CASE STUDY

In 2015, Claire Mose worked as a luxury fashion designer in a company name Kloe Pty Ltd located in the City of Perth, Western Australia. Claire Mose signed an employment contract and a non-disclosure agreement with Kloe Pty Ltd, and Claire has expressly promised the following provision:

Provision 1: It is agreed that any business opportunity relating to or similar to Kloe's Pty Ltd current or future business opportunity is an opportunity that belongs to Kloe Pty Ltd. It is further agreed that Claire will not directly or indirectly, engage or participate in any business activities similar to Kloe Pty Ltd. This provision will continue to be effective up to 5 years after termination of the employment contract.

In June 2020, Claire terminated her employment contract with Kloe Pty Ltd. On the 31^stof January 2021, being aware of the non-disclosure agreement that she had previously signed with Kloe Pty Ltd, Claire arranged for her sister, Minnie Mose, to incorporate a company named Chance Ltd. Chance Ltd uses a combination of the Replaceable Rules and constitution.

"The provisions of the Corporations Act 2001 (Cth) shall apply to this company except for the following:

Clause 1: The sole object of the company is to design and sell luxury bags.

Clause 2: Daisy Dutch shall be employed as the senior legal consultant until 2025 with remuneration of $50,000 per annum.

Clause 3: Minnie Mose shall be one of the 3 directors for life.

NOTE: A discussion on Contract Law is not required.

Question 4 - 5 Marks

On the 29^thMarch 2021, Minnie Mose received a notice of a general meeting to remove Clause 3 and to remove her as director. At the meeting, a special resolution has been passed and Clause 3 was successfully removed. Hence, Chance Ltd has removed Minnie Mose as director and Minnie Mose wants to know whether the shareholders are able to remove her as a director.

With reference to the relevant sections of theCorporations Act 2001(Cth) and case law if any, please discuss whether the removal of Clause 3 is permissible at law.

You areNOTrequired to use the 4 -step process for this question.