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Jack and Jill jointly recently purchased a block of land in Surfers Paradise for $2 million. They want to build a high-rise on the land but don’t have any money. They decide to form a company called Hill Pty Ltd. They seek out several people who invest in Hill Pty Ltd. Jack and Jill then form Hill Pty Ltd, the investors transfer $20,000,000 to Hill Pty Ltd, Hill Pty Ltd purchases the real property for $4,800,000 (the price agreed by Jack and Jill) and construction commences.
The building is completed and all the units are sold at a massive profit. At that point, one of the investors discovers, for the first time, that the real property was purchased from Jack and Jill. He doesn’t think it was fair that Jack and Jill made money selling the real property to the company. Can anyone recover the profit from Jack and Jill?
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