JUDGMENT OF THE COURT 16 July 1992 *

Transcription

1 MEILICKE v ADV/ORGA JUDGMENT OF THE COURT 16 July 1992 * In Case C-83/91, REFERENCE to the Court under Article 177 of the EEC Treaty by the Landgericht Hannover for a preliminary ruling in the proceedings pending before that court between Wienand Meilicke ADV/ORGA AG and on the interpretation of the Second Council Directive, Directive 77/91/EEC of 13 December 1976 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent (OJ 1977 L 26, p. 1), THE COURT, composed of: F. A. Schockweiler, President of Chamber, acting for the President, P. J. G. Kapteyn (Presidents of Chambers), G. E Mancini, C. N. Kakouris, J. C. Moitinho de Almeida, M. Diez de Velasco and M. Zuleeg, Judges, Advocate General: G. Tesauro, Registrar: H. A. Rühi, Principal Administrator, after considering the written observations submitted on behalf of: Wienand Meilicke, Rechtsanwalt of Bonn, by himself, * Language of the case: German. I-4919

2 JUDGMENT OF CASE C-83/91 ADV/ORGA AG, by H. Dingler, Rechtsanwalt of Frankfurt am Main, the German Government, by Dr H. Teske, Ministerialrat in the Federal Ministry of Justice, Dr K. F. Deutler, Ministerialrat in the same ministry, and C. D. Quassowski, Regierungsdirektor in the Federal Ministry of the Economy, acting as Agents, the Commission of the European Communities, by H. Etienne, Principal Legal Adviser, and A. Caeiro, Legal Adviser, acting as Agents, having regard to the Report for the Hearing, after hearing the oral observations of W. Meilicke, ADV/ORGA AG, the German Government, represented by Dr J. Ganske, Ministerialrat in the Federal Ministry of Justice, and the Commission at the hearing on 19 February 1992, after hearing the Opinion of the Advocate General at the sitting on 8 April 1992, gives the following Judgment 1 By order of 15 January 1991, received at the Court Registry on 1 March 1991, the Landgericht Hannover (Regional Court, Hanover) referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a number of questions on the interpretation of the Second Council Directive, Directive 77/91/EEC of 13 December 1976 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent (OJ 1977 L 26, p. 1 'the Second Directive') I

3 MEILICKE v ADV/ORGA 2 The questions were raised in proceedings brought by Wienand Meilicke against the company ADV/ORGA AG ('ADV/ORGA'), of which he is a shareholder and whose management refused to disclose certain information to him at the general meeting of shareholders of 16 February The dispute relates to matters governed by the Aktiengesetz, the German Law on public limited companies, as interpreted by the Bundesgerichtshof. 4 It should be observed that, with respect to increases in capital, the Aktiengesetz makes non-cash contributions (hereinafter referred to as 'contributions in kind') subject to more severe conditions as to publication and verification than those applicable to contributions in cash. 5 The German case-law, however, treats certain cash contributions as 'disguised contributions in kind'. That applies in particular to a cash contribution preceded or followed by a transaction whereby the company in question pays to the subscriber a sum which enables it to discharge a debt it owed to the latter. According to the case-law of the Bundesgerichtshof, such a contribution cannot be regarded as a cash contribution and must therefore be subject to the special rules applicable to contributions in kind, pursuant to Paragraph 27 of the Aktiengesetz and Article 10 of the Second Directive. If those rules are not complied with, the disguised contribution in kind does not discharge the debt (see in particular the judgment of the Bundesgerichtshof of 15 January 1990, II ZR 164/88, DB 1990 p. 311; BGHZ 110, p. 47). 6 That case-law has been criticized on a number of occasions by Mr Meilicke, the plaintiff in the main proceedings, in particular in his book Die 'verschleierte' Sacheinlage; eine deutsche Fehlentwicklung (Schärfer Verlag, Stuttgart 1989), a copy of which is annexed to the observations submitted to the Court by Mr Meilicke in accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC. He considers that the case-law in question is contrary I

4 JUDGMENT OF CASE C-83/91 to the Second Directive, in particular Article 11 thereof, which lays down exhaustive provisions for preventing circumvention of the rules concerning contributions in kind. 7 Mr Meilicke holds one share in ADV/ORGA. The company faced financial difficulties and on 28 April 1989 resolved to increase its capital by DM 5 million. The new shares issued for that purpose were issued at 300% of face value and were underwritten by Commerzbank; they ultimately became the property of that bank. s At ADV/ORGA's general meeting of 16 February 1990, Mr Meilicke put several questions to the management concerning the 1989 increase of capital and the use made of the funds thereby raised. His questions were directed essentially to establishing whether the funds had been used to reduce the company's debts to Commerzbank. 9 Mr Meilicke's request was made under the first sentence of Paragraph 131(1) of the Aktiengesetz, which states that the management must provide each shareholder who requests it at a general meeting with information concerning the business of the company to the extent to which such information enables him to express a fully informed opinion on any item on the agenda. Paragraph 131(3) defines the circumstances in which the management may withhold such information from a shareholder. io Mr Meilicke considered that the answers given to the questions asked at the general meeting of 16 February 1990 were unsatisfactory and that as a result he had not obtained the information to which he was entitled under Paragraph 131 of the Aktiengesetz. He therefore commenced proceedings against ADV/ORGA before the Landgericht Hannover under the procedure laid down in Paragraph 132 of the Aktiengesetz. I

5 MEILICKE v ADV/ORGA n Paragraph 132 of the Aktiengesetz lays down a special procedure for shareholders to enforce their right to obtain information. The first sentence of Paragraph 132(1) provides that the question whether the management is required to disclose the requested information is to be settled by the Landgericht (Regional Court) for the district where the company has its registered office. i2 During the written procedure before the Landgericht Hannover, Mr Meilicke contended that the answers to the questions put to ADV/ORGA were necessary in order to verify the correctness of the annual balance sheet. He stated that those answers should enable him to establish whether the increase of the capital of the company in 1989 constituted a disguised contribution in kind and whether the requirements of the German legislation and case-law concerning contributions of that kind had been complied with. i3 In the course of the written procedure before the national court, ADV/ORGA maintained that the information requested by Mr Meilicke was not relevant to consideration of the correctness of the balance sheet and that the conditions for the application of Paragraph 131 of the Aktiengesetz were not satisfied. It also denied that Mr Meilicke had any interest in bringing proceedings, in view of the criticisms which he himself had, in several works written by him, levelled against the German case-law. ADV/ORGA also considered that the conditions for the application of that case-law were not satisfied. 1 4 At the hearing before the national court, the parties commented in particular on the judgment of the Bundesgerichtshof of 15 January 1990, cited above, and the appropriateness of a request for a preliminary ruling. The Landgericht Hannover asked them to make more detailed submissions concerning the latter point. is ADV/ORGA first repeated that the conditions for the application of the case-law of the Bundesgerichtshof concerning disguised contributions in kind were not satisfied and that there were consequently no grounds for referring the matter to the I

6 JUDGMENT OF CASE C-83/91 Court of Justice. It then contended, in the alternative, that if the Landgericht considered that a disguised contribution in kind could be presumed to have been made and that only the amount of that contribution was unknown, it was necessary to verify whether the management had acted illegally. In support of that argument, ADV/ORGA contended that the conduct of the management could not be regarded as unlawful if the German case-law was contrary to the Second Directive. In that context, ADV/ORGA stated, in agreement with Mr Meilicke, that that question of compatibility should be referred to the Court of Justice under Article 177. i6 Mr Meilicke, for his part, claimed that the facts of the case might in fact disclose a disguised contribution in kind, within the meaning of the German case-law, and that the information asked for was necessary to decide the matter. However, he agreed with ADV/ORGA that the question of the compatibility of the German case-law with the Second Directive should be the subject of a request for a preliminary ruling and for that purpose submitted seven draft preliminary questions to the Landgericht Hannover. i7 In its order for reference, the Landgericht expressed the view that the conditions laid down by Paragraph 131 of the Aktiengesetz were satisfied in that, by virtue of the doctrine of disguised contributions in kind, developed in Germany by the courts and academic legal writers, Mr Meilicke's request for information was justified. The Landgericht observed that it was in fact possible that the repayment of the defendant's borrowings, which antedated the increase of capital, by means of cash contributions from the lender might be void as a result of circumvention of the company-law provisions concerning capital contributions in kind. is However, the Landgericht considers that it is not able to give judgment on Mr Meilicke's claim since doubts exist as to whether its object is lawful. If it was found that the doctrine of disguised contributions in kind was incompatible with Community law, in particular the Second Directive, Mr Meilicke's action would be I

7 MEIUCKE v ADV/ORGA otiose. It is apparent from the order for reference that ADV/ORGA shares those doubts and that Mr Meilicke contends that that doctrine is clearly incompatible with Community law and that, by virtue of Community law, his request should be rejected. i9 The Landgericht therefore considers that, in the interests of legal certainty, the following questions should be referred to the Court of Justice for a preliminary ruling under Article 177: '1. Is it compatible with European Community law in principle to apply the rules concerning safeguards in relation to non-cash subscriptions of capital to the extinguishment of a public limited company's liabilities incurred prior to an increase in its capital by the use of cash subscribed by the creditor? In particular: 2. Is the Second Council Directive on the coordination of company law (OJ 1977 L 26, p. 1) directly applicable, in the sense that individuals may rely upon it before national courts and national courts must take into account the wording and aims of the directive in interpreting national implementing laws (in this case the German Law of 13 December 1978 on the implementation of the Second Directive of the Council of the European Communities on the coordination of company law, Bundesgesetzblatt , p. 1959)? 3. Do the provisions of the Second Council Directive, in particular Articles 10, 11 and 27(2) thereof, merely lay down minimum requirements so that Member States are permitted to enact or apply stricter national law designed to prevent the rules in Articles 10 and 27(2) on examination of value and publication from being circumvented by means of business transactions which have a substantive and temporal link with a contribution in cash; I

8 JUDGMENT OF CASE C-83/91 or Does Article 11 of the Directive contain an exhaustive set of provisions for preventing circumvention of the rules in Articles 10 and 27(2) of the directive on noncash consideration and preclude stricter or less strict national law which departs from those provisions; or In addition to Article 11, does it follow from the aims of Articles 10 and 27(2) of the directive that there is an obligation on all the Member States to prevent circumvention of the rules on non-cash consideration? 3.1 If Articles 10, 11 and 27(2) of the directive merely lay down minimum requirements, (a) is there a standstill rule which permits stricter national law only if it already existed when the directive was adopted? If so, (aa) do the scope of the stricter national law which is still permissible and that of the stricter national law which was adopted after the relevant date and is therefore no longer permissible fall to be determined by the national courts or does this question form part of the interpretation of European law for which the Court of Justice is responsible? (bb) if it is for the Court of Justice to determine the scope of the national law which is contrary to the standstill rule as a matter of interpretation of European law, is there an infringement of the standstill rule where the extinguishment of the company's liabilities towards a person subscribing cash for an increase of capital is treated as an unlawful circumvention of the provisions on non-cash consideration? I

9 MEILICKE v ADV/ORGA (cc) if the scope of national law which is contrary to the standstill rule falls to be determined by the national courts, what is the reference date for determining whether or not the stricter national law retained on the basis of the standstill rule may continue to exist (for example, the commencement of consultations concerning the directive, examination by the European Parliament or adoption by the Council of Ministers), and (dd) is the stricter national law permitted by the standstill rule limited to formal legal provisions (Laws, Regulations) or does it extend to case-law and academic opinion as it stands at the reference date referred to in (cc) above? (b)if Articles 10, 11 and 27(2) of the Second Council Directive lay down minimum requirements (with or without a standstill rule), may stricter national law only be laid down by formal national legal rules or, despite the harmonised wording of the national implementing laws, may it also be laid down by way of interpretation or analogy by the national courts? (c)if Articles 10, 11 and 27(2) of the Second Directive lay down minimum requirements, with reference to what category of interested persons must it be determined whether such national rules constitute permissible, stricter law or impermissible, less strict law? Do the interests protected by the minimum requirements include the interest of the company and third parties in legal certainty in relation to legal transactions which take place between the subscriber and the company and which have a substantive and temporal connection with a contribution in cash (in this case, the extinguishment of the subscriber's claim against the company)? 3.2. If Article 11 constitutes an exhaustive set of anti-avoidance rules, does that mean that Member States are not entitled to treat as unlawful and apply civil or criminal sanctions to a contribution in cash increasing a company's capital or a business transaction, on the sole ground that the company, in substantive and temporal connection with the contribution in cash, has extinguished a debt towards the subscriber, without complying with the provisions in Article 10 of the directive I

10 JUDGMENT OF CASE C-83/91 on publication and examination of value? Does that mean, in particular, that Member States are not entitled to demand publication or an examination of value pursuant to Articles 10 and 27(2) of the directive if the transaction (in this case the repayment of debts) is in the normal course of the company's business within the meaning of Article 11(2) of the directive and takes place after expiry of the period laid down by national law pursuant to Article 11(1)? 3.3. If Articles 10, 11 and 27(2) do not lay down minimum requirements which may be supplemented by stricter national law, but equally Article 11 does not constitute an exhaustive set of anti-avoidance rules and it follows from the aims of the directive that all Member States are under a duty to prevent the examination and publication requirements for non-cash consideration from being circumvented by dividing the operation into a contribution in cash and a business transaction, do the legal principles concerning measures taken against such circumvention derive directly and uniformly from European law, in particular from the aims of the directive, or do they derive from the national law of the individual Member State concerned? 4. Does an increase in a company's capital by means of the extinguishment of the subscriber's claim against the company (a) necessarily constitute an increase in capital by contribution in cash? (b)necessarily constitute an increase in capital by a subscription other than in cash within the meaning of Article 27(1) of the Second Directive? (c) or is there a choice as to whether such a subscription should be treated as a cash contribution or a contribution in kind? Is that choice a matter for the general meeting of shareholders under Article 25(1), first sentence, of the Second Directive or for the Member States? (d)or do the Member States have the power to distinguish, at their discretion, between cash consideration for a share issue and consideration other than cash? I

11 MEILICKE v ADV/ORGA 5. With regard to Article 7, first sentence, of the Second Directive: 5.1. Is Article 7, first sentence, of the Second Directive to be interpreted to the effect that a subscription in the form of the relinquishment of a claim against the company where the company is in financial difficulty is wholly or partly impermissible, or does that provision permit subscription at the nominal value regardless of the financial soundness of the company? 5.2. If Article 7, first sentence, of the Second Directive permits subscription in the form of the relinquishment of a claim against the company at the nominal value without any examination of the financial soundness of the company, (a) is the permissibility of a subscription in the form of the relinquishment of a claim a question pertaining to the application of the Community directive, whose interpretation is a matter for the Court of Justice, (b)or does Article 7, first sentence, lay down minimum requirements and allow Member States to apply stricter national law imposing additional requirements concerning the permissibility of such a subscription, (c)or does Article 7, first sentence, deal exhaustively with the question of what constitutes permissible consideration? 5.3. In so far as Article 7, first sentence, of the Second Directive does not deal exhaustively with the permissibility of a subscription in the form of the relinquishment of a claim against the company (5.2 (b) above) but constitutes a provision containing minimum requirements which allows additional requirements to be imposed by stricter national law, the Court of Justice is also asked to consider (a) whether and under what conditions a standstill rule exists and whether the introduction of an examination of financial soundness in cases where the consideration takes the form of the relinquishment of a claim against the company constitutes an infringement of the standstill rule (see question 3.1 (a) (aa) to (dd) above); I

12 JUDGMENT OF CASE C-83/91 (b)whether stricter national law implies an express formal legal provision or whether it may take the form of a stricter interpretation of the implementing law (in this case Paragraph 27(2), first sentence, of the Aktiengesetz); and (c)with reference to what category of interested persons must it be determined whether additional requirements concerning such consideration constitute permissible, stricter law or impermissible, less strict law? 5.4. If Article 7, first sentence, contains exhaustive rules on the permissibility of such consideration (5.2. (c) above), is the "economic assessment" of a claim against the company to be made: (a) from the viewpoint of the company and hence without regard to the financial soundness of the company; or (b)from the viewpoint of the creditor and hence taking account of reductions in value resulting from the company's lack of financial soundness? 6. If Articles 7, 10, 11 and 27(2) of the directive are to be interpreted as establishing a uniform set of Community anti-avoidance rules which prohibit the repayment of the subscriber's claim against the company where there is a substantive and temporal link to a contribution in cash unless the rules in Article 10 on publication and examination of value are complied with, the Court of Justice is asked to consider whether the following constitute unlawful circumvention of the provisions on non-cash consideration: (a) Must the amount of the cash consideration be identical to the repaid debt or does the fact that they are only partly identical give rise to illegality? I

13 MEILICKE v ADV/ORGA (b)must there be a subjective link between the contribution in cash and the business transaction (in this case the extinguishment of the debt) or is it sufficient that there should be a substantive and temporal connection? If a subjective link is necessary, does a temporal connection raise a presumption of a subjective link? How close must the temporal connection be? (c)if only a subjective link constitutes unlawful circumvention, does the subjective link presuppose that there should be an intention to circumvent the provisions on non-cash consideration, or is it sufficient that it be known that the provisions on non-cash consideration could be applied, or is knowledge of the provisions on publication and examination of value unnecessary if it is known that there is a subjective link between the contribution in cash and extinguishment of the debt? Is a subjective link only damaging if one transaction constitutes a condition for the other or is it sufficient that the conclusion of one transaction is a reason for the conclusion of the other? Must such reasons be reciprocal or is it sufficient that for one of the parties one transaction is the reason for the conclusion of the other? (d)is there also unlawful circumvention where a lending institution for the purposes of Paragraph 186(5) of the Aktiengesetz takes the new shares issued as part of a capital increase by contribution in cash subject.to an obligation to offer them for subscription by existing shareholders, and is the lawfulness of the circumvention of the provisions on non-cash consideration affected by whether and to what extent the lending institution subscribing to the issue is itself an existing shareholder and whether at the time of the subscription by the lending institution rapid placement on the capital market does not appear to be a problem or whether the lending institution has guaranteed the placement? (e) Does it affect the lawfulness of the circumvention of the provisions on non-cash consideration that the bank, despite the repayment of its claims out of the cash which it subscribes, leaves its lines of credit open? Does it depend on whether and when those credit lines are later actually used or on whether and when it could be anticipated, at the time of the increase in capital, that the lines of credit would be used? I-4931

14 JUDGMENT OF CASE C-83/91 7. Is it compatible with the power conferred by the first sentence of Article 25(1) of the Second Directive on the general meeting to decide upon increases in capital for a contribution in cash to a capital issue which is decided upon by the general meeting and is in isolation properly paid to be regarded or treated as invalid or unlawful because the directors and the subscriber have agreed, in substantive and temporal connection with the capital increase, upon a normal business transaction (in this case the extinguishment of a loan) which results in the cash subscribed being returned wholly or partly to the subscriber? Does the existence of unlawful circumvention depend on whether the general meeting was aware, at the time when it decided upon the increase in capital, of the existence of such an agreement between the directors and the subscriber or must it have been aware of such an agreement? 8. If it is unlawful to circumvent the rules in Article 10 on examination of value and publication by dividing the operation into a contribution in cash and a normal business transaction, and if Article 7, first sentence, of the Second Directive is to be interpreted to the effect that subscription in the form of the relinquishment of a claim against the company in circumstances in which the company is in financial difficulties is unlawful (5.1. above), does it follow from the fact that such a subscription is not permissible that the extinguishment of the debt by the company experiencing financial difficulties is lawful notwithstanding the substantive and temporal connection with the contribution in cash or is the extinguishment of the debt, since it cannot be regarded as a lawful contribution in kind duly examined in accordance with registration law, all the more unlawful in the absence thereof?' 20 Reference is made to the Report for the Hearing for a fuller account of the relevant Community legislation, the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court. 2i In view of the circumstances in which the Landgericht submitted its questions, it is necessary to rehearse and clarify a number of principles concerning the jurisdiction of the Court under Article 177 of the Treaty. I

15 MEILICKE v ADV/ORGA 22 It has consistently been held (see, in the first place, Case 16/65 Schwarze v Einfuhr-und Vorratsstelle für Getreide und Futtermittel [1965] ECR 877 and, most recently, Case C-147/91 Criminal proceedings against Ferrer Laderer [1992] ECR , paragraph 6) that the procedure provided for by Article 177 is an instrument for cooperation between the Court of Justice and the national courts. 23 It is also settled law (see, in the first place, Case 83/78 Pigs Marketing Board v Redmond [1978] ECR 2347, paragraph 25, and, most recently, Case C-l86/90 Durighello v INPS [1991] ECR , paragraph 8), that, in the context of such cooperation, the national court, which alone has direct knowledge of the facts of the case, is in the best position to assess, having regard to the particular features of the case, whether a preliminary ruling is necessary to enable it to give judgment. 24 Consequently, since the questions submitted by the national court concern the interpretation of a provision of Community law, the Court is, in principle, bound to give a ruling (see Case C-231/89 Gmurzynska-Bscber v Oberfinanzdirektion Köln [1990] ECR , paragraph 20). 25 Nevertheless, in Case 244/80 Foglia v Novello [1981] ECR 3045, paragraph 21, the Court considered that, in order to determine whether it has jurisdiction, it is a matter for the Court of Justice to examine the conditions in which the case has been referred to it by the national court. The spirit of cooperation which must prevail in the preliminary-ruling procedure requires the national court to have regard to the function entrusted to the Court of Justice, which is to assist in the administration of justice in the Member States and not to deliver advisory opinions on general or hypothetical questions {Foglia v Novello, cited above, paragraphs 18 and 20, and Case 149/82 Robarás v Insurance Officer [1983] ECR 171, paragraph 19). 26 The Court has already made it clear that the need to provide an interpretation of Community law which will be of use to the national court makes it essential to define the legal context in which the interpretation requested should be placed I

16 JUDGMENT OF CASE C-S3/91 and that, in that respect, it may be convenient, in certain circumstances, for the facts of the case to be established and for questions of purely national law to be settled at the time the reference is made to the Court, so as to enable the latter to take cognizance of all the features of fact and of law which may be relevant to the interpretation of Community law which it is called upon to give (Joined Cases 36 and 71/80 Irish Creamery Milk Suppliers Association v Ireland [1981] ECR 735, paragraph 6). Without such information, the Court may find it impossible to give a useful interpretation (see Case 52/76 Benedetti v Munari [1977] ECR 163, paragraphs 20, 21 and 22, and Joined Cases 205 to 215/82 Deutsche Milchkontor v Germany [1983] ECR 2633, paragraph 36). 27 In the light of those considerations, it must first be observed that the specific context of the dispute which gave rise to the reference for a preliminary ruling is defined by Paragraphs 131 and 132 of the Aktiengesetz. Those articles concern the right of shareholders to receive information from the management. 28 The questions submitted do not relate directly to that right but essentially raise the problem of the compatibility with the Second Directive of the doctrine of disguised contributions in kind, as embodied in particular in the judgment of the Bundesgerichtshof of 15 January 1990, cited above. The national court considers that an answer to those questions is needed in order to enable it to adjudicate on the request for information made by Mr Meilicke. It states that the request would have to be rejected if it was found that the doctrine of disguised contributions in kind, as set out in the German case-law, was incompatible with the Second Directive. 29 However, it is apparent from the documents before the Court that it has not been established that the conditions for the application of that doctrine have been satisfied in the main proceedings. Both in the proceedings before the national court and in its written observations to the Court of Justice, ADV/ORGA has rejected the view that the German case-law applies to the transactions entered into between it and Commerzbank. The national court's own reference to the issue is inconclusive, in that it states that Commerzbank's contribution may be contrary to the case-law in question. I

17 MEILICKE v ADV/ORGA 30 It follows that the problem of the compatibility of the doctrine of contributions in kind with the Second Directive is a hypothetical one. 3i Moreover, the hypothetical nature of the problem on which the Court is requested to give a ruling is confirmed by the fact that the documents forwarded by the national court do not identify the matters of fact and of law which might make it possible to define the context in which ADV/ORGA's increase of capital took place and to establish the links between the contribution made by Commerzbank and the doctrine of disguised contributions in kind as set out in the German caselaw. The preliminary questions are specifically concerned with the compatibility of that doctrine with the Second Directive and therefore raise numerous problems, the answers to which largely depend on the circumstances in which the capital was increased. 32 The Court is thus being asked to give a ruling on a hypothetical problem, without having before it the matters of fact or law necessary to give a useful answer to the questions submitted to it. 33 Accordingly, the Court would be exceeding the limits of the function entrusted to it if it decided to answer the questions submitted to it. 34 It follows that it is not appropriate to answer the questions submitted by the Landgericht Hannover. Costs 35 The costs incurred by the German Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. I

18 JUDGMENT OF CASE C-83/91 On those grounds, THE COURT, in reply to the questions referred to it by the Landgericht Hannover, by order of 15 January 1991, hereby rules: It is not appropriate to answer the questions submitted by the Landgericht Hannover. Schockweiler Kapteyn Mancini Kakouris Moitinho de Almeida Diez develasco Zuleeg Delivered in open court in Luxembourg on 16 July J.-G. Giraud Registrar F. A. Schockweiler for the President I