C-119/79

JUDGMENT OF 12. 6. 1980 — JOINED CASES 119 AND 126/79

development of Community law, be may be to restrict the period during decided in accordance with the which such repayment may be national law of the intervention claimed, provided always that that agency responsible for the relevant question is settled in accordance with sector of the market. the same rules as those which apply to the performance of similar supervisory duties carried out by the national Community law does not prevent the administrative authorities in the application of provisions or principles spheres in which they have sole of national law the effect of which responsibility.

In Joined Cases 119 and 126/79

R E F E R E N C E to the C o u r t under Article 177 of the E E C T r e a t y by the Verwaltungsgericht [Administrative C o u r t ] Frankfurt am Main for a pre- liminary ruling in the proceedings pending before that court between, on the one hand,

LIPPISCHE HAUPTGENOSSENSCHAFT E . G . , a co-operative society with registered offices in Lage, Lippe,

and

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T H E C O U R T (Second Chamber)

composed of: A. Touffait, President of Chamber, P. Pescatore and O . D u e , Judges,

Advocate G e n e r a l : F. Capotorti Registrar: A. Van H o u t t e

gives the following

JUDGMENT

JUDGMENT OF 12. 6. 1980 — JOINED CASES 119 AND 126/79

für landwirtschaftliche Marktordnung, of the Commission of 12 July 1968 on which replaced the Einfuhr- und new detailed rules for the application of Vorratsstelle für Getreide und Futter- the provisions concerning denaturing of mittel, found that on 61 occasions on common wheat and rye of bread-making which it had carried out denaturing quality (Journal Officiel L 164, p. 9) laid procedures on common wheat the down a standard method which, with Lippische Hauptgenossenschaft had used

1. Dissolve either 30 grams of colouring 20 January 1977 for repayment of the matter of 85 % concentration or 51 denaturing premium under the first sub- grams of colouring matter of 50 % paragraph of Article 11 (1) of the concentration of Patented Blue V Verordnung Denaturierungsprämie Ge- (Schultz No 826, EEC No E 131) in treide [Regulation on denaturing at least 2.5 litres and at most 3 litres premiums for cereals] of 8 August 1968.

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JUDGMENT OF 12. 6. 1980 — JOINED CASES 119 AND 126/79

Advocate of Hamburg, and on 24 First question October by the Bundesanstalt für landwirtschaftliche Marktordnung, represented by Erdmann Schaller, (a) Payment of denaturing premiums is Head of the Legal Division, acting as based on Community law; its purpose is Agent; to further the aims of the common agri- cultural policy. Claims for repayment of premiums, on the ground of failure to — In Case 126/79, on 10 October 1979 observe the Community provisions by the Commission of the European governing the denaturing process, are Communities, on 26 October by the therefore equally subject to Community Westfälische Central-Genossenschaft law; the period within which it is e.G. and on 5 November 1979 by the possible to make such claims is governed Bundesanstalt für landwirtschaftliche by that legal order. Marktordnung.

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law. That uniform reply must be dictated such infringements is barred on the by Community law. To allow differing expiry of five years, the same must apply limitation periods would prejudice the with even greater force in respect of uniformity of application of Community claims for payment. law.

According to Decision No 5/65 of the High Authority of the ECSC, claims in (d) The reply to the first question respect of production levies are barred should therefore be as follows: after three years; the limitation period is six years if there are no declarations of The question within what period claims production or in the event of incomplete for repayment of denaturing premiums or inaccurate declarations made wilfully granted under Regulation No 956/68 of or through negligence. There is no 12 July 1968, Regulation No 2086/68 of reason why it should be possible to claim 20 December 1968 and Regulation No repayment of denaturing premiums for a 1403/69 of 18 July 1969 may be made longer period than claims in respect of must be decided on the basis of production levies, that is, beyond a Community law. period of three years.

(b) As to the length of the limitation period, in the absence of Community (c) A review of national provisions rules one must proceed, initially, on the concerning limitation periods provides basis of analogies drawn from other evidence as to the general principles of spheres of Community law. law which are common to the legal orders of the Member States with respect to the barring of claims for payment due Regulation No 2988/74 of the Council, to the State. A study of comparative law for instance, provides in respect of the reveals that the principle that claims for field of the law governing transport and debts due under public law are subject to competition for a limitation period of limitation periods is recognized in all the three years in respect of infringements of legal systems and that the limitation provisions concerning applications or periods applicable to the recovery of notifications, and five years for other debts such as those which are the infringements. If action in respect of subject-matter of the main proceedings

JUDGMENT OF 12. 6. 1980 — JOINED CASES 119 AND 126/79

are shorter than the general limitation and the claim for repayment of the periods, which vary between ten years premiums, the fact that the Einfuhr- und (Italy) and thirty years (Federal Republic Vorratsstelle has carried out regular of Germany); requests for repayment checks on the denaturing operations under public law, which are analogous to through its own inspectors. In such the claims concerned in the present circumstances it would be contrary to the dispute, are subject, in the legal orders of principle of the protection of legitimate the Member States, to a limitation period expectations to claim repayment of de- of between two and six years, the naturing premiums more than seven majority of limitation periods for such years after the denaturing operations claims being five years. concerned, on the basis of accounting investigations carried out after the event.

(a) This question is not directly relevant to resolving the main issue. (e) The legal orders of the Member States also recognize the principle according to which public administrative (b) The first and second subparagraphs authorities who allow a lengthy period to of Article 10 (2) of the Verord- elapse before claiming repayment of nung Denaturierungsprämie Getreide of sums which they could have claimed 8 August 1968 require undertakings immediately are prevented from which carry out denaturing procedures exercising that right by the principle of to retain certain records and documents the protection of legitimate expectations. relating to the denaturing of common A study of comparative law establishes wheat for seven years. The real question that, independently of limitation periods, here is whether the principle of the the law in most of the Member States protection of legitimate expectations and acknowledges the principle that subsidies the principle of proportionality may, which have been granted, or other independently of limitation periods, administrative measures giving rise to preclude the exercise of a right to claim rights, cannot be withdrawn or cancelled repayment on expiry of a certain period. after a certain period.

(c) As regards the principle of the (f) The answer to the third question protection of legitimate expectations, should be as follows: which is recognized in Community law, it is important to note, apart from the fact that more than seven years elapsed In view of the principle of the protection between certain denaturing operations of legitimate expectations and the

First question (c) It is unnecessary to have recourse to general principles of Community law in order to decide what period of limitation (a) No Community rules concerning applies to claims for repayment: the periods of limitation on claims for principles of legal certainty and order, repayment of denaturing premiums are which are an integral part of the systems to be found either in the Treaty or in of law of the Member States of the other provisions of Community law or in Community, are already embodied in the the general principles of Community law. rule that the national provisions of the That being so the question of the barring States concerned apply in respect of of claims for repayment in connexion limitation periods. with intervention measures can only be resolved by reference to the rules in force in the Member State concerned. (d) The Court has confirmed in a number of judgments the principle that where there are gaps in Community law (b) The lack of Community rules is a internal law applies, especially internal result of the structure of the Community administrative and procedural law. legal order, the effect of which is, setting According to its case-law, in the absence aside the spheres which are governed of Community rules on the subject directly by the Community and its detailed procedures designed to general task of harmonization, to entrust safeguard rights conferred on individuals the application of Community law to the directly by Community law are to be authorities and courts of the Member governed by the internal legal orders of States. Repayment of premiums which each Member State; thus for instance in

the sphere of social security law the period of 30 years, to the barring of limitation period applicable to advances claims for export refunds. which are to be repaid is, according to the Court, and as the law stands at present, that laid down by internal law. (g) Even the Commission has The Court has also held that in order to acknowledged, in a reply to a written ensure legal certainty the limitation question (Official Journal 1974, C 145, period must be fixed in advance, and p. 16), that “the refunding of charges only the Community legislature is which the Court of Justice has found competent to determine its length and incompatible with the Treaty is a matter method of application; in view of that which should normally be assessed, in conception the Court should reply to the the absence of Community rules, in the first question which has been asked by light of the Member States' general rules the Verwaltungsgericht Frankfurt am for the maintenance of order and Main in the affirmative, the result being certainty as to the law”. that claims for reimbursement of unduly paid premiums are not subject to any limitation period. (h) The differences between the national provisions concerning limitation periods may, admittedly, cause the legal rights and obligations of the citizen to (e) A supplementary argument in vary from one Member State to another. favour of the theory that the question of Such variations are merely the result of limitation should be decided on the basis the application of Community law, at the of internal legal orders is to be found in present stage of integration, by the the fact that the Community legislature Member States. first applied rules in respect of limitation periods in 1979, in particular by Council Regulations No 1430/79 of 2 July 1979 on the repayment or remission of import (i) The first question put to the Court or export duties (Official Journal L 175, should be answered as follows: p. 1) and No 1697/79 of 24 July 1979 on the post-clearance recovery of certain Claims for the repayment of denaturing export duties (Official Journal L 197, premiums which have been granted p. 1). In so far and as long as the under the provisions of Regulation No Community legislature has not drawn up 956/68 of 12 July 1968, Regulation No appropriate provisions, and bearing in 2086/68 of 20 December 1968 and mind the fact that harmonization at Regulation No 1403/69 of 18 July 1969 Community level is as yet incomplete, it are subject to the legal rules of the is appropriate to apply the internal law in Member States as regards the limitation force as a complementary measure. periods to which they are subject.

Third question destroy or to divest himself in any other manner of certain documents after the (a) The Court of Justice has, on a period has expired without incurring number of occasions, outlined the penal sanctions. While it is true that, in principles of law which are applicable in principle, for evidential reasons, any a comparative examination of national right to repayment can no longer be legislation; thus, for instance, it has asserted, a distinction must be drawn accepted that the cancellation of an between the practical impossibility of individual administrative measure which asserting such a right in the individual is unlawful is permissible if it is case, and the impossibility of asserting undertaken within a reasonable period. that right generally in law.

This problem also relates to the does not preclude the possibility of application of Community law by means cancelling an administrative measure of national legislation; it is therefore which has the effect of conferring rights. solely concerned with the regularity of the national procedure for applying an According to the Verwaltungsverfah intervention measure which is prescribed rensgesetz [Law on administrative by Community law. The periods during procedure], in force since 1 January which records must be preserved help to 1977, an administrative measure which ensure that the Community principles of confers rights may not be withdrawn legal certainty and proportionality are later than one year after the date on respected.

reasonable. The Commission observes that the Court In any event, the sole purpose of the is asked to reply to the second question period during which records must be only in the event that the first question is preserved is to permit the individual to answered in the affirmative, and that the

(a) No rule, whether general or Obviously, such recourse to internal law particular, has been established by the for the purpose of implementing the Community legislature concerning the common organizations of the market repayment of denaturing premiums paid must not result in altering the scope of a in error; on the contrary, it has imposed Community regulation; however, the an obligation on Member States, under consistent case-law of the Court of Article 8 of Regulation No 729/70 of the Justice allows for the adoption and Council of 21 April 1970 on the application of provisions of national law financing of the common agricultural which do not create exemptions from the policy (Official Journal, English Special Community system, do not limit its scope Edition 1970 (I), p. 218), to take, in and seek to achieve the same aim. As accordance with national provisions laid regards denaturing, the Court has held down by law, regulation or that Member States are free to enact administrative action, the measures detailed rules for the procedure for necessary to satisfy themselves that supervising denaturing "in relation to transactions financed by the European their own legal system and on their own Agricultural Guidance and Guarantee responsibility". Fund are executed correctly and to recover sums lost as a result of irregu- larities or negligence. The express Member States have been given the task, reference to national law makes it clear by Regulation No 729/70 and by Regu- that the claims for repayment at issue in lation No 283/72 of the Council of the main proceedings must be judged in 7 February 1972 concerning irregularities the light of national law both as to their and the recovery of sums wrongly paid legal nature and as to the question of in connexion with the financing of the limitation. common agricultural policy (Official Journal, English Special Edition 1972 (I), p. 90), of recovering from individuals the (b) The general scheme of the rules sums they have received in contravention which have been created within the of Community regulations in force. In framework of the common agricultural the absence of any Community rules, market and co-operation between Member States have no other possibility Community law and national law is but to apply their national law in respect sufficient to show that the first question of action taken by them against the must be answered in the negative. individuals concerned.

Council Regulations Nos 1430/79 and Third question 1697/79 are a preliminary but significant step on the road to the adoption at In view of the reply given to the first ' Community level of legal provisions question, this question is of merely concerning the enforcement and academic interest. In so far as they may implementation of rights and obligations be useful, the following observations may laid down by Community law. However, be made upon it. they do not concern denaturing premiums for common wheat; therefore the recovery of such premiums continues (a) No Community text expressly states to be regulated by national law. the principle that an authority may not still found a claim for the recovery of a payment on the absence of all the documentary evidence required for the (c) Acknowledgement of the fact that granting of the payment once the periods differences between national rules on prescribed for preserving such infor­ limitation periods and time-limits might mation laid down by the appropriate bring about a difference in the treatment provisions of internal law have expired. of traders in different Member States need not, however, mean that a legal void is created or that a general right to (b) With regard to certain general recovery must be created in toto with the principles of law it should be noted that aid of exaggerated analogies, based on the principle of good faith applies Community law and equipped with equally in Community law and has specific limitation periods. In its various consequences therein, particu­ judgments of 14 July 1972 (the Aniline larly in the form of the objection based Dyestuffs cases, [1972] ECR 619, 713 on the protection of legitimate and 745), the Court of Justice stated that expectations in respect of amendments to Community law knows no general the law, and the principle that a public principle regarding periods of limitation authority may not contradict its own and that, in order to fulfil their function, conduct or that of the legislature. Regu­ such periods must be fixed in advance by lation No 1697/79 applies that principle. the Community legislature; moreover, Moreover, the principle "non venire the Court sees no ground at all in the contra factum proprium" is widely absence of harmonizing provisions for recognized in the case-law of the Court discouraging national courts from of Justice. applying their internal law and has held that any differences in treatment due to the application of national law must be It is for the Verwaltungsgericht to tolerated at the present stage of decide, on the basis of the facts before it, integration. to what extent that principle may be relied on as regards the claims for repayment at issue in the main proceedings. (d) In any event, there is no reason to fear unequal treatment with respect to the main proceedings here: claims by the The replies proposed State against its nationals for repayment of sums paid in error is subject in all the The Commission proposes the following Member States to the longest limitation replies to the first and third questions put periods, in most cases thirty years, and in by the Verwaltungsgericht Frankfurt am no case less than ten years. Main:

(a) Is the question within what period claims for repayment in connexion with the grant of denaturing premiums which have been paid on the basis of Regulation (EEC) No 956/68 of 12 July 1968, Regulation (EEC) No 2086/68 of 20 December 1968 and Regulation (EEC) N o 1403/69 of 18 July 1969 may be made to be decided in accordance with the law of the European Communities?

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(b) If Question (a) must be answered in the affirmative: Are such claims for repayment subject to a limitation period at all and, if so, what period of limitation must be taken as the basis in this instance?

(c) Does European law recognize the principle according to which claims for repayment of these denaturing premiums made after the expiry of the period prescribed by national law for which the records relating to the denaturing processes must be preserved (seven years in this case) can no longer be founded on the ground that it is clear from the records or other documents still existing that the denaturing processes were not carried out properly?

2 According to the file on the case the plaintiffs in the main proceedings, two agricultural co-operatives with registered premises in Lage and Münster respectively, carried out denaturing procedures during a period from 1968 to 1970 and 1974, and on the basis thereof they obtained the denaturing premiums provided for in the above-mentioned regulations. Following investigations carried out in respect of the recipient undertakings the intervention agency found that a number of the denaturing procedures had not been carried out in the manner prescribed by the Community regu- lations, and it issued claims in 1976 and 1977 for repayment of the dena- turing premiums which should not have been granted. The objections to those claims raised by the plaintiffs in the main action having been unsuc- cessful, the plaintiffs brought actions before the Verwaltungsgericht.

5 The Commission, for its part, observes that in general the ascertainment and implementation of rights and obligations derived from the common organ- izations of the market are largely the responsibility of the Member States. It refers in that respect to Article 8 of Regulation No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy (Official Journal, English Special Edition 1970 (I), p. 218) according to which "the Member States in accordance with national provisions laid down by law, regulation or administrative action shall take" the measures necessary, inter alia, to prevent and deal with irregularities or negligence. It recalls that the Court has consistently acknowledged in its case-law that the Community legislature has left to the Member States "the power to regulate the detailed rules of supervision under their own legal systems and on their own responsibility" (judgment of 11 July 1973, Case 3/73, Hessische Mehlindustrie, [1973] ECR 745; see also the judgments of 16 December 1976, Cases 33/76, Rewe, and 45/76, Comet, [1976] ECR 1989 and 2043).

6 The questions raised by the Verwaltungsgericht call for the following obser- vations.

7 According to the general conception underlying the common organization of agricultural markets the granting of denaturing premiums provided for in the regulations which have been referred to is subject to a set of common rules which are applicable uniformly throughout the Community. However, management of that intervention mechanism is the task of the national intervention agencies, which are required, as a result, to perform all the supervisory duties necessary in order to ensure that denaturing premiums are granted only in accordance with the conditions laid down by the Community rules and that any infringement of the rules of Community law by those operating on the market is appropriately penalized. Therefore in the present

10 Accordingly, it is for the national authorities to assess a situation such as that which has been brought before the Verwaltungsgericht on the basis of the rules and principles of their national laws, provided that they do not make a distinction between situations governed by Community law and similar situations subject to the application of national law alone. Furthermore, as regards more especially the problem which has been raised in the third question, it follows that Community law does not restrict the freedom of the national authorities competent in the matter to apply, when recovering benefits which have been mistakenly granted under the Community rules and in the absence of any specific rule concerning limitation periods, such limitation periods as may be drawn from the application of general principles recognized in the law of the country concerned. It is sufficient on this point

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to refer to the grounds for the decision of the Court of 5 March 1980 (Case 265/78, Ferwerda ν Produktschap voor Vee en Vlees), which concerns a problem similar to that before the Verwaltungsgericht.

The question within what period a national intervention agency may claim repayment of the denaturing premiums provided for in Regulations

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No 956/68 of the Commission of 12 July 1968, No 2086/68 of the Commission of 20 December 1968 and No 1403/69 of the Commission of 18 July 1969 on the denaturing of common wheat which were wrongly paid to the recipients must, at the present stage in the development of Community law, be decided in accordance with the national law of the intervention agency responsible for the relevant sector of the market.

Community law does not prevent the application of provisions or principles of national law the effect of which may be to restrict the period during which such repayment may be claimed, provided always that that question is settled in accordance with the same rules as those which apply to the performance of similar supervisory duties carried out by the national administrative authorities in the spheres in which they have sole responsibility.

Touffait Pescatore Due

Delivered in open court in Luxembourg on 12 June 1980.