THE FACTS
Whereas the facts presented by the applicant may be summarised as
follows:
The applicant is a limited company, registered under English law. It
is represented by Dr. Y., a lawyer practising in London, and acting
under a power-of-attorney dated 28th April, 1967. The applicant's case
is presented as follows:
In 1961 X. & Co. (England) Ltd. sold to Z. & Sohn of Tuttlingen, under
contract No. 3452, five hundred dozen New Zealand pickled sheep pelts
at a price of 7 DM per piece.
There are principally three types of such pelts on the market, namely:
Hellaby, Fielding (which is about 5% heavier and, therefore, more
expensive than Hellaby) and Longburn (which is again approximately 5%
heavier and, therefore, more expensive than Fielding).
It appears that 7 DM per piece corresponded at the material time to
approximately 11s. 9d. per piece in English money, or 141s. per dozen.
In the autumn of 1960 the applicant company delivered the goods, but
these were rejected by Z. on the ground that, allegedly, they were too
light. Consequently, the applicant undertook to deliver heavier goods
at the same price of 7 DM per piece.
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(1) See also Application No. 3806/68, p. 140.
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On .. February, 1961, the applicant company informed Z. that it had
despatched 502 1/2 dozen pelts, Fielding quality. The price, at 7 DM
per piece, should have been calculated at 42,210 DM. In fact, however,
the applicant company sent an invoice for 502 1/2 dozen pickled sheep
pelts at 110s. per dozen, i.e. for a total of £2,763.15s.0d., which
equalled approximately 30,450 DM.
According to the applicant company, this was an obvious mistake. The
figure of 110s per dozen corresponded to about 5.50 DM per piece, and
involved, therefore, a reduction of more than 20% of the agreed
purchase price. The mistake arose because the applicant's clerk, since
deceased, erroneously treated the price at which the applicant company
had bought f.o.b. New Zealand as the sales price.
Z. received the goods and accepted and later paid a bill of exchange
in respect of the purchase price of £2,763.15s.0d.
In April 1961, Z. claimed that some of the pelts were not entirely in
accordance with specifications, and that he was, therefore entitled to
an allowance in respect of 3,762 pieces at 110s. per dozen. He
calculated this allowance at £143.13s.9d. The applicant company
accepted such adjustment.
In about December 1961, the applicant company noticed the mistake which
it had made in its invoice of .. February, 1961, and it claimed the
balance of the purchase price which it said was due to its and amounted
to approximately 10.000 DM.
Since Z. did not pay, proceedings were in 1962 instituted before the
Regional Court (Landgericht) in Rottweil. The action was dismissed with
costs. The Court accepted Z's defence that by delivering an invoice on
.. February, 1961, in the sum of £2,763.15.0d., calculated on the basis
of 110s. per dozen, the applicant company had reduced the agreed price
to a lower price calculated in sterling.
The applicant company appealed to the Court of Appeal
(Oberlandesgericht) Stuttgart. By its judgment of .. October, 1966, the
Court of Appeal dismissed the appeal with costs. It held as follows:
It was wrong to suggest that by sending the invoice of .. February,
1961, the applicant company had reduced the price and agreed to a lower
price at the rate of 110s per dozen instead of 141s. per dozen.
Accordingly, the reasons given by the Regional Court in accordance with
Z's submissions were disapproved and the applicant company was held to
have been entitled, in February 1961, to the balance of the purchase
price.
The Court of Appeal, however, went on to hold that by agreeing to the
adjustment of £143.13s.9d, in April 1961, the applicant company did
agree to a waiver of the balance of the purchase price, and that it
could not avoid this on the ground of the mistake within the meaning
of Article 119 of the German Criminal Code (1). This part of the
judgment, which, for present purposes, is alone material, reads as
follows in the English translation:
"2. Even though, according to the contract of .. October, 1960, a
purchase price of 7 DM per piece was agreed, yet such price was not
left unchanged during the subsequent period. The parties reduced it to
110s. per dozen in the course of dealing with the adjustment claimed
by the defendant.
(a) In an number of letters, finally by letter dated .. April, 1961,
the defendant claimed defects of the Fielding pelts which had been
supplied. In his letter of .. April, 1961, the defendant finally
claimed an adjustment of altogether £143.13s.9d. In this connection,
it is significant that the computation attached to the letter explains
the method whereby such adjustment was calculated. In this computation
the defendant refers to the invoice of .. February, 1961, states that
he had received 3,762 pieces at 110s. per dozen and calculates the
adjustment required of the plaintiff as follows:
Share meat cover 1/3 = sh. 36.8 = 11.495 sh. = £574.15s.0d.
From this 25% adjustment £143.13s.9d.
In this calculation it is made clear that the defendant desires a
reduction of the originally agreed purchase price by £143.13s.9d. This
request implies the offer of a change of the purchase price.
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(1) Article 119, paragraph (1), provides:
"A person who, in making a declaration of intention, erred about its
contents or did not intend to make a declaration of such content may
avoid the declaration if it must be assumed that he would not have made
it had he known the facts and reasonably appreciated the case."
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The plaintiff agrees to such change for, by letter of .. May, 1961, it
stated that it was prepared, in order to bring the matter to a
conclusion, to credit the defendant with the sum of £143.13s.9d.
Thereby, the original agreement of a price of 7 DM per piece was
converted into an agreement for a purchase price of 110s. per dozen.
(b) It is quite true that by letter of Messrs. R. & Co. of ..
November, 1961, the plaintiff informed the defendant that it had
committed an error in pricing the goods, in as much as it had invoiced
a price of 110s. per dozen instead of 7 DM per piece. In favour of the
plaintiff it may be accepted that by this statement it intended to
avoid all such statements as were influenced by the erroneous belief
that the purchase price of 110s. per dozen governed, but such avoidance
is without justification. The plaintiff cannot, in the first place,
avoid the claim to the payment of a purchase price of £2,763.15s.0d.,
which is implied in the invoice of .. February, 1961, for the
submission of the invoice is in the present case in which it has merely
declaratory character no declaration of intention, but only a
communication. The plaintiff also cannot avoid its consent of .. May,
1961. In this case, too, it may be assumed in its favour that, in
expressing such consent, it was influenced by the erroneous belief that
the price of 110s. per dozen was governing, but this does not alter
the fact that by letter of .. May, 1961, it had intended to give, and
had given, its consent to the reduction of the purchase price desired
by the defendant. Erroneous in its mind was only the belief relating
to the governing price, but this would be an error of motive, which,
for the question of the avoidability of a declaration of intent, is,
in principle, irrelevant. In the present case, there exists none of the
exceptions in connection with which established practice has held error
of motive to be relevant.
(c) The defendant does not act inequitably if he adheres to the
reduction of purchase price agreed with the plaintiff. He could take
the view that at the latest when examining the claim to a reduction the
plaintiff considered whether, according to its economic circumstances,
it could consent to a purchase price of 110s. per dozen. The defendant
could take this view particularly because the plaintiff stated in these
proceedings the purchase which it had to pay for Fielding pelts and
comparable goods in May 1961 were around 100s. f.o.b. (see the list of
Messrs. B. & Sons of .. November, 1963, submitted by the plaintiff) and
the purchase price for comparable goods in Germany, as the defendant
proved by submitting offers with its pleading of .. June, 1964, were
below 7 DM per piece.
Accordingly, the appeal had to be dismissed."
The applicant company could not appeal to the Federal Supreme Court,
because under German law no appeals to that Court lie in respect of
amounts below 15,000 DM.
The applicant company, however, did appeal to the Federal
Constitutional Court, and its appeal was disallowed on .. February,
1967. The Federal Constitutional Court held that under Article 103,
paragraph (1), of the Basic Law the courts were obliged to consider the
arguments and applications made by the parties and to base its decision
only on such facts or evidence which the parties had an opportunity to
discuss. However, the Court of Appeal in its reasoning did not
introduce any new facts concerning which the parties should have been
heard, but it gave a legal appreciation of facts which had been known
to the parties. Consequently, there had been no violation of any
constitutional rights.
The applicant company now applies to the European Commission for Human
Rights on the ground that it was not given a fair hearing or, indeed,
any hearing, as required by Article 6, on any of the matters which are
referred to above, and formed the basis of the Court's decision.
Its complaints are stated as follows:
The applicant company, in the first place, alleges that it was not
given any hearing at all on the points on which the judgment in the
Court of Appeal is founded, and which were to the effect that:
(a) by the exchange of letters in April 1961, the purchase price was
reduced not by £143.13s.9d., but by a total or approximately 10,000 DM
or £900;
(b) even if the applicant company were asked to and did agree to a
reduction of the purchase price by approximately 10,000 DM it could not
avoid its declaration under Section 119.
Neither of these points was put in the course of the proceedings. On
neither of these points was the applicant company given any hearing at
all.
Secondly, or alternatively, the applicant company complains that it was
not given a fair hearing on either of the points referred to in the
preceding paragraph or, on any of the points taken by the Court of
Appeal in the extract from the judgment which was quoted above. The
applicant company alleges that the reasoning of the Court of Appeal was
wholly arbitrary and based on arguments which had no foundation
whatever in any of the facts before the Court or in law and which
involved an abus de droit and gross unfairness so as to render such
hearing as did take place altogether unfair.
The applicant company further contends that it was, in this context,
not concerned with the fairness or unfairness of the reasons given or
the results reached by the Court, but with the hearing before it. If
a court wished to take a point which had not been put to, or by, the
parties, it may in certain circumstances be entitled to do so, but if
the point was one which was arbitrary, absurd, unfair and manifestly
wrong in law, and contrary to the facts before the court, then it must
clearly put the point to the parties; otherwise the hearing would
necessarily be unfair. Or, if, as in the present case, the court closed
its mind to the true facts, their true evaluation in law and even to
the plain text of a statutory provision, it failed to give a fair
hearing.
The applicant company alleges in this respect that the Court had no
material whatsoever to infer a waiver of 10,000 DM instead of
£143.13s.9d. from the correspondence in April 1961; that what the Court
said about the price level in New Zealand and Germany in April 1961 was
wholly irrelevant and showed complete ignorance of the significance of
a price quoted f.o.b. New Zealand as explained by the record; that in
April 1961 the applicant company could not have had the intention of
waiving 10,000 DM due to it; that if it had expressed any such
intention, this was plainly due to a mistake; and that, above all, such
mistake rendered the waiver voidable under Article 119, because the
applicant company never intended to make any such declaration as the
Court imputed to it, or, in other words, because the second possibility
envisaged by Article 119 (1) applied, so that no question of error
about the contents of the declaration, such as the first alternative
of Article 119 (1) envisages, and of error of motive arose. It was not
denied that, by claiming the balance due to it, in December 1961, the
applicant company in fact purported to avoid all previous declarations.
The applicant company also states that it could not be argued that,
having been granted some hearing on some issues arising in the case,
it was precluded from complaining that it was not granted a hearing on
other issues. Such a construction would do violence to the wording and
the intentions of Article 6. Everyone was entitled to a fair hearing
in respect "of his civil rights". This meant that the hearing had to
be wholly (not only partially) fair in respect of the whole (as opposed
to only part) of the case. In the present case, the applicant company
alleges that it was denied that right, because the Court took certain
points on which the applicant company was not heard at all, and which
decisively affected its civil rights. The applicant company refers to
the Harward Draft Convention on the International Responsibility of
States for Injuries to Aliens (American Journal of International Law,
1961, 548) which provides in Article 7 (k) that in determining the
fairness of any hearing it is relevant to consider whether the alien
was denied "any other procedural right ... recognised by the principal
legal systems of the world". According to the applicant company there
can be no doubt that it is a well-recognised general principle of law
that a party to a case must be heard on any point which the Court of
its own motion decides to make the basis of its decision. That fairness
which Article 6 contemplates clearly so requires.
The applicant company further refers to a recent decision taken by an
English court under English law to the effect that, if arbitrators, in
making an award, rely upon a point of law or fact which has not been
put to or by the parties, then this constitutes a denial of fair
hearing with the result that the award is founded on the arbitrators'
"misconduct", and is liable to be set aside.
The applicant company finally states that it may not be necessary or
relevant to establish that the unfairness of the hearing produced an
unfair and legally untenable result. But, as it was claiming damages
estimated at 17,500 DM, it wished to point out that, had it been given
a fair hearing, a decision adverse to it could not possibly have been
reached. The principal reasons were the same as those put forward above
with a view to showing that the decision reached and the reasons given
by the Court were so unfair as to render the hearing itself unfair.
THE LAW
Whereas the applicant company complains that its rights under Article
6, paragraph (1) (Art. 6-1), of the Convention were violated by the
fact that the Court of Appeal at Stuttgart had, in accordance with the
established practice of the German Courts, based its decision of ..
October, 1966, on points of law without having given the parties an
opportunity to make submissions on these points at the hearing;
Whereas Article 6, paragraph (1) (Art. 6-1), of the Convention provides
that "in the determination of his civil rights and obligations ...
everyone is entitled to a fair and public hearing within a reasonable
time by an independent and impartial tribunal established by law";
Whereas the applicant company does not allege that the said decision
of the Stuttgart Court of Appeal was based on facts which had not been
put to, or by, the parties; whereas the only issue involved here is
whether or not, under Article 5, paragraph (4) (Art. 5-4) of the
Convention, the courts are obliged to put to the parties such points
of law which appear to them to be significant for the reaching of their
decision;
Whereas the Commission observes that it is a generally recognised
principle of law that it is for the court to know the law ("Jura novit
curia"); whereas the Commission further observes that the practice in
the legal systems of the High Contracting Parties varies in this
respect; whereas in certain systems the concept of "fair hearing" is
interpreted in the sense that courts are required to invite the parties
to make submissions on those points of law which appear to the courts
to be significant; whereas, however, other legal systems do not make
any such requirement; whereas, consequently, there is no generally
accepted practice in this respect within the systems of the High
Contracting Parties;
Whereas the Commission finds that, when interpreting the concept of
"fair hearing" under Article 6, paragraph (1) (Art. 6-1), of the
Convention, allowance must be made as regards the existence of such
different legal systems; whereas the Commission finds that the
established practice of the German courts whereby the parties are not
necessarily invited to make oral submissions on all points of law which
may appear significant to the courts does not constitute an
infringement of the principle of "fair hearing" within the meaning of
this provision;
Whereas the finding does not, of course, affect the imposition under
the legal systems of any High Contracting Party of more stringent
requirements in this respect;
Whereas, consequently, an examination of the case, as it has been
submitted does not disclose any appearance of a violation of the rights
and freedoms set forth in the Convention and, in particular, in Article
6 (Art. 6); whereas it follows that the application is manifestly
ill-founded within the meaning of Article 27, paragraph 2 (Art. 27-2),
of the Convention;
Now therefore the Commission declares this application inadmissible.