Look out for this when dealing with proxy appointments for your AGM

By Ané de Klerk

By now most people are aware that those who act as proxies for others at a body corporate’s Annual General Meeting (“AGM”) may only do so for a limited number of members, but some still feel in the dark when it comes to exactly what is allowable when a particular member owns multiple units within the scheme. In order to shed light on what impact, if any, this has on the holding of proxies, let’s first consider the relevant legislative framework.

In dealing with this subject, two important statements are made by the legislature:

1. the registered owner of a unit situated within a particular sectional title scheme may appoint any person (regardless of whether or not that person is a member of the body corporate) to present them at the AGM; and
2. any person representing others at the AGM may do so for either one or two owners of a unit or multiple units in that scheme, but may hold proxies for no more than two such owners. 

What is very important, but often overlooked, is the fact that the proxy holder represents a particular member, rather than a particular unit. This means that a member who owns multiple units is not entitled to appoint multiple proxies. In practice we often see members misunderstand this, appointing different proxies for the different units they own in error, or even showing up to the AGM together with their appointed proxy (normally an attorney), who they then claim has been appointed to act as proxy for a second unit they own – something that is not allowed as a proxy needs to step into the member’s shoes, rather than walk alongside him. 

This has the following practical legal implications:

1. When determining whether a quorum has been established, the proxy holder’s value will be that of the total participation quota of the owner or owners they represent
2. The proxy holder’s vote in number will be one for each owner they represent, up to a maximum of two. Therefore the proxy holder’s vote in number can either be one or two, depending on the circumstances.
3. The proxy holder’s vote value may be quite substantial as it will be equal to the sum of the participation quotas of all sections owned by the owner or owners they represent. For example, if a proxy holder holds proxies for two members, one of which owns three sections and the other owning five sections, that proxy holder’s vote value will be the sum of the participation quotas of all eight sections in question. 

Not sure whether you are vetting proxy appointments properly or worried that you may not be applying the practical implications thereof correctly? You are welcome to email info@theadvisory.co.za to obtain a no-obligation quotation for a consultation with one of our community schemes specialists on the subject.