Posted: February 20th, 2017

Advise Kurt as to whether his dismissal was lawful.

Paul is a director of Sparky Pty Ltd, an electrical services company.  He signed a contract on behalf of the company to buy some electrical components from X Co.  However he was not authorised by the Board of directors to enter the company into this contract and the Board do not wish the company to be bound it.    There is evidence that the Board acquiesced in Paul to making such contracts for the company in the past. There was also a provision in the Constitution authorising the Board to appoint a Managing Director.   Advise the company.  Identify any further facts you would like to know.   Question 5 ABC Enterprises Ltd was incorporated under the Corporations Law and adopted the replaceable rules, subject to certain modifications and additions, including: “A poll may be demanded by at least 6 members entitled to vote on the resolution” and “Proxy documents must be received not less than 4 days before the time for holding the meeting.”   ABC Enterprises Ltd was due to hold its last annual general meeting on 16th July.  On 3rd June, some of the members notified the company that they wished to have Kurt, one of the directors, removed.    At the meeting, the agenda contained no reference to any resolution for the removal of Kurt from his directorship.   Jason, went to the meeting and voted against the resolution but the chairman declared it passed.  Jason and 4 other members (including a proxy nominated 48 hours earlier) demanded a poll but this was refused by the chairman.   Advise Kurt as to whether his dismissal was lawful.