Mark and Martha relied on Jerry's representations to the Board meeting, as they wereexcited about the refurbishment and the potential for profits to increase and hence their remuneration to rise accordingly.

Jerry had assumed that Council approval would be easily granted and did not attempt to seek approval until after the Mark and Martha had signed the contract with FMO Construction. In the meantime, FMO Construction has commenced work and collected an advance payment of $300,000 from Vamina Hotels. Two months after the refurbishment commenced, the Council informed him that the approval was not granted. Vamina Hotels was struggling to meet its loan repayments and has become insolvent.

Mark and Martha have now realised the true state of affairs and demand that Jerry repay the $300,000 to Vamina Hotels at the general meeting. Jerry being a majority shareholder in the general meeting passes a resolution ratifying the contract.

1. Advise Jerry, Mark and Martha whether they have breached any of thedirectors'duties under theCorporations Act 2001 (Cth).(4 marks)
2. Advise what if any defences are available to Jerry, Mark and Martha.(3 marks)
3. Advise Mark and Martha what member remedies are suitable for them in the circumstances.(3 marks)