Kat is a property developer on the Gold Coast. She was recently offered a block of land in Surfers Paradise for $4 million. She formed a company with her boyfriend, Stuart, called K & S Pty Ltd. K & S Pty Ltd purchased this land. Stuart invested $4 million into K & S Pty Ltd for the purchase price of the land but he has taken no part in the management of the company or its affairs.

Kat then formed another company called Big Profit Pty Ltd. Before registering Big Profit Pty Ltd , Kat entered into a contract between K & S Pty Ltd and B ig Profit Pty Ltd whereby K & S Pty Ltd would sell the land to Big Profit for $20 million. The directors of Big Profit Pty Ltd were Kat and her father. Upon its formation, Big Profit Pty Ltd had a directors' meeting whereby they agreed to ratify the sale contract.

Kat proceeded to find investors to invest $20 million in Big Profit Pty Ltd. At no time did Kat tell anyone about the massive profit K & S Pty Ltd would make on the transaction, or her interest in K & S Pty Ltd. The new investors replaced Kat and her father with their own nominee directors.

The property market in Surfers Paradise increased dramatically over the next few months and Big Profit Pty Ltd sold the property for $22 million. In relation to the sale, the new directors of Big Profit Pty Ltd discovered Kat's interest in the earlier transaction and the massive profit that K & S Pty Ltd had made.

Provide legal advice:

(a) As to whether Big Profit Pty Ltd can recover any of the profit K & S Pty

Ltd made?

(b) If so, from whom can this profit be recovered?