The new mandatory proxy form is posing a challenge for owners and industry professionals. There are many issues with the form that we and other commentators have already commented on.
However, we believe it is important to weigh in on the debate around whether a proxy-holder may vote as they choose at an owner’s meeting.
On Page 2 of the proxy form, the owner or mortgagee filling out the form must check one of the two boxes below.
If an owner/mortgagee checks the first box, the proxy will count towards quorum at the meeting and the proxy-holder will be limited to voting on routine matters (ex. a vote to adjourn or terminate the meeting).
If an owner/mortgagee checks the second box, and does not fill out the rest of the proxy form, the proxy-holder should be given a ballot and may vote on any matter that arises at that owner’s meeting (including election of directors). An owner/mortgagee can also check the second box and fill out part of or all of the form to indicate how the proxy should be counted.
The language next to the second option is clear: “The proxy may vote on my (our) behalf with respect to all matters that may come up before the meeting, subject to my instructions set out below, as I(we) could do if personally present at the meeting.”
The instructions in the second option go on to state that the owner may appoint 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.”
Therefore, the proxy-holder’s ability to vote on “all matters” is only limited by instructions the owner/mortgagee may provide on the form (if any). If the owner/mortgagee does not provide instructions, the proxy-holder’s ability to vote is not subject to any instructions and the proxy-holder can vote in the owner’s place.
We understand that there are differing opinions on the interpretation of this form, and some suggest that proxy-holders cannot vote to elect any director unless the candidates’ names’ are filled out and the owner/mortgagee signs next to the candidate selection. We disagree with this position for three main reasons:
- the Condominium Act, 1998 no longer requires an owner/mortgagee to identify who the proxy will vote for, as the former section 52(5) was repealed;
- the language next to the second box above clearly states that the proxy-holder may vote on “all matters” at the meeting as the owner could if they were present, subject to instructions (if any), and
- as the Condominium Act, 1998 is consumer protection legislation, the focus when reviewing proxies is to ensure that an owner/mortgagee’s wishes and intentions are carried out. Refusing to count a proxy-holder’s vote for candidates to the board because the candidates’ names are not listed would, in our opinion, run contrary to the consumer protection nature of the legislation.
Until the Ministry changes the form, or takes a different position, there is no basis to refuse to provide a ballot to a proxy-holder if an owner/mortgagee checks off the second box above, and gives no instructions on how the proxy-holder should vote.