Notarial Act amendments necessary to save profession from crisis of confidence

Castaldi Paris was speaking to MaltaToday in connection with the far-reaching amendments to the Notarial Act announced earlier this week by parliamentary secretary Jason Azzopardi.

The new amendments to the bill will, among things, require all notaries to open trust accounts within which they would deposit any funds that they would be handling on behalf of their clients.

The amendments will also make it possible to withdraw the warrants of those notaries that do not adhere to regulations, an unprecedented disciplinary measure hereto unavailable.

Welcoming the amendments, Castaldi Paris said government’s timing was ideal: “The notarial profession had been passing through a storm during recent months. I had always called for more scrutiny, as the system of checks and balances left a lot to be desired.”

“If the regulations were not tightened up, the notarial profession risked falling apart,” Castaldi Paris warned, adding that the lack of regulation and a mounting number of high-profile notarial misconduct cases were compounding a crisis of confidence among clients.

He referred to the cases of notaries John Hayman, Sandro Schembri Adami, Piere Falzon, “and a few other recent cases which went unreported” as examples of professional misconduct that was undermined the public’s confidence.

In 2000, John Hayman delayed cashing a Lm7,000 cheque on a promise of sale agreement for the purchase of a property. When he passed away a year later, his heirs became embroiled in litigation with the buyer of the property as they tried to get the un-cashed cheque honoured.

Sandro Schembri Adami’s case dealt with more serious offences which saw him being handed down multiple suspended sentences for embezzlement and forging signatures, in 2007 and 2008.

Pierre Falzon is currently facing similar misappropriation and forgery charges in an ongoing court case that saw him leaving for Spain and being extradited back to Malta earlier this year.

Castaldi Paris said that while such cases caused considerable alarm among the public, the current legal framework still forced people to rely on the services of notaries even when unwilling to do so.

“People were told they had not choice. They could not pay certain tax and duty themselves as it was a strictly notarial function – yet at the same time Government could argue that it was not responsible to third parties [in cases where notaries default on their duties]. The public was stuck in the middle,” he said.

“At times, clients were not trusting notaries even with depositing promise-of-sale agreements. You’d have people asking to pay certain things like stamp duty themselves,” he said. “The fact that a client makes such requests shows a lack of trust. I don’t blame them,” he said. “They were not really finding the trust they wanted to find. Many were getting desperate.”

Castaldi Paris in particular welcomed the amendment making it possible for a notary’s warrant to be permanently withdrawn. “Currently, the biggest frustration is how notaries can be found to be at fault, remain flagrantly in fault, but do not risk having their warrant withdrawn.”

“If you don’t touch a notary’s warrant, he or she won’t care less. Provided that they can keep working, they won’t take pains to rectify their position,” Castaldi Paris said. “Suspending their duties and eventually withdrawing their warrant means business.”

MaltaToday had however confirmed that notaries who had their warrant removed would be able to set-sit for the notarial warrant exam and obtain their warrant a-new.

Asked about this apparent loop-hole in the system, Castaldi Paris was cautious, saying that the process of qualifying for the two years of notary practice and subsequently sitting for the eight to nine hour-long exam (spread over two days) was not something that anyone would undertake lightly.

“Unless someone is proven to be guilty of a very grave offence that would blemish their criminal record, I find nothing wrong in allowing them the opportunity to re-sit their warrant exam,” he said.

Referring to the amendments which will now require that all notaries are insured, and oblige them to handle their clients’ funds through especially-created Trust Funds, Castaldi Paris said both notaries and their clients will benefit.

Referring to an amendment specifically detailing notaries’ obligations and responsibilities when performing research and other duties, Castaldi Paris said it clears up a previously grey area.

“Before, there was disagreement over what a notary’s function was, and what services should be provided. Now, duties, responsibilities, obligations, and legal implications are all spelled out,” Castaldi Paris said.

Asked if he felt the amendment bill represented a potential turning point for the profession, Castaldi Paris said this would be the case of the bill translates itself into “sustained and active fine-tuning to the law.”

He added that the bill should only be the start of regular and timely amendments. “Given how the profession is changing and becoming more and more complicated, the law will require more amendments as time goes back. There are aspects of the notarial act that are very old.”