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In Case 49/79 RICHARD POOL, Farmer, of Higher Trayne

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In Case 49/79 RICHARD POOL, Farmer, of Higher Trayne JUDGMENT OF 4. 3. 1980 — CASE 49/79 In Case 49/79 RICHARD POOL, Farmer, of Higher Trayne, Ilfracombe, Devonshire, England, represented by Andrew Durand of the Middle Temple, Barrister, instructed by W. H. Hadfield & Son, Solicitors, Farnham, with an address for service in Luxembourg c/o Shirley Ward, Résidence Belle-Vue, 79 Rue du Kiem, Strassen, applicant, v COUNCIL OF THE EUROPEAN COMMUNITIES, represented by Daniel Vignes and Bernhard Schloh, Director and Adviser respectively in the Legal Department of the Council, with an address for service in Luxembourg at the office of J. N. Van den. Houten, Director of the Legal Departement of the European Investment Bank, 2 Place de Metz, defendant, APPLICATION for damages under the second paragraph of Article 215 of the EEC Treaty, THE COURT composed of: H. Kutscher, President, A. O'Keeffe and A. Touffait (Presidents of Chambers), J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, G. Bosco, T. Koopmans and O. Due, Judges, Advocate General: G. Reischl Registrar: A. Van Houtte gives the following 570 POOL v COUNCIL JUDGMENT Facts and Issues The facts of the case, the course of the into another, the Council by Regulation procedure and the submissions and No 222/73 of 31 January 1973 on the arguments of the parties may be exchange rates to be applied in agri­ summarized as follows: culture for the currencies of the new Member States (Official Journal L 27, p. 4) fixed the rate of exchange to be applied for the conversion of prices and other amounts, in derogation from Article 2 (1) of Regulation No 129, for I — Facts Ireland and the United Kingdom at the rate corresponding to the representative rate for the currencies of those two Member States, the representative rates Regulation No 129 of the Council of 23 being: £1 sterling = £1 Irish = 2.3499 October 1962 on the value of the unit of United States dollars = 2.1644 units of account and the exchange rates to be account. applied for the purposes of the common agricultural policy (Official Journal, English Special Edition 1959-1962, page 274) stated on the one hand that sums In Regulation No 2498/74 of 2 October should be expressed in a standard unit of 1974 fixing representative conversion account in a number of instruments on rates to be applied in agriculture for the the common agricultural policy and on currencies of the new Member States the other hand that it was necessary to (Official Journal L 268, p. 6) the Council fix the rate of exchange to be used for stated that the conversion rates to be measures taken in pursuance of the applied in agriculture had been fixed common agricultural policy which with the aim of reflecting economic required sums given in one currency to realities as closely as possible but that at be expressed in another currency. Article that time the aim was no longer being 1 of the Regulation therefore fixed the achieved in the case of the United value of the unit of account at Kingdom and Irish currencies as the 0.88867088 grams of fine gold; under conversion rates actually recorded for Article 2 (1) the exchange rate to be those two currencies on exchange applied was to be that which corre­ markets had since shown a significant sponded to the par value communi­ depreciation. Consequently Article 1 (1) cated to and recognized by the Inter­ of Regulation No 2498/74 provided that national Monetary Fund. "where transactions to be carried out in pursuance of instruments relating to the common agricultural policy or specific rules laid down under Article 235 of the In pursuance of Article 3 (1) of Regu­ Treaty require the currencies of the new lation No 129, which permits dero­ Member States to be expressed in gations from the principle of using the another currency or in units of account, par value for converting one currency the rate of exchange to be applied for 571 JUDGMENT OF 4. 3. 1980 — CASE 49/79 the conversion of prices and other In its defence the Council has dealt amounts shall, in derogation from Article solely with the question whether in this 2 (1) of Regulation No 129, be that case, the first condition for the which corresponds to the representative Community to incur liability arising from rates for the currencies of those Member a legislative act involving choices of States"; Article 1 (2) fixed the following economic policy is fulfilled, namely representative rates: whether there has been a sufficiently serious breach of a superior rule of law for the protection of the individual; it (a) for the Irish pound: £1 Irish = has suggested that the existence of the 1.9485 units of account; other conditions for an action for damages should only be discussed, if (b) for the pound sterling: £1 sterling = necessary, later in a separate phase of the 2.0053 units of account. proceedings. In these circumstances the applicant has By Regulation No 475/75 of the Council not lodged a reply. of 27 February 1975 on the exchange rates to be applied in agriculture On hearing the report of the Judge- (Official Journal L 52, p. 28), the rep­ Rapporteur and the views of the resentative rate was fixed, for the Irish Advocate General the Court decided to pound at 1.86151 units of account and open the oral procedure without any for the pound sterling at 1.96178 units of preparatory inquiry. It did however account. invite the applicant to identify more precisely the provisions of Regulation No 2498/74 which he regards as illegal Richard Pool, farmer, of Higher Trayne, and to explain the considerations on Ilfracombe, Devonshire, England, fattens which his application is based, in calves for sale as adult bovine animals. particular the reasons leading him to belive that the representative rate for the He takes the view that when the Council pound sterling was in itself fixed in a as from 7 October 1974 fixed the rep­ manner incompatible with the Treaty; resentative rates of the British and Irish the applicant complied with this request currencies applicable for the purposes of within the prescribed period. At the the common agricultural policy at request of the Court the Council different rates for the pound sterling and commented in writing on the applicant's the Irish pound, it breached the replies. prohibition on discrimination set out in Article 40 (3) of the EEC Treaty and caused him damage for which compensation is due to him. Ill — Conclusions of the parties The applicant claims that the Court should: II — Written procedure (a) award him damages of £9 504 against the European Economic On 28 March 1979 Richard Pool lodged Community in the person of the an application under the second Council of the European paragraph of Article 215 of the EEC Communities; Treaty for compensation against the Council of the European Communities. (b) order the Council to pay the costs. 572 POOL v COUNCIL The Council contends that the Court the consumer and the Irish Government should: to favour the producer are illegal. (a) dismiss the application; The present system of pricing is arbitrary because it results in purely national pricing and is clearly unlawful; the clearest demonstration of this is that the (b) order the applicant to pay the costs. United Kingdom and Ireland, which used to enjoy free trade, no longer do so, despite the fact that they continue to share a common currency. IV — Submissions and arguments of the parties during the Article 3 of Regulation No 129 does not written procedure permit the Council to abandon any attempt to fix a rate of exchange which bears a relationship to a currency market and still less to start from the opposite The applicant recalls that Regulation No end and decide what a farmer should 805/68 of the Council of 27 June 1968 receive in national currency and what a on the common organization of the consumer should pay in national market in beef and veal (Official Journal, currency. Where a monetary practice of English Special Edition 1968 (I), p. 187) an exceptional nature is in all respects laid down a single price system for beef identical in the case of two currencies and veal within the Community. there is no warrant in Article 3 of Regu­ lation No 129 for treating them differently. (a) Under the second subparagraph of Article 40 (3) of the EEC Treaty, a In particular it does not give the common organization of the market is to Community a discretion to fix, on a exclude any discrimination between nation by nation basis, the price which it producers or consumers within the considers a farmer should receive on a Community and a common price policy particular market. Regulation No 129 must, under the third subparagraph of provides for the neutral conversion into the same provision, be based on common national currency of the sums expressed criteria and uniform methods of calcu­ as units of account. The regulation does lation. not confer on the Council the absolute discretion to lay down any exchange rates it considers appropriate; the unit of Conversion rates for all the Member account was intended to produce an States should therefore be objective and, objective and politically neutral instru­ where possible, reflect monetary reality. ment for expressing common prices. If the Irish pound and the pound sterling are convertible they must have the same rate of conversion vis-à-vis other (b) It follows from the case-law of the currencies and themselves. Court that the liability of the Community arises in the case of legislative provisions if the Community The present arrangements, which enable has committed a sufficiently serious the United Kingdom Government, for breach of a superior rule of law for the short-term political reasons, to favour' protection of the individual.
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