ANZCN 2018 Conference

The Electronic Future is NOW!Presenter: John Pearce FSNV, FANZCNPresident, Society of Notaries of VictoriaGovernor for Victoria, ANZCN

“In civilized life, law floats in a sea of ethics.”Earl Warren, Former Chief Justice, United States Supreme Court

Life, Law & Ethics

• Personal ethics versus Professional ethics •Office of Notary• Professional conduct and practice rules• Australian and NZ Notaries are not ministerial officers• Liability of Notaries• Common ethical dilemmas• Real life ethics scenarios

Topics covered today

• personal values/moral qualities vs rules imposed on a member of profession

• formed by family/culture since childhood vs learnt when joining a profession and non-negotiable

e.g. honesty, care, sincerity vs truthfulness, diligence, competence, disclosure

• breach may harm/hurt others vs breach may harm professional reputation

• a member who repudiates the ethical code in effect repudiates members of the profession

• adherence satisfies personal needs vs adherence satisfies professional obligations Note: A professional environment may demand some personal ethics

A professional does not have a choice – strict adherence to professional ethics

Personal Ethics vs Professional Ethics

“The first and perhaps the most important thing to be said about ethics is that they cannot be reduced to rules……….If ethics were reduced merely to rules, a spiritless compliance would soon be replaced by skilful evasion.”

Former High Court Chief Justice Sir Gerard Brennan AC (3rd May 1992) – address to Queensland Bar Association.

The nature of legal ethics

Just as in a WorkCover context, “If it can’t be done safely, then it can’t be done”

So too for a lawyer,“If it can’t be done ethically, then it can’t be done” Justice Chris Maxwell, President of Victorian Court of Appeal, to the Ethics Liaison Group, Law Institute of Victoria

Lawyers need to have a hardwired “ethical awareness” Judge Christopher Craigie SC, NSW District Court Judge, former Commonwealth DPP

The nature of lawyers’ ethics cont’d

Your ethical compass

The key to surviving the waterfall

“…the Office of a Notary…is an honourable Employment, and an Office of Dignity: And therefore… it is just and fit that it should be conferred on a man of worth and dignity… And as the Office of a Notary is a public office respecting the Advantage of the State, he ought to have a house of his own, where he may be found and applied to, and not wander up and down without a fixed habitation….and it matters not whether they are their own…or whether they rent or hire them of others. And these Houses they ought not to have in…secret places, but in public, near the Streets.”

John Ayliffe LLD   (1726).  A Commentary, by Way of Supplement to the Canons and Constitutions of the Church of England.

The Office of Notary – England (1726)

• both a symbolic and practical expression of the role of a Notary

• “I will truly and honestly conduct myself in the practice of a public notary in Victoria according to the best of my knowledge, skill and ability.”

• less traditional than most Australian States

The Oath of Office (Victoria)

• a professional – adherence to principles of integrity, technical competence and ethical conduct, not mere window dressing, lip service

• the Notary holds a privileged position in promoting the general welfare in a complex society, but this brings responsibilities

• the holder of a unique public office of trust and fidelity

• in Australia, first and foremost a lawyer, subject to the Australian Solicitors’ Conduct Rules 2015 (“ASCRs”) plus common law e.g. can act for family and close relatives

• also bound by an additional, partially overlapping as well as partially discrete code of ethical conduct - subject to the Professional Conduct and Practice Rules adopted by the Council of The Society of Notaries of Victoria plus well established rules which commenced at the time of Emperor Justinian e.g. cannot act for family or close relatives (independence and impartiality)

The Office of Notary – Victoria

Rule 1 Purpose Rule 2 DefinitionsRule 3 General PrinciplesRule 4 Obtaining instructionsRule 5 Conflicts of interestRule 6 Duty to act impartiallyRule 7 Employed notaries

Professional Conduct and Practice Rules for Victorian Notaries Adopted by the Council of The Society of Notaries of Victoria Inc.on 1 April 2008

Rule 8 Publicity and advertisingRule 9 Introduction and referralsRule 10 Professional feesRule 11 Duty to keep recordsRule 12 Inspection of recordsRule 13 Notaries ceasing to practiceRule 14 Seal of officeRule 15 Personal particulars

Professional Conduct and Practice Rules for Victorian Notaries cont’d

PCPR for Notaries Rule 4: A notary must not:(a) directly or indirectly obtain instructions for notarial services…or(b) do anything in the course of acting as a Notaryin a manner which is likely to compromise or impair any of the following:(i) the notary’s independence or integrity;(ii) a person’s freedom to instruct a Notary of the person’s choice; (iii) the notary’s ability to act in the best interest of the client;(iv) the good repute of the notary;(v) the notary’s proper standard of services; or(vi) the notary’s duty of care to persons in all jurisdictions who may place

legitimate reliance on the notary’s acts.

Obtaining instructions

PCPR for Notaries Rule 4 cont’d: • at the heart of the Office of Notary

“If you have integrity, nothing else matters. If you don’t have integrity, nothing else matters.”

Alan K Simpson, Former United States Senator from Wyoming(see footnote in Prof. Peter Zablud’s Principles of Notarial Practice, 2nd Ed., p. 180)

Integrity

PCPR for Notaries Rule 6: Impartiality – a state of mind or attitudeIndependence – re relationship to othersFor example: Notary must not intervene where

• the Notary has a personal interest• domestic partner has a personal interest• close relative by blood or marriage has a personal interest• professional partner has a personal interest• the Donor/Principal of a Power of Attorney has a personal interest and the

Notary is the Attorney• a Trust is involved and the Notary is the Trustee• A Deceased Estate is involved and the Notary is the Deceased’s LPR

Independence and impartiality

• Australian Notaries are legal practitioners

• Hence bound by client confidentiality

• Curiously, there is no express rule in the Professional Conduct and Practice Rules for Victorian Notaries

• Applicable rule for legal practitioners is Rule 9 ASCRs

Confidentiality

Rule 9 ASCRs: A solicitor must not disclose any information which is confidential to a client and acquired by the solicitor during the client’s engagement to any person who is not:

9.1......9.2 A solicitor may disclose information which is confidential to a client if:• Client authorises disclosure• Solicitor is permitted or compelled by law to disclose• Solicitor needs legal or ethical advice• Solicitor wants to avoid probable commission of a serious criminal offence• Solicitor wants to prevent imminent, serious physical harm to client or another

person• Solicitor needs to disclose to their insurer

Duty of Confidentiality

PCPR for Notaries Rule 8:

A notary may advertise his or her notarial practice

and may seek to directly or indirectly obtain clients and business

in any manner and through any informative or promotional medium which the notary thinks fit,

save for unsolicited telephone calls or unsolicited visits to persons or organisations,

as long as clients remain free to instruct notaries of their own choice. 

Advertising your notarial services

Rule 36 ASCRs: A solicitor…. must ensure that any advertising, marketing, or promotion in connection with the solicitor…. is not:  

a) false b) misleading or deceptive, or likely to mislead or deceive

e.g. no false or misleading statementspurporting to be testimonials

c) offensive ord) prohibited by lawe) does not use the word accredited specialist or a derivative of those words

Advertising your notarial services cont’d

It is recommended that advertising:

(a) Should not identify a client or past client of the solicitor if that would breach the duty of confidentiality;

(b) Should not be disparaging of any other legal practitioner, class of legal practitioners or of the legal profession in general;

(c) Should not compare the practice, standards or skills of the legal practitioner with those of any other named or identifiable legal practitioner;

(d) Should not diminish public confidence in the legal profession or in the administration of justice or otherwise bring the legal profession into disrepute.

Advertising GuidelinesAdopted by the Council of the Law Institute of Victoria on 17 April 2014

What do you think of these marketing statements?

“Available 24/7”

“ Italian documents a specialty”

“Our Mr Smith is an expert notary”

“We are a leading notarial practice”

“All Countries, All Languages”

Examples

PCPR for Notaries Rule 10: • A notary may charge fees for all notarial services provided

• Previously, societies of notaries in common law jurisdictions had prescribed or recommended scales of fees for members to follow

• but now there is a free market economy

• no fixed or recommended fees - restrictive of competition and its participants a price fixing cartel: Australian Securities & Investments Commission

• The Council of the Victorian Society of Notaries from time to time publishes a scale of fees “by way of benchmark information for members and the public”

• The scale is accompanied by the statement: “All notaries are free to set their own fees. The Society has no control over fees charged”.

Professional fees

Suggested guidance in determining an appropriate fee:

• Notary provides a public service, so remuneration not primary

• Fee should not be such as to deprive the potential client of notarial services (discounts where applicable)

• Relevant factors are:➢ time ➢ skill and attention required➢ amount of documentation produced, ➢ value of transaction: high value commercial versus individual/private

Professional fees cont’d

1. The civil law notariat➢ here the notariat is at its most influential

2. The common law notariat➢ here the status, power and function of the civil

law notariat is not replicated

➢ limited to authenticating personal and commercial documents for production and use abroad

3. Notaries in the United States of America

The Three Notariats

• ministerial officers with minimal power to exercise independent judgment.• A ministerial act is commonly one that

➢ is simple, absolute and definite➢ requires merely execution of specific duty vs judicial/discretionary act

• Fundamental powers are to take acknowledgements, administer oaths/affirmations and to do other acts primarily for domestic purposes.

• Plus in most States the powers to certify copies and witness signatures.

• Generally, not lawyers and commission is usually for a fixed term.

• Problems with acceptance of American notarisations because of:➢ no legal training➢ office is ministerial in nature➢ range of powers is limited➢ not meeting expectations of courts, lawyers, public officials, bankers etc abroad.

United States Notaries are Ministerial officers

• unlike Notaries in the United States of America

• not “value-neutral” technicians

• do not merely affix signature/ seal on documents for overseas

• Australian Notaries perform acts which are discretionary

• exercise personal deliberation and judgment

• entails examining the facts, reaching reasoned conclusions and acting on them in a way not specifically directed

Australian Notaries are not Ministerial officers

• Notary is the holder of an important public office

• Arguably, Notary should report to his/her Society of Notaries

• If necessary, Society should refer to the proper authority (in Victoria, the Supreme Court of Victoria, not Legal Services Commissioner)

• But note Rule 32 ASCRs:

“A solicitor must not make an allegation against another Australian legal practitioner of unsatisfactory professional conduct or professional misconduct unless the allegation is made bona fide and the solicitor believes on reasonable grounds that the available material by which the allegation could be supported provides a proper basis for it.”

Reporting misconduct & unsatisfactory practices

General Rule in Australia (English tradition)• A Notary cannot pick and choose clients - non-discretionary• “A Notary is…a publick servant; [and] serves in a publick Manner and

Capacity.” John Ayliffe 1736 (see P Zablud, Principles of Notarial Practice, 2nd Ed, p. 186. • But a Notary is:

➢ not a mere ministerial officer Richard Brooke (see P Zablud, Principles of Notarial Practice, 2nd Ed, p. 186.

➢ not obliged to provide services in all circumstances without regard to nature and quality of documents presented or the particular transaction.

Exceptions violence and fraud breach of a country’s law e.g. money laundering, financing terrorism breach of economic and trade sanctions

arguably, conscience psuedo-legal documents

Saying “no”

• Can Notaries decline to intervene if to do so would violate personal, ethical/moral or religious beliefs?

• e.g. Surrogacy agreements

• Arguably, yes, but need to provide reason(s).

• Arguably, do not have to nominate other Notaries who might do so.

Matters of Conscience

• a longstanding general rule against this

• Notary only advises in relation to nature and terms of a Notarial Act and its authentication

• but must ensure that the document is filled in and that no exhibits / annexures are missing

• client should seek transactional advice from notarial client’s lawyers (Australian or foreign)

Giving legal / transactional advice

• Australian notarial practice has risks but relatively low: Prof. P. Zablud, Principles of Notarial Practice (2nd Ed), p. 193 e.g. Forgery, ID fraud

• Prior to Hedley Byrne : Hedley Byrne & Co. Ltd v Heller & Partners Ltd [1963] 2 All. E.R. 575:

Liability of professionals to others governed by notion of privity of contract

• Hedley Byrne changed the ground rules : Hedley Byrne & Co. Ltd v Heller & Partners Ltd [1963] 2 All. E.R. 575

Professional liability no longer a matter only of contractTort of negligence a concurrent basis for claims against professionals

Liability of Notaries in Contract and Tort

• Notary owed claimant a duty of care

e.g. duty to establish identity, record date, not leave blank spaces

• Notary breached the requisite standard of care

• Claimant suffered loss caused by Notary’s breach

• Loss reasonably foreseeable and sufficiently proximate

Elements of Cause of Action in Tort

Bolam Principle Bolam v Friern Hospital Management Committee (1956) 1 WLR 582:

“…a doctor is not negligent if he acts in accordance with the practice accepted at the time as proper by a responsible body of medical opinion even though other doctors adopt a different practice.

In short, the law imposes the duty of care, but the standard of care is a matter of medical judgement.”

Common Law Standard of Care and Skill

Bolam Principle rejected: Rogers v Whitaker [1992] HCA 58:

“…it is for the court to adjudicate on what is the appropriate standard of care.”

Rosenberg v Percival [2001] HCA 18 per Gleeson CJ:

“…in an action brought by a patient, the responsibility for deciding the content of the doctor’s duty of care rests with the court, not with his or her professional colleagues.”

Common Law Standard of Care and Skill cont’d

see sections 57 – 60 Wrongs Act 1958 (Vic) - Bolam style statutory test

“A professional is not negligent in providing a professional service if it is established that the professional acted in a manner that (at the time the service was provided) was widely accepted in Australia by a significant number of practitioners in the field…

However, peer professional opinion cannot be relied upon for the purposes of this section if the court determines that the peer professional opinion is unreasonable.”

Victorian Statutory Standard of Care

Brakoulias v Karunaharan [2012] VSC 272 (20 June 2012) per Macaulay J

• Plaintiff must meet the Rogers v Whitaker test, namely, have the court decide that the requisite standard of care was breached

• If so, Defendant is to be found negligent …

• Unless the Defendant establishes that he or she acted in a manner that accorded with peer professional opinion as set out in s 59, provided it is not unreasonable.

Rule in Rogers v Whitaker remains relevant

Letter to The Society of Notaries of Victoria

“…Lawyers who provide notarial services as part of their legal practice are… covered under the Committee’s policy, subject always to the policy terms, limits and exclusions.”

4 October 2017

Legal Practitioners’ Liability Committee (Vic)

Commonethical

dilemmas

1. “Witnessing” when signatory has not signed in your presence

“Can I just sign again on a bit of paper and you can check my signature?”

2. Witnessing only one of several signatories “Do we all need to sign

them in your presence or can I bring them to you pre signed?”

3. Notarisation when witnesses still have to sign after appointment “You just notarise my signature. I’ll get my friends to witness it later.”

4. Witnessing and Skype “My wife is pregnant and unwell at home. Can she

sign the document while you watch her on Skype, then I’ll bring the document

to you to witness her?”

Common ethical dilemmas

5. Certifying a copy without sighting the original “You know my wife. I forgot to bring her licence. But here’s a copy of it. Would you notarise it? She needs it for her teacher registration.”

6. Certifying a copy of a document when the original is electronic “I need you to notarise my payslips. But they have been downloaded from my work login which is not accessible on my iPhone. I can show you on my laptop the deposits from my employer into my net banking account.”

7. Certifying a copy of family member’s/relative’s original doc “Hi darling, I’m too busy to go to a JP. Can you certify a copy of my passport?”

Common ethical dilemmas cont’d

8. What due diligence is appropriate when notarising an original document? 9. Can I not date a document because of client’s request?

10. Should I amend an incorrect date?

11. I know this person (e.g. a fellow Solicitor) – should I require utterance of the appropriate words for statutory declarations / affidavits.

12. There are other clients waiting. Do I have to explain about possible need for an Apostille etc?

13. Have I done all that is required to notarise an Indian Power of Attorney?

Common ethical dilemmas cont’d

14. Incomplete documents

15. Not providing a Notarial Certificate (where applicable)

16. Costing issues

17. Foreign language documents not sufficiently understood by client

18. Companies signing documents

19. Non sensical documents / sovereign citizens / Freemen of the Land

20. Legal Capacity

21. Advertising

Common ethical dilemmas cont’d

Searching for guidance

It all seems so easy until you actually get involved - real life ethics scenarios

• A young woman attends your office with her elderly mother.

• The mother is from Romania and speaks little English.

• The daughter does much of the talking – she often speaks over the top of her mother.

• She asks you to witness the signing of a Power of Attorney which is in English and for use in Romania.

• You notice that the mother seems nervous.

What would you do?

Scenario 1

• You prepare a Notarial Certificate as to copy documents.

• The client gets it stamped with an Authentication stamp as well as a consulate stamp.

• The client comes back and requests that one of the pages attached to the Notarial Certificate be removed.

• With the way the document has been bound and stamped, you could do what the client wants without it being evident that the Notarial Certificate has been rebound.

Would you do what the client has requested?

Scenario 2

• You are asked to witness multiple documents relating to a Malaysian Sale and Purchase Agreement.

• The client has been told to tell you not to date certain documents.

Would you comply with the request?

Scenario 3

• A person rings you and says that her mother needs to sign a Life Certificate so that her pension can continue to be paid.

• The daughter says that her mother is too frail to attend your office.

• She pleads with you to agree to witness the mother via Skype.

Would you do it?

Scenario 4

• A journalist from the Australian Broadcasting Corporation phones you.

• He tells you that he is in possession of a copy of a sports contract signed a year ago and purportedly witnessed by you as a Notary.

• The journalist askes to meet with you.

What would you do?

Scenario 5

• You receive a call from Sam who works for a bank in the United States.

• Sam says that Fred has provided him with documents purportedly notarised by you.

• Sam asks whether Fred recently attended your office.

What would you say to Sam?

Scenario 6

• A couple ring to make an appointment for both to sign a Power of Attorney.

• You tell them to bring along a photo ID.

• When they attend, one has his passport but the other does not have a photo ID.

• You tell them you cannot proceed.

• The male becomes loud and aggressive and says his wife will send a scan of the wife’s photo ID later on.

What would you do?

Scenario 7

• In 2015 a Solicitor and Notary Public (Mr Chia) was asked by a client (Mr Li) to notarise a Power of Attorney granted by a company (New Eastern) to Mr Li.

• POA authorised Mr Li to act on behalf of New Eastern, including the power to sign contracts and decide legal proceedings.

• POA had already been signed by a director of New Eastern (Mr Loy).

• Mr Li told Mr Chia that two other people had witnessed Mr Loy sign the POA.

• So Mr Chia added his signature, affixed his notarial seal and prepared a Notarial Certificate stating he had witnessed Mr Loy sign.

Scenario 8 Published 2nd August 2015 in Singapore’s, “The Straits Times”

• In 2016 Mr Li used POA to enter into a contract without New Eastern’s knowledge or consent.

• A director of New Eastern lodged a complaint against Mr Chia.

• Mr Chia went before a disciplinary tribunal and admitted to “grossly improper conduct.”

• The tribunal referred the matter to the Court of Three Judges which can suspend or disbar lawyers.

Scenario 8 cont’d

Held:

• 15 month suspension for “dishonest” conduct.

• Mr Chia had asserted a fact that he knew was untrue – he knew that others might rely on his statements in treating the document as genuine.

• Noted: Mr Chia’s genuine remorse; first instance of misconduct in several decades of practice.

Scenario 8 cont’d

Sundaresh Menon CJ:

• Lawyers who falsely certify that they have witnessed the signing of a document, when in fact they have not, will be “visited with severe consequences.”

• “Solicitors should ensure that they do not yield to the temptation to lower their guard just because they imaging no harm will ensue.”

• A Notary Public plays an important role in assuring the authenticity of documents and the identities of signatories. “The failure to properly discharge such a role compromises public confidence in notaries public and inevitably the legal profession as a whole.”

Scenario 8 cont’d

• I am pleased to say that being ethical is good for your health.

• The Australian National University has recently completed a study looking into the perceptions of first year lawyers about the culture of their new workplaces.

• An ethical climate permeates so much of the everyday practice of law

• That ethical climate in not just about professional conduct rules.

• Rather, it is about everyday decision-making and beliefs which cascade across the workplace

Ethics is good for your health

Ethics is good forYour health Your PC Your law practice The NotariatThe Legal Profession

As a Notary, you are the incumbent of an office of great antiquity enjoying universal respect.

You should never do, or fail to do, anything in the conduct of your notarial practice that would injure the reputation of the office of Notary.

Final Appeal

• Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015https://www.legislation.nsw.gov.au/regulations/2015-244.pdf

• Lawyers Professional Responsibility, 6th edition, G E Dal Pont, Thomson Reuters

• Handy Hints on Legal Practice, 4th edition, G Lewis, E Kyrou, N Dias, Thomson Reuters

• ethics4lawyers website: www.ethics4lawyers.com.au

Some useful resources on legal ethics

Being ethical is a no brainer.

THE END

John PearceBSc(Hons), BTh, DipEd, GDipAppSc,

LLB, GDipLegalPrac, GDipNotarial Prac+61 3 8648 6541

john@ethics4lawyers.comThis presentation has been prepared and delivered

for educational purposes only and is not legal advice.Copyright © 2018 ethics4lawyers Pty Ltd. All rights reserved.