By Julian & Renee (Australia) – with writing support from Alberto Aldana (Colombia)
You expect a professional—especially your accountant or financial advisor—to act in your best interests and not abuse your trust. The recent Federal Court case, DC Rd DC Pty Ltd v Zhang [2026] FCA 16, is a warning for property investors across NSW, including those in Blacktown, The Hills, Baulkham Hills, and beyond.
The Worst-Case Scenario: When Your Advisor Commits Fraud
This case did not involve a simple business dispute. Mr Zhang acted as both accountant and financial advisor to the DC Rd DC group, placing him in a position of significant trust.
- Trusted gatekeeper: Zhang controlled the group’s finances and oversaw investment into property developments.
- Deceptive conduct: He represented that client funds were being invested in real estate projects across Sydney.
- Misappropriation of funds: Instead, he diverted client funds into accounts he controlled, including offshore accounts in Hong Kong.
- Personal benefit: He used approximately $2.6 million of those funds as a deposit on a property in Belrose, concealing the purchase through a company he owned.
Why Advisor Status Matters: Fiduciary Duty
The law treats advisors such as accountants differently from ordinary business counterparts:
- Fiduciary relationship: Zhang owed a legal duty to act solely in the best interests of his clients.
- Breach of duty: He breached that duty by using client funds for personal gain.
- Court remedy—constructive trust: The Court imposed a constructive trust over the Belrose property, meaning Zhang was deemed to hold it on behalf of the victims, allowing it to be used to compensate them.
The Belrose Property: Misuse of Investment Funds
- Misrepresentation: Clients believed their funds were being invested in developments in areas such as Glenwood, Kellyville Ridge, Rouse Hill, and Stanhope Gardens.
- Actual conduct: The funds were instead used to build Zhang’s personal property holdings.
- Rejected defence: Zhang argued this was within the “ordinary course of business.” The Court rejected this argument, confirming that using client funds for personal purposes constitutes a clear breach of duty.
The Court’s Orders: Serious Consequences
In subsequent orders made in February 2026 ([2026] FCA 189), the Court:
- Identified the broader scale of the misconduct, involving funds transferred within NSW and internationally
- Ordered the sale of the Belrose property to recover funds for affected parties
This case highlights that where fiduciary duties are breached, courts have strong powers to recover misused assets.
Business Partners vs. Fiduciary Advisors: What’s the Difference?
| Feature | Normal Business Partner | Fiduciary Advisor (Zhang) |
| Trust Level | Arm’s length, contractual | High trust, fiduciary |
| Duty | Follow the contract | Act in client’s best interest |
| Misleading Info | Might be sales talk | Fraud & professional misconduct |
| Court Remedy | Money damages | Court can seize the property |
Key Takeaways for Investors in Western Sydney and the Hills District
- Do not assume an advisor is trustworthy based solely on qualifications or position.
- Carefully review any investment structure, particularly where funds are directed to entities associated with the advisor.
- While the law provides remedies, recovery through the courts can be complex, time-consuming, and costly.
Investor Checklist
- Does your advisor also control or manage your funds?
- Have you transferred substantial amounts into entities they control for “development” purposes in areas such as Bella Vista, Castle Hill, North Kellyville, or Schofields?
- Do you have clear visibility over where your money is being held and how it is being used?
If any concerns arise, seek independent legal advice as early as possible.
Julian and Renee of Flash Conveyancing specialise in property transactions across New South Wales. With extensive experience working with local councils including Blacktown, Hawkesbury, Blue Mountains, The Hills, Hornsby, and Parramatta, they provide a tailored approach to each settlement. We support clients across communities such as Acacia Gardens, Marsden Park, The Ponds, Northmead, Norwest, and surrounding areas, helping ensure transactions are handled carefully and with full transparency. If you are considering a property transaction in areas such as Angus, Windsor, Kellyville, or Box Hill, obtaining clear and independent advice can help protect your investment and avoid unnecessary risk.