C-181/96

WILKENS v LANDWIRTSCHAFTSKAMMER HANNOVER

J U D G M E N T O F T H E C O U R T (Second Chamber) 28 January 1999 *

In Case C-181/96,

R E F E R E N C E to the Court under Article 177 of the E C Treaty by the Bundes- verwaltungsgericht (Germany) for a preliminary ruling in the proceedings pending before that court between

Georg Wilkens

and

T H E C O U R T (Second Chamber),

composed of: G. Hirsch (Rapporteur), President of the Chamber, G. F. Mancini and R. Schintgen, Judges,

Advocate General: P. Léger, Registrar: H . A. Rühl, Principal Administrator,

after considering the written observations submitted on behalf of:

— Mr Wilkens, by Frank Schulze, Rechtsanwalt, Münster,

— the Council of the European Union, by Jan-Peter Hix, of its Legal Service, acting as Agent,

gives the following

Judgment

1 By an order of 21 March 1996, which was received at the Court on 29 May 1996, the Bundesverwaltungsgericht (Federal Administrative Court) referred to the Court for a preliminary ruling under Article 177 of the EC Treaty two questions on the interpretation and validity of the second subparagraph of Article 3a(1) of Council Regulation (EEC) N o 857/84 of 31 March 1984 adopting general rules for the appli- cation of the levy referred to in Article 5c of Regulation (EEC) N o 804/68 in the milk and milk products sector (OJ 1984 L 90, p. 13), as amended by Council Regu- lation (EEC) N o 1639/91 of 13 June 1991 (OJ 1991 L 150, p. 35, hereinafter 'Regu- lation N o 857/84')·

2 The questions were raised in proceedings between Mr Wilkens, a milk producer, and the Landwirtschaftskammer (Chamber of Agriculture) Hanover concerning the retroactive annulment of a decision provisionally allocating a special reference quan- tity following the withdrawal of the conversion premium which had been granted to the plaintiff in the main action under Council Regulation (EEC) N o 1078/77 of 17 May 1977 introducing a system of premiums for the non-marketing of milk and milk products and for the conversion of dairy herds (OJ 1977 L 131, p. 1).

3 Over-production in the milk and milk products sector, which is governed by Council Regulation (EEC) N o 804/68 of 27 June 1968 on the common organisation of the market in milk and milk products (OJ, English Special Edition 1968(1), p. 176), led the Council to adopt on 17 May 1977 Regulation N o 1078/77, the purpose of which was to encourage farmers to abandon milk production.

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WILKENS v LANDWIRTSCHAFTSKAMMER HANNOVER

quantity under the additional levy scheme as initially provided for because they had not had any milk production during the reference year.

8 As a result of the judgments of the Court of Justice in Case 120/86 Mulder v Min- ister van Landbouw en Visserij [1988] E C R 2321 and Case 170/86 Von Deetzen v Hauptzollamt Hamburg-Jonas [1988] ECR 2355, Council Regulation (EEC) N o 764/89 of 20 March 1989 amending Regulation N o 857/84 (OJ 1989 L 84, p. 2) inserted a new provision, Article 3a, in Regulation N o 857/84 to the effect that under certain conditions a special reference quantity would be granted to that cat- egory of producers.

9 Following the judgments of the Court of Justice in Case C-189/89 Spagl [1990] E C R I-4539 and Case C-217/89 Pastätter [1990] E C R I-4585, paragraph 2 of Article 3a of Regulation N o 857/84 was amended by Regulation N o 1639/91. The second subparagraph of Article 3a(l) of Regulation N o 857/84 provides:

'Producers:

12 The action brought by the plaintiff in the main action challenging that decision was dismissed by judgment of the Verwaltungsgericht (Administrative Court) Hanover on 11 September 1985, as was the appeal against that judgment by judgment of the Oberverwaltungsgericht (Higher Administrative Court) Lüneburg on 26 April 1990. Those two judgments have now the force of res judicata.

13 In June 1989 the plaintiff in the main action applied for a provisional special refer- ence quantity in order to be able to resume milk production. The Landwirtschaftska- mmer Hanover certified that the legal requirements for the grant of such a special reference quantity were met, but reserved the right to withdraw its certification if the action then pending before the Oberverwaltungsgericht Lüneburg led to a reduction of the premium or of the quantity of milk used to calculate the premium.

1 4 Following the judgment of the Oberverwaltungsgericht Lüneburg on 26 April 1990 confirming the decision to withdraw the conversion premium, therefore, the Land- wirtschaftskammer Hanover withdrew the certificate by decision of 13 July 1992. In those circumstances no special reference quantity could be allocated to Mr Wilkens.

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15 The action he brought challenging the decision to withdraw certification was dis- missed by the Verwaltungsgericht Hanover, as was the appeal lodged before the Oberverwaltungsgericht Lüneburg.

JUDGMENT OF 28.1.1999 — CASE C-181/96

N o 857/84 is to be interpreted as meaning that a milk producer who has had his entitlement to a non-marketing or conversion premium granted under Regulation N o 1078/77 withdrawn on the grounds of an alleged failure to fulfil his undertaking not to market milk or milk products for a period of five years may be given a special reference quantity, and whether, if the answer is no, that refusal to grant a special reference quantity is compatible with the principles of the protection of legitimate expectations and proportionality.

19 Before those questions are addressed, it should be noted that the Court has con- sistently held that where it is necessary to interpret a provision of secondary Com- munity law, preference should as far as possible be given to the interpretation which renders the provision consistent with the Treaty and the general principles of Com- munity law, and, more particularly as regards Article 3a of Regulation N o 857/84, with the principle of the protection of legitimate expectations (Case C-98/91 Her- brink [1994] E C R I-223, paragraph 9).

20 In the case of the second subparagraph of Article 3a(1) of Regulation N o 857/84, it is not possible to elicit a clear and unambiguous interpretation from the wording of the provision. The requirement that the conversion period have been completed 'in performance of the undertaking given under Regulation (EEC) N o 1078/77' may be understood as meaning either that the producer must have complied with the various obligations entailed by the undertaking given under the conversion scheme, or that entitlement to a special reference quantity accrues to the producer automatically once the period covered by the undertaking has been completed.

24 Moreover, the Court has held that only producers who were induced by the rules introduced by Regulation N o 1078/77 to suspend milk marketing for a certain period in the general interest and who for that reason made no deliveries during the period of the undertaking may rely on the principle of the protection of legiti- mate expectations in order to claim a special reference quantity under the second subparagraph of Article 3a(1) of Regulation N o 857/84 (Mulder and Von Deetzen, paragraphs 24 and 13 respectively).

25 If non-marketing is therefore an essential requirement of the second subparagraph of Article 3a(1) of Regulation N o 857/84 in order to be eligible for a special refer- ence quantity, it is also the essential condition for the grant of a conversion pre-

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mium and the actual observance of the undertaking given fulfils both the condition and the aim of the rules instituted by Regulation N o 1078/77 (Ecroyd, paragraphs 48 and 49).

26 Consequently, breach of the obligation not to market milk and milk products during the period covered by the undertaking entails the loss of the premium granted under Regulation N o 1078/77 (Jensen, paragraphs 27 and 30) and also pre- cludes allocation of a special reference quantity under the second subparagraph of Article 3a(1) of Regulation N o 857/84.

3i Consequently, producers retain entitlement to a special reference quantity if, despite having breached one or more of the other obligations under the non-marketing or conversion scheme and having therefore forfeited the premium, the purpose of the scheme introduced by Regulation N o 1078/77 has been achieved.

32 In this instance, as far as the nature of the obligation or obligations which the plain- tiff in the main action failed to fulfil is concerned, the Council and Commission have pointed to a contradiction regarding the facts as between the judgment of 26 April 1990 whereby the Oberverwaltungsgericht Lüneburg terminated the proceed- ings regarding withdrawal of the decision to grant the premium, and the order made by the national court which referred the questions for a preliminary ruling.

33 Article 177 of the Treaty is based on a clear separation of functions between the national courts and the Court of Justice, so that, when ruling on the interpretation or validity of Community provisions, the latter is empowered to do so only on the basis of the facts which the national court puts before it (see, inter alia, Case C-30/93 AC-ATE L Electronics Vertriebs [1994] E C R I-2305, paragraph 16, and Case C-326/96 Levez [1998] E C R I-7835, paragraph 26).

34 In that context, it is not for the Court of Justice, but for the national court, to ascertain the facts which have given rise to the dispute and to establish the conse- quences which they have for the judgment which it is required to deliver (Case 17/81 Pabst & Richarz v Hauptzollamt Oldenburg [1982] E C R 1331, paragraph 12, and AC-ATEL Electronics Vertriebs, paragraph 17).

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is merely the logical consequence of the rules on special reference quantities under which eligibility for such a quantity accrues only to the extent that a producer may legitimately expect to receive it.

39 Consequently, the argument put forward by the plaintiff in the main action that he . has been a victim of a double penalty, in the form of repayment of the premium and refusal to.grant a special reference quantity, cannot be accepted.

40 Finally, it should be noted that that interpretation of the second subparagraph of Article 3a(1) of Regulation N o 857/84 also satisfies the principle of proportionality. Calculating the special reference quantity, and the portion thereof to be forfeited, on the basis of the quantity of milk marketed in breach of the undertaking given by the producer does not appear to be manifestly inappropriate in view of the pur- pose of the relevant provision, which is to enable farmers who have suspended marketing in accordance with such an undertaking to resume production. In so far as reduction of the special reference quantity is strictly proportionate to the extent of the breach of that undertaking, it cannot be regarded as capable of prejudicing that objective.

41 In view of the fact that that interpretation of the second subparagraph of Article 3a(1) of Regulation N o 857/84 is founded on the requirements of the principles of the protection of legitimate expectations and proportionality, there is no need to consider whether refusal to grant a special reference quantity is compatible with those principles.

O n those grounds,

T H E C O U R T (Second Chamber),

in answer to the questions referred to it by the Bundesverwaltungsgericht by order of 21 March 1996, hereby rules:

The second subparagraph of Article 3a(1) of Council Regulation (EEC) N o 857/84 of 31 March 1984 adopting general rules for the application of the levy referred to in Article 5c of Regulation (EEC) N o 804/68 in the milk and milk products sector, as amended by Council Regulation (EEC) N o 1639/91 of 13

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