Robin John Feakins v The Scottish Ministers (C-335/13)

Contents

Judgment of the Court (First Chamber)6 November 2014^note(Reference for a preliminary ruling — Common agricultural policy — Single payment scheme — Commission Regulation (EC) No 795/2004 — Article 18(2) — National reserve — Exceptional circumstances — Principle of equal treatment)In Case C‑335/13,REQUEST for a preliminary ruling under Article 267 TFEU from the Scottish Land Court (United Kingdom), made by decision of 14 June 2013, received at the Court on 18 June 2013, in the proceedingsRobin John FeakinsvThe Scottish Ministers,THE COURT (First Chamber),composed of A. Tizzano, President of the Chamber, A. Borg Barthet, M. Berger, S. Rodin (Rapporteur) and F. Biltgen, Judges,Advocate General: J. Kokott,Registrar: L. Hewlett, Principal Administrator,having regard to the written procedure and further to the hearing on 30 April 2014,after considering the observations submitted on behalf of:— R. Feakins, by A.S. Devanny, Solicitor, C. Agnew of Lochnaw, QC, and N. MacDougall, Advocate,— the Scottish Ministers, by N. Wisdahl, acting as Agent, and by J. Wolffe, QC, and D. Cameron, Advocate,— the Greek Government, by I. Khalkias and E. Khroni, acting as Agents,— the European Commission, by K. Skelly and G. von Rintelen, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 19 June 2014,gives the following

Judgment

1This request for a preliminary ruling concerns the interpretation and validity of Article 18(2) of Commission Regulation (EC) No 795/2004 of 21 April 2004 laying down detailed rules for the implementation of the single payment scheme provided for in Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers (OJ 2004 L 141, p. 1), as amended by Commission Regulation (EC) No 1974/2004 of 29 October 2004 (OJ 2004 L 345, p. 85), (‘the Implementing Regulation’).

2The request has been made in an appeal brought by Mr Feakins against a decision of the Scottish Ministers concerning the determination of the reference amount for calculating his single payment entitlements under Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulations (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001, (EC) No 1454/2001, (EC) No 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and (EC) No 2529/2001 (OJ 2003 L 270, p. 1) (‘the Basic Regulation’).

Legal context

The Basic Regulation

3The Basic Regulation, which was in force at the time when the facts underlying the main proceedings occurred, established, in particular, an income support scheme for farmers decoupled from production. That scheme, referred to as the ‘single payment scheme’ in the second indent of Article 1 of that regulation, groups together a number of direct payments paid to farmers under a variety of support schemes which had existed up to that point.

4Recital 24 in the preamble to the Basic Regulation was worded as follows:‘Enhancing the competitiveness of Community agriculture and promoting food quality and environment standards necessarily entail a drop in institutional prices for agricultural products and an increase in the costs of production for agricultural holdings in the Community. To achieve those aims and promote more market-oriented and sustainable agriculture, it is necessary to complete the shift from production support to producer support by introducing a system of decoupled income support for each farm. While decoupling will leave the actual amounts paid to farmers unchanged, it will significantly increase the effectiveness of the income aid. It is, therefore, appropriate to make the single farm payment conditional upon cross-compliance with environmental, food safety, animal health and welfare, as well as the maintenance of the farm in good agricultural and environmental condition.’

5Recital 29 in the preamble to that regulation stated:‘In order to establish the amount to which a farmer should be entitled under the new scheme, it is appropriate to refer to the amounts granted to him during a reference period. To take account of specific situations, a national reserve should be established. That reserve may also be used to facilitate the participation of new farmers in the scheme. The single payment should be established at farm level.’

6For the purposes of implementing the single payment scheme, Member States could opt for the ‘historical’ model or the ‘regional’ model.

7In the context of the ‘historical’ model, farmers who had benefited during a reference period — as a general rule comprising the calendar years 2000 to 2002 — from a payment under at least one of the support schemes referred to in Annex VI to the Basic Regulation, had the right to benefit from ‘payment entitlements’ calculated on the basis of a reference amount obtained for each farmer from the annual average of all the payments granted to him under those schemes during that period. The number of payment entitlements corresponded to the average annual number of hectares which had given the farmer concerned the right to such payments during the reference period.

8Thus, Article 37(1) of that regulation laid down the general rule governing the calculation of the reference amount as follows:‘The reference amount shall be the three-year average of the total amounts of payments, which a farmer was granted under the support schemes referred to in Annex VI, calculated and adjusted according to Annex VII, in each calendar year of the reference period referred to in Article 38.’

9The Basic Regulation provided, however, for certain specific measures applicable to farmers for whom a reference amount calculated in accordance with Article 37(1) would not have been representative of the level of aid which they would have received had the single payment scheme not entered into force.

10In particular, first, in accordance with Article 40(1) of that regulation:‘By way of derogation from Article 37, a farmer whose production was adversely affected during the reference period by a case of force majeure or exceptional circumstances occurring before or during that reference period shall be entitled to request that the reference amount be calculated on the basis of the calendar year or years in the reference period not affected by the case of force majeure or exceptional circumstances.’

11Secondly, Article 42(1) of the Basic Regulation provided for the constitution of a national reserve for each Member State, which had to be funded by the application of a linear percentage reduction of the reference amounts.

12In accordance with Article 42(3) and (5) of that regulation, the Member States could use the national reserve to grant reference amounts to farmers who were commencing their agricultural activity or who were subject to restructuring and development programs.

13Article 42(4) of that regulation provided:‘Member States shall use the national reserve for the purpose of establishing, according to objective criteria and in such a way as to ensure equal treatment between farmers and to avoid market and competition distortions, reference amounts for farmers finding themselves in a special situation, to be defined by the Commission ...’.

14Article 41 of the Basic Regulation provided:1. For each Member State, the sum of the reference amounts shall not be higher than the national ceiling referred to in Annex VIII.2. Where necessary, a Member State shall proceed to a linear percentage reduction of the reference amounts in order to ensure respect of its ceiling.’

15Article 42(7) of that regulation stated:‘Member States shall proceed to linear reductions of the entitlements in case their national reserve is not sufficient to cover the cases referred to in paragraphs 3 and 4.’

16The Basic Regulation was repealed and replaced by Council Regulation (EC) No 73/2009 of 19 January 2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003 (OJ 2009 L 30, p. 16), which entered into force on 2 February 2009 and was subsequently repealed and replaced by Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009 (OJ 2013 L 347, p. 608), which entered into force on 20 December 2013.

The Implementing Regulation

17The Implementing Regulation, which was in force at the time of the events that gave rise to the dispute in the main proceedings, contained the provisions for implementation of the single payment scheme provided for by the Basic Regulation.

18Recital 13 in the preamble to the Implementing Regulation was worded as follows:‘Article 42(4) of Regulation (EC) No 1782/2003 allows the Commission to define the special situations which shall give right to the establishment of reference amounts for certain farmers finding themselves in situations which prevented them, in full or partially, from receiving direct payments in the reference period. It is therefore appropriate to list those special situations by providing for rules in order to avoid cumulating the benefit from the different allocation of payment entitlements on the same farmer without prejudice to the possibility for the Commission to add further cases where the case may be. …’

19Article 18(1) and (2) of the Implementing Regulation provided:1. For the purposes of Article 42(4) of Regulation (EC) No 1782/2003, “farmers in a special situation” shall mean the farmers referred to in Articles 19 to 23a of this Regulation.2. In cases where a farmer in a special situation meets the condition for applying two or more of Articles 19 to 23a of this Regulation or Articles 37(2), 40, 42(3) or 42(5) of Regulation (EC) No 1782/2003, he shall receive a number of payment entitlements not higher than the number of hectares he declares in the first year of application of the single payment scheme and whose value shall be the highest value he may obtain by applying separately each of the Articles for which he meets the conditions.’

20Articles 19 to 23a of that regulation defined a number of special situations in which the farmer concerned could benefit from entitlements from the national reserve.

21In particular, Article 22 of the Implementing Regulation provided:1. A farmer who leased, between the end of the reference period and 15 May 2004 at the latest, for six or more years a holding or part of it whose lease conditions may not be adjusted shall receive payment entitlements calculated by dividing a reference amount, established by the Member State, in accordance with objective criteria and in such a way as to ensure equal treatment between farmers and to avoid market and competition distortion, by a number of hectares not higher than the number of hectares he leased.2. Paragraph 1 shall apply to a farmer who bought, in the reference period or before, or by 15 May 2004 at the latest, a holding or part of it whose land was under a lease during the reference period, with the intention to commence or expand his agricultural activity within one year after the expiry of the lease.’

22Article 12(1), (4) and (8) of that regulation provided:1. Starting from the calendar year preceding the first year of application of the single payment scheme Member States may proceed to the identification of the eligible farmers referred to in Article 33 of Regulation (EC) No 1782/2003, to the provisional establishment of the amounts and the number of hectares referred to respectively in Article 34(1)(a) and (b) of that Regulation and to a preliminary verification of the conditions referred to in paragraph 5 of this Article....4. The definitive establishment of payment entitlements to be allocated in the first year of application of the single payment scheme shall be subject to the application under the single payment scheme in accordance with Article 34(3) of Regulation (EC) No 1782/2003.No definitive transfer of payment entitlements shall be possible before the definitive establishment of payment entitlements....Farmers may introduce, under reserve of the definitive establishment, applications under the single payment [scheme] on the basis of provisional payment entitlements established by the Member States or acquired via the contractual clause referred to in Articles 17 or 27.…8. Except for the purpose of establishing payment entitlements from the national reserve referred to in Articles 6, 7 and 18 to 23a, and without prejudice to paragraphs 5 and 6 of this Article, no parcel needs to be declared for the purpose of the establishment of the payment entitlements. The declaration of parcels referred to in Article 44(3) of Regulation (EC) No 1782/2003 shall apply for the purpose of the application for payment of the payment entitlements under the single payment scheme.’

23The Implementing Regulation was repealed and replaced by Commission Regulation (EC) No 1120/2009 of 29 October 2009 laying down detailed rules for the implementation of the single payment scheme provided for in Title III of Regulation No 73/2009 (OJ 2009 L 316, p. 1), which entered into force on 9 December 2009.

The dispute in the main proceedings and the questions referred for a preliminary ruling

24Before the single payment scheme entered into force, Mr Feakins operated a farm in Sparum, England, for which he had obtained various payments under the production support schemes referred to in Annex VI to the Basic Regulation.

25In 2001 his entire stock had been slaughtered because of foot and mouth disease and his farm had then been used as a site for the disposal of carcasses. He was unable to restock in 2001 and 2002 because of foot and mouth disease. However, following the entry into force of the single payment scheme, Mr Feakins was able, under the provisions of Article 40 of the Basic Regulation, to obtain a reference amount calculated solely on the basis of the figures for the reference year not affected by foot and mouth, namely 2000. Consequently, a reference amount of EUR 232 744 was allocated to him.

26In November 2002, Mr Feakins purchased two farms in Scotland, Langburnshields and Tythehouse, both of which were subject to tenancies due to expire in 2006.

27On 14 March 2005, Mr Feakins submitted an application to the Scottish Ministers for the provisional establishment of payment entitlements from the national reserve for his two Scottish farms. Mr Feakins argued that he found himself in the special situation covered by Article 22(2) of the Implementing Regulation by reason of the fact that he had purchased, during the reference period, land leased to a third party, with the intention of commencing agricultural activity on that land after the expiry of the lease.

28Further to that application, the Scottish Ministers provisionally set the reference amount for his payment entitlements from the national reserve at EUR 95 146. In accordance with Article 12(4) of the Implementing Regulation, those entitlements could not, however, become definitive and give rise to payments until vacant possession was taken of the farms concerned and the corresponding hectares had been declared in an aid application under the integrated administration and control system (‘the IACS form’).

29Mr Feakins declared the Langburnshields farm on his IACS form in May 2005 and the Tythehouse farm on his May 2007 form, after taking vacant possession of Langburnshields farm on 10 March 2005 — that is to say, before the expiry of the lease, by agreement with the tenant — and Tythehouse farm on 28 November 2006. He retained his payment entitlements with respect to his English farm at Sparum, which he leased to a third party.

30In those circumstances, the reference amount granted to Mr Feakins for his English farm was transferred from England to Scotland. The Scottish Ministers then refused him the benefit of the additional amount allocated from the national reserve, on the basis of the ‘best value’ rule referred to in Article 18(2) of the Implementing Regulation. The application of Article 40 of the Basic Regulation entitled him to benefit, for his English farm, from a higher reference amount than that which he was entitled to receive for his Scottish farms under Article 22(2) of the Implementing Regulation.

31Mr Feakins appealed his case to the Scottish Land Court and argued that the Scottish Ministers had misinterpreted Article 18(2) of the Implementing Regulation. He further submitted that, if the Scottish Ministers’ interpretation were correct, that provision would be invalid.

32The referring court takes the view that doubts still remain as to the interpretation and validity of Article 18(2) of the Implementing Regulation.

33In those circumstances, the Scottish Land Court decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1) Whether, on a proper construction, Article 18(2) of [the Implementing Regulation] applies:(a) where a farmer meets the conditions for applying any two or more of the following articles: namely Article[s] 19 [to] Article 23a of that Regulation and Article 37(2), Article 40, Article 42(3) and Article 42(5) of [the Basic Regulation]; or only(b) where a farmer meets the conditions for two or more of Articles 19 [to] 23a of [the Implementing Regulation] or separately two or more of Articles 37(2), 40, 42(3) and 42(5) of [the Basic Regulation]?(2) If Article 18(2) [of the Implementing Regulation] is interpreted in the manner set out in [Question] (l)(a) above, whether Article 18(2) is invalid in whole or in part on one of or both of the following grounds which are advanced by the appellant:(a) on the basis that the Commission, in enacting [the Implementing Regulation], did not have power to enact Article 18(2) to that effect; or(b) on the basis that the Commission, in enacting [the Implementing Regulation], did not state reasons for Article 18(2) [of that regulation]?(3) If Article 18(2) [of the Implementing Regulation] is interpreted in the manner [set out] in [Question] (l)(a) above and Question (2) falls to be answered in the negative, does Article 18(2) [of the Implementing Regulation] apply in the situation where a farmer has received a provisional approval of an allocation from the national reserve under Article 22 of [the Implementing Regulation] for a farm in 2005, but that allocation is not declared in the IACS form until 2007, when the farm was taken over by the farmer?’

Consideration of the questions referred

The first question

34By its first question, the national court asks, in essence, whether Article 18(2) of the Implementing Regulation must be interpreted as precluding the cumulative benefit of any two or more of the provisions of that regulation and of the Basic Regulation which are referred to in that article — including the cumulative benefit of one of those provisions from each of those regulations — or whether Article 18(2) merely precludes the cumulative benefit of any two or more of the relevant provisions from one and the same regulation.

35In order to interpret the provision at issue, it is necessary to consider not only its wording but also the context in which it occurs and the objects of the rules of which it forms part (see, inter alia, Germany v Commission, C‑156/98, EU:C:2000:467, paragraph 50, and Chatzi, C‑149/10, EU:C:2010:534, paragraph 42).

36As regards the wording of Article 18(2) of the Implementing Regulation, it must be pointed out that both the first section of that paragraph and the title preceding Article 18 show that the ‘best value’ rule applies only to ‘farmers in a special situation’, who are defined in Article 18(1) as being those referred to in Articles 19 to 23a of the Implementing Regulation.

37Since the scope of Article 18(2) of the Implementing Regulation is thus defined by the requirement that the conditions for applying at least one of Articles 19 to 23a of that regulation be met, the use of the word ‘two or more’, preceding the reference to those articles, reflects the fact that meeting the conditions for the application of at least one other of those articles triggers the application of the ‘best value’ rule.

38In those circumstances, the words ‘two or more’ may logically be related only to Articles 19 to 23a of the Implementing Regulation, the ‘best value’ rule applying, moreover, also where a farmer who is in one or more of the ‘special situations’ defined by those articles also meets the conditions for the application of one or more of the relevant provisions of the Basic Regulation.

39Article 18(2) of the Implementing Regulation must therefore be interpreted as applying where a farmer in a special situation, and who therefore already meets the conditions for the application of at least one of Articles 19 to 23a of that regulation, also meets the conditions for the application of:— at least one other of Articles 19 to 23a of the Implementing Regulation, or— at least one of Articles 37(2), 40, 42(3) or 42(5) of the Basic Regulation.

40That interpretation is borne out by the scheme and purpose of the provision at issue in the main proceedings and the legislation of which that provision forms a part.

41In that regard, the Court must reject Mr Feakins’ argument that the relevant provisions of the Basic Regulation and those of the Implementing Regulation pursue different objectives, with the result that Article 18(2) does not preclude the cumulative benefit of one of the provisions from one regulation and of one of the provisions from the other.

42As the Advocate General observed in point 42 of her Opinion, the provisions of the Basic Regulation and those of the Implementing Regulation, referred to in Article 18(2) of the latter regulation, are intended to offset, without distinction, the disadvantages which would be suffered by a farmer if, in establishing the reference amount, regard were to be had solely to the payments granted to him during the reference period from 2000 to 2002.

43Distinguishing between the relevant provisions of the Basic Regulation and those of the Implementing Regulation appears all the more difficult since Article 42(3) and (5) of the Basic Regulation, like the provisions of the Implementing Regulation, covers situations giving access to the national reserve and Article 19 of the Implementing Regulation concerns the specific situation of certain dairy farmers who come within the scope of Article 40 of the Basic Regulation.

44The two lists differ therefore only with regard to their legislative source, Articles 19 to 23a of the Implementing Regulation, moreover, constituting merely the implementation of Article 42(4) of the Basic Regulation.

45Consequently, the answer to the first question is that Article 18(2) of the Implementing Regulation must be interpreted as applying, first, in the case where a farmer meets the conditions for the application of any two or more of Articles 19 to 23a of the Implementing Regulation and, second, in the case where a farmer who meets the conditions for the application of at least one of Articles 19 to 23a of the Implementing Regulation also meets the conditions for the application of at least one of Articles 37(2), 40, 42(3) and 42(5) of the Basic Regulation.

The second question

46By its second question, that national court asks, in essence, whether Article 18(2) of the Implementing Regulation, as interpreted in response to the first question, is valid in the light of the principles of the distribution of powers, of equal treatment and of the obligation devolving on the Commission to state reasons under Article 296 TFEU.

47With regard to the validity of the provision at issue in the main proceedings in the light of the principle of equal treatment, it must be noted that that principle requires that comparable situations must not be treated differently and different situations must not be treated alike unless such treatment is objectively justified (see, inter alia, Elbertsen, C‑449/08, EU:C:2009:652, paragraph 41, and Franz Egenberger, C‑313/04, EU:C:2006:454, paragraph 33).

48Article 18(2) of the Implementing Regulation establishes a difference in treatment between, on the one hand, a farmer who has experienced exceptional circumstances entitling him to an adjustment of his reference amount under Article 40 of the Basic Regulation and, on the other, a farmer who has not faced such circumstances and who is allocated a reference amount calculated in accordance with the general rule laid down in Article 37(1) of that regulation. As Mr Feakins has noted, the provision at issue in the main proceedings places the first farmer at a disadvantage in relation to the second by depriving him of the benefit of a reference amount from the national reserve in addition to his reference amount as adjusted under Article 40 of the Basic Regulation.

49A breach of the principle of equal treatment as a result of differing treatment presupposes, however, that the situations concerned are comparable, having regard to all the elements which characterise them (see, to that effect, IBV & Cie, C‑195/12, EU:C:2013:598, paragraph 51).

50The Scottish Ministers, the Greek Government and the Commission have argued that that condition was not satisfied in the present case.

51In that regard, it must be noted that the elements that characterise different situations and their comparability must in particular be determined and assessed in the light of the subject-matter and purpose of the European Union act that makes the distinction in question (see, to that effect, Szatmári Malom, C‑135/13, EU:C:2014:327, paragraph 67). The principles and objectives of the field to which the act relates must also be taken into account (Arcelor Atlantique et Lorraine and Others, C‑127/07, EU:C:2008:728, paragraph 26).

52In this case, as is apparent from recital 24 in the preamble to the Basic Regulation, the rules for calculating the reference amounts granted to farmers under the single payment scheme sought to ensure that the transition to that scheme occurred while the actual amounts paid to farmers were left unchanged in relation to the amounts paid under the various direct payment schemes existing up to that point.

53It is from that perspective that Article 40 of the Basic Regulation provided for the possibility, for a farmer who had faced exceptional circumstances during the reference period defined in Article 38 of that regulation, to obtain an adjustment of his reference amount in order to guarantee him a level of aid reflecting the amounts received under the earlier schemes and, therefore, to place him on the same footing as farmers who had not faced such circumstances.

54Consequently, a farmer allocated a reference amount calculated pursuant to Article 37(1) of the Basic Regulation and a farmer benefiting from an adjustment in the method of calculating his reference amount under Article 40 of that regulation, who both apply for the grant of additional entitlements from the national reserve, are in comparable situations in the light of the objectives of the single payment scheme.

55In those circumstances, it is necessary to examine whether the difference in treatment which stems from the provision at issue in the main proceedings can be objectively justified.

56First of all, it must be noted that, although the Community legislature has a broad discretion with regard to the common agricultural policy, it is obliged to base its choices on objective criteria that are appropriate to the aim pursued by the legislation in question (see, to that effect, Arcelor Atlantique et Lorraine and Others, EU:C:2008:728, paragraph 58, and Panellinios Syndesmos Viomichanion Metapoiisis Kapnou, C‑373/11, EU:C:2013:567, paragraph 34).

57The Commission, like the Scottish Ministers, has submitted that the provision at issue in the main proceedings could be objectively justified by the need, as stated in recital 13 in the preamble to the Implementing Regulation, to avoid cumulating the benefit from the different allocation of payment entitlements on the same farmer. The prohibition of such an accumulation, it submits, serves to protect the financial interests of farmers whose reference amounts have been calculated in accordance with the general rule laid down in Article 37(1) of the Basic Regulation. If the national ceilings are exceeded by reason of an increased recourse to the national reserve, there would be a linear reduction of the reference amounts, allocated to those farmers, under Articles 41(2) and 42(7) of that regulation.

58In that regard, it must be noted that the mechanism provided for by those latter provisions constitutes a means of safeguarding the financial balance of the single payment scheme while observing the principle of equal treatment (see, by analogy, Spagl, C‑189/89, EU:C:1990:450, paragraph 28, and Pastätter, C‑217/89, EU:C:1990:451, paragraph 19). The objective of avoiding the application of that mechanism cannot therefore justify an infringement of that principle.

59In addition, in so far as it entails promoting the interests of the farmers whose reference amounts have been calculated in accordance with the general rule, to the detriment of those farmers whose reference amounts have been adjusted under Article 40 of the Basic Regulation, such an objective runs counter to the purpose of that article. Article 40 is intended, as noted in paragraph 53 above, to offset the disadvantage which would otherwise be suffered by farmers who had faced exceptional circumstances in comparison with those who had not had to face such circumstances.

60Accordingly, it must be found that the provision at issue in the main proceedings was adopted in breach of the principle of equal treatment.

61Without it being necessary to examine the other arguments put forward during the proceedings contesting the validity of Article 18(2) of the Implementing Regulation, that provision must therefore be declared invalid in so far as it precludes a farmer who has suffered exceptional circumstances, within the meaning of Article 40 of the Basic Regulation, from benefiting from both an adjustment of his reference amount under that provision and an additional reference amount from the national reserve under one of Articles 19 to 23a of the Implementing Regulation, whereas a farmer who has not faced such circumstances and who has been allocated a reference amount calculated pursuant to Article 37(1) of the Basic Regulation may receive both that amount and a reference amount from the national reserve under one of Articles 19 to 23a of the Implementing Regulation.

The third question

62In view of the answer to the second question, there is no need to answer the third question.

The temporal effects of a declaration of invalidity in a preliminary ruling

63At the hearing, the Commission requested that, should the Court declare Article 18(2) of the Implementing Regulation invalid, the effects of the judgment be limited to Mr Feakins and to any other applicant of the same type.

64In support of its request, the Commission, first, drew the Court’s attention to the grave financial consequences which would follow from a judgment making such a declaration of invalidity. First, calling into question payments already made over a period of practically ten years would, the Commission submits, create serious difficulties for the Member States and would be contrary to the principle of legal certainty. Secondly, in view of the principle of budgetary discipline, the obligation to recalculate those payments would affect the financing of the common agricultural policy as a whole.

65Where it is justified by overriding considerations of legal certainty, the second paragraph of Article 264 TFEU, which is also applicable by analogy to a reference under Article 267 TFEU for a preliminary ruling on the validity of acts of the European Union, confers on the Court a discretion to decide, in each particular case, which specific effects of the act in question must be regarded as definitive (see, inter alia, Régie Networks, C‑333/07, EU:C:2008:764, paragraph 121, and Volker und Markus Schecke and Eifert, C‑92/09 and C‑93/09, EU:C:2010:662, paragraph 93).

66However, in the absence of any information concerning, first, the number of farmers who will potentially be entitled to claim additional payments following the declaration that Article 18(2) of the Implementing Regulation is invalid and, second, the amount of those payments, it does not in any way follow from the documents before the Court that a limitation in time of the effects of the declaration that that provision is invalid is justified by overriding considerations of legal certainty.

67In those circumstances, there is no need to limit the temporal effects of the present judgment.

Costs

68Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (First Chamber) hereby rules:

1.Article 18(2) of Commission Regulation (EC) No 795/2004 of 21 April 2004 laying down detailed rules for the implementation of the single payment scheme provided for in Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers, as amended by Commission Regulation (EC) No 1974/2004 of 29 October 2004, must be interpreted as applying, first, in the case where a farmer meets the conditions for the application of any two or more of Articles 19 to 23a of Regulation No 795/2004, as amended by Regulation No 1974/2004, and, second, in the case where a farmer who meets the conditions for the application of at least one of Articles 19 to 23a of Regulation No 795/2004, as amended by Regulation No 1974/2004, also meets the conditions for the application of at least one of Articles 37(2), 40, 42(3) and 42(5) of Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulations (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001, (EC) No 1454/2001, (EC) No 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and (EC) No 2529/2001.

2.Article 18(2) of Regulation No 795/2004, as amended by Regulation No 1974/2004, is invalid in so far as it precludes a farmer who has suffered exceptional circumstances, within the meaning of Article 40 of Regulation No 1782/2003, from benefiting from both an adjustment of his reference amount under that provision and an additional reference amount from the national reserve under one of Articles 19 to 23a of Regulation No 795/2004, as amended by Regulation No 1974/2004, whereas a farmer who has not faced such circumstances and who has been allocated a reference amount calculated pursuant to Article 37(1) of Regulation No 1782/2003 may receive both that amount and a reference amount from the national reserve under one of Articles 19 to 23a of Regulation No 795/2004, as amended by Regulation No 1974/2004.