Proxies at Meetings
What is a “proxy”?
Just as there is often confusion about the quorum for meetings, discussed in another articleLINK, so, too, there is often confusion about proxies at meetings.
The first point to note is that, unless expressly permitted by an organisation’s constitution, members must be present at a meeting in person to exercise their votes and cannot vote by proxy (Harben v Phillips (1883) 23 Ch 14 (CA), McArthur v Manawatu Knitting Mills Ltd [1943] NZLR375, and Maori Development Corporation Ltd v Power Beat International Ltd [1995] 2 NZLR568 at 574, supported by the terms of section 24(2), Incorporated Societies Act 1908).
The law about proxies
Most lawyers would not immediately go to Māori Land Court decisions for summaries of general legal issues, but an excellent and comprehensive summary of the law on proxies is to be found in Wall v The Māori Land Court, Māori Appellate Court, MB 55 A20090002091, 29 March 2010, paragraph [59]:
a) At common law a vote on a show of hands means that each person present and entitled to vote has one vote and only one vote and those that wish to vote do so by show of hands: Ernest v Loma Gold Mines [1897] 1 Ch 1. Under this method the voting does not take into account variations and sizes of shareholdings or other entitlements, nor the presence of representatives of absent persons entitled to vote. A proxy cannot vote on a show of hands unless the rules or articles, or relevant statute expressly provides otherwise. However, even when rules permit a proxy to vote on a show of hands, a member who holds a proxy for another member may exercise only one vote on a show of hands. This is on the same principle that the person exercising a vote on a show of hands must be personally present and can exercise only one vote: Horsley’s Meetings – Procedure, Law & Practice (4th ed) Butterworths, paragraph 14.12;
b) A proxy is a person who is a lawfully constituted agent of another person: re English, Scottish & Australian Bank [1893] 3 Ch 385. The appointment of a proxy may be effected by a power of attorney instead of by a proxy instrument. The term power of attorney is used in two ways:
i) An authority which one person confers on another person with power to act in his or her name;
ii) The formal document, that is the legal instrument by which that authority is conferred.
c) At common law there is no right to appoint another person to vote by proxy: Harben v Phillips [1883] 23 Ch 14. Therefore in order that such a right is available, the rules of the body or a relevant statute need to contain an express provision which gives members a right to appoint proxies to act for them at meetings and vote on their behalf and to set out the specific requirements regarding proxies (Horsley paragraphs 14.13 and 16.2);
d) A poll by its nature has two main characteristics:
i) Votes are cast in writing; and
ii) The reasons for a poll being demanded are to enable votes to be cast in proportion to varying voting power (for example according to the number of shares held in a company), on behalf of absent members who have appointed proxies and by absent members presenting themselves and voting where the poll is held at a date later than the meeting at which it was demanded (Horsley, paragraph 14.6);
e) At common law any voter has a right to demand a poll unless rules which apply to the meeting specifically exclude that right: Campbell v Maund (1836) 5 AD & E 864. The right to demand a poll exists by the common law and those entitled to vote cannot be deprived of this right except by express provision: R v Wimbledon Local Board (1882) 8 QB 459 (Horsley, paragraph 15.2);
f) It is usual that a vote by show of hands is taken before a poll is demanded. However, unless rules provide otherwise it is not essential that a demand for a poll should await a vote by show of hands. A poll may be demanded prior to a vote being taken by show of hands: Holmes v Keyes [1958] 1 Ch 670 (Horsley, paragraph 15.3);
g) A proxy may not demand or join in demanding a poll unless expressly permitted to do so in the rules: In re Haven Gold Mining Co (1882) 20 Ch 151 (Horsley, paragraph 15.2);
h) Members desiring to vote on a poll must attend personally, or by proxy, where the rules provide for proxies: McMillan v Leroi Mining Co [1906] 1 Ch 331 (Horsley, paragraph 15.9);
i) When a poll is properly demanded the earlier vote by show of hands in superseded. The decision of the meeting will depend entirely on the result of the poll: Anthony v Seger (1789) 1 HAG CON 13 (Horsley, paragraph 15.4);
j) On a poll, the number of votes recorded by each voter depends on the number to which that person is entitled under the rules of the body. For instance, such an entitlement may be one vote for each member or one vote for each share held (Horsley, paragraphs 14.6 and 15.1).
Handling proxy speaking and voting
The rules of an organization should detail how proxies are to be appointed. The following is an effective and efficient way to deal with proxies where proxy voting is permitted under an entity’s constitution:
- The notice of meeting should include with it a proxy form for use when required – detailing the meeting the form relates to, with space for the member appointing the proxy to identify themselves and to sign the proxy form,
- At the meeting venue there should be a process to check that attendees are members or that a person holding a proxy for a member has been properly appointed as required by the entity’s constitution,
- When a member’s proxy speaks on behalf of the member the proxy should identify the member for whom the proxy is speaking, and
- Voting slips or forms may be issued to members and to proxy-holders for use when voting.
For specific advice about any of the issues discussed in this article, please contact Mark at mark@nfplaw.co.nz.