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.