C-314/89

2. In return for payment of a non-marketing premium his parents had 'Council Regulation (EEC) No 857/84 of undertaken, under the system established by 31 March 1984, as supplemented by Council Regulation (EEC) No 1078/77, 1 Commission Regulation (EEC) No 1371/84 not to market milk or milk products during of 16 May 1984, is invalid in so far as it a period of five years expiring on does not provide for the allocation of a 21 December 1984. reference quantity to producers who, pursuant to an undertaking entered into under Council Regulation (EEC) No 1078/77 of 17 May 1977, did not deliver milk during the reference year adopted by the Member State concerned.' 3. By the end of the non-marketing period, that is to say, when the farm was trans- ferred, sufficient cows had been reared for milk production to be resumed immediately. 6. In order to comply with those judgments the Council amended Regulation (EEC) No 857/84 4 by inserting Article 3a which, subject to certain conditions, enables a 4. In 1985 Mr Rauh was refused a milk special reference quantity to be granted to reference quantity for the first time on the such producers. grounds that there had been no milk production on the holding during the 2 — Case 120/86 Mulder v Minister van Landbouw en Visserij [1988] ECR 2321. 3 — Case 170/86 Von Deelzen v Hauptzollamt Hamburg-Jonas * Original language: French. [1988] ECR 2355. 4 — Council Regulation (EEC) N o 764/89 of 20 March 1989 1 — Council Regulation (EEC) No 1078/77 of 17 May 1977 amending Regulation (EEC) N o 857/84 adopting general introducing a system of premiums for the non-marketing rules for the application of the levy referred to in Article of milk and milk products and for the conversion of dairy 5c of Regulation (EEC) N o 804/68 in the milk and milk herds (OJ 1977 L 131, p. 1). products sector (OJ 1989 L 84, p. 2).

shall receive provisionally, if they so request within three months from 29 March 1989, a special reference quantity and provided that 9. Mr Rauh brought proceedings before such producers: the Finanzgericht München which has expressed serious doubts as to the lawfulness of the competent German auth- orities' refusal and referred the questions set (a) did not cease farming within the out hereinafter to the Court of Justice. meaning of Article 2(3) and (4) of Regulation (EEC) No 1078/88 or transfer the whole of their dairy enterprise before the end of the non-marketing or conversion period; Question 1

(b) establish in support of their request, to the satisfaction of the competent 10. The first question is as follows:

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'Where an undertaking is sold, leased or transferred by inheritance, all or part of the corresponding reference quantity shall be 14. It is not — and could not transferred to the purchaser, tenant or heir be — contested that Article 3a(l) expressly according to procedures to be determined.' envisages only two categories of successors in title who can seek the grant of a special reference quantity, namely:

17. Article 7(3) of Commission Regulation (EEC) No 1546/88 5 provides, moreover,

— producers who originally entered into 5 — Commission Regulation (EEC) No i 546/88 of 3 June the non-marketing undertaking and 1988 laying down detailed rules for the application of the additional levy referred to in Article 5c of Regulation who, on the expiry of their (EEC) No 804/68 (OJ 1988 L 139, p. 12).

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that the abovementioned provisions are of Regulation (EEC) No 857/84 shall, in 'applicable under the various national rules, the event of the transfer of the holding by in other cases of transfer which have inheritance or by any similar transaction, be comparable legal effects as far as producers transferred in accordance with the first and are concerned'. third subparagraphs of Article 7 provided that the producer to whom the holding is transferred in whole or in part undertakes in writing to comply with the undertakings of his predecessor. Article 3a(4) of Regulation 18. What then of an heir in Mr Rauh's (EEC) No 857/84 shall continue to apply to position? the special reference quantity thus trans- ferred. . . . '

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25. Finally the Commission's view would Dutch, which is the language of the case, amount to prolonging the effects on the uses the words 'na afloop van zijn producer (in this instance, Mr Rauh's verbintenis' which means 'after the expiry of father) of his non-marketing undertaking. It his undertaking'. A producer thus continues would render it impossible for the producer to enjoy a right to a reference quantity after to transfer his right to reference quantities the expiry of the non-marketing period. after the expiry of the non-marketing period That also follows from the conditions laid whereas he would have had no difficulty in down in Article 3a(l)(a) under which a transferring all his rights to his successor if person requesting a special reference he had not entered into a non-marketing quantity must not have transferred the undertaking. whole of his dairy enterprise before the end of the non-marketing period. That provision necessarily implies that a reference quantity can in practice be granted only after the end of the non-marketing period. 26. The basic principle underlying the judgments which Article 3a was adopted to implement is precisely the opposite, namely that a producer who has entered into a non-marketing undertaking did so for a limited duration and cannot have to bear 29. However since Article 3a was not the consequences after the expiry of that introduced until 1989, Mr Rauh's father period. was not able to request the grant of such a quantity after 21 December 1984, when his non-marketing undertaking expired. He could have done so within a period of three months as from the date of publication of 27. In paragraph 24 of the abovementioned the regulation adopting Article 3a (as is judgment in Mulder, the Court held that: expressly laid down by that provision). However by then he had already transferred the holding to his son.

32. Reference may also be made to Article do not consider it necessary to examine, as 7 of Regulation No 857/84 which uses the the Commission suggests by way of a expression 'corresponding reference concession from its general view, whether quantity'. Prior to the transaction similar to the heir's predecessor in title did indeed an inheritance, there existed an expectancy intend and was indeed able to resume milk of a 'corresponding reference quantity' and production. But for what it is worth, it that expectancy passed to the heir. In other should be noted that in the main words the expression 'producer' in Article proceedings, the predecessor in title did in 3a(l), interpreted in the light of the general any event restore the holding to such a state principle referred to above and of Article 7, that his son could easily have resumed must be construed in the sense of 'the production immediately, which amounts to producer or his heir'. the same thing.

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of the non-marketing undertaking are not precisely because he availed himself of the entitled to receive a special reference possibilities offered by the Community quantity?' provisions (paragraph 24 of the Mulder judgment and paragraph 13 of the Von 38. Should the Court hold that Regulation Deetzen judgment). No 857/84 is not to be given a broad inter- pretation, as proposed above, I consider that 40. Similarly such a producer could legit- the second question should be answered in imately expect to be able to transfer to his the affirmative. heir a holding which was again permitted to market milk. To deny him that possibility 39. In the Mulder and Von Deetzen would be contrary to the principle of the judgments the Court held that where a protection of legitimate expectations. producer has been encouraged by a Community measure to suspend marketing of milk for a limited period in the general 41. However, since I believe that it is interest and against payment of a premium, possible, albeit at the cost of a certain inter- he may legitimately expect not to be subject, pretive effort, to answer the first question in upon the expiry of his undertaking, to the affirmative, I suggest that the Court rule restrictions which specifically affect him that the second question is redundant.

Conclusion

42. For all the reasons set o u t above I suggest that the following answers be given to the questions asked by the Finanzgericht M ü n c h e n :

'(1) Article 3a of Council Regulation N o 8 5 7 / 8 4 must be interpreted as also allowing, subject to the conditions laid d o w n therein, a special reference quantity to be granted t o an heir w h o has taken over the dairy holding of his predecessor only after the expiry of the predecessor's non-marketing u n d e r - taking.