Identify the proceeding and the procedural irregularity

Reference no: EM132809616

X was a company director in a large proprietary company of six directors. The company does not have a constitution. X provided 1 day notice of a Board meeting to 3 of the 5 directors. The other 2 directors were overseas. A unanimous resolution was passed at the meeting the following day (X abstained from voting) approving a variation to X's management services contract (worth >$250,000 per year). Included in that variation was a contract extension of 3 years (the contract was originally set to expire two months after the meeting). According to company records, the 2 absent directors attended 40% of Board meetings in the past two years.

The 2 directors returned from overseas, read the contract variation and noted that it was heavily in favour of X - they argued that the contract variation was not valid and the company refused to honour the contract extension. X was then removed as a director at the AGM according to the Corporations Act. X sued for breach of contract at common law and the company made a cross-claim against X under s 1322 CA.

Problem 1: Can the company rely on section 1322? Hint: You need to identify the proceeding, the procedural irregularity (or irregularities - refer to Replaceable Rules) and explain how you would prove substantial injustice (if any) in your answer. Has to be completed in ILAC format

Reference no: EM132809616

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