AustraliaA property manager of our investment fund breached their fiduciary duties. What's the remedy?
The main remedy for a property manager breaching fiduciary duties is compensation for loss suffered by the fund, and courts may also order account of profits, injunctions, or removal from office.
What the Law Says
Fiduciary duties owed by property managers to investment funds arise under general law and statutory frameworks. Where a breach occurs, equitable and statutory remedies apply.
A property manager acting for an investment fund typically owes fiduciary duties including loyalty, good faith, and avoidance of conflicts — grounded in common law principles of equity. These duties are reinforced where the fund is a registered managed investment scheme under the Corporations Act 2001 (Cth).
Section 601FC(1) of the Corporations Act 2001 (Cth) requires responsible entities (which may include or appoint property managers) to 'exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they were a responsible entity'. Breach may trigger civil penalties and compensatory orders.
Under general equitable principles (not codified but applied consistently), remedies for breach of fiduciary duty include compensation for loss, an account of profits made from the breach, rescission of tainted transactions, and injunctive relief to prevent further breaches.
Statutory TextThe responsible entity must exercise its powers and discharge its duties with the degree of care and diligence that a reasonable person would exercise if they were a responsible entity.
— Corporations Act 2001 (Cth), s. 601FC(1) — Duties of responsible entities
Statutory TextA person who has been guilty of a breach of trust is liable to compensate the trust for any loss that the trust has suffered as a result of the breach.
— Trustee Act 1925 (NSW), s. 85 — Liability for breach of trust
What to Do
Review the responsible entity’s appointment deed and the fund’s constitution to confirm the scope of the property manager’s duties.
Gather evidence of the breach — e.g., unauthorised transactions, undisclosed conflicts, or failure to act in the fund’s best interests.
Lodge a complaint with ASIC if the fund is a registered managed investment scheme.
Seek urgent legal advice to consider applying to court for compensation, account of profits, or removal of the manager.
Consider whether the breach also triggers reporting obligations under Chapter 7 of the Corporations Act 2001 (Cth).
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.