Doug considers himself an entrepreneur and is always looking for a business opportunity. Doug's friend Steve has a supplier in China who makes hospital products including face masks and hand sanitiser. Doug identifies a business opportunity to buy face masks and hand sanitiser from the China supplier that Steve has contacted and sell to hospitals in Perth. By the end of 2019 Doug has been able to obtain regular supplies from China and has contracts with three of the four Perth hospitals to supply the face masks and hand sanitiser.

The business was incorporated on December 2019 asJDS Pty Ltd. Jane (Doug's wife), Doug and Steve were appointed as directors of the company and had equal shareholdings (33% each).

At the commencement of 2020 the world became engulfed in a pandemic, Covid was spreading.JDS Pty Ltdwas able to obtain additional supplies of face masks and hand sanitiser, which the three Pert hospitals required and other organisations, for example retail, were also demanding these items. Sales flourished forJDS Pty Ltd.

Doug wanted to expand the business and purchase ventilators. Ventilators had become an important hospital product in assisting patients with Covid overseas. Ventilators were expensive and the company needed to obtain additional funds to purchase the Ventilators. Steve's China supplier was able to supply the ventilators, but it was unclear what the demand would be in Perth for ventilators. Jane was concerned about this business venture and did not agree with purchasing the ventilators.

Unfortunately at the end of 2020, Jane and Doug separated, and Jane commenced divorce proceedings. Doug and Steve were concerned that Jane may become difficult to work with and could jeopardise the business and the purchase of the ventilators.

Steve's brother Mike has spare money, and Doug and Steve decide to issue shares to Mike (Mike is not appointed as a director of the company). The money could be used to purchase the ventilators, but it also resulted in the shareholders; Jane, Doug, Steve and Mike each having 25% of the shareholding.

Doug and Steve call a Special General Meeting and together with Mike, pass the following resolutions to modify the constitution:

1.JDS Pty Ltdwill provide any hospital products as deemed suitable by the directors of the company; and,

2.A director can be removed from office by a majority vote of the other directors.

At the next director's meeting Doug and Steve vote to remove Jane as a director and to confirm the agreement with the China supplier for the purchase of ventilators.

AdviseJDS Pty Ltdof the legal issues in this case and if the directors could be in breach of their duties.(20 marks)

Advise Jane if she has any legal remedies at common law or under theCorporations Act. [20 marks]