A proxy is an authority given by a person, "the principal", to another person, "the proxy-holder", to attend a meeting and speak and vote as his/her representative [Note 1]. Creditors attending the meeting in person, through company representatives (paragraph 16.107) and HM Revenue and Customs commission holders (paragraph 16.116) do not require proxies in order to vote at a meeting.
The proxy for the purposes of the Insolvency Act 1986 and the Insolvency Rules 1986 is a written authority [Note 2] [Note 3]. Proxies can be used at both creditors’ and contributories’ meetings [Note 4]. A proxy given for a particular meeting may be used at an adjournment of that meeting [Note 5].
The principal can only give one proxy for a person to be present at any one meeting at which he/she wishes to be represented, although he/she may specify on the proxy one or more alternative individuals to be proxy-holder at that meeting. An individual under the age of 18 cannot be appointed as a proxy [Note 6]. A proxy for a particular meeting may be given to the official receiver or chairman of the meeting [Note 7].
A proxy may be either specific or general, a general proxy entitles the proxy-holder to vote in favour of or against any resolution proposed and entitles the proxy-holder to propose resolutions, including one for the appointment of an insolvency practitioner as liquidator or trustee [Note 8].
A specific proxy gives directions how the proxy-holder must vote, although this does not, unless the proxy states otherwise, preclude the proxy-holder from voting at his discretion on resolutions put to the meeting, which are not dealt with in the proxy [Note 8].
(Amended July 2010)
All creditors and contributories are sent proxy forms with the notice summoning the meeting, unless the court orders otherwise [Note 9] [Note 10] (see paragraphs 16.30 and 16.31 for further information). A proxy need not be submitted using the actual form sent with the notice summoning the meeting but, if not, it must be on a substantially similar form [Note 11].
Proxies need to be examined on receipt to check that they are valid (completed and authenticated) and entered on the schedule of proofs and proxies for use at the meeting [Note 12]. The chairman of the meeting needs to consider the wording of the proxy to ensure that the proxy-holder is acting in accordance with his/her principal’s wishes, particularly if the proxy-holder is proposing the nomination of an insolvency practitioner under a general proxy. If two or more proxies are received on behalf of the same creditor the chairman of the meeting will have to consider which proxy is the valid one (see also paragraph 16.113).
(Amended July 2010)
A proxy must be authenticated by the principal or by a person authorised by him/her (either generally or with reference to a particular meeting), specifying the nature of such authority [Note 13]. Generally, any person can authenticate the proxy and his/her stated authority to do so should not be questioned unless the chairman of the meeting has good reason to suspect that everything is not in order. If after making enquiries the official receiver is in doubt regarding the authority of an authentication he should treat the proxy as valid and mark the proof as objected to (see paragraph 16.79). Where the proxy-holder represents a company, it is not necessary for the company to seal the proxy or to pass a resolution authorising the proxy-holder to act [Note 14].
(Amended July 2010)
Some creditors have authorised representatives from insolvency practitioner firms to authenticate proxies on their behalf in all cases. In most cases the proxies instruct the holder to vote for a resolution, which would lead to the appointment as trustee or liquidator of the insolvency practitioner they represent.
Where the proxy form is authenticated on behalf of a creditor by a representative of an insolvency practitioner’s firm, the chairman of the meeting should require the proxy-holder, before he/she is allowed to vote, to produce a written authorisation from the creditor that the proxy-holder was entitled to authenticate the proxy [Note 15]. Where the creditor is a financial institution or a large commercial creditor the official receiver can accept a general authority to cover all meetings held within his/her office and authorisation need not be provided for every meeting. A record of such authorisations should be kept within the office and reviewed annually to ensure they remain current. The official receiver should also ensure that a general authority is dated.
(amended February 2012)
Where an insolvency practitioner holds an authority to act on behalf of certain creditors (this is often referred to as a “blanket authority”), it is important that the scope of the authority is clear. To assist both creditors and insolvency practitioners Insolvency Practitioners Policy Section have laid down the format of an ideal authority:
(i) The authority should be on the headed notepaper of the creditor including the address and registration details.
(ii) The name and job title of the person authenticating the authority on behalf of the creditor should be printed.
(iii) A statement that the person authenticating the authority is authorised to give the authority.
(iv) The contact details of the person authenticating the authority should be included; address, telephone and email if available.
(v) The letter should be authenticated and dated.
(vi) The authority will be retained by the official receiver for 2 years after which it will have deemed to have lapsed and should be renewed by the creditor (see paragraph 16.106C).
Annex C contains a form of wording that it would be acceptable for official receivers to accept. The ideal format of a blanket authority has been amended to take into account the general changes under the Insolvency (Amendment) Rules 2010, Schedule 1 as referred to in Annex A. See paragraphs 16.65 and 16.66 for guidance on the meaning of authenticate in relation to proof of debt forms, and paragraphs 16.105 to 16.106 in relation to proxies.
Where the official receiver receives a later dated authority from the creditor for another insolvency practitioner it will be assumed that the creditor has withdrawn the earlier authority and the official receiver will be under no obligation to make enquiries.
Official Receiver Business Services (ORBS) maintain details of all authorities on a central database HERE
The guidance contained in paragraph 16.106A and Annex C is not totally prescriptive. Official receivers should use their own judgement regarding any blanket authorities submitted to them. The guidance in paragraph 16.106A does however contain a number of points that should be addressed in the authority, e.g. that it be authenticated and dated. If the official receiver is not satisfied with the authority submitted, he/she should request further clarification, and if necessary, a new authority from the creditor. The guidance at Annex C provides creditors a “menu” of what specific authorities they give to the insolvency practitioner. If one of the items e.g. “Requesting a list of creditors” is not included, then, in the absence of further instructions from the creditor, the official receiver should decline such a request from the insolvency practitioner.
The guidance in paragraph 16.106A specifies that the authority should be renewed after two years. The authority is a relationship between the principal (creditor) and agent (insolvency practitioner). The official receiver is not party to such agreement and cannot therefore cancel the agreement or deem it to have lapsed. The official receiver can however express doubts that the agreement is still current and seek clarification from the principal (creditor). In cases where the authority is over two years old, the official receiver should seek a new authority. In the absence of a new authority the official receiver should contact the creditor each time the insolvency practitioner attempts to rely on the old authority. In the case of existing authorities over two years old, the insolvency practitioner should be encouraged to submit new authorities.
Where insolvency practitioners do not have a national agreement but wish to submit an authority to local official receiver(s), staff should request that any new authorities address the issues raised in the guidance contained in paragraph 16.106A and Annex C. The official receiver should in all cases send a copy of the blanket authority to their RTLU.
(amended February 2012)
A company which is a creditor or contributory of another company may pass a resolution authorising an individual or individuals to represent it at meetings in the liquidation of that latter company [Note 16].
A copy of any such resolution must be produced to the chairman of the meeting. The copy of any such resolution must be either under the seal of the company, which is a creditor or contributory, or certified by the secretary or a director of that company to be a true copy [Note 14].
If it is in order, the individual represents the company as if it were a creditor present in person and may vote accordingly. No proxy is required in these circumstances. Such an authorisation cannot be used at a meeting of creditors in a bankruptcy [Note 16].
(Amended July 2010)
A proxy sent by fax can be accepted for the purposes of a meeting provided the fax is received within the time limits set for the acceptance of proxies.
In the case of Inland Revenue Commissioners v Conbeer ( BCC 189) it was held that a faxed proxy form was validly signed because when a creditor faxes a proxy to the chairman of a meeting he transmits both the contents of the proxy and his/her signature applied to it.
The proxy will still be considered valid if it is faxed via an intermediary such as an insolvency practitioner, who does not hold an original proxy having been instructed by fax or electronic means, as long as that intermediary is duly authorised by the creditor [Note 17]. Similar regard should be applied to scanned proxies received by e-mail (see paragraph 16.108A) with care being taken to ensure the proxy is validly authenticated and completed (see paragraph 16.104).
Where there have been amendments made to the proxy form by the intermediary prior to it being forwarded to the chairman and these amendments are made with the authority of the principal, they should be accepted by the chairman as binding the creditor. Where the chairman has concerns regarding the existence of such authority he/she should contact the creditor in order to clarify the position (see also paragraph 16.71 and paragraphs 16.114 to 16.115).
(Amended July 2010)
The IAR 2010 introduced provisions enabling the submission of information to the official receiver, amongst others, by electronic means from 6 April 2010 [Note 18]. These provisions apply to the submission of proxies provided that the following criteria are met [Note 19]:
In addition, the information provided must be authenticated (see paragraph 16.65). To satisfy the requirements for authentication of documents submitted by electronic means, the identity of the sender must be confirmed in a way specified by the recipient. If the recipient has not specified how the sender’s identity should be confirmed, the proxy or information is sufficiently authenticated if it is accompanied by a statement of the identity of the sender and the recipient has no reason to doubt the truth of that statement [Note 21].
In practice, a scanned proxy containing an original signature and submitted to the official receiver by email can be accepted for the purposes of a meeting provided that the official receiver has no reason to doubt its authenticity. Similarly, a proof received electronically from the creditor or their intermediary, and containing an electronic signature (authentication), may be accepted if the named individual can be traced to the originating organisation and is a known party within that organisation (see ORBS guidance notes http://intranet/DocumentLibrary/CAD/Word/Rules%20Modernisation%201.doc).
(Amended July 2010)
Proxies not lodged by the time specified in the meeting notice [Note 22] [Note 23] [Note 24] [Note 25], or where it relates to an adjourned meeting, by 12 noon on the business day immediately preceding the meeting [Note 26] [Note 27], are not valid for voting purposes [Note 28] [Note 29]. The chairman has no discretion to allow any exceptions. It is important to note on every late proxy received, the date and time of receipt. (See paragraphs 16.52 and 16.74 for further information regarding adjournment of the meeting in these circumstances).
Where the outcome of the meeting would have been affected had the proxy form been received on time, the chairman has discretion to adjourn the meeting [Note 30] [Note 31]. Further, it is possible that the chairman may be willing to permit someone who has submitted papers after the deadline to attend the meeting, even though they will be unable to vote.
Where the official receiver holds proxies for use at meetings, his/her deputy or any other official receiver may act as proxy holder in his/her place [Note 32]. If the official receiver wishes an examiner to act for him/her at a meeting and use proxies in his/her place, the official receiver must first give the examiner a written authority to act, which can be produced by the examiner to those present at the meeting in question, if necessary [Note 33]. Please also see paragraph 16.36.
When the chairman (or official receiver) is given a proxy to speak and vote on behalf of a creditor at meetings, he/she cannot decline to be the proxy-holder and must act in accordance with the terms of the proxy [Note 34] [Note 35] [Note 36].
Where a creditor has given the chairman a proxy requiring that he/she vote for a particular resolution and no other person proposes the resolution, the chairman must do so, unless there is good reason for not doing so. If the chairman does not propose the required resolution he/she is required, immediately after the meeting, to inform the principal of the reason why [Note 35] [Note 36].
Where the chairman holds general proxies he/she may support nominations from others, or, vote for or against any resolution, when he/she believes that in so doing he/she is securing the best interests of the majority of the creditors [Note 37] [Note 38] [Note 39]. The chairman should avoid using his/her general proxies to nominate a liquidator or trustee, unless there is no other nomination leading to an appointment, when he/she may use the general proxies held to nominate an insolvency practitioner by reference to his/her rota (see chapter 17, paragraph 17.43 onwards).
Where a meeting fails to appoint a liquidator or trustee the official receiver is required to decide whether to refer the need for an appointment to the Secretary of State in any event [Note 40] [Note 41].
Subject to what is said in paragraph 16.111, the chairman should not normally use proxies with a general voting discretion to support resolutions which would not otherwise be passed. The chairman must always have some independent basis for supporting a resolution and should make a file note to record clearly the basis and authority on which he/she acts [Note 38] [Note 39].
A creditor can only authorise one proxy for the attendance of one proxy-holder at a specific meeting, although, more than one possible proxy-holder may be named on the proxy as an alternative attendee [Note 6]. The chairman should not therefore be in the position of having two proxies on behalf of the same creditor. If this occurs, the chairman will need to contact the creditor in order to establish the correct position and the circumstances surrounding the error.
Where the chairman has been unable to establish the correct position prior to the meeting he may wish to reject both of the proxies. Alternatively, where the proxies are substantially similar in content, the chairman may wish to admit the most recent proxy for voting purposes.
If the facts indicate that one of the proxy-holders has attempted to mislead the chairman and the proxy-holder is an insolvency practitioner, details should be provided to Insolvency Practitioner Policy Section (IPPS).
In the case of Re Cardona  BCC 697, it was held that a creditor who is entitled to appoint a proxy, is also entitled to revoke that proxy and resubmit it with amended instructions, or appoint a different proxy, during an adjournment of a creditors’ meeting.
Carnwath J, added that appointing a proxy was no more than the giving of authority to act on a party's behalf at a particular meeting, which authority could be varied or revoked at any time prior to the meeting or relevant decision provided that any relevant requirements were complied with.
The principal may therefore withdraw his/her authority for a proxy-holder to act at a particular meeting or withdraw authority for a proxy-holder to vote in a particular way, at any time and may, subject to the time limits stated in the notice of the meeting, submit a new proxy form.
Caution should be applied in cases where amendments are made to proxies, which instruct an insolvency practitioner proxy-holder, to vote for a resolution, which would lead to the appointment as trustee or liquidator of the insolvency practitioner they represent.
Where shortly before the meeting a letter is received from the insolvency practitioner proxy-holder stating that their clients (the principal) wish to withdraw their nomination for the associated insolvency practitioner and vote for another, this should be considered as the creditor seeking to withdraw their proxy. A new proxy should be sent in advance of the meeting. Where the new proxy is not received by the deadline set for receiving proofs and proxies, the creditor has no vote at the meeting unless they attend to vote in person.
Where before the deadline for the submissions for proxies as detailed within the notice of the meeting, a letter is received from the insolvency practitioner proxy-holder stating that their clients (the principal) wish to withdraw their nomination for the associated insolvency practitioner and vote for another, the chairman should ensure that the general authority allows the insolvency practitioner to act in this way. If the general authority does not allow a nomination from another firm the chairman should require the proxy-holder, before he/she is allowed to vote, to produce a written confirmation from the creditor that the proxy-holder was entitled to amend the proxy for that specific case and that the amendments are correct.
Where the official receiver receives a letter from the insolvency practitioner proxy-holder, which states that the insolvency practitioner they represent (the nominee) wishes to withdraw from any vote at the meeting of creditors then the proxy-holder can vote at his/her discretion provided the general authority allows him/her to exercise their discretion. Reference may be made to the OROS intranet page for further information.
Holders of HM Revenue and Customs (HMRC) commissions (written authorities to represent HMRC) are staff of that department who are authorised to lodge proofs of debt and to vote at meetings. Such a vote may be accepted without any proxy being filed, provided a properly admissible proof of debt has been submitted and the person seeking to vote is authorised to do so, as the holder of a commission, which should on attendance be produced to the official receiver. Commission holders are also authorised to serve on liquidation and creditors’ committees without any other formal authorisation [Note 42].
If the principal is an individual, not resident abroad, a person holding a general or specific power of attorney cannot represent him/her at meetings of creditors or vote. If the principal cannot be personally present at a meeting, the only person who can exercise his power of voting is the holder of a proxy, which fulfils the requirements of the Insolvency Act 1986 [Note 11].
If the principal is an incorporated body or other corporate body, the holder of a sufficient power of attorney can represent it at meetings and exercise its vote. Alternatively, the holder of a sufficient power of attorney under the seal of the company or body can execute a valid proxy.
Proxies of statutory companies, corporations or boards, etc must be in accordance with the regulations governing the body concerned, (e.g. a company constituted by a special Act of Parliament may have incorporated in its regulations the provisions of section 140 of the Companies Clauses Act 1845, which enables its secretary to act). Authority to prove a debt does not in these circumstances necessarily carry with it authority to vote and specific inquiries must be made to establish the position.
Objections to a proxy by the chairman, a creditor or any other interested person including the bankrupt should, where possible, be dealt with before the business of the meeting is started. The chairman should make a record of all objections so that if need be he/she can report fully and accurately to the court.
The proxy should be marked objected to where there is any uncertainty. The creditor’s vote will be valid unless an appeal application is made to the court within 28 days for it to be disallowed [Note 43]. Further information is available in Part 5, paragraphs 16.79 to 16.81).
In the unusual event that the official receiver wishes to make such an application, he/she (or a person nominated to act on his/her behalf) is not personally liable for costs in respect of such an application.
Any creditor who has submitted a proof of debt (which has not been wholly rejected) may inspect the proxies submitted for the meeting of creditors and any contributory may inspect the proxies for the meeting of contributories. An insolvency practitioner holding an appropriate authority (see paragraph 16.106 above) may inspect the proxies. The bankrupt or company directors may also inspect the proxies [Note 44]. There are circumstances when an office-holder may refuse a request to inspect documents held by him/her see paragraph 16.100 regarding inspection of proofs of debt and the provisions of Rule 12A.51 in respect of grounds for the refusal of inspection of documents..
Creditors and contributories may only inspect proxies relevant to their meeting. Such inspection may be carried out at the meeting itself. Any person with a right of inspection may take copies of the documents concerned. The official receiver is entitled to charge 15p per A4 or A5 page and 30p per A3 page where he/she supplies such copies [Note 45]. It is not expected that the official receiver will collect these sums in all cases and may use his/her discretion in this regard.
It may be desirable in certain cases, for any proxies held to be retained by the chairman for a period of up to 28 days following the meeting, within which time an appeal may be raised (see paragraph 16.120 above). Any proxies held should then be forwarded to the trustee or liquidator [Note 46].