PROXIES VERSUS REPRESENTATIVES

There are many misconceptions about the differences between a proxy and a representative. Although both involve exercising someone else’s voting rights, these terms are not interchangeable.

If you are unable to attend a body corporate meeting, someone may be able to represent you as your proxy, or as your representative. There are many misconceptions about the differences between a proxy and a representative.

Although both involve exercising someone else’s voting rights, these terms are not interchangeable. While the focus of this article will be a comparison of general meeting proxies and representatives for community titles schemes registered under the Standard and Accommodation Module, we will also touch on the differences between general meeting proxies and committee meeting proxies.

General Meeting Proxies

An owner can appoint a proxy to represent them at a general meeting by filling out the prescribed form (BCCM Form 6) and giving it to the secretary before the start of the meeting, unless the body corporate has set an earlier time. Aside from a few exceptions, such as a body corporate manager or an associate of a body corporate manager, almost anyone can be appointed as a proxy for a general meeting. For instance, an owner with an investment property could appoint their tenant, or a busy owner could simply appoint a family member or a friend. The proxy holder does need to be part of the body corporate.

However, there are some important limitations on general meeting proxies to bear in mind. If there are less than 20 lots in the scheme, a person must not hold more than one proxy. For schemes with 20 or more lots, a person must not hold proxies for more than 5% of the total number of lots. Restricting the number of proxies someone can hold is intended to prevent ‘proxy farming’ and promote a more even distribution of voting power.

General meeting proxies are also barred from voting on certain types of resolutions, including:

• Secret ballot motions;
• Electing committee members;
• Engaging a person as a body corporate manager or a service contractor, or authorising a person as a letting agent;
• Voting on a motion where the owner who gave the proxy has already submitted a hard copy or electronic vote on the motion; and
• Voting at the general meeting if the owner who gave the proxy is present personally (unless the owner has given their consent).

The proxy giver can also choose the length of the appointment. Depending on what the owner selects in the prescribed form, the appointment can be for a particular meeting, for all general meetings held before a specified date, or for the duration of the body corporate’s financial year.

Representatives

Representatives can represent an owner at a general meeting. Unlike general meeting proxies where virtually anyone can be appointed by an owner, the legislation requires a person to fall into a specific category to be a representative – namely, a person acting under the authority of a power of attorney (subject to specified conditions), a guardian, trustee, receiver, or other representative of the lot owner who is authorised to act on behalf of the owner.

To exercise general meeting votes in this capacity, the individual’s name will need to be entered on the body corporate’s roll as the lot owner’s representative. The representative must also provide certain information to the secretary. Specifically, the instrument which gives the individual their representative capacity, or other documentation evidencing this capacity, their residential or business address, and if different, their address for service.

Before the regulation changes, which came into effect in March 2021, a person could act as the representative for an unlimited number of lots under a power of attorney. Due to stakeholder concerns about the strategic use of power of attorney votes at general meetings, the circumstances in which someone can act as a representative under a power of attorney for more than one lot are now limited. Like the limits on the number of proxies someone can hold at a general meeting, restricting the number of lots you can be the representative for when acting under a power of attorney similarly reduces the likelihood of an unfair concentration of voting power. Exceptions exist for owners of multiple lots, family members of the representative, and powers of attorney given to the original owner under sections 211 or 219 of the Body Corporate and Community Management Act 1997.

The most significant distinction between a general meeting proxy and a representative is arguably the pool of matters that can be voted on. Whereas the voting power of a representative at a general meeting essentially mirrors the voting power of regular owners, as discussed earlier, a proxy is unable to vote on various types of resolutions.

Committee Meeting Proxies

Voting committee members can appoint a proxy to vote on their behalf at a committee meeting by giving the prescribed form (BCCM Form 7) to the secretary before the start of the meeting, or an earlier time set by the body corporate. However, a secretary or treasurer must complete the form and obtain committee approval to appoint a proxy.

While there are very few limitations on who can be appointed as a general meeting proxy, for a committee meeting, a proxy can only be another voting committee member. This prevents the appointment of body corporate managers or caretaking service contractors, who are non-voting committee members.

A voting committee member who has been appointed as a proxy can exercise two votes – one vote in their own right, and another in their capacity as proxy. However, a proxy cannot be exercised at a committee meeting if the proxy giver is present personally or by electronic means.

A voting committee member can only be represented by proxy at two committee meetings in the year of the committee’s appointment. This is unlike an owner’s ability to appoint a proxy for any general meetings held during the body corporate’s financial year. Also, while a general meeting proxy form gives owners options about the length of the appointment, a committee meeting proxy automatically ends after the meeting.

By highlighting the key distinctions between general meeting proxies and representatives on the one hand, and between general meeting proxies and committee meeting proxies on the other, we hope that this article has provided clarity on an area of body corporate legislation which can be confusing for stakeholders. It is important to have a solid understanding of the rules surrounding proxies and representatives, as they can influence voting outcomes significantly.

This article was contributed by Jane Wilson – Commissioner for Body Corporate and Community Management