Directors' Liability

Review new duty of care for Directors [section 37(1)]. Revise corporate policy to require Directors to obtain professional opinions in order to avoid liability for breach of duty [section 37(3)].

QUALIFICATION

Revise policy regarding qualification of Directors to provide that a Director is immediately disqualified if a lien for non-payment of common expenses is registered against the Director and not discharged within 90 days [section 29].

PROXY FORMS

Review and become familiar with the requirements of the new proxy forms [section 52(3) to 52(6) and regulation 13]. There are three new proxy forms as follows:

  • Proxy for General Matters (Form 8)
  • Proxy for General Matters and for the Election of Directors (Form 9); and
  • Proxy for General Matters and for the Removal of Directors of Substitutes (form 10)

Consider sending an informational circular to unit owners, enclosing the new proxy forms, and advising them of the new requirement regarding proxies and the necessity of properly completing the new proxy forms to render them valid.

Obviously, the most commonly used proxy will be Form 9 which is the appropriate proxy to utilize for A.G.M. meetings where Directors are to be elected. These proxy forms raise numerous questions and complications, some of which are as follows:

  • Can a proxy for electing directors be deposited at any time up to voting? If so, this will effect the next question.
  • There are blank spaces for the appointee and the candidate for election. Can these be filled in by the appointee at the meeting if they are left blank? Can the appointee fill in the name of candidates who are not on the notice of meeting, but whom were nominated at the meeting?
  • What is the best procedure for the chair and the scrutineers to ensure that each ballot cast pursuant to a proxy has been cast only for candidates listed on the proxy? Should the procedure used for the foregoing problem respect the general principle of anonymous balloting and if so, how will the chair ensure anonymity?

All of the above issues must be addressed well before the holding of an owners’ meeting. The actual procedure used to count and record proxy ballots may be handled a number ways. Generally speaking, the bigger the Corporation, the more planning is required. There is no doubt that many more questions will arise which will have to be dealt with accordingly.