Page 33 - The Law of Difficult Meetings

The Law of Difficult Meetings

Section Heading:
Flow text to this box for the Header (H) Part 6 – Proxies and corporate representatives

25. PROXIES

25.1 Legal considerations

As referred to at paragraph 11 (“Who can speak?”) above, section 324(1) CA 2006 entitles a member who can
attend and vote at a meeting to appoint a proxy to attend and vote. A member will be able to appoint more than
one proxy in respect of its registered shareholding provided that each proxy is appointed to exercise rights attached
to different shares (section 324(2) CA 2006). Section 318 CA 2006 provides that a proxy counts towards a quorum
(yet note that proxies of the same member will not alone comprise a quorum (section 318(2)). Moreover, section
329(1) CA 2006 states that the appointment of a proxy at a company meeting also gives authority to demand
or join in demanding a poll. A proxy can vote on a deferred poll. Also, since an adjourned meeting is simply a
continuation of the original meeting, proxies which are lodged in time for the original meeting can be used at an
adjourned meeting.

A proxy must vote in accordance with any instructions given by the member appointing him (section 324A
CA 2006). It seems that a proxy is not, however, in the absence of a contractual obligation or special fiduciary
relationship, obliged to use the proxy votes he has been given. A Chairman who is appointed as a proxy must use
his proxy votes to ensure that the real sense of the meeting is reflected. In Re‑Waxed Papers Limited (1937) 2 All
ER 481 “the instrument of proxy authorised the proxy to act [for the shareholder] at the meeting ... and at such
meeting ... to vote [for or against] the ‘Scheme of Arrangement’, either with or without modification as ... the proxy
may approve”. The Court of Appeal approved the conclusion of the first instance Judge who said:

“It seems to me that the language is such as will enable [the holder of the proxy] to vote upon any incidental
matter or question that may arise and that might need to be decided in the course of the meeting before the
meeting comes to consider the main purpose for which it was convened.”

A proxy should always act on the principle that he is agent for his appointor and, in the absence of express
instructions, he should vote in accordance with what he can ascertain, on the basis of information available to him,
to be the wishes of the appointor. It may be that the instructions on how to vote on other resolutions give some
indication of how the proxy should vote. However, if the proxy is unable to decide, the wisest course may be to
abstain. In some circumstances, for example where there is a particularly large holding, it may be appropriate for
the proxy to seek the member’s instructions, if this is possible.

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