AmazingMagazinesLtd ('AM') is a publishing house with three directors:Miriam(the Managing Director), Bruce (Domestic Operations) andDavid(International Operations). The companyhas been delivering strong profits for a decade and in thelast five years has consistently made just over $3AUDmillion profit per annum.

The company constitution contains the following select clauses:

24. Notwithstanding anything set out in the law, the signature of three executive directors is required to directly bind the company in contract. 52.Any resolution raised within a directors meeting which purports to alter director remuneration must be agreed by at least three directors.

AMis the parent company ofRemote LearningPty Ltd ('RL). They are experiencing fierce competition and decide to expand into development of online applications for primary schoolsexperiencing the advent of home learning. To fund this endeavour,RLapplied for a $600,000 loan with a bank calledQuickcashLtd ('QuickcashLtd'). The bank requires thatAMguarantee the loan.

At the April 2019 director's meeting, the following resolutions occur:

• All three directors agree that it is in the best interests ofRLifAMguarantee the loan; and
• All three directors agree that for the fifth year in a row, they will be paid their full annual bonuses of $1 million each, as all KPI's have been met.

The next day,BruceseesMurraythe bank manager. They have been doing business for years andMurrayasks how Bruce's family are going. After chatting for a while, Bruce explains that he popped in to sign paperwork on behalf ofRL. Bruce signs the loan documents enablingAMto be a loan guarantor. As a thank you for bringing business,Murrayinvites give Bruce a bottle of expensive Grange wine.

At the November 2019 shareholders meeting, a group of shareholders request that a vote be put to the members to require the directors to pay out a dividend. They also express concern at the increasingly high levels of remuneration and incentives paid to the directors which are detailed in the director remuneration report.

a) Explain whether any directors have breached their duties, whether any valid defences apply, and the possible consequences and penalties that a court could impose if any of the directors are found to be liable? Support your answer with reference to statutory and case law.