Report for the Hearing In Case C-304/91

I — Facts and Procedure

1. Legislation

Council Directive 74/561/EEC of 12 November 1974 on admission to the occupation of road haulage operator in national and international transport operations (OJ 1974 L 308, p. 18) provides as follows:

‘Article 1 Admission to the occupation of road haulage operator shall be governed by the provisions adopted by the Member States in accordance with the common rules contained in this directive. Article 3 1. Natural persons or undertakings wishing to engage in the occupation of road haulage operator shall: (a) be of good repute; (b) be of appropriate financial standing; (c) satisfy the condition as to professional competence. Where the applicant is an undertaking, provisions (a) and (c) above must be satisfied by one of the natural persons who will continuously and effectively manage the transport operations of the undertaking. Member States may also require that other persons in the undertaking satisfy the provision (a) above. ... Article 5 1. Natural persons and undertakings furnishing proof that, before 1 January 1978, they were authorized under national regulations in a Member State to engage in the occupation of road haulage operator in national and/or international road transport operations shall be exempt from the requirement to furnish proof that they satisfy the provisions laid down in Article 3. 2. However, those natural persons who, after 31 December 1974 and before 1 January 1978, were: authorised to engage in the occupation of road haulage operator without having furnished proof, under national regulations, of their professional competence, or designated continuously and effectively to manage the transport operations of the undertaking, must satisfy, before 1 January 1980, the conditions of professional competence referred to in Article 3(4). The same requirement shall apply in the case referred to in the third subparagraph of Article 3(1).’

It appears from the Order for Reference that, at that time, Netherlands regulation required the interested party to possess a certificate of competence and two years experience in a transport company in order to satisfy the condition as to professional competence.

2. Facts of the case

In 1960 Mr H. J. J. van Doesselaar, the applicant in the main proceedings, entered into a partnership with Mr E. F. van Esbroek in order to carry on business as road hauliers. The undertaking was authorized to carry on that business since Mr van Esbroek was in possession of the requisite documents attesting occupational competence under Netherlands legislation. For an initial period of not more than two years Mr van Esbroek performed certain administrative tasks. However, from 1962 to 1987 Mr van Doesselaar in fact managed the transport operations of the undertaking on his own.

On 23 April 1987 the partnership came to an end through the death of Mr van Esbroek. Mr van Doesselaar carried on the business on his own. In a letter of 1 August 1987, Mr van Doesselaar, who is not in possession of an attestation of occupational competence, applied to the Minister van Verkeer en Waterstaat (Minister for Transport and Waterways) to be exempted from the condition as to occupational competence.

By a decision of 24 December 1987, the Minister rejected Mr van Doesselaar's application. In support of this decision the Minister stated that the exemption requested by Mr van Doesselaar could not be granted under Article 5 of the directive. In his view that article was a transitional provision intended to mitigate the effects of the introduction of the occupational competence requirement. However, in the Netherlands, the situation contemplated in this Article had not arisen because the applicable national legislation already imposed that requirement.

The Minister further stated that, under the national rules then and now applicable, Mr van Doesselaar had, since 1960, not been entitled to engage on his own in the occupation of road haulage operator because he did not fulfil the requirement of occupational competence.

On 8 January 1988 Mr van Doesselaar appealed against this decision to the College van Beroep voor het Bedrijfsleven.

By an Order of 8 November 1991 the College van Beroep voor het Bedrijflseven, considering that the decision to be given in the cases involved an interpretation of the provisions of the directive, decided to stay the proceedings pending a preliminary ruling by the Court on the following question pursuant to Article 177 of the EEC Treaty:

‘Must Article 5(1) of Directive 74/561/EEC, in conjunction with Article 5(2) thereof, be interpreted as meaning that the natural person continuously and effectively managing the transport operations of an undertaking which, if the directive had been correctly implemented, would have fallen within the terms of the transitional provision is entitled, on the continuation of the undertaking as a one-man business after termination of the partnership which carried on the undertaking, to the application of the provisions of that article, even if effect has not been given thereto by the national legislature?’

3. Consideration of the national court

The College van Beroep voor het Bedrijfsleven points out that the requirement that the competence requirement be satisfied by one of the natural persons ‘who continuously and effectively manage the transport operations of the undertaking’ (Article 3 of the directive), has been prescribed in a provision generally binding in the Netherlands only since 1 May 1988. In this respect the national court refers to its decision of 23 May 1990 in which it held that authorization under the relevant national legislation (Article 56 of the Wet Autovervoer Goederen — Law on the carriage of goods by road) had to be granted, even long after expiry of the period for implementing the directive, once it was established that one of the operators or managers of the undertaking in question was the holder of the requisite attestation of competence, irrespective of whether the operators or managers continuously and effectively managed the transport operations within the meaning of the directive.

In the opinion of the national court, if the directive had been implemented in the Netherlands in due time and in the correct manner, the partnership in question would not have satisfied the requirement of competence within the meaning of the directive, since the person continuously and effectively managing the transport operations, namely Mr Doesselaar, was not in possession of the requisite attestation. However, since under the hitherto applicable legislation it was in possession of a valid authorization, thanks to the attestation held by Mr Esbroek, it would have been exempted under the transitional provision contained in the directive from the duty to show that it satisfied the occupational competence condition.

As to the question whether the person continuously and effectively managing the transport operations of an undertaking may rely on Article 5, the national court is of the opinion that, since that provision is intended to cover situations in which the introduction of a new requirement places the undertaking in question before insuperable difficulties, where the difficulty is that the natural person managing the undertaking is not in possession of the requisite attestation of competence, Article 5 may properly be construed so as to cover the natural person in question.

4. Procedure before the Court

The Order for Reference was lodged at the Court Registry on 28 November 1991.

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC written observations were submitted by the Commission of the European Communities, represented by Vittorio Di Bucci and Thomas van Rijn, of its Legal Service, acting as Agents, and by the Netherlands Government, represented by the Minister for Foreign Affairs.

Upon hearing the Report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry and assigned the case to the First Chamber.

II — Written observations submitted to the Court

The Netherlands Government prefaces its observation with a remark concerning the national court's assumptions that the directive was not correcdy implemented in the Netherlands and the undertaking managed by Mr van Doesselaar would have come within Article 5 had the directive been correcdy implemented. The Netherlands Government disputes the first assumption and is of the opinion that the two assumptions are immaterial to the answer to be given to the preliminary question which essentially seeks to clarify whether a person such as Mr van Doesselaar may be regarded as coming within the category of persons and undertakings referred to in Article 5.

The Netherlands Government then considers the interpretation of Article 5 of the directive. In its opinion this article is a transitional provision applying to persons who can furnish proof that, before 1 January 1978, they were authorized under national rules in a Member State to engage in the occupation of road haulage operator. Thus, it preserves acquired rights. In order to be able to rely on the application of the transitional provisions, the party concerned, whether a natural person or undertaking, must as at the stated date satisfy the conditions required to carry on the occupation in question. Only under those circumstances is it reasonable to exempt that person from the conditions introduced by the new legislation.

In the present case, Mr van Doesselaar did not on adoption of the directive satisfy the requisite conditions under national legislation in order to obtain authorization. Therefore, he could not run the transport business on his own. It was the undertaking as such, and not Mr van Doesselaar as a natural person, which was authorized to operate on the market as a road haulier. The fact that Mr van Doesselaar had already for many years actually managed the undertaking does not alter this situation in any way.

For these reasons, the Netherlands Government believes that a natural person, who wishes to carry on the transport undertaking on his own but, before 1 January 1978, was not authorized in his own right under national regulations in a Member State to engage in the occupation of road haulage operator in national and/or international road transport operations, may not rely upon the transitional provisions of Article 5 of Directive 74/561, even if that person may previously have continuously and effectively managed such a transport undertaking.

The Commission starts from the premise that, in the opinion of the national court, Netherlands legislation did not comply with the directive at the relevant time. This legislation provides that the condition as to competence must be satisfied by the operation or operators (jointly), whereas the third subparagraph of Article 3(1) of the directive provides that where the applicant is an undertaking one of the natural persons who continuously and effectively manage the transport operations of the undertaking must satisfy the condition as to competence.

On the question whether Article 5 of the directive is applicable in the event of a change in the legal form of the undertaking, the Commission reminds the Court of its case-law on the concept of undertaking (see the judgment in Case 7/90 Vandevenne [1991] ECR I-4371). It considers that an undertaking which changes its legal form but carries on the same business remains the same undertaking under Community law.

Finally, the Commission examines the meaning of the term ‘authorized ... under national legislation’. In its opinion the question is whether an operator may be precluded from relying on the transitional provision simply because he holds no authorization as a result of the incorrect transposition of the Community rules by the national authorities. In the present case, had the directive been correctly transposed into Netherlands law, the Netherlands authorities should have considered withdrawing authorization from the partnership after 1 January 1978, since Mr van Esbroek, the ostensible holder of the authorization, was not the person continuously and effectively managing the transport undertaking. However, the undertaking could have availed itself of the transitional provision contained in Article 5(1), since Mr van Doesselaar was authorized under Netherlands law to engage in the occupation of international road haulier, and the death of Mr van Esbroek would not have changed that. If the directive had been correcdy transposed, Mr van Doesselaar would have been able to rely on Article 5(1).

The mere fact that the Netherlands have not correctly transposed the directive, thereby preventing the applicant from satisfying one of the conditions of Article 5(1) thereof cannot debar him from exercising a right conferred on him by a provision of Community law having direct effect.

D. A. O. Edward

Judge-Rapporteur

1 Language of the case: Dutch.