fiduciary duty; constructive trust
46 The submission that there was a constructive trust (or that one might be imposed) arising out of a breach of fiduciary duty was put by counsel for the second applicants. It was accepted that the "pleaded facts" to be assumed for the purposes of the argument were to be found in allegations in the second applicants' amended statement of facts, issues and contentions dated 10 April 2000. The facts alleged relate principally to general executive and legislative attitudes to relations with indigenous people from the time of settlement. There are, however, some more specific facts alleged. I have referred already to particular allegations as to the continuing exercise by the applicants and their predecessors of the rights which they assert in relation to the claim area. The other particular allegations, specific to the claim area, are these:
"1.8 The Crown in right of the State of Western Australia, prior to the acquisitions taking place, had taken steps to protect the presence, occupation, use and enjoyment of the area by the native title parties and their predecessors by establishing areas within the area the subject to [sic] the acquisitions which were reserved from sale and were designated to be for the use and benefit of Aboriginal people; and such areas were used and occupied by the native title parties and their predecessors.
1.9 The Crown in right of the Commonwealth knew or, after reasonably diligent inquiry, was capable of knowing of the fact of the setting aside of such areas for the use and benefit of Aboriginal people and the occupation of those areas by Aboriginal people, whom they were capable of ascertaining by reasonably diligent inquiry were the native title parties or their predecessors."
Those allegations were by no means prominent in the argument, which concentrated almost exclusively on the more general allegations to which I shall come. It should be pointed out, however, that Mr Guthrie's evidence, which the second applicants did not dispute, was that the whole of the claim area falls within land "originally" (Mr Guthrie's word) comprised in two reserves, both created in 1877: one for "Commonage" and one for "Quarry for Public Purposes". His evidence traces the title to the land from that time. He records that in 1910 Crown Reserve 12720 was created for "Aborigines camping"; that reserve covered land which was originally part of the "Commonage" Reserve B259. Reserve 12720 covered a relatively small area on the north west corner of the land with which this case is concerned and included a relatively small portion of the claim area. It was not within the land granted to Guildford Municipality. It was part of the land acquired by the Commonwealth in 1943 by way of acquisition by compulsory process under the 1906 Acquisition Act. In short, no particulars are given of the "steps" referred to in par 1.8 of the second applicants' amended statement of facts, issues and contentions; on the evidence, what might be described as one such step was taken - the creation of Reserve 12720 - but no other.
47 The general allegations commence with a proclamation made by the first Governor, Captain James Stirling, which included the paragraph:
"And whereas the protection of Law doth of right belong to all People who come or be found within the Territory aforesaid I do hereby give notice that if any person shall be convicted of behaving in a fraudulent cruel or felonious manner to the Aboriginal race of inhabitants of this Country such person shall be liable to be prosecuted and tried for the offence as if the same had been committed against any others of His Majesty's subjects."
48 The allegations then refer to much colonial legislation, commencing from the 1840s (and largely long since repealed), making particular provision for indigenous people and their protection. The legislation related, for example, to restrictions on access to alcohol, to the provision of reserves and their management and the provision of medical services and education. Particularly, the second applicant relied on the effect of s 70 of the Constitution Act 1889 (WA) and certain provisions of the Aborigines Act 1905 (WA). The former provision required the appropriation of an annual sum to be applied by the Aborigines Protection Board in promoting the welfare and education of Aborigines (and by s 73 of the Constitution Act, any bill to amend s 70 was to be reserved "to the Governor for the signification of Her Majesty's pleasure thereon"). The provisions of the Aborigines Act, the effect of which is pleaded in the amended statement of facts, issues and contentions, established an Aborigines Department to exercise supervision and care over matters affecting the interests and welfare of Aborigines and to protect them against injustice, imposition and fraud; and provided for the establishment of reserves, their management and regulation and for the making of regulations for the control, care and education of Aborigines in institutions. Certain observations made in the Legislative Council in 1883 by the then Premier are referred to as well.
49 That history was said to show that the Crown had recognised or assumed general tutelary obligations in relation to Aboriginal people. That was said to have given rise to a "fiduciary expectation": that is, that the Crown would act in the interests of the Aboriginal people and for the purpose of the relationship with them which it had assumed (P D Finn "The Fiduciary Principle", in Youdan (Ed), Equity, Fiduciaries and Trusts, 1989, pp 46, 47). The Crown had asserted sovereignty over the Aboriginal people; it had adopted a protective role; it had power to abrogate their interests (and had performed acts in exercise of that power). Those circumstances, it was said, together with the creation of the "fiduciary expectation", gave rise to fiduciary obligations on the part of the Crown. As well as general statements in the cases about circumstances giving rise to fiduciary duties, the second applicants relied on authorities in the United States, Canada and New Zealand, on the analysis in the judgment of Toohey J in Mabo [No 2] at 199-205 and the discussion by Deane and Gaudron JJ (Mabo [No 2] at 112, 113) of the availability of equitable remedies, particularly the remedial constructive trust, to protect native title against the wrongful denial of it or wrongful interference with it. Recognising the obvious difficulty with a proposition that the Crown is obliged to exercise powers exclusively in the interests of Aboriginal people (Wik at 95-97 per Brennan CJ), the second applicants contended (relying on United States and particularly Canadian authorities) for the existence of a duty which required, in the exercise of a power to dispose of land so as to extinguish native title, at least consultation with the owners of native title, the taking of their interests into account and, perhaps, reasonableness according to an objective standard.
50 A particular difficulty with the fiduciary case is, indeed, the level of generality at which the facts are pleaded. Ordinarily, the question whether fiduciary duties arise is decided having regard to the particular circumstances of particular relationships, or particular dealings, between particular people. Similarly, a constructive trust is imposed, ordinarily, because the circumstances of dealings between particular people make it unconscionable that one should, to the exclusion of the other, be permitted to assert a full beneficial title to particular property: one circumstance in which that may arise, of course, is where property has been acquired in breach of a fiduciary duty. Here, the claims are based mainly upon a general obligation, said to have been assumed by the Crown (and largely treating as immaterial any distinction between the Crown in right of one polity and the Crown in right of another) at and following European settlement of Western Australia, to protect the indigenous people. It is that general obligation said to have been assumed, coupled with a power to injure the interests of indigenous people (for example, by granting land and thereby extinguishing native title) that is said to have given rise to a fiduciary duty which was breached where title to land was granted or assumed by the Crown without consultation with indigenous people who may have had rights in relation to it and without having particular regard to their interests. Those, in essence, were the propositions on which the argument concentrated. To the extent that facts relating to the particular land, or particular indigenous people said to have had rights in relation to it, are pleaded, again that has been done at a high level of abstraction and, as I have mentioned, there is undisputed evidence as to the extent to which any of the claim area was actually within lands which were, at any relevant times, reserved for particular purposes of Aboriginal people.
51 In Thorpe v The Commonwealth [No. 3] (1997) 71 ALJR 767 at 775, Kirby J summarised the effect of authorities in the United States and Canada as follows (omitting references to authority):
"In the United States of America it has been held that a fiduciary relationship exists in certain circumstances between the United States and the Indian tribes. It would appear that such relationship was found on the basis that the tribes, as domestic dependent nations, had sought and received the protection of the United States, a more powerful government. A fiduciary duty with respect to the lands of indigenous peoples has also received a measure of acceptance in Canada. In the context of land surrendered to the Crown by Aboriginal groups, it has been held that a trust‑like relationship was established. Indeed, in Canada it has been suggested that the Crown has a broader responsibility to act in a fiduciary way towards indigenous peoples arising out of the Crown's historical powers over, and assumption of responsibility for, such peoples within its protection. The recognition of Aboriginal rights within the Canadian Constitution has also been invoked as a foundation for a fiduciary relationship."
52 In Fejo his Honour referred, at 148, 149, to the need to exercise care in the use of authorities from other jurisdictions "because of the peculiarities which exist in each of them arising out of historical and constitutional developments, the organisation of the indigenous peoples concerned and applicable geographical or social considerations". Nevertheless, counsel for the second applicants relied on authorities from other jurisdictions as indicating a basis for finding a fiduciary duty which transcended the particular local conditions and the particular legal frameworks of the various jurisdictions.
53 Counsel placed particular reliance on a series of Canadian authorities, the first of which is Guerin v The Queen (1985) 13 DLR (4th) 321. Guerin itself involved a lease of Indian lands to a golf club. A statutory scheme regulating the disposal of Indian lands provided that those lands might be disposed of only by the Crown upon surrender by the Indian band concerned; the Crown, following surrender, negotiated for the disposal of the land on behalf of the band. In those circumstances, there is nothing surprising about the conclusion that the Crown, in negotiating a disposal in that capacity, undertook a fiduciary duty to act in the interests of members of the band. As Dickson J explained the matter, at 340:
"The purpose of this surrender requirement is clearly to interpose the Crown between the Indians and prospective purchasers or lessees of their land, so as to prevent the Indians from being exploited. This is made clear in the Royal Proclamation itself, which prefaces the provision making the Crown an intermediary with a declaration that 'great Frauds and Abuses have been committed in purchasing Lands of the Indians, to the great Prejudice of our Interest and to the great Dissatisfaction of the said Indians …'. Through the confirmation in the Indian Act of the historic responsibility which the Crown has undertaken, to act on behalf of the Indians so as to protect their interests in transactions with third parties, Parliament has conferred upon the Crown a discretion to decide for itself where the Indians' best interests really lie. …
This discretion on the part of the Crown, far from ousting, as the Crown contends, the jurisdiction of the Courts to regulate the relationship between the Crown and the Indians, has the effect of transforming the Crown's obligation into a fiduciary one."
54 The language of the Proclamation quoted by his Lordship is reminiscent of language used in the Proclamation and some of the early legislation on which the second applicants rely. In the Canadian legislative scheme, however, the language was directed to abuses requiring the particular protection of laws which specifically interpose the Crown as intermediary for the purpose of protecting the interests of Aboriginal people in dealing with their land.
55 Two aspects of the later Canadian cases relied upon require caution in their use as authority directly applicable in Australia. One is the extent to which they depend upon a construction of particular statutes, most importantly s 35(1) of the Constitution Act 1982 (Can). That section provides that the existing Aboriginal and treaty rights of the Aboriginal Peoples of Canada are thereby recognised and affirmed. Lamer CJC pointed out in Delgamuukw v British Columbia (1997) 153 DLR (4th) 193 at 249 that:
"On a plain reading of the provision, s 35(1) did not create Aboriginal rights; rather, it accorded constitutional status to those rights which were 'existing' in 1982."