Report for the Hearing in Case C- 189/89

I — Facts and procedure

1. The applicable Community legislation

2. The dispute in the main proceedings

The plaintiff in the main proceedings, Karl Spagl, farms a holding in Bavaria with a usable area of 36 Tagwerk (about 12 hectares) of grassland. When he acquired the holding in 1976 it was stocked with 12 dairy cows and five calves.

On 23 December 1977 Mr Spagl applied for a non-marketing premium for milk and milk products for a period of five years with a view to reorganizing his holding. Whilst production was suspended from 1 April 1978 to 31 March 1983, he carried out maintenance work on his buildings and machinery. In August 1984 there were 12 cows housed on the land.

On expiry of the non-marketing period, Mr Spagl took steps to obtain a reference quantity under the additional premium scheme for milk. By letter of 4 September 1984, the purchasing agency fixed the reference quantity for delivery as zero on the ground, inter alia, that his was not a special case under the applicable legislation. For the same reason, the competent authorities refused, in a series of decisions, to acknowledge that exceptional circumstances existed or to assign an additional reference quantity to Mr Spagl.

By decision of 4 April 1986, the defendant in the main proceedings, the Hauptzollamt (Principal Customs Office) Rosenheim, dismissed a complaint from Mr Spagl against that determination of reference quantity on the ground that the competent professional organizations had not issued a certificate to the effect that exceptional circumstances existed. An action against that decision was brought before the Finanzgericht München (Finance Court, Munich).

Considering that the decision to be given depended on the validity of the applicable Community rules, the Finanzgericht München stayed the proceedings and referred the following questions to the Court for a preliminary ruling under Article 177 of the EEC Treaty:

In the grounds of its order for reference, the national court expresses doubts as to the compatibility of Article 3a of Regulation No 857/84, as amended, with the principle of the protection of legitimate expectations, the principle of equal treatment, the guarantee of the right to property and the provisions of the Treaty concerning the common agricultural policy. It considers in particular that, as a result of the imposition of a time-limit relating to the expiry of the non-marketing period, that provision affects above all the owners of small and medium-sized agricultural undertakings which — by contrast with large operators — were not able to buy the additional dairy cattle necessary for the immediate resumption of deliveries, owing to the size of their holdings and their limited financial resources. Those undertakings thus bear a burden such that their existence is seriously threatened by the refusal to grant them a reference quantity.

The national court also expresses doubts concerning the validity of the provisions in question in so far as the level of the special reference quantity, calculated in accordance with Article 3a of Regulation No 857/84, is fixed as 60% of the quantity of milk or milk equivalent delivered by the producer during the period of 12 months preceding the month in which the application for the non-marketing premium was lodged.

3. Procedure before the Court

The order for reference was received at the Court Registry on 30 May 1989.

Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities, written observations were submitted by Mr Spagl, represented by U. Nurnberger, a Rechtsanwalt in Munich, the Irish Government, represented by L. J. Dockery, Chief State Solicitor, acting as Agent, the Council of the European Communities, represented by A. Brautigam, Principal Administrator in the Council's Legal Department, acting as Agent, and by the Commission of the European Communities, represented by its Legal Adviser D. Booß, and by K.-D. Borchardt, a member of its Legal Department, acting as Agents.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided on 14 March 1990 to assign the case to the Fifth Chamber, pursuant to Article 95 of the Rules of Procedure, and to open the oral procedure without any preparatory inquiry.

II — Written observations

1. The first question

Mr Spagl and the Irish Government maintain that the regulations at issue are invalid. The Council and the Commission, on the other hand, contend that they are valid.

The second question

III — Answers to the questions put by the Court

1. The Council stated in reply to a question put to it by the Court that, in determining the special reference quantities referred to in Article 3a of Regulation No 857/84, it had relied on the following considerations:

2. At the Court's request, the Commission furnished statistical details of the trend in the volume of milk production and deliveries in the Community by holding. It also stated, in reply to a question put to it by the Court, that, in most of the Member States, there was more than one rate for the various groups of products of which production was normal. On that point too it provided more detailed statistics.

1 Language of the case: German.