Mads Peder Jensen v Landbrugsministeriet.

• Jurisdiction: European Union
• Celex Number: 61987CC0199
• ECLI: ECLI:EU:C:1988:347
• Docket Number: 199/87
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Date: 29 June 1988

Important legal notice

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61987C0199

Opinion of Mr Advocate General Sir Gordon Slynn delivered on 29 June 1988. - Mads Peder Jensen v Landbrugsministeriet. - Reference for a preliminary ruling: Højesteret - Denmark. - Premiums for the non-marketing of goods. - Case 199/87.

European Court reports 1988 Page 05045

Opinion of the Advocate-General

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My Lords,

Mr Jensen, a farmer with a dairy herd in the western region of Denmark, applied for a non-marketing premium pursuant to Council Regulation ( EEC ) No 1078/77 ( Official Journal 1977, L 131, p . 1 ) introducing a system of premiums for the non-marketing of milk and milk products and for the conversion of dairy herds . He entered into a contract with the EC Directorate of the Danish Ministry of Agriculture, by which he undertook not to market milk for a period of five years in return for a non-marketing premium calculated on the basis of his existing milk production . By the terms of that contract, which bore an endorsement of approval dated 3 May 1979, but which he apparently signed on 12 September 1979, Mr Jensen undertook, inter alia :

( i ) not to sell, give away or otherwise dispose of milk or milk products from the holding for a period of five years,

( ii ) not to allow others to use the holding or any part thereof for dairy farming ...,

( iii ) not to entrust the holding or any part thereof to a third party by way of sale, lease, termination of lease or by any other means unless the EC Directorate had previously been informed in writing of the name and address of the transferee,

( iv ) to refund the premium paid together with interest thereon at a rate corresponding to 2% above the discount rate established from time to time by the National Bank in the event of his non-compliance with the undertakings given by him or if a transferee of the holding to which the undertakings related did not take them over .

Mr Jensen was accordingly granted a non-marketing premium of DKR 289 120.12, of which he received half ( DKR 144 560.06 ) as an initial instalment on 23 November 1979 . The balance of the premium was to be payable in two equal instalments, each of 25% of the total, before the end of the third and fifth years of the undertaking . The stock on the holding, consisting of some 45 to 50 cows, was subsequently sold for slaughter and the use of the holding changed to the rearing of bull calves .

Upon the application of a creditor his farm was put up for sale by court order on 15 April 1981 - that is approximately 19 months after the undertaking was given . At the time of the sale it seems that Mr Jensen disclosed the existence of the non-marketing undertaking . The farm was taken over by the Dansk Landbrugs Realkredietfond ( the Danish Agricultural Credit Fund : "the Fund "), which resold it, on 23 August 1981 to a Mr Michael Christian Lyneborg .

The EC Directorate of the Danish Ministry of Agriculture asked Mr Lyneborg whether he wished to take over the non-marketing undertakings previously entered into by Mr Jensen . On receiving no reply from Mr Lyneborg, the Directorate asked Mr Jensen, by letter dated 25 November 1981, to refund the DKR 144 560.06 already paid by way of premium . On his refusal to do so, the Danish Ministry of Agriculture brought proceedings before the Vestre Landsret ( the Western Regional Court ) for the recovery of that sum with interest thereon .

The Western Regional Court gave judgment for the Danish Ministry of Agriculture and Mr Jensen appealed to the Hoejesteret ( the Supreme Court ). On appeal, the Danish Ministry of Agriculture maintained that it should be refunded the premium paid so far in full, together with interest . Mr Jensen submitted that he was not in breach of his contract, because his transfer of the holding was not a voluntary transfer, and that his appeal should therefore be allowed in full . In the alternative, he submitted that he should only be held liable to repay that portion of the premium received which corresponded to the period of time during which his undertaking was not complied with, namely DKR 28 912.01 . The Hoejesteret stayed proceedings and referred the following questions to the Court :

"( 1 ) Do the term 'takes over' in Article 6 ( 1 ) of Council Regulation No 1078/77, the term 'transfer' in Article 8 ( 4 ) of Commission Regulation No 1307/77 and the term 'transfer' in Article 9 ( 4 ) of Commission Regulation No 1391/78 also cover a situation in which an agricultural holding undergoes a change of ownership as the result of an auction by court order?

( 2 ) Is the situation in which an agricultural holding undergoes a change of ownership as a result of an auction by court order covered by the provisions on force majeure contained in Article 12 of Commission Regulation No 1391/78, as amended by Article 1 of Commission Regulation No 1799/79?

( 3 ) Must Articles 6 ( 1 ) and 11 ( 1 ) of Council Regulation No 1078/77 and Article 9 ( 1 ) of Commission Regulation No 1391/78, according to which the Member States shall take all necessary steps to recover any sums already paid in respect of the premium, be interpreted as meaning that a demand may be made only for the recovery of a sum which is proportionate to the period during which the undertakings under the premiums system were not complied with?"

In Denmark, the conditions for the receipt of the milk non-marketing premium introduced by Regulation No 1078/77 are apparently set out in Notice No 366 of 30 June 1977 of the Ministry of Agriculture, as amended by Notice of 5 July 1978, and are reflected in the terms of the contract already referred to .

Under Regulation No 1078/77, the conditions which must be fulfilled for the grant of a non-marketing premium include not allowing the holding or any part thereof to be used by others for dairy farming ( Article 2 ( 2 ) ( b ) ). Article 6 ( 1 ) provides that, "Any person who takes over an agricultural holding may...