Like everyone else, strata corporations in the COVID-19 era have to operate in a quickly changing landscape. On March 16, 2020, the Provincial Health Officer banned gatherings of 50 or more people, which made it impossible for many strata corporations to hold in person general meetings. On December 2, 2020, during the second wave, the prohibition of most events, including strata meetings, closed the door for all in person meetings. The April 15, 2020 Ministerial order M114 (“Order”) allowing all strata meetings to be held electronically helped. However, there were no guidelines issued on how to conduct an electronic general meeting. Strata corporations had to adapt while ensuring compliance with the Strata Property Act (“Act”) and their bylaws. One of the most confusing aspects relates to proxies. The lack of guidance resulted in an uptick in Civil Resolution Tribunal (“CRT”) proxy-related decisions. These decisions provide guidance, to councils and strata managers to help prevent having to re-vote decisions from an improperly conducted meeting.
Governing Legislation and Recent Court Case
Section 56 of the Act lays out the requirements for a proxy as follows:
- The proxy document must be in writing, and signed by the appointing owner;
- The proxy can be revoked at any time;
- Employees of the strata corporation, and the strata manager cannot be proxies;
- The proxy must be allowed all of the powers the strata lot owner would normally hold in the meeting, unless expressly limited in the proxy document.
We also know from the BC Supreme Court decision in Macdonald v. Strata Plan EPS 522 that a proxy form must be properly completed. They must not be blank. They must identify a specific individual as the proxy. A proxy which names “any council member” is invalid. A proxy form that does not name a proxy is invalid. Changes to who is appointed as the proxy on a proxy form should be initialed by the owner to be considered valid. The proxy form must be signed either by hand or digitally.
The Birth of “Restricted Proxies”
The pandemic was declared March 11, 2020. The BC government declared a state of emergency on March 18, 2020. Two days earlier, Dr. Bonnie Henry issued a ban on gatherings of 50 or more persons, recommended that people stay at home and physically distance. For many strata corporations, this made holding a general meeting impossible. Section 49 of the Act allows for electronic attendance at a general meeting, but only if there is a bylaw. The standard bylaws do allow council meetings to be held electronically, but there is no equivalent standard bylaw for general meetings. While some strata corporations amended their bylaws to allow for electronic general meetings, that certainly was not universal. A solution was needed. The concept of the “restricted proxy” was born.
The idea of the restricted proxy was the extension of “we are all in this together”. Strata corporations asked all owners to submit a proxy form naming one of a select number of persons, mostly council members, as their proxy. To make owners comfortable with a general meeting that no one but council members attended, the proxy form included in the notice package contained restrictions that directed the proxy how to vote. Often, the proxy form would limit the proxy to only voting without granting full proxy powers to assure owners that the meeting would proceed based on the agenda and resolutions as presented in the notice package. There would be no surprises. The proxy form also stated that the proxy forms had to be submitted prior to the meeting by a specific deadline, would be kept for two years and would be available for inspection. Proxy forms are not a record of the strata corporation under section 35 of the Act. So typically, the strata corporation would not have a record of them, nor could they be compelled under the Act to produce them to an owner upon request. This measure was meant to reassure any owners that would otherwise be uncomfortable having such a “closed” meeting that the outcome of the votes could be scrutinized. The rationale was that everyone as a community would willingly complete the proxy form to avoid gatherings in numbers that would breach the provincial health order and prevent the spread of COVID-19. It was a seemingly perfect solution to a big conundrum.
When the Order came out on April 15, 2020 allowing any strata corporation to hold a general meeting electronically regardless of a strata corporation’s bylaws, the need for a restricted proxy form disappeared. Yet, the term “restricted proxy” stuck. Rather than meaning a form that directs the proxy how to vote, “restricted proxies” became synonymous to mandatory meetings by proxy, where owners cannot attend, vote in person on their own behalf or choose their own proxy. There is no mechanism under the Act or the standard bylaws to allow for a mandatory restricted proxy or restricted proxy meeting. The strata industry would be best served if we all forgot “restricted proxies”, and instead, used a “proxy with restrictions”, or a “proxy with directions”.
Proxy forms – CRT’s Do’s and Don’ts
Form “A” of the Strata Property Regulation provides a simple template for a proxy form. It’s optional, which means strata corporations aren’t required to use it, but it is a great starting point. While a strata corporation can include a proxy form in the general meeting notice package, section 45 of the Act doesn’t actually require one to be included.
- Don’t include instructions that the owner must only choose from a list of specified proxies. (Shen v The Owners, Strata Plan EPS 3177; Balayewich v The Owners, Strata Plan LMS 317).
- Don’t require that the proxy be granted only limited or restricted powers such that the proxy cannot propose amendments or participate. An owner has the option to grant their proxy full proxy powers (Hodgson v The Owners, Strata Plan LMS 908; Curll v The Owners, Strata Plan NW 2926); or
- Don’t include a requirement that the proxy form be submitted in advance of a general meeting though it can be suggested for organizational purposes. If a proxy chooses not to submit the proxy form in advance, it must still be accepted at the meeting. (Preshaw v The Owners, Strata Plan VIS 5792).
- Don’t use the proxy form as a ballot. A proxy form appoints a proxy. The proxy votes at the meeting. (Curll v The Owners, Strata Plan NW 2926).
- Do allow for an owner to grant their proxy “full proxy power” in the event the owner does not want to grant only restricted powers. (Hodgson v The Owners, Strata Plan LMS 908; Curll v The Owners, Strata Plan NW 2926)
- Do allow an owner to freely choose their proxy. While the proxy form can list council members, it must also provide space for the owner to select someone of their choosing as an option (Shen v The Owners, Strata Plan EPS 3177; Hodgson v The Owners, Strata Plan LMS 908; Balayewich v The Owners, Strata Plan LMS 317).
- Do accept a proxy that is signed, by hand or digitally, by the owner who is designating the proxy (Hedberg v The Owners, Strata Plan 511).
Best practices for strata corporations in the use of Proxy forms in electronic meetings
After many months of trial and error, the CRT has paved a clearer path for strata corporations to deal with proxies in an electronic general meeting setting. Below are best practices to follow:
- The strata corporation’s responsibility in relation to proxies is to allow for a proxy to attend. It is up to the owner to determine whether to restrict or direct the proxy.
- The electronic general meeting must allow for the proxy to participate as if they were the owner.
- Once the proxy form has been certified at the start of the meeting, the proxy form should be given back to the proxy. It is not the strata corporation’s duty to ensure the proxy is voting or acting in accordance with the directions on the proxy form.
- When conducting general meetings, the person(s) certifying proxies must be able to view the signed proxy form. The proxy can text or email a picture of it, show it on their camera during the general meeting, or mail a copy of it in advance.
- A proxy must be allowed full proxy powers, such as proposing and voting on amendments, if permitted by the owner. Remember, the strata corporation is not responsible for ensuring the proxy acts as directed (see #3 above). The owner must ensure the proxy is prepared and educated on the possibility of further voting.
- When deciding how to run an electronic meeting, try and recreate an in-person meeting in an online setting. The same bylaws and provisions of the Act apply to both.
As electronic general meetings continue to take place, knowing how to properly deal with proxies is essential to ensure that they are well run, and conducted in accordance with the bylaws and the Act.
On February 16, 2021, the province passed Order in Council 81/2021. On July 10, 2021, the strata corporation’s ability to hold electronic meetings without a bylaw ends. This means that strata corporations must adopt bylaws allowing for electronic general meetings if they intend to continue to do so after July 10, 2021.
Please contact any of the Strata Property Group lawyers at Clark Wilson LLP for further information.