European Community law – Landlord and tenant – Tenant milk producer – Expiry of rural lease – Landlord temporarily acquiring former tenant’s milk reference quantity although not milk producer – Whether transfer valid when being passed on to milk producer as soon as possible – Ruling accordingly
In 1974, the appellant’s predecessor entered into a rural lease of land in Germany that was owned by K, for an indefinite period, to produce milk. In 1984, when the additional levy system for milk producers that exceeded their allocated reference quantity was introduced, the appellant’s predecessor was allocated a specific reference quantity in respect of that area of land that was leased for milk production.
In 2000, the appellant and K terminated the lease with effect from 1 January 2001. The holding reverted to K and the relevant authorities confirmed that a reference quantity had been transferred to him. However, part of that reference quantity was to be withdrawn since K was not a milk producer. K’s challenge to that decision was rejected, but the Administrative Court quashed the decision on appeal. The higher Administrative Court dismissed an appeal against that ruling, holding that, on the expiry of a rural lease of a dairy holding, the corresponding reference quantity reverted to the lessor only if he himself was a milk producer or the land was transferred to another milk producer without delay.
The authorities appealed to the Federal Administrative Court, which considered that a provisional acquisition by a lessor that was not a producer was always possible in so far as the acquisition was temporary and made necessary by national legislation; and that it led to the grant of a new lease to a lessee that had the status of a producer. The final result was regarded as a single operation transferring the reference quantity from one producer to another.
The court took the view that the same approach should be applied in the present case where the land transfer was separate from the transfer of the reference quantities but referred to the European Court of Justice for a preliminary ruling on the proper interpretation of article 7(2) of Council Regulation 3950/92, establishing an additional levy in the milk and milk products sector.
Held: A preliminary ruling was made.
Under article 7(2) of Council Regulation 3950/92, on the expiry of a rural lease on a milk production holding, the attached reference quantity could revert to a lessor who was not and did not intend to become a milk producer, provided that the lessor transferred the reference quantity as soon as possible through a state sales office to a third party that was a milk producer.
Member states might, in accordance with article 8(b) of Regulation 3950/92, and with a view to restructuring milk production or making environmental improvement, determine objectively the conditions under which producers might obtain, in return for payment, at the beginning of a 12-month period, the reallocation by the relevant competent authority, of reference quantities released definitively at the end of the preceding 12-month period by other producers.
Further, pursuant to article 8(e), member states might also authorise, upon application by the producer to the relevant competent authority, the transfer of reference quantities without the corresponding holding. It followed that the Community legislature envisaged the possibility of the transfer of a reference quantity, through a state sales office, to a producer without the holding to which it attached being transferred. The fact that, in the present case, the reference quantity attached to a dairy holding temporarily reverted to the lessor, which did not have the status of a producer, was not decisive, provided that the situation did not persist and that the reference quantity in question was transferred to a third party that had the status of a producer as soon as possible.
Consequently, a provisional acquisition of a reference quantity attached to a holding by a lessor that did not have the status of a producer, so that it could be transferred to a state sales office to be sold to a milk producer as soon as possible, was not contrary to article 7(2).
G-W Bieniek, Rechtsanwalt, appeared for the appellant; H Steggewentz (acting as agent) appeared for the respondent; M Lumma and C Blaschke (acting as agents) appeared for the German government; J Schieferer, F Erlbacher and H Tserepa-Lacombe (acting as agents) appeared for the European Commission.
Eileen O’Grady, barrister
