Report for the Hearing delivered in Case 199/87

I — Facts and written procedure

1. The applicable Community legislation

2. The main proceedings

On 12 September 1979, Mads Peder Jensen, the owner of an agricultural holding, entered into an agreement with the Danish Ministry of Agriculture in which he agreed to take part in the Community system of premiums for the non-marketing of milk and milk products. Under that contract, he undertook to comply with all the conditions for obtaining the said premiums resulting in particular from Council Regulation No 1078/77 and Commission Regulation No 1391/78. In particular, the contract stipulated that Mr Jensen could not, for a period of five years, sell, give or dispose of in any other way, the milk or milk products produced on his holding. The premium paid had to be refunded with interest if he does not fulfil the obligations imposed on him or if a purchaser of the holding on which those obligations are imposed does not himself undertake to comply with the said obligations.

It is apparent from the documents before the Court that half the premium at issue, amounting to DKR 289120, was paid on 23 November 1979 and the rest was to be paid in two equal instalments, each representing 25% of the premium, before the end of the third and fifth years of the non-marketing period respectively.

On 15 April 1981, the holding was sold at an auction held by court order to the Dansk Landbrugs Realkreditfond (Danish Agricultural Credit Fund) for an amount of DKR 1185000. On 23 August 1981, the Dansk Landbrugs Realkreditfond sold the property to Michael Christian Lyneborg. Since the latter did not undertake to fulfil the obligations entered into by Mr Jensen in regard to the system of premiums, the Ministry of Agriculture, in a letter of 25 November 1981, called upon the latter to repay the amount of the premium already paid, namely DKR 144 560.

Since Mr Jensen did not comply with that request, the Ministry of Agriculture brought an action before the Vestre Landsret (Western Division of the High Court) in reply to which Mr Jensen contended essentially that he had fulfilled the non-marketing contract entered into with the intervention agency. Since, by judgment of 31 August 1983, the application was granted at first instance, Mr Jensen brought an appeal before the Højesteret (Supreme Court). He is seeking principally the dismissal of the other party's application or, in the alternative, a declaration that he owes an amount inferior to that which he was ordered to pay by the Vestre Landsret which, in all events, should not be greater than DKR 28 912.

In support of his appeal, Mr Jensen claims that there was no breach of contract inasmuch as his holding was not transferred to a third party. In that connection, he claims, principally, that a breach of contract can only concern a voluntary transfer of ownership. He also claims that he cannot be blamed for the fact that the contract did not continue to run and argues that it should be specified in the text of the contract whether the refund obligation is also to cover the situation in which an agricultural holding undergoes the change of ownership as the result of a forced sale by court order. With regard to his alternative conclusions, he points out that the contract entered into with the Ministry of Agriculture was in any event fulfilled for a period of two years, corresponding to 40% of the term of the contract, which, as a proportion of the total amount of the premium, corresponds to DKR 115648. Since that amount should be deducted from the amount of DKR 144560 actually paid, the amount to be refunded is reduced to DKR 28 912.

For its part, the Ministry of Agriculture contends that the obligations under the non-marketing contract were not taken over by the purchaser of the holding and that, consequently, the premium paid must be refunded in its entirety, since Community rules make no distinction in that regard between a voluntary sale and a forced sale by court order.

In the light of those arguments, the Højesteret considered that the case raised questions concerning the interpretation of the Community regulations on the system of premiums for the non-marketing of milk and milk products. Therefore, by decision of 23 June 1987, it decided to stay the proceedings and refer the following questions to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty:

3. Procedure before the Court

The order for reference was registered at the Court Registry on 26 June 1987.

Pursuant to Article 20 of the protocol on the Statute of the Court of Justice of the EEC, written observations were submitted by the Landbrugsministeriet, represented by Ole Fentz and Falling Olsen, lawyers, and by the Commission of the European Communities, represented by its Legal Adviser, Denise Sorasio, and by Ida Langermann, a member of its Legal Department.

Upon hearing the report of the Judge-Rapporteur on the views of the Advocate General, the Court decided, by decision of 24 February 1988, to assign the case to the Third Chamber under Article 95 of the Rules of Procedure and to open the oral procedure without any preparatory inquiry.

II — Written observations

1. First question

Both the Ministry of Agriculture and the Commission propose that the reply to the first question should be in the affirmative.

2. Second question

The Ministry of Agriculture and the Commission agree in proposing that the reply to the second question should be in the negative.

3. Third question

The Ministry of Agriculture and the Commission consider that the third question should be answered in the negative.

1 Language of the Case: Danish.