In an important decision of the Ontario Superior Court of
Justice released on August 4, 2016, the Ontario Medical Association
("OMA") was ordered to revise the
contents of a proxy form it circulated to its members in advance of
a general meeting held on August 14, 2016. Although there were
other procedural issues before the Court in this case, its reasons
for ordering revisions to the proxy are of particular significance
to not-for-profits and charities.
The proxy was circulated in respect of a vote held at a general
meeting of OMA's members (approximately 42,000 physicians) to
ratify a new Physicians Services Agreement
("PSA"), which sets out the fee schedule
for medical services provided to patients in Ontario. These fees
are paid for through the Ontario Health Insurance Plan.
The sections of the proxy form that troubled the Court are as
follows (excerpts reproduced in the judgment):
4. This proxy will be voted as directed by the member, however,
if such a direction is not made in respect of any matter and you
[the Member] have not appointed a person other than the persons
whose names are printed herein, this proxy will be voted as
recommended by the OMA Management.
6. This proxy confers discretionary authority in respect of
amendments to matters identified in the Notice of Meeting or other
matters that may properly come before the meeting.
VOTING RECOMMENDATIONS ARE INDICATED BY HIGHLIGHTED TEXT OVER THE
1. Resolution to ratify the 2016 Physicians Services Agreement
(as defined in the Notice of Meeting).
These sections of the proxy form raised the following concerns
for the Court: (i) the fact that the proxy could, in certain
circumstances, be voted as recommended by OMA Management (see
Section 4, above); (ii) the fact that the proxyholder was
empowered, in certain circumstances, to vote as he or she saw fit
(see Section 6, above); (iii) the proxy form contained instructions
to vote "For" or "Against" only one of the
three resolutions to be debated; and (iv) the proxy form contained
a highlighted recommendation to vote "For" that single
resolution (see Resolution 1, above).
The Court stated that, in the form proposed, the proxy was
"all of unhelpful, unclear, unbalanced, and unfair." It
would have been "far fairer," in the Court's view, to
have either: (i) provided no instructions and no recommendations
for the three resolutions to be debated; or (ii) provided
instructions and no recommendations. In addition to these general
comments, the Court made the following specific revisions to the
the Court removed all voting
the Court provided instructions for a
"For" or "Against" vote in respect of each of
the three resolutions to be debated;
the Court used the subjunctive verb
tense and the words "in the future" to make clear that a
vote on two of the resolutions did not preclude a vote on the
resolution dealing with the PSA;
the Court commented generally that it
revised the language in the proxy to show that proxyholders
"are voting on matters of policy and not purporting to make
findings of fact, findings of law, or findings of mixed fact and
law, which are matters better addressed by a court."
The principle of law cited by the Court in support of these
revisions is that a proxyholder is fundamentally the agent of the
member who authorized the proxy. In other words, the
proxyholder's mandate to vote on a particular resolution,
through the proxy, must be as instructed by the member. It is not
the role of the proxyholder to make independent findings on
resolutions being debated.
Notably, the OMA raised the argument that the Court did not have
the jurisdiction to cancel or revise its proxy form. However, the
Court found the matter to be fully within its purview because the
proxy form circulated by the OMA would have precluded the meeting
from being conducted fairly and in accordance with corporate
Although this judgment may not affect most charities and
not-for-profits, it is a noteworthy example of the types of issues
that come before the courts when there is contention amongst
members of an organization.
To read the full text of this decision, click here.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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