"OFFICIAL
AUTHORITY" : LAW VS. MYTH
AN
ARTICLE BY
MARK KOBER-SMITH
What
is “official authority”
?
The
EU Treaties have as one of their key freedoms the freedom
of movement of services. This right is a fundamental one,
and any exception to it, even if spelled out in the Treaty,
has to be interpreted very strictly. This means that the
Court should always try to uphold free movement, and that
even if it
is
restricted, that restriction must go no further than is
necessary.
The exemptions with regard to official authority are
contained in article 39(4) and article 45 of the Treaty.
Both articles exempt from the free movement provisions
those activities which are connected, directly and
specifically, with the exercise of “official
authority”.
Article 39(4) is in fact only relevant to jobs in public
administration, and thus is not applicable to notaries or
private firms at all.
Article 45 does relate to private individuals and firms.
The question has always been – does the individual or
firm actually exercise official authority or not, or are
they connected with its exercise?
“Official authority” is not defined in the
Treaty, so a large number of cases have arisen and gone to
the European Court of Justice (“the ECJ”)
because Member States have claimed the exemption and used
it to deny access by foreign firms or individuals to work
on the basis that the freedom of movement guaranteed by the
EU Treaty is not applicable, due to the exemption granted
by Article 45.
What
have we learned from the case-law of the
ECJ?
A
landmark case was that of
Reyners
[2/74
Judgment of 21/06/1974, Reyners / Belgian State
(Rec.1974,p.631) (GR1974/00317 P 1974/00325 ES1974/00293
SVII/00309 FIII/00311)],
which involved a lawyer trying to practise in Belgium, and
which held that “the possible application of the
restrictions on freedom of establishment provided for by
the first paragraph of Article 55 [note – this was
the former number of what is now Article 45] must therefore
be considered separately in connexion with each Member
State having regard to the national provisions applicable
to the organization and the practice of this
profession”.
[For the full text of the judgment in the
Reyners
case, click
HERE
]
In that case, a Dutch lawyer was trying to practise in
Belgium and was refused permission on the grounds that (a)
he was not Belgian and that (b) Belgian advocates exercised
official authority.
Since similar nationality restrictions applied in other EU
states, those states joined in the proceedings in
Reyners.
The ECJ noted that it had to consider not only each
profession separately, i.e. each country one by one, but
also it had to consider each activity carried out by each
profession.
This exception is because Article 45 relates to
activities,
not whole professions. Even if one activity is indeed
connected with official authority, this is
not
enough to exempt the entire profession, unless that
activity is so closely tied to all the other activities of
the profession that it cannot be separated.
The ECJ specifically found in
Reyners
that many of the activities claimed as exempt could not
possibly be said to exhibit a connection with official
authority. One such activity was legal advice and
consultation (a central activity for many notaries).
Reyners
is a key case because it also made clear that it is not up
to individual states to decide what is official authority.
Otherwise, each state could simply specify that all of its
citizens exercised official authority.
The ECJ said in
Reyners:
“This consideration must however take into account
the community character of the limits imposed by Article 55
on the exceptions permitted to the principle of freedom of
establishment in order to avoid the effectiveness of the
Treaty being defeated by unilateral provisions of other
states” [paragraph 50]
What
about other “official authority” cases
?
These cases include teachers in Greece [Commission v.
Greece Case 147/86], security staff in Spain [Commission v.
Spain Case C-114/97], internal auditors [Thijssen Case
C-42/92] programming and computer systems for public
administration [Commission v. Italy Case C-3/88],
experts’ reports on traffic accidents [Commission v.
Greece Case C-306/89] and public lotteries [Commission v.
Italy C-272/91]
The Article 45 defence failed on each occasion. It almost
never wins.
So why do notaries claim an exemption that is almost never
granted?
Notaries are very shy about revealing their arguments,
preferring boldly to claim exemption rather than submit any
alleged proof. What we have are hints and guesses at their
position. Again, we suggest that this shyness at open
argument exists for a very good reason, i.e. there are no
convincing arguments in favour of any exemption.
Notaries fluctuate between claiming they are exempt because
they alone are highly qualified (which is absurd, since so
are other lawyers, and exams can be set if needed), and
claiming that somehow they actually exercise authority in
the case of agreements for the payment of money which are
signed in front of them.
Their argument goes like this. If A lends B money and they
sign their contract in front of a notary, then if B fails
to pay, A can get a copy of the contract from the notary
and send a bailiff to take B’s goods without having
to go to court.
This allegedly shows that notaries are like judges, who
exercise official authority, and so notaries exercise such
authority and are exempt under Article 45.
What is wrong with notaries’ arguments
?
1. The
ECJ in
Reyners said
that the exclusion only applied to
activities, not
whole professions. Even if this debt activity was an
example of official authority, it would not shield notaries
from free movement, since it forms only a very small part
of the activity of notaries and simply does not apply in
some EU Member States at all.
2. The debt example is entirely different from going to a
judge, since a judge can impose his or her decision,
irrespective of what either party to the matter wants. In
the case of the debt, both parties have agreed in advance
exactly what will happen if the debtor does not pay. The
authority of the judge is
official
authority, since it is independent of the will of the
parties. The notary is simply carrying out the will of the
parties, an entirely different thing.
3. Many notary activities involve legal advice and
consultation and notaries are keen to make clear that they
can do every legal task. It has already been ruled that
such work is not covered by Article 45.
4. The notarial profession in Continental Europe was
largely modelled on the French notarial system. The highest
French court has stated on two separate occasions that
notaries do NOT possess official authority.
5. The idea of “official authority” is a
concept borrowed from French administrative law. That
concept holds that official authority is something
exercised by public bodies for the general interests of the
state or administrative unit (town, village) etc. It is not
a concept applicable to the purely private acts of
individuals.
6. I suggest that, whatever arguments are put forward by
other notarial professions, the French notarial profession,
at least, has lost this argument. Their own courts do not
accept their argument about official authority, so why
should anyone else?
7. Notaries’ arguments depend on vagueness,
imprecision and the incorrect assumption that every
notarial profession is the same, and so entitled to the
same exemption. As
Reyners showed,
each notarial profession needs to justify each exemption of
each activity, which they have failed to do.
8. Even if notaries did exercise official authority, there
is no reason why non-nationals should not practise as
notaries. All that is needed is to set exams.
The
French cases
The notarial profession in its modern form has been
strongly influenced by France, which exported its Civil
Code to many other countries in Napoleonic times. Although,
unlike other EU notaries, I do not think all notaries are
all exactly the same, it is instructive to look at what
French writers on contract and notaries have written.
Indeed, as I argue throughout, every notarial profession
has to be looked at separately.
The
Cour de Cassation
The Cour de Cassation is the highest and most authoritative
court in France. On 22nd June 1999 it gave its judgement on
the interpretation of the words “un dépositaire ou
agent de l’autorité publique” [a holder or
agent of public authority] in the French law on libel of
1881-07-29 article 31. (Nº de pouvoir : 98-83514)
The case concerned a notary, and whether he was or was not
a person covered by the above definition. The court decided
that notaries were not covered by the definition and upheld
the ruling of the previous court “dès lors
qu’un notaire, qui n’est pas investi de
prérogatives de puissance publique, n’a pas la
qualité d’agent de l’autorité publique”
[“since a notary, who is not someone invested with
the prerogatives of official authority, does not have the
status of an agent of public authority”]
Please note that “puissance publique” and
“autorité publique”, the meaning of which was
decided above in respect of French notaries by a French
court, are exactly the qualities claimed by notaries to
exempt them from the application of the Treaty.
This
ruling is a recent one but confirms an earlier ruling in
France which went further, when the Cour de Cassation
stated: - « les officiers ministériels : les notaires
ne peuvent être considérés ni comme des fonctionnaires
publics, ni comme des dépositaires ou agents de l'autorité
publique, ni comme des citoyens chargés d'un service public
; ils n'exercent leur ministère que dans les intérêts
privés » (Crim., 5 janv. 1935, D.H., 1935, p. 165).
[Translation
– “Notaries cannot be considered as civil
servants, nor as people who have official authority or act
as agents of official authority, nor as citizens charged
with a public service, they only do their work for private
interests”.]
I suggest that, whatever arguments are put forward by other
notarial professions, the French notarial profession, at
least, has lost this argument. Their own courts do not
accept their argument about “official
authority”, so why should anyone else?
Please also note that the French notarial profession was
closely copied by other notarial professions in Europe, so
that it is likely that the same ruling may be made in other
countries.
Other
French writers on notaries
Jean Carbonnier in his extensive treatise on French Civil
law, has a firm place for notaries, as the supreme witness.
The notary makes records of what has happened and his
testimony, as to what he has seen and witnessed with his
own eyes, is essentially practically unchallengeable.
Yet Carbonnier notes that an error is made by those who
equate notaries with judges. He states that the judge can
impose his will on the parties, irrespective of their
wishes, and thus has an independent will. The notary, by
contrast, cannot impose any decision or indeed any term
which is not agreed by both parties, since his job is to
record those agreements and make them legally effective.
The presence of the notary is simply the external condition
which makes the parties’ own will effective.
Carbonnier writes: « En parallèle avec une tendance
qui revendique l’autonomie du droit notarial en face
du droit civil, on a essayé, à l’étranger, de faire
apparaître entre les parties et le notaire un rapport
juridique notarial, de droit mi-public, mi-privé, qui
aurait son contenu et son esprit propres – un peu à
l’image de l’action en justice, conçue comme un
rapport juridique entre plaideurs et juge. L’analogie
ne peut être poussée très loin, car le notaire n’a
pas sur les parties la même autorité que le juge dans
l’instance; non seulement il ne juge pas, mais il ne
fait pas acte de volonté ; son activité (constater,
vérifier, qualifier) n’est qu’une condition
extrinsèque de l’efficacité de l’acte juridique
émanant de la volonté des parties. » [J.
Carbonnier : Droit Civil page 151, published by
Presses Universitaires de France]
Indeed, the very cornerstone of the French notarial system
was defined in the law of 25 ventôse an X I :
“Les notaires sont des officiers publics établis pour
recevoir tous les actes et contrats auxquels les parties
doivent ou veulent faire donner le caractère
d’authenticité attaché aux acts de l’autorité
public et pour en assurer la date, en conserver le depot,
en délivrer des grosses et expeditions”
No mention is made here of notaries having power over
citizens, by contrast it is clear that it is the parties to
the contracts who are seeking to make them authentic, and
seeing a notaire is a way to do this. The only power given
is one to confer authenticity on contracts and agreements.
The difference is thus clear : the judge imposes his will,
whereas the notary brings into force the combined will of
the parties and has a duty to be impartial. Indeed he
cannot and must not force his will on anyone. The coercive
power needed to give the notary the right to exclude
notaries’ compliance with the EU Treaty (if it
existed) would actually disqualify the notary from being a
notary at all. Indeed if notaries did exercise this
coercive force, the notarial profession would have been
suppressed long ago.
Every
citizen has official authority
I suggest that French law itself provides that any citizen
can, in certain contexts, do exactly what notaries claim is
so special about their work. Notaries in France can and
usually do draft the acts which are called “actes
notariés”. However, as a French law textbook makes
clear, the parties to a purely private document, drafted by
themselves without any notarial intervention at all, can
give that act the same value as one drafted by the notaire
himself, simply by both going to a notary, proving their
identity and acknowledging their signatures, and depositing
the document with the notary for safe keeping.
I argue that this practice simply reflects the legal
reality. The contract is the expression of the free will of
the two parties. The notary is there as a supremely
trustworthy witness, as record-keeper and legal adviser,
but his supposedly sacred act, the supreme manifestation of
his art, is one which can be equalled in legal effect by
two private individuals.
I quote the French text : “L’ordonnance
nº45-2590 du 2 novembre 1945 investit les notaires
d’un monopole pour recevoir les actes ou contrats
auxquels les parties doivent ou veulent faire donner le
caractère d’authenticité attaché aux actes de
l’autorité publique….En revanche, les parties
peuvent conférer à l’acte sous seing privé une valeur
équivalente à celle d’un acte notarié, en procédant
d’un commun accord à son dépôt aux minutes d’un
notaire avec reconnaissance d’écritures et de
signatures (Décret du 14-10-1955 art 66 ) .
I
suggest that this undermines the argument of the exclusive
power of notaries, since the state has delegated its power
to everyone, not just to notaries, provided that the
parties deposit their agreement with a notary and prove
their identity and signature.
Mark
Kober-Smith [Notary Public, London]
E-mail : Please click
HERE