TOPIC: LAW AND ETHICS, OR HOW JUSTICE BECOMES INJUSTICE

TASR, TVNOVINY.sk
BRATISLAVA,  July 14, 2010.

Mrs. Jana Martinková,  lawyer   from the company Advocatus Martinková s. r. o.  answers the questions:

Advokátka Jana Martinková - Attorney-at-law (lawyer), der Rechtsanwalt - Advocatus Martinková s. r. o.
Do you think that law and morals  go hand in hand or are they  drawing apart?

Surely, every day,  each of us  experiences  that law and ethics  are  different normative systems. Each such repeating experience  leads us to the dilemma what  morality is, if and what kind of connection   it  has  with positive law and if such law does not function  isolated from morality.  I personally think that  everybody (some  more and some less)    has  a certain natural (acquired by tradition, socialization,  education) inner ability to distinguish what is and what  isn’t  fair, ethical,   honest  and  at the same time, this  subconsciousness  tells us  to behave correctly,  justly, to suppress egoism,  indolence and hate. Therefore, it is important that  also those  who create  positive law in the legislative process test  any  created or amended  legal standard  subjectively  according to their own ethical  principles.  Otherwise,  the area where the law is applied,  i.e. we all,   is  overflown by  unstable and inconsistent legislation  (in  extreme cases,  even purpose-made).  

Do you want to say that   MPs  are those who are   to be blamed that law is drawing apart from ethics?

Not only them, but the whole process starts there.  If a legal standard as a product of the  legislative process should be   effective, stable  and durable,   it must be in  line with  the needs of practice and reality and,  on the other hand,  it can’t   cover only a single, currently emerged situation and complicate life. The ethical level of those who create, execute and enforce  laws is  important also  because  if a  law is good, i.e. in line  with the  morality (which is  constant in its principles  and therefore, much more stable), its addressees (we all)  will be   able to presuppose its contents and therefore, they will  obey it  although   its wording  may not be known to them. Therefore, in my opinion,  the moral maturity  of  law makers and law interpreters  is decisive for  the whole  legal mechanism to work. But we must bear in mind that MPs  not only make laws but they apply law   in everyday life,  just as we do. If they demonstrate their disrespect for law as such by their  behaviour , they „encourage“ those to whom the  laws addressed  to do the same.  

Apart from MPs, who else is responsible for  harmony or disharmony between law and ethics?

Any  individual applying law. Either as a person  who executes law or as   a judge  who interprets the  it. Their ethical profile  is the decisive factor  determining how the law will be put into  life and  how it will  function. On    this  application level, the role of a judge is  crucial. The subsumption (relating of  a legal standard to  a particular case) chosen by him is decisive for a correct  and thus, also ethical   understanding of  the   legal standard.  The meaning of the legal standard established  in this way  determines and conditions behaviour of all of us.  Definitely,  a judge has  a crucial  role but  we should not forget  that each of us should start to execute law in accordance with ethics by himself and not to wait for  impulses from outside.

What do you think about  observing law  in Slovakia?

Regretfully,  I must admit a certain personal scepticism. The barriers in violating laws   in general, i.e.  not only criminal laws   are easing up.  For example, while   in the past, empty envelops were sent to  shareholders instead of notices  to prevent them to  exercise theirs shareholders´ rights,  nothing is sent to them nowadays.  I refer not only  to  „harmless“  general meetings when the majority shareholder  holds  a   general meeting  without calling and sending notices to minority shareholders (although there may be hundreds or thousands of them).   If I say that this „lawfulness  à la Slovakia“  enables   anybody simply to take control over somebody else’s company, I’m not far from the reality.  Cases when members of the  board of directors of  a company  are replaced and the company gets  out of the  control of its legitimate owner  only  on basis of a simple declaration   made in a notarial  deed that  somebody  is e.g. a 100% owner  of  the  company  are not rare. 

How is this possible?

To  register  such changes,  though  illegitimate, it is enough  to present to the Commercial Register  a notarial  deed.   The Commercial  Register contents itself with the data stated in such public document and its examines only the „bureaucratic“ requirements  of an  application. The problem is that some notaries don’t  to be obliged to examine  such  assertions (e.g.  that an individual is    a shareholder, that he owns shares, that the shares are present etc.) and though  such assertions are  supported by no  proofs,  they satisfy themselves   with a pure   unsupported deceleration.  But of course,  I have to point out  that I know  a lot of notaries  who fulfil their  tasks  excellently and consequently.   They verify everything what they include into a notary deed, i.e. the authorisation to make a certain legal  act, extract from the Commercial Register, the presence of shareholders  and the  presence of shares  presented by them, and they file copies of such documents it a dossier.  Such notaries  public are aware of  their  position -  the position of  public officials  and  they realize that they   prepare  public documents.  Such notaries public would never reduce  their  office to pure office work.

There aren’t many such inconsequent notaries public, are there?

I don’t know how may of them are consequent  and how may are not,  but taking into consideration the  standpoint of Notary Chamber,   according to which: „ a notary public has no obligation to  examine articles of association of a company or  if a general meeting  was called  in  accordance with law, the  commercial code and the articles of association, to verify shares  of  the company, to examine presence of shareholders  or  quorum of a general meeting“,  I hope that most  notaries  do not satisfy  themselves  in their work with this  alibistic „interpretation“  of law and  that  in case of doubt, they  take into consideration also  the provision of § 2, section 2 of the  Notarial Code  that imposes an obligation  to care  about consolidation and   certainty of legal relations The  discrepancy between morality and law can be seen clearly here.  Since the  documents issued by  notaries have  the character of public documents,  the rebuttable  presumption  „praesumtio iuris“  of  their truthfulness, authenticity  and correctness relates to them. But if  a  notary  public is not responsible  for the  contents of a public document,  is it ethical  that he prepares  it?  If  the chairman of the board of directors alone takes the   responsibility,  why the notary public doesn’t just certify his signature?  It would be 100x   cheaper and more ethical. And the publicly known cases  when a notary public  certifying a legally significant fact  falsely declares his personal  presence,  sometimes at different places at the same time also  spoil   the  reputation of notaries.
 
Does it mean that only the person making a statement before a notary public  is responsible for the legal act and not the notary public?

If we are  satisfied  with the standpoint of the Notary Chamber, and I must say that I’m  not   and  I’m sure that the injured party is even less satisfied, the only person  who  takes responsibility in  such cases  is the chairman of the board of directors  who declares    before a notary public that the general meeting   has been   called   in the prescribed manner, in accordance with the articles of association, that  the shareholders and shares are present and that the general meeting has  a quorum.  In the first  place,  he  should  be  criminally liable  but the problem is that mostly,    such person  is only  „a straw man“ whom the actual deceiver  exploits and goes   next door.  Of course, it takes a long time  until the things move in  the right direction (actions for invalidity  of  the general meeting’s resolutions, complaints, etc.)  and in the meanwhile,  the company   goes  bankrupt.  And the real shareholder(s) can just wonder how little  remained  them from their company, or that they lost everything.  

And  the Commercial Register has no objections when it registers changes in a company on basis of a decision of a „non-shareholder“?

They should not only have objections but  in my opinion,  they should  refuse  an application  filed by  an unauthorised entity.  In this particular case, if the registration court examined  conformity of the  documents  enclosed to the  application with the data in the register,  what it did not, it would find out that  the person exercising the shareholders rights  in form of a decision of  the sole shareholder was  not a shareholder of the company.   Consequently,  the new members   of the board of directors appointed by an  illegitimate person  ( by a „non-shareholder“) cannot be authorised to act on behalf of the company  and to file an application for registration of changes in the registered data. If the registration court  admits     a reverse  interpretation,  it may happen that the  “protector of lawfulness”  generates  the  state of legal   uncertainty, which is inadmissible in any legally consistent state!  The practice shows that the  registration court’s obligations  should be  extended explicitly.

Notaries and their activities  were mentioned also in connection with the  fraudulent transfers of real-estates.

It is true that notaries were mentioned also in relation to so called „residential mafia“,  but it is  necessary to say that  in most cases, they   were deceived  or abused themselves.  Misuse  of an official seal or  presentation of  a false or stolen  ID card  was not an  exception.    Since  in most cases,  notaries  only certified signatures of  the transferors - owners  of   properties   in whose name straw men acted,  their share  in the   responsibility  might have been minimal. Victims of such   tricks  were mainly  elderly, trusting people,  or  people in difficult financial situation  who swallowed  promises of the  floppers  and signed  contracts voluntarily  themselves and  so, it was not necessary to use tricks  when  their signatures were certified.  Of course, I don’t deny that „the residential mafia“ had  often interconnection   not only  to   real estate agencies  but also  to   the „inconsequent“ notaries. However,  amendments   in this area, and not only  the  amendments   to  the Notarial  Code, obliged  notaries to refuse   a legal  act   which  contravenes  or avoids law, or  which is in contradiction with  good  morals. Until then, they might but did not have to refuse such act.   Also the responsibility of notaries public  with regard to their  position  as    public  officials  and performance  of  their   office as  execution of a public  authority, became more strict and it has become   an objective one.   

Does it mean that these  amendments have  solved the problems with notarial deeds?

A notarial deed has always been considered to be a public document  and therefore, it  should always be prepared  with  due  care because  sometimes, it  is  quite impossible to   rectify its  consequences.  If  a legal entity  is the  party of a  notarial deed ,   a notary public is obliged to verify its existence and if the person acting on its behalf has the authority  (e.g. by an extract from the Commercial Register).  However, the obligation to verify  if such person has  the authority to execute the required  legal act,  in our particular case  the decision of the sole shareholder, has been omitted. Why,  when making a notarial deed which  serves not only for registration of changes in the Commercial Register but is also an execution title,  a notary public  does not examine if the person  intending to exercise  shareholder’s rights  is a shareholder of the company at all?   A lot of notaries who employ   their own  moral obligations and conscience  instead of  the missing legal provisions do it and those who don’t  and are misused by swindlers   try  excuse their  fault by  saying that the law   doesn’t  oblige them to do so.  But the new wording of  § 36 of the Notarial Code  places a duty on  the notaries to  perform their office with  due professional care. In this connection, a question obtrudes if it means that they were not obliged to do so up till now when   it was necessary to  enact it  explicitly.      But in spite of that,  I believe that 98% of notaries public  work with due professional care every day  notwithstanding the  deficiencies  in legislation compared with   2% of those  who, despite of the  explicitly prescribed duty  don’t do more than they inevitably must do according to law and  in this way, they make it possible that the legislative gaps   continue to be  misused.   And because of them, it would be desirable to oblige notaries  public  not only to verify the authority of an  entity to do   a certain legal act   but also  to be able to  support such verification by relevant documents.  In  this way,  notaries  public would  protect  both  the injured lawful  entities  against deceivers and  themselves against   possible responsibility. 

If a notary public is   involved in an unlawful legal act, he may   lose his office,   is that right?    

Unfortunately,  it sometimes  happens that a black sheep  shows up  and   misuses  his office,    not only the office  of a notary public, but also  the  office  of a counsel or  an executor.   As these offices may be held only by morally irreproachable individuals, such black sheep   avoids this condition  very cleverly by  leaving the given profession as soon as  there is a threat of a disciplinary punishment – striking  from the list  of counsels, or  removal from the office of an executor or  a  notary public  in consequence of  a severe infringement of  his duties . And  in this way, he will probably   manage   to become  a judge.  What I want to say is that in fact,  all this is  not a problem of  notaries, counsels, judges or executors.  This  is a problem of the morality of each of us.