C-355/97

1. In the present reference for a preliminary as it is relevant to the present case, is ruling, the Oberster Gerichtshof (Supreme described by the referring court as follows: Court), Vienna seeks clarification from the Court on the interpretation of Article 70 of the Act concerning the conditions of acces- sion of the Kingdom of Norway, the Republic of Austria, the Republic of Fin- land and the Kingdom of Sweden and the adjustments to the Treaties on which the European Union is founded (hereinafter 'the Act of Accession'). 1In particular it asks the Court whether the derogation clause laid down in Article 70 also covers legislation such as the Austrian legislation on secondary residences which was adopted after accession. 2 The case at issue relates to the provisions which confer on the administration the right to bring proceedings to contest land transactions. The order for reference notes in this regard three legislative measures. The first, the 'TGVG 1983', 3provided that Legislative and factual background to the the acquisition of land by natural persons main proceedings who were not Austrian citizens, or by legal persons established abroad or controlled by foreign nationals, was subject to authorisa- tion granted by the competent administra- tion. If property was acquired without the prescribed authorisation, the penalty The relevant national legislation imposed was the annulment of the sale. The 'TGVG 1991' 4introduced a legislative provision which accorded the Landes- grundverkebrsreferent (Land Director 2. The legislation of the Land of Tyrol responsible for land transfers, hereinafter regarding the acquisition of land, in so far 'the Land Director') the right 'to bring proceedings for a declaration that the * Original language: Italian. transaction is void where there is reason 1 —OJ 1994 C 241, p. 21. 2 — Article 70 provides that: 'Notwithstanding the obligations under the Treaties on which the EU is founded, the Republic of Austria may maintain its existing legislation regarding 3 — Tiroler Grundverkehrsgesetz [Tyrol Law on the Transfer of secondary residences for five years from the date of Land] of 18 October 1983. accession'. 4 — Tiroler Grundverkehrsgesetz of 3 July 1991.

The second measure introduced by the legislature, the 'TGVG 1993', 6 replaced the previous rules. Paragraph 35(2) con- firmed the right of the Land Director to bring proceedings for the annulment of sham or evading transactions. 7 Under Paragraph 40, the Land Director's right to bring an action was extended to all trans- actions existing upon the entry into force of the Law. The same provision also laid down that operations concluded before 3. Two successive rulings on that legisla- that date were governed by the TGVG tion were delivered by the Verfassungsger- 1983. ichtshof (Austrian Constitutional Court). The first, on 28 September 1996, declared as unconstitutional the Law of 3 July 1991 in so far as it amended the TGVG 1983, whose provisions thus became inoperative. By the second ruling, of 10 December 1996, the Verfassungsgerichtshof declared In 1996 the Tyrol legislature introduced a the TGVG 1993 to be unconstitutional; the further amendment, the TGVG 1996, 8 relevant provisions could therefore no which entered into force on 1 October longer be applied to pending proceedings, 1996. The order for reference mentions with the exception of those whose applica- Paragraph 35(1) of that Law, which repro- tion — as stated by the national court — duces the corresponding provision of the resulted from the reference made by Para- TGVG 1993, and Paragraph 40, which lays graph 40(4) of the TGVG 1996. down the transitional provisions. Para- graph 40(5), which is of particular interest, provides as follows: 'The right of the 9 — The rest of Paragraph 40 provides: '(2) In administrative Landesgrundverkehrsreferent to bring pro- matters concerning land transfers which were pending on ceedings for a declaration under Paragraph 1 January 1994, the Grundverkehrsgesetz 1983 shall con- tinue to apply as regards substantive law. With respect to 35(1) shall extend also to sham and evading official bodies and procedure, however, the provisions of this Law shall apply. (3) For legal transactions and operations which were concluded before 1 January 1994, the Grundverkehrsgesetz 1983 shall continue to be applic- able as regards substantive law. With respect to official 5 — Paragraph 16(a)(1). The final provisions of the law stipu- bodies and procedure, the provisions of this Law shall apply. lated that the law also applied to 'sham or evading (4) Infringements of the Grundverkehrsgesetz 1983 com- transactions existing upon the entry into force of the mitted before 1 January 1994 shall be prosecuted under that present Law'. Law. Infringements under the Tiroler Grundverkehrsgesetz, LGBI. No 82/1993, committed before the entry into force of 6 — Tiroler Grundverkehrsgesetz of 7 July 1993. this Law shall be prosecuted under the Tiroler Grundver- 7 — That provision states that 'the Landesgrundverkehrsreferent kehrsgesetz, LGBI. No 82/1993. (...) (6) Paragraphs 34 and may bring (...) proceedings for a declaration that a legal 35 shall also apply to legal transactions and operations transaction is void, in particular because it is a sham or already recorded in the land register, in respect of which evading transaction'. consent would have been required under the Grundver- 8 — Tiroler Grundverkehrsgesetz of 3 July 1996. kehrsgesetz 1983'.

6. An appeal on a point of law was lodged against that judgment before the referring 5. By application to the Landesgericht court, which first examined the right of the (Regional Court), Innsbruck of 28 March Land Director to bring proceedings con- 1994, the Land Director sought a declara- testing the sale transaction at issue. tion, on the basis of the TGVG 1983, that the contract of purchase between Beck and Bergdorf was void on the ground that the transaction was a sham or evading transac- tion. However, the order for reference does not make clear in what way the transaction The issue is presented as follows. Following was a sham or constituted evasion. Clar- the abovementioned rulings of the Consti- ification is provided by the Land Director tutional Court, the TGVG 1983 and 1993 in his observations to the Court: he were no longer applicable to the present explains that, following the conclusion of case. It followed, according to the referring the transaction for the sale of land at issue, court, that the administration's right to the shares of the company buying the land bring proceedings could be justified solely had been acquired by German citizens. on the basis of the TGVG 1996, and in There was therefore a sham because the particular the transitional provisions laid transaction involving the purchase of the down in Paragraph 40 which, in turn, refer land by an Austrian company, followed by to the earlier 1983 and 1993 legislation the acquisition of the shares of that same with regard to certain aspects. In essence company by German citizens, purportedly the earlier legislation, which had also been served to evade the Tyrol legislation on the held to be contrary to the national consti- purchase of land by foreign nationals. tution, continued to apply in the case at However, this fact is not developed fur- issue on account of the reference made in

7. The Commission and the Austrian Gov- ernment both take the view that the Court of Justice should not answer the question submitted by the national court. In their view, the description of the factual and legislative context set out in the order for 'Is Article 70 of the Act concerning the reference is incomplete and does not enable conditions of accession of the Republic of the Court to understand either the signifi- Austria, the Republic of Finland and the cance of the question or its relevance to the Kingdom of Sweden and the adjustments to decision to be given in the main proceed- the Treaties on which the European Union ings. In fact it would appear from the is founded, which provides that notwith- information provided by the national court standing the obligations under the Treaties that the question raised is merely hypothe- on which the European Union is founded tical. First of all, the case does not fall the Republic of Austria may maintain its within the scope of Community law, since existing legislation regarding secondary the contested transaction dates back to residences for five years from the date of 1983, that is to say before Austria's acces- accession (1 January 1995), to be inter- sion to the Community. Community law is preted as meaning that the transitional therefore inapplicable ratione temporis. In provisions in Paragraph 40(2) and (5) of addition, every aspect of the case falls the Tiroler Grundverkehrsgesetz 1996 within the same Member State, with the

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LANDESGRUNDVERKEHRSREFERENT DER TIROLERLANDESREGIERUNG V BECK AND BERGDORF

The system 8. That view should be endorsed, in my established by Article 177 enables the opinion. The Court has unequivocally held Court to fulfil its interpretative role in the that 'in order to reach an interpretation of determination of disputes which involve the Community law which will be of use to the application of Community law. It therefore national court, it is essential that the follows that questions which do not serve national court define the factual and legis- to determine the case correctly, since they lative context of the questions it is asking are of merely theoretical or hypothetical or, at the very least, explain the factual relevance, are inadmissible. circumstances on which those questions are based'. 10 The national court is required to give a full description of the factual and legislative background to the main pro-

If there were no ascertain whether the interpretation of complaint of any violation of the freedoms Community law sought 'bears a relation guaranteed by the Treaty, there would obviously not be any reason to invoke the derogation provided for in Article 70 in the 10 — See Joined Cases C-320/90 to C-322/90 Telemarsicabruzzo and Others [1993] ECR I-393, paragraph 6; orders in Case light of the alleged infringement of the C-157/92 Banchero [1993] ECR I-1085, paragraph 4, Case C-66/97 Banco de tormento e Exterior [1997] ECR obligations arising under Community law. I-3757, paragraph 7, Joined Cases C-128/97 and C-137/97 In this case, however, the national court Testa and Modesti [1998] ECR I-2181, paragraph 5, Case C-9/98 Ermanno Agostini [1998] ECR 1-4261, paragraph does not take that approach.

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OPINION OF MR LA PERGOLA — CASE C-355/97

a preliminary ruling. taken — as the Land Director does in his written observations 15 — that the alleged sham actually conceals the use of an intermediary in the contested transaction with a Community national rather than an Austrian as the real purchaser. However, as I have already stated, that remark is made — and not fully developed — solely in the observations submitted by the Land Director, and to which there is no reference in the account given by the national court. The Court's case-law, on the other hand,

Member State. 16 — In accordance with the case-law, 'it is the Court's duty to ensure that the opportunity to submit observations is maintained, bearing in mind that. . . only the decisions 14 — The inapplicability of Community law to purely domestic making references are notified to the interested parties': see situations follows from the consistent case-law of the Joined Cases 141/81, 142/81 and 143/81 Holdijk and Court. See inter alia Case C-41/90 Höfner and Elser Others [1982] ECR 1299, paragraph 6; orders in Case [1991] ECR I-1979, paragraph 37, Case C-332/90 Steen C-458/93 Saddik [1995] ECR I-511, paragraph 13, Case [1992] ECR I-341, paragraph 9, Joined Cases C-29/94 to C-167/94 Grau Gomis and Others [1995] ECR I-1023, C-35/94 Aubertin and Others [1995] ECR I-301, para- paragraph 10, Case C-307/95 Max Mara [19951 ECR graph 9, and USSL No 47 di Biella, cited above, paragraph I-5083, paragraphs 8 and 20, and Case C-2/96 Sunino and

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LANDESGRUNDVERKEHRSREFERENT DER TIROLER LANDESREGIERUNG V BECK AND BERGDORF

present case for the Court to venture into appear, Objectively needed for the decision hypothetical reconstructions which have to be taken by the national court', 18 as not been described in the order for refer- required by the case-law of the Court. ence and on which the Governments con- Where there is no such need, the Court cerned have not had the opportunity to put clearly tends to decline jurisdiction to forward their point of view, especially since answer the questions submitted to it by the Court has properly adopted a cautious the national court for a preliminary rul- approach where there is the risk of answer- ing. 19 ing hypothetical questions, with a view to safeguarding the effectiveness of the pre- liminary ruling procedure whose function would otherwise be distorted.

Substance

11. I therefore believe that the Court should not answer the question referred by the national court for a preliminary ruling: any ruling on interpretation by the Court would — according to the terms of 12. In the event of the Court nevertheless the order for reference — concern a merely taking the view that it has to answer the domestic situation, since the main proceed- question referred for a preliminary ruling, I ings do not appear in any way to involve will examine the merits of the question. interests which merit protection under the Community legal order. 17 Bearing this in mind, the question of interpretation raised by the national court is not, it would

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OPINION OF MR LA PERGOLA — CASE C-355/97

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LANDESGRUNDVERKEHRSREFERENT DER TIROLER LANDESREGIERUNG V BECK AND BERGDORF

Conclusion

13. In the light of the foregoing, I propose that the Court:

— declare inadmissible the reference for a preliminary ruling submitted by the Oberster Gerichtshof, Vienna, by order of 28 August 1997.

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