Guo v Yufeng Investment Group (Australia) Pty Ltd (No 2)

[2026] NSWSC 1035

Supreme Court of NSW

Built by Barristers,
For Australian Law.

1. REMEDIES — account of profits — determination of the extent of the benefits obtained by Third and Fourth Defendants as a result of the Third Defendant’s breach of his fiduciary obligations in which the Fourth Defendant knowingly participated — whether amounts payable by way of interest on a bank facility should be treated as a project expense in determining the extent of the benefits received — whether the amount of the award should be grossed-up for tax — whether interest on the benefits received in individual financial years should run from the end of the relevant financial year or from the end of the project

An account of profits for breach of fiduciary duty extends to all 'benefits' obtained by the wrongdoer by reason of the breach, not merely 'accrued profit in narrow accounting terms'; accordingly, where a fiduciary retains the entirety of net sale proceeds (not just accounting profit) without the principal's informed consent, the principal's proportionate share of those net proceeds is a benefit for which the fiduciary must account.
A tax gross-up is not appropriate for an account of profits remedy, because unlike compensatory damages (which look to the plaintiff's loss), an account of profits looks to the gain made by the party in breach; grossing up would require the fiduciary to disgorge more than was actually gained, which is inconsistent with the disgorgement rationale.
Where a fiduciary fails to distribute operational profits on an ongoing basis as contemplated by the parties' agreement, pre-judgment interest should run from the end of each financial year in which profits accrued, not from the conclusion of the project; resolving doubtful assumptions in favour of the wrongdoer is contrary to equitable principle.