Opinion of Advocate General Tanchev delivered on 16 September 2021.

• Jurisdiction: European Union
• Celex Number: 62020CC0177
• ECLI: ECLI:EU:C:2021:748
• Date: 16 September 2021
• Court: Court of Justice (European Union)

Provisional text

OPINION OF ADVOCATE GENERAL

TANCHEV

Delivered on 16 September 2021(1)

Case C‑177/20

‘Grossmania’ Mezőgazdasági Termelő és Szolgáltató Kft

v

Vas Megyei Kormányhivatal

(Request for a preliminary ruling from the Győri Közigazgatási és Munkaügyi Bíróság (Administrative and Labour Court, Győr, Hungary))

(Reference for a preliminary ruling – Principles of EU law – Primacy – Direct effect – Conflict between EU law and national law – Infringement of EU law established by the Court of Justice in a preliminary ruling as well as in an infringement action – Obligations and rights of national administrative authorities and courts – Non‑application of the national law to cases which are similar, but not identical, to those at issue in that preliminary ruling – Administrative decision becoming final in the absence of a challenge before the courts – Disapplication or withdrawal of such a decision due to it being contrary to EU law – Kühne & Heitz (C‑453/00) line of case-law)

1. This case presents the Court with a fundamental Cornelian dilemma in law: whether to give precedence to the principle of legality or the principle of legal certainty. The preliminary reference was submitted by the Győri Közigazgatási és Munkaügyi Bíróság (Administrative and Labour Court, Győr, Hungary) in the context of a decision rejecting the re-registration of the applicant’s cancelled usufruct rights over agricultural land.

I. The facts giving rise to the dispute in the main proceedings and the question referred for a preliminary ruling

2. Grossmania is a commercial company based in Hungary and comprises nationals of Member States other than Hungary. Grossmania held rights of usufruct over immovable properties in Hungary. Those rights were cancelled in the property register pursuant to Paragraph 108(1) of the a mező- és erdőgazdasági földek forgalmáról szóló 2013. évi CXXII. törvénnyel összefüggő egyes rendelkezésekről és átmeneti szabályokról szóló 2013. évi CCXII. Törvény (Law No CCXII of 2013 laying down various provisions and transitional measures concerning Law No CXXII of 2013 on transactions in agricultural and forestry land; ‘the 2013 Law on transitional measures’) and Paragraph 94(5) of the az ingatlan-nyilvántartásról szóló 1997. Évi CXLI. törvény (Law No CXLI of 1997 on the property register; ‘the Law on the property register’). Grossmania did not appeal against the cancellation of its rights of usufruct.

3. By judgment of 6 March 2018, SEGRO and Horváth, (Joined Cases C‑52/16 and C‑113/16, EU:C:2018:157) (‘the judgment in SEGRO and Horváth’), the Court held that Article 63 TFEU precluded national legislation, such as that at issue in the main proceedings, under which rights of usufruct which have previously been created over agricultural land and the holders of which do not have the status of close relation of the owner of the land were extinguished by operation of law and were, consequently, deleted from the property registers.

4. As a result, Grossmania applied to the Vas Megyei Kormányhivatal Celldömölki Járási Hivatala (Celldömölk District Registry, part of the Vas Region Administrative Department, Hungary; ‘the first-tier administrative authority’) to have its rights of usufruct over the properties in question re-registered. By decision of 17 May 2019, it rejected that request, referring in particular to Paragraph 108(1) of the 2013 Law on transitional measures.

5. Grossmania lodged an administrative appeal and, by decision of 5 August 2019, the Vas Region Administrative Department confirmed the above decision. It stated that the application for re-registration was inadmissible in particular on the basis that Paragraph 108(1) of the 2013 Law on transitional measures was still in force. In its view, the judgment in SEGRO and Horváth and the judgment of 21 May 2019, Commission v Hungary (Usufruct Over Agricultural Land) (C‑235/17, EU:C:2019:432) (‘the judgment in Commission v Hungary’) were not applicable to this case.

6. Grossmania brought an administrative law action before the referring court against the decision of 5 August 2019. The referring court points out that there can be no financial compensation for Grossmania as there are no national provisions allowing for such compensation. It refers to case-law of the Alkotmánybíróság (Constitutional Court, Hungary). In that case-law it was held that a situation had been created which was contrary to the Hungarian Fundamental Law because, as regards rights of usufruct and rights of use extinguished pursuant to Paragraph 108 of the 2013 Law on transitional measures, the legislature had not adopted legislation allowing compensation to be awarded for exceptional pecuniary damage which cannot be claimed in the context of a settlement between the parties to the contract but which relates to valid contracts. The Alkotmánybíróság called upon the legislature to rectify that omission, which was contrary to the Fundamental Law, by 1 December 2015. However, over five and a half years later no provision has been adopted in that regard. The referring court points out that the facts in SEGRO and Horváth differ from those in the present case in that Grossmania did not bring an action against the administrative decisions cancelling its rights of usufruct.

7. Therefore, the Győri Közigazgatási és Munkaügyi Bíróság (Administrative and Labour Court, Győr) decided to stay proceedings and refer to the Court of Justice the following question for a preliminary ruling:

‘Must Article 267 TFEU be interpreted as meaning that, where the Court of Justice, in a decision given in preliminary ruling proceedings, has declared a legislative provision of a Member State to be incompatible with EU law, that legislative provision cannot be applied in subsequent national administrative or judicial proceedings either, notwithstanding that the facts of the subsequent proceedings are not entirely identical to those of the previous preliminary ruling proceedings?’

II. Analysis

A. Brief summary of the arguments of the parties

8. Written observations were submitted by Grossmania, the German, Spanish and Hungarian Governments and the European Commission.

9. Given that all the parties (save for the Hungarian Government) rely on the same case-law and raise arguments which overlap in order to submit that the question must be answered in the affirmative, I will limit myself to referring to their main arguments in my assessment.

10. The Hungarian Government submits, first, that – as the referring court itself observed – the situation in the main proceedings differs from the one underlying the judgment in SEGRO and Horváth, given that Grossmania had not appealed the cancellation of its usufruct rights in 2014. It follows from the judgment of 13 January 2004, Kühne & Heitz (C‑453/00, EU:C:2004:17) (‘the judgment in Kühne & Heitz’) that an administrative authority is only required to re-examine such a decision if the four conditions in paragraph 28 of that judgment are fulfilled. It is not disputed by the parties that this is not the case here. In those circumstances, it is necessary to strike a balance between the principle of legal certainty and the principle of legality under EU law and to ascertain whether the principles of equivalence and effectiveness are observed, so that individuals are able to make claims on the basis of EU law. The Hungarian Government contends that the national rules for actions in force at the relevant time respected those requirements. Secondly, the Hungarian Government argues that, in the near future, national rules will be adopted which will guarantee that – in relation to cancelled rights of usufruct – the interests of the parties concerned will be duly taken into account. This topic is currently the subject of discussions with the Commission.

B. Assessment

1. Preliminary observations

11. This case raises the question whether a judgment of the Court – which declared a national provision (Paragraph 108(1) of the 2013 Law on transitional measures) to be contrary to EU law – prevents the application of that provision to situations, which are comparable to that which gave rise to that judgment, but which are not identical. That question must be answered in the affirmative.

12. This follows inter alia from the fact that the obligation imposed on courts of last instance to refer a question for a preliminary ruling has an exception: where ‘the question raised is materially identical with a question which has already been the subject of a preliminary ruling in a similar case’. (2)

13. In the judgment in SEGRO and Horváth, paragraph 129, the Court ruled that Article 63 TFEU precludes a provision such as Paragraph 108(1) of the 2013 Law on transitional measures. (3) Despite the fact that the question referred merely mentions the judgment in SEGRO and Horváth, it is clear that it is necessary in the present Opinion to take into account also the judgment in Commission v Hungary. Indeed, that judgment specifically declared that Hungary had failed to fulfil its obligations, under Article 63 TFEU and Article 17 of the Charter of Fundamental Rights of the European Union (‘the Charter’), when it adopted Paragraph 108(1) of the 2013 Law on transitional measures.

14. First, that judgment establishing a breach of obligations is res judicata in relation to facts and law decided upon in that judgment. Secondly, ‘the finding that a Member State has failed to fulfil its obligations under [EU] law entails, first, an automatic prohibition, on the application, by both the judicial and administrative authorities of that Member State, of the [national measure at issue] and, secondly, an obligation on the part of those authorities to take all appropriate measures to facilitate the full application of [EU] law’. (4)

15. It follows from the foregoing that the Hungarian authorities (including the referring court) are obliged to disapply Paragraph 108(1) of the 2013 Law on...