C-38/94

R. v MAFF, EX PARTE COUNTRY LANDOWNERS ASSOCIATION

J U D G M E N T O F T H E COURT (Third Chamber) 9 November 1995 *

In Case C-38/94,

REFERENCE to the Court under Article 177 of the EC Treaty by the Divisional Court of the Queen's Bench Division of the High Court of Justice for a prelimi- nary ruling in the proceedings pending before that court between

The Queen

and

T H E COURT (Third Chamber),

composed of: J. C. Mortinho de Almeida (Rapporteur), acting as President of the Chamber, C. Gulmann and H. Ragnemalm, Judges,

Advocate General: G. Cosmas, Registrar: L. Hewlett, Administrator,

after considering the written observations submitted on behalf of:

— the Country Landowners' Association, by Dawson & Co., Solicitors,

— the United Kingdom, by Lucinda Hudson, of the Treasury Solicitor's Depart- ment, acting as Agent, assisted by Kenneth Parker Q C and Eleanor Sharpston, Barrister,

neth Parker and Eleanor Sharpston, and the Commission, represented by Thomas van Rijn and Peter Oliver, of its Legal Service, at the hearing on 30 March 1995,

after hearing the Opinion of the Advocate General at the sitting on 15 June 1995,

gives the following

Judgment

1 By order of 12 January 1994, received at the Court on 28 January 1994, the Divi- sional Court of the Queen's Bench Division of the High Court of Justice referred to the Court for a preliminary ruling under Article 177 of the EC Treaty five ques- tions concerning the interpretation and validity of Articles 13 and 15 of Commis- sion Regulation (EEC) N o 3567/92 of 10 December 1992 laying down detailed rules for the application of the individual limits, national reserves and transfer of rights provided for in Council Regulation (EEC) N o 3013/89 on the common organization of the market in sheepmeat and goatmeat (OJ 1992 L 362, p. 41, here- inafter 'Regulation N o 3567/92'), and Articles 39 and 55 of Commission Regu- lation (EEC) N o 3886/92 of 23 December 1992 laying down detailed rules for the application of the premium schemes provided for in Council Regulation (EEC) N o 805/68 on the common organization of the market in beef and repealing Reg- ulations (EEC) N o 1244/82 and (EEC) N o 714/89 (OJ 1992 L 391, p. 20, herein- after 'Regulation N o 3886/92').

2 The questions were raised upon an application by the Country Landowners' Asso- ciation ('CLA') for judicial review of the way in which Statutory Instrument 1993 N o 1626 Agriculture (the Sheep Annual Premium and Suckler Cow Premium Regulations 1993) had implemented the regulations mentioned above.

(b) When a producer sells or otherwise transfers his holding, he may transfer all his premium rights to the person who takes over his holding.

He may also transfer, in whole or in part, his rights to other producers without transferring his holding. According to the procedure provided for in Article 30,

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the Commission may draw up specific rules relating to the minimum number which could form the subject of the partial transfer.

In the case of a transfer without transfer of the holding, a part of the premium rights transferred, not exceeding 15%, shall be surrendered without compensa- tion to the national reserve of the Member State where his holding is situated for free distribution to new entrants or other priority producers referred to in Article 5(b)(2).

5 Article 5b, added by the same regulation, provides:

' 1 . Each Member State shall establish an initial national reserve equal to at least 1% and at most 3 % of the sum of the individual limits applicable to producers whose holdings are situated in its territory. The national reserve shall also receive the entitlements pursuant to Article 5a(4)(b).'

6 Article 13 of Regulation N o 3567/92, in which the Commission adopted detailed rules for the application of Regulation N o 3013/89, provides:

'Member States, if necessary, shall take appropriate transitional measures with a view to finding equitable solutions to problems which might arise in contractual relationships existing at the time this Regulation enters into force between produc- ers who do not own all the land they farm, in the event of a transfer of premium rights or of other actions having equivalent effect. Such measures may only be taken in order to resolve the difficulties connected with the introduction of a pre- mium rights system linked to the producer and must in any event respect the prin- ciples governing that link.'

7 Article 15 of that regulation provides:

'Member States shall adopt all other suitable measures necessary to ensure that the system of individual limits is applied properly. They shall inform the Commission thereof.'

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JUDGMENT OF 9. 11. 1995 — CASE C-38/94

1 1 In those circumstances, the national court stayed the proceedings and pursuant to Article 177 of the Treaty referred the following questions to the Court of Justice for a preliminary ruling:

' 1 . Is Article 13 of Commission Regulation (EEC) N o 3567/92 and/or Article 39 of Commission Regulation (EEC) N o 3886/92 to be interpreted as enabling and/or requiring a Member State to introduce a compensation mechanism for the owners of agricultural land only where there is a detriment to landowners consequent upon a transfer of premium rights away from the landowner's holding by the tenant-producer?

2. Is Article 13 of Commission Regulation (EEC) N o 3567/92 and/or Article 39 of Commission Regulation (EEC) N o 3886/92 to be interpreted as enabling and/or requiring a Member State to introduce a compensation mechanism for the owners of agricultural land in circumstances where there is a specific prob- lem

(i) related to the transferability, or

4. Does Article 5a(4)(f) of Council Regulation (EEC) N o 3013/89, as inserted by Council Regulation (EEC) N o 2069/92, and/or Article 4e(5) of Council Regu- lation (EEC) N o 805/68, as inserted by Council Regulation (EEC) N o 2066/92, affect the interpretation and/or validity of Article 13 of Commission Regulation (EEC) N o 3567/92 and/or Article 39 of Commission Regulation (EEC) N o 3886/92 and/or Article 15 of Commission Regulation (EEC) N o 3567/92 and/or Article 55 of Commission Regulation (EEC) N o 3886/92?

5. Depending on the answers to questions 1, 2, 3 or 4, what are the principles that Member States must apply in devising such a compensation scheme?'

The first three questions

1 2 By its first three questions the national court asks whether Articles 13 and 15 of Regulation N o 3567/92 and Articles 39 and 55 of Regulation N o 3886/92 require Member States to introduce a compensation mechanism for the loss suffered by the owners of agricultural land owing to the introduction of a system of premium rights linked to the producers of sheepmeat, goatmeat or beef and veal, in partic- ular where the premium right is transferred by producers who do not own the land on which they farm.

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17 The same applies to the Commission's implementing regulations. Thus, Article 13 of Regulation N o 3567/92 authorizes the Member States to take, if necessary, appropriate transitional measures 'in the event of a transfer of premium rights'. It is true that the last part of that article states that '[s] uch measures may only be taken in order to resolve the difficulties connected with the introduction of a pre- mium rights system linked to the producer'. However, the measures in question are those referred to in the first part of the article, which relates expressly to the case of transfer of premium rights.

is Secondly, the provisions in question do not require the Member States to provide for a mechanism for compensating detriment to landowners caused by the transfer of premium rights. They are allowed only to adopt measures for resolving partic- ular problems linked to transfers of premium rights and to lay down principles with which those measures must comply.

19 It is for each Member State to assess the need for such measures, having regard in particular to the national arrangements for implementing the rules in question and the national rules governing the legal relationship between landlord and tenant.

20 As regards Article 15 of Regulation N o 3567/92 and Article 55 of Regulation N o 3886/92, these provisions merely lay down that the Member States are to adopt all other suitable measures necessary to ensure that the system of individual limits is applied properly and to inform the Commission thereof. They give effect to Article 5 of the Treaty and cannot in themselves require a compensation mecha- nism to be adopted for compensating any detriment suffered by landowners as a result of the introduction of the quota system in question.

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R. v MAFF, EX PARTE COUNTRY LANDOWNERS ASSOCIATION

24 As the Commission has pointed out, problems related to the introduction of the premium system are likely to arise only in contractual relationships already in existence when the regulations entered into force. When contractual relations are concluded at a later date, the parties may take into account the possibility that pre- mium rights might be transferred without a transfer of the holding.

25 In any event, the applicant in the main proceedings itself admits that compensation measures should be limited to existing contractual relationships.

26 The answer to the fourth question must therefore be that consideration of Articles 13 and 15 of Regulation N o 3567/92 and of Articles 39 and 55 of Regulation N o 3886/92 has disclosed no factor of such a kind as to affect their validity.

Fifth question

T H E COURT (Third Chamber),

in answer to the questions referred to it by the Divisional Court of the Queen's Bench Division of the High Court of Justice by order of 12 January 1994, hereby rules:

1. Neither Articles 13 and 15 of Commission Regulation (EEC) N o 3567/92 of 10 December 1992 laying down detailed rules for the application of the indi- vidual limits, national reserves and transfer of rights provided for in Council Regulation (EEC) N o 3013/89 on the common organization of the market in sheepmeat and goatmeat nor Articles 39 and 55 of Commission Regu- lation (EEC) N o 3886/92 of 23 December 1992 laying down detailed rules for the application of the premium schemes provided for in Council Regulation (EEC) N o 805/68 on the common organization of the market in beef and repealing Regulations (EEC) N o 1244/82 and (EEC) N o 714/89, nor any general principle of Community law require Member States to introduce a mechanism for compensating detriment caused to owners of agricultural

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R. v MAFF, EX PARTE COUNTRY LANDOWNERS ASSOCIATION

land by the introduction of a system of premium rights linked to producers of sheepmeat, goatmeat or beef and veal, even where premium rights are transferred by producers who do not own the land on which they farm.