Many owners who do not attend condominium owners meetings use proxies to vote for the election of directors and other matters. The use of proxies is particularly prevalent in condominiums where a large number of owners are not residents. What happens if there are allegations that proxies have been tampered with or altered?
It is the responsibility of the Chairman of the meeting to examine the proxies and determine their validity. The extent of the Chairman’s duties in this regard was the focus of a recent court case, YCC No. 42 v. Gosal et al.
In that case, after determining that 75 proxies were invalid as a proxy holder had been seen altering proxies, the Chairman tabulated the ballots and declared the results of the election. A couple of months later the Corporation’s manager, without authorization from the Board conducted a recount of the ballots and arrived at a different result. Based on this, as well as further allegations of proxy tampering, the Chairman then conducted his own recount. After invalidating ALL of the proxies, the Chairman then purported to decertify the election results. A court application was subsequently commenced by the “old” board in place prior to the election, seeking to set aside the election results, while another application was commenced by the “new” board seeking to uphold the election results.
The judge concluded that the Chairman had no authority to decertify the election results approximately 7 weeks after the election. “It is the duty of the chair to examine all ballots, decide on their validity, count the votes cast and declare the result . . . Once the chair makes a declaration as to the result of the vote, it is final and binding unless otherwise reversed by the court.”
The judge also noted that there was no basis for the Chairman to declare all of the proxies invalid. “The law is that proxies are prima facie valid if they are in proper form and appear to have been executed by a person qualified to vote. As well, the improper rejection of a proxy is as potentially significant to an election as the improper admission of one.”
After concluding that the Chairman had no power to decertify the election results, the judge then considered whether the court should invalidate the election, on the basis that that invalid proxies had been used. First of all, the judge noted that objections to the acceptance or rejection of proxies should have been made at the meeting and that the burden of proof is on those seeking to have the proxies declared invalid. In this case those that were seeking to overturn the election results did not satisfy the onus on them to prove both that proxies had been tampered and that this materially affected the outcome of the election. For that reason the results of the election stood.
There are a number of useful “take-aways” from this case:
- Objections to the acceptance or rejection of proxies should be made at the meeting.
- Once the Chairman of the meeting declares the results of the vote, then those results stand.
- After the meeting anyone seeking to invalidate a vote on be the basis that invalid proxies were used, will need to commence a court application and will have the onus to establish both that the proxies were invalid and that this materially affected the results.
