Hello can you help me answer this Problem based question. Also please provide relevant case laws and statutes in Australia. Use ILAC format to answer the question.

Question 1:

In January 2019, James, Kate and Jennifer formed Fin Ltd (Fin). During the formation of the company, Kate and James were involved in completing the formalities needed to register the company. Jennifer was not responsible for the incorporation of the company. However, she had an understanding that she would receive $10,000 from the creation of the company.

a) Following from the facts in Question 1, Fin is incorporated. Fin's initial directors were puppets of James. James sold a piece of land that he owned to the company for $700,000. The market value of the property was $500,000. The transaction was approved by the directors of the company without inquiry into facts or figures. After a few months, new directors were appointed and they would like to take action against James to rescind the contract of sale of the land. Advise the directors of the company.

Exemplar: The exemplar for the format of the answers to the problem questions is as follows:

Issue: What is the question that is being asked? You need to identify the correct issue/s. If there is more than one issue in a question, each issue needs to be responded to separately.

Law: Mention relevant cases and sections and explain them. For sections, you need to summarise the section's content. You do not copy the section word for word. For cases, you do not need to mention the facts of the case. You need to mention the judgment. It is important to have a clear section of the law. If the student only mentions the name of the case or the number of the section without any explanation, no mark will be allocated to the law part.

Application: You will apply the law to the facts of the problem. You need to use the facts of the problem and check if they fulfil the requirements of the law.

Conclusion: What is the outcome? This part is only one line and is the answer to the question raised in the issue