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Notary’s constitutional complaint against instructions issued by the supervisory authority regarding the documentation of his notarial escrow services rejected
Press Release No. 49/2012 of 05 July 2012
Order of 19 June 2012
1 BvR 3017/09
Notaries are independent holders of a public office and are appointed for the purpose of notarising legal transactions and performing other official duties connected with the preventive administration of justice in the Länder (states). They are subject to the supervision of the President of the Regional Court (Landgericht), the President of the Higher Regional Court (Oberlandesgericht) and the Land Department of Justice (Landesjustizverwaltung) (§ 92 of the Federal Regulation for Notaries (Bundesnotarordnung - BNotO)). Such supervision includes, among other things, the regular review and monitoring of notaries' performance of their public office. Notaries are obliged to present for inspection and hand over their files, records and books as well as the deeds held by them in escrow to the supervisory authorities (§ 93 BNotO). Notaries are grouped together in societies of notaries, which are obliged in particular to lay down guidelines in the form of bylaws that are based on statutory provisions and the regulations issued pursuant thereto. Such guidelines must define the official duties and other duties of the members of the societies.
The duties of a notary include, among other things, the holding in escrow of money and assets that they have been given for safekeeping or the delivery of same to third parties. The Official Regulations for Notaries (Dienstordnung für Notarinnen und Notare), which were issued by the Land Departments of Justice, lay down the rules for documenting notarial escrow services. The present proceedings concern § 10 of the Schleswig-Holstein Official Regulations for Notaries (Schleswig-Holsteinische Dienstordnung für Notarinnen und Notare - DONot). § 10 provides that notaries must enter every receipt and every expenditure in respect of third-party funds which they have received or disbursed in their escrow journal and in their ledger card. In the case of cashless transactions, entries must be made on the day on which the notary receives the account statement or notification of credited interest or bank charges (§ 10.3 DONot).
The complainant, who is a notary licensed in Schleswig-Holstein, instead entered cashless transactions in his escrow journal and in his ledger card on the day on which the funds were credited or debited from his account. Following the complainant's failure to alter his accounting practice in spite of the criticisms of it, the President of the Regional Court instructed him in writing to book entries in the case of cashless transactions in accordance with § 10.3 DONot. The President of the Regional Court warned the complainant that he would be disciplined if he committed any further breaches of the Official Regulations. The complainant's appeals to the Higher Regional Court and the Federal Court of Justice (Bundesgerichtshof) were unsuccessful. The complainant is of the opinion that the decisions challenged in his constitutional complaint violate in essence his fundamental right to freely practise a profession because the Official Regulations for Notaries and the instruction issued to him pursuant to such Regulations have no statutory basis and therefore do not satisfy the requirement of a specific enactment of a statute in Article 12.1 sentence 2 of the Basic Law (Grundgesetz - GG).
The First Senate of the Federal Constitutional Court rejected the constitutional complaint as unfounded. The challenged instruction and the court decisions upholding it do not violate the complainant's freedom to practise his profession, which is protected by Article 12.1 GG.
In essence, the decision is based on the following considerations:
1. Notaries practise a profession which is affiliated with the state. As independent professionals involved in the preventive administration of justice, they perform state functions which are comparable to judicial functions. Consequently, the type of work that they do is typically similar to that of a civil servant. The constitutional guarantee of the freedom to practise a profession in Article 12.1 GG applies to this profession just as it does to professions that are part of the civil service in the strict sense. Due to the proximity of state-affiliated professions to the civil service, notaries must, however, accept that the effects of the fundamental right to freedom to practise a profession are suppressed in their case by special provisions. Since notaries are active in different professional areas during the performance of their public office, it is necessary to draw distinctions on the basis of the exact degree of similarity to the civil service and the permissibility of special regulations associated with it in a specific case. The relevant provisions in this case relating to the documentation of escrow services in accordance with the Official Regulations for Notaries must be classified as public-sector tasks whose performance has been assigned to notaries. These are subject to special regulations. They do not merely relate to the notary's internal organisation of his or her office, which is a matter of personal freedom. A necessary part of a notary's performance of his or her official duties is the documentation of escrow transactions using an escrow book and a ledger card. Such documentation serves not only to ensure that notaries' offices properly hold third-party funds and assets in safekeeping, but also to ensure that these official duties are supervised by the supervisory authorities.
2. Accordingly, the instruction challenged by the complainant and the general provision in § 10.3 sentence 1 DONot upon which it is based are not constitutionally objectionable either in form or content. Even if the challenged measures have to be evaluated in terms of the fundamental right to freely practise a profession, which is an issue that the court's order does not address, they nonetheless satisfy the constitutional requirements. This applies both with respect to the instruction as a means of supervision as well as in respect of the instruction's content.
a) The individual instruction issued to the complainant is not constitutionally objectionable as a means of supervision. It is true that the law does not expressly provide for a right to give notaries instructions. However, the grant to the supervisory authorities in the context of their supervisory powers in § 92 and § 93 BNotO of a right to give notaries instructions is sufficient to satisfy the requirement of a specific enactment of a statute in Article 12.1 sentence 2 GG. The right to give instructions is one of the typical instruments used for public supervision. The legislature makes use of the possibility and means of supervision provided for in § 92 and § 93 BNotO for the purpose of supervising notaries' performance of their public office. Therefore the non-constitutional courts are justified when interpreting § 92 and § 93 BNotO in concluding that the supervisory powers of the Land Department of Justice, which are expressly regulated by statute, presuppose the existence of a right to give instructions and that such right is included in the overall system governing the supervision of notaries. From a substantive perspective, no constitutional objections exist against an instruction as an instrument as such whether it be in the form of an individual instruction or in the form of a general instruction. In both cases the instruction serves the public good, namely the supervision of notaries' performance of their public office and thus the democratic accountability in accordance with the rule of law of public officials who are outside the state administrative organisation; in addition, it serves the purpose of ensuring that notaries act properly in connection with the preventive administration of justice.
b) The content of the individual instruction issued to the complainant also satisfies the constitutional requirements. It has a statutory basis. The provisions in the Official Regulations on the documentation of escrow transactions can be based on the powers of the Land Department of Justice to issue general instructions in accordance with § 93 BNotO. In particular, the statutory provisions authorise the supervisory authorities to lay down the specific details of individual technical questions concerning documentation provided that this does not significantly burden the addressees. This is the case here. The provisions on documenting escrow transactions contained in the Official Regulations benefit state supervision. The provision on the accounting date is, if at all, associated with only a slight increase in the burden on notaries as compared with other kinds of accounting systems. In addition, the general instruction in § 10.3 sentence 1 DONot does not violate higher-ranking law simply because it imposes an official duty whose establishment is, according to the theory behind the Federal Regulation for Notaries, reserved to the societies of notaries. It is in keeping with the proximity of the notary's profession to the civil service that the powers of an independently administered body cannot completely exclude direct state supervision of notaries' performance of their public office if for no other reason than the fact that the state has a continuing responsibility for the administration of justice.