C-84/81

JUDGMENT OF 19. 5. 1982 — CASE 84/81

In Case 84/81

REFERENCE to the Court under Article 177 of the EEC Treaty by the High Court of Justice, Queen's Bench Division, Commercial Court, for a preliminary ruling in the case pending before that court between

STAPLE DAIRY PRODUCTS LIMITED

and

INTERVENTION BOARD FOR AGRICULTURAL PRODUCE

JUDGMENT

Facts and Issues

The facts of the case, the course of temporaņ' widening of the margins of the procedure and the observations fluctuation for the currencies of certain submitted under Article 20 of the Member States (Official Journal, English Protocol on the Statute of the Court of Special Edition 1971 (I), p. 257), as Justice of the EEC may be summarized amended bv Regulation (EEC) No as follows: 1112/73 of the Council of 30 April 1973 (Official Journal 1973, L 114, p. 4), by adding a provision to the effect that the percentage or the average of the percen­ tages to be applied to prices to obtain the monetar)' compensatory amounts was to I — Facts and w r i t t e n p r o c e d u r e be reduced by a certain rate. This rate was 1.50 points for Member States such as the United Kingdom with floating currencies, that is to say, not belonging to the European monetary system. 1. Council Regulation (EEC) No 652/79 of 29 March 1979 on the impact of the European monetary system on the Common Agricultural Policy (Official As provided by the second paragraph of Journal 1979, L 84, p. 1) was adopted as Article 5, Regulation No 652/79 was a result of the setting up of the European originally to apply until 30 June 1979, monetary system. It provided that the but its validity was extended until 31 amounts fixed in units of account for the March 1980 bv Article 1 of Council purposes of the Common Agricultural Regulation (EEC) No 1264/79 (Officii! Policy were thenceforth to be expressed Journal 1979, L 161, p. 1). in units of account known as " E C U " by means of a fixed coefficient.

so as to abolish the franchise for floating increase or a re-introduction of currencies which had appreciated. The monetary compensatory amounts for regulation therefore expired on 31 certain Member States, it appears March 1980. necessary, in view of the over-riding public interest and as a precautionary measure pending a final decision on the Having been obliged to amend the matter by the Council, to continue to monetary compensatory· amounts when apply the system in its present form, to there was a change in the value of the wit, the calculation of monetary pound sterling, on 2 April 1980 the compensatory amounts in relation to the Commission adopted Regulation (EEC) ECU and taking account of the N o 846/80, amending Regulation (EEC) franchises provided for bv Regulation N o 2140/79 as regards the abolition of (EEC) N o 652/79." monetar)' compensatory amounts for the United Kingdom in certain sectors and their introduction in other sectors The Commission informed traders of (Official Journal 1980, L 91, p. 1). By this development in a communication that regulation, which entered into force published in the Official Journal of 9 on 7 April 1980, the date of its April 1980 (Official Journal 198C. C 87, publication in the Official Journal, it p. 12). fixed positive monetary compensator)' amounts, in particular in the dairy On 23 April 1980 the Council adopted sector, for the United Kingdom, but Regulation (EEC) No 1011/80, amend­ maintained the method of calculation in ing Regulation N o 652/79 on the impact relation to the ECU and the franchise of of the European monetary system on the 1.5C points provided for by Regulation Common Agricultural Poliev (Official No 652/79. Journal 1980, L 108, p. 3). Article 1 of that regulation, which entered into force Following a further change in the value on 26 April 1980, the day of its publ­ of the pound sterling, amongst other ication in the Official Journal, is worded currencies, Regulation N o 846/80 was as follows: replaced bv Commission Regulation N o 967/80 of 18 April 1980 altering "With effect from 1 April 198C the date the monetary compensatory amounts '31 March 198C' appearing in the second (Official Journal 198C, L 103.' p. 1). That subparagraph of Article 5 of Regulation regulation maintained the same method (EEC) No 652/79, shall be replaced bv of calculation and the same franchise, '30 June 1980', without the individual but abolished the positive monetary rights acquired by operators being compensatory amounts applicable to the thereby affected." United Kingdom in most sectors, including the dairy sector, on the ground that the amounts thus calculated were 2. Between 1 April 1980 and 26 April negligible in relation to the average value 1983 the plaintiff in the main of the products in question. proceedings, Staple Dairy Product!. Limned, exponed milk products from the United Kingdom to other Member In the preambles to Regulation No States of the Community. The détendant S46/S0 and No 967/Sľ, the Commission in the main proceedings, the Intervention stated: Board for Agricultural Produce, the authority responsible under British law ". . . in order to avoid a hiatus in the for, amongst other things, the pavment system resulting, in particular, in an of sums provided by the Community for

(b) What is the nature of the "(1) Having regard to the date pre- individual rights of operators scribed in Article 5 of Council there referred to, how and in Regulation (EEC) No 652/79, as what circumstances are such amended bv Article 1 of Council rights acquired and in what Regulation ' (EEC) No 1264/79, way are they not to be were the competent authorities in affected?" the United Kingdom bound in respect of transactions undertaken between 1 April 1980 and 26 April 1980 inclusive to pay monetary 3. The order for reference was received compensatory amounts on exports at the Coun Registry on 10 April 1981. of milk products from the United Kingdom to other Member States of the European Communities, without making a deduction of 1.50 In accordance with Anicie 20 of the percentage points? Protocol on the Statute of the Court of Justice of the EEC, written obsenations were lodged by Staple Dairv Products Limited, represented by David Vaughan. (2) Is Commission Regulation (EEC) Q C . and R. G. Clinton, Solicitor, by the No 84b/8C adopted after the date British Government, represented b\ prescribed in Anicie 5 of Council W. H. Godwin of the Treasury Regulation (EEC) No 652/79, as Solicitor's Office, acting as Agent, by the so amended, invalid for lack of Council of the European Communities, competence or for anv other reason represented by us Legal Adviser,

JUDGMENT OF 19. 5. 1982 — CASE 84/81

Bernhard Schloh, acting as Agent, and cannot affect the position between 31 by the Commission of the European March 1980 and 7 April 1980. Communities, represented by Richard Wainwright, a member of its Legal Department, acting as Agent. In conclusion, Staple Dairy' Products Limited suggests that the answers to the first and second questions should be: Upon hearing the report of the Judge- Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any "Upon the expiry of the date prescribed preparatory inquiry. in Anicie 5 of Council Regulation No 652/79 as amended (namelv after 31 March 1980) until 26 April 1980:

STAPLE DAIRY PRODUCTS v INTERVENTION BOARD FOR AGRICULTURAL PRODUCE

In any event, the Council acted expiry of that regulation on 31 March unlawfully in adopting Article 1 of Regu- 1980 could not have led to serious lation No 1011/80 if, by so doing, it practical difficulties. extended the application of the regu- lation to exports effected before the date of its adoption. According to various decisions of the Court, such a retroactive In any event, there was not a hiatus in effect is contrary to the general the system for applying the franchise principles of Community law. An rules, because, with the expiry of Regu- exception is not justified in this case, for lation No 652/79 amending Regulation Regulation No 1011/80 was not adopted N o 974/71, the latter reverted to its in pressing economic circumstances. original form and ought to have been applied in the same way as before the adoption of Regulation N o 652/79. Commission Regulation No 846/80 was The third question should therefore be therefore adopted without any legal answered as follows: basis.

"With regard to Article 1 of Council However, the question of the Regulation No 1011/80, in the case of Commission's powers does not need to the exponation of dairy produce from be answered in this case, since the the United Kingdom to other Member position created by Regulation No States, monetary compensatory amounts 846/80 was regularized retroactively by- are not subject to the 1.50 per cent Council Regulation No 1011/80, deduction, when the right to receive extending the validity of Regulation No the monetary compensatory amounts 652/79 with effect 'from 1 April 1980 accrued between the period 1 April 1980 until 30 June 1980. to 26 April 1980 (both dates inclusive)."

consider it necessary to examine the issue 101), according to which the retroactive of the Commission's powers, its ruling effect of a Community measure may be should be confined to the facts of the justified "exceptionally . . . where the case and should not extend to a general purpose to be achieved so demands and proposition concerning the Commission's where the legitimate expectations of legislative powers in a legal vacuum. The those concerned are duly respected". only question to be resolved in this case is whether, in altering the monetary compensatory amounts, the Commission was entitled to take account of the Both those conditions were satisfied. It franchises provided for bv Regulation was in fact a matter of overriding public No 652/79. interest that the system of monetary compensator)· amounts, including the franchises, should be applied in the period 1 to 25 April — the later date being the day before the regulation 3. The Council, whose obsen-ations are entered into force — in exactly the same confined to the third question, first way as it was applied up to 31 March presents the background to the case. The 1980. Furthermore, legitimate expec- system of franchises was introduced in a tations were respected. The franchise limited form in 1974. In 1975, a general system has for many years been an franchise of 1.25 points was applied inherent part of the system of monetary to floating currencies which had compensator»· amounts, so that no trader depreciated. This figure was raised to could reasonably have hoped that it 1.50 points in 1976. By Regulation No would be abolished. That view is all the 652/79, the franchise of 1.50 points was more valid in view of the fact that the applied to all floating currencies, Commission's proposal on the extension irrespective of whether they had of Regulation No 652/79, its Regulation appreciated or depreciated. No 846/80 and its communication to traders of 9 April 198C all envisaged the maintenance of the franchise without any change whatsoever. Anicie 1 of Regulation No ICI 1/60 was worded so as to achieve two aims: first, to render that article applicable to all transactions with effect from 1 April Under these circumstances, the clause 1980 and, secondly, to ensure that concerning individual rights in Article 1 individual rights which might have been of Regulation No 1C11/8C should be acquired by traders before the date of interpreted as covering onlv individual the entry into force of the regulation rignts acquired bv an individual or an would not be affected by such retroactive undertaking as a result of an individual application. decision of the national authorities of a Member State granting him or it the right to receive monetar)· compensatory amounts without deduction of the franchise. in so doing, the Council was guided bv the case-law of the Court, particularly the ludgments of 25 January 1979 in Case 98/7$ Rackc v Hauptzollamt Mainz ([1979] ECR 69) and Case 9S/7X Decker In conclusion, the Council suggests that \ Hauptzollamt Landau ([1979] ECR the answer to the third question should

be that, even in the period from 1 to 25 there is a failure to act by the Council April 1980, the system of monetary and, as a result, a "legal vacuum". compensatory amounts, including the franchise of 1.50 points, was fully applicable. The adoption by the Commission of Regulation No 846/80 constituted a valid exercise of its powers, since the following conditions were satisfied: 4 (a) After describing the history of the franchise system, the Commission explains, in relation to the first question, (aa) There was a legal vacuum that it fixes monetary compensatory following the Council's failure to extend amounts, taking into account the Regulation No 652/79 in March 1980. franchises, and that it is thereafter for The failure to extend that regulation the Member States to grant or charge removed the legal basis for the monetary compensatory amounts on application of the ECU in the Common particular transactions at the rates fixed. Agricultural Policy, with the result that an essential element for the fixing of monetary compensatory amounts was As the Court confirmed in its judgment lacking. of 13 February 1979 in Case 101/78 Granaria v Hoofdproduktschap voor Akkerbouwprodukten ([1979] ECR 623), A return to the unit of account (UA) by Community regulations must be the inverse application of the coefficient presumed valid unless and until they are fixed in Article 1 of Regulation N o declared invalid by a competent court. 652/79 would not have been possible as Therefore the authorities in the United the value of the ECU had meanwhile Kingdom were obliged to apply the changed; monetary compensatory amounts fixed by the Commission regulations, subject to their right to bring an action to annul those regulations under Article 173 of (bb) The Commission was empowered the EEC Treaty. and obliged to take action to ensure the continued functioning of the Common Agricultural Policy. The concept of The first question should therefore be continuity, or a similar legal principle, is answered as follows: recognized by the courts of several Member States. It has also received some recognition in the decisions of the Court of Justice. The principle requires public "So long as Commission Regulations No authorities to ensure that the services for 846 and No 967/80 have not been which they are responsible function declared void under the Treaty, the regularly and continuously. national authorities are bound to apply the monetary compensatory amounts fixed by those regulations." The power and duty to act to prevent undue disturbance to the Common Agri- cultural Policy as a result oi a legal (b) The second question raises a point of vacuum are conferred on the principle as to the powers and duties of Commission by the first indent of Article the Commission in the management of 155 of the Treaty. In support of this the Common Agricultural Policy where argument, the Commission refers to the

The Commission was also unable to The Commission explains that the phrase "freeze" the monetary compensatory "without the individual rights acquired amounts at their existing level pending by operators being thereby affected" was the Council's decision, since that would inserted as a precautionary measure, to not have taken account of the appreci- cover the eventuality of an alteration by ation of sterling on the exchange the Council of the franchise system markets. which existed by virtue of Regulation No 652/79. In this case, no individual right was acquired. idd) In any event, the retroactive extension of the expiry date of Regu- lation No 652/79 by Regulation No The Commission therefore proposes that 1011/80 ratified the measures taken in the third question should be answered as the meantime by the Commission. follows:

STAPLE DAIRY PRODUCTS v INTERVENTION BOARD FOR AGRICULTURAL PRODUCE

2 Those questions were raised in the course of an action brought by Staple Dairv Products Limited against the Intervention Board for Agricultural Produce, the authority responsible for, inter alia, the payment of sums provided by the Community for the purposes of the Common Agricultural Policy. Between 1 and 26 April 1980, the plaintiff exponed milk products from the United Kingdom to other Member States. The Intervention Board

JUDGMENT OF 19. 5. 1982 — CASE 84/81

for Agricultural Produce granted it monetary compensatory amounts in respect of those exports pursuant to Commission Regulation N o 846/80, which fixed the monetary' compensatory amounts in relation to the European Currency Unit, known as 'the ECU', and took account of the franchises introduced by Council Regulation No 652/79, in this case 1.5C points.

3 The system of franchises, which has existed in various forms since 1974, consists in reducing by a certain rate the monetary gap used for the fixing of monetary compensatory amounts, in order to avoid overcompensation through the application thereof. It was maintained by Council Regulation N o 632/79, which, following the creation of the European monetary system, substituted the ECU for the unit of account for the purposes of the application of the Common Agricultural Policy. The rate of the franchise fixed by that regulation was at the material time 1.50 points for Member States, such as the United Kingdom, whose currencies did not belong to the European monetary system.

< Regulation N o 652/79, which was originally to apply until 30 June 1979, was extended until 31 March 1980, when it expired following the Council's failure to adopt in time the Commission's proposals to consolidate the existing agrimonetary provisions or, alternatively, to extend the regulation's validity until 30 June 1980.

7 It was not until 23 April 1980 that the Council adopted Regulation No 1011/80, amending Regulation No 652/79 on the impact of the European monetary system on the Common Agricultural Policy (Official Journal 1980, L 108, p. 3). Anicie 1 of that regulation extended Regulation N o 652/79, with effect from 1 April 1980, until 30 June 1980, "without the individual rights acquired by operators being thereby affected". The regulation entered into force on 26 April 1980, the date of its publication in the Official Journal.

s Under those circumstances, Staple Dairy Products Limited considered that no franchise was applicable to the monetary compensatory amounts payable on exports of milk products from the United Kingdom to other Member States carried out between 1 and 26 April 1980. It therefore brought an action in the High Court for a declaration that it was entitled to monetary compensator)· amounts without deduction of the franchise.

« Considering that a decision of the Court of Justice was necessary to enable it to give judgment, the High Court submitted the following questions for a preliminar)· ruling:

"(1) Having regard to the date prescribed in Article 5 of Council Regulation (EEC) No 652/79, as amended by Anicie 1 of Council Regulation (EEC) N o 1264/79, were the competent authorities in the United Kingdom bound in respect of transactions undertaken between 1 April 1980 and 26 April 1980 inclusive to pay monetar)· compensatory

JUDGMENT OF 19. 5. 1982 — CASE 84/81

amounts on exports of milk products from the United Kingdom to other Member States of the European Communities, without making a deduction of 1.50 percentage points?

n The plaintiff in the main proceedings maintains that that provision is invalid, because it produces an unlawful retroactive effect, in so far as it extends to exports carried out during the said period.

STAPLE DAIRY PRODUCTS v INTERVENTION BOARD FOR AGRICULTURAL PRODUCE

i: In this regard, the Court has already stated in its judgments of 23 January 1979 in Case 98/78 (Rackev Hauptzollamt Mainz [1979] ECR 69) and Case 99/78 {Decker v Hauptzollamt Landau [1979] ECR 101) that although in general the principle of legal certainty precludes a Community measure from taking effect from a point in time before its publication, it may exceptionally be otherwise where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected. Those conditions are satisfied in this case.

i3 Indeed, with regard to the first condition, it may be said that the aim to be achieved required the re-establishment with effect from 1 April 1980 of the system instituted by Regulation No 652/79. That basic regulation introduced a number of measures concerning the European monetary system in relation to the Common Agricultural Policy. Those measures form an indissoluble whole, covering both the replacement of the unit of account by the ECU for the purposes of the Common Agricultural Policy and the introduction of the franchise in order to avoid distortions in prices and also gradually to abolish monetary compensatory amounts.

i6 It must also be remembered that Commission Regulation No 846/80, as is clear from its preamble, introduced positive monetary compensatory amounts in certain sectors, including the dairy sector. Since the effect of Council Regulation N o 1011/80 was retroactively to confirm those provisions, it is even less capable of interfering with the legitimate expectations of exporters, who, without that regulation, could not legally have obtained anv monetarv compensatory amount.

17 The content and scope of the proviso included in Article 1 of Regulation No 1011/80 concerning the individual rights acquired by operators must be examined in the light of the foregoing considerations. The plaintiff in the main proceedings contends that that proviso must be understood as laving down a general right for exponers to be treated solely in accordance with the legislation in force at the time when the exports were made, which would mean that the franchise could not be applied to their exports made between 1 and 25 April 1980.

is Such an interpretation, which would amount to the total exclusion of the application of Regulation N o 1011/80 prior to the date of its enirv into force, cannot be accepted. It would be contrary to the clear wording of the regulation and would in addition impair its efficacy by calling in question the proper functioning of the system.

19 The reference in Article 1 of Regulation No I0I1/8C to individual rights acquired by operators refers only to rights definitivei) conferred on those operators by individual decisions adopted by the competent national authority between 1 and 25 April 1980.

T H E COURT,

in answer to the questions referred to it by the High Court of Justice by order of 2 March 1981, hereby rules:

Article 1 of Council Regulation No 1011/80 of 23 April 1980 retro- actively confirmed the application by the competent national authority of monetary compensatory amounts to exports of milk products from the United Kingdom to other Member States between 1 and 25 April 198C, those amounts being granted in accordance with Commission Regulation

OPINION OF SIR GORDON SLYNN — CASE 84/81

No 846/80, that is to say in relation to the ECU and taking account of the franchise of 1.50 points, without prejudice, however, to rights definitively conferred on operators by individual decisions adopted by the competent national authority between 1 and 25 April 1980.

Menens de Wilmars Bosco Touffait Due Pescatore Mackenzie Stuart O'Keeffe Koopmans Everling Chloros Grévisse