Perplexing Proxies

Patrick Greco, Partner at Shibley Righton LLP, addresses some confusions over Ontario's new prescribed condo proxy forms, and whether proxy holders have the discretion to vote in any manner they see fit.

A number of people have expressed concerns over the newly prescribed Proxy Form under the Condominium Act.

While the first page of the Proxy Form is fairly self-explanatory, there is a lot of confusion over Box #1 under "Name of Proxy" on page 2 of the Proxy Form, and its impact on completing the rest of the form.

The confusion flows from the recent repeal of former section 52(5) of the Condominium Act. You may recall that this section had stated that "(a)n 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". With that section gone, it is difficult to tell what legal effect the wording of the new Proxy Form has.

The first option in Box #1 is clear. If checked off, the unit owner only gives authority to the proxy holder to vote on matters of routine procedure at the owners' meeting, but not any substantive votes on election/removal of directors, by-laws, etc. That is where the clarity ends.

The second box is where trouble arises. This box purports to give the proxy holder authorization to vote on all matters at the meeting (including substantive votes), subject only to the owner's "instructions below". Unfortunately, it is unclear whether, if no further instructions are given, the proxy holder may act as the owner could at the meeting, including receiving ballots to vote on all matters on the agenda for the meeting. Reading through the rest of the form suggests that this is not the case for all voting matters.

It is notable that there are "Instructions to person filling out the form" under the subsequent areas of the Proxy Form for the election of directors to general Board positions (either from a normal vacancy or after a removal vote) and for the election of directors to owner-occupied positions. (As a side note, there is no section that explicitly deals with a vote to remove an owner-occupied director!) These instructions are clear that a proxy holder may only vote for a candidate's name that is written in on the form and beside which the owner has signed.

However, there are no such instructions with regard to votes to remove directors or votes on specific matters such as by-laws.

Some other law firms have suggested that if names and owner signatures are not included on the form as candidates for directors, the proxy holder has the right to a ballot and a vote for directors of his or her choice.

We disagree with this opinion.

We are of the view that in order for the proxy holder to vote to elect any director, the owner must have completed the proxy with the candidate(s) name(s) and signed accordingly in the right-hand column. The proxy holder will not be given a ballot on these votes.

If no name and signature are included on the form, our view is that by default the proxy holder cannot receive a ballot and vote for directors.

However, for removal votes and other votes (such as on by-laws), owners may either express their choice of vote on the Proxy Form or leave those areas blank and have their proxy holder receive a ballot to vote.

It is unfortunate that a form which was designed to provide greater clarity and protect owners is worded and formatted in such a way that it is open to multiple reasonable interpretations. We have brought these matters to the attention of the Ministry and hope it will act without delay to resolve them one way or the other.

This article was original published in Shibley Righton LLP's February 2018 Newsletter and has been republished with permission.