C-177/90
ECLI:EU:C:1991:352
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KÜHN v IANDWIRTSCHAFT5KAMMER WESER-EMS
OPINION OF MR ADVOCATE GENERAL MISCHO delivered on 26 September 1991*
Mr President, 3. After Mr Kühn's application that the Members of the Court, reference quantity for his holding be calculated on the basis of its production in 1981 or 1982 had been rejected by the competent authorities, Mr Kühn brought an action before the Administrative Court which was also dismissed. The Oberverwal- tungsgericht für die Länder Niedersachsen 1. Council Regulation (EEC) No 856/84 of und Schleswig-Holstein (Higher Adminis- 31 March 1984 amending Regulation trative Court for Lower Saxony and (EEC) No 804/68 on the common organ- Schleswig-Holstein), before which the ization of the market in milk and milk matter was brought, has referred two products (Official Journal 1984 L 90, questions to this Court for a preliminary p. 10) introduced an 'additional lev/ on ruling which I will examine later. Before quantities of milk delivered in excess of a doing so, I would however like to make a reference quantity. The latter is determined preliminary observation. in accordance with Council Regulation (EEC) No 857/84 of 31 March 1984 adopting general rules for the application of the levy referred to in Article 5c of Regu- lation (EEC) No 804/68 in the milk and Preliminary Observation milk products sector (Official Journal 1984 L 90, p. 13).
4. The questions which have been referred to the Court for a preliminary ruling were raised in proceedings between the owner of a farm and the national authority 2. The plaintiff in the main proceedings, empowered to fix reference quantities, and Mr Kühn, is the owner of a holding which in its order for reference the national court had been leased to Mr Roolfs. The lease refers to a possible infringement of the was terminated by judicial decision with fundamental right to property and the effect from 30 April 1981 but the lessee principle of non-discrimination between obtained security of tenure until 30 April lessors. 1983. He had delivered 220 489 kg of milk in 1981, 200 626 kg in 1982 and 55 621 kg in 1983. His successor, Mr Cremer, delivered another 32 666 kg in 1983 which was the reference year chosen by Germany 5. On the other hand, however, Regulation and in the course of which there had No 857/84 provides for the grant of therefore been a considerable fall in reference quantities only to producers of production on the holding owned by milk. Article 2 of that regulation provides Mr Kühn. that
* Original language: French.
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'The reference quantity . . . shall be equal to farm who had never himself engaged in the quantity of milk . . . delivered by the milk production on the leased farm, on producer during the . . . calendar year . . . '. which, moreover, the essential elements of a milk-production unit, namely the dairy herd and the technical facilities necessary for milk production, had always remained the Article 12 of the same regulation defines the property of the lessee. In that particular producer as being context, the Court held in substance that it would be contrary to the requirements of the protection of the lessee's fundamental rights if he were prevented from keeping, 'a . . . person . . . farming a holding . . . : upon the expiry of his lease, a part of the reference quantities, because that would deprive him, without compensation, of the fruits of his labour and of his investments in — selling milk or other milk products the tenanted holding. directly to the consumer, and/or
— supplying the purchaser.' 8. I consider it important to recall those matters in order to make the point that under the system of quotas the relationship 6. Moreover, the relevant legislation between owners and lessees is far from expressly authorizes the Member States to simple and to propose that in the present place at the disposal of the departing lessee case the Court should not go deeply into all or part of the reference quantity corre- the problems associated with that sponding to the holding which he is leaving. relationship. This case, moreover, does not I refer here to Regulation No 590/85 ' raise the question of the reference quantities which amended Article 7 of Regulation which the previous lessee can take with him, No 857/84. In the sixth recital in the because it became apparent at the hearing preamble to that regulation it is explained that Mr Roolfs had not obtained any that the application of Article 7 (in its reference quantity. On the other hand, if original version) might, in certain cases, your judgment is eventually to the effect result in difficult situations at an economic that a larger reference quantity must be and social level and that it was therefore assigned to the new lessee, Mr Cremer, the appropriate to introduce the right in owner of the holding, Mr Kühn will indi- question to permit a lessee whose lease on a rectly benefit from that. I will accordingly holding is due to expire to continue milk limit myself to examining the questions production elsewhere. referred from the point of view of the rights of milk producers.
7. In its judgment in Wachaufy Bundesamt für Ernährung und Forstwirtschaft2 the Court had to consider the case of a lessor of a The first question
1 — Council Regulation (EEC) No 590/85 of 26 February 1985 amending Regulation (EEC) No 857/84 (OJ 1985 L 68, p. 1). 2 — Judgment in Case 5/88 Wachauf v Bundesamt Jur Ernährung und Forstwirtschaft [1989] ECR 2609. 9. The first question is worded as follows:
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'Were the Council or the Commission of Member Sutes shall inform the Commission the European Communities under an obli- of cases of application of the first gation, when adopting the provisions subparagraph. Additions to the list of governing guaranteed milk quantities, to situations referred to in the second make allowance (in Article 3(3) of Regu- subparagraph may be made according to the lation (EEC) No 857/84) for a change of procedure laid down in Article 30 of Regu- lessee on an agricultural holding occurring lation (EEC) No 804/68.' in the reference year chosen by the Member States, by means of a provision for cases of hardship (for example, the option of appointing a different year as the reference 11. Applying that procedure the year)?' Commission added to the list of situations, to which I have just referred, by means of Article 3 of Commission Regulation No 1371/84 laying down detailed rules for the application of milk quotas1 and added 10. Article 3(3) of Regulation (EEC) the following cases: No 857/84 provides that
'— compulsory appropriation of a 'Producers whose milk production during considerable pan of the utilizable agri- the reference year referred to under Article cultural area of the producer's holding, 2 has been affected by exceptional events resulting in a temporary reduction of occurring before or during that year shall the fodder area of die holding, obtain, on request, reference to another calendar reference year within the 1981 to 1983 period. — if the producer runs the holding himself, occupational incapacity of long duration, The following situations may justify application of the first subparagraph: — theft or accidental loss of all or part of the dairy herd, where this has had a significant effect on the milk production — a serious natural disaster affecting the of the holding.' producers' farm to a substantial extent,
12. The Landwirtschaftskammer (Chamber — the accidental destruction of the of Agriculture), Weser-Ems, the defendant producers' fodder resources or buildings b the main proceedings, the Council and used for dairy livestock, the Commission of the European Communities propose that the Court should reply in the negative to the first question. In
) — Coraminkm Regulation (EEC) N o 1371/84 of 16 May — an epizootic affecting all or part of the 1984 laying detailed rula for the application of the additional levy retened to in Article 5c of Regulation milk herd. (EEC) N o 804/68 (OJ 1984 L 112, p. II).
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support of their argument they refer to the were adopted in breach of the principle of consistent case-law of the C o u n according the protection of legitimate expectations and to which that it was invalid in so far as it did not provide for the allocation of a reference quantity to producers who had not delivered milk during the reference year because they 'when a situation necessitates the evaluation had entered into an undertaking to cease of a complex economic situation, as is the production temporarily. case concerning the Common Agricultural Policy, the Community legislature enjoys a wide discretion as to the nature and scope of the measures to be taken'. 15. It should first be noted that the last subparagraph of Article 3 of Regulation No 857/84 provides expressly that additions to the list of situations referred to 13. They also refer to the Court's judgment in the second subparagraph may be made in Case C-67/89 Berkenbeide v Haupt according to the Management Committee zollamt Münster [1990] ECR 2615, procedure. The Council has therefore paragraph 14, in which the Court, after recognized that other exceptional events, referring to the same provisions as those worthy of inclusion, might exist. Even after concerned in this case, stated that Article 3 of Commission Regulation N o 1374/84 added three other cases to the list of situations which could justify the 'the structure and purpose of the regulations adoption of another calendar reference on the additional levy indicate that they year, the Commission kept and still keeps contain an exhaustive list of the situations in open the possibility of making further which reference quantities or individual additions to that list. quantities may be granted and set out precise rules concerning the determination of those quantities'. 16. In the case in point there is no doubt that the production of milk on the property owned by Mr Kühn 14. However, that statement is not sufficient to dispose of the matter. The problem is whether the Community institutions have infringed the principles of 'has been affected . . . during the reference legal certainty or of the protection of legitimate expectations by not providing a year*. derogation in situations such as those in dispute in the main proceedings. It should be recalled that in the judgment in Case 120/86 Mulder v Minister van Landbouw en However, what may be disputed is whether Visserij [1988] ECR 2321 the limiting that reduction in production was due to nature of the derogating clauses did not 'exceptional events'. prevent the Court from holding that the regulations on the additional levy on milk
4 — See in particular the judgment in Case 84/87 ErptUinl v 17. In that respect, it is clearly apparent Serr&tJR ďttaX ì VAfnaitm a è L Vtáadoot [1988] ECR 2647 at p. 2673. from Article 3 of Reguladon N o 857/84
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that the exceptional events which may be consider that most of those cases do not taken into consideration must exist with display all the characteristics of force respect to the mflk producer and not to the majeure, as defined by the Court, namely owner of the land and buildings. unusual and unforeseeable circumstances, beyond the control of the person concerned, the consequences of which could not have been avoided even if all due care had been exercised.5
18. I therefore consider that the Council, the Commission and the Landwirtschafts- kammer Weser-Ems are wrong to view 20. Accordingly, if the second and third matters from the point of view of the lessor situations referred to in Article 3 of Regu- and to sute that the change of lessee during lation No 857/84 are considered, it will be the reference year and the fall in production seen that they are not concerned with liable to result from it constitute obvious unforeseeable events. On the contrary, it and inherent risks in connection with the may be considered that 'the accidental lease of a farm which are entirely fore- destruction of the producer's fodder seeable by the lessor. For the same reason, it resources or buildings', as indeed 'an is not appropriate to argue, as does the epizootic affecting all or part of the milk Landwirtschaftskammer Weser-Ems, that herd', are pan of the inherent risks involved the lessor could have guarded against those in a milk producer's business. Similarly, the risks by inserting appropriate clauses into producer's Occupational incapacity of long the lease. Moreover, even if Mr Kühn had duration' or 'the theft or accidental loss of stipulated in the leases entered into with part of the dairy herd' could not be Mr Roolfs, and then with Mr Cremer, that regarded as force majeure. they were required to produce a certain quantity of milk per month, the failure to comply with that stipulation might have given him a right to obtain compensation for breach of contraa, but would not have led to a reference quantity being fixed 21. The Council, the Commission and the which was higher than the quantity of milk Landwirtschaftskammer Weser-Ems are actually delivered. It is that reference however correct in stating that the situations quantity which is in dispute in this case. specified all concern 'circumstances beyond the producer's control', that is to say events over which he has no control.
22. When seen from this point of view, 19. One must therefore put oneself in the what is the position of farmers who, like position of the lessee and examine, from his Mr Cremer, have begun their production point of view, whether he has been the during the year which was subsequently victim of 'exceptional events'. The Council chosen as reference year by the Member argues that only cases of force majeure could State concerned? be considered as such and that this is proved in particular by the six cases appearing in 5 — See in particular the jucteemem in Caie 266/84 DnJkavit the list. However, like the Commission, I Fnma v Fornt [1986] ECK 170, paragraph 27.
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23. If one considers the problem in the average of 4 083 kg. During the first four abstract, one is led to conclude that any months of the same year the previous lessee, producer of milk has control over his Mr Roolis, had still produced 55 621 kg, production: he alone decides whether to that is to say 13 905 kg per month. During acquire a greater or lesser number of dairy the course of the whole of 1992, Mr Roolfs cows. Moreover, if on a particular holding had produced 200 625 kg, a monthly the previous farmer has been able to keep average of 16 718 kg. 90 cows and produce up to 220 000 kg of milk per year, there is, at first sight, no reason why the subsequent farmer could not also do the same. 27. The reference quantity allocated to Mr Cremer amounted to 41700 kg, to which were added 5 000 kg under a provision of a German law which permits an 24. However, if one leaves aside this level additional quantity to be allocated to of abstraction, one finds that the reality is farmers in danger of having to cease their much more complex and all depends upon activities. Mr Cremer therefore obtained a the actual situation of each individual reference quantity much lower than the farmer. If he had previously already quantity of milk actually produced on produced milk on another holding with a Mr Kühn's holding by Mr Roolfs, and by large herd owned by him, he will be able to Mr Cremer himself, during the course of transfer that herd without difficulty to the the reference year 1983 (namely 88 287 kg). new holding and to achieve immediately a high monthly rate of production on it.
28. As the Commission points out, we are entitled to presume that the 41 700 kg have 25. If, however, the new farmer has at the been calculated on the basis of Article 6(2), outset no dairy cows and if his finances are in conjunction with Article 4(4), of Regu- limited, he will only be able to acquire lation No 1371/84, the result of which is gradually (by purchase or breeding) a dairy that, where there is a change of lessee after herd similar to that owned by his prede- the beginning of the reference period, the cessor. Member States may allocate to the new lessee a reference quantity corresponding to his sales in his last 12 months of operation before 1 April 1984, weighted by a percentage where appropriate. In the case of 26. It is apparent from the file relating to producers who have been conducting opera- the main proceedings and the explanations tions for less than 12 months, Member given at the hearing that Mr Cremer, the Sutes are to determine an annual sales new lessee, found himself in the latter quantity on the basis of actual sales. situation. The former lessee had sold all his cows and all his fodder. Accordingly, Mr Cremer had only been able to build up his dairy herd gradually. Therefore, the milk production on the holding had only 29. The case of Mr Cremer shows that this been 32 666 kg between 1 May and rule can have dramatic results for the 31 December 1983, that is to say a monthly producer concerned. From a legal point of
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view, one might ask first of all whether the Werner Faust v Commission [1982] material impossibility for a new lessee to ECR 3745, and paragraph 33 of the achieve, during the reference period laid judgment in Joined Cases 424/85 and down by the provisions which I have 425/85 Cooperative Meikproducentenbe- quoted, milk production corresponding even drijven Noord-Nederland BA (Frico) and approximately to the average level achieved Others v Vædsehoorzienings In- en by the previous lessee, ought not to have Verkoopbureau [1987] ECR 2755). This is been considered by the Council or by the particularly true in an area such as the Commission as an exceptional event within common organization of the markets whose the meaning of Article 3(3) of Regulation purpose involves constant adjustments to No 857/84. meet changes in the economic situation (see paragraph 22 of the judgment in Case 84/78 Angelo Tomadini v Amministrazione delle finanze dello Stato [1979] ECR 1801, paragraph 48 of the judgment in Case 30. However, in fact it is not the slow 112/80 Firma Anton Dürbeck v Haupt- start-up in production which is exceptional, zoUamt Frankfurt am Main/Flughafen [1981] but the fact that the unusually low ECR 1095, and paragraph 33 of the production, which is often typical of the judgment in Frico, cited above).' 'It follows beginning of an agricultural lease, was that traders cannot claim a vested right to nevertheless adopted as the basis for fixing the maintenance of an advantage which they the reference quantity allocated to such a derive from the establishment of the producer. Hiis problem does not therefore common organization of the markets and really fall within the logic of the scheme which they enjoyed at a given time (see underlying Article 3(3) of the Council's paragraph 22 of the judgment in Case regulation. I therefore propose that the 230/78 Eridania-Zuccherifici Nazionali and Court hold that the Council, by not Another v Minister for Agriculture and providing ad hoc for the particular situation Forestry and Others [1979] ECR 2749, and of that category of farmers to be taken into paragraph 18 of the judgment in Joined account, has infringed the principle of the Cases 133/85 to 136/85 Walter Rau Lebens- protection of legitimate expectations. mittelwerke v Bundesanstalt für kndwirt- schafiliche Marktordnung [1987] ECR 2289).'*
31. I am certainly aware that the Court has consistently held that 32. I recognize also that in 1983 milk producers had to expect that production quotas would be fixed which would impose a ceiling on their production or even reduce 'whilst the principle of the protection of it when compared with their previous legitimate expectations is one of the funda- production. But no producer could have mental principles of the Community, traders expected to have imposed on him a cannot have a legitimate expectation that an reference quantity equivalent only to existing situation which is capable of being one-fifth of the milk produced on the same altered by the Community institutions in the holding during the previous years. In exercise of their discretionary power will particular, no German farmer taking on a be maintained (see paragraph 27 of the holding during 1983 could have expected judgment in Case 245/81 Edeka Zentrale that 1983 would have been chosen, AG v Germany [1982] ECR 2745, paragraph 27 of the judgment in Case 6 — Judgment in Cue C-350/88 Meat md Othm v 52/81 Offene HandebgeseUschafi in Firma Commotion [1990] ECR 1-395, paragraph» 33 and 34.
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subsequently, as the reference year and that The second question the unusually low production during his starting period would ako be taken as the basis for fixing his reference quantity. If he had been aware of that, it is virtually certain that he would not have agreed to enter into 36. The second question is worded as a lease. follows:
33. By not adopting an appropriate dero- 'Is a reference quantity transferred, by gating provision to take account of this type virtue of Article 7(1) of Regulation (EEC) of case, the Council has accordingly No 857/84 in conjunction with subpara- violated the legitímate expectations of that graphs 1 and 3 of Article 5 of Regulation category of producers. (EEC) No 1371/84, to a producer who takes over the holding when an entire holding used for milk production changes hands between 1 January 1983 and 2 April 1984?' 34. Secondarily, the Council's conduct constitutes a disproportionate breach of the principle of the freedom to pursue an occu- pation. Fixing a producer's reference quantity at such a low level is not justified 37. Under Anicie 7(1) of Council Regu- by the need to ensure that the quantities of lation No 857/84:7 milk and milk products placed on the market do not exceed the total quantity guaranteed by the Community (see, by analogy, paragraphs 13 and 14 of the judgment in Joined Cases C-90/90 and •Where a holding is sold, leased or trans- C-91/90 Neu v Secretam d'État à l'Agri- ferred by inheritance, all or part of the culture et à la Viticulture [1991] ECR corresponding reference quantity shall be 1-3617, paragraphs 13 and 14). Accordingly, transferred to the purchaser, tenant or heir the Council has wrongly invoked the according to procedures to be determined.' principle of legal certainty and of the effec- tiveness of the additional levy.
38. Subparagraph 1 of Article 5 of Commission Regulation No 1371/848 35. I therefore propose that the reply to the provides that where an entire holding is first question referred to the Court by the sold, leased or transferred by inheritance, Oberverwaltungsgericht should be that, the corresponding reference quantity is to when adopting the provisions governing be transferred in full to the producer who guaranteed milk quantities, the Council of takes over the holding. Subparagraph 2 of the European Communities was under an Article 5 lays down rules applicable where obligation to adopt a provision making it one or several parts of a holding is leased. possible to allocate, to new lessees commencing milk production during the 7 — In the version in force following Council Regulation (EEC) N o 590/85 of 26 February 1985 amending Regu- reference year adopted by a Member Sute, lation (EEC) N o 857/84 (OJ 1985 L 68, p. 1). at their request, another calendar reference 8 — At amended by Commission Regulation (EEC) N o 1043/85 of 24 April 1985 amending for the ninth time year within the period from 1981 to 1983. Regulation (EEC) No 1371/84 (OJ 1985 L 112, p. 18).
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39. Finally, subparagraph 3 of Article 5 provisions quoted, considered as a whole, sutes that the provisions of subparagraphs 1 that the Community legislature intended and 2 of Article 5 are applicable in other that at the end of the lease the reference cases of transfer which, under the various quantity should in principle return to the national rules, have comparable legal effects lessor who retakes possession of that as far as producers are concerned. holding, subject, however, to the Member Sutes' power to allocate all or part of the reference quantity to the departing lessee.'
40. Regulation No 1371/84 has in the mean time been replaced by Regulation (EEC) No 1546/88.9 The provisions which I have just cited appear thereafter, without 42. In paragraph 15 of the same judgment amendment, in Article 7 of that new regu- the Court stated that: lation.
41. In paragraph 13 of its judgment in 'The surrender of a tenanted holding upon Wachauf, cited above, the Court held: the expiry of a lease has comparable legal effects, within the meaning of subparagraph 3 of Article 5 of Regulation No 1371/84, to those brought about by the transfer of the holding upon the grant of the lease, for 'According to Article 7(1) of Regulation both transactions enuil a change in the No 857/84, as amended by Council Regu- possession of the production units in lation N o 590/85 of 26 February 1985 question within the contractual relations (Official Journal 1985 L 68, p. 1), "where created by the lease. Consequently, the a holding is sold, leased or transferred by surrender, upon the expiry of the lease, of inheritance, all or part of the corresponding leased agricultural production units is a case reference quantity (that is to say the covered by subparagraph 3 of Article 5 of quantity exempt from the additional levy) Regulation No 1371/84, provided that shall be transferred to the purchaser, tenant upon the grant of the lease their transfer or heir according to procedures to be falls under subparagraph 1 of Article 5, determined". However, paragraph 4 of that which is the case when a "holding" within article provides that "in the case of rural the meaning of Article 12(d) of Regulation leases due to expire, where the lessee is not No 8 5 7 / 8 4 . . . is involved.' entitled to an extension of the lease on similar terms, Member Sutes may provide that all or part of the reference quantity corresponding to the holding or the part thereof which forms the subject of the lease shall be put at the disposal of the departing 43. When a farmer leaves a holding, the lessee if he intends to continue milk reference quantities allocated to him production". It is apparent from the therefore returned in principle to the owner who, by entering into a lease with another 9 — Commitaon Regulation (EEC) No 1 Me/88 of ) hue farmer, transfers them to the latter unless it 1988 laying down neural rules for tbe appbeation of the has been expressly agreed to allow the additional hrry referred co in Anide Sc of Regulación (EEC) No 804/68 (OJ 1988 L 139, p. 12). departing lessee to retain a part.
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44. But what is the situation where the second paragraph of Article 7 of Regulation change of lessee has taken place during the No 1546/88 provide that reference year, that is to say at a time when a reference quantity had not yet been allocated? 'Member States may apply the provisions of points 1, 2 and 4 in respect of transfers taking place during and after the reference 45. In my opinion, it follows on logically period'. from the foregoing that the quantity produced during the first part of the reference year by a lessee whose lease expires must also revert, at least for a 'legal Those regulations wrongly provided the second', to the owner of the holding before Member Sutes only with an option to do being transferred to the new lessee. The so. production which the latter achieves during the rest of the reference year will accordingly be added to the quantity 47. I therefore propose that the Court produced by the previous lessee and both should reply in the affirmative to the second together will constitute the reference question. quantity for the new lessee.
48. It is clear that if the Court replies to the 46. In view of the interpretation given by first question in the manner which I have the Court, in paragraph 13 of its judgment just proposed, a new lessee whose average in Wacbauf, to Article 7 of Regulation monthly production during the reference No 857/84, which takes precedence over year has been lower than that of the the Commission Regulations No 1371/84 previous lessee, will be more interested in and No 1546/88, it cannot be objected that asking for one of the other reference years the second sentence of subparagraph 3 of within the period 1981 to 1983 to be taken Article 5 of Regulation No 1371/84 or the into consideration.
Conclusion
49. I therefore propose that the Court give the following replies to the questions submitted by the national court:
'1. When adopting the provisions governing guaranteed milk quantities, the Council of the European Communities was under an obligation to adopt a provision making it possible to allocate to new lessees commencing milk
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production during the reference year adopted by a Member State, at their request, another calendar reference year within the period from 1981 to 1983.
2. Article 7(1) of Regulation (EEC) No 857/84 in conjunction with subpara- graphs 1 and 3 of Article 5 of Regulation (EEC) No 1371/84 are to be inter- preted as meaning that a reference quantity is transferred to a producer who takes over a holding used for milk production when that entire holding has been transferred between 1 January 1983 and 2 April 1984.'
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