Hi everyone, it’s Allison Benson from Thoughts from a Strata Lawyer.

I am talking to you today about proxies. I have recently updated a blog regarding the number of proxies that a person can hold, and I will link that blog down below.

This blog is about the often under estimated, overlooked proxy limitations. There’s 3 main ones.

My first one, and it is a good one.

A strata manager, a building manager, or an on-site residential letting or letting agent cannot exercise a proxy (and if they do, it’s invalid) if that proxy vote would either confer or assist in conferring a material benefit on them.

Think material benefits as including extensions of contract, increases in pay, settlement of NCAT proceedings or other litigation. Anything that has a material benefit. That’s a really important limitation.

And I should say these limitations are under clause 25 on schedule one of the Strata Schemes Management Act 2015 (NSW). There are similar provisions in the Community Land Management Act 2021 (NSW).

So that was my 1st limitation, an overlooked, underestimated one.

My 2nd one catches people all the time it when the proxy and the lot owner attend the meeting and vote.

If the principal, being the person that has appointed a proxy, also votes at the meeting, the proxy’s vote doesn’t count.

So if I give my proxy vote to one of my team and my team member and I both attend the meeting. Well, I vote. If my team member also votes, their vote doesn’t count because the lot can only vote once. So my vote, because I’m the principal, that applies over the vote of the proxy. So if you have that situation where you’ve got a lot owner and a proxy voting at the same meeting, it’s the lot owner’s vote that’s going to count.

The 3rd overlooked, underestimated limitation on proxy votes, is the instrument of appointment.

A proxy can only vote in accordance with their instrument of appointment.

By that, I mean the actual proxy form that the lot owner signed to appoint their proxy. Now, it’s a prescribed form. I’ll link the prescribed form down below. The form has to have all of the details in the Fair Trading prescribed form. So it has to have a date (that’s going to be important), It has to state who the law owners are, the strata plan number and who they (the lot owner) appoints, to the actual name of the person they’re appointing as a proxy. They can also appoint a alternate proxy if their first proxy already holds the maximum number of proxy votes.

Really, really important, the prescribed form requires the lot owner to state the period, the period of time, or the number of meetings for which the proxy can vote. The appointment of the proxy has effect but is it for one meeting? Is it one month? Is it for two2 consecutive annual general meetings? is it for 12 months?

Now, the appointment cannot have effect for more than 12 months: you can’t appoint somebody as your proxy for more than 12 months, or for more than two consecutive annual general meetings, whichever is the greater amount. That’s really important.

If you have appointed a proxy, and you go away for 18 months, on time you your proxy finished at the 12 month mark (if an earlier time period was not specified)/

If you go away for 18 months, but in the 1st 2 months, and there’s two annual general meetings, then your proxy doesn’t count after that if it would otherwise have been within 12 month time frame. Now, it’d be a bit weird to have two annual general meetings, I should say, within 12 months but it wouldn’t necessarily be unheard of if one’s late, because you only have to have an annual general meeting, every financial year. So theoretically, you could have one if it’s the normal financial year 1 July to 30 June, you could have one on 1 July in one year, and you could have it on the 30th of June in the year before and you’d still be compliant with the legislation. Sometimes as well, annual general meetings are brought forward and they’re held a little bit earlier, or they’re held a little bit later so, it can be a lot shorter period than 12 months is what I’m trying to say.

You can also, on the proxy form, state what you were authorising the proxy to vote on or how you are authorising your proxy to vote, or even the matters that they’re authorised to vote on. That’s often overlooked because people just take it as, this person’s got my proxy vote, and just assume that they have the authority to vote however they like. They don’t.

If you are looking at proxies and you need to count them up for your meetings, you really should check the proxy form itself. Make sure that it’s been properly executed. We want to see signatures. All the lot owners. We want to know that the person who is actually there as the proxy is the person that has been appointed under the instrument as the proxy. We want to know that that proxy is still valid, so that the time period that the proxy has been appointed for or the number of meetings that the proxy has been appointed for, it’s still within power. This is a trip that just gets so many people caught on. Please don’t get caught up by it. Please, please, please double check.

My (updated) blog on Proxy Limitations – how many can be held: https://allisonbensonau.com/2024/02/09/strata-schemes-and-restrictions-on-voting-by-proxy-a-power-of-attorney-or-as-a-company-nominee/

Fair Trading Proxy Form: https://www.nsw.gov.au/sites/default/files/2023-08/Strata%20proxy%20appointment%20form.pdf

As always is general legal advice, general advice rather than legal advice tailored to your specific legal situation. If in doubt, get legal advice because these can be very, very technical.

Thank you for listening.