Society of Trust and Estate Practitioners The Interface between Equitable Principles and Public Law


Fiduciary Duties and Indigenous People



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Fiduciary Duties and Indigenous People
In the United States, Canada and New Zealand as well as in Australia the question whether governments owe fiduciary duties to indigenous people has been considered. The relationship between the Indian peoples and the United States government was described in fiduciary language in Cherokee Nation v State of Georgia85. Marshall CJ described Indian peoples as domestic dependent nations saying:

Their relation to the United States resembles that of a ward to his guardian.86

The Supreme Courts of the United States in US v Mitchell87 found the United States government to be liable in damages for mismanagement of forest resources on Indian Reservation lands. In that case a fiduciary duty arose from Federal Timber Management Statutes and other legislation under which the government had 'elaborate control over forests and property belonging to Indians'. Reference was made to 'the undisputed existence of a general trust relationship between the United States and the Indian people' and the 'distinctive obligation of trust incumbent upon the Government in its dealings with these dependent and sometimes exploited people'.88

In Guerin v R89 the Supreme Court of Canada found the Crown in a fiduciary relationship to Indians whose lands had been surrendered to it for lease to a golf club. The lease was granted on terms which had not been discussed with and which were disadvantageous to the Indians. The grant was held to be a breach of the Crown’s fiduciary duty. The nature of the Indian title and the statutory scheme for disposing of Indian land placed upon the Crown an equitable obligation enforceable by the Court to deal with the land for the benefit of the Indians. Dickson J (with whom Beetz, Chouinard and Lamer JJ concurred) said:

This obligation does not amount to a trust in the private law sense. It is rather a fiduciary duty. If, however, the Crown breaches this fiduciary duty it will be liable to the Indians in the same way and to the same extent as if such a trust were in effect.90

While it might be thought the judgment of Dickson J based the fiduciary duty upon the surrender of Indian lands to the Crown a broader interpretation of his judgment was open. In R v Sparrow91 the relevant duty was founded upon a fiduciary obligation derived from the nature of Indian interests in the land.

New Zealand jurisprudence establishes the existence of the fiduciary relationship between the Crown and Maori people. These cases support the proposition that the Treaty of Waitangi created an enduring relationship akin to a partnership between the Crown and Maori, each accepting a positive duty to act in good faith, fairly, reasonably and honourably towards the other.92

In Australia in Mabo (No 2)93 it was submitted that Queensland was under a fiduciary duty or affected by a trust of which the Meriam people were beneficiaries in connection with their rights and interests in land. It was not contended that the trust or fiduciary obligation fettered legislative power. It was argued however that it limited the way in which power otherwise granted, for example, under Crown lands legislation, could be exercised. The claim for relief in Mabo (No 2) included a claim for a declaration that Queensland was under a fiduciary duty or alternatively bound as a trustee to the Meriam people to recognise or protect their rights and interests in the Murray Islands.

Brennan J did not deal directly with the claim in his judgment. He did say, however, that:

If native title were surrendered to the Crown in expectation of a grant of a tenure to the indigenous title holders, there may be a fiduciary duty on the Crown to exercise its discretionary power to grant a tenure in land so as to satisfy the expectation, but it is unnecessary to consider the existence or extent of such a fiduciary duty in this case.94 (footnotes omitted)

His reasoning about the existence and nature of native title and the extinguishment of native title did not involve any consideration of a fiduciary relationship between government and native title holders or indigenous people generally. Nor did Deane and Gaudron JJ afford any comfort to those who would argue for the existence of a fiduciary duty as an invalidating principle in respect of executive action extinguishing native title. They did say however:

Notwithstanding their personal nature and their special vulnerability to wrongful extinguishment by the Crown, the rights of occupation or use under common law native title can themselves constitute valuable property. Actual or threatened interference with their enjoyment can, in appropriate circumstances, attract the protection of equitable remedies. Indeed, the circumstances of a case may be such that, in a modern context, the appropriate form of relief is the imposition of a remedial constructive trust framed to reflect the incidents and limitations of the rights under the common law native title. The principle of the common law that pre-existing native rights are respected and protected will, in a case where the imposition of such a constructive trust is warranted, prevail over other equitable principles or rules to the extent that they would preclude the appropriate protection of the native title in the same way as that principle prevailed over legal rules which would otherwise have prevented the preservation of the title under the common law.95

Dawson J, having formed the view that traditional rights had been extinguished upon annexation of the Murray Islands, concluded that there was no fiduciary duty imposed on the Crown. Toohey J, alone among the judges, accepted the existence of such a duty arising directly from or by close analogy to equitable principle. It arose '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'.96 The obligation was of the character imposed on a constructive trustee. The content of the obligation was to ensure the traditional title was not impaired or destroyed without the consent, or otherwise having regard to, the interests of the title holders. It could not limit legislative power but the enactment of legislation could amount to a breach of the obligation.

Mason CJ in Coe v Commonwealth97, a pleadings case, considered a claim for breach of fiduciary duty arising out of the enactment of a statutory power of alienation. He said:

The existence of a fiduciary duty cannot render the legislation inoperative, though according to Toohey J, it could generate a right to equitable compensation if the legislation constituted a breach of duty.98

The state of authority to date is unencouraging in relation to the identification of a fiduciary duty owed to indigenous people by reason of their status as such or as native title holders. Of course, principles analogous to those governing fiduciary relationships may inform the exercise of statutory power as mandatory relevant elements for consideration and as implied limits derived from implied legislative purpose. Nor does it exclude the possibility of an interpretive principle under which laws impacting on the rights of indigenous people should be construed by reference to fiduciary considerations where such a construction is open.



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