Breach of fiduciary duty claims: directors, partners and advisers

Q: How long do I have to bring a breach of fiduciary duty claim in Queensland?

Usually six years. The Limitation of Actions Act 1974 (Qld) sets six years for contract and tort claims. Courts apply that period to equitable claims by analogy. There is no limitation period for a fraudulent breach of trust, or to recover trust property still held. Civil penalty proceedings must start within six years (s 1317K).

A fiduciary must act loyally in another’s interests, without conflict or secret profit. Directors, partners, agents, some advisers and senior employees owe them. A breach can lead to equitable compensation, an account of profits or a constructive trust, and directors also face statutory claims. Acting fast preserves evidence and assets.

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Key points

Fiduciary duties are proscriptive: no conflict, no unauthorised profit. Loss or dishonesty need not be proved.
Directors also owe statutory duties under ss 180 to 184 of the Corporations Act 2001 (Cth).
The company, its liquidator or shareholders with leave can sue. ASIC can seek penalties and disqualification.
Remedies include equitable compensation, an account of profits, constructive trusts, injunctions and s 1317H orders.
Third parties who knowingly receive company property, or assist a dishonest breach, can also be liable.

General guidance only – not legal advice. Please obtain independent legal advice before relying on any of this information. The law is stated as at September 2026.

Who is a fiduciary, and what duties do they owe?

A fiduciary undertakes to act for, or in the interests of, another person in exercising a power that affects them. That is the test from Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41. Directors, partners, trustees, agents and employees are classic examples; some joint venturers and senior managers also qualify.

In Chan v Zacharia (1984) 154 CLR 178, Deane J identified two themes: no conflict between interest and duty, and no unauthorised profit from the position. Any benefit is held on constructive trust, however honest the fiduciary.

Directors also owe statutory duties:

s 180: care and diligence, subject to the business judgment rule
s 181: good faith and proper purpose
ss 182 and 183: no improper use of position or information, including by employees
s 184: a criminal offence for reckless or dishonest breaches.

Trading while insolvent may also breach s 588G (insolvent trading). Partners must account for private profits and for profits from competing with the firm (Partnership Act 1891 (Qld), ss 32 and 33).

What does a breach of fiduciary duty look like?

Typical scenarios include:

diverting a business opportunity or client to an entity the fiduciary controls
setting up a competing business while still in office
undisclosed related-party payments, loans, asset transfers or remuneration
misuse of confidential information or client lists
phoenix-style asset stripping from a failing company (see insolvency)
a partner leaving and taking clients, staff or work in progress.

In DTM Constructions Pty Ltd v Poole [2017] QSC 210, directors secretly diverted land deals and building contracts to their own companies. The Supreme Court of Queensland found breaches of fiduciary duty and ss 181 to 183, and ordered equitable compensation.

Who can sue, and what remedies are available?

The duties are owed to the company, which usually sues through a new board or a liquidator. Shareholders cannot recover the company’s loss directly, but can sue in its name with leave under ss 236 and 237 (see shareholder disputes).

ASIC can seek a declaration of contravention, a penalty and disqualification (ss 1317E, 1317G and 206C). For individuals, the maximum penalty is the greater of $1.82 million (5,000 penalty units) or three times the benefit gained.

Remedies include:

equitable compensation for loss
an account of profits, stripping the fiduciary’s gain
a constructive trust over assets or profits, with tracing
rescission and injunctions
compensation orders under s 1317H, which include profits made by any person.

Third parties who knowingly receive company property, or knowingly assist a dishonest breach, are also liable. See Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, applying Barnes v Addy.

What are the defences, and how long do you have to sue in Queensland?

Fully informed consent is the main defence: a conflict or profit the principal has approved is not a breach. For directors, see ss 191 and 195.

The business judgment rule in s 180(2) covers only the duty of care. It protects an informed, good faith decision, free of material personal interest, that the director rationally believes serves the company. Section 189 protects reasonable reliance on advice.

Under the Limitation of Actions Act 1974 (Qld), contract and tort claims have six years. Courts usually apply that period to equitable claims by analogy. Fraudulent breaches of trust, and claims to recover trust property from the fiduciary, have no limitation period (s 27). Civil penalty proceedings must start within six years (s 1317K).

What should you do if you suspect a breach of fiduciary duty?

Claims are built on board papers, bank records, emails and forensic accounting. Move quickly and quietly.

Preserve evidence: email accounts, devices and accounting records.
Do not tip off the suspected fiduciary before you have advice.
Check the constitution, shareholders’ agreement or partnership deed.
Quantify the loss and the fiduciary’s gain.
Consider urgent relief. Queensland courts can grant freezing and search orders (see our employee fraud recovery article).
Get advice on who should sue and which remedy to seek.

A director facing a claim should notify their D&O insurer at once, keep every document, and take advice before responding.

How Taylor David can help

We act for companies, shareholders, partners, liquidators and directors across Brisbane and Queensland. We can:

investigate a suspected breach and advise on claim and remedy
bring claims for equitable compensation, an account of profits or a constructive trust
act for liquidators pursuing former directors
obtain urgent injunctions and freezing orders
defend directors and officers, including in ASIC investigations.

This work sits within our litigation and insolvency practices.

Frequently asked questions

Questions we are often asked

What is the difference between a fiduciary duty and a director’s statutory duty?

Fiduciary duties come from equity and are proscriptive: no conflict, and no profit without consent. The statutory duties in ss 180 to 184 overlap but add positive obligations, such as care and diligence. ASIC can enforce them with penalties and disqualification. Equitable duties are enforced by the person owed them. Most claims plead both.

Can a director be personally liable for the company’s losses?

Yes. A director who breaches fiduciary or statutory duties can be ordered to compensate the company for its loss. Under s 1317H, compensation can include profits made by any person. The director may also have to disgorge personal profits or hold assets on constructive trust. Liquidators often run these claims with insolvent trading claims.

Can a former director be sued after resigning?

Yes. Resignation does not erase liability for breaches committed in office, and some duties continue afterwards. Section 183 expressly applies after a person stops being an officer or employee. Equity also stops a former director exploiting an opportunity that matured in office, or using confidential information taken with them. Time limits apply.

What is an account of profits?

An account of profits strips the fiduciary of the gain from the breach. The claimant need not prove any loss. The court works out the profit attributable to the breach. It may allow something for skill and effort, as in Boardman v Phipps [1967] 2 AC 46. A claimant usually elects between an account and equitable compensation.

How long do I have to bring a breach of fiduciary duty claim in Queensland?

Usually six years. The Limitation of Actions Act 1974 (Qld) sets six years for contract and tort claims. Courts apply that period to equitable claims by analogy. There is no limitation period for a fraudulent breach of trust, or to recover trust property still held. Civil penalty proceedings must start within six years (s 1317K).

General guidance only – not legal advice. Please obtain independent legal advice before relying on any of this information. The law is stated as at September 2026.

Related expertise

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To discuss your situation in confidence, call Scott D. Taylor on +61 7 3229 9800, email [email protected] or send us an enquiry online.

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