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Augustus Pty Ltd has four directors, Anthony, Seth, Paulie and Cristopher. Anthony holds 20% of the shares in the company, Seth holds 10% of the

Augustus Pty Ltd has four directors, Anthony, Seth, Paulie and Cristopher. Anthony holds 20% of the shares in the company, Seth holds 10% of the shares in the company, Paulie holds 15% of the shares in the company, and Christopher holds 25% of the shares in the company. The rest of the shares are held by Sandra and Elizabeth, who are not directors of the company. The board of directors want to add the following new clauses to the companys constitution: The income of the company from wherever derived must be used solely for promoting the company; and The company must not pay, distribute or transfer to members, either directly or indirectly, any property or income of the company by way of dividend. A general meeting is called by the board of directors. At the general meeting the directors want a special resolution passed to add these two clauses to the company constitution. As a result of an administrative error, notice of the general meeting to shareholders of the company was either delayed or it did not reach the shareholders at all. Sandra, who holds 15% of the shares in the company, received notice of the meeting two days before the meeting whilst she was on a holiday with her family, so she did not attend the meeting. Elizabeth, who holds 15% of the shares in the company did not receive any notice of the meeting so she did not attend the meeting. When the general meeting is held the resolution is passed by Anthony, Seth, Paulie and Cristopher, who were present at the meeting. Sandra and Elizabeth disagree with the new additions to the company constitution.

Using your knowledge of Australian company law, advise Sandra and Elizabeth whether they can challenge the validity of the special resolution and if so, how.

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