market the quantities of maize also connexion to the judgment in Case 3/65 shown in anticipation of receiving the (Espérance-Longdoz) and the opinions licences applied for. The refusal to in Joined Cases 9 and 12/60 (Vloe­ issue the said licences following the berghs) and in Joined Cases 19 and 20/­ protective measure of the Federal Gov- 60 and 2 and 3/61 (Fives—Lille—Cail).

BECHER v COMMISSION

the German authorities and the Com­ In its reply the applicant disputes the mission were going to act illegally. existence of a principle common to the Furthermore, the applicant claims that law of the Member States, as claimed by it concluded its contracts before 2.15 the defendant; It states that there is p.m. on 1 October 1963. It considers no question in this case of a loss of that the burden of proof on this point benefits which are contrary to public falls on the Commission. For the rest it policy. states that the EVSt should have notified The decisions of the Commission with by telex the content of the new notice regard to the free-at-frontier prices were to all the importers who had applied for mandatory in law. As the decision of 27 import licences. September 1963 did not fix a free-at- Ob) The second point raised by the de­ frontier price it was never reversed. The fendant concerns the alleged failure to applicant was therefore entitled to take make a profit. It relies upon the prin­ this decision, which moreover, corre­ ciple, which it claims to be common to sponds perfectly to reality, as the basis the laws on liability of the Member of its provisions, the fact that the levy States, according to which no repara­ resulting therefrom was to its advantage tion can foe claimed for the loss of being irrelevant. The advantage obtained benefits which are contrary to public by a strict observance of all the legal policy. As 'the object of Regulation No provisions remains legitimate even when 19 is to compensate for the difference it is greater than usual. The commercial between prices ruling in exporting coun­ margin of 3 DM per metric ton alleged tries and those Tilling in importing coun­ by the Commission is unacceptable, hav­ tries (see Articles 2, 3 and 10 as well as ing regard to the principle of the free the fifth and ninth recitals in the pre­ economy of the market. Moreover a amble), the fact of importing with a system of fixed prices does not exist. zero levy cereals which could be pur­ In its rejoinder, the defendant considers chased in the exporting country at a that the principles of the judgment of price considerably lower than the thres­ the Court of 14 July 1967 are applicable hold price of the importing country is in the present case, which is disting­ incompatible with the principles of the uished solely by the fact that it involves said regulation. It is even less in ac­ a fourth head of damages relating to cordance with the said principles that the sale in transit abroad of a part of the importers should obtain from this the maize bought by the applicant on 1

As the applicant requested import licences on 1 October for the following January and purchased certain quantities of maize in anticipation of the grant of the said licences, it is claimed that the Commission should be required to make good the injury caused to it which consisted on the one hand of the penalties paid for repudiation of the contracts and the loss resulting from importation on unfavourable conditions of quantities actually delivered and, on the other hand, in the loss of profit resulting from the impossibility of importing the cereals at a zero levy.

The applicant complains that the Commission incorrectly applied Article 22 of Regulation No 19 and that a correct application would have required the abolition and not the retention of the German protective measure which, according to it, would have led to the non-execution, if not the complete dis­ appearance, of the said measure. The defendant replies that its conduct was

BECHER v COMMISSION

not such as to render it liable because, on the one hand, it did not amount to a wrongful act or omission and, on the other, the rule of law which it is supposed to have infringed is not intended to protect interests such as those of the applicant.

The effect and scope of the decision of 3 October 1963 which is the object of the complaint should be considered within the framework of the common organization of the markets in cereals and particularly in relation to the appli­ cation which was made of this system by the decision of the Commission of 27 September 1963 against the consequences of which the decision of 3 October was intended to protect the German market.

It appears from the recitals in the preamble to its decision of 3 October 1963 that the Commission, owing to a lack of knowledge concerning the level of prices for the new harvest in France, had not taken into account in its de­ cision of 27 September 1963 the effect of these prices on the formation of prices on the French market and had based that decision solely on the price of the maize, sorghum and millet of the old harvest originating in France, delivered free-at-frontier in Germany, which were higher than the threshold price fixed by the Federal Republic of Germany. The said decision of 27 September 1963 did not thus fix free-at-frontier prices for these products and there followed on 1 October 1963 a zero levy for imports originating in France into the Federal Republic of Germany. As Regulation No 31/63 of the Council allowed, as from 1 October, advance fixing of levies for maize at the rate in force on the day of lodging of the request for licences for imports

JUDGMENT OF 30. 11. 1967 — CASE 30/66

to be effected three months later, the applicant took advantage of this option to benefit from the prices of the new harvest which were lower than both the free-at-frontier prices fixed by the decision of 27 September and the German threshold price in force and, on 1 October 1963, it lodged with the Einfuhr- und Vorratsstelle, the competent department of the Federal Republic of Ger­ many, applications for licences with the levy fixed in advance in respect of relatively large quantities of the said products.

The Government of the Federal Republic of Germany considered that the issue of these licences would have led to the importation into that State during the month of January of large quantities of maize at prices below the threshold price and on 1 October 1963 adopted and notified to the Commis­ sion the protective measure consisting in the suspension as from that date of the issue of import licences. By its decision of 3 October the Commission kept the said protective measure in force up to and including 4 October.

BECHER v COMMISSION

notified to it to conduct as exhaustive an examination as that required to be made by the Governments of the Member States and bears independent responsibility for the retention of a protective measure.

With regard to the argument that the rule of law which is infringed is not intended to protect the interests of the applicant, the said Article 22, together with the other provisions of Regulation No 19, is directed, according to the wording of the fourth recital in the preamble to the regulation, to ensuring appropriate support for agricultural markets during the transitional period on the one hand, and to allowing the progressive establishment of a single market by making possible the development of the free movement of goods on the other. Furthermore, the interests of the producers in the Member States and of free trade between these States are expressly mentioned in the preamble to the said regulation. It appears in particular from Article 18 that the exercise of freedom of trade between States is subject only to the general requirements laid down by its own provisions and those of subsequent regu­ lations. Article 22 constitutes an exception to these general rules and conse­ quently an infringement of that article must be regarded as an infringement of those rules and of the interests which they are intended to protect. The fact that these interests are of a general nature does not prevent their includ­ ing the interests of individual undertakings such as the applicant which as cereal importers are parties engaged in intra-Community trade. Although the application of the rules of law in question is not in general capable of being of direct and individual concern to the said undertakings, that does not pre­ vent the possibility that the protection of their interests may be—as in the present case it is in fact—intended by those rules of law. The defendant's argument that the rule of law contained in Article 22 of Regulation No 19 is not directed towards the protection of the interests of the applicant cannot therefore be accepted.

As to the first category, as the applicant purchased the maize in anticipation of importation subject to a zero levy, its injury was caused by the necessity to import subject to the payment of a levy. However, the refusal to grant the import licences subject to a zero levy in respect of this transaction had no legal basis, as the decision of the Commission of 3 October had been annulled by the abovementioned judgment of 1 July 1965 and, furthermore, as, according to the documents provided by the applicant, the German protective measure had been declared illegal by the German courts for reasons based on German law. Consequently the charging of the levy, made in the name of and for the benefit of the Treasury of the Federal Republic of Germany, is thus shown to be contrary to both Community law and German law. In these circumstances, the question arises whether the damage alleged would be made good by the repayment of the sums improperly paid by way of levy.

During the oral procedure, the existence in the present case of the right to such repayment was put in doubt by the applicant. The Court cannot, how­ ever, rely on such a statement to accept the conclusive nature of the alleged damage. It is proper, therefore, to ask the applicant to prove that it has ex­ hausted all methods of recourse both administrative and judicial under the relevant national law to obtain reimbursement of the sums improperly paid by way of levy. Only after production of such evidence would there be reason to consider whether any injury exists which the Community should make good.

It is not possible, however, to argue from the said requests for information that a diligent importer was obliged to keep himself informed of the situation at all times. It appears both from the wording of Article 17 of Regulation No 19 and from the account of the functioning of the common organization of the markets provided by the defendant that the levy announced at the beginning of the day normally remains applicable during the whole day. In these circumstances, the requirements of the production of proof either that the importer purchased the maize on 1 October 1963 before 2.15 p.m. or that he could not have been aware of the withdrawal of the zero levy, which moreover was illegal, is equivalent to a reversal of the burden of proof. As such a reversal is not justified, the defendant must be allowed to prove, where appropriate, that the purchases of maize were made with knowledge of the said withdrawal, the right to produce evidence to the contrary being reserved to the applicant.

As to the second category of injury mentioned above, the applicant alleges that it has suffered injury because of both the expense which it has had to bear in repudiating the said contracts or the losses suffered on resale as well as the loss of profit which it has suffered in respect of the quantities of maize purchased but not imported in consequence of the protective measure.

The penalties paid and the losses suffered on resale are the direct conse­ quence, on the one hand, of the confidence of the applicant in the proper application of the Regulation No. 19 and, on the other hand, of the unfore­ seen factor constituted by the protective measure which was retained by the decision of the Commission of 3 October 1963. In purchasing the quantities of maize in question on 1 October 1963, the applicant legitimately relied upon the system of levies in force in order to enter into contractual obligations in respect of imports into the Federal Rebublic. It thus has the right to be re­ imbursed for the whole of the injury suffered through payment of penalties, unless the amount of such penalties was higher than necessary.

However, the applicant has informed the Court that the injury alleged is the subject of two actions for damages, one against the Federal Republic of Germany before a German court and the other against the Community before the Court of Justice. It is necessary to avoid the applicant's being insufficiently or excessively compensated for the same damage by the different assessment of two different courts applying different rules of law. Before determining the damage for which the Community should be held liable, it is necessary for the national court to have the opportunity to give judgment on any liability on the part of the Federal Republic of Germany. This being the case, final judg­ ment cannot be given before the applicant has produced the decision of the national court on this matter, which may be done independently of the evidence asked of the applicant to the effect that it has exhausted all methods of recourse for the recovery of the amounts improperly paid by way of levy. Furthermore, if it were established that such recovery was possible, this fact might have consequences bearing upon the calculation of the damages con­ cerning the second category. However, the decisive nature of the said evi­ dence required does not prevent the applicant from producing the other evidence previously indicated in the meantime.

However, with regard to the nature of the legal decisions to be produced, the applicant requested further that it should be stated whether on the one hand it would suffice to produce the decision in a test case or, on the other hand,

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to Article 215 of the Treaty establishing the European Economic Community; Having regard to Regulation No 19 of the Council of the said Community dated 4 April 1962, especially Article 22; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities;

THE COURT

by way of interlocutory judgment, hereby :

I. Orders the applicant to send to the Court the decisions given by the relevant courts of the Federal Republic of Germany concerning its action for damages against the Federal Republic;

2. Orders the applicant to send to the Court evidence in writing that it has exhausted all methods of recourse, both administrative and judicial, for obtaining reimbursement of the sums improperly paid to the Treasury of the Federal Republic of Germany by way of levy;

OPINION OF MR GAND — CASE 30/66

OPINION OF MR ADVOCATE-GENERAL GAND

DELIVERED ON 7 NOVEMBER 19671

Mr President, 107/63, Toepfer and Getreide-Import, Members of the Court Rec. 1965, p. 525), the Becher under­ taking made an application for damages The application made by Firma Becher against the Commission on the basis of is one of a number of cases which have the second paragraph of Article 215 of arisen as a result of the decision of the the EEC Treaty. The written pro­ Commission of the EEC of 3 October cedure was not concluded until after 1963 authorizing the Government of the your judgment was given on 14 July Federal Republic of Germany to main­ last (Joined Cases 5, 7 and 13 to 24/66, tain until 4 October the protective meas­ Kampffmeyer), deciding upon similar ures which it had taken on the previous applications by other importers. The 1 October with a view to suspending the case is therefore to a large degree issue of import licences for maize. simplified and prejudged on certain The applicant, which is an importer of points, but it appears unfortunately that cereals with its registered office at your judgment decided certain questions Bremen, on 1 October 1963 lodged with only to give rise to others, since, as was the Einfuhr- und Vorratsstelle, the com­ seen in the oral procedure, the applicant petent German organization, two appli­ requests that you should specify or even cations for the issue of licences for the modify certain solutions which you import in January 1964 of French maize then adopted. I shall therefore briefly at a rate of levy, fixed in advance, of recall the general principles of your 0 DM; these applications were rejected judgment of 14 July last in order to see on 3 October. how they apply to the case of the Following the annulment by your judg­ Becher undertaking. ment of 1 July 1965 of the decision of You decided in the first place that the the Commission (Joined Cases 106 and Commission's decision validating the