C-98/91

* Original language: German. 1 — Council Regulation No 1078/77 of 17 May 1977 introducing 2 — Council Regulation (EEC) No 857/84 of 31 March a system of premiums for the non-marketing of milk and 1984 adopting general rules for the application of the levy milk products and for the conversion of dairv herds, OJ referred to in Article 5c of Regulation (EEC) No 804/68 in 1977 L 131, p. 1. the milk and milk products sector, OJ 1984 L 90, p. 13.

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holding situated at Gietheim. The association 8. By order of 26 June 1991 the court produced milk there during the year referred a further question, concerning the 1988/89. validity of Article 3a(5) of Regulation No 857/84 (in the version contained in Regulation No 764/89), which lays down rules regarding the remission or repayment of the additional levy in respect of quantities produced prior to the sixth period of appli­ 6. Upon the introduction by Regulation cation of the scheme (that is to say, prior to 3 (EEC) No 764/89 of rules for the grant of 1 April 1989). 'special' reference quantities to so-called 4 SLOM farmers, who, in accordance with undertakings given pursuant to Regulation No 1078/77, had delivered no milk during the relevant reference year, the plaintiff like­ wise applied for the allocation of such a ref­ B — Opinion erence quantity.

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10 mate expectations — would appear in a tent authority designated by the Member different light, and would possibly be nuga State, in accordance with the procedure laid tory, if that provision did not constitute an down by it and provided that the producers obstacle to the allocation of a special refer can prove that they still operate, in whole or ence quantity. in part, the same holdings as those they oper- ated at the time of the approval, referred to in Article 5(2) of Commission Regulation

1 No 1033/89 of 20 April 1989, regard being primarily to the judgment in O'Brien. 1In had to the recitals in the preamble thereto, that case, the Court construed the unequivo incompatible with higher-ranking Commu cal wording of the contested provision, read nity law, and in particular with Article 3a of in conjunction with Article 3a(1) of Regula Regulation (EEC) No 857/84 of the Council tion No 857/84, as meaning that the provi of the European Communities, as inserted sional allocation of a special reference quan therein by Council Regulation (EEC) tity is subject to the condition that the No 764/89?' producer in question still operates, in whole or in part, the same holding as that which he operated at the time of his premium applica

stances. This examination is necessary, since lation No 764/89 with that principle. There can be no doubt, however, that the reference should be to Article 3a of Regulation No 15-16/88, the validity of which is in issue in the first question referred for a preliminary ruling. 11 — Footnote 8 above. 9 — OJ 1978 L 167. p. 45. 12 — Paragraph 12 of the judgment.

'applications (for the allocation of a special 15. As regards those circumstances in which reference quantity) may be submitted solely Member States may provide, pursuant to by producers in a position to operate at least Article 7(4) of the amended version of Regu­ in part the same production units as those lation No 857/84, that all or part of the ref­ they operated when applying for the pre­ erence quantity is to be put at the disposal of mium for the non-marketing of milk or for the outgoing lessee, I shall revert to this the conversion of dairy herds'. point in my examination of the validity of the contested provision. For the purposes of its interpretation at this stage, I need only state that the intention of the Community legislature was to secure the application, not of that exception, but merely of the afore­ 14. The Court's statements in that judgment mentioned rule. were of an entirely general nature. In my view, therefore, the position can be no differ­ ent in the present case, in which the farmer in question lost the holding on the expiry of his lease. At all events, the contested provi­ sion appears to constitute a specific expres­ sion of the principle of a 'link with the 16. Thus Article 3a of Regulation land', 15 whereby reference quantities are No 1546/88 can clearly be regarded in the allocated to producers, that is to say, having present context as confirming the principle regard to the definitions given in Article of a link with the land in the event of the 12(c) and (d) of Regulation No 857/84, to expiry of a lease, a special feature of which the person or group of persons farming a is, of course, the fact that that rule is applied holding at a particular time. 16 As the Court to surrenders taking place between the end has inferred from Article 7(1) and (4) of Regulation No 857/84, in the version con­ 17 — Council Regulation of 26 February 1985 amending Regula­ tion (EEC) No 857/84 laying down general rules for the application of the levy referred to in Article 5c of Regula­ tion (EEC) No 804/68 in the milk and milk products sector, 13 — See footnote 12 above. OJ 1985 L 68, p . 1. 14 — Paragraph 13 of the judgment. 18 — Commission Regulation of 16 May 1984 laying down 15 — This has now become the expression customarily used: see detailed rules for the application of the additional levy Case C-341/89 Ballmann [1991] ECR I-25; Report for the referred to in Article 5c of Regulation (EEC) No 804/68, Hearingi I-29, right hand column; Opinion of Advocate OJ 1984 L 132, p. 11. General Tesauro, I-33, left hand column. 19 — Judgment in Case 5/88 Wachauf [1989] ECR 2609, para­ 16 — Judgment in Case C-84/90 Dent [1992] ECR I-2009, para­ graphs 13 to 15; judgment in Case C-177/90 Kühn [1992] graph 17. ECR I-35, paragraph 22.

of the non-marketing period and the adop­ 21. However, the rules as they emerge, for tion of Regulation No 764/89, where the the purposes of the present case, from farmer concerned had not yet been allocated Article 3a of Regulation No 1546/88 in the a quota. light of the considerations just set out do not go beyond those limitations. Instead, they merely give concrete form to the rules estab­ lished by Regulation No 857/84, particularly 17. In the present case, therefore, that provi­ subparagraph (b) in Article 3a(1), but with­ sion precludes the allocation of a special ref­ out distorting their meaning. It should be erence quantity; no other interpretation stated that the Court's conclusions in its appears possible. judgment in O'Brien were not based solely on Article 3a of Regulation No 1546/88, but were derived jointly from that provision and from Article 3a(l) of Regulation No 857/84 — rightly, in my view. As regards 18. II. The validity of that provision needs to the problem raised by the general principle be examined on that basis. I propose, for the of a link with the land in the light of the purposes of such examination, to consider belated adoption of Regulation No 764/89, merely its effects with regard to the facts of subparagraphs (a) and (b) of Article 3a(1) of this case. As is clear from a comparison with Regulation No 857/84 cannot be construed the case of Maier, it covers cases of widely as excluding the strict application of that differing kinds, with the result that its valid­ principle to a departing lessee. Consequently, ity needs to be examined in the light of each the Commission was not precluded by that of those cases. latter provision from laying down the spe­ cific rule that the holding referred to in sub­ paragraph (b) of that provision must be the same as that referred to in subparagraph (a); 19. 1. The national court questions, first, the that rule is, incidentally, contrary neither to compatibility of the contested provision with the structure nor the wording of the provi­ Article 3a of Regulation No 857/84. That sion. article requires only that the applicant must be able to produce the reference quantity requested on his holding. There is, however, no express requirement that he must still be operating the holding in respect of which the SLOM agreement was entered into.

24. The plaintiff has asserted in this regard, both in the main proceedings and before the Court, that, if he had had a milk quota at the 26. There is no need to dwell at length on his time of the expiry of the lease, that lease submission regarding the possible extension would have been extended or an arrange­ of the lease. On the assumption that the ment would have been concluded between plaintiff could, as he alleges, have obtained him and the lessor regarding the sharing of 24 such an extension if he had held a quota at quotas. As regards the first of those two the time, it could not be inferred from that possibilities, the plaintiff stated in the oral fact that the contested provision was invalid. procedure that his lease would 'very prob­ For he says nothing about the question ably' have been extended if he had held a whether the criterion laid down in that pro­ milk quota since 1985. As to his prospects of vision for the allocation of a special reference retaining the milk quota (at least in part) quantity is itself open to objection. Instead, despite his surrender of the tenanted holding, he refers to a disadvantage arising from a he asserted in the written procedure that he past failure to act on the part of the Commu­ would certainly have been able to transfer nity legislature: the plaintiff maintains that, any quota held by him at the time to his new 25 because no quota arrangement existed in holding. By reason of the rules applicable 1987 in respect of SLOM farmers, he lost his in that regard in the Netherlands, he relies former holding, with the result that he does on Article 19 of the Beschikking Superheff­ 26 not now fulfil the contested criterion. In the ing of 1988, which provides that a lessee plaintiff's submission, the reason for his hav­ may, by agreement with his lessor, retain the ing been specifically disadvantaged in com­ reference quantity on the expiry of the lease. parison to farmers who did not avail them­ This would be the case in particular if, as in selves of Regulation No 1078/77 lies not in the contested criterion but in the fact that there was no quota arrangement in force in 21 — Judgment in Case 120/86 Mulder [1988] ECR 2321. 1987. A different conclusion could perhaps 22 — Judgment in Case 170/86 Von Deetzen [1988] ECR 2355. be arrived at if there were any basis for 23 — See, for example, paragraph 24 of the judgment in Mulder. 24 —P.R 5 of the order making the reference; also paragraph 33 at the end of the plaintiff's written observations. 25 — Paragraph 36 of his written observations. 26 — Staatscourant 1988, No 64 of 31.3.1988. 27 — Paragraph 23 of the plaintiff's written observations.

28. A comparison with the situations of departing lessees in the two groups of farm­ ers in question (on the one hand, farmers who did not avail themselves of Regulation No 1078/77 and, on the other hand, SLOM 32. Next, nothing in the present case indi­ farmers) leads in principle to the conclusion cates the existence of any third party inter­ that that question should be answered in the ests warranting protection such as to pre­ affirmative. It is true, as Advocate General clude any such rules. In particular, I am Jacobs has rightly pointed out in relation to unable to ascertain any legal basis for sup­ Article 7(4) of Regulation No 857/84, as posing that a lessor in a situation such as that amended, that Member States are not obliged obtaining in the present case would be 2 to exercise such a power. 8However, it must entitled to be spared from the disadvantages be stated that the provision contested in this which he might suffer as a result of such case itself excludes the possibility of any rule rules. more favourable to a departing lessee than the principle, specifically contained in the contested provision, of a link with the land.

33. The second reservation concerns the limi­ tations applying to the protection of legiti­ 28 — Opinion of 4 July 1991 in CASEC-121/90Posthumus[1991] ECR I-5833. at p. I-5844. paragraph 22. mate expectations within the meaning of the

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'Those producers could not therefore expect to be in a position to dispose, for profit, of an advantage, such as the allocation of a ref­ erence quantity under the additional levy scheme, when that advantage had been con­ ferred on them specifically in order to enable them to resume their occupational activity'.

36. Thus it was open to the Commission, having regard to the principle of the protec­ tion of legitimate expectations, to give con­ 35. Those considerations were also applied crete form to Article 3a(1) of Regulation by the Court in the case of Maier, in which a No 857/84 by means of the rule laid down in SLOM farmer had leased his holding to a Article 3a(1) of Regulation No 1546/88 only third party for a term of twenty years at a in so far as it mitigated the effect of that pro­ time between the end of the conversion vision by way of an exception corresponding period and the adoption of Regulation to Article 7(4) of Regulation No 857/84.

29 — Judgment in Case C-44/89 Von Deetzen [1991] ECR I- 5119, paragraph 21. 30 — See paragraphs 21 and 22 of the judgment.

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39. With regard to the requirement that there must be a possibility of milk production, 'Article 3a of Commission Regulation subparagraph (a) of Article 3a(1) requires the No 1546/88, in the version resulting from operation by the applicant of a qualifying Regulation No 1033/89, is invalid in so far as holding. As is apparent from the case of it does not provide for the conferment on Maier, therefore, the contested provision Member States of power to allocate a special cannot in any event be impugned in so far as reference quantity to a producer for the pur­ it confirms generally the requirement regard­ poses of production on a holding operated ing the operation of a qualifying holding. by him which is not the holding which he (or a farmer who has fulfilled the undertak­ ing given pursuant to Council Regulation No 1078/77 and from whom the producer derives his title) operated at the time of the 40. Finally, I would like to add an observa­ grant of his premium application pursuant to tion regarding the manner in which the

32 — As to the fundamental rights, sec the judgment in Wachauf 31 — Sec paragraph 22. (footnote 19 above), paragraph 19.

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Article 5(2) of Commission Regulation 43. As regards the first of those aspects, the No 1391/78, where opening words of Article 3a(1) of Regulation No 857/84, read in conjunction with the first indent of that provision, make it clear that the applicant must himself in principle have fulfilled a non-marketing or conversion — the holding originally operated, follow­ undertaking. ing the fulfilment of the undertaking given pursuant to Regulation No 1078/77, has had to be surrendered to the lessor by reason of the expiry of the lease and in the absence of any entitle­ 44. Next, as regards the second aspect, the ment on the part of the lessee to its applicant must, according to those opening extension on comparable terms; words, be a 'producer referred to in the third paragraph of Article 12(c)' of that provision. Article 12(c) provides that

'Must Article 3a, in conjunction with Article 42. I. Question 1 concerns in essence the 12(c) of Council Regulation (EEC) question of the identity of the holding in No 857/84, be interpreted as meaning that a respect of which a special reference quantity person or group of persons are not pre­ can be requested. Questions 2 and 3, on the vented from being regarded as producers to other hand, are concerned with certain con­ whom both the first and second indents of ditions which must be fulfilled by the appli­ Article 3a(1) and Article 3a(1)(a) are appli­ cant in person. More precisely, the point at cable by the fact that the conversion agree­ issue here is his status as a SLOM farmer or ment was entered into by one person his relationship with such a person, on the whereas, at the date of the request for a ref­ one hand, and, on the other, with the holding erence quantity on the basis of Article 3a, to which the benefit of the special reference that person is operating a holding in collabo­ quantity attaches. ration with one or more other persons?'

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'If Question 2 is answered in the affirmative, persons in the form of an association. The must the person who entered into the con­ circumstances of the present case indicate in version agreement or the group of persons that regard that the formation of the associa­ which operates the holding at the date of the tion was intended to be in anticipation of the request referred to in Question 2 be regarded transfer of the farm to its future heirs. It as the person entitled to a reference quantity appears appropriate, therefore, to answer the 33 by virtue of Article 3a? question on the basis of what was held in the 34 judgment in Raub.

33 — According to the information given by the College, the question relates to Article 3a of Regulation No 8Í7/84. 34 — Judgment in Case C-314/89 Ranh [1991] ECR I-1647.

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subject to restrictions affecting him specifi­ '"producers" includes not just farmers who cally precisely because of his non-marketing themselves entered into an undertaking pur­ undertaking. suant to Regulation No 1078/77 but also those who, after the expiry of the undertak­ ing entered into by the farmer, have taken over the holding in question by succession 36 or by a similar transaction.'

Those restrictions would be maintained if Article 3a of Regulation No 857/84 were interpreted as not permitting such an heir or successor to have granted to himself, in the same way as the producer himself, a special 51. Thus the Court held that the said Article reference quantity under the conditions laid 3a down in Article 3a.'

49. The Commission's objection that the 'must be interpreted as meaning that, subject original producer had not requested the allo­ to the conditions laid down therein, a special cation of a special reference quantity prior to reference quantity may be granted to a pro­ the transfer of the holding was not accepted ducer who has taken over a holding by way by the Court, of succession or a similar transaction after the expiry of a non-marketing undertaking entered into pursuant to Council Regulation No 1078/77 of 17 May 1977 by his predeces­ 37 sor in title'.

'The term "similar transaction" must be 55. That judgment makes it clear, for the pur­ interpreted as referring to any transaction, poses of the present case, that a transfer simi­ whatever its legal basis, which produces lar to succession may also take place in such effects comparable to those of inheritance. It a way that the beneficiary does not, as in the thus embraces, in particular, transactions case of Rauh, become the producer as such concluded in respect of the holding con­ but forms, in collaboration with the person cerned between a producer and the potential from whom he stands to inherit, an associa­ beneficiary of his estate, provided that the tion (in the form either of a group of persons terms of the transaction in question are such or a legal person) which itself has the status that, according to its purpose and subject- of a producer. matter, the main intention is that the holding should continue to be exploited by the potential beneficiary and not that the mar­ ketable value of the holding should be real­ ized by the person from whom he stands to 56. In order to resolve the present case on inherit. the basis of the Rauh judgment, as supple­ mented by the judgment in Von Deetzen, it is necessary to clarify the effects of the remaining differences between the facts of this case and those in Rauh.

subject-matter of that transfer. The extent to transfer similar to succession cannot in those which the matter can in fact be assessed in circumstances be placed in a worse position. that way depends on the circumstances, In my view — and here we come to the sec­ namely the contents of the lease and the ond point — this assessment is not altered nature of the association. That is a matter for where the SLOM farmer has not at any time the national court to determine in so far as operated the holding on his own but the may be necessary. producer has instead started to operate it immediately upon or after the transfer simi­ lar to succession. I can see no objective rea­ son for distinguishing between those two 58. The question referred for a preliminary cases. ruling can be satisfactorily answered, as regards that point, by reference to the requirement that there be a transfer similar to succession.

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of Regulation No 857/84, the Court in the 64. IV. In the light of the foregoing, I pro­ case or Maier defined the term 'producer' in pose that the Court give a joint answer to accordance with Article 3a of Regulation Questions 2 and 3, given the connection No 1546/88, which corresponds beyond all between them. I regard it as sensible for the doubt with the term as it is used in Regula­ Court, in so doing, to establish the connec­ tion No 857/84. It stated that the term tion with Question 1 by specifying that the change in the identity of the producer, in so far as it has occurred as a result of the trans­ fer similar to succession, does not preclude the allocation of a special reference quantity 'can mean only a person farming a holding even where there has been a permissible who operates on his own responsibility an change in the location of the holding within integral set of units for the production of the meaning of the answer to Question 1, milk'. 40 nor even where the operation of the new holding has been commenced by the pro­ ducer immediately upon or after the transfer 43 similar to succession.

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If, notwithstanding the fact that the holding or in so far as this is precluded by Article in question is not the same as that on which 3a(5) of the regulation, in respect of the the farmer fulfilled the undertaking pursuant period between the expiry of the conversion to Regulation No 1078/77, that farmer agreement and the date at which there was a would have been entitled to the allocation of change in the situation, as a result of which a special reference quantity had he been the producer concerned is not eligible for a going to operate it on his own, the allocation provisional special quantity, in so far as the of the special reference quantity to the pro­ quantity of milk produced in that period ducer is precluded neither by the identity of does not exceed the reference quantity which the holding operated nor by the fact that the would have been allocated if that change had farmer has at no time operated that holding not taken place?' on his own but the producer commenced to operate it immediately upon or after the transfer similar to succession.'

Question 4 68. According to the grounds of the order for reference, the College is concerned with those quantities which were delivered by the plaintiff from his holding at Laag Zuthem 66. The fourth question referred by the Col­ between the resumption of milk production lege concerns Article 3a(5) of Regulation and the end of his lease. No 857/84, which provides as follows:

70. However, I propose to deal briefly with may have been paid in the past as additional that question, as follows. Quite apart from levies cannot in those circumstances be the fact that the Court may diverge from my refunded (since that would amount to unjust proposals regarding the first two questions, enrichment). More precisely, the judgments it should also be stated that the national in Mulder and Von Deetzen did not nullify court, in linking its final question to the giv­ the legal basis for such previous payments, ing of a negative answer to the first two which is contained in Article 5c of Regula­ questions, is proceeding on the basis of a tion No 804/68 and in Regulation false premise. The national court acknowl­ No 857/84, as supplemented by Regulation edges that in this case a special reference No 1371/84. In those judgments Regulation quantity is ipso jure to be granted, constitut­ No 857/84 (as supplemented by the version ing at the same time the decisive quantity for contained in Regulation No 1371/84) was the purposes of Article 3a(5). However, the declared to be null and void in so far as the proposed answer to the first question would Council had omitted, in breach of higher- merely result in the conferment on Member ranking Community law, to provide for the States of a power comparable with Article grant to certain producers of reference quan­ 7(4) of Regulation No 857/84, in the version tities by way of exception to the principle contained in Regulation No 590/85, the underlying the additional levy. However, the effects of the exercise of which on this case finding of nullity did not relate to the legal are at present uncertain. Clearly, the College basis underlying the additional levy itself. did not contemplate the first question being Thus it was for the Council in its discretion answered 'in the negative' in quite that sense — and, of course, in accordance with the when it formulated the conditions subject to aforesaid judgments — to specify the prin­ which the fourth question was to be ciple and scope of any reference quantities, answered. For that reason I regard it as by way of an exception within the meaning appropriate to examine that last question stated above. In so far as this did not happen, also. it cannot be said the additional levies paid pursuant to Regulation No 857/84 were paid otherwise than on a legal basis.

past, it is necessary to examine the validity of in the Mulder and Von Deetzen judgments, that paragraph, on which doubt is cast in the which applied before 1 April 1989 or, to put second part of the question. it more precisely, in the lacuna to which that system gave rise in the absence of any quota rules applying to SLOM farmers; it does not lie in the remission rules themselves. Those rules neither perpetuate the lacuna in the old 45 system as regards the future nor preclude 74. (a) As regards compatibility with the remission in favour of ineligible farmers in principle of the protection of legitimate respect of the past. To adopt the wording expectations, consideration must conse­ used by the national court (see the way in quently be given to the question whether which the question referred is formulated): Article 3a(5), within the meaning given to it remission is 'precluded', for the purposes of by the judgments in Mulder and Von the point at issue here, not by the rules Deetzen, specifically disadvantages SLOM themselves but by the old milk quota system, farmers by comparison with other farmers. It which they leave unchanged. I am therefore should be stated in that regard that the of the view that those rules cannot be held to Court not only disapproved — at one stage be invalid by reason of any infringement of — the absence of quota rules in respect of the principle of the protection of legitimate SLOM farmers (see the judgments in Mulder expectations. and Von Deetzen), but also, what is more, held parts of those special rules, following their adoption, to be invalid, again by reason of their infringement of the principle of the 44 protection of legitimate expectations. The latter step was necessary because the stipula­ tions at issue provided expressly for the defects originally complained of to be per­ petuated in the new system, and for the scope of their application to extend into the 76. (b) Nor do I consider that the principle future. of equal treatment has been infringed. The only standpoint from which, in that regard, an infringement could possibly be regarded as having occurred is that of discrimination against farmers enjoying the benefit of the provision. However, it should be stated in 75. The position is different in the present that connection that the two groups of farm­ case, however. The provision complained of ers are in different situations, as the Com­ is limited to the introduction of retroactive mission has rightly pointed out. The impor­ rules governing remission in relation to spe­ tant point for those who were in fact entitled cific farmers. The reason why other farmers to a reference quantity, and in relation to are not eligible for remission of the addi­ whom it was thus certain that they would be tional levy in respect of the period prior to commencing or resuming milk production, 1 April 1989 lies in the system, disapproved was as far as possible to limit, in the interests

C — Conclusion

79. In the light of the foregoing considerations, I propose that the Court give the following answers to the questions referred to it by the College van Beroep voor het Bedrijfsleven:

In response to the first three questions :

(1) Article 3a of Commission Regulation No 1546/88, in the version resulting from Regulation No 1033/89, is invalid in so far as it does not provide for the conferment on Member States of power to allocate a special reference quantity to a producer for the purposes of production on a holding operated by him which is not the holding which he (or a farmer who has fulfilled the undertak­ ing given pursuant to Council Regulation No 1078/77 and from whom the

46 — Judgment in Joined Cases C-104/89 and C-37/90 Mulder and Others v Council and Commission [1992] ECR I-3061.

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If, notwithstanding the fact that the holding in question is not the same as that on which the farmer fulfilled the undertaking pursuant to Regulation No 1078/77, that farmer would have been entitled to the allocation of a special reference quantity had he been going to operate it on his own, the allocation of the special reference quan­ tity to the producer is precluded neither by the identity of the holding operated nor by the fact that the farmer has at no time operated that holding on his own but the producer commenced to operate it immediately upon or after the transfer similar to succession.

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As far as may be necessary, in response to the fourth question:

(3) Consideration of Article 3a(5) of Regulation No 857/84 has disclosed no factor of such a kind as to affect its validity.

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