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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Wettwer (Agriculture) [1999] EUECJ C-376/97 (10 June 1999) URL: http://www.bailii.org/eu/cases/EUECJ/1999/C37697.html Cite as: [1999] EUECJ C-376/97

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JUDGMENT OF THE COURT (Second Chamber)

10 June 1999 (1)

(Special premium for beef producers - Obligation to keep cattle on the applicant's holding for a minimum period - Transfer of the holding during that period by way of anticipated succession inter vivos - Effect on entitlement to the premium)

In Case C-376/97,

REFERENCE to the Court under Article 234 EC (ex Article 177) by the Bundesverwaltungsgericht (Germany) for a preliminary ruling in the proceedings pending before that court between

Bezirksregierung Lüneburg

and

Karl-Heinz Wettwer,

on the interpretation of certain provisions of Regulation (EEC) No 805/68 of the Council of 27 June 1968 on the common organisation of the market in beef and veal (OJ, English Special Edition 1968 (I), p. 187), as amended by Council Regulation (EEC) No 571/89 of 2 March 1989 (OJ 1989 L 61, p. 43), Council Regulation (EEC) No 468/87 of 10 February 1987 laying down general rules applying to the special premium for beef producers (OJ 1987 L 48, p. 4) and Commission Regulation (EEC) No 714/89 of 20 March 1989 laying down detailed rules applying to the special premium for beef producers (OJ 1989 L 78, p. 38),

THE COURT (Second Chamber),

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

Advocate General: P. Léger,

Registrar: R. Grass,

after considering the written observations submitted on behalf of:

- Mr Wettwer, by Jürgen Lukanow, Rechtsanwalt, Euskirchen,

- the Commission of the European Communities, by Klaus-Dieter Borchardt, of its Legal Service, acting as Agent,

having regard to the report of the Judge-Rapporteur,

after hearing the Opinion of the Advocate General at the sitting on 4 February 1999,

gives the following

Judgment

1. By order of 16 September 1997, received at the Court on 4 November 1997, the Bundesverwaltungsgericht (Federal Administrative Court) referred to the Court for a preliminary ruling under Article 234 EC (ex Article 177) a question on the interpretation of certain provisions of Regulation (EEC) No 805/68 of the Council of 27 June 1968 on the common organisation of the market in beef and veal (OJ, English Special Edition 1968 (I), p. 187), as amended by Council Regulation (EEC) No 571/89 of 2 March 1989 (OJ 1989 L 61, p. 43), Council Regulation (EEC) No 468/87 of 10 February 1987 laying down general rules applying to the special premium for beef producers (OJ 1987 L 48, p. 4) and Commission Regulation (EEC) No 714/89 of 20 March 1989 laying down detailed rules applying to the special premium for beef producers (OJ 1989 L 78, p. 38).

2. That question was raised in proceedings between Mr Wettwer, a farmer, and the Bezirksregierung Lüneburg (Lüneburg District Authority, hereinafter 'the Bezirksregierung') concerning the transfer to his son of entitlement to a special premium, Mr Wettwer having conveyed his farm to his son during the currency of the undertakings which he had given with a view to obtaining the premium in question.

   The legal background

3. Article 4a of Regulation No 805/68, as amended by Regulation No 571/89, provides:

   '1. Beef and veal producers may qualify for a special premium. It shall be granted at the producers' request for male animals at least nine months old which are fattened on their holdings.

   The premium shall be limited to 90 animals per calendar year and per holding; the amount of the premium shall be set at ECU 40 per animal.

   The premium shall be granted once only for each animal. It shall be paid to the producer or passed on to the producer.

   2. The Council, acting on a proposal from the Commission by qualified majority, shall adopt general rules concerning the special premium, and in particular the definition of the producers eligible for the premium and the conditions governing the granting thereof.

   3. The Commission, in accordance with the procedure laid down in Article 27, shall adopt detailed rules for the application of this Article. ...'

4. Under Article 1 of Regulation No 468/87, adopted by the Council pursuant to Article 4a(2) of Regulation No 805/68, a producer is defined as 'an individual farmer, whether a natural or legal person, who farms on the territory of the Community and who raises cattle'. 'Holding' is defined in the same article as 'all the production units operated by the producer on the territory of a single Member State'.

5. Article 3(1) of Regulation No 468/87 provides that requests for the premium are to be 'lodged once or several times a year with the competent authorities of the Member State' and 'accompanied by a written declaration from the producer certifying that he has fattened the male animals for which he has requested a premium'.

6. Article 5 of Regulation No 468/87 provides that the detailed rules applying to the special premium for beef producers which the Commission is to adopt pursuant to Article 4a(3) of Regulation No 805/68 are to cover, in particular, the provisions concerning the lodging of requests and the payment of the premium and procedures for monitoring compliance with the conditions referred to in Article 3(1), in particular the length of time the cattle are kept on the holdings in order to ensure sufficient control.

7. According to the second indent of Article 2 of Regulation No 714/89, which lays down the detailed rules applying to the premium which were in force at the material time in the main proceedings, the producer is accordingly required, on lodging his application, to undertake 'to retain the male animals for which he applies for the premium on his holding for the period fixed pursuant to Article 8(2) ... and at least until they are nine months old'.

8. Article 8(2) of Regulation No 714/89 provides that, in order to enable them to exercise adequate control of applications lodged pursuant to Article 2, Member States are to set a minimum period during which male cattle must be kept on the holding following the date of lodging of the application. That period may not be less than two nor more than five months. In Germany, it is three months.

9. Under Article 8(1) of Regulation No 714/89, the national authorities responsible for verifying that the provisions governing the special premium are complied with are to carry out administrative checks and on-the-spot inspections. Those control measures are to cover in particular:

   '(a) the presence on the holding run by the producer of the number of male cattle covered by the application ...;

   (b) the correctness of the required declarations and fulfilment of the undertakings made by the producer;

   (c) ...'.

10. Article 9(1) of Regulation No 714/89 provides that, without prejudice to Article 9(2), (3) and (4), no premium is payable where the number of eligible animals ascertained at the time of inspection is lower than the number in respect of which the premium application was lodged. In order to reinforce the measures for preventing and sanctioning irregularities and frauds, Article 9(6) provides:

    'In cases where paragraph 1 is applied, if the competent authority determines that a false declaration has been made either deliberately or through negligence the producer in question shall be excluded from the premium system for a period of 12 months from the date such determination was made.'

11. Under Article 9(3) of Regulation No 714/89: 'Entitlement to the premium shall subsist for the number of animals effectively eligible where, for reasons of force majeure, and especially those listed in Article 5 of Commission Regulation (EEC) No 1244/82, the producer has not been able to comply with the undertaking provided for in Article 2. The producer shall duly inform the competent authorities within 10 days of the incident.'

12. Article 5(1) of Commission Regulation (EEC) No 1244/82 of 19 May 1982 laying down detailed rules implementing the system of premiums for maintaining suckler cows (OJ 1982 L 143, p. 20) provides:

    'Without prejudice to the particular circumstances to be taken into consideration in individual cases, the competent authorities may accept as justification for the maintenance of the right to the premiums the following cases of force majeure in particular:

    (a) decease of the beneficiary;

    (b) inability over a long period on the part of the beneficiary to carry out his job;

    (c) expropriation of a major part of utilised agricultural area of the holding farmed by the beneficiary, provided that such expropriation was not foreseeable on the day on which the application was lodged;

    (d) a natural disaster seriously affecting the agricultural area farmed by the beneficiary;

    (e) accidental destruction of those of the beneficiary's buildings given over to the rearing of bovine animals;

    (f) an epidemic affecting some or all of the beneficiary's herd of cattle.'

    The main proceedings

13. On 2 May 1991 Mr Wettwer applied to the Bezirksregierung for the grant of the special premium for beef producers provided for in Article 4a(1) of Regulation No 805/68, as amended, in respect of 10 animals reared on his farm.

14. By notarial act of 4 July 1991, Mr Wettwer transferred his farm, including the rights and obligations attaching to it, by way of 'vorweggenommene Erbfolge' (anticipated succession inter vivos) to his son, who was also a farmer and who operated another agricultural holding. Mr Wettwer informed the Bezirksregierung of this on 23 July 1991.

15. By decision of 17 October 1991, the Bezirksregierung rejected Mr Wettwer's application on the grounds that he had not kept the 10 animals concerned on his holding for at least three months following the lodging of the application and that, since premiums were granted to persons and not to holdings, a premium could be paid only to the person applying for it.

16. In proceedings brought by him before the Verwaltungsgericht (Administrative Court) for annulment of the decision refusing to grant the special premium, Mr Wettwer claimed that his son, as his successor, met the requirements connected with the premium application, relating to the keeping and fattening of the animals on the holding, so that the conditions for the grant of the premium were satisfied.

17. By judgment of 17 September 1992, the Verwaltungsgericht dismissed Mr Wettwer's action on the grounds that, under Article 4a(1) of Regulation No 805/68, as amended by Regulation No 571/89, a premium is granted to the producer applying for it and not to the holding, and that neither Mr Wettwer nor his son was entitled to the premium, since the former had lost his status as a producer prior to expiry of the control period of three months and the latter had not applied for the premium.

18. Mr Wettwer appealed against that judgment to the Niedersächsische Oberverwaltungsgericht (Higher Administrative Court, Lower Saxony) which, by judgment of 26 May 1995, set aside the decision given at first instance, principally on the ground that it could not be inferred either from the provisions of Community law or from any rule of national law that an inter vivos transfer of an agricultural holding precluded the transferee from succeeding to the rights and obligations arising, for the applicant, from an application for the special premium.

19. Following delivery of that judgment, the Bezirksregierung lodged an appeal on questions of law before the Bundesverwaltungsgericht. That court considered that the absence in the relevant legislation of any express provision regarding the point in issue did not exclude either of the two interpretations put forward or the arguments relied on in support of them, and therefore decided to stay proceedings and refer the following question to the Court:

    'Is entitlement to a beef and veal producers' special premium for the year 1991 transferred to a producer to whom, during the compulsory stock holding period, the applicant transferred his agricultural holding by way of anticipated succession inter vivos and who carried out the prescribed keeping and fattening of the bovine animals in question?'

20. As is apparent from the order for reference, the national court is essentially asking by that question whether Article 4a(1) of Regulation No 805/68, as amended by Regulation No 571/89, in conjunction with the provisions of Regulations Nos 468/87 and 714/89, is to be interpreted as meaning that, where an agricultural holding is transferred by way of 'vorweggenommene Erbfolge' (anticipated succession inter vivos) during the currency of the undertakings given by an applicant for the 1991 special premium for beef producers, entitlement to that premium passes to the new owner, provided that the latter has satisfied the conditions laid down with regard to the keeping and fattening of the herd.

21. For the purposes of answering the question, as thus reformulated, it should be noted, first, that, under Article 4a(1) of Regulation No 805/68, as amended by Regulation No 571/89, it is the beef and veal producers applying for the special premium who are eligible to receive it, and that it is granted for male animals at least nine months old which are fattened on their holdings, subject to a limit of 90 animals per calendar year and per holding.

22. Second, it must be observed that, for the purposes of monitoring compliance with those conditions laid down by the Council, the implementing provisions adopted by the Council and by the Commission, namely Article 3 of Regulation No 468/87 and Article 2 of Regulation No 714/89, require premium applications to be accompanied by written declarations from the producer certifying that he has fattened the animals for which he has requested the premium and undertaking to keep them on his holding for a minimum period fixed pursuant to Article 8(2) of Regulation No 714/89.

23. As is apparent from the express wording of the third recital in the preamble to Regulation No 714/89, provision has been made, in view of the difficulties of furnishing evidence of compliance with the requirements laid down, for applications to be accompanied by declarations and undertakings by recipients and for those declarations and undertakings to be subject to administrative and on-the-spot checks by Member States.

24. In those circumstances, such declarations and undertakings on the part of applicants constitute an essential element of the controls to be carried out under the scheme set up by the Community legislature for the grant of the special premium for beef producers.

25. Third, where an applicant for the premium transfers his holding, the transferee is not obliged or even permitted by the Community legislation to undertake to comply with the undertakings given by the transferor of the holding at the time of lodging his application.

26. As the Commission has correctly pointed out, in the absence of such a formal undertaking on the part of the transferee, it would be impossible to apply the penalty of exclusion from the premium system for a period of 12 months to be imposed under Article 9(6) of Regulation No 714/89 on persons making a false declaration, either deliberately or through negligence, with the result that the efficacy of the system of controls set up to ensure compliance with the conditions of grant of the premium would be substantially impaired.

27. In the light of all those considerations, it must be concluded that, where a holding is transferred during the currency of the undertakings given by an applicant for the special premium for beef producers, the applicant loses his entitlement to the premium and the transferee cannot claim such a premium unless he himself lodges

    an application, accompanied by all the requisite declarations and undertakings. It follows that, in the absence of such an application by the transferee, the fact that he may himself have satisfied the conditions laid down with regard to the keeping and fattening of the herd will not suffice to enable him to qualify for the premium.

28. As the Advocate General observes in point 22 of his Opinion, where, as in the main proceedings, a holding has been transferred to another producer, the above interpretation represents the only way of ensuring, as the legislation currently stands, that the limit of 90 animals per calendar year and per holding in respect of which the premium may be granted is not exceeded by the transferee.

29. The above interpretation is further borne out by the fact that under Article 9(3) of Regulation No 714/89, which expressly relates to cases in which the producer has been unable to comply with the undertaking to keep the animals on his holding as provided for in Article 2 of that regulation, entitlement to the premium is to subsist only in the event of force majeure.

30. A transfer of the holding during the currency of that undertaking cannot be assimilated to a case of force majeure, or, in particular, to non-compliance with the undertaking on account of the death of the beneficiary or his inability over a long period to carry out his job, which number among the cases of force majeure listed in Article 5 of Regulation No 1244/82 and referred to in Article 9(3) of Regulation No 714/89. Such a transfer does not constitute an unusual and unforeseeable circumstance which was beyond the control of the party by whom it is pleaded and the consequences of which could not have been avoided even if all due care had been exercised (see, in particular, as regards the definition of the concept of force majeure, Case C-263/97 First City Trading and Others [1998] ECR I-5537, paragraph 38).

31. The answer to the question referred must therefore be that Article 4a(1) of Regulation No 805/68, as amended by Regulation No 571/89, in conjunction with the provisions of Regulations Nos 468/87 and 714/89, is to be interpreted as meaning that, where an agricultural holding is transferred by way of 'vorweggenommene Erbfolge' (anticipated succession inter vivos) during the currency of the undertakings given by an applicant for the 1991 special premium for beef producers, entitlement to that premium does not pass to the new owner, even though the latter has satisfied the conditions laid down with regard to the keeping and fattening of the herd.

    Costs

32. The costs incurred by the Commission, which has submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT (Second Chamber),

in answer to the question referred to it by the Bundesverwaltungsgericht by order of 16 September 1997, hereby rules:

Article 4a(1) of Regulation (EEC) No 805/68 of the Council of 27 June 1968 on the common organisation of the market in beef and veal, as amended by Council Regulation (EEC) No 571/89 of 2 March 1989, in conjunction with the provisions of Council Regulation (EEC) No 468/87 of 10 February 1987 laying down general rules applying to the special premium for beef producers and Commission Regulation (EEC) No 714/89 of 20 March 1989 laying down detailed rules applying to the special premium for beef producers, is to be interpreted as meaning that, where an agricultural holding is transferred by way of 'vorweggenommene Erbfolge' (anticipated succession inter vivos) during the currency of the undertakings given by an applicant for the 1991 special premium for beef producers, entitlement to that premium does not pass to the new owner, even though the latter has satisfied the conditions laid down with regard to the keeping and fattening of the herd.

HirschMancini Schintgen

Delivered in open court in Luxembourg on 10 June 1999.

R. Grass G. Hirsch

Registrar President of the Second Chamber

---

1: Language of the case: German.