Language of document : ECLI:EU:T:1997:191

JUDGMENT OF THE COURT OF FIRST INSTANCE (First Chamber,Extended Composition)

9 December 1997 (1)

(Action for damages — Non-contractual liability — Milk — Additional levy —Reference quantity — Regulation (EEC) No 2055/93 — Compensation forproducers — Limitation period)

In Joined Cases T-195/94 and T-202/94,

Friedhelm Quiller, residing in Lienen (Germany),

Johann Heusmann, residing in Loxstedt (Germany), represented by BerndMeisterernst, Mechtild Düsing, Dietrich Manstetten, Frank Schulze and WinfriedHaneklaus, Rechtsanwälte, Münster, with an address for service in Luxembourg atthe Chambers of Lambert Dupong and Guy Konsbruck, 14A Rue des Bains,

applicants,

v

Council of the European Union, represented by Arthur Brautigam, Legal Adviser,acting as Agent, assisted by Hans-Jürgen Rabe and Georg M. Berrisch,Rechtsanwälte, Hamburg, and members of the Brussels Bar, with an address forservice in Luxembourg at the office of Alessandro Morbilli, Manager of the LegalAffairs Directorate of the European Investment Bank, 100 Boulevard KonradAdenauer,

and

Commission of the European Communities, represented by Dierk Booß, LegalAdviser, acting as Agent, assisted by Hans-Jürgen Rabe and Georg M. Berrisch,Rechtsanwälte, Hamburg, and members of the Brussels Bar, with an address forservice in Luxembourg at the office of Carlos Goméz de la Cruz, of its LegalService, Wagner Centre, Kirchberg,

defendants,

APPLICATION for compensation, under Article 178 and the second paragraph ofArticle 215 of the EC Treaty, for damage suffered by the applicants as a result oftheir being prevented from marketing milk by virtue of Council Regulation (EEC)No 857/84 of 31 March 1984 adopting general rules for the application of the levyreferred to in Article 5c of Regulation (EEC) No 804/68 in the milk and milkproducts sector (OJ 1984 L 90, p. 13), as supplemented by Commission Regulation(EEC) No 1371/84 of 16 May 1984 (OJ 1984 L 132, p. 11), amended by CouncilRegulation (EEC) No 764/89 of 20 March 1989 (OJ 1989 L 84, p. 2),

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (First Chamber, ExtendedComposition),

composed of: A. Saggio, President, C.P. Briët, A. Kalogeropoulos, V. Tiili andR.M. Moura Ramos, Judges,

Registrar: A. Mair, Administrator,

having regard to the written procedure and further to the hearing on 13 March1997,

gives the following

Judgment

1.
    In 1977, in order to cut back surplus milk production in the Community, theCouncil adopted Regulation (EEC) No 1078/77 of 17 May 1977 introducing asystem of premiums for the non-marketing of milk and milk products and for theconversion of dairy herds (OJ 1977 L 131, p. 1, hereinafter 'Regulation No1078/77‘). That regulation offered a premium to producers in return for theirsigning an undertaking not to market milk or to convert their herds for five years.

2.
    In 1984, in order to cope with persistent overproduction, the Council adoptedRegulation (EEC) No 856/84 of 31 March 1984 (OJ 1984 L 90, p. 10), amendingRegulation (EEC) No 804/68 of the Council of 27 June 1968 establishing acommon organization of the market in milk and milk products (OJ, English SpecialEdition 1968 (I), p. 176, hereinafter 'Regulation No 804/68‘). The new Article 5cof the latter regulation introduced an 'additional levy‘ on milk delivered byproducers in excess of a 'reference quantity‘.

3.
    Council Regulation (EEC) No 857/84 of 31 March 1984 adopting general rules forthe application of the levy referred to in Article 5c of Regulation (EEC) No 804/68in the milk and milk products sector (OJ 1984 L 90, p. 13, hereinafter 'RegulationNo 857/84‘) fixed the reference quantity for each producer on the basis of theproduction delivered during a reference year.

4.
    By judgments of 28 April 1988 in Case 120/86 Mulder v Minister van Landbouw enVisserij [1988] ECR 2321 (hereinafter 'Mulder I‘) and Case 170/86 von Deetzen vHauptzollamt Hamburg-Jonas [1988] ECR 2355, the Court of Justice declaredRegulation No 857/84, as supplemented by Commission Regulation (EEC) No1371/84 of 16 May 1984 laying down detailed rules for the application of theadditional levy referred to in Article 5c of Regulation (EEC) No 804/68 (OJ 1984L 132, p. 11, hereinafter 'Regulation No 1371/84‘), invalid on the ground that itinfringed the principle of the protection of legitimate expectations.

5.
    In order to comply with those judgments, the Council adopted Regulation (EEC)No 764/89 of 20 March 1989 amending Regulation No 857/84 adopting generalrules for the application of the levy referred to in Article 5c of Regulation (EEC)No 804/68 in the milk and milk products sector (OJ 1989 L 84, p. 2, hereinafter'Regulation No 764/89‘). Pursuant to that amending regulation, producers who hadentered into non-marketing or conversion undertakings received a referencequantity known as a 'special‘ reference quantity (or 'quota‘). Such producers arereferred to as 'SLOM I producers‘.

6.
    Allocation of a special reference quantity was subject to several conditions;furthermore, the reference quantity was limited to 60% of the quantity of milk ormilk equivalent sold by the producer in the 12 months preceding the month inwhich the application for the non-marketing or conversion premium was lodged.

7.
    Some of those conditions and the limitation of the specific reference quantity to60% were declared invalid by the Court of Justice, by judgments of 11 December1990 in Case C-189/89 Spagl [1990] ECR I-4539 and Case C-217/89 Pastätter [1990]ECR I-4585.

8.
    Following those judgments, the Council adopted Regulation (EEC) No 1639/91 of13 June 1991 amending Regulation No 857/84 (OJ 1991 L 150, p. 35, hereinafter

'Regulation No 1639/91‘), which granted a special reference quantity to theproducers concerned. Such producers are referred to as 'SLOM II producers‘.

9.
    The second indent of Article 3a(1) of Regulation No 857/84, introduced byRegulation No 764/89, also laid down an 'anti-accumulation rule‘. Under that rule,the transferees of a non-marketing premium were entitled to a specific referencequantity only if they had not previously received, in respect of other land notcovered by a non-marketing or conversion undertaking, a reference quantity underArticle 2 of Regulation No 857/84. Producers deprived of a reference quantity onthe ground that such a quantity had already been granted to them for other landare known as 'SLOM III producers‘.

10.
    The anti-accumulation rule laid down in the second indent of Article 3a(1) ofRegulation No 857/84 was also declared invalid by judgment of the Court of Justiceof 3 December 1992 in Case C-264/90 Wehrs [1992] ECR I-6285 on the ground thatit breached the principle of the protection of legitimate expectations.

11.
    In compliance with that judgment, the Council adopted Regulation (EEC) No2055/93 of 19 July 1993 allocating a special reference quantity to certain producersof milk and milk products (OJ 1993 L 187, p. 8, hereinafter 'Regulation No2055/93‘). That regulation allocated a special reference quantity to those producerswho, as transferees of non-marketing premiums, had been excluded from thebenefit of Article 3a of Regulation No 857/84 because they had received areference quantity under Article 2 or Article 6 of the latter regulation.

12.
    In the meantime, one of the producers who had brought the action resulting inRegulation No 857/84 being declared invalid by the Mulder I judgment had,together with other producers, instituted proceedings against the Council and theCommission in which they sought compensation for the losses which they hadsustained on account of their not having been granted a reference quantity underthat regulation.

13.
    By judgment of 19 May 1992 in Joined Cases C-104/89 and C-37/90 Mulder andOthers v Council and Commission [1992] ECR I-3061 (hereinafter 'Mulder II‘), theCourt of Justice held that the Community was liable for the damage in questionand invited the parties to reach agreement on the amount of compensation, subjectto a later decision by that court.

14.
    The effect of that judgment is that all producers who were prevented frommarketing milk solely because they had entered into a non-marketing or aconversion undertaking are, in principle, entitled to compensation for the damagesustained. However, in that judgment, the Court of Justice held that the Communityhad not incurred liability by limiting the special reference quantity to 60% of thequantity of milk sold by the producer in the 12 months preceding the applicationfor a premium, which had been declared invalid in the Spagl and Pastätterjudgments, cited above. It held that that limitation did not constitute a sufficiently

serious breach of a superior principle of law, as defined by the case-law, to renderthe Community liable vis-à-vis producers.

15.
    In view of the large number of producers affected and the difficulty in negotiatingindividual settlements, the Council and the Commission published on 5 August 1992Communication 92/C 198/04 (OJ 1992 C 198, p. 4, hereinafter 'the Communicationof 5 August 1992‘). After setting out the implications of the judgment in Mulder II,the institutions stated their intention to adopt practical arrangements forcompensating the producers concerned in order to give full effect to that judgment.Until such time as those arrangements were adopted, the institutions undertook notto plead, with regard to all producers entitled to compensation, that entitlement toclaim was barred through lapse of time under Article 43 of the EEC Statute of theCourt of Justice (hereinafter 'the Statute‘). However, that undertaking was madesubject to the proviso that entitlement to compensation had not already been time-barred on the date of publication of the Communication or on the date on whichthe producer had applied to one of the institutions.

16.
    Following the Communication of 5 August 1992, the Council adopted Regulation(EEC) No 2187/93 of 22 July 1993 providing for an offer of compensation tocertain producers of milk and milk products temporarily prevented from carryingon their trade (OJ 1993 L 196, p. 6, hereinafter 'Regulation No 2187/93‘).

Facts

17.
    Messrs Quiller and Heusmann, milk producers in Germany, received on 2 April1984 under Article 2 of Regulation No 857/84 original reference quantities, that isto say quantities of milk exempt from the levy provided for in Article 5c ofRegulation No 804/68, in respect of the agricultural holdings owned by them atLienen and Loxstedt (Germany) respectively. Those quantities were 142 000 and536 700 kg respectively.

18.
    In 1978 Mr Quiller had leased another holding belonging to Friedrich Beckmann.The latter had, under Regulation No 1078/77, entered into a non-marketingundertaking for the period from 1 June 1978 to 31 May 1983 and had received thepremium corresponding to that undertaking, on the basis of a quantity of 32 642 kgof milk. By declaration of 26 October 1978 made in accordance with Article 6 ofRegulation No 1078/77, the applicant, as lessee of Mr Beckmann's holding(hereinafter 'the Beckmann holding‘), undertook to continue to fulfil theobligations entered into by Mr Beckmann.

19.
    In 1988 Mr Quiller's wife inherited the Beckmann holding. Since then, Mr Quillerhas managed the holding on the basis of a 'right of use‘.

20.
    In 1984 Mr Quiller did not obtain a reference quantity for the Beckmann holdingto the extent that the obligations which he had assumed applied to the referenceyear adopted under Regulation No 857/84. He was thus prevented from resumingthe marketing of milk produced on that holding.

21.
    Mr Heusmann's wife owns a dairy holding at Bramel (Germany) (hereinafter 'theBramel holding‘) which, in 1980, was farmed by her father, Mr Kriegs. During thatyear, Mr Kriegs signed, under Regulation No 1078/77, a non-marketing undertakingexpiring on 9 October 1985. In return for that undertaking, he was allocated a non-marketing premium on 8 July 1980 on the basis of a quantity of 263 104 kg of milk.

22.
    On 1 August 1980 Mr Heusmann took over the land farmed by Mr Kriegs andbecame subject to the latter's non-marketing undertaking.

23.
    On the expiry of that undertaking on 9 October 1985 he did not obtain a referencequantity for the Bramel holding, to the extent that the undertaking applied to thereference year adopted under Regulation No 857/84. He was thus prevented fromresuming marketing of the milk produced on that holding.

24.
    Following the Wehrs judgment, the applicants received special reference quantitiesfrom the German authorities. On 2 December 1993 Mr Quiller received a quantityof 27 746 kg of milk. Mr Heusmann received a quantity of 223 638 kg on 1February 1993.

Procedure

25.
    By letter sent to the Commission on 12 January 1994 Mr Quiller soughtcompensation for the damage sustained by him as a result of being unable todeliver milk in the period from 1 April 1984 to 29 July 1993, the date of publicationof Regulation No 2055/93. On 29 March 1994 the Commission replied that it wasunable to offer him compensation.

26.
    On 24 May 1994 he brought the first of the present actions, registered as CaseT-195/94.

27.
    By letters sent to the Commission and the Council on 11 April 1991, Mr and MrsHeusmann sought compensation for the damage sustained through their beingprevented from delivering milk in the period from 9 October 1985 to April 1991as a result of the refusal to grant them a reference quantity for the Bramel holding.By letters of 2 and 15 May 1991, received on 7 and 17 May, the institutions repliedthat the conditions to be satisfied for the Community to incur liability were notfulfilled.

28.
    By letter sent to the Commission on 13 January 1994 Mr Heusmann asked theCommission to state whether it waived the right to rely on any limitation period

until publication of the judgment of the Court of Justice to be given followingMulder II. On 29 March 1994 the Commission replied that it was not able to offerhim compensation.

29.
    On 1 June 1994 he brought the second of the present actions, registered as CaseT-202/94.

30.
    By order of 31 August 1994 the Court of First Instance joined Cases T-195/94 andT-202/94 for the purposes of the written procedure, the oral procedure andjudgment.

31.
    The written procedure was concluded in both cases on 10 May 1995 upon lodgmentof the rejoinder.

32.
    By letter of 22 January 1996 Mr Heusmann informed the Court that, by notarialdeed of 16 June 1995, he and his wife had transferred their agricultural holding totheir son, Jan Heusmann, with effect from 1 June 1995. Under that contractownership of part of the land including the Bramel holding was transferred to JanHeusmann, whilst for the remaining part a 10-year right of use had been grantedto him. Under the contract Mr and Mrs Heusmann also assigned their rightsagainst the Community to their son.

33.
    Consequently, the applicant requested that the forms of order sought in hisapplication be amended to show that the compensation sought should be paid toJan Heusmann.

34.
    By letter of 29 February 1996 the defendants stated that they had no objection tothe amendment requested by the applicant.

Forms of order sought

35.
    In Case T-195/94 the applicant claims that the Court of First Instance should:

—    order the defendants jointly and severally to pay him compensation ofDM 61 573.60, together with interest at the rate of 8% from 19 May 1992,for the damage sustained between 2 April 1984 and 29 July 1993;

—    order the defendants jointly and severally to pay the costs.

36.
    In his reply he also claims that the defendants should pay the costs of an expert'sreport drawn up on 9 March 1995, and placed with the documents before theCourt.

37.
    In Case T-202/94 the applicant claims that the Court of First Instance should:

—    order the defendants jointly and severally to pay him compensation ofDM 600 924, together with interest at the rate of 8% from 19 May 1992, forthe damage sustained between 9 October 1985 and 1 February 1993;

—    order the defendants jointly and severally to pay the costs.

38.
    In his reply the applicant also claims that the defendants should pay the costs ofan expert's report drawn up in February 1995, annexed to the reply.

39.
    In his letter of 22 January 1996 he also amends the form of order sought by himto the effect that the compensation sought should be paid to Jan Heusmann.

40.
    The defendants contend that the Court of First Instance should:

—    dismiss the applications as inadmissible or, in the alternative, unfounded;

—    order the applicants to pay the costs.

The admissibility of the application in Case T-195/94

Arguments of the parties

41.
    The defendants contend that, in so far as it merely refers to Regulation No 2187/93and contains no conclusive pleas in law, the application infringes Article 44(1)(c)of the Rules of Procedure and is therefore inadmissible. In particular, theapplication does not contain any calculation of loss of profit drawn up inaccordance with the principles laid down in Mulder II.

42.
    The applicant denies that his application is inadmissible for infringement of Article44 of the Rules of Procedure. He asserts that, on the contrary, the application givesdetailed particulars of the damage sustained. Moreover, he has attached an expert'sreport, letters and a certificate from the Chamber of Agriculture of Westfalen-Lippe to substantiate his statements concerning the Beckmann holding.

Findings of the Court

43.
    Under Article 44(1)(c) of the Rules of Procedure, the application must set out thesubject-matter of the proceedings and a summary of the pleas in law on which theapplication is based.

44.
    In this case, those requirements have been observed. The pleas in law relied on areclear from the application and, moreover, the defendants have been able torespond to them effectively. As regards more particularly the fact that the

calculation of the alleged damage was based solely on Regulation No 2187/93,which is not in the defendants' view applicable to this case, it must be pointed outthat the application contained information as to the nature and the extent of thedamage alleged and its link with a Community measure (Case 5/71 ZuckerfabrikSchöppenstedt v Council [1971] ECR 975, at 984, and Case T-387/94 Asia MotorFrance and Others v Commission [1996] ECR II-961, paragraph 107) and that thatevidence was appropriately supplemented in the reply.

45.
    The objection of inadmissibility must therefore be rejected and the applicationdeclared admissible.

The existence and extent of a right to damages under Article 215 of the EC Treaty

46.
    In support of their claims, the applicants maintain that the conditions for non-contractual liability on the part of the Community are fulfilled. In Case T-195/94that liability encompasses the damage sustained in the period from 2 April 1984,the date of entry into force of Regulation No 857/84, to 29 July 1993, the date ofpublication of Regulation No 2055/93. In Case T-202/94 it encompasses the damagesustained in the period from 9 October 1985, the date of expiry of the non-marketing undertaking in respect of the Bramel holding, to 1 February 1993, thedate on which the applicant received a reference quantity for that holding. Theapplicants also claim that their right to damages is not barred through lapse oftime.

47.
    The defendants deny any liability on the part of the Community vis-à-vis theapplicants. They contend that, in any event, any right to compensation has beenbarred through lapse of time.

1.    The existence of Community liability

48.
    The Community's non-contractual liability for damage caused by the institutions asprovided for in the second paragraph of Article 215 of the EC Treaty is notincurred unless a set of conditions relating to the illegality of the conductcomplained of, the occurrence of actual damage and the existence of a causal linkbetween the unlawful conduct and the harm alleged are all fulfilled (Joined Cases197/80 to 200/80, 243/80, 245/80 and 247/80 Ludwigshafener Walzmühle and Othersv Council and Commission [1981] ECR 3211, paragraph 18, and Joined CasesT-481/93 and T-484/93 Levende Varkens and Others v Commission [1995] ECRII-2941, paragraph 80).

49.
    As regards liability arising from legislative measures, the conduct with which theCommunity is charged must, according to settled case-law (Joined Cases 83/76,94/76, 4/77, 15/77 and 40/77 Bayerische HNL and Others v Council and Commission

[1978] ECR 1209, paragraph 4, and Case T-390/94 Schröder and Others vCommission [1997] ECR II-501, paragraph 52), constitute a sufficiently seriousbreach of a superior rule of law for the protection of individuals. If the institutionhas adopted the measure in the exercise of a wide discretion, as is the case inrelation to the common agricultural policy, that breach must also be sufficientlyserious, that is to say manifest and grave (HNL v Council and Commission, citedabove, paragraph 6, Case 50/86 Grands Moulins de Paris v Council and Commission[1987] ECR 4833, paragraph 8, Mulder II, paragraph 12, and Joined Cases T-480/93and T-483/93 Antillean Rice Mills and Others v Commission [1995] ECR II-2305,paragraph 194).

50.
    It is therefore necessary to determine whether those conditions are fulfilled in thiscase.

Breach of a superior rule of law

Arguments of the parties

51.
    The applicants state that the Court held in the Wehrs judgment (paragraphs 13 to15) that the legitimate expectations of the SLOM III producers were frustrated. Aproducer who takes over a non-marketing undertaking and the person who enteredinto it cannot be treated differently. If the applicants had been able to foresee thatthey would be prevented from producing milk, they would not have taken over thenon-marketing undertakings signed by Mr Beckmann and Mr Kriegs. The reducedprice at which they took over the holdings in question took account only of theperiod covered by the non-marketing or conversion undertaking.

52.
    The defendants state that the applicants freely took over the holdings which weresubject to non-marketing commitments. They cannot therefore claim,notwithstanding the Wehrs judgment, that the refusal to allocate a referencequantity for those holdings frustrated their legitimate expectations. According tosettled case-law, economic operators who, following encouragement from theCommunity, have interrupted their production for a given period cannot, at the endof that period, be subject to restrictions which specifically affect them by reason ofthe fact that they took advantage of the opportunities offered by the Communityrules. However, in contrast to the first producers who signed a non-marketingundertaking, the SLOM III producers were not encouraged by any Communitymeasure to enter into such an obligation. In any event, the lower price at whichthose producers took over their holdings reflects the economic risk linked with thepossibility of a refusal to allocate a reference quantity to them.

Findings of the Court

53.
    In paragraphs 13 and 14 of the Wehrs judgment the Court of Justice held thatSLOM III producers were legitimately entitled to expect not to be subject to asystem like that deriving from the anti-accumulation rule in Regulation No 857/84.In paragraph 15 of that judgment, it declared that rule invalid for infringement ofthe principle of protection of legitimate expectations. Earlier, in Mulder II(paragraph 15), it had pointed out that that principle constitutes a superior rule oflaw for the protection of individuals.

54.
    Since the anti-accumulation provision was applied to the applicants — a matterwhich is not in dispute — the defendants' argument seeks in fact to reopen aquestion already settled by the Wehrs judgment. It must therefore be rejected.

55.
    As regards in particular the defendants' argument that SLOM III producers werenot encouraged by any Community measure to enter into the non-marketingundertaking, it must be emphasized, as did the Court of Justice in the Wehrsjudgment (paragraphs 13 to 15), that the legitimate expectations of the producersin question are infringed if they are subject, on expiry of a non-marketingundertaking which they have taken over, to restrictions specifically affecting themon account of that undertaking.

56.
    The defendants' argument concerning the allegedly lower price at which theholdings subject to the SLOM undertakings were taken over must also be rejected.As the applicants state, under normal market conditions that price reduction merelyreflects the reduced value of the land for the period covered by the non-marketingor conversion undertaking.

57.
    It must therefore be held that a superior rule of law has been breached.

The existence of a sufficiently serious breach of the principle of protection of legitimateexpectations

58.
    A sufficiently serious breach of a superior rule of law occurs when the institutionsmanifestly and seriously disregard the limits of their discretionary power withoutdemonstrating the existence of public interest of a higher order. It is settled case-law that a breach of that kind occurs where the Community legislature fails to takeinto consideration a clearly distinct category of economic operators, particularly ifthe measure taken is unforeseeable and falls outside the bounds of normaleconomic risks (Mulder II, paragraphs 16 and 17; see also Case 238/78 Ireks-Arkadyv Council and Commission [1979] ECR 2955, paragraph 11).

59.
    It is thus necessary to ascertain whether those factors are present in this case.

(a)    The failure to take into consideration a clearly defined category of economicoperators

Arguments of the parties

60.
    The applicants maintain that SLOM III producers are in exactly the same situationas SLOM I and SLOM II producers. Like the latter, they were excluded by illegalregulations from any reallocation of the quantity covered by their non-marketingundertaking. Moreover, they constitute a clearly defined category in that theirnames appear in the records of the competent authorities.

61.
    By failing to allocate a reference quantity to SLOM III producers the Communitylegislature, without invoking a public interest of a higher order, completelydisregarded the situation of a clearly defined category of economic operators. InRegulation No 764/89 it made no economic policy choice, in the sensecontemplated in paragraph 21 of Mulder II, with respect to SLOM III producers.In that regulation the Council completely failed to take account of the interests ofthose producers, who were thus treated in the same way as SLOM I and SLOM IIproducers were treated by Regulation No 857/84 in its initial version.

62.
    There is no justification whatever for the failure to allocate a reference quantity toSLOM III producers. Contrary to the defendants' assertion, the general interest instability in the milk market is not such as to justify that choice, since the quantitiesof milk necessary for the producers concerned constitute no threat to the balanceof the market. The fact that the applicants benefited from a reference quantitygranted under Article 2 of Regulation No 857/84 for a holding not subject to a non-marketing undertaking and, in consequence, were not completely excluded frommilk production is of no importance. In that connection, it was necessary to takeaccount only of the SLOM holding and to apply the Mulder II criteria to it. Thefact that the applicants had produced milk on another holding shows that theywished to resume milk production on the SLOM holding after expiry of the non-marketing undertaking.

63.
    The defendants maintain that, in contrast to SLOM I producers, SLOM IIIproducers do not constitute a distinct category of economic operators. SLOM Iproducers were identified by the fact that they had delivered no milk because ofan undertaking ante-dating the regulation which adversely affected them. SLOMIII producers are identified by the fact that they took over a holding subject to anundertaking. They may have done so either before or after the adoption ofRegulation No 857/84. Consequently, on the date when that regulation wasadopted, the applicants did not form part of a distinct category of economicoperators. In response to the claim that SLOM III producers were identified on thebasis of the files held by the authorities granting the non-marketing premiums, thedefendants contend that the existence of those records does not alter the fact thatthe non-marketing obligations could, in law or in fact, have been taken over after

the entry into force of Regulation No 857/84 and that, on that date, the producersdid not constitute a delimited group.

64.
    The defendants contend that Regulation No 764/89 did not fail to take account ofthe situation of SLOM III producers. To the extent to which they had received areference quantity under Article 2 of Regulation No 857/84, those producers werenot excluded totally and permanently from the market and could pursue productiondespite the fact that they had no reference quantity for the SLOM holding. TheCommunity has thus incurred no liability for the non-allocation to SLOM IIIproducers of a reference quantity by Regulations Nos 857/84 and 764/89. Contraryto what the applicants claim in their replies, the conditions for liability laid downin Mulder II (paragraph 17) relate only to cases of total exclusion of the producersconcerned from the marketing of milk. Moreover, introduction of the anti-accumulation rule did not result in discrimination against SLOM III producers ascompared with SLOM I and SLOM II producers but simply failed to improve theirsituation.

65.
    In view of the delicate situation prevailing on the milk products market and the factthat SLOM III producers in the applicants' circumstances were able to continue toproduce on their non-SLOM holdings, the defendants, drawing a distinctionbetween the two groups, did not, having regard to their discretionary power, takea manifestly unlawful decision. The institutions took account of a public interest ofa higher order by refusing to grant reference quantities to SLOM III producers.When Regulation No 764/89 was adopted, they made an economic policy choicewhich consisted in not allocating such quantities to SLOM III producers, in ordernot to jeopardize the stability of the milk market. That option did not exceed thebounds of the discretion available to them for that purpose. The producers inquestion, having already received an original reference quantity, found themselvesin a special situation, which justified different treatment. Those reasons are clearlyset out in the second, third and fifth recitals in the preamble to Regulation No764/89. The legislature took account of conflicting interests and reserved theallocation of reference quantities to those of the producers who had not yetreceived one.

Findings of the Court

66.
    The SLOM III producers were those who had not directly participated in thescheme provided for by Regulation No 1078/77 but had taken over a holding theprevious operator of which had done so. Even if, for the purposes of RegulationNo 857/84, the conditions which applied to them were common to all other SLOMproducers, their situation displayed that particular feature and thereby distinguishedthem. As a result, they were SLOM producers who, following the adoption ofRegulation No 764/89, continued to have no special reference quantity. It was onlyas from the entry into force of that regulation that the basis of the conditions

applied to them became different, but their situation as producers had beendifferent ever since they had taken over holdings encumbered by undertakingssigned under Regulation No 1078/77.

67.
    The defendants' argument that formal identification of the category must precedethe adoption of the rules declared unlawful has no basis. Whilst that was admittedlythe position of SLOM I producers who had signed a non-marketing undertakingbefore the adoption of Regulation No 857/84, which catered for their situation, thefact that, after the successive amendments to that regulation, only one residualcategory was maintained, in the sense that it was only to that single category thatthe earlier common rules remained applicable, does not mean that it cannot berecognized as being a distinct category.

68.
    Moreover, as is clear from the Mulder I and Mulder II judgments, the SLOM I andSLOM II producers, taken together, formed a distinct category. SLOM IIIproducers were characterized by the fact that they had been kept in the samesituation as the other groups until 1993 and therefore, like the latter, theyconstitute a distinct category to which a reference quantity was not granted, inbreach of a superior rule of law (see paragraph 53 above).

69.
    Lastly, the defendants' argument based on the fact that in this case there was nototal exclusion, in so far as SLOM III producers were able to carry on productionon their original holdings, must be rejected. Since the reasoning involved is basedon the fact that those producers had not been totally prevented from marketingmilk, the institutions should necessarily have taken account of the ratio existingbetween the reference quantities for the original holding and those for the SLOMholding. By failing to take account of that ratio in relation to each of thoseproducers, the defendants arbitrarily apportioned, on a basis that differed for eachof the SLOM III producers, the charges deriving from the 'overriding necessity ofnot jeopardizing the fragile stability that currently obtains in the milk productssector‘ (fifth recital in the preamble to Regulation No 764/89). In thosecircumstances, the economic sacrifice allegedly needed to respond to that publicinterest was shared in an objectively unequal manner. Thus, the institutionsexceeded the discretionary power vested in them for that purpose.

(b)    The unforeseeability of the measure adopted and the failure to observe thebounds of normal economic risks

Arguments of the parties

70.
    The applicants claim that the economic sacrifices required of them as a result oftheir being deprived of a reference quantity exceeded the bounds of what isrecognized as permissible in the case-law, in particular in Mulder II. They state that,having regard to the reference quantities received by them following the Wehrsjudgment (see paragraph 11 above), the damage sustained by them between 1984

and 1993 was considerable. The reasons which prompted the Court of Justice, inMulder II, to hold that there was no obligation to pay compensation where specialreference quantities were limited to 60% by Regulation No 764/89 are nottherefore applicable in this case.

71.
    The applicant in Case T-195/94 claims that the special reference quantity allocatedto him in 1993 under the SLOM III regime represented 23.94% of the originalreference quantity (see paragraph 18 above). He states that if the compensationsought in these proceedings is calculated in accordance with Mulder II, thatpercentage rises to 26.3%.

72.
    In Case T-202/94 the applicant maintains that the special reference quantitygranted to him under the SLOM III regime, calculated in accordance with theMulder II criteria, represented 31.4% of the original reference quantity (seeparagraph 21 above). In his reply he claims that the special reference quantityactually allocated represented 41.67% but that, if account is taken of the reductionsimposed as a result of the applicable rules, that percentage rises to 45.55% or 49%of the original reference quantity.

73.
    In the defendants' view, the fact that the applicants were prevented from resumingproduction was not unforeseeable, in particular in Case T-195/94, where theapplicant acquired his right of use after the adoption of Regulation No 857/84.Moreover, the impossibility of resuming production did not exceed the bounds ofnormal economic risks. In that connection, the reference quantity of which theapplicants were deprived was less than 40% of the sum of the original and specificreference quantities concerned. The Court of Justice accepted in Mulder II that theCommunity did not incur liability for a decrease of less than 40% of the SLOMreference quantity. The position of those producers corresponds to that in respectof which the Mulder II judgment excluded Community liability with regard to the60% rule laid down by Article 3a(2) of Regulation No 857/84, as amended byRegulation No 764/89.

Findings of the Court

74.
    The applicants, like all SLOM III producers, were totally prevented, on theirSLOM holdings, from marketing milk in the period between the expiry of theundertaking signed under Regulation No 1078/77 and the time when, following theWehrs judgment, they received a special reference quantity. Since they were refuseda reference quantity in April 1984 and October 1985 respectively and that quantitywas not finally allocated to them until December and February 1993, it isunquestionable that a very considerable sacrifice was required of the applicants.

75.
    Contrary to the defendants' contention, that sacrifice was entirely unforeseeableand was not within the bounds of the normal risks inherent in the economic activityin question.

76.
    As regards the unforeseeability of the damage, it must be noted that the applicants,as SLOM III producers, were in the same situation as SLOM I producers since,with regard to the holding covered by the non-marketing undertaking, the allocationof a reference quantity was totally and permanently excluded as a result of theapplication of Regulation No 857/84 (Mulder II, paragraph 17). As the Court ofJustice held, SLOM I and SLOM III producers were victims of a restriction whichspecifically affected them because of that undertaking (see Mulder I, paragraph 24,and Wehrs, paragraph 13).

77.
    The same finding must apply even if the legal basis on which the applicants carriedon business on the SLOM holding changed after the entry into force of RegulationNo 764/89. Since they became subject to the non-marketing undertakings beforethat date, the producers were in fact legitimately entitled to expect to resumemarketing on the expiry of those undertakings (see Wehrs, paragraph 13).

78.
    As regards failure to keep within the bounds of normal economic risks, it must beborne in mind that in Mulder II (paragraph 17) the Court of Justice held that theCommunity incurred liability because no reference quantity was allowed to SLOMI producers, with the result that they were totally prevented from producing. Onthe other hand, the fact of allocating to SLOM II producers a reference quantityreduced to 60% of that normally available to producers was not held to be of sucha nature as to entail liability.

79.
    As pointed out earlier (see paragraph 76 above), the applicants' situation is similarto that of SLOM I producers in that they were totally prevented from engaging inproduction on the land covered by the undertaking which they had taken over.

80.
    Moreover, contrary to the defendants' contention, several factors distinguish theapplicants' situation from that of the SLOM II producers.

81.
    The Court observes in that connection that the damage at issue in Mulder II hadalready been inflicted in its entirety when the Court of Justice adjudicated onentitlement to compensation. On all the SLOM holdings the marketing of milk hadbeen impossible for the period between the application of Regulation No 857/84in its initial version and the date of entry into force of Regulation No 764/89 (seeparagraph 5 above). Between the latter date and the entry into application ofRegulation No 1639/91, SLOM I and SLOM II producers had the marketing oftheir products limited to 60% of the original reference quantity (see paragraph 6above). They finally received a full reference quantity only by virtue of RegulationNo 1639/91 (see paragraph 8 above).

82.
    It follows that, in Mulder II, the Court of Justice excluded Community liability onlyin relation to a limitation (to 60%), which was restricted in time (to about twoyears), of the quantity of milk delivered or sold during the 12 months prior to thenon-marketing or conversion undertaking. The situation of total or partialunavailability was therefore limited to a maximum of seven years, between theexpiry of the first undertakings given under Regulation No 1078/77 or the adoptionof Regulation No 857/84 and the entry into force of Regulation No 1639/91. SLOMI and SLOM II producers were thus subject to total exclusion for a maximumperiod of five years, and Community liability was recognized for that period.

83.
    In this case, the applicants, like all SLOM III producers, were totally deprived ofany reference quantity (see the Wehrs judgment). That situation extended from theapplication to them of Regulation No 857/84 until the allocation of a referencequantity, occurring only after the Wehrs judgment, which was delivered on 3December 1992.

84.
    In those circumstances, the nature and duration of the unavailability of thereference quantity are factors which clearly differentiate the situation of theapplicants from that of the producers in relation to whom the Mulder II judgmentheld that Community liability had not been incurred.

85.
    That unavailability of a reference quantity exceeds the bounds of the normal risksinherent in the economic activity in question and is such as to cause the Communityto incur non-contractual liability.

The existence of the damage and the causal link

86.
    The applicants maintain that, being producers from whom a reference quantity hadbeen withheld, they sustained damage. The defendants deny the existence of suchdamage since the applicants, not being producers, could not call for a referencequantity to be allocated to them.

Arguments of the parties

87.
    According to the applicants, it is clear from documents from the Westfalen-LippeChamber of Agriculture dated 19 July 1991 and from the Hanover Chamber ofAgriculture of 21 February 1995 that they sustained damage, in so far as theycontinued to operate the SLOM holdings after becoming subject to the non-marketing undertakings relating to them. It was only because of the legaluncertainty affecting his situation that the applicant in Case T-202/94 submitted hisapplication for a reference quantity together with his wife.

88.
    Contrary to the defendants' contentions, it is of no importance that the specificreference quantity was applied for in respect of the holding which had not beensubject to the non-marketing undertaking. According to the case-law of the Courtof Justice, for a reference quantity to be reallocated or definitively allocated, it issufficient for the applicant to produce that quantity on his holding and to continueto operate within the latter, at least in part, the holding which was subject to a non-marketing undertaking (Case C-86/90 O'Brien [1992] ECR I-6251). Moreover,according to Article 9(d) of Council Regulation (EEC) No 3950/92 of 28 December1992 establishing an additional levy in the milk and milk products sector (OJ 1992L 405, p. 1, hereinafter 'Regulation No 3950/92‘), a holding may comprise severalseparate agricultural units. The applicant in Case T-202/94 intended using the oldSLOM holding to produce milk at the end of the non-marketing period. It is clearfrom the expert's report attached to the reply that he in fact did so after thereference quantity was allocated to him.

89.
    The defendant institutions state that, regardless of the anti-accumulation ruleintroduced by Regulation No 764/89, the applicants sustained no damage. Theywere not entitled to the allocation of any reference quantity since they were notproducers within the meaning of Article 3a(1) of Regulation No 857/84 and had notproduced any evidence of that status.

90.
    In Case T-195/94 it is the applicant's spouse, who inherited the SLOM holding, towhom that status attached. The applicant cannot rely on the opinion of theWestfalen-Lippe Chamber of Agriculture of 19 July 1991, since that authoritymerely reiterated his statements. Reference to the definition of holdings inRegulation No 3950/92 is likewise not conclusive. That definition relates to theoperation of a number of production units. However, in this case the problem iswhether the applicant actually operated the SLOM holding.

91.
    In Case T-202/94, it is apparent from the opinion of the Hanover Chamber ofAgriculture of 25 January 1990 that it was the applicant's spouse who lodged theapplication for a reference quantity. The status of producer within the meaning ofArticle 3a(1) of Regulation No 857/84 therefore attaches to her. The certificatefrom the Hanover Chamber of Agriculture of 21 February 1995 as to theapplicant's status as producer does not dispel all doubts in that regard.

92.
    In any event, regardless of the anti-accumulation rule in Article 3a(1) of RegulationNo 857/84, the applicants were not entitled to the special reference quantitiessought from the German authorities since it was clear from their applications thatthey wished to produce those quantities on their original holdings and not on thosewhich they had taken over. The rules at issue (Article 3a(1), first indent,subparagraph (b), of the regulation) provide for entitlement to a special referencequantity for producers who prove that they are able to engage in production ontheir holdings. That is confirmed by the judgment in Case C-44/89 von Deetzen[1991] ECR I-5119, paragraph 21, in which the Court of Justice held that theimpossibility of marketing reference quantities did not adversely affect the

legitimate expectations of the producers. By producing the quantity in question ona holding other than that covered by a non-marketing undertaking, theyendeavoured to transfer that quantity.

93.
    The applicants' reference to the O'Brien judgment is not, in the defendants' view,conclusive. That judgment refers to Article 3a(3) of Regulation No 857/84, notArticle 3a(1). It was held in that judgment that a producer can claim a specialreference quantity only if he continues to operate the holding covered by his non-marketing undertaking. However, in this case, the question is whether theapplicants actually operated the SLOM holding and whether there is an operationwithin the meaning of Regulation No 857/84 when that holding is no long used formilk production.

94.
    Denying the existence of any causal link, the defendants maintain, in theirrejoinder, that the applicant in Case T-195/94 could have received an originalreference quantity if he had resumed milk deliveries in 1983 after expiry of thenon-marketing undertaking. Article 6(2) of Regulation No 1371/84 and the relevantGerman legislation allowed the grant of a reference quantity to those producers,calculated on the basis of their actual deliveries. The failure to obtain that quantitywas therefore attributable to the applicant and there is no causal link between thedamage suffered and Regulation No 857/84.

Findings of the Court

95.
    Messrs Quiller and Heusmann received from the competent national authorities on23 December 1993 and 1 February 1993 respectively a special 'SLOM III‘reference quantity. According to Article 1 of Regulation No 2055/93, such aquantity was to be granted to milk producers who had already been refused areference quantity. It follows that, for the competent national authorities, theapplicants were at that time producers on the agricultural holdings in question,within the meaning of the Community rules, and therefore that they had beenprevented from marketing milk by virtue of Regulation No 857/84. That isconfirmed by the certificates from the Chambers of Agriculture of Hanover andWestfalen-Lippe of 25 January 1990 and 19 July 1991.

96.
    As regards the defendants' argument that the applicants were responsible for thedamage they suffered, in that they had applied for reference quantities for theiroriginal holdings and not for the SLOM holdings, it is clear from Article 3a(1) ofRegulation No 857/84, as amended by Regulation No 764/89, that the conditionsapplicable to the specific arrangements for production of the special referencequantity, and in particular that laid down in paragraph (b), presuppose theallocation of such a quantity. Those conditions apply, therefore, only where theproducer can claim a special reference quantity, the allocation of which is governedby the first and second indents of paragraph 1. In any event, the applicants were

excluded from that allocation by application of the anti-accumulation rule in thesecond indent of that paragraph, since they had already received a referencequantity in respect of their original holdings.

97.
    As regards the defendants' argument in Case T-195/94 to the effect that there isno causal link between the damage and the conduct of the Community, it must beobserved that Regulation No 1371/84 entered into force only on 18 May 1984. Theundertaking encumbering the applicant's land expired on 31 May 1983, so that theapplicant could not know at that time that resumption of production would enablehim to receive a reference quantity. It was only when Regulation No 1371/84entered into force that he could have learned of that consequence. Theinterpretation adopted by the institutions thus involves attaching to the applicant'sdecision not to resume production in 1983 certain consequences which, at thematerial time, were unforeseeable. Accordingly, that argument must be rejectedand the existence of a causal link cannot be called in question in this case.

98.
    It follows from all the foregoing that the Community must be declared liable forthe damage sustained by the applicants.

2.    Time-bar

99.
    It is now necessary to consider whether, and if so to what extent, the applicants'claims are time-barred.

Arguments of the parties

100.
    The applicants maintain that the limitation period cannot start to run either fromthe date of expiry of the non-marketing undertaking or from 2 April 1984, the dateof entry into force of Regulation No 857/84, the application of which gave rise tothe damage sustained by them.

101.
    Although they concede that Regulation No 857/84 caused harm to all SLOMproducers and that Regulation No 764/89 further undermined the position ofSLOM III producers, they maintain that it was only on the date of the Wehrsjudgment, which held Regulation No 764/89 to be invalid, that the conditions laiddown in Article 43 of the Statute were met as far as they were concerned. Giventhat the act in question is a legislative measure, those conditions include knowledgethat the measure giving rise to the damage is unlawful. A citizen cannot berequired to institute proceedings for compensation immediately after the adoptionof an unlawful regulation. The legal uncertainty of the situation, the presumptionof validity of Regulation No 857/84 and, above all, the need to obtain a specialreference quantity account for the fact that proceedings for compensation fordamages were not initiated. However, the applicant in Case T-202/94 admits that

he could have initiated proceedings as soon as the undertaking affecting his SLOMholding expired.

102.
    As regards interruption of the limitation period, the applicants state that it is notpermissible that SLOM III farmers be treated differently from SLOM I and SLOMII producers. Consequently, the scheme provided for by Article 8 of Regulation No2187/93 should have been applicable to them, just as it was to the other producers.Moreover, the Communication of 5 August 1992, by which the institutionsinterrupted the limitation period, should also be applied to them, therebypreventing the defendants from pleading that their action was time-barred. On thedate of that communication, their rights had not yet been barred through lapse oftime, since the measure giving rise to the damage was Regulation No 764/89. Evenif the limitation period had started to run at the end of the non-marketing period,the periods not excluded through limitation commenced on 5 August 1987, that isto say five years before 5 August 1992, the date on which the limitation period wasinterrupted.

103.
    The applicant in Case T-195/94 maintains that, in any event, he stopped thelimitation period running by the letter he sent to the institutions on 12 January1994, to which the Commission replied on 29 March 1994, refusing to paycompensation for the harm suffered. Pursuant to Article 43 of the Statute, theapplication was lodged within two months following receipt of that letter of refusal.At that time, the rights to compensation brought into being by Regulation No764/89 had not yet been barred through lapse of time.

104.
    The applicant in Case T-202/94 also states that the running of the limitation periodapplicable to him was interrupted by his letter to the institutions of 11 April 1991.Article 43 of the Statute does not require an action to be brought immediately aftersuch a letter. In any event, in their replies of 2 May and 15 May 1991, theCommission and the Council expressly waived the right to plead expiry of thelimitation period and the applicant relied on those statements. The effects of thatwaiver were not nullified by Regulation No 2187/93, which was not a measureaddressed directly and individually to the applicant and against which an actionwould not therefore have been possible. Moreover, by letter of 13 January 1994,the applicant asked the institutions whether they maintained their waiver. Only theCommission replied, by letter of 29 March 1994, refusing to compensate the SLOMIII producers. Since that letter incorporated a rejection, the application was lodgedwithin the period of two months prescribed in Article 43 of the Statute.

105.
    The defendants consider that the actions brought by the applicants are time-barredand, consequently, inadmissible. They state that, in accordance with the case-lawof the Court of Justice and Article 43 of the Statute, the limitation period starts torun when all the requirements governing the obligation to provide compensationfor damage are satisfied and, particularly where the source of the liability is alegislative measure, from the time when the consequences of that measure arose

(Joined Cases 256/80, 257/80, 265/80, 267/80 and 5/81 Birra Wührer and Others vCouncil and Commission [1982] ECR 85, paragraph 10, hereinafter 'Birra Wührer‘,and Case 51/81 De Franceschi v Council and Commission [1982] ECR 117,paragraph 10, hereinafter 'De Franceschi‘).

106.
    In this case, the limitation period started to run, in Case T-195/94, on 2 April 1984,the date of entry into force of Regulation No 857/84, and, in Case T-202/84, on 9October 1985, the date of the end of the non-marketing period. On those dates, therequirements laid down in Article 215 were satisfied: the Community incurredliability at that time by virtue of legislation, namely Regulation No 857/84, in itsfirst version, subsequently declared invalid by the Mulder I judgment, because thatregulation seriously infringed the principle, of a higher order, of protection oflegitimate expectations.

107.
    The harm alleged by the applicants derives from the fact that they were unable toobtain reference quantities for the SLOM holdings which they had taken over.However, neither the taking-over of those holdings by the applicants norRegulation No 764/89, which added Article 3a to Regulation No 857/84, alteredthat legal situation to the detriment of the applicants. Upon the entry into force ofRegulation No 857/84 the applicants were thus in a position to seek a declarationthat it was illegal. The presumption of legality attaching to every regulation doesnot prevent economic operators from seeking a declaration that it is unlawful (Case101/78 Granaria v Hoofproduktschap voor Akkerbowprodukten [1979] ECR 623,paragraph 5). That is what the applicants did in the cases which gave rise to theMulder I and Wehrs judgments: they, unlike the applicants, did not seek to avoidthe risks associated with the institution of proceedings.

108.
    The defendants then contest the applicants' assertion that the limitation periodstarted to run after 2 April 1984 and 9 October 1985 respectively (see paragraph106 above). First, the starting date of that period cannot be taken to be 28 April1988, the date on which the Court of Justice, in Mulder I, declared Regulation No857/84 partially invalid. According to the case-law of the Court of Justice, for alimitation period to start to run, the victim of damage must have been aware, orhave been in a position to become aware, of the event giving rise to the damage(Case 145/83 Adams v Commission [1985] ECR 3539, paragraph 50), not of itsillegality. Second, the limitation period could not be dependent on Regulation No764/89, which introduced the anti-accumulation rule and placed the SLOM IIIproducers in a separate category. That regulation did not make the applicants'situation any worse than it was before the adoption of Regulation No 857/84, in itsinitial version, since the latter had already, since its entry into force, excluded thegrant of reference quantities for the applicants' SLOM holdings. Third, thelimitation period likewise did not commence on 3 December 1992, the date of theWehrs judgment, because the event giving rise to the damage suffered by theapplicants was the scheme introduced by Regulations Nos 857/84 and 764/89, notthe declaration that it was unlawful.

109.
    The defendants also reject the view that the limitation period was renewed fromday to day so far as the applicants were concerned. Even though Article 8 ofRegulation No 2187/93 so provides, such a solution does not necessarily have toserve as a basis for interpreting Article 43 of the Statute.

110.
    The defendants also contend that the Communication of 5 August 1992 does notprevent their raising a plea of inadmissibility based on the limitation period.Paragraph 2 of that Communication made it clear that the undertaking not toinvoke the limitation period applied only to the extent to which the right tocompensation in question was not already barred through lapse of time on the dateof the Communication. In any event, the Communication concerned only SLOMI and SLOM II farmers, as evidenced, first, by the reference to the case which gaverise to the judgment in Mulder II, which concerned only those groups of producers,and, second, the wording of paragraph 1 of the Communication, which refers toproducers who did not obtain a reference quantity following their participation inthe system introduced by Regulation No 1078/77.

111.
    As regards interruption of the limitation period, the defendants contend, in CaseT-195/94, that the letter sent by the applicant to the Commission on 12 January1994 did not interrupt the period, since the action was not brought within theperiod of two months laid down in the third sentence of Article 43 of the Statute.That period did not start running from the date of the Commission's reply to theletter in which the applicant asserted his right, but rather from the date of receiptof that letter. In this case, since the action was brought after the expiry of thatperiod, the letter of 12 January 1994 did not interrupt the limitation period.

112.
    In Case T-202/94, the defendants also contend that the applicant's letter of 11 April1991 did not interrupt the limitation period, since the action was not brought withinthe period laid down in Article 43 of the Statute. In their replies of 2 and 15 May1991 the Commission and the Council waived their right to invoke the limitationperiod only to the extent to which the rights in question were not yet barredthrough lapse of time. Since the period started running on 9 October 1985 (seeparagraph 106 above), the bar to the institution of proceedings came into being on9 October 1990, that is to say, before the letter sent by the applicant. Moreover,the waiver of the right to invoke the limitation period expired three months beforethe Mulder II judgment, delivered on 19 May 1992, and the applicant did notinstitute proceedings within that period. In that connection, the defendants contendthat it is absurd for the applicant to argue that the waiver was valid until thepublication of the judgment to be given on the amount of compensation followingthe judgment in Mulder II: the latter judgment disposed of all important issuesconcerning liability, the only matter of interest to all the parties concerned.

113.
    In conclusion, the defendants contend that, since the limitation periods began torun on 2 April 1984 and 9 October 1985, the applicants' rights have beenextinguished, through lapse of time, since 2 April 1989 and 9 October 1990,

respectively. At the very least, in Case T-195/94 the time-bar affects all rightsarising before 24 May 1989, the date which precedes by five years that of 24 May1994, when the proceedings were initiated. As regards Case T-202/94, theapplicants' rights arising before 1 June 1989, that is to say five years beforeproceedings were initiated, are barred through lapse of time.

Findings of the Court

114.
    The limitation period laid down by Article 43 of the Statute cannot begin to runbefore all the requirements governing the obligation to make good the damage aresatisfied and, in particular in cases where liability stems from a legislative measure,before the injurious effects of the measure have been produced (Birra Wührer andDe Franceschi, at paragraph 10; Case T-20/94 Hartmann v Council and Commission[1997] ECR II-595, paragraph 107).

115.
    In determining to what extent the applicants' rights are barred through lapse oftime, it is necessary first to determine the date on which the damage arose, andthen the date on which an event interrupting the limitation period occurred.

116.
    In this case, damage was sustained as from the day on which, after the expiry of thenon-marketing undertakings to which the applicants became subject by subrogation,the applicants would have been able to deliver milk produced on their SLOMholdings if a reference quantity had not been denied to them in pursuance ofRegulation No 857/84.

117.
    In that connection, the applicants' argument that the limitation period could nothave started to run until after the entry into force of Regulation No 764/89 which,amending Regulation No 857/84, introduced the anti-accumulation rule, must berejected. Even if it was only as from the adoption of that rule that the group ofproducers in question was placed in a separate category (see paragraph 66 above),that was merely the consequence of introducing a new scheme for those of theSLOM producers who, as from that time, were able to secure the allocation of aspecial reference quantity. In contrast, the situation of the SLOM III producersremained the same, in that, even if they were covered by the Article 3a added toRegulation No 857/84, the only effect of the new rule was to maintain for thoseproducers the earlier scheme under which marketing was wholly excluded.

118.
    In the present cases, it is not disputed that the applicants sustained damageresulting from the application of Regulation No 857/84, as initially drafted, and thatsuch damage continued after the insertion into that regulation of Article 3a byRegulation No 764/89. It follows that the measure giving rise to the damagesustained by the applicants was Regulation No 857/84. Since Regulation No 764/89is unconnected with the cause of that damage, it has no relevance to the limitationperiod.

119.
    Accordingly, the applicants sustained damage on the date on which Regulation No857/84 was applied to them, as is confirmed moreover by the date as from whichthey seek compensation (see paragraphs 35 and 37 above). In Case T-195/94 thatdate is the date of entry into force of the regulation, 2 April 1984, since, eventhough the non-marketing undertaking expired on an earlier date, the applicant wasnot refused the allocation of a reference quantity until that date. In Case T-202/94that date is 9 October 1985, the day following expiry of the non-marketingundertaking to which the applicant became subject by subrogation.

120.
    It is necessary to consider next whether all the requirements governing theCommunity's obligation to make good the damage, which determines the startingdate of the limitation period, were satisfied on the date on which the damageoccurred, as determined above, in accordance with the Birra Wührer and DeFranceschi judgments and as contended by the defendants; or whether, asmaintained by the applicants, it occurred only on the dates of the Mulder I or Wehrsjudgments, which, respectively, held Regulation No 857/84 as originally drafted, andthen as amended by Regulation No 764/89, to be invalid.

121.
    The essence of the applicants' argument is that knowledge of the illegality of themeasure giving rise to the damage is one of the conditions governing liability of theCommunity and that the concurrent satisfaction of those conditions, by virtue ofBirra Wührer and De Franceschi, marks the starting point of the limitation period.Consequently, according to the applicants' argument, the period prescribed inArticle 43 of the Statute cannot start to run before the measure is declaredunlawful.

122.
    In that regard, it must be borne in mind that, since an action for damages isindependent from an action for annulment (Zuckerfabrik Schöppenstedt v Council,cited above, and order of 21 June 1993 in Case C-257/93 Van Parijs and Others vCouncil and Commission [1993] ECR I-3335, paragraphs 14 and 15), an actionbased on Article 215 of the Treaty does not necessarily have to be accompaniedor preceded by an application for annulment or for a declaration of invalidity, withthe result that greater protection is secured for individuals (Hartmann v Counciland Commission, cited above, paragraph 128). It follows that the annulment ofRegulation No 857/84 or a finding that it was invalid did not constitute a necessaryprecondition for the applicants to obtain reparation and that they were thereforeentitled to bring their action against the Community as soon as they began to sufferdamage under Regulation No 857/84, as initially drafted (see also Case T-554/93Saint and Murray v Council and Commission [1997] ECR II-563, paragraph 81).

123.
    In those circumstances, the conditions governing liability of the Community weresatisfied on the date on which Regulation No 857/84 was applied to the applicants(see paragraph 119 above). The limitation period therefore began to run on thatdate.

124.
    The defendants cannot contend that the applicants' claims were barred in theirentirety five years after the limitation period began.

125.
    The damage which the Community must redress is not damage causedinstantaneously. The damage occurred from day to day over a period of time, asa result of the maintenance in force of an unlawful measure, for so long as theapplicants were prevented from obtaining a reference quantity and thereforedelivering milk. Consequently, having regard to the date of the event whichinterrupted the limitation period, the time-bar under Article 43 of the Statuteapplies to the period preceding that date by more than five years and does notaffect rights which arose during subsequent periods (Hartmann v Council andCommission, cited above, paragraph 132).

126.
    As regards the event interrupting the limitation period, it is necessary first toconsider the arguments, common to both actions, relating to the application tothese cases of the Communication of 5 August 1992 and Regulation No 2187/93and then to analyse the effects of the events which, in each action, are claimed tohave interrupted the limitation period.

127.
    The argument that the applicants benefited from the Communication of 5 August1992 must be rejected. By that Communication the institutions undertook not toinvoke the limitation period vis-à-vis producers for whom Mulder II had recognizedas being entitled to compensation. The only persons to whom that measure appliedwere thus those producers who had not received a reference quantity underRegulation No 857/84, as originally drafted, but had obtained one followingRegulation No 764/89. It was thus addressed only to SLOM I and SLOM IIproducers. Since the specific situation of SLOM III producers had not beenanalysed in Mulder II, the applicants could not benefit from the judgment givenagainst the institutions. Consequently, the Communication of 5 August 1992 did notconcern them and did not have the effect of preventing the institutions from raisingthe expiry of the limitation period as a plea in bar to the applicants' claims.

128.
    Nor can the SLOM III producers benefit from Regulation No 2187/93 and, inparticular, from the provisions of Article 8 of that regulation concerninginterruption of the limitation period. In that connection it need merely be pointedout that, according to Article 2, that regulation applies only to those producers whoreceived special reference quantities under Regulations Nos 764/89 and 1639/91.The applicants, not being in that situation, cannot therefore rely upon RegulationNo 2187/93.

129.
     The fact that that regulation is not applicable to them does not mean that thereis any breach of the principle of equal treatment. For there to be a breach of thatprinciple comparable situations must have been treated differently (see CaseT-143/89 Ferriere Nord v Commission [1995] ECR II-917, paragraph 55). However,as just pointed out (paragraphs 127 and 128), the situation of the SLOM IIIproducers was different from that of the persons benefiting from Regulation No

2187/93. In any event, as the Court of First Instance has held (Case T-541/93Connaughton and Others v Council [1997] ECR II-549, paragraph 35, and Saint andMurray v Council and Commission, cited above, paragraph 41), that regulation isin the nature of a proposal by way of settlement which merely opens up anadditional avenue for the producers recognized as having that right to obtaincompensation.

130.
    As regards the events interrupting the limitation period, it must be pointed outthat, in Case T-195/94, the applicant sent to the Commission alone, on 12 January1994, a letter claiming damages for the harm suffered between 2 April 1984 andthe date of allocation of a definitive reference quantity. By letter of 29 March 1994,the Commission refused that request. The Council, for its part, did not contend thatthe event interrupting the limitation period could not be relied upon against itself.

131.
    Since the action was brought on 20 May 1994, within two months after theCommission's letter of 29 March 1994, the limitation period was interrupted on 12January 1994, in accordance with Article 43 of the Statute.

132.
    The argument put forward by the institutions to show that the action should havebeen brought within a period of two months after the letter of 12 January 1994 hasno basis whatsoever. The reference in the last sentence of Article 43 of the Statuteto Articles 173 and 175 of the Treaty has the effect of rendering applicable, as faras interruption of the limitation period is concerned, the rules for calculating time-limits laid down by those provisions. Since the Commission's reply was given morethan two months after the applicant's letter, but within the period for challengingan implied rejection, that reply caused a new period to start to run (see CaseC-25/91 Pesqueras Echebastar v Commission [1993] ECR I-1719). Since the actionwas brought before the end of that second period, the interruption of the limitationperiod took place on 12 January 1994.

133.
    According to the case-law (Birra Wührer and De Franceschi paragraph 10,Hartmann v Council and Commission, paragraph 140, and Saint and Murray vCouncil and Commission, paragraph 93), the period for which compensation shouldbe paid corresponds to the five years prior to the date on which the limitationperiod was interrupted. It thus extends from 12 January 1989 to 28 July 1993, thedate on which a reference quantity was allocated to the applicant.

134.
    As regards Case T-202/94, it must be pointed out, first, that on 11 April 1991 theapplicant sought from the Council and Commission damages for the harm sufferedup to that date. In their replies of 2 and 15 May 1991, the institutions, whilstdenying liability, undertook not to invoke the limitation period until three monthsafter publication of the Mulder II judgment. However, that undertaking coveredonly the rights not barred through lapse of time at the date of the letters inquestion.

135.
    Contrary to the applicant's assertion, that correspondence cannot be construed asreferring to the judgment of the Court of Justice to be given following Mulder II.The questions concerning Community liability were disposed of in the latterjudgment. As is clear from the operative part of that judgment, only the amountof the compensation remains to be determined. The institutions' letters of 2 and 15May 1991 therefore concerned the Mulder II judgment.

136.
    Furthermore, by those letters, the institutions waived the right to invoke thelimitation period for the period specified in them. As may be seen from the letterstheir purpose was to avoid the immediate institution of proceedings ('In order tokeep proceedings to a minimum, the Council/Commission ... is neverthelessprepared not to invoke the limitation period ...‘). That was consistent with thepractice of the institutions at that time, which was to send letters to that effect toproducers who submitted to them requests to make good the damage sustained bythem.

137.
    It is therefore necessary to determine the effects of the undertaking by theinstitutions not to invoke the limitation period, which encouraged the producers,in return, not to institute proceedings.

138.
    It cannot be accepted, as the institutions contend, that, merely as a result of theapplicant's not bringing an action within the period prescribed in Article 43 of theStatute, after the expiry of a period of three months following publication of theMulder II judgment, the limitation period could resume running, as against theapplicant, on the dates of the letters of 2 and 15 May 1991 as if the undertakingby the institutions had not been given. That undertaking was a unilateral act of theinstitutions intended to encourage the applicant not to bring an action. Thedefendants cannot therefore rely on the fact that the applicant behaved in amanner which worked exclusively to their benefit.

139.
    In those circumstances, the limitation period was suspended from 7 May 1991, thedate of receipt of the letter sent by the Commission to the applicant, until 17September 1992, that is to say the end of a period of three months followingpublication in the Official Journal of the European Communities, on 17 June 1992,of the operative part of the judgment in Mulder II.

140.
    Second, it is necessary to determine the date on which the limitation period wasinterrupted. The applicant sent to the Commission, on 13 January 1994, a letterin which it asked that institution to confirm that it maintained its waiver of the rightto invoke the limitation period until publication of the judgment of the Court ofJustice to be given following Mulder II. By letter of 29 March 1994, received on 5April 1994, the Commission replied that the Community was not liable for theapplicant's losses.

141.
    Since the application was lodged within two months from the receipt of that replyand since the letter of 13 January 1994 must be regarded as containing an

application to the institutions within the meaning of Article 43 of the Statute, thelimitation period was interrupted on the latter date.

142.
    In those circumstances, in accordance with the case-law (see paragraph 133 above),the period for which compensation is payable in Case T-202/94 should in principlecommence five years before the date of the event interrupting the limitation periodand end on 1 February 1993, the date on which a special reference quantity wasallocated. However, since the limitation period was suspended from 7 May 1991 to17 September 1992 (see paragraph 139 above), that is to say for 16 months and 10days, the period for which compensation is payable is the period from 3 September1987 to 31 January 1993.

3.    The amount of damages

143.
    When the cases were joined, the parties were invited to concentrate on theproblem of entitlement to compensation for damage.

144.
    Consequently, even though in their applications the applicants quantified theamount of the compensation claimed (see paragraphs 35 and 37 above), the partieshave not been able to make submissions specifically on the amount ofcompensation relating to the period determined by the Court.

145.
    In those circumstances, the Court invites the parties to endeavour to reachagreement on this point within a period of 12 months, in the light of the presentjudgment and the clarifications contained in Mulder II regarding the method ofcalculating the damage suffered. Failing agreement, the parties shall present to theCourt, within the aforesaid period, their submissions as to the amounts to beawarded.

Costs

146.
    Having regard to paragraph 145 above, the decision on costs will be reserved.

On those grounds,

THE COURT OF FIRST INSTANCE (First Chamber, Extended Composition),

by way of interlocutory judgment, hereby:

1.    Orders the defendants to pay compensation for the damage sustained bythe applicants, first, as a result of the application of Council Regulation(EEC) No 857/84 of 31 March 1984 adopting general rules for the

application of the levy referred to in Article 5c of Regulation (EEC) No804/68 in the milk and milk products sector, as supplemented byCommission Regulation (EEC) No 1371/84 of 16 May 1984 laying downdetailed rules for the application of the additional levy referred to in Article5c of Regulation (EEC) No 804/68, in so far as those regulations did notmake provision for the allocation of a reference quantity to holdings subjectto an undertaking given under Council Regulation (EEC) No 1078/77 of 17May 1977 introducing a system of premiums for the non-marketing of milkand milk products and for the conversion of dairy herds, where theproducers had not delivered milk during the reference year adopted by theMember State concerned, and, second, as a result of application of the saidRegulation No 857/84, as amended by Council Regulation (EEC) No 764/89of 20 March 1989, in so far as the second indent of Article 3a(1) excludedthe allocation of a special reference quantity to the transferees of apremium granted under Regulation No 1078/77;

2.     Declares that the period in respect of which the applicants must becompensated for the damage sustained as a result of the application ofRegulation No 857/84 is, in Case T-195/94, the period from 12 January 1989to 28 July 1993 and, in Case T-202/94, the period from 3 September 1987to 31 January 1993;

3.    Orders the parties to submit to the Court, within 12 months from thisjudgment, particulars of the amounts to be paid, as agreed by the parties;

4.    In default of such agreement, orders the parties to present to the Court,within the same period, their submissions as to the amounts to be awarded;

5.    Reserves the costs.

Saggio
Brïet
Kalogeropoulos

            Tiili                        Moura Ramos

Delivered in open court in Luxembourg on 9 December 1997.

H. Jung

A. Saggio

Registrar

President


1: Language of the case: German.