Hans-Otto Wagner GmbH Agrarhandel KG v Commission of the European Communities (12/79)

(a)The regulations applicable

(b)The matter in dispute

In accordance with Regulation No 2101/75 the Bundesanstalt für Landwirtschaftliche Marktordnung [Federal Office for the Organization of Agricultural Markets], hereinafter referred to as ‘the Federal Office’, which was formerly the Einfuhr- und Vorratsstelle für Zucker und Rohtabak, delivered to Hans-Otto Wagner Agrarhandel KG (hereinafter referred to as ‘Wagner’) a statement of award of tender on the basis of the twentieth partial invitation to tender under the standing invitation to tender for export.Following the statement of award Wagner received from the Federal Office on 18 March 1976 an export licence for 500 tonnes of sugar.After the publication of Council Regulation No 1451/76 Wagner sent a telex message on 29 June 1976 to the Federal Office protesting at the fact that the regulation allowed the abolition of the right to cancel in the event of an alteration in the exchange rates applicable in the agricultural sector.On 30 June 1976 the Commission adopted Regulation No 1579/76 relating to the appropriate compensation. The date provided for the entry into force of the regulation was 1 July 1976. However, publication of the relevant Official Journal was delayed for one day because of a strike. As a result Regulation No 1579/76 could not have effect until 2 July 1976 (judgment of 31 March 1977 in Case 88/76 Société pour l'Exportation, des Sucres S.A. v Commission [1977] ECR 709).By letter dated 1 July 1976, received at the Federal Office on the same day, Wagner asked for cancellation of the export licence and release of the security of DM 107362 which it had lodged.By decision dated 5 July 1976 the Federal Office, referring to Regulation No 1579/76, rejected the application. The Federal Office had already notified the decision to Wagner by telephone on 2 July 1976.Wagner thereupon used the export licence, but states that the transaction caused it considerable losses.Wagner took the view that Regulation No 1579/76 could not apply to applications for cancellation of licences lodged on 1 July 1976 and after correspondence with the Commission brought the present action for damages.

(c)Procedure

The application dated 22 January 1979 was registered on 24 January 1979.On hearing the report of the Judge-Rapporteur and the views of the Advocate General the Court decided to open the oral procedure without any preparatory inquiry. Nevertheless, the Court asked the parties to reply in writing to certain questions. Further, the parties were requested to confine their arguments to the question of liability.

Admissibility of the application

The applicant claims that it did not take proceedings against the decision by the Federal Office dated 5 July 1976 for it would have had to expect lengthy administrative proceedings including an application for a preliminary ruling to the Court of Justice. In the meantime the export licence would have been regarded as valid. In order to mitigate the damage the applicant had accordingly been forced to use the licence to avoid forfeiting its security and in order to claim in any event the export subsidies, including the compensatory amounts. Otherwise it would have had to run the risk of bringing further administrative proceedings against the decision forfeiting its security of DM 107362 for not using the licence.The defendant considers that the application is inadmissible.The applicant ought to have brought proceedings against the decision by the Federal Office dated 5 July 1976 before the national authorities and courts.It is clear that when on 1 July 1976 the applicant lodged its application for cancellation of the licence it did not yet know that the publication of the Official Journal in Luxembourg had been delayed by one day. That fact was revealed during the course of the proceedings. Either the Federal Office would then simply have granted the application or else the application would have led to a request for a preliminary ruling under Article 177 of the EEC Treaty; at the latest when the Court of Justice had given judgment the question would have been settled as in Case 88/76^note and the applicant would have obtained full satisfaction, that is to say it would have not had to use its export licence and its security would have been released.The defendant refers to the case-law of the Court (Joined Cases 67 to 85/75 Lesieur Cotelle and Others v Commission [1976] ECR 391; Case 46/75 IBC v Commission [1976] ECR 65; Joined Cases 12, 18 and 21/77 Debayser and Others v Commission [1978] ECR 553 and in particular pages 567 to 569).It is not possible to maintain the point of view taken by the applicant, namely that it could not be required to make use of the national remedies.The applicant had two choices. On the one hand at the risk of forfeiting its security it could have brought an action against the decision by the Federal Office. On the other hand it could have used the licence, together with the various advantages, that is to say it would have received the general monetary compensation and the special compensation for the disadvantage it had suffered.The applicant preferred the latter alternative. It was perfectly at liberty to take such a decision, but it had then to abide by it and suffer the consequences. The applicant could not claim to hold the Commission liable for a disadvantage amounting to damage for the fact that it had not brought an action before the national courts which had jurisdiction.Further, it is the general administrative practice of the Federal Office that pending proceedings there is no forfeiture of the security. To this extent therefore the applicant ran no risk.In its reply the applicant claims that the present application seeks compensation for the damage caused by the defendant to the applicant. The applicant is convinced that the damage was caused by wrongful conduct on the part of the defendant. Accordingly the application is admissible (Case 43/72 Merkur-Außenhandels-GmbH v Commission [1973] ECR 1055 at p. 1069; Case 126/76 Firma Gebrüder Dietz v Commission [1977] ECR 2431 at p. 2441).The judgement given by the Court in Case 132/77 Société pour l'Exportation des Sucres v Commission [1978] ECR 1061, in which the applicant hád not succeeded in showing that a decision taken by the competent national administrative authorities had been influenced by conduct on the part of the Commission, is not authority to the contrary effect.It is not possible to require the applicant to bring proceedings before the national courts.The applicant did not learn of the late publication of Regulation No 1579/76 until after the time-limit had expired for appealing against the decision of the Federal Office dated 5 July 1976.For this reason the applicant could not at the time actually assess the chances of success of a claim and weigh up the risks resulting from not using the licence save on the basis of its objections in substance to the lawfulness of Regulation No 1579/76. At the time the applicant was not able simply to content itself in this respect with bringing a claim against the decision of the Federal Office dated 5 July 1976; it would have had further to resolve to allow the period of validity of the licence to expire without using it. If it had appealed against the decision of the Federal Office dated 5 July 1976 but then had used the licence it would have suffered the very damage which it is claiming in this action. On the one hand the applicant had therefore to take account of the risk of losing as security an amount representing more than one sixth of its capital and on the other it could assess its chances of avoiding such loss of the security resulting from not using the licence only on the basis of its objections of substance to the lawfulness of Regulation No 1579/76.The applicant denies that it is the general practice of the Federal Office not to forfeit securities pending proceedings against decisions refusing applications to cancel.Finally, the applicant has received no advantage in relation to other exporters. It has simply suffered losses for which it seeks compensation. The advantages from cancelling the licence would have been greater. Instead of losses as a result of using the licence the applicant would have made a profit in the event of cancellation of the licence.In its rejoinder the defendant observes that the decisive factor is whether the application is directed against measures adopted by national authorities on the basis of provisions of Community law.The case-law of the Court is guided by the legitimate aim of drawing a systematic and clear dividing line between the various legal remedies (Court of Justice and national courts) and preventing overlapping of these legal remedies in spite of substantially similar aims; in this connexion priority is given to pursuing legal remedies before the national courts in so far as these are or were available.In this case the applicant has brought proceedings for damages because it neglected to challenge the decision of the Federal Office dated 5 July 1976. If the applicant had done so the decision would have been annulled or withdrawn. By leaving that decision to apply in its case the applicant definitively undertook to export 500 tonnes of sugar to non-member countries with the refund fixed in advance (plus the compensation for disadvantage). However, according to the applicant itself the alleged damage results from the fact that in view of this position the applicant was obliged to buy and sell sugar on terms unfavourable to it. As a result the first cause of the damage is the export licence issued by the national authority, namely the Federal Office, in conjunction with the decision refusing to cancel that licence. By bringing an action under Article 215 of the EEC Treaty the applicant is seeking subsequently to escape the consequences of the national measures and thus to avoid the conditions laid down by the national law for making an application for annulment (inter alia time-limits). The application is therefore basically directed against the said measures.The defendant maintains that the applicant ought to have brought the matter before the national courts. The very fact that to begin with the applicant knew nothing of the delay in the publication of the Official Journal shows the artificial nature of this application based on this factor which could not have had the slightest influence on the commercial measures which the applicant took.In fact, the applicant would receive an advantage vis-à-vis other exporters if it were successful in the present action. At the time an exporter who decided to bring an action against the national refusal ran the risk of forfeiting his security.The applicant did not wish to run that risk. If it were lawful to compensate it for the disadvantage resulting from the decision by means of the compensation provided for by Regulation No 1579/76, it would not be possible to say, and in particular from the perspective at the time, that it was incurring a risk. It would thus have been put in a better position than that of exporters who had decided to bring an action before the national courts.

Substance

The applicant claims that in adopting Regulation No 1579/76, which was at the origin of the rejection by the Federal Office of the request for cancellation lodged by the applicant on 1 July 1976, the defendant was the cause of the damage which the applicant suffered.Further, since the defendant knew at the latest on 2 July 1976 that Regulation No 1579/76 had not been published either on 30 June 1976 or on 1 July 1976, it ought to have explained to the competent national authorities that the regulation could not apply to requests for cancellation of 1 July 1976.In its defence the defendant alleges that there was no wrongful conduct on its part on which the non-contractual liability of the Cpmmunity could be based.First of all it observes that the applicant bases its complaint of wrongful conduct on the part of the Commission only on the delay in publication of Regulation No 1579/76. It is therefore not claiming that there is anything wrong with the substance of the regulation as it did in 1976 vis-à-vis the Federal Office.The defendant admits that in the beginning the refusal by the Federal Office may have seemed insufficiently justified in law in view of the fact that the regulation in question could not apply to the request lodged by the applicant on 1 July 1976 for cancellation of the licence. However, since the applicant subsequently submitted to the refusal and made commercial arrangements which seemed to it good having regard to that refusal, it can no longer rely on that specific error. Otherwise its conduct could be classed as venire contra factum proprium.The delay in publication of the Official Journal in question is obviously a case of force majeure and there is no wrongful conduct on the part of the Office for Official Publications and therefore of the Commission.Further, it is completely without foundation to think that the Commission could have informed the competent national authorities on 2 July 1976 that Regulation No 1579/76 was temporarily inapplicable. The defendant did not learn until 14 September 1976 of the delay in publication, that is to say the date when the application in Case 88/76 was lodged.Assuming that there was wrongful conduct on the part of the Commission, it is not sufficient to give rise to noncontractual liability on the part of the Community within the meaning of Article 215 of the Treaty. The misconduct relied on in the present case relating to the publication of the. Official Journal is to be regarded as a formal defect. Whatever may be the legal consequences of such defects, they cannot give rise to liability for a wrongful act or omission.In the defendant's view it is further necessary that the damage claimed should be the direct consequence of the specific conduct alleged against the Commission. The damage should have arisen precisely because Regulation No 1579/76 was applied to the applicant already with effect from 1 July 1976. That was not so in the present case.Further, the applicant could have prevented the damage it alleges by challenging the refusal of the Federal Office.In its reply the applicant maintains that there was wrongful conduct on the part of the defendant.Further, it considers that the substance of Regulation No 1579/76 is unlawful in that it infringes and abolishes rights legitimately acquired. In this respect it refers to the applicant's statement in Case 88/76 Société pour l'Exportation des Sucres S.A. v Commission [1977] ECR 709.It alleges that the decision of the Federal Office of 5 July 1976 was not only temporarily unlawful but was based on provisions which were absolutely inapplicable because they had not yet entered into force. There is scarcely any more serious legal defect,The wrongful conduct on the part of the defendant lies in the fact that it did not immediately state that the regulation could not apply to requests to cancel lodged on 1 July 1976.It is therefore irrelevant that the late publication of the Official Journal was due to force majeure. Further, the defendant cannot base a case of force majeure on the strike of its own staff.The defendant or in any event certain staff of the Office for Official Publications knew on 2 July 1976 of the late publication of Regulation No 1579/76. If that information was not passed within the defendant's organization to the proper officers that was due to the negligence on the part of that organization.As regards the causal link between the wrongful act or omission on the part of the defendant and the damage suffered by the applicant, the latter observes that if the defendant had clearly indicated at the proper time that Regulation No 1579/76 had not yet entered into force on 1 July 1976, the applicant would in any event have been in a position to challenge the decision of the Federal Office.Both according to the equivalence theory and the theory of adequate causality the causal connexion between the defendant's misconduct and the damage caused to the applicant cannot be denied.The applicant considers that at the time, having regard to the circumstances, it discharged its duty to mitigate the damage.In its rejoinder the defendant points out first of all that under Article 42 of the Rules of Procedure a fresh issue is inadmissible. The applicant has never alleged even indirectly in its application that the content of Regulation No 1579/76 is unlawful. It is only in the reply that it claims that the regulation is unlawful.As regards the substance of the case the defendant alleges that the late publication involves no misconduct by the Commission giving rise to non-contractual liability on the part of the Community. There is no wrongful breach by the Commission of its duty.If it is thought that the wrongful conduct of the Commission lies in the fact that it neglected to warn the Federal Office, the question arises whether the decision by the Federal Office is unlawful. In this respect the defendant maintains the point of view put forward in its defence.The Commission did not fail to perform any duty towards the applicant by not informing the Federal Office of the delay in publication. Generally speaking the very existence of such a duty must be denied. A special duty to give notice might on the other hand arise from the specific requirements of legal certainty or the protection of legitimate expectation in relation to individuals. Such a duty would, however, be simply ancillary for it would arise only from the fact of late publication. In the present case this duty could only mean protecting exporters from the damage which they suffered because of the delay in publication, in other words because they relied on the continued possibility of cancelling on 1 July 1976. However, the applicant has said nothing in this respect.If it is assumed that the wrongful conduct of the Commission consisted in the delay in publishing Regulation No 1579/76, then there is no causal link between the fact and the damage alleged. If the regulation had been published, as expected, by 1 July 1976 at the latest, the applicant would have been in exactly the same position as now.Even on the basis of the alleged negligence by the Commission in not informing the Federal Office, there is no sufficient causal link between this and the damage. The purpose of a special duty to inform could only be to protect exporters against damage which would be a consequence of the delay in publishing Regulation No 1579/76. There was no such damage and as a result there is no specific causal link between the failure to perform the legal duty in question and the damage alleged.In answer to a question put by the Court the applicant confirms that is has received the compensation provided for by Regulation No 1579/76.The compensation for the disadvantage nevertheless did not make good the damage which the refusal of its request to cancel caused the applicant to suffer. The compensation was equal only to the difference between the monetary compensatory amount applicable from 1 July 1976 and that which would have been applicable if the new conversion rates had not been used from 1 July 1976.