Armin and Eren operated a toy shop company in Melbourne under the name Jaeger Toys Ltd. They started the business in 2015 and rented an office and shop in the city which were rented from Titan Pty Ltd. At the time of starting their venture, Armin contributed $25,000 to the business, and Eren brought in the equipment such as computers and desks, valued at $50,000.

Armin took care of the marketing and promotion, while Eren concentrated on the retail and administrative operations. The business employed Jean to manage the Melbourne shop and purchase stock. His authority to purchase stock is limited to $10,000 and must be approved by both Armin and Eren.

In the last four years of business operations, several problematic transactions occurred including:

1. The stores usual toy supplier (Mary) had a special discount for large orders, which prompted Jean to place an order of $30,000 worth of toys - three times the usual size of orders. When the invoice arrived, Armin and Eren refused to pay Mary and accept the stock, arguing Jean did not have the actual authority to buy the stock at that price and Mary should have known this since she was informed about Jean's position when Jean was hired.

2. Armin borrowed $10,000 from the Monash Bank to purchase a large order of Genshin Impact toys as it was predicted to be the most popular toys to buy for Christmas. This decision was made after talking to his 12-year-old nephew, who is a big fan of the Genshin Impact video game. Armin made no effort to conduct market research or consult with experts to determine whether the business decision will be profitable. Armin also failed to check the company financial reports, which would have revealed the company cannot afford the loan.

Waning interest for the toy line has resulted in less than expected sales. Jaeger Toys is unable to pay the debt and Monash Bank claims Armin's decision breached his director duty to the company.

QUESTION 1.

Advise whether Jaeger Toys Ltd (the company) is liable to pay the $30,000 debt under theCorporations Act?