March 2021 - JMART completed a deal for the permit of a special license for land in Northern Territory, Darwin. This allows JMART to start there exploratory assignments for unconvential gas. The land owner, Majak Pty Ltd, gets paid $1.33m each year for four years. James (Chairman of the board and Director at JMART and Director at Northern Terrirory Rural FInance LTD) is running the process of securing the land license as delegated by the board. There is other land available in the area but James has only ever been in talks with Jack Majak, the sole director of Majak Pty Ltd. It's been discovered that Jack Majak has huge personal debts that are owed to the Northern Territory Rural Finance Ltd, after a long drought. The license fees allow Jack Majak to pay off off his debts and avoid bankruptcy. James didn't provide a formal report to the board but the other directors were happy with the access to land that's just been obtained. In a directors' meeting, the directors chose to vote and to approve the deal and give James and Tony (CEO) the authority to execute the contracts in JMART's name.

Question - Answering using IRAC, advise Lisa (CEO) as to whether there's any merit to ASIC bringing any action against James for the breach of his statutory duties as a director at JMART. If ASIC are successful, outline the potential penalties/remedies that a court could use against James (Director)