OPINION OF MR WARNER — JOINED CASES 80 AND 81/77

41 As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, costs are a matter for that court.

On those grounds,

THE COURT,

in answer to the questions submitted to it by the Tribunal d'Instance, Bourg-en-Bresse, by judgments of 30 June 1977, hereby rules:

Article 31 (2) of Regulation No 816/70 in so far as it authorizes producer Member States to prescribe and levy, in intra-Community trade in the products covered by the organization of the market which that regulation sets up, charges having an effect equivalent to customs duties, is incompatible with Article 13, in particular paragraph (2) thereof, and with Articles 38 to 46 of the Treaty and is consequently invalid.

Kutscher Sørensen Bosco Donner Mertens de Wilmars

Pescatore Mackenzie Stuart O'Keeffe Touffait

Delivered in open court in Luxembourg on 20 April 1978.

President

Registrar

It is common ground that that influx was due, at all events in the main, first to the fact that in 1973 and 1974 theIn 1975 there was an exceptional influx of Italian wine onto the French market. weather had been such that yields had

My Lords,

948

should I think mention that the French Government referred to four instances where, it said, the Council had enacted provisions derogating from the general rule of the free movement of goods within the Community, the suggestion being, so I understood, that, since the Council had enacted those provisions, it must have had power to do so. The first instance was that of the subsidy that was in question in the Holtz & Willemsen case. The other three (in relation to which no decision of the Court was cited) were drawn respectively from the common organization of the market in fruit and vegetables, from that of the sugar market, and from the legislation on fisheries. The Commission submitted that, in fact, in none of those three instances was there truly a derogation from the rule as to the free movement of goods. I do not propose to enter into the question whether there was or was not. To my mind it cannot assist the Court in determining what is, on the true interpretation of the Treaty, the scope of the Council's powers, to know what in fact the Council regarded as being within its powers in particular instances.

In my opinion, however, the only inference that it is safe to draw is that the Court was not there concerned to pronounce on anything other than unilateral derogations. Of greater moment, to my mind, in that case, is the conclusion of Mr Advocate General Capotorti that "While ... it is true that the common organizations of the market give rise to intervention on the agricultural market by public authorities to an extent which would not be permissible in the industrial field, those organizations still have to abide by the fundamental principle of the freedom of trade throughout the Community" (see [1977] ECR at p. 539).

There is authority inconsistent with the other extreme contention, that of the Plaintiffs, notably in the m.c.a. cases and in the Holz & Willemsen case. I would accordingly reject that contention too.

There is no authority that supports the contention of the Commission; and the m.c.a. and Holz & Willemsen cases are inconsistent with it too. Moreover that contention, which rests neither on any express provision of the Treaty nor on any known rule of interpretation, would produce an arbitrary result. So I would reject it also.

There is authority to support the contention of the Council, but not in the wide terms in which it was formulated. In order to justify the inclusion by the Council, in any legislation relating to the common organization of agricultural markets, of a provision derogating from the general rules of the Treaty, in circumstances not expressly provided for anywhere in Articles 39 to 46, it must be shown not only that that provision is auxiliary and temporary, but also that, in view of a particular factual situation, the provision is necessary, and goes no further than is necessary, to afford a safeguard against the malfunctioning of such organization. That is the effect of the m.c.a. and Holtz & Willemsen cases, and it must be right because the power for the Council to derogate from the rules of the Treaty in such circumstances being an implied power, implied in Article 43 of the Treaty, it cannot be wider than is necessary for the attainment of the objectives for which the express powers contained in that Article are conferred (consider para. I (3) of the reasoning of the Court in its Opinion given on 26 April 1977 under Article 228 (1) of the Treaty in the matter of the draft 'Agreement establishing a European laying-up fund for inland waterway vessels' [1977] ECR, at p. 755).

I should add — although perhaps this goes without saying — that, even where it is shown that a provision derogating from the general rules of the Treaty is necessary as a temporary safeguard against the malfunctioning of the common organization of a market, the power of the Council to enact such a provision does not, in my opinion, include power to delegate any wide discretion to Member States. The operation of the provision must remain under the control of the Community itself.

For the reasons I have already stated, I am of the opinion that, at the time when Regulation No 816/70 was adopted, a situation existed which warranted the inclusion in that Regulation of Article 31 (2). Moreover the second subparagraph of that provision was designed to ensure that its operation remained under the control of the Commission. I am accordingly of the opinion that, at its inception, Article 31 (2) was valid, and that Your Lordships should so rule in answer to the first question referred to the Court by the Tribunal d'Instance of Bourg-en-Bresse.

I turn to the second question.

As to that the French Government submits first that Article 31 (2) must have remained in force in September 1975 because it was not repealed until May 1976. The French Government argues that, since that provision was contained in a Council Regulation, its applicability could be brought to an end only by an act of the Council. In support of that view the French Government refers to the fact that the minutes of the Meeting of the Council held on 27 and 28 April 1970, when Regulation No 816/70 was adopted, contained a declaration to the effect that "the Commission would consider, at the beginning of the next wine growing year, whether, in each Member State, all the mechanisms necessary for the management of the market in wine, within the framework of the common organization of that market, had been established in such a way that their due functioning could be ensured; and would report its findings to the Council". The French Government also relies on the views expressed by certain members of the Council at subsequent meetings of it. In my opinion that submission should be rejected. By its own terms Article 31 (2) was limited to operate only "so long as the administrative mechanisms necessary for the management of the market in wine are not in application". Indeed, had it not been for that limitation, Article 31 (2) would, I think, having regard to the reasons that warranted its inclusion in Regulation No 816/70, have been void as being in excess of what it lay within the power of the Council to enact. The difficulty arises from the fact that the Regulation did not specify by whom and in what manner it should be ascertained when the condition subsequent expressed in the limitation was satisfied. It cannot, however, be deduced from that that such ascertainment should be a matter for the Council. Having regard to the terms of, respectively, Articles 145 and 155 of the Treaty, it is not to the Council, but to the Commission, that pertains the function of ensuring that measures taken by the Institutions pursuant to the Treaty are applied.

There are a number of reasons why the declaration contained in the Council's Minutes cannot have had the effect suggested by the French Government. First, and most obviously, such a declaration is not an act having legislative force and, even if it were, it could not alter the provisions of the Treaty as to the respective functions of the Council and of the Commission. It was submitted on behalf of the French Government that the declaration might be invoked, under the heading of "travaux préparatoires", as an aid to the interpretation of Regulation No 816/70. But no amount of such aid would enable one to interpret the Regulation in a way inconsistent with the Treaty. Moreover, whatever may be the value in general of "travaux préparatoires" in the interpretation of Council Regulations — and, as Your Lordships know, I doubt if they can have any — they certainly cannot be invoked when unpublished. (I would refer in that connexion to what I said in Case 28/76 Milac v HZA Freiburg [1976] ECR at p. 1664 and in Case 109/76 Blottner v Nieuwe Algemene Bedrijfsvereniging [1977] ECR, at p. 1154).

It was also submitted on behalf of the French Government (at the hearing) that the declaration might be held to have had legal effect by virtue of the principle in Case 81/72 Commission v Council [1973] 1 ECR, 575. But that principle is only that a declaration of the Council may, in certain circumstances, give rise to legitimate expectations which the law will protect. It is difficult to see that the declaration here in question can have given rise to any legitimate expectation on anyone's part. At all event the French Government did not mention any. Lastly, the terms of the declaration were narrow in scope. They called upon the Commission to give consideration to a matter that it would have been its duty to consider anyway and to "report its findings to the Council". Nothing was said about the purpose of that report. It could well have been envisaged as being for information only. Furthermore, the declaration called upon the Commission to give consideration to that matter only once, i.e. at the beginning of the next wine growing year. Nothing was said as to what was to happen if the Commission found (as indeed, in the events, it did) that, at that time, the administrative mechanisms in question had not been fully established in all Member States.

It was submitted on behalf of the French Government that that question was not of a kind that it was within the jurisdiction of this Court to resolve in proceedings under Article 177 of the Treaty. We were referred to two Judgments one, dated 29 April 1977, of the Tribunal d'Instance of Marseille and the other, dated 29 June 1977, of the Tribunal d'Instance of Sète, in two others of the 40 or so cases that I have mentioned, in which those Courts (unlike the Tribunal d'Instance of Bourg-en-Bresse) took that view, and ordered experts' reports on the question whether those administrative mechanisms had been set up in Italy by 11 September 1975.

There again I have come to the conclusion that the submission of the French Government must be rejected, with the consequence that the Judgment of the Tribunal d'Instance of Marseille and that of the Tribunal d'Instance of Sète were mistaken.

If I am right in thinking that, by virtue of Article 155 of the Treaty, it lay, in the first instance, with the Commission, and with the Commission alone, to determine when those administrative mechanisms had been set up and were functioning, it could not alter anyone's rights whether or not in fact the Commission took any formal decision on the matter. If the Commission issued such a decision, it would be open to challenge by the Council or by any Member State under Article 173 of the Treaty. Alternatively its validity would be open to review under Article 177, on a reference from any Court or Tribunal in any Member State. In either case it would be for this Court to decide, according to the evidence, whether the decision of the Commission was sustainable. As I pointed out in Cases 51, 86 & 96/75 EMI v CBS [1976] ECR at p. 854, it is open to this Court, on a reference under Article 177 as to the validity of any act of a Community Institution, to admit evidence on any issue of fact affecting such validity.

Ultimate jurisdiction on such a question thus lies with this Court.

So I turn to the evidence.

In the Article 169 proceedings (Case 117/75) the French Government made a number of allegations to the effect that, by September 1975, the mechanisms necessary for the management of the market in wine had still not been fully set up in Italy, or at all events were not functioning there properly. The Court asked the French Government whether it proposed to put in any evidence to substantiate those allegations. In response to that invitation the French Government put in a bundle of documents consisting in part of indispatches from the French Embassy in Rome, in part of cuttings from Italian newspapers and in part of extracts from the "Gazzetta Ufficiale della Republica Italiana". In its written observations in the present cases the French Government repeated much the same allegations, again without preferring any evidence. The Court invited it to say whether it would agree to that bundle of documents being transferred from the file in Case 117/75 to the file in the present cases. To that course the French Government assented. It did not however rely on those documents in argument. Having perused them, I have come to the conclusion that they are of negligible evidentiary value.

The rest of the evidence consists of documents put in by the Commission and by the Council Agriculture. Of those the first that is relevant is the report made by the Commission to the Council pursuant to the declaration contained in the minutes of the meeting of the Council of 27 and 28 April 1970. That report was dated 27 July 1971. Its conclusions were expressed in the following terms: "— Les instruments nécessaires à la gestion du marché viti-vinicole semblent, pour la plus grande partie, être mis en place par les États membres.

It was argued on behalf of the French Government that those reports should be ignored because the Working Party on Wine and the Special Committee on Agriculture were simply non-statutory bodies set up by the Council to assist it in its tasks, so that they had no power to bind their master, the Council itself. If, however, I am right in thinking that the competence of the Council did not extend to adjudicating upon the question whether the condition subsequent contained in Article 31 (2) of Regulation No 816/70 had been satisfied at any particular time, that argument is beside the point. The relevance of those reports is that, having been made by specialized bodies (I

hesitate to use the word "expert") on which all the Member States and the Commission were represented, they constitute evidence and, I would think, strong evidence, that in fact that condition was satisfied when they said it was. There is no suggestion that the reports were other than unanimous. The French Government also refers to what happened at two subsequent meetings of the Council.

Of those meetings the first was that held on 29 and 30 May 1972, when the reports of the Commission and of the Special Committee on Agriculture were considered. The minutes of that meeting are before the Court. Formally, the Council confined itself to taking note of the report of the Commission. During the course of the discussion, however, the French Minister of Agriculture had said that he could not believe that all the mechanisms in question were in application, because daily experience showed that difficulties were still being encountered on the wine market. It was "politically" impossible for him to accept that the Council should declare Article 31 (2) spent. In answer to a question from the President, he confirmed that what he meant was that, whilst those mechanisms had been established, they were not functioning adequately. The Member of the Commission present stated that the provisions of Regulation No 816/70 had been applied. Whether those provisions needed modification or improvement was another matter.

The second meeting of the Council was that held on 9 September 1975, just before the adoption by that Government of the decree here in question. The minutes of that meeting are too are before the Court. At the start of the meeting the French Minister of Agriculture drew attention to the disturbance caused in the French wine market by the depreciation of the Italian lira. He suggested the re-introduction of m.c.a.'s. That suggestion was however rejected. The French delegation then put forward the suggestion that Article 31 (2) should be invoked on the footing that the Council had so far failed to agree on the measures necessary to improve the common organization of the market in wine, although it had, by a Resolution of 21 April 1975 (Official Journal C 90 of 23 April 1975) committed itself to doing so by 1 August 1975. The French Government relies strongly on the fact that, not only a number of other Members of the Council but also the responsible Member of the Commission (Mr Lardinois), who was present, accepted that such a solution might be possible. It is fair to say however that they accepted it only reluctantly and as one element in a possible "political package", the feasibility of which would need to be examined by the Commission, there being doubts about its practicability and about its legality. In the events the solution was rejected, because other Members of the Council were opposed to it on both political and legal grounds. It is, incidentally, noteworthy that a number of them expressed, as I have done, the view that it was for the Commission to say when the condition subsequent in Article 31 (2) had been satisfied.

In my opinion one cannot deduce from the proceedings at those two meetings of the Council that, in September 1975, the condition subsequent in Article 31 (2) had still not been satisfied. One may deduce from them, and from much else in the documents placed before the Court by the Commission and by the Council, that the common organization of the market as established by Regulation No 816/70 was in need of improvement. It was indeed improved, later, by Regulation No 1160/76. But Article 31 (2) cannot, in my opinion, be interpreted as meaning that the right of a Member State to take measures thereunder was to remain exerciseable, not only so long as the mechanisms necessary to give effect to Regulation No 816/70 itself were not in application, but also so long as it might appear that the provisions of that Regulation were imperfect.

There is one other piece of evidence to which I should refer. On 15 September 1975, Mr Lardinois held a press conference in Brussels at which he expounded the considered view of the Commission. In the course of doing so, he outlined the measures that the Commission itself had taken to alleviate the situation on the wine market. One of them was the dispatch to the Italian Government of a letter asking it to accelerate the payment of sums due to producers and traders under the common organization of that market (e.g. refunds, storage aids, distillation premia, etc.). He said that such payments, though normally effected in Member States within two months, took closer to a year to effect in Italy, and that that had an adverse effect on the market. This, in some hardship. The remedies against it vary from country to country. There are ombudsmen, there are courts, there is the press and there are parliamentary questions. At the Community level we rely particularly on Article 169 of the Treaty. But one cannot, I think, hold that a temporary provision in a Council Regulation establishing a common organization of the market in an agricultural product, derogating, in order to meet a particular factual situation, from the general rules of the Treaty, such as was, if I am right, Article 31 (2) of Regulation No 816/70, may be regarded as still capable of being invoked, five years after the entry into force of that Regulation, simply in order to afford a remedy against administrative inefficiency.

I am therefore of the opinion that Your Lordships should, in answer to the second question referred to the Court by the Tribunal d'Instance of Bourg-en-Bresse, rule that the provisions of Article 31 (2) of Regulation No 816/70 had ceased to be applicable before 11 September 1975.