HOLDING THE GOVERNMENT TO ACCOUNT: THE
‘STOLEN WAGES’ ISSUE, FIDUCIARY DUTY AND TRUST LAW

STEPHEN GRAY*

[This article examines whether trust or f iduciary law provides potential ‘stolen wages’ plaintiffs with
a  strong  basis  for  a  claim  over  money  in  bank  accounts  that  previous  gover nments  held  on  the plaintiffs’ behalf. It also considers the broader issue of whether gover nments owed a f iduciary duty
flowing from their obligations under general ‘protective’ legislation to prevent such workers from being exploited and underpaid. It is argued that potential stolen wages plaintiffs have a strong claim
in trust, and that an argument based on f iduciary duty, whilst weaker than that based on trust law, is more  likely  to  succeed  than  in  the  previous  types  of  cases  in  which  indigenous  plaintiffs  have unsuccessfully argued f iduciary duty in the Australian courts.]

C ONTENTS 

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   I NTRODUCTION 

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.

115

116	Melbourne University Law Review	[Vol 32

entitled Unfinished Business: Indigenous Stolen Wages (‘Stolen Wages Report’).1
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 jurisdic- tions around Australia, money earned by Aboriginal workers was withheld and kept in government-controlled trust accounts. These trust accounts were estab- lished  under  ‘protective’ legislation.6  Their  ostensible  purpose  was  benevolent and paternalistic, being to ensure that ‘unsophisticated’ or ‘uncivilised’ Aborigi- nal 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 benefici- aries.
The Stolen Wages Report undertook a preliminary investigation into this ques- tion  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,
Unf inished 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 concer ned 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 gover nment 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 gover nment 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 (Melbour ne),
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 gover nments, and misuse of Welfare Fund money for other than general wel- fare projects could be grounds for action and a direction to repay lost funds.
The New South Wales gover nment has also established a scheme known as the Aboriginal Trust Fund Repayment Scheme. According to the Stolen Wages Report, the NSW scheme has gener- ally  ‘been  better  received  than  the  Queensland  Gover nment’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 Norther n 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  off icer  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 off icer.

2008]	Holding the Government to Account	117

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)  ex- empted  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  govern- ments  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 responsibili- ties;  …  failing  to  inspect  stations;  and  …  failing  to  enforce  protective  regula- tions.’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 pay- ment of the pension of an aboriginal native of Australia shall be made, on behalf of the pen- sioner, 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 their own purposes: see, eg, C M Tatz, Aboriginal Administration in the Norther n Territory of Australia (PhD Thesis, Australian National University, 1964) ch 5.
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 gover nments sought to control the lives of Indige-
nous 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 Indige-
nous  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   S T O LEN  WAGES  P LAINTIFFS  AND  THE  L AW  O F  T RUSTS 

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’ wages  that  was  withheld  on  trust.  Legislation  such  as  the  Wards’  Employment Ordinance 1953–1959 (Cth) clearly specified that ‘such portion’ of an Aborigi- nal  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 ascer- tainable, would appear to be satisfied.
The most difficult of the three certainties for stolen wages claimants to estab- lish 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 Norther n Territory in 1955, for example, a total of £16 549 was held in trust accounts in
the Norther n 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  ac-
counts (£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 Norther n 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 Gover nment 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, execu- tive,  and  public  administration  responsibilities  which  are  governmental  func- tions  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 Norther n 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)  (‘Au-
thorson’). 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 gover nmen-
tal 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 gover nmental property usu-
ally does not denote a trust enforceable in a court of equity.’
24  (1845) 12 Cl & F 425, 487–8; 8 ER 1474, 1499–500 (Lynd hurst 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 funds’ were set up in various agreements and documents, including the Mining Ordinance 1928 (Gilbert and Ellice Islands), which described the funds as being 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 Selbour ne 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 gover nmental functions. This latter possible explana- tion, which does not exist in the case of an ordinary individual, makes it necessary to scruti- nise 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 Ameri- can  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 establish- ing  ‘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 politi- cal 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  obliga- tions 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 Jour nal 70, 77–9.
38  Hogg  and  Monahan  describe  the  political  trust  as  a  ‘nothing’  and  as  a  ‘catastrophe’  for  its
supposed benef iciaries, who ‘had been unsuccessful in obtaining satisfaction from the gover n-
ment 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
of individual interests which exist [sic] under the Human Rights Act 1998’: see R v East Sussex
County Council; Ex parte Reprotech (Pebsham) Ltd [2002] 4 All ER 58, 66 (Lord Hoffmann).
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 concern  surrender  of  or  dealings  with  land.46   Similarly,  in  Authorson v A-G
(Canada)  (‘Authorson’),  which  involved  a  class  action  by  a  group  of  disabled 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 admin- istered on his behalf is a clear indication that this is not a political trust. By con- trast,  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 f lowed from the Crown’s use of the Banaban Islanders’
land and were — again, admittedly from a moder n 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  benef it  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 — specif ically, a f iduciary 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 Jour nal 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 f isheries legislation. He argued that he was exercising a traditional Aboriginal
right to f ish, 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 regu-
lated or even extinguished. However, the Crown’s power to do so must be balanced against its
trust or f iduciary obligation to Aboriginal people. This f iduciary 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
Jones, ‘The State and the Stolen Generation: Recognising a Fiduciary Duty’ (2002) 28 Monash
University Law Review 59, 69.
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 interest restriction on the scope of the political trust doctrine. In Mabo v Queen- sland [No 2] (‘Mabo’), Toohey J accepted that the defendant might be bound to 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  McPher- son 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 f iduciary
obligation in Guerin [1984] 2 SCR 335 was the sui generis Aboriginal interest in the land. Aus-
tin and Goudge JJA stated at 519 (emphasis added):
f iduciary 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 im-
posed on the Crown in dealing with that interest which render the Crown subject to the f iduci-
ary obligation. … [I]t is the nature of the relationship, not the specif ic category of actor in-
volved, that gives rise to the f iduciary duty.
49  (1992)  175  CLR  1.  For  discussion  concer ning  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 un- able to use it. They therefore recommend that the sums set opposite to their names be handed
to the Queensland and Victorian Gover nments 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 proceed- ings. This posture may have been — and may still be — appropriate in Eng- land. I do not comment on that. Its justification in a country which began to en- act 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.
61  Paul  Finn,  ‘The  Forgotten  “Trust”:  The  People  and  the  State’ in  Malcolm  Cope  (ed),  Equity:
Issues and Trends (1995) 131, 140 (citations omitted).
62  See, eg, Judiciary Act 1903 (Cth) s 64, which is applicable in the Norther n Territory.

2008]	Holding the Government to Account	125

political trust doctrine rather than as merely clarifying the fact that the govern-
ment 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 benefici- aries  of  so-called  Individual  Indian  Money  (‘IIM’)  trust  accounts.  These  ac- counts   were   established   by   statute   to   hold   money   derived   from   in- come-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 dam- ages 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  litiga- tion.”’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 plain- tiffs 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 gover nment on the basis of such legislation may have the effect of making gover nment ‘as accountable for its management
of Aboriginal f inances “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 gover nment then entered into treaties or agree-
ments 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. Allot-
ted 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 Off ice 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 benef iciaries

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 enforce- able 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
A third argument is derived from the High Court’s decision in Accident Com- pensation  Tribunal  v  Federal  Commissioner  of  Taxation  (‘Accident  Tribu- nal v FCT’),  a  case  concerning  whether  the  Registrar  of  the  Tribunal  held 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 accord- ing 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 instru- ment 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
Souther n Illinois University Law Jour nal 647, 675–6. The 1989 Arthur Anderson report is re-
ferred 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 gover nment owed a duty of care
necessarily implies that the reasonableness or unreasonableness of the inaction of which com- plaint 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 gover nment 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  ques- tion.’75
According to the High Court, the Registrar’s duty to invest workers’ compen- sation  money  may  not  be  ‘easily  described  as  a  Crown  or  governmental  func-
tion’.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 presump-
tion  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 obliga-
tion  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  obliga- tions.’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 Gover nment 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 Jour nal 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 govern- ment 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 account- ing 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.
93  Dal   Pont   and   Chalmers,   above n 92,   619   (citations   omitted).   See   further   Christen-
sen v Christensen [1954] QWN 37, 44.
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
gover nment’s general responsibility to the gover ned 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 gover nment’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 gover nment. The courts’ reluc- tance  to  attach  equitable  doctrines  of  conf idence  to  gover nmental  information  ref lects  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
aff irmed 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
f ive years after their success on appeal in Cobell v Norton, they are yet to receive any f inancial

130	Melbourne University Law Review	[Vol 32

III   S T O LEN  WAGES  P LAINTIFFS  AND  FIDUCIAR Y  D UTY 

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  includ- ing  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 gover nment’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 Jr, ‘Judge Lamberth’s Reign of Terror at the Department of Interior’ (2004) 56 Administrative Law Review 235, 239. Prominent in these ‘myriad details’ (at 239) has been debate about several issues: f irst, the judge’s power to issue ‘a permanent structural injunction that requires the [De- partment 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  gover nment  employees:  at  240–5;  thirdly,  his  actions  in  ordering  the  DOI’s computer  system  to  be  disconnected  from  the  inter net  because  of  the  fear  that  hackers  might destroy or alter trust records: at 245–6. Problems of missing data and inadequately skilled per- sonnel 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 character-
ised  by  Richard  J  Pierce  Jr  as  a  ‘reign  of  terror’ —  Pierce  uses  this  phrase  in  the  title  of  his
article ‘Judge Lamberth’s Reign of Terror at the Department of Interior’ (2004) 56 Administra-
tive Law Review 235. Most recently, he has been removed from the case on the basis that his
‘professed hostility to Interior’ had become ‘so extreme as to display clear inability to render fair
judgment’: see Cobell v Kempthor ne, 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 def ine completely and with precision those mat- ters which give rise to f iduciary obligations notwithstanding that it is possible to discer n a f i- duciary 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 Island- ers 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 f iduciary obligation in the Queensland
gover nment’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 suff i- cient to attract regulation by Equity to ensure that the position is not abused. The f iduciary 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 f iduciary 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 circum-
stances of the specif ic relationship from which it arises. But, generally, to the extent that a per-
son  is  a  f iduciary  he  or  she  must  act  for  the  benef it  of  the  benef iciaries’:  at  204  (Toohey J)
(citations omitted). The other members of the High Court gave the issue of f iduciary duty only
brief  treatment.  Dawson J  considered  that  the  existence  of  any  f iduciary  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 f iduci-
ary principles: at 166. Brennan J, with whom Mason CJ and McHugh J concurred, considered
that a f iduciary 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 f iduciary duty would arise exclusively in the hypothetical scenario he
describes’. Deane and Gaudron JJ opined that actual or threatened interference with the enjoy-
ment 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 f iduciary 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  ‘discre-
tionary 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 f iduciary 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 f iduciary 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 f iduciary obligation to a power–dependency relationship, pro- vided there are ‘[t]he elements of power and discretion, and the corresponding vulnerability, and reasonable  expectations’.  Jones  suggests  that  the  f iduciary  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, ‘Bren- nan CJ in Wik supported the extension of f iduciary principles to the indigenous context gener- ally’: 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 gover nment owes them a f iduciary obliga-
tion: 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 f iduciary 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
appeal   on   an   earlier   application   for   extension   of   the   statutory   limitation   period,   Wil-
liams v Minister (Aboriginal Land Rights Act 1983) (1994) 35 NSWLR 497, Kirby P had held
that  the Aborigines  Welfare  Board  was  under  a  f iduciary  duty  to  provide  for  Ms  Williams’s
custody, maintenance and education. The duty arose from the Aborigines Welfare Board’s posi-
tion 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,
f iduciary  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  f iduciary-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 pro-
ceedings 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 guard-
ian of the appellants by virtue of statute is no obstacle to the creation of a f iduciary 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 f iduciary obligations to the appel-
lants 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 f iduciary obligation must accommodate itself to the terms of statute. In particular, a f idu- ciary 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 f iduciary obligation could forbid what the leg- islation permitted.
122  According  to  O’Loughlin J,  it  was  ‘inappropriate  for  a  judge  at  f irst  instance,  to  expand  the range of the f iduciary relationship so that it extends … to a claimed conf lict of interests where the conf lict 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 f iduciary relationship existing between herself and her doctor. The
High  Court  accepted  that  some  restricted  aspects  of  the  doctor–patient  relationship  could  be
f iduciary in nature, in particular those relating to f inancial matters or conf idential information.
However, these restricted f iduciary duties — which are essentially applications of the traditional
prof it and conf lict 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  guard-
ian.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 f iduciary 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 insuff icient re- gard to the effect that the imposition of f iduciary duties on particular relationships has on the law of negligence, contract, agency, trusts and companies in their application to those relation- ships.
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 govern- ment 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 conse- quences of that breach.

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

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
Peter Hanks, Patrick Keyzer and Jennifer Clarke, Australian Constitutional Law: Materials and
Commentary (7th  ed, 2004) 125.
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,	Melbour ne,	16	October	2007)
<http://www.law.monash.edu.au/castcentre/events/2007/morse-lecture.html>.  Morse’s  argument
recognises that the gover nment 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  Norther n 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 constitu- tional  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 rela- tionship is likely to founder.141

According to Finn, the lack of constitutional or legal recognition of the sepa- rate 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 enjoy- ment 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 suff icient to
establish    a    ‘sui    generis    f iduciary    principle’    applicable    in    the    context    of    the
gover nment–aboriginal citizen relationship: at 141.
146  Lisa  Di  Marco,  ‘A  Critique  and  Analysis  of  the  Fiduciary  Concept  in  Mabo v Queensland’
(1994) 19 Melbour ne 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 f iduciary 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  in- fringement of aboriginal rights, it certainly does not promote or defend aborigi- nal 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  back- drop. 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 with- out 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  Er nest J Weinrib, ‘The Fiduciary Obligation’ (1975) 25 University of Toronto Law Jour nal 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 protec- tive  standards  and  measures  contained  in  the  Aboriginals  and  Welfare  Ordi- nances.
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 responsibili- ties; by failing to inspect stations; and, by failing to enforce protective regula- tions. 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 In- digenous 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

152  Richard  H  Bartlett,  ‘The  Fiduciary  Obligation  of  the  Crown  to  the  Indians’  (1989)  53  Sas- katchewan Law Review 301, 301–2, referred to in Di Marco, above n 146, 876.
153  Tan, above n 45, 448.
154  Anthony, above n 2, 17–18.
155  See,  eg,  Jeremy  Long,  North  Australia  Research  Unit,  Australian  National  University,  The
Go-Betweens:  Patrol  Off icers  in  Aboriginal  Affairs  Administration  in  the  Norther n  Territory
1936–74 (1992) 139, where, according to former patrol off icer Jeremy Long,
[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 off icers had no vehicle at all or no vehicle f it 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 uncomforta- bly  similar  to  an  attempt  to  enforce  ‘positive’ obligations;  obligations  that,  to date, Australian courts have rejected.

IV   C ONCLUSION 

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 claim- ants 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  diff iculties  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  off icer  W  E  Har ney,  appendiced  to  Long’s  book.  Har ney  comments  that  had  a patrol  off icer  criticised  station  owners  ‘about  the  treatment  of  their  aboriginal  stockmen,  they repl[ied] by using their hospitality, a very effective weapon, to inf luence their visitors (off icial and other) by referring in scathing innuendo to his character’: W E Har ney, ‘The Protector of Aboriginals’ in Jeremy Long, North Australia Research Unit, Australian National University, The Go-Betweens:  Patrol  Off icers  in  Aboriginal  Affairs  Administration  in  the  Norther n  Territory
1936–74 (1992) 172, 172.
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 commenta- tors 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 govern- ing the administration of the trust accounts.
Finally, and unlike the unsuccessful plaintiffs in Cubillo and Williams, poten- tial  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 recover- able in tort.
Though potential stolen wages claimants seem to have solid grounds for suc- cess, 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.