C-64/76

DUMORTIER FRERES v COUNCIL

equality of treatment existing prior to States to which the second paragraph the adoption of the contested measure of Article 215 of the EEC Treaty without sufficient justification. refers cannot be relied on to deduce

5. In the context of an action for an obligation to make good every harmful consequence, even a remote damages, in order to decide upon the existence or extent of the damage one, of unlawful legislation; the alleged by the applicant, it is damage alleged must be a sufficiently necessary to take into account, in an direct consequence of the unlawful conduct of the institution concerned. appropriate case, the fact that the applicant was able to pass on in his 7. It follows from the principles common selling prices the disadvantages for to the legal systems of the Member which he claims compensation. States, to which the second paragraph 6. In the field of non-contractual of Article 215 of the EEC Treaty liability of public authorities for refers, that in the context of an action legislative measures, the principles for damages a claim for interest is common to the laws of the Member generally admissible.

In Joined Cases 64 and 113/76, 167 and 239/78, 27, 28 and 45/79,

P. DUMORTIER FRÈRES, S.A., Tourcoing (Case 64/76),

MAÏSERIES du Nord, S.A., Marquette-lez-Lille (Case 113/76),

JUDGMENT OF 4. 10. 1979 — JOINED CASES 64 AND 113/76, 167 AND 239/78, 27, 28 AND 45/79

an address for service in Luxembourg at the Chambers of E. Arendt, Centre Louvigny, 34/B/IV, Rue Phillippe II, applicants, v

Council OF tut; European Communities, represented by D. Vignes, Director of the Legal Department, acting as Agent, assisted by Y. Cretien, an Administrator in the said department, acting as Joint Agent, with an address for service in Luxembourg at the office of J. N. Van den Houten, Director of the Legal Department of the European Investment Bank, 2 Place de Metz,

defendant,

APPLICATIONS under Article 178 and the second paragraph of Article 215 of the EEC Treaty,

THE COURT

DUMORTIER FRÈRES v COUNCIL

Moulins et Huileries de Pont-à-Mousson industry. The main features of those and Société Cooperative "Providence regulations are: Agricole de la Champagne" v Office National Interprofessionnel des Céréales — Equality of treatment between the [1977] ECR 1795, the Court decided processing of maize into gritz or into that: starch;

JUDGMENT OF 4. 10.1979 — JOINED CASKS 64 AND 113/76, 167 AND 239/78, 27, 28 AND 45/79

2 December 1976 (Case 113/76), be stayed "until the Council has adopted 1 August 1978 (Case 167/78), 30 Oc­ the measures which it is required to take tober 1978 (Case 239/78), 19 February in pursuance of that judgment". By an 1979 (Cases 27 and 28/79) and 20 application and amended claim lodged March 1979 (Case 45/79), seek in on 19 February 1979, the applicants particular an order that the European asked for the proceedings to be Economic Community compensate the reopened. The Council submitted its applicants for the damage arising from observations regarding the reopening of the abolition, as from 1 August 1975, of the proceedings in these cases on the production refund for maize gritz. 20 April 1979.

4. All the applicants also commenced 5. A claim for damages following the proceedings in the French administrative abolition of production refunds for courts, seeking annulment of the maize gritz is also the main issue in decisions of the Office National Inter­ Joined Cases 241, 242 and 245 to 250/78 professionnel des Céréales (ONIC) D.G.V. and Others v Council and rejecting their claims for payment of the Commission. production refunds for maize gritz intended for brewing.

6. By an order of 12 June 1979 the The cases before the French courts Court dectued to join the present cases concerning the applicants in Cases for the purpose of the oral procedure. 167/78 and 28/78 were the subject of references for preliminary rulings, which led to the aforesaid judgment of the Court of 19 October 1977. Following 7. After hearing the report of the that judgment, the administrative courts Judge-Rapporteur and the views of the in question annulled the decisions given Advocate General, the Court decided to by ONIC refusing the refund in those open the oral procedure without any two cases. In the first case, ONIC preparatory inquiry. However, the Court appealed to the French Conseil d'Etat asked the parties to reply to certain against the judgment of the ad­ questions. ministrative court.

— In the alternative, in Cases 64 and — Order the defendant to pay the costs. 113/76, 27, 28 and 45/79, award on the same ground, in the event of interest to compensate for delay in B — The Council claims that the Court payment not being granted, on the should: basis of the current value of the unit of account, namely FF 6.225, but subject to variations in that value on — Dismiss the applications; the day of the judgment of the Court: — Order the applicants to pay the costs. FF 3 156 599.40 (Case 64/76), FF 1 810 399.88 (Case 113/76), FF 7 596 064.30 (Case 27/79), FF 6 254 820.70 (Case 28/79), FF 913 700.00 (Case 45/79); III — Submissions and argu­ ments of the parties — Order the defendant to compensate them, in Cases 64 and 113/76, 167/78, 27 and 45/79, for the other A — Admissibility items of damage arising from the failure to restore that refund, which damage amounts to: FF 2 094 348.60 (Case 64/76), 1. The Council points out that a trader who claims to be entitled to receive from FF 1 171 327.50 (Case 113/76), FF 1 500 000.00 (Case 167/78), a French body a payment to be borne by FF 2 683 288.00 (Case 27/79), the European Agricultural Guidance and FF 1 658 843.82 (Case 45/79); Guarantee Fund must bring an action before the administrative court, in which action such court has unlimited jurisdiction, seeking an order requiring — Declare, in Case 45/79, that the the body responsible for payment to pay failure to restore the refunds forced it the sum in question. the applicant to commence insolvency proceedings and to cease trading permanently pending the restoration However that may be, where an action of equal treatment between the two for an abuse of powers is brought before products by the Council, as from the administrative court at the same time 19 October 1977, its assets having as an action under Article 215 of the

jurisdiction, and an action for damages decisions rejecting their claims for against the Community before the Court payment of refunds. As those actions for of Justice arise concurrently, the Council abuse of powers do not give the body also considers that it must plead the responsible for payment any basis for inadmissibility of the latter action, as it paying, particularly where there is no finds the action before the national court Community legislation stating that the only appropriate one for the same payment should be made, the applicants reasons as those which it has just set out. consider that the Council is contradicting On concurrency of proceedings, the itself when it maintains that there is

Council refers to the judgment of the concurrency of proceedings on the Court of 14 July 1967 in Joined Cases 5, ground that the action for abuse of 7 and 13 to 24/66 Kampffmeyer and powers and the action under Article 215 Others v Commission [1967] ECR 245. of the Treaty have the same objective.

of 19 October 1977, the Court itself laid B — Substance down that a declaration of unlawfulness could not itself lead to a satisfactory result, in the absence of any legal 1. The applicants claim in their provision capable of providing a basis for applications that the Council has not that payment. taken all the measures that are necessary in order to comply with the judgment of the Court of 19 October 1977: the only effect of Regulations Nos 1125 and The applicants recall that the 1127/78 is to prevent any aggravation of Community is not a party to the the damage suffered by those in the proceedings before the national ad­ maize industry as from the date of that ministrative courts, so that neither the Tribunal Administratif nor the Conseil judgment, without however eliminating the damage suffered during the period d'Etat could order payment of the between 1 August 1975 and 19 October refunds in the course of adversary 1977. Those regulations are unlawful proceedings in which a court has because they permitted the continuance unlimited jurisdiction, since such a of the situation created by the regu­ decision could not be relied on against lations which the Court declared invalid. the Community institution, in particular against the European Agricultural Guidance and Guarantee Fund. ONIC is only the body responsible for making payment, a mere intermediary between The applicants express the view that if as the Fund and the recipient of the refund. Thus it would be inconceivable to order regards the future the Council could choose between different methods of that body to pay a refund for which it restoring equality between the two would not be reimbursed or a fortiori to products, it opted itself, in Regulation order it to pay damages for an unlawful Nos 1125 and 1127/78, as it had always act for which it is not responsible. done before 1 August 1975, for the method of granting a refund at the same rate for gritz and for starch. In any case, The applicants conclude that only the as regards the past, since the starch action for liability under Article 245 of manufacturers had drawn refunds, the the Treaty is likely to lead to a satis­ repayment of which could not be factory result. requested, the only option available was to pay the same refunds to those in the maize industry retroactively. For the rest, the principle of the inadmissibility of an action due to the existence of concurrent proceedings, is, in the opinion of the applicants a dero­ gation from the general law and thus Consequently, the applicants consider cannot be invoked when Articles 178 and that they are entitled to maintain that 215 of the Treaty do not entail any observance of the principle of equality limitation upon that legal order. should have led to their being granted Moreover, in French administrative law, during the entire period from 1 August as in the law of the principal Member 1975 to 19 October 1977 production States, no bar to proceedings is created refunds at the same rate as the refunds by the existence of concurrent adversary which had been granted during the same proceedings in which a court has period to the starch industry, with the unlimited jurisdiction. result that the refusal to grant the said

A further item of damage suffered by the applicant in Case 167/78 during the The applicants emphasize that, as ONIC period in dispute is alleged to have been continued during the period in dispute to due to the increase in the price of maize, keep records of the declarations which it was not in fact possible to make concerning the quantities of maize used up for by means of an equivalent for the production of gritz intended for increase in the selling price to the the brewing industry, the basis for the breweries, owing to the abolition of the calculation of that particular head of refund. Consequently, the trading results damage is easy to ascertain, the more so which showed a profit during all the as it is not disputed that following the measures taken in 1975 the maize years preceding 1975, showed a large deficit in 1976, 1977 and during the first industry did not pass on the loss of months of 1978. The combined loss income suffered in its selling prices, the incurred in 1976 and 1977 forced the brewers having resisted any increase applicant to cut its staff as from 1977 in owing to the freezing of the price of beer. order to reduce its general costs and that involved the applicant in further liabilities. In spite of those measures, the applicant suspended its commercial operations in May 1978 and on that occasion dismissed further staff and this involved the payment of compensation. A The applicants in Cases 64 and 113/76 final item of damage suffered by the claim in respect of a second head of applicant arises from the fact that it damage residing in an appreciable reduction in their sales, as most continued from May 1978 to bear the fixed costs of its operations without any breweries were forced to change over to possibility of recovering those costs the purchase of starch as a total or through results because of the cessation partial substitute for gritz. The applicants submit letters from their customers which of manufacturing. it is claimed prove the causal link between that change and the abolition of the refunds. In their opinion, this head of damage must be assessed in the first place by reference to the reduced The applicant in Case 27/79 alleges a tonnage of maize meal which they further head of damage as a result of the processed after the abolition of the closure at the end of 1976 of its factory refunds. Secondly, the sales effected at Valenciennes. In that regard it points could only be obtained by offering the out that the competition from starch had buyers prices which caused the applicants been particularly keen in the north of considerable financial loss, since they France, where the only French starch had to undertake to pass on to their factory is situated. That competition led customers the amount of the refunds to a reduction in the activities of that claimed. The applicants add that a region's maize industry, even before the considerable proportion of their abolition of the refunds for gritz took customers have taken their business effect. As soon as that abolition became

known, the brewers immediately factory was forced to stand idle. The switched to the use of starch, and they same thing happened on 31 July. These had also resisted any increase in the cost violent fluctuations forced the company of their supplies owing to the freezing of to incur high operating costs in order to their own prices. At the same time, the deal with an increase in work, whilst the selling price of gritz had undergone an following month it no longer had increase of approximately 15 % as a sufficient work to keep the work-force result of a similar increase in the occupied. In 1975 that led to a loss of threshold price of maize. Thus the total cash flow. The applicant was forced to return on 100 kg had fallen to a level commence insolvency proceedings in below the production cost and that September 1976. Although it was granted situation was aggravated by a a "règlement judiciaire" [a procedure considerable drop in sales, which whereby the insolvent retains control increased the burden of the fixed manu­ over his estate and creditors are paid facturing costs. under court supervision], it was not authorized to continue trading as there was no prospect of improvement in sight. The entire work-force was laid off and redundancy payments were made. The trading losses for the first eight months of 1976 and the costs connected with the insolvency proceedings led to a heavy For the applicant in Case 45/79 the loss of cash flow. The balance sheet for increase in the price of maize, which 1977 shows a similar loss, caused mainly could not be passed on in the selling by the expenses of the receiver and the prices of gritz owing to the abolition of fixed costs still being incurred. the refund, had particularly serious consequences: formed in 1965, it had set up a new factory which required considerable investment and consequent ammortization. Another factor should be taken into account: the heavy fall in those selling prices, which occurred first in the north of France, but which rapidly spread through the entire French 2. The Council recognizes that brewing industry as a result of the way technically gritz and starch are entirely in which it is concentrated. interchangeable as regards the brewing of beer. It asserts that in fact Community brewers, and French brewers in particular, have not altered their practice of using maize gritz for the brewing of beer, even after the abolition of the refund.

1971 1972 1973 1974 1975 1976

gritz used per average hectolitre of beer brewed 3.85 kg 4.23 kg 4.53 kg 4.84 kg 4.83 kg 4.77 kg gritz used per average degree/hectolitre 0.80 kg 0.85 kg 0.91kg 0.97 kg 0.96 kg 0.94 kg

Moreover, the production of beer in France increased relatively little from 1973:

1971 1972 1973 1974 1975 1976 1977

hectolitres brewed

20 956 233 20 395 009 22 664 020 22 097 834 22 660 123 24 585 077 23 539 864

1974: 1st quarter 51.5 FF 2nd quarter 53 FF 3rd quarter 65 FF 4th quarter 70 FF

1975: 1st quarter 80 FF 2nd quarter 97 FF 3rd quarter 116 FF 4th quarter 116 FF (3.95) 100 FF (2.94)

1976: 1st quarter 116.5 FF 2nd quarter 101.5 FF 3rd quarter 106 FF 4th quarter 109 FF (3.72) 132 FF (3.88)

1977: 1st quarter 108 FF 2nd quarter 110 FF 3rd quarter 113 FF 4th quarter 117 FF (3.99) 115 FF (3.38)

1978: 1st quarter 108 FF 2nd quarter 113 FF 3rd quarter 118 FF 4th quarter 122 FF (4.16) 132 FF (3.88)

From this table the Council draws the maize industry passed on its selling following conclusions: prices to breweries more than the average increase in the price of maize — between 1974 and 1978 there was a on the Community market; thus it considerable all-round increase in the largely passed on the lost profit due price of maize gritz, due to the to the abolition of the refund in its increase in the target price and the selling prices; threshold price;

use of gritz; in those circumstances, a production of the Alsace region has brewer had no reason to purchase risen, to the detriment of the northern maize starch; that is one of the region; for the producers of maize gritz reasons why the consumption of in the north, the sale of their products maize gritz did not fall during that in Alsace presents difficulties, due period; essentially to questions concerning the transport of those products. — between 1977 and 1978 there was an

the 1975/1976 marketing year to 22 225.29 tonnes in the 1976/1977 The Council is well aware of the relative marketing year. value of the table, but it believes that it indicates a general tendency as regards The Council further points out that the the gritz producers in France. applicant in Case 27/79 closed its factory at Valenciennes at the end of February The Council goes on to state that while 1976. The figures produced by the the selling prices of maize gritz to applicant show that that factory's breweries were rising, the cost of production stood at 267.01 tonnes in beer increased only moderately.

in that region. None the less, according tonnes. According to the Council, the to the Council, the brewers in that closure of the factory at Valenciennes, region prefer maize gritz to maize starch which was already contemplated before and use it in much greater quantities. 1975, was due to the applicant's desire to The Council indicates other factors reorganize its production and to retain in peculiar to the market situation of gritz operation only its best, and, in any case, in the northern region of France: the its most productive factory.

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1974 1975 1976 1977

135 923 t 141 754 t 175 437 t 191 296 t

According to the Council, the German numerous regions of the Community undertakings normally have modern without incurring high transport costs. factories with high productivity. Their production is not as a rule devoted The Council adds that exports of gritz exclusively to maize gritz; they are also from the Federal Republic are directed in geographically well situated, along the particular at the French market: they Rhine, which enables them to reach rose from 7 197 tonnes in 1972 to 21 370

JUDGMENT OK 4. 10. 1979 — JOINED CASKS 64 AND 113/76, 167 AND 239/78, 27.28 AND 45/79

tonnes in 1977; they had already The Council also submitted to the Court doubled between 1972 (7 197 tonnes) figures relating to the exports of maize and 1974 (14 294). gritz from the Benelux countries:

1974 1975 1976 1977

In this regard, the Council emphasizes 19 October 1977. That abolition was not that in those figures the proportion of the direct cause of the difficulties exports to the other Member States is experienced by a limited number of predominant. They prove that for the French producers during recent years. Netherlands and Belgo-Luxembourg The Council adds that the maize markets the abolition of the refund did industry's lost profit, if it exists, was not cause any real commercial difficulty. ultimately borne by the consumers and The Council-adds that an undertaking does not display the characteristics of producing maize gritz was formed in damage which must be borne by the Benelux in February 1976. It was already Community within the meaning of the producing 8 600 tonnes in the first six judgment of the Court of 25 May 1978 months of the 1975/1976 marketing in Joined Cases 83 and 94/76, 4, 15 and year. Subsequently, it increased its 40/77 HNL and Others v Council and production to over 26 000 tonnes in Commission [1978] ECR 1209. 1976/1977. From this analysis the According to the Council such damage Council draws the conclusion that the cannot really be identified: it concerns French producers of maize gritz have for the maize gritz producers of the a number of years been meeting ever Community as a whole and they have stronger competition from the German not in reality suffered damage in relation producers and that that competititon is to the starch industry: they have in fact, one of the main causes of their generally speaking, increased their difficulties. Only the French under­ production and their turnover since 1975 takings of relatively large dimensions, and there has been no quantifiable shift with a certain level of productivity, were away from the use of maize gritz and able to withstand that competition. towards the use of maize starch. Finally, the Council notes that the factories of the two principal German Finally, the Council points out that if it exporters of maize gritz, that is to say, were proved that the increase in the the applicants in Cases 241 and 242/78, French imports of gritz was due to the are situated, in the one case, on the disadvantage at which French maize was Main Canal and in the other case on the put in relation to German gritz by the Rhine. Their position on the Alsace effect of the compensatory amounts, market is therefore better than that of there would consequently be no the producers in the north of France, relationship of cause and effect between taking into account the constraints of the abolition of the refund and the transport between the northern region losses. and Alsace.

In their opinion the compensation in They add that the statistics relied on by respect of the refund could not depend the Council could be relevant only with on variations in the volume of regard to the applicant companies which production and sales which they have have claimed compensation for attained. Indeed, the general principles additional commercial damage distinct common to the laws of the Member from the loss of the refund. States to which Article 215 of the Treaty refers, make the award of damages dependent upon a wrongful act on the part of the institutions, the suffering of As regards their situation on the gritz damage and a direct causal link between market, the applicants observe that if the that wrongful act and that damage. brewer's choice is dictated by his financial interest and if none the less the use of gritz in French breweries remains According to the applicants, the stable in spite of the abolition of the adoption of discriminatory measures refund, that stability can be explained constitutes a wrongful act, for the only by the scale of the sacrifices Council cannot claim to have complied assumed by the maize industry in an with the judgment of the Court of 19 attempt to retain, or increase, its market, October 1977. pending the restoration of the refund. Therefore the applicants will not strive to dispute the table showing the total consumption of gritz, which the Council The damage is equally undeniable, since produced, although the statistics drawn if the principle of equality had been observed, they could have drawn the up by the Union des Semouliers de Maïs [Association of Maize Meal Producers] same refunds as those paid for starch. The applicants recall that the general show considerably different results. principles to which Article 215 of the Treaty refers lead to the view that full compensation must be paid for all The applicants dispute the Council's damage, whether it consists of an actual figures as regards the purchase prices to loss (damnum emergens), or whether it breweries of maize gritz and add that takes the form of lost profit (lucrum even if they were to be considered cessans). They add that during the period accurate, they would be devoid of any in question the maize industry was probative value: a number of facts could operating at a loss, even as regards the explain the development of prices, which undertakings which may have appeared need not be regarded as a reflection of to be expanding or profitable, either by the abolition of the refund; the increase virtue of external injections of capital or in the price of gritz between the second the realization of assets, or by virtue of and third quarter of 1975 is not profits achieved in other branches of appreciably greater as a percentage than activity. the increase between the first and the second quarter, in spite of the retention of the refund at that time; thus the Finally, the applicants point out that the increase in gritz prices between the first causal link cannot be contested further, quarter of 1974 and the third quarter of since it was the measures adopted, and 1975 merely reflects the increase in the

The applicant in Case 45/79 states that, although its structures were weak owing to the undertaking's relatively recent formation, they were normal and the fact The applicants then consider the problem that at a time when the gritz market was of the regional situation of the gritz expanding its managers had formed a producers in France. In this regard they new and modern undertaking with find that in the northern region certain recourse to ordinary borrowing could brewers actually switched to starch. not be regarded as an error on their part. Letters from brewers, submitted by the The company did not experience any applicants, corroborate that finding. It is financial difficulty until 1975, but it did wrong to state that the production of not possess sufficient reserves to enable it beer in the north of France is declining to sell its production at a loss during a

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4. In its rejoinder in Cases 27, 28 and According to the applicant in Case 113/76, the Council is mistaken when it 45/79, the Council adds to its previous claims to see in the take-over of the observations, in particular, that even if gritz and starch were technically inter­ applicants in Cases 167/78 and 45/79 changeable for the brewing of beer, proof of a certain level of prosperity. no such substitution took place Although the applicant's balance sheet commercially. for 1976 shows an accounting profit, that is actually due to the receipt of a sub­ stantial sum of compensation for compulsory purchase and to the carrying forward of profit from previous years, The Council also states that the French but the general operating account shows brewing industry used approximately an operating loss of FF 367 000. In 1976 15 000 tonnes of maize starch in 1970, the operating loss exceeded 1 million but only 9 000 in 1978. It recalls that francs with an accounting loss on the 110 000 tonnes of gritz are consumed on balance sheet of more than FF 869 000. average each year. Thus, in its opinion, the competition between the two products is purely theoretical and does not seem to have come into play on the The applicants further declare that the occasion of the abolition of the refund French market represents only a very save in the exceptional cases of two or small proportion of German exports, of three breweries in the north of France

JUDGMENT OF 4.10. 1979 — JOINED CASES 64 AND 113/76. 167 AND 239/78, 27, 28 AND 45/79

situated close to the two French starch invoked against all the applicants, as factories. regards all their claims, because they have not sought to prove conclusively a Moreover, the effect of the refund seems connexion between their alleged losses and the Council's action within the infinitely less important as a component of the price than the fluctuations in the meaning of the judgment of the Court of price of one or other of the ingredients. 15 June 1976 in Case 74/74 CNTA v Commission [1976] ECR 797.

In that regard, the applicants submitted The Council recalls that in its judgment information concerning the development in Cases 5, 7 and 13 to 24/66 Kampff­ of the delivered price for gritz charged meyer, the Court accepted that damages by each of them since 1974, in relation could be recovered for lucrum cessans to the development of the price of raw only subject to very strict conditions. materials and their operating costs during the same period. They consider The Council further observes that the that that information proves the lack of argument that there is no relationship of foundation for the Council's argument to cause and effect between the abolition of the effect that they passed on in their the refund and the damage may be selling prices to the breweries the greater

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DUMORTIER FRÈRES v COUNCII

part of the increases caused by the the applicants increased substantially abolition of the refund. during the same period; consequently, the gross profit margin of each of the The information shows that: the applicants fell dramatically, leading to threshold price of maize rose by over losses for a large number of them. 40 % during the period under consideration; the selling prices of gritz V — Oral procedure to the brewing industry vary only in proportions which do not stand in a At the hearing on 10 July 1979 the common relationship to those of the raw parties presented oral argument. material used, the increase in the selling price of gritz for the applicant in Case The Advocate General delivered his 64/76, for example, amounting to opinion at the sitting on 12 September 4.58 % only; the manufacturing costs for 1979.

4 Following that judgment production refunds for maize gritz used by the brewing industry were re-introduced by Council Regulation No 1125/78 of 22 May 1978 amending Regulation No 2727/75 on the common organi­ zation of the market in cereals (Official Journal 1978 L 142 of 30 May 1978, p. 21). The amount of the refunds was fixed by Council Regulation No 1127/78 adopted and published on the same date as Regulation No 1125/78 (Official Journal 1978, L 142, p. 24). Both regulations entered into force on the third day following their publication in the Official Journal of the European Communities. However, pursuant to the last paragraph of Article 1 of Regulation No 1125/78 and Article 6 of Regulation No 1127/78, the refunds were granted at the request of the interested party as from 19 October 1977, that is to say with retroactive effect from the date of the judgment of the Court in the above-mentioned preliminary rulings.

5 Thus the object of the applicants' claims is to obtain compensation for the damage which they claim to have suffered as a result of the absence of refunds during the period between 1 August 1975, on which date Regulation No 665/75 was first applied, and 19 October 1977. The alleged damage consists, as regards all the applicants, in the loss of receipts equal to the amounts of the refunds which would have been paid to them if maize gritz had benefited from the same refunds as starch, and as regards some of the applicants, in additional losses caused in particular by a fall in sales and operating deficits.

Admissibility

Substance

8 Since by its judgment of 19 October 1977, the Court has already established that the abolition of the refunds for maize gritz for the brewing industry, together with the retention of the refunds for maize starch, was incompatible with the principle of equality, the first problem which arises in these cases is whether the unlawfulness thus established is of such a nature as to render the Community liable under the second paragraph of Article 215 of the EEC Treaty.

9 The finding that a legal situation resulting from the legislative measures of the Community is unlawful is not sufficient in itself to give rise to such liability. The Court has already expressed that view in its judgment of 25 May 1978 in Joined Cases 83/76 and others Bayerische HNL Vermeh­ rungsbetriebe and Others v Council and Commission [1978] ECR 1209. In this regard, the Court recalled its settled case-law, according to which the

JUDGMENT OF 4.10.1979 — JOINED CASES 64 AND 113/76. 167 AND 239/78, 27, 28 AND 45/79

Community does not incur liability on account of a legislative measure which involves choices of economic policy unless a sufficiently serious breach of a superior rule of law for the protection of the individual has occurred. Taking into consideration the principles in the legal systems of the Member States governing the liability of public authorities for damage caused to individuals by legislative measures, the Court said that in the context of Community provisions in which one of the chief features was the exercise of a wide discretion essential for the implementation of the Common Agricultural Policy, the Community did not incur liability unless the institution concerned manifestly and gravely disregarded the limits on the exercise of its powers.

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made by the Commission in June 1975 to re-introduce the refunds for maize gritz on the ground that the absence of such refunds could foreseeably upset the balance between the breweries' raw materials costs in maize gritz and maize starch.

13 For those reasons the Court arrives at the conclusion'that the Community incurs liability for the abolition of the refunds for maize gritz under Regu­ lation No 665/75 of the Council.

14 This said, it is necessary to go on to examine the damage resulting from the discrimination to which the gritz producers were subjected. The origin of the damage complained of by the applicants lies in the abolition by the Council of the refunds which would have been paid to the gritz producers if equality of treatment with the producers of maize starch had been observed. Hence, the amount of those refunds must provide a yardstick for the assessment of the damage suffered.

15 The Council objected to that method of calculating the damage on the ground that the gritz producers eliminated the damage by passing on the loss resulting from the abolition of the refunds in their selling prices. In principle, in the context of an action for damages, such an objection may not be dismissed as unfounded. In fact, it must be admitted that if the loss from the abolition of the refunds has actually been passed on in the prices the damage may not be measured by reference to the refunds not paid. In that case the price increase would take the place of the refunds, thus compensating the producer.

19 Some of the applicants have also submitted claims for compensation for certain additional items of damage which they claim to have suffered.

20 In the case of the two maize processors established in the north of France, the further damage lies particularly in a substantial fall in their sales to breweries. Although it is beyond dispute that the figures submitted by the applicants clearly show such a fall, that fact can hardly be ascribed to the absence of refunds. In fact, as has already been said, the applicants have insisted on the fact that the selling prices of gritz were not increased on account of the abolition of the refunds. On the contrary, as the Court recognized when examining the development of the prices, the gritz

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producers chose to sell at a loss in order to retain their markets, and not to increase their prices at the risk of losing those markets. Thus the inequality which existed between gritz and starch as regards the granting of refunds was not reflected in the selling prices. If in spite of that commercial policy the gritz producers' sales fell, the reason for this must be sought in something other than the inequality caused by the abolition of the refunds.

JUDGMENT OF 4. 10. 1979 — JOINED CASES 64 AND 113/76. 167 AND 239/78, 27.28 AND 45/79

The claim for interest

24 The applicants further claim that the Council should be ordered to pay interest at the French legal rate from the dates on which the payment of the refunds became due each month.

25 As it is a question of a claim made in relation to the non-contractual liability of the Community, pursuant to the second paragraph of Article 215, it must be considered in the light of the principles common to the legal systems of the Member States, to which that provision refers. It follows that a claim for interest is in general admissible. Taking into account the criteria for the assessment of damages laid down by the Court, the obligation to pay interest arises on the date of this judgment, in that it establishes the obligation to make good the damage. The rate of interest which it is proper to apply is 6 %.

On those grounds,

THE COURT,

5) Costimex, S.A., Strasbourg;

6) "La Providence Agricole de la Champagne", Société Cooperative Agricole, Rheims;

7) Maiseries Alsaciennes S.A., Colmar,

the amounts equivalent to the production refunds on maize gritz used by the brewing industry which each of those undertakings would have been entitled to receive if, during the period from 1 August 1975 to 19 October 1977, the use of maize for the production of gritz had conferred an entitlement to the samc refunds as the use of maize for the manufacture of starch; an exception shall be made for the

DUMORTIER FRÈRES v COUNCIL

quantities of gritz sold at prices increased by amounts equivalent to the unpaid refunds under contracts guaranteeing the buyer the benefit of any re-introduction of the refunds;

Delivered in open court in Luxembourg on 4 October 1979.

A. Van Houtte H. Kutscher

Registrar President

OPINION OF MR ADVOCATE GENERAL CAPOTORTI (see [1977] ECR 1773)

OPINION OF MR ADVOCATE GENERAL CAPOTORTI (see Case 238/78, p. 2976)