1. Fresh and Healthy Pty Ltd (Fresh) operates a chain of local grocery stores in Melbourne's CBD. Jianxin, Marina and Alex are the only shareholders and directors.

Jianxin is the managing director of Fresh and is responsible for the day-to-day decisions relating to the operation of the business. Jianxin is a La Trobe graduate, and has recently completed his tertiary qualifications in Business Management.

Marina is a self-professed chef with a YouTube cooking show streaming live online every third day at 10:00am.She left school at 15 and travelled to Tuscany where she learned to cook. Marina prides herself for the recipes she shares with her social media followers and spends most of her day developing her own fusion cuisine. She has not attended any of the board meetings for the past two years. She has often said to Alex 'I'm a superstar! I won't let anyone tell me what to do! I'm not wasting my day looking at the silly accounting tables Jianxin sends out before every meeting. I don't understand most of it anyway. He can run Fresh as he likes, as long as I'm paid my dividends on time!'

Alex is a land surveyor, with ten years of expertise in measuring properties and pieces of land to determine boundaries. His office is located on St Kilda Rd in Melbourne's CBD, but he mostly conducts land surveys in Melbourne's urban growth boundary, including Melbourne's newest suburb of Pakenham East. He is very passionate about Fresh's business and has taken an interest in the way Jianxin is running the company.

Alex is unhappy with Jianxin's recent decision to move Fresh's main store, which is located on Flinders St, to larger premises in a different area. Without consulting Marina and Alex, Jianxin made an unconditional offer to purchase the first land he inspected in Pakenham East for $580,000.Jianxin thought the location was perfect for a grocery store, because there was no competition nearby and the store was likely to become profitable immediately once the construction of the store premises was completed.

Jianxin called a board meeting soon after inspecting the land and told Marina and Alex enthusiastically about the property. He said he had to act quickly, and he made the offer to buy the land for fear there may be other interested purchasers now that Pakenham East was labelled by the media as the 'fastest growing suburb in Melbourne's south east'. Marina, who was taking time out from her daily cooking show to attend the meeting, agreed to Jianxin making the unconditional offer without really understanding the implications on the finances of the company. Alex was reluctant to agree. He thought the directors were being rushed to make a decision regarding the purchase of the land without having taken the time to consider other properties listed at other locations.

After settlement, and due to significant issues along the way, the starting date for the construction of the store premises was pushed back to the following year by the builder. Unknown to Jianxin, the land did not have the appropriate council approvals and council zoning for any external buildings and future land development. Jianxin did not know, as well, about the property taxes that Fresh had to pay. The delay increased the costs of the construction project by $120,000, which was beyond what Jianxin had anticipated. Upon inspecting the land, Alex also advised that the property was overvalued and Fresh had paid $200,000 in excess of the market value in the south east area of Melbourne.

Jianxin, Marina and Alex are worried about their obligations as directors, especially that Fresh's finances continue to deteriorate. They are seeking your advice on the following matters:

1.1) whether the director(s) breached the general law or statutory duty of care and diligence.(10 marks)

1.2) whether Jianxin's decision to purchase the land for $580,000 would be protected by Corporations Act 2001(Cth) s 180(2). (5 marks)

1.3) whether Marina agreeing to Jianxin's decision to purchase the land would be protected by Corporations Act 2001(Cth) s 189. (5 marks)

1.4) whether Jiaxin would have breached his duty to prevent insolvent trading if Fresh became insolvent six months after the purchase of the land, and whether he would have any defence(s) under Corporations Act 2001(Cth). (10 marks)