How Do Proxies Work at Unit Holder Meetings in Papua New Guinea?

A unit trust with thousands of members cannot expect them all in one room. Proxies let a retiree in Goroka or a church in Wewak be heard at a meeting in Port Moresby without travelling. The rules are in Subdivision 5 of Division 5 of Part V of the Capital Market Act 2015.

Who may appoint a proxy, and how many

The proxy can be anyone: a relative, a lawyer or the chair of the meeting, and the notice of meeting must say so (section 221(d)). The deed cannot remove the right, although it may provide that a proxy cannot vote on a show of hands (section 233(2)).

What a proxy can do

Section 233(1) gives the proxy the same rights as the member to speak at the meeting and to vote, “but only to the extent allowed by the appointment”. If the member turns up in person, the proxy’s authority is suspended while the member is present, unless the deed provides a different rule (section 233(3)–(4)). A proxy who is also a member votes their own units as they wish (section 235(6)).

A valid appointment

Section 235(1) makes an appointment valid if it is signed by the member and contains four things: the member’s name and address, the scheme’s name, the proxy’s name or the name of the office held by the proxy, and the meetings at which it may be used. The deed may relax these requirements but not add to them (section 235(2)). No witness is needed (section 235(9)). An undated form is taken to be dated the day it reaches the trustee (section 235(3)), and a later appointment revokes an earlier one if both could not validly be exercised at the same meeting (section 235(10)).

The appointment may direct how the proxy is to vote on a particular resolution (section 235(4)), and section 235(5) sets the consequences. An undirected proxy need not vote, but a proxy who does vote must follow any direction; a proxy holding appointments that point different ways must not vote on a show of hands; and the chair, as proxy, must vote on a poll and must follow the directions given. Voting contrary to a direction is an offence, but only where the appointment resulted from the trustee circulating a list of willing proxies or a form holding the person out as willing to act (section 235(7)), and the trustee is liable for a member’s resulting loss (section 235(8)).

The 48-hour deadline

Subject to the deed, section 236(2) requires the proxy appointment, and any power of attorney under which it was signed (or a certified copy), to be received by the trustee “at least 48 hours before the meeting”. The documents are received when they arrive at the trustee’s registered office, at a fax number there, or at any place, fax number or electronic address specified for the purpose in the notice of meeting (section 236(4)). For an adjourned meeting, appointments received 48 hours before the resumption are effective for the resumed part (section 236(3)). A form handed in at the door is too late unless the deed says otherwise.

Death, revocation and transfer

Section 237(1) protects the integrity of the vote. Unless the trustee “has received written notice of the matter before the start or resumption of the meeting”, a proxy’s vote is valid even if, before it was cast, the member died, became mentally incapacitated, revoked the appointment, revoked the authority under which a third party appointed the proxy, or transferred the units. Telling the proxy is not enough. The deed may vary this rule (section 237(2)).

The trustee and proxy forms

A trustee that sends out proxy forms or a list of persons willing to act as proxies must treat members even-handedly. If a member asked for the form, the trustee must send it to every member who asks; otherwise it must send it to all members entitled to appoint a proxy (section 234(1)). A trustee that fails to send the required documents, so that a member misses out on being represented, is liable in damages to that member, recoverable in the National Court (section 234(2)–(3)).

Body corporate representatives

A company, superannuation fund or incorporated land group that holds units does not use a proxy. Under section 238 a body corporate may appoint an individual as its representative to exercise all or any of its powers at a meeting. The appointment must say what the representative may do and may restrict those powers; more than one representative may be appointed, but only one may act at a time (section 238(2)–(4)). See how voting is conducted and what notice must be given.