Question
From a very young age, Eartha Mitt enjoyed gardening with her mother. She took such delight in watching her 'plant babies' grow and flourish. Over
From a very young age, Eartha Mitt enjoyed gardening with her mother. She took such delight in watching her 'plant babies' grow and flourish. Over time, she became disheartened and frustrated with the damage being done to her plants by slugs, snails, and other insects. She tried a number of different, natural pesticides but nothing seemed to work. In addition to gardening, Eartha is a passionate innovator and is motivated by effecting change on the world around her whilst preserving the natural world. She decided to combine her love of gardening with her passion for innovation.
In 2023, Eartha incorporated Wizzy Wiz Pty Ltd (WWPL), a bespoke technology company which became famous for its invention of the "GardenBot". The GardenBot uses artificial intelligence to crawl over soil looking for slugs, snails and other invaders using a light. Once spotted, the GardenBot picks up the invader, stores it and then 'digests' the organic material to power itself.
The directors of WWPL are Eartha, Matthew and Thinh who are also shareholders. Damian and Tracey also own shares in WWPL.
Director meetings are often called without notice or warning and lack sufficient information about resolutions to be discussed. At a recent directors' meeting, the directors were called to vote on whether to sign a contract engaging a new company to improve the crawling wheels of the GardenBot, however no information about the supplier, the cost of the contract, or the proposed new crawling wheels was provided to the directors.
General Meetings of WWPL are very informal and often take place outside or at a local caf. At a recent General Meeting, the shareholders received 20 days' notice of the meetingwhich included a resolution proposing to remove Matthew from the board. Eartha did not receive the notice as she was attending a conference in Brisbane on upcoming gardening innovations which incorporated artificial intelligence technology. The meeting was held and the resolution proposing to remove Matthew was passed unanimously. Eartha was very upset when she discovered what happened at the meeting as she would have voted against the resolution.
Eartha has become extremely frustrated with the lack of notice and formality at director and shareholder meetings and feels that resolutions are not thoroughly discussed, and resolutions are made without proper consideration. She tells the other members that the lack of formality and information means that all the company's activities are void and demands that each meeting be reconvened so that the resolutions can be decided properly.
(a) The shareholders are concerned about the time and expense involved in reconvening the meetings and come to you for advice. Advise these shareholders if Eartha is right and whether all the resolutions of WWPL are void. Your answer should carefully consider s1322 of the Corporations Act 2001. You may assume that WWPL is governed by the replaceable rules in the Corporations Act 2001.
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