Proxies and How They May Now be Used for Elections

The recent amendments to the Condominium Act and its regulations resulted in changes to how proxies (for meetings of owners) may be given and the voting authority that may be given to the person appointed as proxy. One question that we’ve considered with respect to these changes is: Absent specific instructions from the proxy-giver, is the person appointed as proxy now permitted to decide how to vote for candidates for election?

The short answer to this question is, in our view, yes.

To begin, it is important to note that as part of the recent amendments to the Condominium Act, section 52(5) was repealed. This section used to read as follows:

An instrument appointing a proxy for the election or removal of a director at a meeting of owners shall state the name of the directors for and against whom the proxy is to vote.

As noted above, this section was repealed, and was not replaced with any similar language. As a result, the need for the proxy giver to specify the names of the director candidates for whom and against whom they wish to vote is no longer a requirement of the Act.

The purpose of section 52(5) was, in part, to prevent individuals from gathering larger numbers of proxies that would effectively allow those individuals to unilaterally decide who should be elected to the Board. It was, in effect, intended as a control on the election process.

The removal of this section would appear to indicate that the legislators no longer feel that this control is required.

Instead, a new prescribed proxy form has been created, which contains within it the controls that the legislators evidently feel are sufficient with respect to the election process.

In this respect, the new proxy form contains the following two options, one of which is to be selected by the proxy-giver:

The proxy may vote on my (our) behalf only with respect to matters of routine procedure at the meeting, and no other matters, as I (we) could do if personally present at the meeting. Instruction for person filling out this form: Check this box if you are appointing the proxy to vote only on matters of routine procedure, and no other matters. If this box is checked, then the rest of the form should not be filled out.  

 ________________

Signature or initials

The proxy may vote on my (our) behalf with respect to all matters that may come before the meeting, subject to my instructions set out below, as I (we) could do if personally present at the meeting. Instruction for person filling out this form: Check this box if you are appointing the proxy to vote on all matters that may come up at the meeting (for example, voting for candidates and other substantive matters), subject to your instructions below.  

 

 

________________

Signature or initials

The first option above is clearly only intended to permit the proxy to attend the meeting for the purposes of counting towards the quorum requirement and to vote on procedural matters. Otherwise (under the first option) the person appointed as proxy is essentially instructed to abstain.

The second option delegates a far broader power to the proxy – essentially the power to vote on all substantial matters that come before the meeting (subject to any specific instructions that may be given by the owner(s) in the proxy form). The prescribed wording, as noted above, specifically cites “voting for candidates” as one of the items that the proxy may vote for – again, subject to the specific instructions given by the proxy-giver in the balance of the proxy form.

The proxy form contains a section that specifically deals with the election of directors. In particular, the proxy-giver may check a box that confirms:

I/we instruct the proxy to nominate, if necessary, and to vote for the candidates named below and in the order set out below.

In other words, the proxy-giver has the option of including specific instructions as to how he/she wishes to cast their vote. But this is optional – they are not required to include this specific instruction. In other words, the proxy-giver has the option NOT to give any voting instruction.

Although the instructions included on the proxy form contain language that seems to indicate that the proxy holder can only ever vote in the manner set out by the proxy-giver, in our view, because there is an option (i.e. to either provide specific voting instructions, or not), this is an indication that the proxy holder is only restricted in terms of how he/she votes when the proxy giver has “checked off” the above-noted statement respecting voting for candidates.

In our view, the bottom line is as follows: If the proxy-giver opts to include a specific voting instruction, “the proxy instrument is the ballot” (in relation to that business) and the person appointed as proxy has no discretion and doesn’t receive any ballot (for that business). On the other hand, if the proxy-giver opts NOT to include any instruction, the person appointed as proxy has discretion and should receive a ballot (for that business). And this principle also applies, in our view, to election or removal of directors. [Of course, this also assumes that the proxy-giver has selected the second option (as between the two options noted above)…..giving the person appointed as proxy the right to vote on all matters, subject to the instructions (if any) from the proxy-giver.]

In summary, in light of the repeal of section 52(5) of the Act, and in light of the broad wording of the proxy form (which can be restricted by the proxy-giver, as outlined above), we are of the view that it is now possible for owners to delegate to their proxy the power to vote (even in relation to election or removal of directors) in the manner the proxy sees fit.

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