115

STEPHEN GRAY*

CONTENTS

I Introduction............................................................................................................. 115

II Stolen Wages Plaintiffs and the Law of Trusts ................................................. 118

A The ‘Political’ or ‘Public’ Trust: When Can the Government Be a

Trustee? .................................................................................................................. 119

1 Overcoming Tito v Waddell [No 2]: The Independent Legal

Interest Test............................................................................................................. 121

2 Overcoming Tito v Waddell [No 2]: The Sovereign Immunity

Argument................................................................................................................ 124

3 Overcoming Tito v Waddell [No 2]: Liability of Crown

Servants ................................................................................................................ 126

4 Overcoming Tito v Waddell [No 2]: The Statutory Trust ............................... 127

B Scope of the Trustee’s Duties.......................................................................... 129

III Stolen Wages Plaintiffs and Fiduciary Duty .................................................... 130

A Indigenous People and Fiduciary Duty after Trevorrow: A Sui Generis

Fiduciary Relationship? ........................................................................................ 135

IV Conclusion .......................................................................................................... 139

I INTRODUCTION

The purpose of this article is to consider whether governments owe legally

enforceable trust or fiduciary duties to potential ‘stolen wages’ plaintiffs in

Australia. It will do so in the context of recent public debate about the possibility

of a legal or political settlement of the issue. The most significant impetus for

such debate was the release in December 2006 of a report by the Senate Standing

Committee on Legal and Constitutional Affairs on Indigenous stolen wages

* BA, LLB (Hons) (Monash), LLM (Melb); Lecturer, Faculty of Law, Monash University. The

author wishes to thank David Yarrow for his helpful comments and suggestions on an earlier

draft. Thanks also to Professor Jeffrey Goldsworthy, Ms Melissa Castan and to the anonymous

reviewers and editors of the article.

Shortly after the report was released, a group of workers from Daguragu (Wave 

Hill) cattle station in the Northern Territory was reported as having ‘expressed

interest in a test case to recover their stolen wages.’2 In Queensland, where the

government has established a much criticised compensation scheme,3 workers

are reported to be ‘contemplating recourse to the courts’.4

The term ‘stolen wages’ refers primarily to allegations of ‘earnings withheld

from Aboriginal workers throughout the twentieth century’.5 In various jurisdictions

around Australia, money earned by Aboriginal workers was withheld and

kept in government-controlled trust accounts. These trust accounts were established

under ‘protective’ legislation.6 Their ostensible purpose was benevolent

and paternalistic, being to ensure that ‘unsophisticated’ or ‘uncivilised’ Aboriginal

workers saved a portion of their wages. These workers and their descendants

allege that governments abused their positions as trustees of these accounts,

keeping the money for their own purposes rather than repaying it to the beneficiaries.

The Stolen Wages Report undertook a preliminary investigation into this question

of ‘wages’ withheld in trust. Its terms of reference also included other

government entitlements, in particular social security benefits such as child

1 Senate Standing Committee on Legal and Constitutional Affairs, Parliament of Australia,

Unfinished Business: Indigenous Stolen Wages (2006).

2 Thalia Anthony, ‘Unmapped Territory: Wage Compensation for Indigenous Cattle Station

Workers’ (2007) 11(1) Australian Indigenous Law Review 4, 4, which also refers to ABC Radio

Alice Springs, ‘Indigenous Stolen Wages with Maurie Ryan’, Barry Nicholls, 11 December

2006. The workers concerned also said that they were ‘willing to testify that they were denied

wages and provided with the poorest quality rations’: at 4.

3 In May 2002, the Beattie government established a compensation scheme offering $2000 each to

Aboriginal people under 50 years old and $4000 for those older, with a total projected payout of

$55.4 million. Individuals accepting the offer were required to sign a letter of acceptance giving

up their rights to sue the government on this issue. The offer was widely criticised by Aboriginal

people, and was condemned by the Human Rights Equal Opportunity Commission’s Social

Justice Commissioner, Dr William Jonas, as being ‘insultingly low.’ By late 2006, only half of

the estimated 16 400 claimants had applied for payment and $20 million of the $55.5 million

had been allocated: see Stuart Rintoul, ‘Lawsuit on Stolen Wages’, The Australian (Melbourne),

14 October 2006, 9. See also Rosalind Kidd, Trustees on Trial: Recovering the Stolen Wages

(2006) 20.

4 According to Kidd, above n 3, 21, counsel in Queensland have advised

that a strong case could be made for legal accountability for the thousands of savings accounts

run by previous governments, and misuse of Welfare Fund money for other than general welfare

projects could be grounds for action and a direction to repay lost funds.

The New South Wales government has also established a scheme known as the Aboriginal Trust

Fund Repayment Scheme. According to the Stolen Wages Report, the NSW scheme has generally

‘been better received than the Queensland Government’s reparations offer’: see Stolen

Wages Report, above n 1, 114.

5 Victoria Haskins, ‘& So We Are “Slave Owners”!: Employers and the NSW Aborigines

Protection Board Trust Funds’ (2005) 88 Labour History 147, 147.

6 For example in the Northern Territory, s 41(1) of the Wards’ Employment Ordinance 1953–1959

(Cth) gave the Director of Welfare the power to require an employer to pay to the Director or to

an authorised welfare officer a portion of the wages of an employed ward. The Director then

paid this money into a trust account to be opened by the Director at the nearest branch of the

Commonwealth Savings Bank: s 41(3). Under s 41(3A), the trust account was to be called the

‘Wards’ [sic] Trust Account’. Under s 41(6), moneys were deemed to be the property of the

ward. However, under s 41(7) the moneys could only be spent by the ward with the approval of

the Director or an authorised welfare officer.

endowment, maternity allowance, unemployment benefits, aged or invalid

pensions, and workers compensation.7 The Senate Standing Committee on Legal

and Constitutional Affairs received ‘compelling evidence’ indicating that

governments ‘systematically withheld and mismanaged Indigenous wages and

entitlements over decades.’8

However, the term ‘stolen wages’ is not confined to the question of moneys

withheld in trust. It also refers to the question of underpayment or non-payment

of wages,9 which was often authorised by legislation. For example, the Northern

Territory regulations under the Aboriginals Ordinance 1918–1933 (Cth) exempted

country employers from paying wages to their Aboriginal employees

where they could prove to the Chief Protector that they were maintaining those

employees’ ‘relatives and dependants’.10 It has also been argued that governments

failed to ensure that employers of Aboriginal people fulfilled their

legislative obligations, thereby allowing pastoral stations ‘to provide rations

rather than wages in order to avoid [the governments’] own welfare responsibilities;

… failing to inspect stations; and … failing to enforce protective regulations.’

11

Part II of this article will consider whether the law of trusts will assist potential

stolen wages plaintiffs seeking an accounting of or compensation for wages and

other entitlements allegedly misappropriated by the government. The article will

argue that such plaintiffs have a strong case. The most significant result of such

proceedings might be that governments — rather than individual plaintiffs —

would be required to produce a historical account of these trusts.

Part III of the article will consider whether governments owed fiduciary duties

to indigenous workers and whether any such duties were breached. At its

narrowest, a fiduciary duty might extend only to the question of mismanagement

of trust account moneys. More broadly, it has recently been argued that fiduciary

duties might extend to the positive obligation of ensuring that employers paid

employees and adhered to the conditions prescribed under ‘protective’ legisla-

7 Stolen Wages Report, above n 1, 1, 29–40. Prior to 1966, social security legislation permitted

various pensions and allowances to be paid to controlling authorities or institutions rather than

directly to the pensioner. For example, the Social Services Consolidation Act 1947 (Cth) s 47

stated in relation to age and invalid pensions:

Where, in the opinion of the Director-General, it is desirable to do so, he may direct that payment

of the pension of an aboriginal native of Australia shall be made, on behalf of the pensioner,

to an authority of a State or Territory controlling the affairs of aboriginal natives, or to

some other authority or person whom the Director-General considers to be suitable for the

purpose …

In practice, pensions were often paid directly to missions or pastoralists, who used the money for

8 Stolen Wages Report, above n 1, 4.

9 The Stolen Wages Report notes that ‘the term “stolen wages” is an ambiguous term’ but that for

the purposes of the report it ‘refers to all wages, savings, entitlements and other monies due to

Indigenous people during the periods where governments sought to control the lives of Indigenous

people’: ibid 3.

10 Under reg 14 of the Aboriginals Ordinance Regulations 1918–1933 (Cth), ‘where it is proved to

the satisfaction of the Chief Protector that the grantee of the licence is maintaining the relatives

and dependants of any aboriginal employed by him, the Chief Protector may exempt the grantee

from the payment of any wages in respect of that aboriginal.’

11 Anthony, above n 2, 17.

118 Melbourne University Law Review [Vol 32

tion, or even to a more general duty of ‘ensuring the general welfare of Indigenous

workers’.12 However, it will be suggested that these broader fiduciary

obligations are far less likely to be recognised in Australian courts, despite the

recent decision in Trevorrow v South Australia [No 5] (‘Trevorrow’) providing

some support for the existence of such general obligations.13

II STOLEN WAGES PLAINTIFFS AND THE LAW OF TRUSTS

A trust is a type of fiduciary relationship ‘under which one party, the trustee,

holds property for the benefit of another party, the beneficiary.’14 In order for an

express trust to exist, it must be shown that there was an intention to create a

trust; that the subject matter of the trust is sufficiently certain; and that the

object, or intended beneficiary, is specified with sufficient certainty.15 Together,

these requirements are known as the ‘three certainties’.16

It seems relatively easy for stolen wages claimants to satisfy the second and

third certainties. The subject matter of the trust is that part of the claimants’

employee’s wages was to be withheld and kept in a ‘Wards’ [sic] Trust

Account.’17 Governments in at least some jurisdictions kept records indicating

how much was held in each individual’s account.18

Similarly, the object of the trust is the intended beneficiary, or Aboriginal

employee. Where trust account records were kept, and particularly where the

names of individual account holders were specified, the requirement for ‘list

certainty’,19 which is the requirement that all beneficiaries in a trust are ascertainable,

would appear to be satisfied.

The most difficult of the three certainties for stolen wages claimants to establish

is that there was an intention to create a trust. Stolen wages plaintiffs would

need to establish that the creator of the trust — that is, the government — had

the intention to create a legally enforceable trust when it passed legislation

creating Aboriginal Trust Accounts.

12 Ibid 17.

13 (2007) 98 SASR 136, 343–8 (Gray J).

14 Peter W Hogg and Patrick J Monahan, Liability of the Crown (3rd ed, 2000) 257.

15 See Knight v Knight (1840) 3 Beav 148, 172–3; 49 ER 58, 68 (Lord Langdale). See further P D

Finn, Fiduciary Obligations (1977) 16.

16 Denis S K Ong, Trusts Law in Australia (3rd ed, 2007) 74.

17 Wards’ Employment Ordinance 1953–1959 (Cth) ss 41(1), (3A). See also above n 6.

18 In the Northern Territory in 1955, for example, a total of £16 549 was held in trust accounts in

the Northern Division alone. Most of this money (£13 458) was held in accounts with balances

under £50. The amount held in trust accounts far outweighed the amount held in savings accounts

(£6216). In 1957, the total held in the Aboriginals Trust Account was £33 575 12s 7d. Of

this amount, £11 002 was held in 74 individual savings accounts on behalf of wards with credit

balances in excess of £50: see Letter from J C Archer to the Secretary, Department of Territories,

15 October 1955, in Employment of Aborigines in the Northern Territory (Australian Archives,

A452, 1955/668, AAC, Canberra). In Queensland on the other hand, according to Sanushka

Mudaliar, individual accounts were not normally kept: see Sanushka Mudaliar, ‘Stolen Wages

and Fiduciary Duties: A Legal Analysis of Government Accountability to Indigenous Workers in

Queensland’ (2003) 8(3) Australian Indigenous Law Reporter 1, 5.

19 The ‘list certainty’ test is set out in Inland Revenue Commissioners v Broadway Cottages Trust

[1955] Ch 20.

2008] Holding the Government to Account 119

At first glance, this argument appears straightforward. Legislation establishing

Aboriginal trust funds in the Northern Territory, like equivalent legislation in

Queensland and in other Australian jurisdictions, consistently used the terms

‘Trust Fund’ and ‘Trust Account’ to describe the funds into which the moneys

were paid. The legislation described the moneys as being for the account holders’

‘protection and care’. The Chief Protector or Director of Welfare had legal title

to the money in the accounts, but was supposed to act on behalf of or for the

benefit of the employee.20

It is true that where a trust is created by statute ‘normally the use of the word

trust would make [it] clear that a trust has been created.’21 However, it is far

from clear that this general rule is applicable where the trust relationship alleged

is with the Crown. Case law indicates that in some situations the courts will

regard the Crown’s intention, notwithstanding the use of the language of trusts,

as not in fact being to create a legally enforceable trust but rather to create an

entirely different creature — the ‘political’ or ‘public’ trust.

A The ‘Political’ or ‘Public’ Trust: When Can the Government Be a Trustee?

It is fundamental to the principle of separation of powers that the courts should

not interfere in the governmental, administrative or executive functions of the

Crown:

the Crown has many tasks to perform in the discharge of its legislative, executive,

and public administration responsibilities which are governmental functions

to be enforced in the political arena rather than encumbered with

court-imposed remedies.22

Consequently, the courts are traditionally reluctant to impose trust obligations

on the Crown. According to Megarry V-C, this effectively creates a legal

presumption against the Crown being a trustee: ‘if the Crown was a trustee at all,

it would always be a trustee in the higher sense unless there was enough to show

that it was intended to be a trustee in the lower sense.’23

The ‘political’ or ‘public’ trust doctrine was established in various English

cases, including Skinners’ Co v Irish Society24 and Kinloch v Secretary of State

20 In relation to Queensland, see Mudaliar, above n 18, 5. In relation to the Northern Territory, see

Welfare Ordinance 1953–1960 (Cth) ss 25–6; Aboriginals Ordinance 1918–1933 (Cth) s 29A.

21 Hogg and Monahan, above n 14, 258.

22 Authorson v A-G (Canada) (2002) 215 DLR (4th) 496, 518 (Austin and Goudge JJA) (‘Authorson’).

See also John Glover, Equity, Restitution & Fraud (2004) 118 for more on the ‘public’

trust.

23 Tito v Waddell [No 2] [1977] Ch 106, 217. According to Glover, in this context there arises ‘a

presumption that legislation does not intend to impose trust obligations in respect of governmental

or administrative functions on the Crown and its servants and agents’: Glover, above n 22,

118. According to J D Heydon and M J Leeming, Jacobs’ Law of Trusts in Australia (7th ed,

2006) 65, ‘the mere use of the word “trust” in relation to Crown or governmental property usually

does not denote a trust enforceable in a court of equity.’

24 (1845) 12 Cl & F 425, 487–8; 8 ER 1474, 1499–500 (Lyndhurst LC). See also the discussion of

this case in Glover, above n 22, 119.

120 Melbourne University Law Review [Vol 32

(India) (‘Kinloch’).25 In Kinloch, war booty captured during the Indian mutiny

campaign was stipulated by a Royal Warrant to be held ‘in trust’ for members of

the armed forces. The House of Lords held that this merely described a political

obligation and did not create a trust enforceable in the courts.26 Any ‘trust’

related only to

higher matters, such as might take place between the Crown and public officers

discharging, under the directions of the Crown, duties or functions belonging to

the prerogative and to the authority of the Crown.27

In Tito v Waddell [No 2], the inhabitants of a small and phosphate-rich Pacific

Island near Nauru brought proceedings against their former colonising power,

the British Crown.28 The plaintiffs alleged that the Crown had acted in breach of

trust and fiduciary obligations owed to them in respect of phosphate mining

royalties that had been paid into funds described as ‘trust funds’. These ‘trust

held ‘in trust on behalf of’ the natives.29 The British Crown had recognised in

negotiation with the plaintiffs that ‘the land was the Banabans’ land, and the

royalty was being paid in respect of the phosphate in that land.’30

Nevertheless, Megarry V-C considered that what had been created was a trust

‘in the higher sense’ rather than a true, and legally enforceable, trust.31 The use

of the word ‘trust’ — even in a formal document or decree such as a Royal

Warrant or the Mining Ordinance 1928 (UK) — does not necessarily create an

enforceable trust,32 particularly where the trust relationship alleged is with the

Crown.33 There were no relevant statements by government officers showing an

unequivocal intention that the royalty be held on a true and enforceable trust.34

Nor did the mere existence of a separate fund, even where established by statute,

play any part in distinguishing between a true trust and a mere governmental

obligation. Indeed, according to Megarry V-C, ‘the separateness of the fund or

account seems … to be indifferently a badge of each.’35 In addition, there was

25 (1882) 7 App Cas 619, discussed in Glover, above n 22, 119; Kidd, above n 3, 37. The case

name is spelt variously as ‘Kinloch’ or ‘Kinlock’: see, eg, Tito v Waddell [No 2] [1977] Ch 106,

212–14 (Megarry V-C).

26 Kinloch (1882) 7 App Cas 619, 619.

27 Ibid 626 (Lord Selbourne LC).

28 [1977] Ch 106.

29 See ibid 165 (Megarry V-C), where the Mining Ordinance 1928 (Gilbert and Ellice Islands)

s 6(2) is quoted as requiring the royalties to ‘be paid to the resident commissioner to be held by

him in trust on behalf of the former owner or owners if a native or natives of the colony subject

to such directions as the Secretary of State for the Colonies may from time to time give.’

30 Tito v Waddell [No 2] [1977] Ch 106, 222 (Megarry V-C).

31 Ibid.

32 Ibid 212–16, discussing Kinloch (1882) 7 App Cas 619.

33 Ibid 211. According to Megarry V-C, the possibility exists that

without holding the property on a true trust, the Crown is nevertheless administering that

property in the exercise of the Crown’s governmental functions. This latter possible explanation,

which does not exist in the case of an ordinary individual, makes it necessary to scrutinise

with greater care the words and circumstances which are alleged to impose a trust.

34 Ibid 223.

35 Ibid 219.

2008] Holding the Government to Account 121

nothing in the agreements creating the Banaban Fund ‘to give any identifiable

Banabans any definable right in the capital of that fund.’36

This case is consistent with a view expressed in numerous 19th century American

and Canadian cases that the courts should not intervene even where the

Crown has broken express promises or treaty obligations to indigenous people37

— a latter-day version of the view that ‘the King can do no wrong’.38 It is

inconsistent with international human rights principles and possibly even

domestic human rights legislation where such legislation exists.39 This approach

presents a significant barrier to potential ‘stolen wages’ claimants since the

defence could argue that, following Tito v Waddell [No 2], legislation establishing

‘Aboriginal Trust Funds’ and the like merely created a governmental

obligation or a ‘political trust’ rather than an enforceable legal trust.

However, there are several possible arguments that Tito v Waddell [No 2]

should be distinguished or not followed.

1 Overcoming Tito v Waddell [No 2]: The Independent Legal Interest Test

The first argument against the Tito v Waddell [No 2] formulation of the political

trust is that the doctrine is applicable only where the trust property can be

characterised as, effectively, an emanation of the sovereign’s goodwill — a

Crown grant to which the plaintiffs have no pre-existing legal right. Where the

plaintiffs have an independent and pre-existing legal interest in the trust property,

the political trust doctrine does not apply.

There is considerable overseas authority for this restriction of the political

trust. In Guerin v The Queen (‘Guerin’), an Indian band that had surrendered

land to the Crown argued that the Crown owed trust and fiduciary obligations to

deal with the land on terms conducive to their welfare.40 The Crown argued that

the political trust doctrine applied to render legally unenforceable any obligations

it had assumed in relation to the land. The Court held that the political trust

doctrine was inapplicable because the Crown was not merely acting ‘in the

exercise of its legislative or administrative function.’41 Rather, it was acting

pursuant to its obligation to protect the Indians’ interest in land, which was an

‘independent legal interest’42 because — in contrast to Tito v Waddell [No 2]43

— it was not the creation of the legislature or executive.44

36 Ibid 222.

37 See, eg, Lone Wolf v Hitchcock, 187 US 553 (1903); Henry v The King (1905) 9 Ex CR 417;

A-G (Canada) v Giroux (1916) 53 SCR 172. See also Kidd, above n 3, 38–40; Camilla Hughes,

‘The Fiduciary Obligations of the Crown to Aborigines: Lessons from the United States and

Canada’ (1993) 16 University of New South Wales Law Journal 70, 77–9.

38 Hogg and Monahan describe the political trust as a ‘nothing’ and as a ‘catastrophe’ for its

supposed beneficiaries, who ‘had been unsuccessful in obtaining satisfaction from the government

out of court, and had then lost prolonged and expensive litigation’: Hogg and Monahan,

above n 14, 259.

39 Note, in the United Kingdom context, that ‘[p]ublic law can also take into account the hierarchy

40 [1984] 2 SCR 335. For discussion of this and other related cases, see Hughes, above n 37,

87–91.

41 Guerin [1984] 2 SCR 335, 385 (Dickson J for Dickson, Beetz, Chouinard and Lamer JJ).

42 Ibid.

122 Melbourne University Law Review [Vol 32

A response to this may be that this restriction on the scope of the political trust

doctrine is limited to cases not involving an independent legal interest, the

restriction only applying where the trust property is Aboriginal land. The Court

in Guerin required the plaintiffs to prove aboriginal or native title before a trust

or fiduciary obligation would be imposed.45 However, later Canadian cases such

as R v Sparrow held that the independent legal interest test for the existence of

trust or fiduciary duties could be satisfied even where the case did not directly

war veterans who alleged that the Crown had maladministered pensions and

other funds it held on their behalf, the Ontario Court of Appeal distinguished

both Kinloch and Tito v Waddell [No 2].47 This was on the basis that:

in neither case could it be said that the funds held by the Crown were in any

sense owned by those claiming that the Crown held the funds in trust for them.

Here, the fact that each veteran had a property interest in the fund being administered

on his behalf is a clear indication that this is not a political trust. By contrast,

the ‘political trust’ cases involve not private funds, but public funds or

43 Judicial attempts to distinguish Tito v Waddell [No 2] make for interesting reading. In Guerin

[1984] 2 SCR 335, 352, Wilson J (for Ritchie, McIntyre and Wilson JJ) argued that royalties

paid to the Banaban Islanders in Tito v Waddell [No 2] were ‘exclusively Crown property’. This

seems to ignore the fact that the royalties flowed from the Crown’s use of the Banaban Islanders’

land and were — again, admittedly from a modern perspective — a recognition of the Banaban

Islanders’ pre-existing moral, if not legal, rights. Glover regards Wilson J’s argument on this

point as an ‘unlikely contention’: Glover, above n 22, 125 fn 611. Nevertheless, Toohey J in

Mabo v Queensland [No 2] (1992) 175 CLR 1, 202 fn 65 (‘Mabo’) put a similar argument,

stating that ‘[t]he trust claimed in Tito v Waddell [No 2] to exist for the benefit of Banaban

landowners, with respect to a fund comprising compensation or royalties paid by Crown lessees,

was a question of construction of the Mining Ordinance 1928 of the Gilbert and Ellice Islands

Colony.’ Ultimately, it is suggested, Tito v Waddell [No 2] is only reconcilable with the later

jurisprudence if viewed as a product of the era of terra nullius, an era in which the Islanders’

land rights were not recognised as rights of a ‘legal’ nature at all.

44 Thus, the Court held that the Crown had accepted an equitable obligation that was very close to

a trust — specifically, a fiduciary duty under which it ‘will be liable to the Indians in the same

way and to the same extent as if such a trust were in effect’: Guerin [1984] 2 SCR 335, 376

(Dickson J for Dickson, Beetz, Chouinard and Lamer JJ). See also Glover, above n 22, 123–5;

Hughes, above n 37, 88–9.

45 Guerin [1984] 2 SCR 335, 376–7 (Dickson J for Dickson, Beetz, Chouinard and Lamer JJ). See

also David Tan, ‘The Fiduciary as an Accordion Term: Can the Crown Play a Different Tune?’

(1995) 69 Australian Law Journal 440, 443–4.

46 [1990] 1 SCR 1075. The appellant in R v Sparrow [1990] 1 SCR 1075 had been convicted of an

offence against fisheries legislation. He argued that he was exercising a traditional Aboriginal

right to fish, and that this right was recognised by the Constitution Act 1982, being sch B to the

Canada Act 1982 (UK) c 11 (‘Constitution Act 1982’). The Supreme Court of Canada found that

‘aboriginal and treaty rights’ (the term used in the Constitution Act 1982) could validly be regulated

or even extinguished. However, the Crown’s power to do so must be balanced against its

trust or fiduciary obligation to Aboriginal people. This fiduciary obligation arose not only from

the Canadian Constitution but also from ‘[t]he sui generis nature of Indian title, and the historic

powers and responsibility assumed by the Crown’: at 1108 (Dickson CJ and La Forest J for

Dickson CJ, Lamer, Wilson, La Forest, L’Heureux-Dube and Sopinka JJ). See also Amanda

47 (2002) 215 DLR (4th) 496.

2008] Holding the Government to Account 123

property held by the Crown, whose distribution is found to be the province of

the political arena, not the courts.48

The Australian cases are not as yet clear on the reach of the independent legal

the plaintiffs by trust and fiduciary obligations in relation to the plaintiffs’ rights

in the Murray Islands.49 His Honour rejected the Queensland government’s

argument that any responsibilities it owed to the plaintiffs with respect to the

Islands were a mere matter of governmental discretion, or a political trust.50 His

Honour distinguished Kinloch on the basis that there ‘[t]he interest claimed to be

held in trust was created expressly by the Crown itself’,51 stating that traditional

title, in contrast, ‘arises as a matter of common law, quite independently of any

grant or other action on the part of the Crown.’52

In Noble v Victoria (‘Noble’), the Queensland Court of Appeal rejected an

argument that the Victorian government owed trust or fiduciary obligations in

relation to reward money it had received on behalf of, but never given to, two

‘black trackers’ who had assisted in the capture of the Kelly Gang.53 McPherson

JA cited Tito v Waddell [No 2] in support of the notion that the actions of the

Rewards Board in allocating the money to the government, rather than directly to

‘persons unable to use it’,54 created a mere ‘precatory trust’ rather than a legally

enforceable trust.55 According to McPherson JA, the words of the Rewards

Board and the other instruments on which the plaintiffs founded their claim

‘nowhere use the expression “trust” or anything like it.’56 McPherson JA also

stated that:

The plaintiffs’ claim is in no way related to land occupied or formerly occupied

by Aborigines, but exclusively to personal property in the form of money that

48 Ibid 517 (Austin and Goudge JJA). The Court also rejected an argument that had been accepted

in another case, Callie v Canada [1991] 2 FC 379, that the sole source of the Crown’s fiduciary

obligation in Guerin [1984] 2 SCR 335 was the sui generis Aboriginal interest in the land. Austin

and Goudge JJA stated at 519 (emphasis added):

fiduciary duty is created by the aboriginal right to the land (undoubtedly a sui generis right),

together with the obligations placed on the Crown by the Indian Act in disposing of that land.

It is the combination of the aboriginal interest in the land with the statutory obligations imposed

on the Crown in dealing with that interest which render the Crown subject to the fiduciary

obligation. … [I]t is the nature of the relationship, not the specific category of actor involved,

that gives rise to the fiduciary duty.

49 (1992) 175 CLR 1. For discussion concerning this aspect of the Mabo decision, see Hughes,

above n 37, 72–6; Jones, above n 46, 70–2.

50 Mabo (1992) 175 CLR 1, 201–2.

51 Ibid.

52 Ibid 202.

53 [2000] 2 Qd R 154. See also the trial decision Noble v Victoria (Unreported, Supreme Court of

Queensland, Helman J, 12 September 1997) and discussion of the decision in Kidd, above n 3,

49.

54 Noble [2000] 2 Qd R 154, 157. The Rewards Board had noted that

it would not be desirable to place any considerable sum of money in the hands of persons unable

to use it. They therefore recommend that the sums set opposite to their names be handed

to the Queensland and Victorian Governments to be dealt with at their discretion.

55 Ibid 164–5.

56 Ibid 164.

124 Melbourne University Law Review [Vol 32

was promised or to be paid by a colonial government to persons some of whom

happened to be Aborigines.57

It is suggested, however, that Noble is not authority for the proposition that the

independent legal interest exception is confined in Australia to cases in which

the alleged trust property is traditional indigenous land. The plaintiffs’ case in

Noble was relatively weak in that the report of the Rewards Board allocating the

money to the government clearly stated that the money was to be dealt with ‘at

… [the government’s] discretion.’58 As the Ontario Court of Appeal pointed out

in Authorson, the logically crucial feature distinguishing ‘political’ from true

trusts is that the former concerns government or Crown property while the latter

concerns private property.59 There seems to be no reason in policy or principle

for not following the Canadian approach.

If the Canadian approach is followed in Australia, there seems little doubt that

potential stolen wages plaintiffs would be able to overcome the argument that

legislation creating ‘Aboriginal Trust Funds’ and the like merely created a

political trust. Unlike the plaintiffs’ money in Noble or booty in Kinloch, the

money placed in Aboriginal Trust Funds was not money in the nature of a grant

or reward. It was money that the plaintiffs had earned as employees and to which

they had a clear legal right. If the situation were otherwise, there would seem no

alternative but to regard Aboriginal workers as having been legally enslaved.60

2 Overcoming Tito v Waddell [No 2]: The Sovereign Immunity Argument

The second argument against applying Tito v Waddell [No 2] to potential

stolen wages claims in Australia is that Tito v Waddell [No 2] rests — explicitly

or implicitly — upon what Paul Finn terms:

a palpable … deference and preference accorded the Crown in curial proceedings.

This posture may have been — and may still be — appropriate in England.

I do not comment on that. Its justification in a country which began to enact

comprehensive Claims against the Government legislation as early as 1866

is open to serious question.61

The suggestion is that the true basis for the political trust doctrine is not the

traditional judicial reluctance to interfere in political or executive decisions — a

feature of the separation of powers common to both English and Australian law

— but rather a peculiarly English attitude of deference to authority. Finn’s

argument implies that Australian courts have a more robust attitude towards

authority than English courts. This suggests that legislation allowing claims

against the government62 should be interpreted as abrogating entirely the

57 Ibid.

58 Ibid 157.

59 (2002) 215 DLR (4th) 496, 517 (Austin and Goudge JJA).

60 For a recent discussion of this issue, see Stephen Gray, ‘The Elephant in the Drawing Room:

Slavery and the “Stolen Wages” Debate’ (2007) 11(1) Australian Indigenous Law Review 30.

62 See, eg, Judiciary Act 1903 (Cth) s 64, which is applicable in the Northern Territory.

2008] Holding the Government to Account 125

political trust doctrine rather than as merely clarifying the fact that the government

can be sued in an appropriately non-political case.63

There is some support for Finn’s suggestion in a recent United States case,

Cobell v Babbitt, which had strong factual similarities to potential stolen wages

claims.64 The case was a class action by over 300 000 Native American beneficiaries

of so-called Individual Indian Money (‘IIM’) trust accounts. These accounts

were established by statute to hold money derived from income-

producing activities negotiated by the Bureau of Indian Affairs over Indian

land.65 The plaintiffs sought relief for alleged mismanagement of their trust

accounts.

The Columbian District Court did not explicitly refer to the so-called political

trust doctrine. However, it did consider whether the doctrine of sovereign

immunity had been waived in relation to the substantive claims and remedies

sought by the plaintiffs. Sovereign immunity in the US is waived in certain

circumstances provided in the Administrative Procedure Act, 5 USC § 702

(1993), which states that:

An action in a court of the United States seeking relief other than money damages

and stating a claim that an agency or an officer or employee thereof acted

or failed to act in an official capacity or under color of legal authority shall not

be dismissed nor relief therein be denied on the ground that it is against the

United States …

Lamberth J rejected an argument from the defendants that the ‘plaintiffs’

accounting claim is merely “part and parcel” of a hypothetical money damages

claim that has been “temporary [sic] shelved for the purposes of this litigation.”’

66 His Honour noted that the plaintiffs had ‘repeatedly stated that they do

not seek to recover any money or other substitutionary relief.’67 Had the plaintiffs

sought monetary damages, their action would have been barred due to the

operation of the doctrine of sovereign immunity.68

63 Kidd takes up Finn’s argument, suggesting that claims against the government on the basis of

such legislation may have the effect of making government ‘as accountable for its management

of Aboriginal finances “as the humblest citizen”’: Kidd, above n 3, 169.

64 91 F 2d 1 (DC Cir, 1999).

65 The IIM accounts were the result of US policies dating back to the early 1800s, under which

tribal communities were ‘removed’ or relocated from their original tribal homelands to remote

locations in the Louisiana Purchase territory. The government then entered into treaties or agreements

identifying the new tribal lands. Under the General Allotment Act of 1887, c 119, 24 Stat

388 (‘Dawes Act’), individual tribal families were allotted small parcels of land from within their

original tribal reservation, with the ‘surplus’ lands then opened to non-Indian settlement. Allotted

land was held in trust by the US for the individual Indians: see ibid 5 (Lamberth J). Pursuant

to this trust duty, at the time of the original court trial in 1999 the US held approximately 11

million acres of the plaintiffs’ individual land allotments in trust: ibid 6 (Lamberth J). Income

was derived from such agreements and activities as grazing leases, timber leases, timber sales,

oil and gas production, mineral production and rights of way: ibid 7 (Lamberth J). Another

agency, the Office of Trust Fund Management, was then responsible for correctly banking the

money received and crediting it to an individual account holder or a special deposit account: see

ibid 7–13 (Lamberth J).

66 Cobell v Babbitt, 91 F 2d 1, 27 (DC Cir, 1999).

67 Ibid 24.

68 Thus, in effect, the operation of the doctrine prevented the plaintiffs from seeking recovery of

the US$2.4 billion revealed in an Arthur Anderson report to have been misappropriated from the

IIM accounts. For a discussion of the possible implications of this position for the beneficiaries

126 Melbourne University Law Review [Vol 32

If this doctrine is regarded as equivalent to the doctrine of the political trust,

then Cobell v Babbitt supports the proposition that legislation permitting claims

against the government is relevant to the question of whether a ‘true’ or enforceable

trust, rather than a political trust, exists. In Australia, legislation permitting

claims against the government does not restrict the available remedies to a mere

accounting of the lost moneys.

Nevertheless, the case law — and particularly Toohey J’s comments in Mabo69

— supports the proposition that the political trust doctrine does still exist in

Australia, albeit perhaps in a limited form. It does not seem plausible to argue

that claims against the government entirely abrogate the doctrine. A better

argument seems to be that the doctrine is now limited to situations in which it is

inadvisable on a policy basis to impose trust obligations on government. Factors

relevant to such an assessment are arguably similar to the factors now recognised

as governing the imposition of a duty of care upon government in tort.70

3 Overcoming Tito v Waddell [No 2]: Liability of Crown Servants

workers’ compensation payments as trustee.71 The Court accepted the principle

derived from Kinloch that clear words were required

before an obligation on the part of the Crown or a servant or agent of the

Crown, even if described as a trust obligation, will be treated as a trust according

to ordinary principles or, as it is sometimes called, a ‘true trust’; … in the

absence of clear words, the obligation will be characterized as a governmental

or political obligation, sometimes referred to in the decided cases as a trust ‘in

the higher sense’ or ‘a political trust’.72

Despite this, the High Court also pointed out that the language of the instrument

is not conclusive since ‘subject matter and context are also important and,

in some cases, may be more revealing of intention than the actual language

used.’73 This suggests that the use of the word ‘trust’ in legislation providing for

the withholding of wages should be seen in the context of the general ‘protective’

of the IIM accounts and for taxpayers, see Billee Elliott McAuliffe, ‘Forcing Action: Seeking to

“Clean Up” the Indian Trust Fund: Cobell v Babbitt, 30 F Supp 2D 24 (DDC 1998)’ (2001) 25

Southern Illinois University Law Journal 647, 675–6. The 1989 Arthur Anderson report is referred

to at 657.

69 (1992) 175 CLR 1, 201–2, where Toohey J leaves open the question of whether the idea of a

political trust has any utility.

70 See, eg, Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540, 557, where Gleeson CJ

stated that to hold that the government owed a duty of care

necessarily implies that the reasonableness or unreasonableness of the inaction of which complaint

is made is a legitimate subject for curial decision. Such legitimacy involves questions of

practicality and of appropriateness. There will be no duty of care to which a government is

subject if, in a given case, there is no criterion by reference to which a court can determine the

reasonableness of its conduct.

71 (1993) 178 CLR 145.

72 Ibid 162–3 (Mason CJ, Deane, Toohey and Gaudron JJ) (citations omitted).

73 Ibid 163.

2008] Holding the Government to Account 127

intention of legislation controlling Aboriginal wages, a view that arguably tends

to suggest that a mere ‘governmental obligation’ was intended.

However, in the case the High Court also pointed out that ‘there is no rule of

law or equity to prevent the imposition of ordinary trust obligations on a person

who is, in other respects, a servant or agent of the Crown.’74 A person who is a

servant or agent of the Crown ‘may bear that character in relation to some

functions, but not [necessarily] those associated with the obligation in question.’

75

According to the High Court, the Registrar’s duty to invest workers’ compensation

money may not be ‘easily described as a Crown or governmental function’.

76 Indeed, the ‘mere fact that the person on whom the obligation is cast is a

statutory office holder cannot, of itself, require [the inquiry into] whether he or

she is a trustee in the ordinary sense to be approached on the basis of a presumption

to the contrary.’77 The issue of whether the obligation in question can

properly be described as a ‘governmental interest or function’78 can only be

determined with reference to ‘the law as it stands from time to time.’79

Following this reasoning, stolen wages claimants might argue that the obligation

cast on the Chief Protector or other responsible official with respect to

moneys held by them on behalf of Aboriginal employees cannot properly be

described as a ‘Crown or governmental function.’ Just as the Registrar’s duties in

relation to compensation moneys were separate to their general duties in relation

to the Accident Compensation Fund, so too were the Chief Protector’s duties in

relation to Aboriginal employees’ money separate to their general ‘protective’

duties in relation to those employees. There was no ‘governmental interest or

function’ involved in managing the Aboriginal Trust Accounts.

A potential difficulty with this argument for stolen wages plaintiffs is that the

Registrar of the Tribunal in Accident Tribunal v FCT was alive and available to

give evidence. In contrast, it is unlikely that a Director of Welfare or other

responsible government official would be available to give evidence in a stolen

wages claim relating to the administration of trust funds 40 or more years ago.

However, it is clear that the trust relationship in Accident Tribunal v FCT rested

on the terms of the statute, not on the evidence of the Registrar in person. Stolen

wages claimants would equally be relying on the terms of the statute rather than

on the evidence of some long-retired or deceased Director of Welfare.

4 Overcoming Tito v Waddell [No 2]: The Statutory Trust

A final possibility is that the obligation cast on the responsible official should

properly be described neither as an ‘ordinary’ or ‘true’ trust nor a ‘political’ trust,

but rather as something in between: the so-called ‘statutory’ trust. The ‘statutory

trust’ is a category most recently, if somewhat fleetingly, referred to by the High

74 Ibid (citations omitted).

75 Ibid.

76 Ibid.

77 Ibid 164.

78 Ibid.

79 Ibid (citations omitted).

128 Melbourne University Law Review [Vol 32

Court in Bathurst City Council v PWC Properties Pty Ltd (‘Bathurst’).80 This

case raised the question of whether the Bathurst City Council could be restrained

from selling land to a private developer by provisions in local government

legislation that land under the control of a council was ‘land subject to a trust for

a public purpose’ and was ‘community land’.81

There was no ‘true’ trust as there was no beneficiary. Nor could the trust easily

be described as being for charitable purposes.82 Nevertheless, following a review

of the history of legislation regulating the management and control of ‘waste

lands’ of the Crown,83 the Court concluded that the council would be restricted

by the relevant provisions in its dealings with the land ‘and subject to restraint at

the suit of the Attorney-General.’84 The Court described this obligation as a

‘“statutory trust” which bound the land and controlled what otherwise would

have been the freedom of disposition enjoyed by the registered proprietor of an

estate in fee simple.’85

It is questionable whether the category of statutory trust as described by the

High Court in Bathurst is applicable to stolen wages claimants. According to the

authors of Jacobs’ Law of Trusts in Australia, the decision in Bathurst was the

most recent in ‘the long history of “public trusts” created by Crown grant.’86

They also added that ‘[t]hose obligations may be enforceable at the suit of the

Attorney-General as a matter of public law, but do not give rise to a trust

enforceable in equity.’87 Finn refers to the statutory trust as often ‘a trust for an

abstract non-charitable purpose’.88 David Wright comments that this ‘“statutory

trust” placed a fetter upon the free alienability of the land’89 but notes that ‘[i]t is

not apparent if this “statutory trust” can also be the source of positive obligations.’

90

Thus, it is currently unlikely that a statutory trust might provide the basis for a

stolen wages claim as the trust obligation alleged by potential stolen wages

claimants does not concern land, is not created by Crown grant, is not likely to

be enforced by the Attorney-General and does concern identifiable beneficiaries.

Nevertheless, it is at least conceivable that a stolen wages claim might provide

the High Court with a further opportunity to ‘modernise the Australian law of

trusts’ by giving further ‘content to the “statutory trust”.’91

80 (1998) 195 CLR 566.

81 Local Government Act 1993 (NSW) sch 7 s 6(2)(b).

82 Bathurst (1998) 195 CLR 566, 591 (Gaudron, McHugh, Gummow, Hayne, Callinan JJ).

83 Ibid 589.

84 Ibid 592.

85 Ibid.

86 Heydon and Leeming, above n 23, 66.

87 Ibid.

88 Finn, ‘The Forgotten “Trust”’, above n 61, 139 fn 59.

89 David Wright, ‘The Statutory Trust, the Remedial Constructive Trust and Remedial Flexibility’

(1999) 14 Journal of Contract Law 221, 225 (citations omitted).

90 Ibid 225 fn 36.

91 Ibid 225.

2008] Holding the Government to Account 129

B Scope of the Trustee’s Duties

In ordinary private trust law, the first duty of the trustee is ‘that an account of

[their] receipts and payments should be kept, to be produced to those interested

in the account when it is properly demanded.’92 ‘The account must be timely,

faithful, accurate, and usually supported by documentary evidence.’93 Trustees

should keep accurate information regarding beneficiaries and retain a current

schedule of trust property. They should also identify accounts as ‘trust’ accounts

and document revenue and expenditure.94

As noted above, it is arguable that not all of these duties apply equally to the

Crown as trustee. In particular, the duty not to ‘mix’ trust funds may not apply

equally to the Crown.95 However, the Crown as trustee still owes a duty to

account.96 This general obligation of accountability applies a fortiori to government

relations with indigenous people, which are marked by relations of peculiar

power and vulnerability.97

A duty to account is of enormous significance to stolen wages claimants. As

the history of the litigation in Cubillo v Commonwealth (‘Cubillo’)98 has shown,

the lapsing of time is perhaps the greatest single difficulty facing stolen wages

claimants. Given the loss of records and the death of key witnesses, the accounting

difficulties of tracing ‘what happened’ to individual moneys placed in trust

are likely to be almost insuperable. Governments, rather than individuals, are

best placed to answer such questions. In Cobell v Norton, following a finding of

breach of trust, the US government was ordered to overhaul its accounting

practices and to produce a historical account of the trust funds.99 Such an order

would be of great value to stolen wages claimants around Australia.100

92 Wroe v Seed (1863) 4 Giff 425, 429; 66 ER 773, 774–5 (Stuart V-C). See also Trustee Act 1907

(SA) s 8; G E Dal Pont and D R C Chalmers, Equity and Trusts in Australia (3rd ed, 2004)

619–20.

94 See Dal Pont and Chalmers, above n 92, 620.

95 New South Wales v Commonwealth [No 3] (1932) 46 CLR 246, 262 (Rich and Dixon JJ). This

case is also discussed in Hogg and Monahan, above n 14, 260.

96 Dal Pont and Chalmers, above n 92, 137 (emphasis in original) (citations omitted) speak of the

government’s general responsibility to the governed as trustee:

perhaps the easiest duty to conceptualise is the duty to comprehensively account faithfully and

accurately to the people in a form that facilitates the public monitoring of the government’s

performance. This is required as a check upon misuse of the power conferred by the public to

its representative, and as such, founds the basis of responsible government. The courts’ reluctance

to attach equitable doctrines of confidence to governmental information reflects this

policy at a judicial level.

See also Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106, 138

(Mason CJ).

97 For example, the Crown has the power to alienate land belonging to indigenous peoples, thus

extinguishing native title: Mabo (1992) 175 CLR 1, 203 (Toohey J). See also Dal Pont and

Chalmers, above n 92, 141; above Part II(A)(1).

98 (2001) 112 FCR 455.

99 240 F 3d 1081, 1109 (Sentelle J) (DC Cir, 2001), where the Columbian Court of Appeal

affirmed the order of the district court: at 1093 (Sentelle J).

100 However, as the history of the litigation in Cobell v Norton has shown, such an order is likely to

be only the beginning of the road. More than 10 years after the plaintiffs launched their case, and

five years after their success on appeal in Cobell v Norton, they are yet to receive any financial

130 Melbourne University Law Review [Vol 32

III STOLEN WAGES PLAINTIFFS AND FIDUCIARY DUTY

Should stolen wages plaintiffs be unable to prove an express trust, they might

argue that the government assumed fiduciary duties in relation to moneys kept in

Aboriginal Trust Accounts. Alternatively, they might argue that the government

owed broader, perhaps even positive, fiduciary obligations to indigenous

workers. Thalia Anthony, for example, has recently suggested that governments

owed a duty to ‘ensur[e] the general welfare of Indigenous workers,’101 including

a duty to ensure that cattle stations and other employers adhered to their

statutory obligations to provide wages rather than rations and to adhere to other

employment conditions.102

Generally, a fiduciary relationship exists where one party (the fiduciary)

undertakes to act in the interests of another ‘in the exercise of a power or

discretion which will affect the interests of that other person in a legal or

practical sense.’103 The accepted fiduciary relationships include those of trustee

and beneficiary, employee and employer, director and company, and guardian

and ward.104 However, the courts have preferred to develop fiduciary law on a

case-by-case basis rather than by seeking a precise definition.105

Thus in Mabo, Toohey J noted that ‘[t]he factors giving rise to a fiduciary duty

are nowhere exhaustively defined.’106 He summarised the general features of

fiduciary relationships in terms that seem curiously apt to describe the position

of a Chief Protector or Director of Welfare vis-à-vis the Aboriginal ‘native’ or

‘ward’:

compensation for the government’s admitted breach of trust. Instead, the case has been delayed

with interminable collateral proceedings, or ‘scores of other orders and opinions’ in what one

American legal commentator has termed an ‘incredibly complicated case’: see Richard J Pierce

issues: first, the judge’s power to issue ‘a permanent structural injunction that requires the [Department

of the Interior (‘DOI’)] to provide the kind of accounting the judge prescribed on the

schedule he prescribed’: at 239 (citations omitted); secondly, the judge’s use of contempt orders

against various government employees: at 240–5; thirdly, his actions in ordering the DOI’s

computer system to be disconnected from the internet because of the fear that hackers might

destroy or alter trust records: at 245–6. Problems of missing data and inadequately skilled personnel

have been at least partially responsible for the delay: see Christopher Barrett Bowman,

‘Indian Trust Fund: Resolution and Proposed Reformation to the Mismanagement Problems

Associated with the Individual Indian Money Accounts in Light of Cobell v Norton’ (2004) 53

Catholic University Law Review 543. Lamberth J’s zeal in pursuing the DOI has been characterised

by Richard J Pierce Jr as a ‘reign of terror’ — Pierce uses this phrase in the title of his

‘professed hostility to Interior’ had become ‘so extreme as to display clear inability to render fair

judgment’: see Cobell v Kempthorne, 455 F 3d 317, 335 (Tatel J for the Court) (DC Cir, 2006),

citing Liteky v United States, 510 US 540, 551 (Scalia J for the Court).

101 Anthony, above n 2, 17.

102 Ibid.

103 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41, 97 (Mason J)

(‘Hospital Products’). See also Tan, above n 45, 441.

104 Hospital Products (1984) 156 CLR 41, 96 (Mason J), 141 (Dawson J).

105 At ibid 141 (citations omitted), Dawson J noted that the courts have

said more than once that it is not possible to define completely and with precision those matters

which give rise to fiduciary obligations notwithstanding that it is possible to discern a fiduciary

relationship when it exists.

106 (1992) 175 CLR 1, 200 (citations omitted).

2008] Holding the Government to Account 131

Underlying such relationships is the scope for one party to exercise a discretion

which is capable of affecting the legal position of the other. One party has a

special opportunity to abuse the interests of the other. The discretion will be an

incident of the first party’s office or position. The undertaking to act on behalf

of, and the power detrimentally to affect, another may arise by way of an

agreement between the parties, for example in the form of a contract, or from

an outside source, for example a statute or a trust instrument. The powers and

duties may be gratuitous and ‘may be officiously assumed without request’.107

These comments seem to suggest that a fiduciary relationship would exist

between a government and potential stolen wages plaintiffs. Such a relationship

could have arisen directly because the relationship between such plaintiffs and

the government was that of ward and guardian. Alternatively, such a relationship

could have arisen indirectly by virtue of the government’s undertaking contained

in ‘protective’ legislation to act on behalf of Aboriginal employees, including the

provisions relating to trust accounts and the resulting power to detrimentally

affect the interests of Aboriginal workers. It is notable that Toohey J’s comments

did not regard the fiduciary relationship as necessarily arising only out of the

power to alienate and extinguish native title. Rather, Toohey J left open the

possibility that such a fiduciary relationship had a broader basis in the general

‘course of dealings by the Queensland Government with respect to the Islands

since annexation … and the exercise of control over or regulation of the Islanders

themselves by welfare legislation’.108

In Wik Peoples v Queensland (‘Wik’), Brennan CJ made comments that have

been interpreted by some commentators as supportive of the existence of a

broad, even sui generis, fiduciary obligation.109 Responding to an argument that

the state owed a fiduciary duty to indigenous inhabitants of land that was subject

to pastoral leases, Brennan CJ stated that the statutory power to alienate land and

thereby extinguish native title could not, of itself, be described as creating a

107 Ibid (citations omitted).

108 Ibid 203. Toohey J also found a narrower basis for the fiduciary obligation in the Queensland

government’s power to alienate and extinguish native title in the Meriam people’s traditional

land at 203 (emphasis in original):

The power to destroy or impair a people’s interests in this way is extraordinary and is sufficient

to attract regulation by Equity to ensure that the position is not abused. The fiduciary

relationship arises, therefore, out of the power of the Crown to extinguish traditional title by

alienating the land or otherwise; it does not depend on an exercise of that power.

Such a fiduciary obligation was ‘in the nature of the obligation of a constructive trustee’: at 204

(Toohey J) (citations omitted). The content of the obligation would be ‘tailored by the circumstances

of the specific relationship from which it arises. But, generally, to the extent that a person

is a fiduciary he or she must act for the benefit of the beneficiaries’: at 204 (Toohey J)

(citations omitted). The other members of the High Court gave the issue of fiduciary duty only

brief treatment. Dawson J considered that the existence of any fiduciary duty was dependant

upon the existence of an Aboriginal interest in or over the land. Since his Honour considered that

such Aboriginal interests in land did not exist, there was ‘no room’ for the application of fiduciary

principles: at 166. Brennan J, with whom Mason CJ and McHugh J concurred, considered

that a fiduciary duty might arise upon surrender of native title to the Crown: at 60. However,

Hughes, above n 37, 72 (emphasis in original) suggests that ‘it is not certain that Brennan J

intended to suggest that a fiduciary duty would arise exclusively in the hypothetical scenario he

describes’. Deane and Gaudron JJ opined that actual or threatened interference with the enjoyment

of native title might attract more general equitable remedies, such as the imposition of a

remedial constructive trust: at 113. They did not explicitly consider fiduciary duty.

109 (1996) 187 CLR 1.

132 Melbourne University Law Review [Vol 32

fiduciary duty.110 Some extra element was needed: this element was a ‘discretionary

power — whether statutory or not — that is conferred on a repository for

exercise on behalf of, or for the benefit of, another or others’.111

However, Toohey J’s broad conception of the fiduciary relationship has been

criticised on a policy basis112 and has not been adopted in subsequent cases. In

Williams v Minister (Aboriginal Land Rights Act 1983) (‘Williams’), the New

South Wales Supreme Court found that the plaintiff’s position as a state ward

subject to the control of the Aborigines Welfare Board did not invoke the legal

relationship of guardian and ward.113 Consequently, the duties attaching to

guardianship did not apply.114 In addition, the Court declined to follow Canadian

cases that have extended fiduciary principles to cover social and familial

relationships,115 holding that such principles did not protect the ‘fundamental

human and personal interests’ claimed.116

Similarly, in Cubillo the Full Court of the Federal Court rejected a claim by

members of the ‘Stolen Generation’ that the Commonwealth had breached

110 Ibid 96.

111 Ibid (Brennan CJ). On the facts in Wik, however, Brennan CJ at 96 was

unable to accept that a fiduciary duty can be owed by the Crown to the holders of native title

in the exercise of a statutory power to alienate land whereby their native title in or over that

land is liable to be extinguished without their consent and contrary to their interests.

This was because ‘[t]he imposition on the repository of a fiduciary duty to individuals who will

be adversely affected by the exercise of the power would preclude its exercise’: at 96. See also

Jones, above n 46, 73, where she argues that these comments, together with Toohey J’s analysis

in Mabo, effectively extend the fiduciary obligation to a power–dependency relationship, provided

there are ‘[t]he elements of power and discretion, and the corresponding vulnerability, and

reasonable expectations’. Jones suggests that the fiduciary obligation is ‘easily applied in the

Stolen Generation context’ since the state had a discretionary power to remove children from

their families, the children were in a position of vulnerability and the ‘reasonable child could

have believed that the State would act in their interests’: at 73. Indeed, Jones suggests, ‘Brennan

CJ in Wik supported the extension of fiduciary principles to the indigenous context generally’:

at 74.

112 According to Glover, to source the obligation merely in a ‘power–dependency relationship’

could have the result that ‘many groups within society who live in comparable conditions to the

Meriam people’ might also be able to argue that the government owes them a fiduciary obligation:

Glover, above n 22, 126–7.

113 (1999) 25 Fam LR 86.

114 Ibid 234–5 (Abadee J). The plaintiff claimed that the Board — and consequently the responsible

Minister — had breached a fiduciary obligation owed to her by failing to ensure that she was

properly cared for, as a result of which she suffered physical and psychological harm. In an

that the Aborigines Welfare Board was under a fiduciary duty to provide for Ms Williams’s

custody, maintenance and education. The duty arose from the Aborigines Welfare Board’s position

as the child’s statutory guardian: at 511 (Kirby P). In the hearing on the substantive issue,

however, Abadee J distinguished Kirby P’s views: see Williams (1999) 25 Fam LR 86, 233. See

also Jones, above n 46, 64.

115 See, eg, M(K) v M(H) [1992] 3 SCR 6, 64 (La Forest J for La Forest, Gonthier, Cory and

Iacobucci JJ). See generally Dal Pont and Chalmers, above n 92, 127–8. Note that, in Australia,

fiduciary law has been rejected as a vehicle to circumvent limitation statutes in sexual abuse

claims: see Paramasivam v Flynn (1998) 90 FCR 489.

116 Williams (1999) 25 Fam LR 86, 233 (Abadee J). According to Dal Pont and Chalmers,

above n 92, 128, this decision is an example of the ‘frosty reception’ given to attempts in the

Australian courts ‘to rely upon the fiduciary-like relationship between guardian and ward to

replicate common law duties.’ If the plaintiff had legal remedies, they were in tort. As the Court

noted, it was not possible to ‘convert an unsustainable claim at common law, based on the same

facts, into a sustainable one in equity’: Williams (1999) 25 Fam LR 86, 242 (Abadee J).

2008] Holding the Government to Account 133

fiduciary obligations to act in their interests and ensure that they were adequately

cared for.117 Though the Court accepted O’Loughlin J’s finding at trial that the

Director of Welfare might owe fiduciary duties arising from his statutory role as

the children’s legal guardian,118 the Court held that the fact that the Director

might owe fiduciary obligations did not mean that such obligations were owed

by the Commonwealth.119 In any case, fiduciary obligations could not be

‘superimposed’ on common law duties ‘simply to improve the nature or extent of

the remedy.’120 A fiduciary obligation could not ‘forbid what the legislation

permitted.’121 This meant that the concept of fiduciary duty could not be used to

impugn the plaintiffs’ removal from their parents nor the conditions under which

they were detained. If a fiduciary duty existed at all, it could protect economic

interests only.122

The Full Court of the Federal Court’s comments about the restricted scope of

the fiduciary obligation can be understood in light of an earlier High Court

decision in Breen v Williams (‘Breen’).123 In Breen, the High Court rejected an

attempt to apply fiduciary law ‘in an expansive manner so as to supplement tort

law and provide a basis for the creation of new forms of civil wrongs.’124 It was

117 (2001) 112 FCR 455. Note that the earlier case — Cubillo v Commonwealth (1999) 89 FCR 528

— involved an interlocutory application in which the Commonwealth applied to have the proceedings

summarily dismissed. This interlocutory application is explained in Cubillo (2001) 112

FCR 455, 466–7 (Sackville, Weinberg and Hely JJ).

118 O’Loughlin J’s reasoning can be found in Cubillo v Commonwealth [No 2] (2000) 103 FCR 1,

397–409. The Full Federal Court stated that ‘[t]he fact that the Director became the legal guardian

of the appellants by virtue of statute is no obstacle to the creation of a fiduciary relationship’:

Cubillo (2001) 112 FCR 455, 575 (Sackville, Weinberg and Hely JJ) (citations omitted).

119 The Director, not the Commonwealth, was the appellants’ guardian and so the relationship of

power and vulnerability existed between the Director and the appellants, not the Commonwealth

and the appellants. Whether the Commonwealth in fact owed fiduciary obligations to the appellants

depended on ‘other considerations’, although the Court declined to specify precisely what

these considerations were: see Cubillo (2001) 112 FCR 455, 575 (Sackville, Weinberg and

Hely JJ).

120 Norberg v Wynrib [1992] 2 SCR 226, 312 (Sopinka J), quoted in Cubillo (2001) 112 FCR 455,

576 (Sackville, Weinberg and Hely JJ). See also Breen v Williams (1996) 186 CLR 71, 109–10

(Gaudron and McHugh JJ) (‘Breen’).

121 Cubillo (2001) 112 FCR 455, 577 (Sackville, Weinberg and Hely JJ). In full, the Court stated

that:

Any fiduciary obligation must accommodate itself to the terms of statute. In particular, a fiduciary

obligation cannot modify the operation or effect of statute: to hold otherwise, would be

to give equity supremacy over the sovereignty of parliament: [Tito v Waddell [No 2] [1977]

Ch 106, 239]. It follows that if the removal and detention of Mrs Cubillo had been authorised

by the [Aboriginals Ordinance 1918 (NT)], no fiduciary obligation could forbid what the legislation

permitted.

122 According to O’Loughlin J, it was ‘inappropriate for a judge at first instance, to expand the

range of the fiduciary relationship so that it extends … to a claimed conflict of interests where

the conflict did not include an economic aspect’: Cubillo v Commonwealth [No 2] (2000) 103

FCR 1, 408.

123 (1996) 186 CLR 71.

124 Ibid 113 (Gaudron and McHugh JJ) (citations omitted). In Breen, a woman seeking access to her

doctor’s medical records for the purpose of a class action in the US argued that she was entitled

to those records by virtue of a fiduciary relationship existing between herself and her doctor. The

High Court accepted that some restricted aspects of the doctor–patient relationship could be

fiduciary in nature, in particular those relating to financial matters or confidential information.

However, these restricted fiduciary duties — which are essentially applications of the traditional

profit and conflict rules — did not extend to a positive duty to disclose information: at 110, 113

(Gaudron and McHugh JJ).

134 Melbourne University Law Review [Vol 32

at pains to point out that Australian fiduciary law is proscriptive only125 — that

is, that it could not be the source of positive obligations such as ‘utmost good

faith and loyalty’, which would extend the duty to take reasonable care already

imposed in tort.126

On this analysis, fiduciary duty would be of little assistance to potential stolen

wages plaintiffs seeking redress for the government’s failure to protect their

welfare by ensuring that employers adhered to statutory employment conditions.

Arguably, the government — or at least the Director of Welfare — did have a

fiduciary relationship with such workers. However, the Director’s duties would

only extend to the traditional fiduciary duties to avoid conflict of interest and

profit, not to a positive obligation to ensure that employment conditions were

fulfilled.

Most recently, however, in Trevorrow the South Australian Supreme Court

accepted that a fiduciary relationship existed between the plaintiff and the

Aborigines Protection Board, which was the plaintiff’s statutory legal guardian.

127 The plaintiff was an Aboriginal man who had been removed from his

parents as an infant in 1957. His removal was without the knowledge and

consent of his parents and in circumstances where the relevant departmental

officials knew that they had no legal power or authority to so act.128 However,

the state failed to disclose these facts to the plaintiff, who remained under the

impression that his parents had consented to his removal until 1997, when his

solicitor obtained various departmental files.129

The Court considered that the plaintiff was ‘in a situation of vulnerability and

dependence which required special protection of his interests’.130 The state had a

duty to ensure that he was given full information as to the circumstances of his

removal and to ensure that he was given access to professional legal advice.131

The Court cited Kirby P in Williams v Minister (Aboriginal Land Rights Act

1983),132 as well as Canadian authority,133 in support of its conclusion that the

125 Ibid 113 (Gaudron and McHugh JJ):

Australian courts only recognise proscriptive fiduciary duties. This is not the place to explore

the differences between the law of Canada and the law of Australia on this topic. With great

respect to the Canadian Courts, however, many cases in that jurisdiction pay insufficient regard

to the effect that the imposition of fiduciary duties on particular relationships has on the

law of negligence, contract, agency, trusts and companies in their application to those relationships.

See generally Shaunnagh Dorsett, ‘Comparing Apples and Oranges: The Fiduciary Principle in

Australia and Canada after Breen v Williams’ (1996) 8 Bond Law Review 158, 177–9.

126 Breen (1996) 186 CLR 71, 95 (Dawson and Toohey JJ), 111 (Gaudron and McHugh JJ).

127 (2007) 98 SASR 136, 343–8 (Gray J).

128 Ibid 324.

129 Ibid 327.

130 Ibid 344.

131 Ibid.

132 (1994) 35 NSWLR 497, 511 (Kirby P).

133 Szarfer v Chodaos (1986) 27 DLR (4th) 388, indirectly referred to in Trevorrow (2007) 98 SASR

136, 347 (Gray J).

2008] Holding the Government to Account 135

plaintiff would be entitled to compensation in equity for the losses occasioned by

the want of proper care.134

It must be said that it is not easy to reconcile the decision in Trevorrow with

the earlier decisions in Williams and Cubillo.135 It is important to note that in

contrast to the situation in Williams and in Cubillo, the plaintiff in Trevorrow was

removed from his parents despite the defendant being clearly aware that it had no

statutory authority to do so. Thus, Trevorrow was a case in which the government

had clearly acted outside its statutory powers rather than one in which it

had allegedly failed to adequately enforce them. This might suggest its limited

applicability to broader stolen wages claims alleging that the government had

failed adequately to police its statutory obligations towards Aboriginal workers.

In any case, Trevorrow is inconsistent with other recent Australian cases in this

area in that it accepts that the fiduciary relationship can be the source of positive

obligations and that, if these are breached, the defendant is liable for the consequences

of that breach.

From time to time, and particularly in the optimistic aftermath of the Mabo

decision, indigenous people and their advocates have spoken of the possibility of

a broad fiduciary principle being invoked to protect the interests of indigenous

people in their relationship with the government. After a subsequent line of cases

in which the prospects of success of such an argument appeared all but extinct,

the decision in Trevorrow has arguably blown a reinvigorating breeze across the

embers of the argument. Recently, Brad Morse has suggested that fiduciary duty

might be used to impugn extinguishments of native title prior to 1975,136 or, even

more controversially, to impugn legislative infringements of indigenous rights or

interests such as those reflected in the Commonwealth’s Northern Territory

‘intervention’.137 The possibility that indigenous rights might be recognised in

some form in a constitutional preamble, or even in the Constitution itself,138

could give added impetus to such arguments.

134 Trevorrow (2007) 98 SASR 136, 347–8 (Gray J). However, the Court decided that equitable

compensation should not be granted since any rights in equity entirely overlapped with common

law entitlements.

135 As discussed above, Kirby P’s judgment in Williams v Minister (Aboriginal Land Rights Act

1983) (1994) 35 NSWLR 497 was not followed on appeal. See also the brief explanation in

136 See generally Brad Morse, ‘Is the Common Law Still Relevant for Indigenous Australians? A

Canadian Perspective’ (Speech delivered at the Castan Centre for Human Rights Law Public

Lecture, Monash University Law Chambers, Melbourne, 16 October 2007)

<http://www.law.monash.edu.au/castcentre/events/2007/morse-lecture.html>. Morse’s argument

recognises that the government had the power to extinguish native title prior to 1975 but that its

power to do so was subject to a duty to respect the native title rights of those whose title was

extinguished. For an equivalent argument in Canada, see Guerin [1984] 2 SCR 335.

137 Northern Territory National Emergency Response Act 2007 (Cth).

138 See, eg, Kevin Rudd’s proposal in his recent ‘Apology to Australia’s Indigenous Peoples’ to

constitutionally recognise indigenous peoples: Commonwealth, Parliamentary Debates, House

of Representatives, 13 February 2008, 172 (Kevin Rudd, Prime Minister).

136 Melbourne University Law Review [Vol 32

Finn has depicted the relationship of the government with indigenous people

as an ‘aspect’ of the general, if ‘forgotten’, trust or fiduciary relationship

between citizen and state.139 However, he notes that we lack treaty or constitutional

provisions equivalent to those in New Zealand and Canada ‘capable of

sustaining distinctive rights in indigenous people, [or] distinctive obligations in

the state and its agencies.’140 As a result,

we are, of necessity, thrown back on constitutional principle, the common law

and, where relevant, statute. And it is here, in my view, that advocacy for an

enhanced but distinct fiduciary law regulating the State/indigenous people relationship

is likely to founder.141

According to Finn, the lack of constitutional or legal recognition of the separate

and distinct status of Australian indigenous people means that they can only

benefit from ‘the same fiduciary (or trust) relationship which exists between the

State and the Australian people.’142 This would require only that the government

act fairly as between indigenous and non-indigenous people, a position, he

suggests, already reached via the Racial Discrimination Act 1975 (Cth)

(‘RDA’).143 Nevertheless, this fiduciary duty ‘to act fairly’ would require ‘a

balancing of interests in a given case’ including ‘an evaluation of the general

public purposes served by a particular decision, the proportionality of the means

employed to the end to be served, and the impact of the decision on the enjoyment

of particular Aboriginal rights affected.’144

Other writers have gone further, arguing that indigenous people do not stand in

the same relationship to the Crown as do non-indigenous citizens. As a uniquely

underprivileged group whose traditional lands have for the most part been

expropriated by the Crown, indigenous people exist in a relationship of special

vulnerability to Crown actions. As such, it is arguable that the government has,

‘in addition to undertaking to act in the interests of the people, undertaken a

more specific duty in respect of particular persons’.145

However, there are difficulties in locating the source of the government’s

fiduciary duty towards Aboriginal people in a specific undertaking to act on their

behalf. One such difficulty, as Lisa Di Marco points out, is that this ‘does not

reflect or sit well with historical reality’, in particular the fact that the Crown has

generally abused rather than protected Aboriginal rights and interests.146

139 Finn, ‘The Forgotten “Trust”’, above n 61, 135–8.

140 Ibid 137. In Canada, see Guerin [1984] 2 SCR 335; R v Sparrow [1990] 1 SCR 1075. In the US,

see United States v Creek Nation, 295 US 103 (1935). See generally Tan, above n 45.

141 Finn, ‘The Forgotten “Trust”’, above n 61, 137.

142 Ibid 138 (emphasis in original).

143 Ibid.

144 Ibid.

145 Dal Pont and Chalmers, above n 92, 141 (emphasis in original), paraphrasing Toohey J in Mabo

(1992) 175 CLR 1, 203–4 (Toohey J). According to Dal Pont and Chalmers, this is sufficient to

establish a ‘sui generis fiduciary principle’ applicable in the context of the

government–aboriginal citizen relationship: at 141.

146 Lisa Di Marco, ‘A Critique and Analysis of the Fiduciary Concept in Mabo v Queensland’

(1994) 19 Melbourne University Law Review 868, 872. Di Marco argues that the Crown ‘merely

acted in the interests of the Aborigines as appropriate’ rather than ‘with any real commitment to

be bound by fiduciary obligations’: at 873.

2008] Holding the Government to Account 137

One possible response is that the Crown’s historical abuse of Aboriginal rights

is evidence that it has breached its fiduciary obligation rather than evidence that

such an obligation did not exist in the first place. General protective legislation

— or what the government says it will do — is the undertaking. Failure to

enforce the terms of that legislation — or what the government actually does —

would suggest evidence of breach.

David Tan identifies a somewhat different problem with the idea that the

fiduciary relationship between the Crown and Aboriginal people is sourced in an

undertaking — the problem of identifying ‘what the Crown-fiduciary precisely

undertook to do on behalf of Aboriginals.’147 The task of guaranteeing the

‘protection’ or ‘special rights’ of Aboriginal people, he suggests,

is wholly unlike other fiduciary categories, in which the fiduciary actually acts

on behalf of the beneficiary/principal. Although the Crown must avoid infringement

of aboriginal rights, it certainly does not promote or defend aboriginal

rights in the same manner as a trustee, director, solicitor, guardian or doctor

acts on behalf of her or his principal. In fact, the Crown-aboriginal fiduciary

relationship sits uncomfortably when juxtaposed against this classical backdrop.

More often than not, the Crown and aborigines appear to be adversaries,

suggesting the opposite of a fiduciary relationship, where the existence of a

conflict between the interests of the fiduciary and the beneficiary indicates a

prima facie breach of the duty!148

It is not entirely clear why a fiduciary relationship between the Crown and

Aboriginal people is unlike other fiduciary relationships simply because the

Crown is not obliged to ‘promote or defend’ Aboriginal rights. The argument is

perhaps plausible in the context of the post-assimilation, post-RDA era of

‘self-determination’ — an era which, in any case, seems now to have ended.

However, it seems far less plausible in the era of ‘protection’ or of assimilation,

during which the Aboriginals Ordinance 1918 (Cth) and its successors were

aimed precisely at ‘promoting or defending’ Aboriginal rights or interests, as

they were then conceived.

An alternative basis for a sui generis fiduciary relationship between the Crown

and Aboriginal people is the ‘special vulnerability’ of indigenous people, an

unequal power relationship such that ‘one party is at the mercy of the other’s

discretion.’149 A test based on ‘special vulnerability’, particularly if combined

with ‘public policy’, could be the source of a broad duty to protect Aboriginal

rights and interests.

However, this alternative basis for the fiduciary relationship is also not without

difficulty. To begin with, it seems excessively wide — its scope ‘practically

impossible to ascertain’150 — to the extent that the danger appears to exist of

fashioning obligations ‘according to trendy notions of justice and fairness in the

treatment of Aboriginal people.’151 Secondly, as Richard Bartlett has suggested,

147 Tan, above n 45, 445.

148 Ibid (citations omitted).

149 Ernest J Weinrib, ‘The Fiduciary Obligation’ (1975) 25 University of Toronto Law Journal 1, 7,

cited in Di Marco, above n 146, 875.

150 Tan, above n 45, 448.

151 Ibid 447.

138 Melbourne University Law Review [Vol 32

it is arguable that the fiduciary duty based on vulnerability is confined to the

special or peculiar vulnerability of proprietary interests.152

As can be seen, the major obstacle for an argument based on fiduciary duty has

not been establishing that such a relationship existed but that its scope was broad

enough to encompass harm of the type alleged. In traditional fiduciary law, the

duties of the fiduciary are confined to a rule forbidding misuse of the fiduciary’s

position for advantage (‘the profit rule’) and a rule forbidding conflict of interest

(‘the conflict rule’).153 While these duties clearly cover the alleged withholding

or misuse of trust fund moneys, they would not appear to encompass broad

failures to advance the interests of indigenous workers or to enforce the protective

standards and measures contained in the Aboriginals and Welfare Ordinances.

Thalia Anthony has suggested that in failing to enforce such measures, the

Commonwealth breached the conflict and profit rules:

The Commonwealth, as a fiduciary, breached its duties by allowing stations to

provide rations rather than wages in order to avoid its own welfare responsibilities;

by failing to inspect stations; and, by failing to enforce protective regulations.

In pursuing its own interests to minimise expenditure the Commonwealth

engaged in a conflict of interest and profited from its role as fiduciary. … It is

arguable that the Government also declined to cancel licences for fear that Indigenous

cattle station workers would become its responsibility.154

These suggestions raise a broad question of what it means to say that a duty is

only proscriptive, or negative, and not positive in nature. If a positive moral

obligation is not enforced, might it not also be true to say that a negative duty to

avoid ‘profiting’ — by failing to enforce that obligation — is breached? This is

particularly true when the fiduciary is the government, which always ‘profits’ in

a sense when it minimises expenditure and is always in ‘conflict’ as between

different interest groups with legitimate demands.

However, a problem with this argument is that it could be characterised as

leading to precisely the type of inquiry into executive decisions that the courts

have declined to make in the political trust cases. It is difficult to say at a

distance of 40 years or more why the government failed adequately to enforce

protective regulations in the Northern Territory and elsewhere. No doubt the

desire to minimise expenditure on Aboriginal affairs was part of it. In part also,

as the historical record makes clear, it was the difficulty of attracting and

retaining good staff, particularly dedicated and experienced patrol officers

capable of ‘standing up’ to pastoral management.155 Moreover, there is also the

153 Tan, above n 45, 448.

154 Anthony, above n 2, 17–18.

[c]omplaints that shortages of experienced staff were limiting patrol activities recur frequently

in the annual reports of the late 1950s and early 1960s … Station inspection work was often

restricted because officers had no vehicle at all or no vehicle fit to negotiate the rough roads

and tracks between the stations.

2008] Holding the Government to Account 139

difficulty of proving breach of fiduciary duty where patrol officers visited

stations only rarely and for short periods, and where owners avoided being

questioned about suspected forgeries and exaggerations in the station ledgers.156

Even if the political trust argument can be surmounted, an argument that failure

to enforce regulations constitutes a breach of fiduciary duty appears uncomfortably

similar to an attempt to enforce ‘positive’ obligations; obligations that, to

date, Australian courts have rejected.

IV CONCLUSION

This article has established that potential stolen wages plaintiffs have solid

legal bases, either in trust or fiduciary law, for arguing that governments should

be made to account for missing moneys held in Aboriginal trust funds and the

like. These legal bases arise from distinguishing past cases, such as

Tito v Waddell [No 2], Cubillo, Williams and Breen, from the context of stolen

wages claims.

There are several reasons why such arguments are more likely to succeed than

in previous unsuccessful cases. First, and in contrast with the plaintiffs in Cubillo

and in Williams, stolen wages claimants are not seeking to apply concepts of

trust or fiduciary duty to personal, non-economic interests. The economic

damage they allege is squarely within orthodox principles.157

Secondly, in contrast to the plaintiffs in Cubillo, potential stolen wages claimants

are not challenging the validity of actions taken under relevant legislation

applying to Aboriginal people. Rather, damage of the type they allege would be a

consequence of the breach of duties established in relevant applicable legislation.

They are not seeking to invoke the fiduciary obligation to ‘forbid what the

legislation permitted.’

Thirdly, while there is no constitutional basis for duties of the type they allege

— as exists in Canada and New Zealand — there is a clear statutory basis. This

basis is, of course, found in the applicable Ordinances specifying the powers and

duties of the Chief Protector or Director of Welfare as trustee.

Fourthly, while the trust or fiduciary duties alleged do not have their bases in a

proprietary interest — as in most of the US and Canadian authority and as

suggested in Mabo and Wik — they are clearly the reflection of an independent

legal interest of the type recognised as necessary in Guerin. The plaintiffs’

independent legal interest is their legal right to the money owed to them as

employees.

Some of the difficulties faced by all patrol staff dealing with pastoral management, but

particularly by the inexperienced, are summarised in a typescript by the well-known writer and

former patrol officer W E Harney, appendiced to Long’s book. Harney comments that had a

patrol officer criticised station owners ‘about the treatment of their aboriginal stockmen, they

repl[ied] by using their hospitality, a very effective weapon, to influence their visitors (official

and other) by referring in scathing innuendo to his character’: W E Harney, ‘The Protector of

156 See ibid 9.

157 Cf Paramasivam v Flynn (1998) 90 FCR 489.

140 Melbourne University Law Review [Vol 32

Fifthly, potential stolen wages claimants do not need to rely on the broad

‘power–dependency’ or ‘vulnerability’ relationship suggested by Toohey J in

Mabo as sufficient to invoke fiduciary duties, a concept criticised by commentators

and not followed in subsequent case law. Unlike the unsuccessful plaintiff in

Williams, potential stolen wages claimants do not have to rely on fiduciary duties

allegedly flowing from a broad guardian–ward relationship established by

protective legislation. While the protective legislation is useful to place the

specific duties in context, and perhaps as an alternative basis for the relationship,

the major source for the duties is clearly the legislation establishing and governing

the administration of the trust accounts.

Finally, and unlike the unsuccessful plaintiffs in Cubillo and Williams, potential

stolen wages claimants do not face the difficulty of the fact that there are

alternative, common law remedies available. This is because these claimants are

not seeking compensation for non-economic loss of the sort normally recoverable

in tort.

Though potential stolen wages claimants seem to have solid grounds for success,

it must be noted that there are fewer prospects of success for the argument

that the government owed broader, positive fiduciary obligations. This is at least

the case if Australian courts continue to adopt the interpretation of the scope of

the fiduciary obligation preferred in cases such as Cubillo, Williams and Breen. It

is possible that the decision in Trevorrow represents the first intimations of

change. It seems more likely, however, that a more expansive interpretation of

the scope of the fiduciary obligation must await a future, and bolder, High Court.