C-401/99

THOMSEN

O P I N I O N OF ADVOCATE GENERAL LÉGER delivered on 20 September 2001 1

1. The questions referred to the Court 4. Let us look at the facts behind the concern the interpretation of the Commu- dispute. nity legislation on the milk and milk products sector and, more specifically, the provisions relating to the reference quan- tities 2established in 1984 with the aim of preventing the over-production of milk in the European Community.

I — Facts of the main proceedings

Räume Husum (Office for Rural Areas), must be interpreted widely, in the sense certified by decision of 16 January 1996 that it refers to both former and potential that a reference quantity had been trans- producers. In its opinion, any person ferred to the Henningsen heirs as the lessors entitled to a reference quantity can be of part of the holding, with effect from deemed to be a milk producer even if that 1 October 1995. It took that decision on person neither sells nor supplies milk. the basis of Paragraph 7(2) and (4) of the Milchgarantiemengenverordnung (German regulation on guaranteed milk quantities) of 21 March 1994. 5

9. The applicant in the main proceedings appealed against the judgment of the Ver- waltungsgericht before the Schleswig-Hol- steinisches Oberverwaltungsgericht (Ger- many).

7. After an unsuccessful objection before the defendant administration, Mr Thomsen brought an action for annulment of the decision of 16 January 1996 in the form of the decision of 14 February 1996 on the objection. Mr Thomsen claimed that, under the relevant provisions of Community law, I I— Legal background a reference quantity could be transferred only to a milk producer. In his view, the Henningsen heirs had never produced milk and did not intend to do so in the future.

Community law

' 1 . Reference quantities available on a holding shall be transferred with the hold- ing in the case of sale, lease or transfer by 12. Regulation No 857/84 was repealed by inheritance to the producers taking it over Regulation No 3950/92, which extended in accordance with detailed rules to be the additional levy system, initially determined by the Member States taking intended to apply until 1 April 1993, until account of the areas used for dairy produc- 1 April 2000. tion or other objective criteria and, where applicable, of any agreement between the parties. Any part of the reference quantity which is not transferred with the holding shall be added to the national reserve.

13. Under the second paragraph of Article 5 of Regulation No 3950/92:

'... reference quantities available to pro- ducers who have not marketed milk or other milk products for one of the 2. Where there is no agreement between 12-month periods shall be allocated to the the parties, in the case of rural leases due to national reserve and may be reallocated in expire without any possibility of renewal accordance with the first subparagraph. on similar terms, or in situations involving comparable legal effects, the reference quantities available on the holdings in 9 — OJ 1984 L 90, p. 13. question shall be transferred in whole or

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in part to the producers taking them over, and/or in accordance with provisions adopted or to be adopted by the Member States, taking account of the legitimate interests of the parties.'

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production, one half of the relevant refer- ducer', within the meaning of Article 9(c) ence quantities is transferred to the lessor, of Regulation No 3950/92, includes both subject to a maximum of 2 500 kg per former and future, that is potential, 'pro- hectare. This restriction to one half, that is ducers'. 2 500 kg per hectare, does not apply where the lessor requires the reference quantities in order to produce milk for himself, his spouse or his children.

22. It is uncertain whether that interpre- 19. Under Paragraph 9 of the MGV, the tation should be endorsed. It considers that milk producer must provide the purchaser the wording of Article 9(c) of Regulation with a certificate drawn up by the compet- No 3950/92 is clear and that a literal ent authorities of the Land, in this case the interpretation would mean that, under Amt für ländliche Räume, showing the Article 7 of the regulation, transfers of reference quantities transferred to him, the reference quantities can take place only if corresponding date, the transferring milk the person taking over the holding is a producer and the fat content of the produc- producer at the time of the transfer or, at tion. any rate, becomes a producer at that time.

20. If the lessor immediately transfers the surrendered land to another lessee, the transfer of the former lessee's reference quantities to the lessor is shown in a first 23. Conversely, the criteria for application certificate and then the competent auth- of Article 7 of Regulation No 3950/92 are ority draws up a second certificate concern- not satisfied when parts of a holding to ing the transfer of the lessor's reference which reference quantities attach are trans- quantities to the new lessee. ferred by purchase, lease or surrender of leased land to a person who is not a producer and who does not intend to take over milk production or to pass on the land to third parties for that purpose.

IV — The questions referred '(1) Is Article 7(2) of Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and milk products sector to be construed as meaning that, on the expiry of rural leases, the reference 25. In its three questions, which should be quantities available on the holdings in examined together, the referring court is question may be transferred in whole essentially asking whether Article 7(2) of or in part in accordance with provi- Regulation No 3950/92 should be con- sions adopted or to be adopted by the strued as meaning that the transfer of a Member States, taking account of the reference quantity available on the expiry legitimate interests of the parties, only of a rural lease can be made in favour of the if at the time of surrender the lessors lessor only if he either has the status of are producers as defined in Article 9(c) 'producer' 11 or transfers the reference of Regulation No 3950/92? quantity available to a third party who has that status.

(2) If the notion of producer in Article 7(2) 26. As the referring court itself pointed out, is to be understood in a broader sense, the wording of Articles 7(2) and 9(c) of is a transfer in such cases also possible Regulation No 3950/92 is unambiguous. 12 where the lessors do not envisage taking up the marketing of milk but are desirous of transferring the refer- ence quantities together with the land to third parties? 27. Under Article 7(2) of Regulation No 3950/92, the reference quantities avail- able on the holdings in question are to be transferred in whole or in part to the

32. The first subparagraph of Article 7(1) provides for the simultaneous transfer of the reference quantity and the holding in the case of the sale, lease or transfer by 29. Furthermore, it follows from the gen- inheritance of the holding to the producers eral scheme of the legislation concerning taking it over. While this is not a return to the additional levy on milk that a reference the lessor after expiry of the lease, the quantity can be allocated to a farmer only if situation is comparable, however, since the he has the status of producer. 13In the case transfer of the reference quantity takes of a transfer, by lease, of a reference place in favour of an operator who may, quantity together with the land to which like the lessor, be the owner of the holding. it attaches, it can only take place in According to that article, the reference accordance with the first subparagraph of quantity available on a holding is trans- Article 7(1) of Regulation No 3950/92 if ferred with the holding in the case of sale, the lessee has the status of a producer. 14 lease or transfer by inheritance to the producers taking it over. Whether it is to a purchaser or an heir, the transfer is subject to the condition that they are producers.

30. It is true, as indicated by the German Government, that the reference quantity at

33. EARL de Kerlast confirms the exist- 13 — Case C-341/89 Ballmann [1991] ECR I-25, paragraph 9. 14 —Case C-15/95 EARL de Kerlast [1997] ECR I-1961, ence of that prior condition. In that judg- paragraph 24. ment, reference is made to the Ballmann

35. In the present case, both the first 37. The intervenors in the main proceed- s u b p a r a g r a p h of Article 7(1) and ings point out that Article 7(1) of Regu- Article 7(2) of Regulation No 3950/92 lation 857/84 provided that, in the case of refer specifically to transfers of reference sale, lease or transfer by inheritance, the quantities available 'to the producers tak- transfer was made to the purchaser, tenant ing them over'. I do not think it appropriate or heir, without mentioning the condition to construe in different ways two provi- at issue. That regulation was repealed by sions which are worded strictly identically, Regulation No 3950/92 but, according to unless an interpretation which neglects the the intervenors, it is clear from the 15th principle of legal certainty is to be recom- recital in the preamble to the latter regu- mended. lation that the original choice should not be changed, namely 'the principle ... that when an undertaking was sold, leased or transferred by inheritance, the correspond- ing reference quantity was transferred to the purchaser, tenant or heir'. The inter- venors infer from that recital that the The common interpretation of the two substitution of the term 'producer' for paragraphs of Article 7 is also dictated by 'purchaser', 'tenant' or 'heir' does not the interpretation, within the first subpara- impose a condition of carrying out produc- graph of Article 7(1) of Regulation tion activity. No 3950/92 itself, of the three situations envisaged by that provision. The status of producer, required in EARL de Kerlast in the case of transfer of a reference quantity by lease, must necessarily apply in the case of sale or inheritance, unless the words 'producers taking them over', placed in that sentence as a common factor, are to be 38. That interpretation ignores the fact that interpreted differently. a Commission text, Regulation (EEC) I - 5784

39. It is therefore not established that, by Regulation No 3950/92, the Council intended to change the general scheme of 43. However, I do not draw from that the legislation applicable to the additional judgment the same conclusions as those levy, as described by the Court in the relied on by the German Government in its EARL de Kerlast judgment. written observations.

16 —Case C-463/93 St. Martinus Elten [1997] ECR I-255, 15 — Regulation (EEC) No 1371/84 laying down detailed rules for the application of the additional levy referred to in paragraph 30. Article 5c of Regulation (EEC) No 804/68 (OJ 1984 17 — Paragraph 35. L 132, p. 11). 18 — Paragraph 31.

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19 — Paragraph 35. 21 — Case C-98/91 Herbrink [1994] ECR I-223, paragraph 13. 20 — Commission Regulation (EEC) No 1546/88 of 3 June 22 — Case 5/88 Wachauf[1989] ECR 2609, paragraph 13, and 1988 laying down detailed rules for the application of St. Martinus Elten, cited above, paragraph 30. the additional levy referred to in Article 5c of Regulation 23 — See point 31 of the Opinion of Advocate General (EEC) No 804/68 (OJ 1988 L 139, p. 12). Ruiz-Jarabo Colomer in EARL de Kerlast.

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without consequence. It would mean con- rural leases due to expire, where the lessee ceding that the status as a producer of the is not entitled to an extension of the lease lessor whose holding is no longer subject to on similar terms, Member States may a lease is not a condition of the transfer, in provide that all or part of the reference his favour, of the reference quantity pre- quantity corresponding to the holding or viously held by the lessee. the part thereof which forms the subject of the lease shall be put at the disposal of the departing lessee, if he intends to continue milk production'. 24

49. That is not the solution I recommend in this case. 53. The Court thus logically drew the inferences from legislation limiting the principle in question to the benefit, in that case, of the lessee.

50. It is clear from the case-law of the Court that that principle is not without exceptions. 54. There are no grounds for reasoning otherwise, in the present case, where the notion of 'producer' must be understood as expressing the intention of the Community legislature to make the right of the lessor to take over the reference quantity conditional 51. Ballmann and EARL de Kerlast dem- upon the demonstration of his status as a onstrate that point, as they make the farmer selling or supplying milk, that is his allocation and transfer of a reference quan- status as 'producer', within the meaning of tity conditional upon the fact that the Article 9(c) of Regulation No 3950/92. farmer is a producer.

56. The condition at issue also applies to the third parties to whom a lessor decides to assign his holding. In so far as Article 7(2) of Regulation No 3950/92 59. According to the German Government, refers to producers, it does not restrict the the notion of 'producer' should be inter- transfer of reference quantities to lessors preted in the light of the second subpara- alone. It allows them, when they regain graph of Article 5 of R e g u l a t i o n possession of their holding, to enter into a No 3950/92. contract with a new lessee. Consequently, that new lessee can be the recipient of the reference quantity only if he is a 'producer', within the meaning of Article 9(c) of Regu- lation No 3950/92.

60. It should be borne in mind that, under that provision, reference quantities avail- able to producers who have not marketed milk for 12 months are to be allocated to 57. The Commission has recommended the the national reserve and may be reallo- interpretation of Article 7(2) of Regulation cated. It is also provided that the producer No 3950/92 which I propose the Court is to receive a reference quantity where he should adopt. At the hearing, however, it resumes production within a certain period. recognised that such a solution does not allow the lessor to recover the reference quantity in order to resume the activity of producer when he has interrupted that activity, particularly by dint of leasing his holding. 61. The German Government maintains 25 — Case C-292/97 Karlsson and Others [20001 ECR I-2737, that, according to those provisions, a paragraph 57. temporary interruption to milk production

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Conclusion

69. In view of the foregoing, I propose that the Court should give the following reply to the questions referred to it by the Schleswig-Holsteinisches Oberver- waltungsgericht:

Article 7(2) of Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and milk products sector should be construed as meaning that the transfer of a reference quantity available on the expiry of a rural lease can be made to the lessor only if he either has the status of a 'producer' within the meaning of Article 9(c) of that regulation or, on expiry of the lease, transfers the reference quantity available to a third party who has that status. The notion of 'producer' within the meaning of Article 7(2) of Regulation No 3950/92 also includes the lessor who undertakes to take up the activity of 'producer' with the meaning of Article 9(c) of that regulation as soon as the lease expires.

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