European Cacophony for Notaries. Where is the Harmony?

European Cacophony for Notaries. Where is the Harmony?

This week’s Blog is about European Harmonisation and I do mean that sarcastically.

I do not necessarily expect any reader to spend too long getting to the bottom of it all: my intent is merely to give an example of the sort of knots that Notaries so often have to untie on behalf of their clients.

Not everyone has a straightforward Nationality, Domicile or residence. Each word refers to a legal concept about which there are hundreds of years of precedents and case laws, and it would be possible for one person to have Nationality of one Country, residence of another, and domicile of a third. Though rare.

The circumstances of the case below, reported by a colleague Notary, is by no means untypical or particularly unusual.

The English resident was born in England. She has Spanish parents and a Spanish passport.

Her intention is to marry in Italy. The Italian Registry Office requested from her a Spanish certificate that she is alive and asked for this to be legalized with the Apostille.

The Spanish consulate in London granted the certificate.

The British FCO under article 1 of the Hague Convention will not legalise with the Apostille a document issued by a foreign consulate.

Nor will the Spanish Foreign Office in Madrid even though the certificate was issued by their London colleagues.

In fact as my colleague has pointed out to the Italians, under article 2 of the European Convention on the Abolition of Legalisation of Documents Executed by Diplomatic Agents or Consular Officers of the European Council signed in London the 7th June 1968 (and adopted by Spain the 28th August 1982), such a document is exempted of legalisation. Spain and Italy are parties of that Convention. So, there is in fact no need of legalization under International Law.

Will that impress the Italians? Doubtful, No one likes to lose face, or enjoys having their mistakes pointed out to them. Least of all a bureaucrat, arguably.

Nor do I understand why the Italians take the view that the Spanish must issue the Certificate of life in the first place. The woman is in England, surely an English Notary could do this.

My advice to her would be, get married in England. A small affair in a Registry Office, followed by the intended celebrations in Italy. As a “Blessing” rather than a wedding, there will be no such problems of red tape, and none of their guests need know if she doesn’t tell them.

And she can wear her wedding dress twice, – does that halve the cost of it?

If this is a harmonised Europe, I wonder what it used to be like?

Or can we get ever together? Cue for a Song.  Link here

At least your visit to my office will be harmonious: you will receive a warm welcome and very good coffee. You can contact me or Louise here at AtkinsonNotary E7 Joseph’s Well Leeds LS3 1AB, phone 0113 8160116 and email notary@atkinsonnotary.com

Solicitor In The Soup. Funny? Or Scary?

Don’t know why, but most people find it funny when a Solicitor falls into the soup.

In my experience Lawyers are not the best loved professionals, although contrariwise, most people will not have a word said against their own choice of lawyer. No, it’s just the others we don’t like.

This week’s blog highlights a case in which it seems that a firm of solicitors – trying to assist their clients – have somewhat dropped themselves into trouble. Here is the link.
Whilst some will have a jolly good laugh, there are perhaps lessons which Solicitors can take – at the very least they can examine the circumstances of the case and wonder to themselves whether this was a trap they could have fallen into.

The circumstances of the case are that in 2008 a solicitor’s client had instructed that a new limited company should be set up as an SPV – that is jargon for a “special purpose vehicle” – the special purpose being the acquisition of development land.

What I envisage, as a former Solicitor myself, is that the solicitors acting for these clients were under a lot of pressure to enter into a Contract for the purchase of land.

Commercial legal work is always pressured. The pressure could derive from the Client, or from the Solicitor’s own feeling that, in 2008, there were not many land deals going on and so the pressure to earn money meant that the deal should go through at the earliest possible timescale.

Or it could be that there was inter-departmental pressure in a large firm of lawyers.
For example, the Company Department is in daily touch with the clients, the Commercial Property department working in the background is simply told to “get on with it”

In a time of recession, at any rate the solicitors were very quick to enter into a Contact which was to buy land in Kensington London for 20 million pounds.

Presumably in order to avoid delay the solicitor signed the contact on behalf of their client, so that the Directors of the “Company” did not actually sign it..

It turns out that shortly after exchange of contacts the solicitor’s client did not want to proceed with the transaction.

The problem here, as the solicitor soon found out, was that in fact that the special vehicle purpose company had never been incorporated. It is not explained how or why the Company was never actually formed.

Perhaps the Company lawyers had been told not to go ahead, and assumed that the Property Department would check the situation before proceeding.

Perhaps the company formation papers had been submitted to Companies House but returned because of slight error. This is all my speculation and the reported case does not explain.

BUT – the bottom-line is that the contact to purchase the land, was stated to be made on behalf of a Company WHICH DID NOT ACTUALLY EXIST.

If the solicitor who signed the contact did not know it beforehand, then s/he certainly has found out now that Section 36 (C) [1] of the Companies Act 1985 [then in force] applied to this situation.

That Act of Parliament has been largely superseded by the Companies Act of 2006, and the corresponding section is s51 with substantially the same words –link here-

The important bit is “A contract that purports to be made by or on behalf of a company at a time when the company has not been formed has effect, subject to any agreement to the contrary, as one made with the person purporting to act for the company or as agent for it, and HE IS PERSONALLY LIABLE ON THE CONTACT ACCORDINGLY”

In the circumstances of this case this means that the solicitor who has signed the Contract is now personally liable to pay 5.1 million pounds.

Although solicitors are always willing to assist their clients’ affairs, this is probably more than the signing solicitor understood to be their personal exposure in the case. Do you think?

The obvious lesson is that any solicitor thinking of signing a contract on behalf of his client company would do well first to make a company search in order to establish that the company has actually been formed.

I do not think that this kind of situation would be likely to arise in a small high street firm where perhaps one man or woman is in charge of both the company formation and also the conveyancing.

I can quite see that in a larger firm where there are different departments and one set of solicitors will deal with company formations and another set will deal with property acquisition that a failure of communication between the departments can have this sort of result.

I do not know what happened in this case but my imagination visualises this Scenario – Company department says “we are forming an SPV please get on with the land purchase” – Conveyancing department does as it is told and gets on with it – and reaches exchange of contracts rather more quickly than the company department expected – the client changes his mind – result an expensive chaos.

I am not entirely sure what to say about this situation – it is not my place as a Notary to advise a large firms of solicitors how to run their business but if it were perhaps the message is:

1 Do not sign contracts on behalf of your client. Not Ever. Put it in your terms and conditions. Don’t be bullied.

OR
1A If you do sign contracts on behalf of your client perhaps make sure your client actually exists.

As so often the overriding lesson which solicitors may take from this case that trying to be helpful is fraught with risk. Doing things properly might take longer and might open your client to losing a beneficial transaction, it might lead you as a solicitor to the risk of losing a client but is rarely likely to leave you a bill of 5.1 million pounds.

Link here – Take Your Time Do It Right

If you would like to have your Notarial work done properly, do please get in touch – You can contact me or Louise here at AtkinsonNotary E7 Joseph’s Well Leeds LS3 1AB, phone 0113 8160116 and email notary@atkinsonnotary.com

Louise Ponders Foreign Powers of Attorney.

Louise Ponders Foreign Powers of Attorney.

Here at AtkinsonNotary we see many clients who require to sign a Power of Attorney for use in another country.

If you have a Power of Attorney which requires signing here for use overseas then it will need to be witnessed by a Notary Public.

It should be noted that a Power of Attorney is a very powerful document and should certainly not be entered into carelessly.

The most common reason why we see clients requiring a Power of Attorney to be completed is usually because they are looking to sell or purchase a property overseas and because completing a Power of Attorney negates the need for having to travel to the foreign jurisdiction to sign necessary documents – the Power would give authority to a legal adviser to sign on their behalf.

The usual scenario is that the document [Power of Attorney] would be drawn up by the foreign adviser and emailed directly to us.

We would then arrange for client(s) to attend with identification [preferably, passport and proof of address] to sign in the presence of the Notary when he would witness the signature and place his own signature, stamp and seal to the document.

Different countries have different requirements as to how Powers should be executed.
For example it is the Spanish way that the Power of Attorney [Poder] be read out loud to the client by the Notary [whether you want it or not!] to make quite sure that the client does fully understand the nature of the document before it is signed.

A typical Power of Attorney that we see tends to be very wide in scope – that is to say it is a general precedent from the attorney’s computer and the attorney just simply clicks print and sends it in this format [a “one size fits all” scenario].

It therefore usually includes more powers for the attorney than necessary – it is not tailored down to the individual need of the client’s job – i.e if a client was selling a house then the document would really just need to give authority for the attorney to sign sale documents however most of the Powers that are sent over give a wider authority – typically including power to buy or sell a property, to open bank accounts, to borrow or repay mortgages etc…

The reason for this usually is to keep the costs down for the client in preparing such a document – the one size fits all Power tends to cover anything that might arise.

Whilst sometimes clients feel that they are nervous of giving too wide a power, the logic surely must be, that no-one should give any Powers at all to a foreign third party whom they do not consider to be entirely trustworthy. And if trustworthy, then presumably they will not abuse powers however wide?

Once the document has been Notarised – then of course depending on which country, further legalisation may be required – please see earlier blogs for more information as to this process [called “legalisation] here.

We can also give further guidance over the telephone if you are unsure – As always, for any queries you may have in relation to a Power of Attorney or any other foreign matter then please do not hesitate to contact us.

You can contact me or Chris Atkinson here at AtkinsonNotary E7 Joseph’s Well Leeds LS3 1AB, phone 0113 8160116 and email notary@atkinsonnotary.com

Getting It Right – Paperwork For Use In India

Guidance for Preparation and Signing of Legal papers for use in India

When the task is to prepare a document in England for acceptance abroad, there are many countries in the world which seem to make it unnecessarily difficult.

Angola, Nigeria, Dominican Republic and Russia spring to mind, and in Europe, perhaps Austria.

However, one Country in particular stands out in the “difficult to get it right” stakes, and step forward, India.

If there were only one message I could give to you, it is that it ultimately costs more to get it wrong than to get it right. Taking shortcuts in respect of legal documentation for any foreign Country is a recipe for wasting money. For India however there seems to be no single formula or set of words which will be accepted everywhere. Instead, every Lawyer there has his [rarely her’s] own ideas, his own way of doing things.

Typical mistakes/reasons for rejection include the following:

1. Drafting the Deeds yourself.
2. Failure to Notarise.
3. Failure to legalise.
4. Failure to Witness as required.

There are more mistakes which can result in rejection of your documents in India, but these four above are far and away the most usual.

To expand on these –

1. Drafting the Deed Yourself.

I have been a Notary now for over Twenty two years and I have a copy of every Indian Power of Attorney I have ever notarized. There are many hundreds of them and each one is different in words or in format. If you have any experience of India, you will know that nothing is standardized there. Most Indian Lawyers consider that their documents are the only correct ones. The Moral – Get your lawyer in India to draft your paperwork. If you draft it yourself, they will reject it. It can be emailed over to UK and then I can print it at my office for you.

2. Failure to Notarise.

There are unfortunately many Solicitors in England who appear to be willing to countersign as your witness on your Indian Deeds. This is ALWAYS WRONG. A Solicitor who is not a Notary, is not accepted in India as an appropriate Witness for your Deeds.

3. Failure to Legalise

This is a tricky area. India has signed the 1961 Convention of The Hague and your Notarized documents should be legalised with the Apostille stamp. But, to muddy the waters, often documents will be accepted without this, and on the other hand sometimes Indian lawyers incorrectly ask for an Indian High Commission Stamp. This article is too short to give full details of all the problems, but I can explain if you phone or email me.

4. Failure to Witness.

With the exception only of some Bank Deeds, all Indian Deeds executed in England and particularly Powers of Attorney require that your signature is witnessed by two adults in addition to me the Notary. There are many ways to get this wrong, only one way to get it right. Again, I do explain what is needed whenever a new client contacts me, and in my Office I can provide these extra Witnesses.

There are of course other ways to get things wrong. Some Deeds will be rejected unless you add photographs. Some Indian Lawyers demand [wrongly] that you use pre-stamped paper purchased in India. Some insist on green paper, some insist on strange sizes of paper.

The message I am hoping to give, is that time spent on preparation, in contacting your foreign lawyers and quizzing them in great detail as to EXACTLY what they want from you in England, will not be wasted. Otherwise the experience can turn into a frustrating and expensive [in both time and money] series of trial and error experiments.

As I say, I shall be only too happy to assist you through the maze. You can contact me or my colleague Louise Morley here at AtkinsonNotary E7 Joseph’s Well Leeds LS3 1AB, phone 0113 8160116 and email notary@atkinsonnotary.com