Case C‑120/17

Administratīvā rajona tiesa

v

Ministru kabinets

(Request for a preliminary ruling from the Latvijas Republikas Satversmes tiesa)

(Reference for a preliminary ruling — Agriculture — Support for rural development — Regulation (EC) No 1257/1999 — Articles 10 to 12 — Early retirement support — National legislation providing for the transfer by inheritance of early retirement support — Legislation approved by the European Commission — Subsequent change of position — Protection of legitimate expectations)

Summary — Judgment of the Court (Eighth Chamber), 7 August 2018

1. Agriculture — Common agricultural policy — EAGGF financing — Support for rural development — Mechanism granting aid for early retirement — Regulation No 1257/1999 — National legislation making it possible to transfer by inheritance support for early retirement — Not permissible

   (Council Regulation No 1257/1999, Arts 10 to 12)

2. Agriculture — Common agricultural policy — EAGGF financing — Support for rural development — Mechanism granting aid for early retirement — Regulation No 1257/1999 — National legislation making it possible to transfer by inheritance support for early retirement — Legislation approved by the Commission — Protection of legitimate expectations

   (Council Regulation No 1257/1999)

1.  Articles 10 to 12 of Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain regulations must be interpreted as precluding Member States, when implementing those articles, from adopting measures making it possible to transfer, by inheritance, support for early retirement such as that at issue in the main proceedings.

   Thus, first, Article 11(1) of the regulation sets out conditions which are all linked to the person of the transferor of a farm.

   Secondly, while it fixes a total period of 15 years for the payment of early retirement support, Article 12(2) of Regulation No 1257/1999 also lays down a second temporal limitation, namely that the payment may not go beyond the 75th birthday of the transferor of a farm. That provision may not therefore be interpreted as giving rise to an unrestricted right to the payment of early retirement support for a period of 15 years. It not only emphasises the temporary nature of that support, but also implies a fortiori that the death of the transferor of a farm brings its payment to an end.

   Thirdly, the objectives of Regulation No 1257/1999 also lead to the conclusion that early retirement support may not be the subject of a transfer by inheritance.

   First of all, Article 10(1) of the regulation sets a number of objectives for the early retirement support measure, namely, to provide an income for elderly farmers who decide to stop farming, to encourage the replacement of elderly farmers by farmers able to improve, where necessary, the viability of the remaining agricultural holdings and to reassign agricultural land to non‑agricultural uses where it cannot be farmed under satisfactory conditions of economic viability.

   Next, the Court has concluded from the existence of those various objectives that the EU legislature intended to encourage early retirement in the farming sector in order to improve the viability of agricultural holdings and to create an economic incentive to older farmers to cease their activities early, and in circumstances in which they would not ordinarily do so, the supplement to the retirement pension or additional income being only one of the consequences of the application of Regulation No 1257/1999 (see, to that effect, judgment of 7 July 2016, Poland v Commission, C‑210/15 P, not published, EU:C:2016:529, paragraph 39).

   It follows that, first, early retirement support is granted to the transferor of a farm on the basis of conditions that are strictly personal to him and, secondly, the defining objective of that support is not to supplement the income of that transferor. Therefore, in view of its personal nature, that support may not be passed on to the heirs of the transferor of the farm in the event of his death.

   (see paras 40-46, operative part 1)

2.  The principle of the protection of legitimate expectations must be interpreted as meaning that a provision of national law, such as that at issue in the main proceedings –– which provided for the transfer by inheritance of early retirement support and was approved by the European Commission as compatible with Regulation No 1257/1999 –– gave rise to a legitimate expectation on the part of the heirs of farmers who received that support, and that a conclusion such as that mentioned in the minutes of the meeting of the European Commission Committee on Rural Development of 19 October 2011, to the effect that such support may not be passed on by inheritance, did not bring that legitimate expectation to an end.

   As the Advocate General has stated in point 52 of his Opinion, the legitimate nature of the expectation must be recognised where the individual relying on it is in a particular situation which is worthy of protection, such as that at issue in the main proceedings.

   The heirs of farmers who received early retirement support derived their inheritance rights from national legislation, the content of which was approved by the Commission’s decision of 30 July 2004 and from which it was not apparent that, notwithstanding that approval, the legislation was contrary to Articles 10 to 12 of Regulation No 1257/1999. Furthermore, those inheritance rights had been given concrete expression in the agreements granting early retirement support, which were concluded between (i) a department with the authority to render the State liable to grant that support, namely the Rural Support Service, and (ii) farmers who transferred their agricultural holdings in exchange for early retirement support, the heirs not being a party to those agreements. In those circumstances, the reasonable expectation that those heirs could have that their inheritance rights were lawful is legitimate.

   (see paras 63-65, 74, operative part 2)