Peter, Zara and Mary are the directors and shareholders of Happy Holidays Pty Ltd ("Happy Co") which organises camping holidays in rural Queensland. Happy Co's headquarters are located in inner-Melbourne. Peter and Zara are the executive directors and Mary is a non-executive director. Peter is also the company's Chief Financial Officer. Tourists come from all over the world to experience Happy Co's holidays which can be booked out for months in advance. However in recent months, the company has taken on too many loans and is struggling to meet its repayments. With the aim of improving the company's financial position, the directors consider running similar holidays in Tasmania. They know that Tasmania is renowned for its beautiful forests and unique animals.

Peter and Zara decide to schedule a directors' meeting for later that month to discuss whether Happy Co should expand into the Tasmanian market. Peter states that he will also bring along a recent financial report to help with the discussion.At the meeting Peter, Zara and Mary read the financial report that Peter has brought. Peter obtained the report from Jonathan who works in Sydney and is the company's external accountant. All the company's financial material is sent to Jonathan and not to Peter and Zara. Although he is not a director of Happy Co, Jonathan regularly gives Peter, Zara and Mary advice that they usually follow for Happy Co. However, Jonathan prepared a financial document for Happy Co using the data of a different, more successful company without realizing it. He recommends that Happy Co borrow $300,000, which is in fact far more than the company could realistically pay back. Peter, Zara and Mary read through Jonathan's document carefully and Zara, who like Peter is a trained accountant, confirms that the details are correct and that the company can afford to take out a $300,000 loan to finance the expansion. As a result, a week later the company enters a secured loan with the Nature Bank. The loan is secured by a mortgage over the property on which Happy Co has its main office, which already has two mortgages over it.

When the company holds its first camping holiday in Tasmania, it is a disaster. The weather is terrible, there is no suitable space for the tents, the water in the creek is full of dangerous bacteria and a family of Tasmanian Tigers keep stealing the camp's food. A few of the campers fall dangerously ill with bacterial infection and another camper breaks both of his legs after falling over in the wet weather. They finish the camping trip early and the sick campers are air-lifted to a hospital nearby.

A few months after the disastrous camping trip, Zara rushes into Peter's office looking shocked and waving a piece of paper in her hand. As Peter looks up, Zara exclaims that the company is going to be in trouble because the ill and injured tourists are planning to sue the company for negligence, for their medical costs and lost wages. Before Peter could say anything, Zara then shows him a letter from the Nature Bank stating that the company has defaulted on its loan. She also told him that earlier that day she had received a threatening phone call from one of the company's other creditors demanding that its debt be paid.

Three months after that conversation, the ill and injured tourists are awarded $500,000 each and several of Happy Co's creditors file legal action against it for unpaid loans. The gas and electricity services of the company's office have been cut off due to unpaid bills and Peter, Zara and Mary know that the company will not be able to pay back the money it owes to the tourists, the Nature Bank or to its other creditors

Have the directors of Happy Co breached any of their duties under theCorporations Act 2001(Cth)? Explain ensuring that you discuss the legal position of all of the directors.